Refunds or Tax Credits of Input Tax: Zero-Rated Sales
- Applicable only to VAT-registered persons.
- Refunds or credits granted for value-added taxes (VAT) paid on zero-rated sales of goods and services.
- Refund application for export sales must be filed within two years from export date.
- For other zero-rated sales, application must be filed within two years after the close of the quarter in which the sales occurred.
Refunds or Tax Credits of Input Tax: Capital Goods
- Applicable only to VAT-registered persons.
- Refunds or credits granted for VAT paid on capital goods, provided such input taxes have not been applied against output taxes.
- For ongoing businesses, refund applications can be made only after two successive quarters following the end of the taxable quarter in which input tax was paid.
- For newly registered VAT persons, refund can be applied for only after 180 days from registration or actual start of business, whichever is later.
- Refunds must be filed within two years from payment of the tax.
- Refunds apply proportionally if capital goods are used for both taxable and exempt operations.
- Special rules apply to transactions involving BOI-registered pioneer enterprises with partially VAT-exempt sales.
Claims for Tax Credits and Refunds Procedures
- Application for tax credit/refund must be filed using BIR Form No. 2552.
- Filed with the Revenue District Office where the principal place of business is located or directly to the Commissioner (VAT Division).
- Required documents include original invoices/receipts for cancellation, copies of export or sales documents, statements of inward remittance of foreign currency from Central Bank or accredited banks, and other supporting documents as applicable.
- Detailed documentary requirements depending on type of transaction (export sales, zero-rated services, capital goods, regulated sales).
- Refundable amount limited to VAT paid directly and attributable to zero-rated transaction.
- If input taxes cannot be directly attributed, use formula to prorate refundable input tax based on proportion of zero-rated sales to total sales.
Cancellation of VAT Registration and Refund Application
- Persons whose registration was cancelled due to retirement, cessation, or status change may apply for unused input tax credit within two years from cancellation date.
- Application filed with Revenue District Officer where principal place of business was located.
- Must be accompanied by an acknowledged copy of the final VAT return.
Filing Returns and Payment Procedures (Amendment to Section 23(b))
- Returns with cash payment should be filed with an accredited bank in the taxpayer's locality.
- If no accredited bank available, filing can be made with collection agents, authorized municipal treasurers, or Revenue District Officers.
- Returns without cash payments filed with Revenue District Officer, collection agents, or municipal treasurer.
- Returns with payment wholly in Tax Credit Certificate (BIR Form No. 2320) must be filed with the Revenue District Officer.
- Tax Debit Memo (BIR Form No. 2321) issued showing serial number and amount covered by Tax Credit Certificate.
- Partial payments using Tax Credit Certificates and cash require issuance of Tax Debit Memo for the certificate portion and proper filing of return with the appropriate accredited institution.
Effectivity
- The amended regulations become effective upon approval dated April 7, 1988.
- Signed by the Secretary of Finance, Vicente R. Jayme.