Unused tax credit certificates to be converted to cash after a year

TAX CREDIT certificates (TCCs) that remain unused for more than one year will be converted into cash, the Bureau of Internal Revenue (BIR).

BIR Commissioner Caesar R. Dulay issued Revenue Regulations (RR) 14-2020 on Thursday to amend provisions on the cash conversion of unutilized TCC.

The directive was approved by Finance Secretary Carlos G. Dominguez III on March 6.

“Any TCC which remains unutilized for more than one year at any given interval of time during its validity shall be converted into cash with prior written notice by the BIR, subject to the availability of funds in accordance with the procedural requirements that will be issued by the BIR for this purpose,” the amended rules read.

A TCC is a document reflecting the amount due to a taxpayer from the overpayment or erroneous payment of taxes.

A taxpayer has the option to use the TCC as payment for any tax liabilities via a tax debit memo (TDM) or it can be converted into cash “in case the taxpayer-owner has no…use for it,” according to BIR.

A taxpayer can file a request to convert the unused tax credits into a cash refund within the validity period of the TCC provided that the original copy is surrendered to the BIR for verification and cancellation and a refund check or treasury warrant is issued.

However, a refund check that will remain “uncashed or unclaimed within five years” from the day it was issued will be “forfeited in favor of the government.” The amount will be remitted back to the state’s general fund.

“All TCCs which are already expired upon the effectivity of this regulations shall be automatically cancelled by the BIR, except those TCCs which are with the BIR, for purposes of utilization thru TDM, conversion or revalidation, before the expiration of their respective dates of validity,” the bureau said.

The regulations will take effect 15 days after the RR 14-2020’s publication on Friday, May 29. — B.M. Laforga