QuestionsQuestions (BIR REGULATIONS NO. 5-2000)
A TCC is a certification, duly issued in a BIR accountable form by the Commissioner (or authorized representative) to the named taxpayer, acknowledging that the grantee is legally entitled to a tax credit. It has a money value that may be used to pay internal revenue tax liabilities (subject to exclusions/limitations), converted as a cash refund, or otherwise disposed of as allowed under the regulations.
A tax credit is the amount due to a taxpayer resulting from an overpayment of a tax liability or an erroneous payment of a tax due.
A TDM is a certification issued by the Commissioner (or authorized representative) acknowledging that the taxpayer paid internal revenue tax liability through the use of a TCC. The TDM serves as the official receipt, and the amount shown is charged against and deducted from the credit balance of the TCC.
TCCs may be granted for (a) excess quarterly income taxes paid per final adjustment return, (b) overwithholding at source not deducted/applied against income tax due, (c) certain input taxes (zero-rated/ effectively zero-rated sales; capital goods imported or locally purchased by VAT taxable person), (d) unused input taxes from cancellation/cessation or change of VAT status, (e) specific excise taxes paid (e.g., petroleum products sold to tax-exempt entities/international carriers; goods actually exported without returning to the Philippines), and (f) taxes erroneously/illegally paid or penalties imposed without authority.
No. The regulations state that a taxpayer erroneously registered as a VAT person will not be covered by paragraphs (c) and (d) of Section 2.
No. It expressly states that in no case shall a tax refund or tax credit certificate be given resulting from availment of incentives under special laws for which no actual tax payment was made.
A TCC may not be used for: (a) payment/remittance of any kind of withholding tax, (b) payment arising from availment of tax amnesty, (c) payment of deposits on withdrawal of exciseable articles, (d) payment of taxes not administered or collected by BIR, and (e) payment of compromise penalty.
Transfer is allowed only if: (i) the transfer has prior approval by the Commissioner (authorized representative) who verifies validity and balance; (ii) the transfer is limited to one transfer only; and (iii) the transferee must use it strictly to pay the transferee’s direct internal revenue tax liability and cannot convert it to cash in the transferee’s hands.
The TCC to be transferred must be presented before the Commissioner (or authorized representative) for verification. If valid and with creditable balance, it must be marked “Valid for Transfer,” countersigned by the officer.
Yes. The original copy of the TCC is cancelled even if only part of its face value is transferred. New TCC(s) are issued for the respective transferred portions and/or the remaining balance for the account of the transferor.
Conversion may be requested during the TCC’s validity period. The original TCC showing creditable balance must be surrendered to the Asst. Commissioner, Collection Service (or authorized Revenue Officer) for verification and cancellation.
If a refund check or treasury warrant is not cashed or claimed within five (5) years from the date of issue, mailing, or delivery (whichever comes later), it is forfeited in favor of the Government and the amount reverts to the General Fund.