RMC No. 71-2023 — Provides streamlined guidelines and mandatory requirements for claims of Value-Added Tax (VAT) Credit/Refund except those under the authority and jurisdiction of the Legal Group Digest | Full Text | Annex A.1 | Annex A.1.1 | Annex A.1.2 to A.1.7 | Annex A.2 | Annex A.3

REPUBLIC OF THE PHILIPPINES

BUREAU OF INTERNAL REVENUE DEPARTMENT OF FINANCE

Quezon City

JUN 2 3' 2023

REVENUE MEMORANDUM CIRCULAR NO. 7! - 2023

SUBJECT : Provides Streamlined Guidelines and Mandatory Requirements for Claims of

Value-Added Tax (VAT) Credit/Refund Except Those Under the Authority and Jurisdiction of the Legal Group

TO : All Internal Revenue Officials, Employees and Others Concerned

This Circular is issued 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 of 1997, as amended (Tax Code, as amended), in (ine

Corporate Recovery and Tax Incentives for Enterprises Act or the CREATE Act. with the latest developments on VAT introduced by Republic Act (R.A.) No. 10963 or the Tax Reform for Acceleration and Inclusion or TRAIN and R.A. No. 11534, also known as

I. GENERAL POLICIES

1. Pursuant to Section 2 of Revenue Regulations (RR) No. 26-2018, which amended

Sections 4.106-5, 4.108-5, 4.112-1 and 13 of RR No. 13-2018, the time frame to

submission of the official receipts or invoices and other documents in support of the application filed in accordance with Sections I12 (A) and (B) of the Tax Code of 1997, as amended, up to the release of the payment for the approved amount of the refund. process and grant claims for VAT refund is ninety (90) days from the date of

2. The "Application for VAT Credit/Refund Claims" (BIR Form No. 1914) shall be received by the processing offices, to wit:

a. The VAT Credit Audit Division (VCAD) in the National Office for claims of fuel from renewable energy sources pursuant to Section 108(B)(7) of the Tax Code, as amended, in which case, Item 2(b) hereof shall apply: direct exporters, regardless of the percentage of export sales to total sales, pursuant to Section 106(A)(2)(a)(1) and 106(A)(2)(a)(6) for sale of goods and Sections 108(B)(2), 108(B)(4), and 108(B)(6) for sale of services, and whose claims are anchored under Section I12(A) of the Tax Code, as amended, except for claims with a mix of VAT zero-rated sales emanating from sales of power or

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b. Claims of taxpayer-claimants (1) engaged in other VAT zero-rated activities,

not limited to renewable energy developers pursuant to Section 108(B)(7) of the VAT zero-rated sales, pursuant to Section l12(A) of the Tax Code, as amended; other than direct exports mentioned in Section (I)(2)(a) of this Order, such as but Tax Code, as amended, and. those with indirect exports classified as effectively

Sections 204 and 229 of the Tax Code, as amended, shall be filed at the following.. status to non-VAT but with accumulated unutilized input taxes pursuant to : Section 112(B) of the Tax Code, as amended; and (3) those with claims for : recovery of erroneously or illegally assessed or collected VAT pursuant to : offices which have jurisdiction over the taxpayer-claimant: (2) whose VAT registration has been cancelled or change in the VAT registration

b.1 The VAT Audit Section (VATAS) in the Regional Assessment Division; or

b.2 The respective Revenue District Office (RDO) if without VATAS; or

b.3 The Large Taxpayers VAT Audit Unit (LTVAU) of the Large Taxpayers Service (LTS).

3. Subject to the provisions of Sec. 4.112-1(b) of RR No. 13-2018, the filing of the claim

for VAT refund of a VAT-registered person whose registration has been cancelled due to retirement from or cessation of business, or due to changes in or cessation of

Revenue (BIR) office which has jurisdiction over the taxpayer, within two (2) years from the date of issuance of the tax clearance by the BIR. status under Section 106(C) of the Tax Code shall be at the Bureau of Internal

4. The taxpayer-claimant shall ensure the completeness and authenticity of the be received and processed by the authorized processing office. Checklist of Requirements (Annexes A.1, A.2 or A.3, whichever is applicable), shall documentary requirements upon filing of the application for VAT refund. Hence, only applications with complete documentary requirements, as enumerated in the

5. In case where the taxpayer-claimant filed VAT refund claim beyond the 2-year the claim shall still be accepted, however, the processing office shall recommend prescriptive period required to file under Section 112 of the Tax Code, as amended.

outright denial of the claim.

6. If upon filing or during the processing of the VAT refund claim, the taxpayer-claimant has outstanding tax liabilities (final and executory) as defined under Section II(1) of may be used or settle to collect either fully or partially of the outstanding delinquent tax liability subject to existing tax laws and revenue issuances on the enforcement and settlement of delinquent accounts. Revenue Memorandum Order No. 11-2014, and evidenced by Delinquency Verification Certificate (DVC) (Annex "B) prescribed in Revenue Memorandum Circular No. 64-2019, the ensuing approved VAT refund shall be referred for garnishment to the Collection Section of the Revenue District Office and Collection Division of the Revenue Region having jurisdiction over the taxpayer-claimant, as

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7. The person who will sign and file the application for VAT refund, execute affidavit/s and/or such other document/s supporting the claim shall be duly authorized by the

designating/authorizing said representative of the corporate claimant or sole taxpayer-claimant. The "Secretary's Certificate" or "Special Power of Attorney

proprietorship/partnership, as the case may be, should be notarized and must be presented to the processing: office, together with one (l) valid government-issued Identification Card (ID) of the said authorized representative.

H. DOCUMENTS TO BE SUBMITTED BY THE TAXPAYER-CLAIMANT UPON FILING OF THE APPLICATION FOR VAT CREDIT/REFUND

1. The application/s must be accompanied with complete supporting documents enumerated in the Checklist of Requirements under Annexes A.1, A.2 or A.3, whichever is applicable. As could be gleaned from the said list of mandatory

requirements, most documents or data that can be culled from the records of the BIR are no longer required to be submitted in compliance with The Ease of Doing

from submitting copies of the same to aid the processing offices in the timely Business Law (R.A. No. 11032). However, the taxpayer-claimants are not precluded

processing of the claim.

2. The original copies of invoices/receipts for sales and purchases shall be submitted for verification by the assigned Revenue Officers (ROs), which shall be forwarded to the

cost, stating therein the reason for the request and the specific document/s that need/s claimant of such transmittal. Should there be a need to obtain a copy of the same, the Commission on Audit (COA) if the claim is approved for refund with notice to requesting party shall submit a written request for a certified copy with COA at no

to be certified.

However, for claims that have been denied in full, the processing office shall return

the taxpayer-claimants after stamping "VAT Credit/Refund Processed" to the the original copies of supporting sales invoices or receipts for sales and purchases to

supporting sales invoices or receipts for purchases.

3. Claims for refund of unutilized input VAT on importation shall be supported with a "VAT Payment Certification" issued by the Revenue Accounting Division (RAD) of Administrative Document (SAD). Only the importations anpearing on_the amount. the Bureau of Customs (BOC), including the supporting Import Entry and. Internal Revenue Declarations (IEIRD)/Inforimal Import Declaration and Entry or Single certification_of BOC-RAD shall be considered in the computation of refundable

4. For the amortized portion of the input VAT on aggregate purchases of capital goods 110(A)(2)(b) of the Tax Code of 1997, as amended, the following rules shall apply: exceeding one million pesos (Pl,000,000.00) in a month pursuant to Section

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a. For current claims, the corresponding sales invoices and/or official receipts. including proofs of payment, if qualified as "big ticket" purchase, shall be required to be submitted and verified.

b. For the amortized deferred input VAT which originated. from purchases prior to the

period of claim, acceptability of supporting documents is clarified as follows:

b.1 If the source documents of the capital goods were submitted and verified in the subsequent claims. The copy of the schedule should be authenticated by during the time they were claimed, there is no need to re-submit the same in the approved report will be the basis in determining the amortized portion the head of the processing office by marking "Certified True Copy from the Original" on each and every page thereon to clearly show that the purchases have been duly verified in the previous VAT refund claim/s. In this regard, the processing office shall maintain a file for every claimant with amortized input source documents. Instead, the schedule of amortization of deferred input VAT

processing office shall compare/reconcile the current amount claimed vis-a- vis the amount indicated in the schedule/s. VAT on purchases of capital goods exceeding P1,000,000.00 in a month. The

b.2 For claims coming from the amortized portion of the deferred input VAT on importation of capital goods, photocopies of previous certifications from BOC-RAD, in addition to the schedules as certified mentioned above. b.3 In case the input VAT of capital goods was disallowed due to noncompliance

with the invoicing requirements for local purchases or for some other reasons

purchases for the current claim and thereafter. taxpayer-claimant is already barred from claiming the input VAT from the said which may warrant absolute disallowance of the corresponding input VAT, the

b.4 For purchase/importation of capital goods made starting January 1, 2022 no amortization shall be made and the input VAT shall be claimed on the month of purchase in accordance with Section 110 (B) of Tax Code, as

amended.

5. Only the tax returns filed by the taxpayer-claimant, particularly the quarterly and/on

or before the date of application of the VAT refund or the issuance of a Letter of Authority, whichever comes first, shall be considered in the processing of the claim. return/s showing the deduction of the amount of input VAT sought to be refunded, on Annual Income Tax Returns, the Quarterly VAT Returns and the quarterly VAT

6. The taxpayer-claimant shall attach a notarized sworn certification (Annex "A.1.1) accounting records shall be presented by the taxpayer-claimant upon written request of the assigned ROs. Failure to present the books of accounts and accounting records attesting to the completeness of the documents submitted. Accordingly, the claim/s relevant to the claim/s may be a ground for denial of the claim. shall be processed based on the documents submitted. The books of accounts and

7. For claims filed under Section 112(B) of the Tax Code, as amended, despite the closure or cessation of the business, the taxpayer-claimant must ensure cooperation

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verification if there are issues or findings that need further clarification so as not to with the assigned ROs and availability of all documents that may be requested during

cause delay on the 90-day processing of the VAT refund/credit. Failure to cooperate or submit the requested documents, other than the mandatory requirements, by the assigned ROs may result in the full or partial denial of the claim.

HH. EFFECTIVITY

This Circular shall take effect for VAT refund/credit claims that will be filed starting July 1,2023

amended, modified or revoked accordingly. All revenue issuances and BIR Rulings inconsistent herewith are hereby considered

this Circular as wide a publicity as possible. All internal revenue officials and employees concerned are hereby enjoined to give

ROMEOD.LUMAGUI, JR. Commissioner of Internal Revenue 010240

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