BIR Ruling [DA-416-00]

December 7, 2000 BIR RULING [DA-416-00] 230, RR 5-200 098-95, 192-99 MEMORANDUM For : Marcelinda Omila-Yap Head Revenue Executive Assistant Collection Service From : Lilian B. Hefti Deputy Commissioner Legal and Inspection Group Date : October 25, 2000 This refers to your Memorandum dated October 18, 9000 addressed to the Assistant Commissioner, Legal Service requesting in effect for a ruling on the query dated October 13, 2000 of Pilipinas Shell Petroleum Corporation on "whether or not the five (5) Tax Credit Certification (TCCs) issued by the One-Stop-Shop and Duty Drawback Center of the Department of Finance (DOF) and the two (2) TCCs issued by this Office to Manila Mining Corporation are valid and authentic and whether or not the same may be legally transferred to it, in the light of Revenue Regulations (RR) No. 5-2000, Section 4 of which specifies only BIR-issued TCCs as available for transfer" and that in support of your request, you submitted to this Office, photocopies of the aforementioned TCCs. In reply. please be informed that the seven (7) TCCs are all BIR-issued TCCs. The only difference is that the five (5) TCC Numbering SN 019068, SN 021718, SN 021735, SN 021741 and SN 021761 were recommended by the Tax Revenue Group, One Stop Shop Tax Credit & Duty Drawback Center, Dept. of Finance and signed by Alberto R. Salanga, Executive Director of the Center and by then Deputy Commissioner Romeo S. Panganiban, while the two (2) TCC Numbering SN 000879 and SN 000893 were recommended by the Appellate Division and signed by then Commissioner Beethoven L. Rualo. Please be informed further that this Office is not in the position to ascertain whether or not all of the aforementioned TCCs are valid and authentic. Per Certification of the Chief, the Appellate Division dated October 25, 2000 hereto attached, TCC Nos. SN 000879 and SN 000893 are valid and authentic. Insofar as the five (5) other TCCs issued by the One-Stop-Shop and Duty Drawback Center of the Department of Finance, we suggest that you direct your request with the said Office. This office has ruled that a TCC validly issued pursuant to the Tax Code of 1997, can be transferred or assigned by the owner. Provided of course, that the TCC sought to be transferred, must not have expired and remains valid in the hands of the original holder pursuant to the provisions of Section 230 of the Code. (BIR Ruling No. 192-99) This Office has also had an occasion to state that "( I)n the event of the issuance of tax credit certificate, the taxpayer as the owner thereof, has the exclusive right to enjoy and dispose of the taxpayer's ownership of said certificate . The free enjoyment and disposition of said certificate can only be subject to the limitations imposed by law. (Articles 427 and 428 New Civil Code of the Philippines) (BIR ruling No. 098-95). TEHDIA Moreover, please be informed that in order to be valid, the transfer must be made in accordance with the conditions and procedures regarding the transferability of TCCs, set forth in Revenue Regulations No. 5-2000, issued on July 19, 2000, which reads: "SEC. 4. ASSIGNMENT OR TRANSFER . . . . a) Transferability of TCC. Taxpayers with TCCs issued by the BIR in their name hold the same in the concept of an owner. Consequently, BIR-issued TCCs may be transferred in favor of an assignee subject only the following conditions: (i) The transfer must be with prior approval of the Commissioner or his duly authorized representative who shall verify whether or not the TCC sought to be transferred is still valid in the hands of the original holder; (ii) The transfer should be limited to one transfer only. (iii) The transferee shall use the TCC assigned to him strictly in payment of his direct internal revenue tax liability and in no case shall the same be available for conversion to cash in his hands. b) Assignment Procedures. The transfer or assignment of a TCC from the original holder to his or its assignee shall be subject to the following procedures: (i) The TCC sought to be assigned or transferred shall be presented before the Commissioner or his duly authorized representative for verification. If found to be valid and still with creditable balance, the TCC shall be marked "Valid for Transfer", countersigned by the said officer. (ii) Upon execution of the Deed of Assignment, the transferor shall present the same, together with the original copy of the TCC. (iii) The original copy of the TCC shall still be cancelled even if only a portion of its face value is transferred or assigned, in which case, new TCC(s) shall be issued representing the respective portions pertaining to the transferee(s) and/or the balance remaining for the account of the transferor. cAaDCE (iv) Any TCC issued in favor of the transferee or assignee shall be valid for five (5) years, but subject to the following conditions which must be annotated therein, as follows: 1. Not valid for further transfer; 2. Not valid for cash conversion." (SGD.) LILIAN B. HEFTI