BIR Ruling

August 10, 1973 MEMORANDUM FOR: Revenue Operations Head (Assessment) This refers to your Memorandum dated July 25, 1973 requesting information whether refund of excessive income tax withheld for 1971 and prior years also earn 6% annual interest, as in the case of the 1972 excessive income tax withheld, if the refund is effected after three (3) months from the date of the filing of the return or from April 15, which over is later. aisadc It will be noted that the payment of interest in case of late refund of excessive income tax withhold is now authorized pursuant to an amendment of Article 2(d) (2) of Supplement A Withholding on Wages, Title II, Tax Code, by Presidential Decree No. 69 which took effect on January 1, 1973. It seems clear, therefore, that the payment of interest applies only with respect to excessive income tax withhold for 1972 and subsequent years. It does not apply to excessive income taxes withhold for 1971 and prior years which have not been refunded when the aforementioned amendment by Presidential Decree No . 69 took effect . This is so because by the time the amendment took effect, it is obvious that the required three-month period to effect refund of refundable income tax for 1971 and prior years had already expired. The purpose of the amendment is to prevent delay in the refund of excessive withholding taxes refund of which accrued after the enactment of the law, and not to authorize payment of interest on refundable income taxes which have not yet been refunded when the amendment took effect. Your query is, therefore, answered in the negative. (SGD.) MISAEL P. VERA Commissioner of Internal Revenue TAN 1601-593-5 "TAXPAYERS SHOULD INDICATE THEIR TAN IN ALL COMMUNICATIONS TO THE BIR."