RMC 54-2014
The Bureau of Internal Revenue issued Revenue Regulation (RR) No. 1-2017 to clarify Revenue Memorandum Circular (RMC) No. 54-2014, regarding its retroactive application of pending claims that were deemed denied upon the expiration of the 120-day period. The clarification stemmed from the Supreme Court’s decision in Pilipinas Total Gas, Inc. vs The Commissioner of Internal Revenue on Dec. 8, stating that RMC No. 54-2014 cannot be applied retroactively for those value added tax (VAT) claims for tax credit or refund that were filed and pending prior to June 11, 2014, the date the RMC took effect. The taxpayer is given every right to apply for his claim in accordance with existing regulations at the time of filing.
Prior to RMC No. 54-2014, RMC No. 49-2003 provides that with pending claims that have not been acted upon by the BIR due to incomplete documentation, the taxpayer has 30 days to submit documentary requirements, unless given further extension. The application shall only be officially received upon the submission of complete documents.
Furthermore, the following claims that were filed and pending before the effectivity of RMC No. 542014 are not covered by RR No. 1-2017:
1. Claims filed beyond the two-year statutory prescriptive period under Sec 112 (A) of the Tax Code;
2. Those denied in writing by the approving authority;
3. Those approved or granted fully or partially by the approving authority; and,
4. Those already appealed to and pending with the Commission on Tax Appeals unless there is proof of withdrawal of the case filed thereof.
The application of VAT claims for refund or credit will continue to be processed administratively under the following rules:
1. The taxpayer has two years after the close of the taxable quarter when the sales were made, to apply for tax refund or credit. Thus, the taxpayer must have submitted his complete documents in support of the filed application before the administrative claim is barred by prescription; and,
2. In all cases, documents that support the claim must be completed within the two-year period and the BIR should have decided on the claim within 120 days from the submission of the complete documents.
Please be guided accordingly.