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BIR Revenue Regulations No. 26-2018 (27 December 2018)

Amends Certain Provision of Revenue Regulations No. 13-2018 to Implement the 90-Day Processing of Claim for VAT Refund Under Section 112(C) of the Tax Code of 1997, as amended by Republic Act (R.A.) No. 10963, Otherwise Known as TRAIN

Sections 4.106-5, 4.108-5, 4.112-1 and 13 of RR No. 13-2018, are further amended as follows:

“SEC. 4.106-5. Zero Rated Sales of Goods or Properties. – xxx.

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Provided, That items (2), (3), and (4) abovementioned shall be subject to the twelve percent (12%) Value-Added Tax (VAT) and no longer be subject to zero percent (0%) VAT rate upon satisfaction of the following conditions:

1. That successful establishment and implementation of an enhanced VAT refund system that grants refunds and pays refunds of Creditable Input Tax within ninety (90) days from the filing of the VAT refund application with the Bureau: Provided, That, to determine the effectivity of Item no. 1, all applications filed from January 1, 2018 shall be processed and decided within ninety (90) days from the filing of the VAT refund application.

The 90-day period to process and decide shall start from the filing of the application/claim for refund up to the release of the payment of the VAT refund. Provided That, the claim/application is considered to have been filed only upon submission of the official receipts or invoices and other documents in support of the application as prescribed under pertinent revenue issuances.

The Secretary of Finance shall provide transitory rules for the grand of refund under the enhanced VAT Refund System after the determination of the fulfillment of the condition by the Commissioner of Internal Revenue as provided in item 1 paragraph 1 hereof; and

2. All pending VAT refund claims as of December 31, 2017 shall be fully paid in cash by December 31, 2019.

Provided, that the Department of Finance shall establish a VAT refund center in the BIR and in the Bureau of Customs (BOC) that will handle the processing and granting of cash refunds of creditable input tax.

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SEC. 4.108-5. Zero Rated Sale of Services.

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Provided, That subparagraphs (b)(1) and (b)(5) abovementioned shall be subject to the twelve percent (12%) Value-Added Tax (VAT) and no longer be subject to zero percent (0%) VAT rate upon satisfaction of the following conditions:

1. That successful establishment and implementation of an enhanced VAT refund system that grants refunds and pays refunds of creditable input tax within ninety (90) days from the filing of the VAT refund application with the Bureau: Provided, That, to determine the effectivity of Item no. 1, all applications filed from January 1, 2018 shall be processed and decided within ninety (90) days from the filing of the VAT refund application.

The 90-day period to process and decide shall start from the filing of the application/claim for refund up to the release of the payment of the VAT refund. Provided That, the claim/application is considered to have been filed only upon submission of the official receipts or invoices and other documents in support of the application as prescribed under pertinent revenue issuances.

The Secretary of Finance shall provide transitory rules for the grand of refund under the enhanced VAT Refund System after the determination of the fulfillment of the condition by the Commissioner of Internal Revenue as provided in item 1 paragraph 1 hereof; and

2. All pending VAT refund claims as of December 31, 2017 shall be fully paid in cash by December 31, 2019.

Provided, that the Department of Finance shall establish a VAT refund center in the BIR and in the Bureau of Customs (BOC) that will handle the processing and granting of cash refunds of creditable input tax.

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SEC. 4.112-1. Claims for Refund/Credit of Input Tax. -

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(d) Period within which refund/credit of Input Taxes shall be made

In proper cases, the Commissioner of Internal Revenue shall grant refund for creditable input taxes within ninety (90) days from the date of submission of the official receipts or invoices and other documents in support of the application filed in accordance with subsections (a) and (b) hereof; Provided, That, should the Commissioner find that the grant of refund is not proper, the Commissioner must state in writing the legal and factual basis for the denial.

The 90-day period to process and decide shall start from the filing of the claim up to the release of the payment of the VAT refund. Provided, that, the claim/application is considered to have been filed only upon submission of the official receipts or invoices and other documents in support of the application as prescribed under pertinent revenue issuances.

In case of full or partial denial of the claim for tax refund, the taxpayer affected, may within thirty (30) days from the receipt of the decision denying the claim, appeal the decision with the Court of Tax Appeals (CTA). Provided, that failure on the part of any official, agent or employee of the BIR to act on the application within the ninety (90)-day period shall be punishable under Section 269 of the Tax Code, as amended. Provided further, That, in the event that the 90-day period has lapsed without having the refund released to the taxpayer-claimant, the VAT refund claim may still continue to be processed administratively. Provided however, That the BIR official, agent or employee who was found to have deliberately caused the delay in the processing of the VAT refund claim may be subjected to penalties imposed under said section.

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The foregoing amendment, relative to the 90-day processing period of claims to include the payment thereof, shall apply to claims to be filed upon the effectivity of the Regulations.


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