Refund of the Corresponding Tax Withheld from Rice Subsidies

1990 BIR RULING NO. 202-90 204 (3) 000-00 202-90 Gentlemen : This refers to your letter dated July 18, 1990 stating that your company, Hoechst Far East Marketing Corporation, is giving a monthly rice subsidy to all its employees since 1980 and has been deducting withholding tax for said subsidy. Recently, you learned that on November 5, 1987, BIR Ruling No. 348-87 was issued exempting the monthly rice subsidy from withholding tax. cd Based on the foregoing, you request for a ruling as to whether you can ask for a refund of the tax withheld from your employees since 1980 and if so, you want to deduct the amount from your future withholding tax remittance. In reply, please be informed that your individual employees can claim a refund of the corresponding tax withheld from their rice subsidies provided that a written claim therefor is filed in writing with this Office within two years after the payment of the tax, pursuant to Section 204 (3) of the Tax Code, quoted as follows: ". . . No credit or refund of taxes or penalties shall be allowed unless the taxpayer files in writing with the Commissioner a claim for credit or refund within two years after the payment of the tax or penalty." Moreover, it is only after the claim for refund or tax credit has been approved by this Office and a tax credit memo issued that your company may apply the tax credit memo against future withholding taxes of your employees to be remitted to this Office. cdt Very truly yours, (SGD.) JOSE U. ONG Commissioner