Revenue Memorandum Circular No. 54 - 2014 dated 11 June 2014

19 June 2014

The Commissioner of Internal Revenue (“CIR”) has issued Revenue Memorandum Circular (“RMC”) No. 54-2014 dated 11 June 2014 to summarize the rules on filing and processing of applications for VAT refund/tax credit based on cases decided by the Supreme Court:

1. Prescriptive period within which administrative claim for refund or tax credit of input tax should be made: Tax refunds relating to zero-rated or effectively zero-rated sales must be filed within 2 years after the close of the taxable quarter when sales were made in accordance with Sec. 112 (A) of the Tax Code. The CIR shall have 120 days from date of submission of complete documents to decide whether or not to grant the claim for refund or issue a Tax Credit Certificate (TCC) for creditable input taxes. If no action is made by the CIR within the 120-day period, such “inaction shall be deemed a denial” of the application for tax refund or TCC.

2. Filing and Processing of Administrative Claims: Applications for VAT refund/TCC must be accompanied by complete supporting documents as enumerated under the “Checklist of Mandatory Requirements for Claims for VAT Credit/Refund”. The taxpayer shall attach a statement under oath attesting to the completeness of submitted documents. In case of juridical (corporate) applicants, that statement should be accompanied by a sworn certification signifying that the signing officer (i.e. at the very least, the Chief Financial Officer) is authorized by the Board of Directors. The checklist and sworn certification (Annexes “A” and “B” of the RMC) can be downloaded from http://www.bir.gov.ph/.

Upon submission of the administrative claim and its supporting documents, the same shall be processed and no other documents shall be accepted/requested from the taxpayer.

3. Mandatory 120+30 Day Period: In case of full or partial denial of the claim for tax refund or TCC, or the failure on the part of the CIR to act on the application within the period prescribed above, the taxpayer affected may file an appeal in one of two ways: (1) file the judicial claim within 30 days after the Commissioner denies the claim within the 120-day period, or (2) file the judicial claim within 30 days from the expiration of the 120-day period if the Commissioner does not act within such period.

4. Exception to the Mandatory and Jurisdictional Nature of the 120+30 day Period: As an exception to the 120+30 day period, it was emphasized that from the time of issuance of BIR Ruling No. DA-489-03 on December 10, 2003 up to its reversal by the Supreme Court in the Aichi case on October 6, 2010 (or a period of almost 7 years), taxpayers/claimant need not wait for the lapse of the 120-day period before it could seek judicial relief with the CTA. This exception, however, is limited to cases of premature filing (filing of judicial claim prior to the lapse of the120-day period) and does not extend to late filing of a judicial claim.

5. Pending Administrative Claim: The CIR shall lose jurisdiction over an administrative claim once the taxpayer has filed a “petition for review” with the CTA.
Failure to file the judicial claim with the CTA within 30 days from expiration of the 120-day period shall render the Commissioner’s decision or inaction which is “deemed a denial”, final and unappealable. This rule will apply to all pending administrative claim for refund/tax credit.

This Circular shall take effect immediately.