BIR Ruling No. 407-11

October 26, 2011 BIR RULING NO. 407-11 Section 204 (C) NIRC Philippine National Bank PNB Financial Center Pres. D. Macapagal Boulevard Pasay City Attention: Ma. Jacinta P. Hernandez Sales and Service Head Gentlemen : This refers to your letter dated July 28, 2011, requesting for refund of the amount of Ten Thousand Five Hundred Eighty Six & 80/100 (Php10,686.80) * representing the withholding tax deducted in 1998 from the interest income derived by your client, Sisters of Mary Banneux, Inc., from its various savings account. 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." (emphases supplied) Based on the above-cited provision, the taxpayer should file his request for the refund of tax, which he believed to have been erroneously paid, within two (2) years after the payment of the same. In this case, the request for tax refund was made only after approximately thirteen (13) years from the time of its payment in 1998. Thus, the right to ask for the refund of the amount of Php10,686.80 which was deducted from the account of the Sisters of Mary Banneux, Inc. and remitted to the Bureau of Internal Revenue in 1998 has already prescribed. HcSaAD In view of the foregoing, this Office hereby rules that your request for tax refund cannot be granted for having been filed out of time. Very truly yours, (SGD.) KIM S. JACINTO-HENARES Commissioner of Internal Revenue