Publishing the Full Text of the Letter from the Bangko Sentral ng Pilipinas Regarding the Effect of the Liberalization of BSP Rules on Foreign Exchange and Foreign Trade Transactions on the Processing of Applications for VAT Refunds

December 3, 1997 REVENUE MEMORANDUM CIRCULAR NO. 57-97 SUBJECT : Publishing the Full Text of the Letter from the Bangko Sentral ng Pilipinas Regarding the Effect of the Liberalization of BSP Rules on Foreign Exchange and Foreign Trade Transactions on the Processing of Applications for VAT Refunds TO : VAT Committee Members, All Internal Revenue Officers and Others Concerned For the information and guidance of all revenue officials and employees, we are circularizing the letter dated October 22, 1996 sent by the Managing Director and Officer-in-Charge of the Foreign Exchange Department of the Bangko Sentral ng Pilipinas regarding the effect brought about by the liberalization of BSP Rules on Foreign Exchange and Foreign Trade Transactions on the processing of applications for VAT refunds. LLjur "October 22, 1996 "Commissioner Liwayway Vinzons-Chato Bureau of Internal Revenue BIR Bldg., Agham St. Diliman, Quezon City "Dear Commissioner Chato: "We have been receiving and acting upon requests from export firms for BSP certification of their non-violation of BSP rules and regulations to support their applications with your Bureau for VAT tax refunds. The requests have come primarily from firms from Cebu, Makati City and Mandaluyong City. "Due to the liberalization of BSP rules on foreign exchange and foreign trade transactions, we feel such BSP certifications have already lost their rationale or purpose. "Under CB Circular No. 1389 dated April 13, 1993, foreign exchange receipts, acquisitions or earnings of residents from exports may now, at the option of said exporter be sold for Pesos to AABs or outside the banking system, retained or deposited in foreign currency accounts, whether in the Philippines or abroad and used freely for any purpose. The exporter may or may not inwardly remit the foreign exchange proceeds of his exports, at his option. No authority from BSP is now needed also for an exporter to open and maintain a dollar account in any bank here or abroad. Exports through the inter-company open account offset arrangement, between firms with parent/affiliate relationship abroad, no longer require prior approval of the BSP. "May we respectfully suggest therefore, that the submission of the BSP certification be no longer required by your Bureau. This should reduce paperwork for all concerned and facilitate processing of applications for VAT tax refunds. Very truly yours, (Signed) GREGORIO R. SUAREZ Managing Director and Officer-in-Charge (FED)" All revenue officials and employees are enjoined to give this Circular as wide a publicity as possible. LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue