THE BUREAU of Internal Revenue (BIR) has extended anew the deadline for processing value-added tax (VAT) refund claims affected by a 2014 rule that had initially denied many of them.
In Revenue Memorandum Circular 102-2018 published yesterday, the BIR extended the deadline by a little over three months to March 29, 2019, from Dec. 14 previously. This is the second time it extended the deadline. In mid-June, the BIR extended the deadline by about six months from June 30 initially, to Dec. 14. The initial June 30 deadline was set in February last year.
The timetable for processing VAT refund claims is applicable to those affected by RMC No. 54-2014 The BIR under previous leadership implemented a 2014 circular that gave the Commissioner 120 days to decide on VAT refund applications, with inaction after the period “deemed a denial.” Claimants were also given 30 days from denial to elevate the claim to the Court of Tax Appeals.
The BIR implemented this rule retroactively, affecting many taxpayers’ pending claims and the chance to elevate them to the tax court upon expiration of the “120+30”-day period.
The BIR under the Duterte administration then issued Revenue Regulation 1-2017 in January last year to give “fair and adequate relief to taxpayer-claimants,” following a Supreme Court ruling that taxpayers “have every right to pursue their claims in the manner provided by existing regulations at the time it was filed,” and that RMC No. 54-2014 “cannot be applied retroactively as this would prejudice taxpayers whose VAT claims for tax credit or tax refund were filed and pending before June 11, 2014 the date RMC No. 54-2014 took effect.”
Deputy Commissioner Arnel SD. Guballa said the backlog of the applicable VAT refund claims are not that big, noting that the bureau will be able to act on pending claims within the adjusted timetable. “Kakayanin (We will manage),” he said by phone.
Under the tax code, VAT-registered taxpayers can claim a refund of their creditable input tax due or apply for a tax credit certificate for their zero-rated sales within two years from the end of the taxable year when sales were made.
Under Republic Act No. 10963, or the Tax Reform for Acceleration and Inclusion Act that took effect in January, the maximum processing time for VAT refund claims is 90 days, shorter than the previous 120 days.
The BIR on Wednesday has also issued clarifications on the tax treatment of the Personal Equity and Retirement Account (PERA).
The BIR published Revenue Memorandum Circular No. 99-2018 on Wednesday, providing frequently asked questions on administrative guidelines for PERA tax treatment.
It said that employers’ contributions to employees’ PERA are not subject to 35% fringe benefits tax and that contributing employers are not entitled to a five percent tax credit.
Employers are not affected by penalties for early withdrawal by employees from their PERA and neither will early withdrawals result in penalties on the transfer of funds from a PERA administrator to another.
Opening PERA accounts do not require the submission of a tax identification number, according to the circular.
It said that overseas Filipinos are also entitled to tax credit certificates in relation to a PERA.
Among others, the BIR also said that PERA transactions are subject to the 20% stock transactions tax.
The PERA was launched in 2016, seeking to encourage Filipinos to save up for their retirement through voluntary contributions, complementing mandatory contributions in state-run pension funds of the Government Service Insurance System for state employees and the Social Security System for those in the private sector. — E. J. C. Tubayan