Tax Alert No. 10 [Revenue Memorandum Circular (RMC) No. 37-2025 dated 10 April 2025]

Prescribes the streamlined procedures and guidelines on the mandatory requirements for claims of VAT refund under Section 112 of the NIRC of 1997, as Amended (Tax Code), except those pursuant to a writ of execution by the Courts 

Please be informed that the BIR issued Revenue Memorandum Circular (RMC) No. 37-2025 on 10 April 2025 to provide uniform guidelines and prescribe the revised mandatory documentary requirements in the processing and grant of VAT refund claims under Section 112 of the Tax Code, in line with the latest developments on VAT introduced by Republic Act (R.A.) No. 12066 or the CREATE MORE Act.  

1. Coverage of the RMC:
   
   Claims for VAT refund under Section under Section 112(A) and (B) of the Tax Code, except those pursuant to a writ of execution by the Courts, that are filed on 1 April 2025 and thereafter.
   
   
2. General Policies

• Pursuant to Section 6 of Revenue Regulations (RR) No. 10-2025, the time frame to process and grant claims for VAT refund is ninety (90) days from the date of submission of the certified true copies of the invoices or official receipts and other documents in support of the application filed in accordance with Section 112(A) and (B) of the Tax Code, up to the release of the payment for the approved amount of the refund. 
• VAT refund claims shall be physically or manually filed at the designated processing office authorized to receive applications. 
• Only applications with complete documentary requirements, as enumerated in the Checklist of Requirements (Annexes "A.1.1", "A.1.2", or "A.2", whichever is applicable), shall be received and processed by the authorized processing office. 
• VAT refund claim filed beyond 2-year prescriptive period shall be accepted. However, the processing shall recommend outright denial thereof. 
• The approved VAT refund may be used to settle or collect either fully or partially the outstanding delinquent tax liability of taxpayer-claimant with outstanding tax liabilities (final and executory). 
• Rules for VAT refund claims where the period covered starts from 1 April 2025, are as follows: 

1. Export-oriented enterprises (EOE) meeting the 70% export threshold from the preceding taxable year cannot claim input VAT refunds if local suppliers passed on VAT despite securing a VAT zero-rating certificate from the EMB. EOEs may contest or resolve with suppliers for reimbursement of the VAT paid or convert transactions from 12% VAT to 0% VAT. 
2. Upon the effectivity of the CREATE MORE Act and its implementing rules and regulations, EOEs can apply for a VAT zero-rating on local purchases and VAT exemption on importations through the EMB. EMB will certify direct export sales of qualified taxpayer-claimants, and the BIR will verify export sales based on EMB certifications. 
3. EOEs meeting the 70% export threshold but failing to secure EMB certification cannot claim VAT refunds for the succeeding year. Unutilized input VAT may be carried forward to subsequent taxable quarters and can be utilized against future VAT liabilities. 
4. EOEs below the 70% threshold must submit EMB notifications confirming their status for the preceding year to claim input VAT refunds for local purchases attributable to zero-rated sales.  
5. No input VAT can be claimed until VAT is paid on purchases from RBE-sellers

You may access the full version of the RMC and the corresponding Annexes through the BIR website. 

For any inquiry or request for assistance, please feel free to contact anyone from our Tax Services group. You may also reach us through this link