BIR Ruling No. 226-13

June 20, 2013 BIR RULING NO. 226-13 Sec. 204 (C) of the Tax Code of 1997, as amended; BIR Ruling No. 407-11 United South Dockhandlers, Inc. CFC Container Yard 2 Pier 4, North Reclamation Area Cebu City Attention: Fritzi G. Cubero HR Administrative Manager Gentlemen : This refers to your letter dated 21 December 2012 requesting for reconsideration of your claim for refund of the double payment made on your expanded withholding tax for the month of April 2009. It is represented that UNITED SOUTH DOCKHANDLERS, INC. (USDI) with Tax Identification No. 000-311-080-000, made an overpayment/double payment of expanded withholding tax for the month of April 2009 in the amount of Seventy Nine Thousand Seven Hundred Forty One and Sixty Four Centavos (Php79,741.64) paid thru EFPS (PNB) on 14 and 15 May 2009, respectively. Correspondingly, USDI requested for offsetting of its overpaid expanded withholding tax to their next withholding tax payable as per letter dated 29 May 2012. On 14 December 2012, Maria Soccoro O. Lozano, Chief, LTD Cebu, informed USDI that its request for offsetting of overpaid expanded withholding tax for the month of April 2009 which was paid on 15 May 2009 has already been reversed and USDI's recourse to such overpayment is to file a claim for tax refund which, however, has already lapsed for failure to file the same within the two (2) year period. SICaDA In reply thereto, please be informed that Section 204 (C) of the Tax Code of 1997, as amended, provides that: " SEC. 204.Authority of the Commissioner to Compromise, Abate and Refund or Credit Taxes . The Commissioner may xxx xxx xxx (C)Credit or refund taxes erroneously or illegally received or penalties imposed without authority, refund the value of internal revenue stamps when they are returned in good condition by the purchaser, and, in his discretion, redeem or change unused stamps that have been rendered unfit for use and refund their value upon proof of destruction . 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 (2) years after the payment of the tax or penalty : Provided, however, That a return filed showing an overpayment shall be considered as a written claim for credit or refund." (emphasis supplied) SAHaTc Furthermore, Section 229 of the Tax Code of 1997, as amended, provides, that: "SEC. 229. Recovery of Tax Erroneously or Illegally Collected. No suit of proceeding shall be maintained in any court for the recovery of any national internal revenue tax hereafter alleged to have been erroneously or illegally assessed or collected, or of any penalty claimed to have excessively or in any manner wrongfully collected without authority, or of any sum alleged to have excessively or in any manner wrongfully collected, until a claim for refund or credit has been duly filed with the Commissioner, but such suit or proceeding may be maintained, whether or not such tax, penalty, or sum has been paid under protest or duress. In any case, no such suit or proceedings shall be filed after the expiration of two (2) years from the date of payment of the tax or penalty regardless of any supervening cause that may arise after payment. Provided, however, That the commissioner may, even without a written claim therefor, refund or credit any tax, where on the face of the return upon which payment was made such payment appears clearly to have been erroneously paid." Based on the above-cited provisions, USDI should have filed its request for the refund two (2) years after the payment of the said overpaid tax. Instead, records disclosed that USDI requested for offsetting of their overpaid expanded withholding tax to its next withholding tax payable approximately three (3) years after its alleged overpayment/double payment. Thus, the right to ask for the refund of the amount of Seventy Nine Thousand Seven Hundred Forty One and Sixty Four Centavos (Php79,741.64) has already prescribed. CaHAcT This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it will be disclosed that the facts are different, then this ruling shall be considered null and void. Very truly yours, (SGD.) KIM S. JACINTO-HENARES Commissioner of Internal Revenue