REVENUE MEMORANDUM CIRCULAR NO. 17-2018 issued on March 8, 2018 amends certain provisions of Revenue Memorandum Circular Nos. 89-2017 and 54-2014 regarding the processing of claims for issuance of Tax Refund/Tax Credit Certificate (TCC) in relation to amendments made in the National Internal Revenue Code (NIRC) of 1997, as amended by Republic Act No. 10963 (Tax Reform for Acceleration and Inclusion [TRAIN] Law).
The Tax Verification Notices (TVNs) shall be issued by the head of the processing office in the verification of claims for Value-Added Tax (VAT) refund and shall be manually issued until such time that the Tax Verification Notice Monitoring System (TVNMS) is fully operational.
The time frame to grant claims for VAT refund is ninety (90) days from the date of submission of the official receipts or invoices and other documents in support of the application filed. The processing of claims based on submitted documents shall not be construed as an audit/investigation; hence, the taxpayer-claimant may be issued subsequently a Letter of Authority (LA) by the VAT Audit Section (VATAS) in the Regional Assessment Division or the investigating office having jurisdiction over the taxpayer-claimant.
Any findings in the course of the verification/review of the VAT claims that may lead to a deficiency in internal revenue taxes, other than VAT, shall be communicated by the processing/reviewing office to the concerned investigating office having jurisdiction over the taxpayer-claimant. However, if the findings involve VAT, these may result to disallowance or denial of the claim, or if the case warrants, for possible assessment of VAT liability. Should the claim be for denial, such fact should be communicated in writing to the taxpayer within the 90- day period.
Cases where the results would be an assessment on VAT instead of a refund/TCC should be referred to the VATAS, for Regional Offices where the VATAS is already in place, Revenue District Office (RDO), Large Taxpayers Audit Division or Large Taxpayers VAT Audit Unit (LTVAU), as the case may be. A copy of the Revenue Officer’s memorandum report and documents relevant to the findings shall be furnished to the aforesaid offices. The concerned Revenue District Officer/Chief of LT Audit Division/Head of VATAS/Head of LTVAU shall evaluate the report/findings referred to them and shall request for the issuance of an electronic LA (eLA), if warranted.
However, if there is already an existing eLA covering the same period, the concerned office shall consolidate the findings referred to them with their findings and recommend the issuance of a Notice for Informal Conference/Preliminary Assessment Notice/Final Assessment Notice for the collection of the deficiency tax. Subsequently, a feedback on the action taken shall be sent to the VAT claim processing office within fifteen (15) days from receipt of the findings.
All claims by direct exporters shall be filed with and processed by the VAT Credit Audit Division (VCAD), including direct exporters under the jurisdiction of the Large Taxpayers Service. All claims processed by the VCAD shall be reviewed by the Tax Audit Review Division (TARD) prior to approval of the claims. The following are the authorized approving revenue officials for said claims:
Amount of Claim Approving Revenue Official
Not more than P 50,000,000.00 ACIR – Assessment Service
More than P 50,000,000.00 DCIR – Operations Group
up to P 150,000,000.00
Amount of Claim Approving Revenue Official
More than P 150,000,000.00 Commissioner of Internal Revenue
All claims for VAT refund by other zero-rated taxpayers, indirect exporters and claims filed in accordance with Sec.112 (B) of the Tax Code, as amended, shall be filed with and processed by the concerned Revenue District Office and LT Audit Division having jurisdiction over the taxpayer-claimant. The docket with report on said claims shall be reviewed by the Assessment Division/Office of the Head Revenue Executive Assistant (HREA), and shall be subject to approval/disapproval by the Regional Director/ACIR–LTS, as the case may be, irrespective of amount.
An eLA shall be issued to cover the audit/verification of claims for issuance of tax refund/TCC other than VAT through the Electronic Letter of Authority Monitoring System (eLAMS) or Case Management System (CMS) of the electronic Tax Information System (eTIS).
The RDO shall process all claims for tax refund/TCC filed by their registered taxpayers-claimants which shall be reviewed by the Assessment Division prior to transmittal to the Regional Director. The Regional Director shall be the authorized approving official for claims amounting to Ten Million (10M) Pesos and below. For claims exceeding 10M Pesos, the reports on the said claims shall be signed by the Regional Director, who shall recommend the approval/issuance of the Tax Refund/TCC. The docket for claims exceeding 10M shall be transmitted to the TARD for further review prior to approval of the revenue officials in accordance with the thresholds specified above. All memorandum reports recommending claims within the applicable thresholds hereof shall be signed by the Assistant Commissioner–Assessment Service, prior to final approval by the Deputy Commissioner–Operations Group/Commissioner of Internal Revenue.
All claims filed with and processed by the Divisions under the LTS shall be reviewed by the Head Revenue Executive Assistant prior to approval by the ACIR–LTS.
The 90-day period prescribed under 112 (C) of the Tax Code, as amended, shall start from the actual date of filing of the application with complete documents duly received by the processing office. The 90-day period shall be applied prospectively, i.e., for claims filed upon the effectivity of RA No. 10963.
The following time frame shall be strictly adhered to by the processing, reviewing and approving offices:
| VCAD Cases | No. of Days from Receipt of Application | ||
|---|---|---|---|
| For claims not more than ₱50,000,000.00 | For claims more than ₱50,000,000.00 up to ₱150,000,000.00 | For claims more than ₱150,000,000.00 | |
| Verification/processing | 65 | 60 | 55 |
| Review (TARD) | 20 | 20 | 20 |
| Recommending/Final Approval | |||
| ACIR-AS | 5 | 5 | 5 |
| DCIR-OG | 5 | 5 | 5 |
| CIR | 5 | ||
| Total No. of Days | 90 | 90 | 90 |
| LTS Cases | No. of Days from Receipt of Application |
|---|---|
| Verification/processing | 60 |
| Review (Office of the HREA) | 20 |
| Approval by ACIR-LTS | 10 |
| Total No. of Days | 90 |
| Regional Cases | No. of Days from Receipt of Application |
|---|---|
| Verification/processing RDOs | 60 |
| Review (Assessment Division) | 20 |
| Approval by Regional Director | 10 |
| Total No. of Days | 90 |
The application must be accompanied by complete supporting documents enumerated in the Revised Checklist of Mandatory Requirements for claims filed pursuant to Sec. 112 (A) of the Tax Code, as amended, or Checklist of Documentary Requirements for claims filed under Sec. 112 (B) of the same Tax Code.
The taxpayer-claimant shall also attach a notarized sworn certification attesting to the completeness and veracity of the documents submitted. Accordingly, the claim shall be processed based on the documents submitted, as well as the books of accounts and accounting records presented by the taxpayer-claimant.
Failure on the part of the taxpayer-claimant to submit the relevant vital document/s in support of his/its claim upon filing of the application shall result to non-acceptance of the application, and failure to present the books of accounts and accounting records relevant to the claim is a ground for its denial.
All pending claims shall continue to be processed in accordance with Revenue Regulations No. 1-2017. These claims shall be acted upon by the concerned offices not later than June 30, 2018.
Claims in the possession of the Revenue District Offices and Regional Offices as of the effectivity of this Circular, including those claims which require further review and approval by the National Office shall no longer be transmitted to the TARD. The concerned Regional Assessment Division shall review these claims prior to transmittal to the Regional Director, for approval/disapproval of the claim.
Claims in the possession of offices under the Assessment Service shall be acted upon based on the specified thresholds, while claims in the possession of offices under the LTS shall be subject to approval/disapproval of the ACIR-LTS after review of the respective HREAs. All current pending claims filed prior to the effectivity of the TRAIN Law shall be processed within the 120-day period, as clarified by RMC No. 54-2014.
Any revenue officer or official who fails to act on the application for claims for issuance of Tax Refund/TCC within the 90-day period shall be punishable under Section 269 of the Tax Code, as amended