Non-filing of a Written Claim for Tax Credit

November 6, 1981 BIR RULING NO. 219-81 086 000-00 219-81 Central Marketing Corporation Room 504 Corinthian Plaza Bldg. 121 Paseo de Roxas Makati, Metro Manila Attention: Mr . Roman T . Yap General Manager Gentlemen : This refers to your letter dated August 31, 1981, requesting our opinion on whether your refundable amount of P63,107.79 as overpaid quarterly corporate income tax for the taxable year 1978 could be credited against your 1979 corporate income tax liabilities. You have represented that on July 23, 1979, you filed your claim for refund of the aforestated amount with the Commissioner; that since by the end of the year 1979 you have not yet received the said tax refund, you applied the subject overpayment against your 1979 final corporate income tax liability without waiting for the decision of the Commissioner allowing you to credit the same; that your 1978 corporate income tax return was already investigated but that your 1979 return is now under investigation; and that the examiners insist on disallowing the aforestated amount as a tax credit against your 1979 corporate income tax and thereafter imposed interest on your deficiency tax due and asked you to file a claim for tax credit of the 1973 overpayment. In reply, I have the honor to quote hereunder Section 7 of Revenue Regulations No. 10-77 dated October 3, 1977 implementing Section 87 of the Tax Code, before amendment by Presidential Decree No. 1705: "Sec. 7. Filing of final or adjustment return and final payment of income tax . A final or an adjustment return on BIR Form No. 1702 covering the total taxable income of the corporation for the preceding calendar or fiscal year shall be filed on or before the 15th day of the fourth month following the close of the calendar or fiscal year. The return shall include all the items of gross income and deductions for the taxable year. The amount of income tax to be paid shall be the balance of the total income tax shown on the final or adjustment return after deducting therefrom the total quarterly income taxes paid during the preceding first three quarters of the same calendar or fiscal year. "Any excess of the total quarterly payments over the actual income tax computed and shown in the adjustment or final corporate income tax return shall either (a) be refunded to the corporation, or (b) may be credited against the estimated quarterly income tax liabilities for the quarters of the succeeding taxable year. The corporation must signify in its annual corporate adjustment return its intention whether to request for the refund of the overpaid income tax or claim for automatic tax credit to be applied against its income tax liabilities for the quarters of the succeeding taxable year by filling up the appropriate box on the corporate tax return (BIR Form No. 1702)." Under the foregoing provision and based on your representations and the documents you submitted, you were allowed by law to automatically credit your overpayment of income tax in the amount of P63,107.79 for the taxable year 1978 against your estimated income tax liabilities for the taxable quarters of the year 1979, without further decision from this Office. cdtech Such being the case, there was no more need for you to file a written claim for tax credit in order that you may be allowed to credit the same. Very truly yours, RUBEN B. ANCHETA Acting Commissioner