Clarifying the Issuance of Delinquency Verification Certificate for Claims for Value-Added Tax (VAT) Credit/Refund Pursuant to Section 112 of the National Internal Revenue Code (NIRC) of 1997, as Amended

May 31, 2019 REVENUE MEMORANDUM CIRCULAR NO. 064-19 SUBJECT : Clarifying the Issuance of Delinquency Verification Certificate for Claims for Value-Added Tax (VAT) Credit/Refund Pursuant to Section 112 of the National Internal Revenue Code (NIRC) of 1997, as Amended TO : All Internal Revenue Officials and Others Concerned I. BACKGROUND It has been observed that in the issuance of Delinquency Verification Certificates for the processing of claims for VAT credit/refund within the 90-day period provided in Revenue Regulations No. 26-2018, there are offices within the Bureau of Internal Revenue (BIR) that fail to comply with the correct determination of outstanding liabilities, which indicate only a one-month validity period instead of six (6) months on the certificate and which commit other errors and deviation in policies that are not aligned to existing revenue issuances. II. CLARIFICATIONS 1. Item no. I.4 of RMC No. 47-2019, states among others, that upon filing of the claim, the taxpayers shall have no outstanding tax liabilities as defined under Section II (1) of RMO No. 11-2014. These liabilities are Accounts Receivable/Delinquent Account (AR/DA), which refer to the amount of tax due from a taxpayer who failed to pay the same within the time prescribed for its payment arising from: a. Self-assessed tax liability as follows: dishonored check (check used to pay the tax liability but was later dishonored by the concerned depository bank of the delinquent taxpayer); tax due per return filed by taxpayer who failed to pay the same within the time prescribed for its payment; and non-payment of the 2nd installment due from individual taxpayers who availed of installment payments of income tax under Sec. 56 (A) (2) of the Tax Code, as amended. b. Deficiency assessment issued by the Bureau, which became final and executory due to any of the following applicable instances: DETACa b.1 Failure to file a request for reinvestigation/reconsideration within thirty (30) days from receipt of the Final Assessment Notice (FAN); b.2 Failure to submit documents in support of the request for reinvestigation within sixty (60) days from filing of the request; b.3 Failure to appeal to the Court of Tax Appeals (CTA) within thirty (30) days from receipt of the decision denying the request for reinvestigation/reconsideration or in case of inaction on the part of the BIR, from the lapse of the one hundred eighty (180) days from the submission of the required documents; b.4 Failure to appeal CTA's decision on the case with the higher court as a result of which the decision became final and executory; and b.5 Decision/Resolution by the CTA/Supreme Court (SC) in favor of the BIR which became final and executory. Based on the foregoing definition of AR/DA in RMO No. 11-2014, "open stop-filer cases" and deficiency tax assessments which are timely protested, subject of reconsideration/re-investigation, or pending appeal with the Appellate Division or CTA/SC shall not be considered as AR/DA and, therefore, existence of which shall not prevent the processing of VAT refund. 2. In compliance to item no. 2.8 of Annex "A.1" Revised Checklist of Mandatory Requirements on Claims for VAT Refund of Revenue Memorandum Circular No. 47-2019, only the following offices shall issue the Delinquency Verification Certificate to the claimants of credit/refund: a. For Non-Large Taxpayers: Collection Division of the respective Regional Office and Accounts Receivable Monitoring Division (ARMD) b. For Large Taxpayers: Large Taxpayers Collection Enforcement Division (LTCED) and ARMD (for large taxpayers under the jurisdiction of the Large Taxpayers Service in the National Office) Large Taxpayers Division-Cebu/LT Division-Davao and ARMD (for large taxpayers under the jurisdiction of Large Taxpayers Division-Cebu or Davao, wherever is applicable) 3. The attached Delinquency Verification Certificate (DVC) per Annex "A" hereof is prescribed as the official DVC format for claims for VAT credit/refund. The concerned offices shall not issue any format that deviates from the format prescribed herein. If there is no outstanding tax liability or if the assessed tax liability is under protest/appeal, or if there are "open stop-filer cases," the box that will be checked is that which indicates "HAS NO DELINQUENT TAX LIABILITY." Thus, there is no need to state the details of the said cases on the DVC. All revenue issuances and portions thereof inconsistent herewith are hereby considered amended, modified or revoked accordingly. aDSIHc All internal revenue officials and employees are hereby enjoined to be guided accordingly and give this Circular as wide publicity as possible. This Circular shall take effect immediately. (SGD.) CAESAR R. DULAY Commissioner of Internal Revenue ATTACHMENT Delinquency Verification Certificate