BIR Ruling [DA-052-98]

February 11, 1998 BIR RULING [DA-052-98] Justice Rodolfo A. Nocon 76 San Juan St. Bo. Kapitolyo Pasig City S i r : This refers to your letter dated January 29, 1998 stating that on August 28, 1997, you paid VAT in the amount of P78,000.00 for the one year advanced rental of your condominium unit covering the period August 1, 1997 to July 31, 1998 per lease contract with HCA Philippines, Inc. dated July 17, 1997; that the lease contract had been preterminated effective February 1, 1998; that you refunded to HCA Philippines, Inc. the unused portion of the advanced rental paid to you including the VAT; and that you have a new lease contract for which you received again an advanced rental for one year. Based on the foregoing, you now request credit for the unused VAT you paid last August 28, 1997 to be deducted from the VAT you will pay for the new lease contract, computed as follows: VAT paid last August 28, 1997 P78,000.00 Less used portion of VAT paid 36,672.06 VAT credit P41,327.94 ========= New VAT to be paid P73,242.72 Less VAT credit 41,327.94 New VAT due for payment P31,914.78 ========= In reply, please be informed that your request cannot be granted for lack of legal basis. Any claim for refund of alleged excess tax payment shall be subject to verification by this Office pursuant to existing rules and regulations. Accordingly, until after the amount claimed as tax credit have been finally determined to be legally due to the taxpayer and a tax credit issued therefor, no automatic offsetting of the amount claimed as tax credit can be allowed. ESHAIC However, a Tax Credit Certificate duly issued by this Office shall, upon proper application, be allowed to be used in payment of your other tax liabilities such as the VAT on the new lease of your condominium unit (BIR Ruling No. 415-93 dated October 15, 1993). You may, therefore, file an application for issuance of Tax Credit Certificate with the Appellate Division, this Office, within two (2) years from the date of your alleged VAT payments. Very truly yours, (SGD.) SIXTO S. ESQUIVIAS IV Deputy Commissioner (Legal and Enforcement Group)