BIR Ruling No. 005-10

May 24, 2010 BIR RULING NO. 005-10 Resource One Unit 1-5, Lot 10, East Science Ave. Phase IV, Laguna Technopark Bian, Laguna Attention: Kerwin Benedict Tan Chairman Gentlemen : This refers to your letter dated October 27, 2009 wherein you requested for confirmation that the BIR and not the Bureau of Customs (BOC) has the authority to receive, process, review and make adjustments on the claimed excess input VAT arising from importations. It is represented that Resource One filed an 'Application for Tax Credit' for the duration of April to December 2005, as a result of the company's excess input VAT; that the docket is presently in the possession of the Assessment Service of the BIR; and that you were advised by the Assessment Service that with regard to the claim for tax credit of excess input VAT arising from importations the BOC would be the proper office to process, review, adjust and ultimately approve (or disapprove) your application. Hence, you now request that your application for tax credit of excess input VAT arising from importations be processed by the BIR and not by the BOC. We regret to inform you that your request cannot be granted. Revenue Memorandum Order No. 40-94 dated May 6, 1994 prescribes the procedures on the processing of claims for VAT credit or refund. Section III paragraph 14 thereof states in part the process if part of the amount sought to be refunded or credited pertains to VAT on importation. The provision states: cEaACD "14. Prepare and send Notice of Approved Authority to Issue VAT Credit/Refund to BOC (Annex "D"), whenever the approved amount has input tax on importation component, together with the copies of the following: a) Approved Authority to Issue VAT Credit/Refund b) Revenue Officer's Verification/Audit Report (ROVAR) c) Examiner's Audit Memorandum Report d) Checklist of Audit Procedures Undertaken (CAPU) e) Delinquency Verification Form f) Certification from BOI, BOC, and/or EPZA that no similar claim(s) has been filed thereat for the period covered by the application g) Application of VAT Credit/Refund h) Approved Application for Zero-Rating (RR 2-88) i) VAT return(s) j) Invoices, import declarations, import entry documents, official receipts/confirmation receipts evidencing payment of VAT, etc. k) Summary of importations made during the period l) Summary of export sales" The aforementioned provision clearly requires that the documents relative to the claim for refund or credit with regard to VAT on importations should be forwarded to the BOC for processing. The main reason why the BOC is tasked to process the claim is because the BOC can verify whether the amounts of VAT on importations being claimed for refund or credit were actually paid. It is the BOC, and not the BIR, which maintains records relative thereto. aEHAIS Very truly yours, (SGD.) JOEL L. TAN-TORRES Commissioner of Internal Revenue