Prescribing the Procedures on the Processing of Value-Added Tax Credit/Refund

June 27, 1988 REVENUE MEMORANDUM ORDER NO. 23-88 SUBJECT : Prescribing the Procedures on the Processing of Value-Added Tax Credit/Refund TO : All Concerned I. Objectives : This Order is issued: A. To effectively facilitate and expedite the processing of value-added tax credit/refund. B. To properly implement the provision on refunds or tax credit of input tax as prescribed in Revenue Regulations No. 3-88 dated April 7, 1988. II. Guidelines : A. Value-added tax credit/refund shall be issued to the taxpayer within sixty (60) days from the date application was received pursuant to Executive Order No. 273. Accordingly, payment of VAT refund claims shall be given top priority by all offices concerned. B. The Application for Tax Credit/Refund of Value-Added Tax Paid (BIR Form No. 2552) may be filed either with the Revenue District Office where the principal place of business is located or directly with the Commissioner, Attention: VAT Division. C. The Revenue District Office or VAT Division shall accept only those applications with the required supporting documents. D. Prior to the preparation of the Tax Credit Certificate or Disbursement Voucher, if cash refund, all the original copies of the purchase invoices or receipts evidencing the value-added tax paid must be presented to VAT Division for cancellation. III. Procedures : These Procedures shall be followed by the offices/divisions concerned: A. Revenue District Office/VAT Division 1. Received the application in three (3) copies with required supporting documents from the taxpayer; Original VAT Division Duplicate RDO/VAT Division Triplicate Taxpayer 2. Ascertain the completeness of the supporting documents and stamp "RECEIVED" and date of receipt on all copies of the application; 3. Give back to the taxpayer the triplicate copy. (In the case of the RDO, forward on the following working day the original copy of the application and all the required supporting documents to VAT Division.) B. VAT Division 1. Record in the control book pertinent information from the application such as date received, name of taxpayer and VAT Registration Number; maintain a control book exclusively for application for VAT credit/refund; 2. Number the application following the numbering in the control book and indicate the date of initial receipt and RDO No., if filed in the RDO, on the upper right corner of the application; 3. Evaluate the application based on the required supporting documents and data from previously filed VAT returns; In case of disapproval, inform taxpayer immediately. 4. Request verification on the taxpayer's outstanding tax liability from the Accounts Receivable/Billing Division using prescribed form marked Annex B; 5. Prepare Authority to Issue VAT Credit/Refund in three (3) copies using prescribed form marked Annex C; Original attached to the Duplicate docket Triplicate VAT Division If application is for cash refund : 6. Forward the docket to the Chief, Special Operations Service for review and recommendation to the Commissioner or his authorized representative; 7. Cancel the original copies of purchase invoices or receipts evidencing the VAT paid upon approval of the authority; 8. Prepare in five (5) copies Disbursement Voucher (Gen. Form 5A) corresponding to the amount approved per Authority to Issue VAT Credit/Refund; Original Auditor Duplicate Disbursement Accounting Div. Triplicate Budget Division Quadruplicate General Services Division Quintuplicate File copy 9. Forward the voucher with docket to Special Operations Service for signature on the appropriate box; 10. Follow the usual procedure on the processing of disbursement voucher per RMO No. 20-86 dated June 26, 1986. If application is for tax credit : 6. Cancel the original copies of purchase invoices or receipts evidencing the VAT paid; 7. Prepare four (4) copies of Tax Credit Certificate (TCC), BIR Form No. 2320; Original Taxpayer Duplicate Rev. Accounting Division Triplicate RDO concerned Quadruplicate VAT Division 8. Prepare a TCC Register and/or record on the TCC Register the pertinent information. 9. Forward the docket to the Chief, Special Operations Service for review and recommendation to the Commissioner or his authorized representatives; 10. Release the original TCC to the taxpayer; 11. Forward the docket to Records Division, for safekeeping; 12. Forward monthly the duplicate of TCCs to Revenue Accounting Division and the triplicates to RDO concerned; 13. Prepare monthly report of TCCs Issued in three (3) copies to be distributed as follows: aisa dc Original Special Operations Service Duplicate Accountable Forms Division Triplicate VAT Division C. Accounts Receivable/Billing Division 1. Verify and accomplish pertinent portion of the delinquency verification form indicating therein the outstanding tax liability of the taxpayer concerned, if any. D. Revenue Accounting Division 1. Record in the books of accounts all TCCs issued by the VAT Division based on the duplicate copy received; and 2. File TCCs in sequential order. IV. Effectivity : This Order shall take effect immediately upon approval. (SGD.) BIENVENIDO A. TAN, JR. Commissioner