Revised guidelines in the refund or credit of excess taxes withheld on individual incomes

September 9, 1983 REVENUE REGULATIONS NO. 08-83 SUBJECT : Revised Guidelines in the Refund or Credit of Excess Taxes Withheld on Individual Incomes TO : All Internal Revenue Offices, Withholding Agents and Others Concerned SECTION 1. Scope . Pursuant to Section 326, in relation to Section 91 and 54, all of the National Internal Revenue Code, as amended, these Regulations are hereby promulgated to govern the refund or credit of creditable withholding taxes on individual incomes. cd SECTION 2. Definitions of Terms . For the purpose of these regulations, the following definitions of terms are hereby adopted: (a) "Tax refund" shall mean the excess of creditable income taxes withheld over the amount of income tax due from an individual taxpayer as determined from his income tax returns. (b) "Refund notice" shall mean the notice of refund or credit to an individual refundee entitling him to claim cash payment of his refund from the Philippine National Bank (PNB) Disbursing Office in accordance with the terms of the said notice . casia (c) "Payment expiry date" refers to the date indicated on the refund notice and the refund vouchers as the last date the taxpayers may claim payment of the tax refund from the PNB. If such date falls on a non-business day, the next business day shall be the payment expiry date. (d) "Tax credit certificate" refers to the certificate of refund issued to an individual taxpayer entitled to payment in accordance with the said certificate. SECTION 3. Refund or credit . (a) Time to make refund or credit of excess taxes withheld on compensation income . Any excess of creditable withholding taxes over the taxes due from an individual taxpayer as determined after pre-audit of his income tax return shall be refunded or credited within ninety (90) days from April fifteen (15). Refunds or credits made after such time shall earn interest at the rate of six per centum (6%) per annum . (b) Refund notice (RN) If the amount of excess withholding taxes exceeds TWO HUNDRED PESOS (P200.00), a "Refund Notice" shall be issued to the individual taxpayer to whom the refund is due. The said notice shall entitle the refundee to payment in cash of the amount stated thereon upon its presentation to the authorized Disbursing Officer of the Philippine National Bank (PNB) in the branch or office mentioned before the "payment expiry date". If the taxpayer fails to claim his refund before the expiry date, another Refund Notice shall be issued. If the taxpayer again fails to claim his refund before the expiry date, a Tax Credit Certificate (TCC) shall be issued to him. (c) Tax credit certificate (TCC) If the amount of excess withholding taxes is TWO HUNDRED PESOS (P200.00) or the Second Refund Notice was not presented to PNB for payment on or before the expiry date, the refund or credit shall be made with the issuance of TCC. The TCC authorizes the employer to credit the said amount against the income tax which would otherwise be withheld from the employee for the year in which payment or application is made, or serves as an authority for the refundee to use the tax refund in payment of his income tax obligation to the Bureau. cdt 1) Authority of the employer Before the refundee is credited for the amount of refund, he shall be required to affix his signature on the original copy of TCC. The employer who credited the amount thereof against the tax required to be withheld from the refundee shall attach the said assigned certificate to its return, BIR Form W-1, for the quarter in which credit was made. 2) Validity of TCC and forfeiture of refund The TCC shall be valid for one year from the date of issue. After the lapse of such period, but within five years from the date of issue, the refundee may request the Commissioner of Internal Revenue for its reissuance. The TCC issued in accordance with these regulations which remain unclaimed or uncashed within five years from the date the original TCC was mailed or delivered, shall be forfeited in favor of the government. With the approval of the Commissioner of Internal Revenue, TCC'S may be paid through the facilities of PNB or through other means if the need for such mode of payment is duly established by the taxpayer. SECTION 4. Identification Requirement . The refundee shall always be required to identify himself adequately by presenting appropriate identification papers such as the acknowledged copy of his income tax return, Tax Account Number Identification Card, Office ID, Drivers License, etc., before payment or credit is effected under these regulations. In meritorious cases and with the approval of the Commissioner of Internal Revenue, refunds may be claimed through an authorized representative of the refundee. cd SECTION 5. Transitory Provision . These Regulations shall likewise govern pending tax refund or credits for 1981 and prior years. SECTION 6. Repealing Clause . Any provision of existing regulations or issuance which are inconsistent herewith are hereby repealed or modified accordingly. SECTION 7. Effectivity . These Revenue Regulations shall take effect immediately upon approval. (SGD.) CESAR A. VIRATA Minister of Finance Recommended by: (SGD.) RUBEN B. ANCHETA Acting Commissioner