RMO No. 23-2023: Prescribes the mandatory requirements and guidelines, policies and procedures in the processing of claims for Value-Added Tax (VAT) Credit/Refund except those under the authority and jurisdiction of the Legal Group

Key points

1. Receiving offices and priority. Offices prioritize Section 112 claims over other claims not needing immediate issuance of TCCs or refund checks. BIR Form No. 1914 goes to the VCAD, the VATAS, the RDO or the LTVAU, depending on the claimant. The Revenue Officer of the Day checks that documents are complete, and only complete applications are processed.
2. Late claims and delinquent liabilities. Claims filed beyond the 2-year prescriptive period are recommended for outright denial. If the claimant has final and executory liabilities shown by a Delinquency Verification Certificate, the approved refund may be garnished for the delinquency. Processing may continue where an abatement or compromise request is pending with no decision by the National Evaluation Board or approving official.
3. Time frame and denial. A refund is granted within ninety (90) days from complete submission, counted from actual filing with complete documents. If the claim is denied in full or in part, the Commissioner must state the legal and factual basis in writing. The taxpayer may appeal to the Court of Tax Appeals within thirty (30) days from receipt of the decision. BIR officials who fail to act within the 90 days are punishable under Section 269.
4. Verification. The head of the processing office issues a Tax Verification Notice, manually until the IRIS Case Management System is fully operational. Verification is not an audit and focuses on the validity and existence of zero-rated sales and related purchases, checked against the books of accounts and EIS data. Findings on non-VAT deficiencies or possible VAT assessments are referred to the RDO or Large Taxpayers Audit Division, which gives feedback within fifteen (15) days from receipt of the referral.
5. Review and approval. Reports go to the Tax Audit Review Division for VCAD dockets, the Regional Assessment Division for VATAS and RDO dockets, and the Head Revenue Executive Assistant of the Programs & Compliance Group for LTVAU dockets. For VCAD claims, the ACIR Assessment Service approves up to ₱ 50 Million, the DCIR Operations Group more than ₱ 50 Million up to ₱ 150 Million, and the CIR more than ₱ 150 Million. LTVAU claims go to the ACIR-LTS, and VATAS/RDO claims to the Regional Director, regardless of amount.
6. Section 204(C) and 229 claims and originals. Under RMC No. 17-2018 thresholds, the Regional Director approves up to ₱ 10 Million, the ACIR-AS more than ₱ 10 Million up to ₱ 50 Million, the DCIR-OG more than ₱ 50 Million up to ₱ 150 Million, and the CIR more than ₱ 150 Million. Claims filed under the LTS go to the ACIR-LTS regardless of amount. The tax docket of an approved refund goes to the COA, and original invoices of fully denied claims are returned after stamping VAT Credit/Refund Processed.

Who is affected

• Taxpayer-claimants of VAT credit/refund
• BIR processing and approving offices

Deadlines and effectivity

• Applies to claims filed starting July 1, 2023
• Refund granted within ninety (90) days from complete submission
• Appeal to the Court of Tax Appeals within thirty (30) days from receipt of denial
• Referral feedback within fifteen (15) days from receipt