Guidelines for the Effective Implementation of the VAT TCC Monetization Program

August 16, 2012

DOF OFFICE ORDER NO. 008-12

In line with DOF-DBM-BIR Joint Circular No. 2-2012 and DOF-DBM-BOC Joint Circular No. 3-2012, both dated 31 May 2012, in relation to Executive Order No. 68 s. 2012, this Order is hereby promulgated to prescribe the guidelines for the effective implementation of the VAT TCC Monetization Program under the said Joint Circulars.

SECTION 1. Coverage. — The VAT TCC Monetization Program (hereinafter referred to as the "Program"), as implemented by this Order, covers all outstanding tax credit certificates (TCCs) that are:

A. VAT TCCs issued jointly by the CENTER and the Bureau of Internal Revenue (BIR) pursuant to the provisions of Section 112 of the National Internal Revenue Code, as amended; and

B. Duty drawback TCCs issued jointly by the CENTER and the Bureau of Customs (BOC) pursuant to the provisions of Section 106 of the Tariff and Customs Code of the Philippines, as amended, with respect to the import VAT portion thereof.

SECTION 2. Filing of Applications for TCC Monetization. — Applications under the Program must be received by the CENTER within three (3) months from the effectivity of the said Joint Circulars. The last day for filing of applications is 17 October 2012.

SECTION 3. Procedures. —

1. Documentary Requirements. — An application under the Program shall be deemed complete if accompanied by the following documents:

a. Duly accomplished Application Form (Annexes "A" and "B" — available at the CENTER and downloadable from http://taxcredit.dof.gov.ph), which must be signed by the TCC owner or authorized representative; cIACaT

b. Original TCC(s) applied for monetization;

c. Proof of authority of representative: (a) secretary's certificate on the board resolution designating the TCC holder's authorized representative in the case of corporations, and (b) special power of attorney in the case of sole proprietorships; and

d. Other applicable documents required by the BIR and the BOC.

Applicants may also be required to submit records (e.g., updated General Information Sheet and photocopies of identification cards of representatives) pertaining to the CENTER's existing TCC claimant enrolment requirements.

2. Pre-screening and Filing. — The application must be submitted first to the CENTER's TCC Issuance and Application Division (TCCIAD) for pre-screening before it may be filed and received by the DOF Receiving Section. If the application documents are complete and in order, the TCCIAD shall fill up and attach a routing slip to the application and the applicant may then file the same with the DOF Receiving Section. If the documents are incomplete or with patent discrepancies, the application shall be returned to the applicant.

A letter of application, signed by the TCC owner or authorized representative, may be provisionally accepted in lieu of the prescribed Application Form.

If an original TCC applied for monetization is alleged to be in the custody of the BIR or BOC, such alleged fact must be stated in the Application Form or letter of application. If the original TCC is alleged to be in the custody of the CENTER, the Application Form or letter of application must be accompanied by proof that the original TCC is in the custody of the CENTER.

The TCCIAD shall take appropriate measures to advise applicants, upon and after filing, that their applications will not be processed until and unless the Application Form and/or the original TCC (alleged to be in the custody of the BIR or BOC) is submitted to the CENTER on or before 17 October 2012.

3. Evaluation of the Application. — The TCCIAD shall evaluate applications against the following criteria: cSEAHa

a. That the TCC was duly issued by the CENTER;

b. That there is no tampering on the certificate;

c. That the requesting party is the rightful TCC owner;

d. That the TCC is not yet expired; and

e. That the TCC has remaining creditable/outstanding balance.

Non-submission of the Application Form or the original TCC within the prescribed period shall be a ground for denial of an application.

4. Determination of TCC Balance. — The creditable/outstanding balance of the TCC shall be determined as follows:

a. For VAT TCCs under Section 1 (A) of this Order — the TCC face value less the amount of TCC utilization determined from postings on the dorsal portion of the TCC, declaration of the applicant (Application Form), and records of the CENTER.

b. For TCCs under Section 1 (B) of this Order — the import VAT value [determined from the corresponding approved TCC application dockets] less the amount of TCC utilization determined from postings on the dorsal portion of the TCC, declaration of the applicant (Application Form), and records of the CENTER. TCC utilization shall be applied first against the duty value of the TCC.

5. Evaluation Report. — When all the criteria in Section 3 (3) hereof are met, the TCCIAD shall prepare an evaluation report stating the following:

a. Evaluation findings based on the criteria under Section 3 (3) of this Order.

b. Recommendation to approve the application.

c. That the final creditable/outstanding TCC balance shall be determined by the BIR or the BOC. cEAaIS

d. For TCCs under Section 1 (B) of this Order, a recommendation to issue a replacement TCC for any outstanding tax credits corresponding to import duties.

The Deputy Executive Director shall review the report and, if warranted, the Executive Director shall approve the same. The approved report, the supporting papers submitted by the applicant and the corresponding TCC application docket shall be endorsed to the BIR or BOC for final action.

SECTION 4. Notifications. — In case of denied applications, the CENTER, through the TCCIAD, shall promptly communicate in writing the denial to the concerned applicants.

Where a denial is due to fraud, falsification, tampering, recycling, counterfeiting, perjury, or other illegal acts, the matter shall be referred by the CENTER to the proper authorities.

SECTION 5. Cancellation of TCCs Applied for Monetization. — The TCCs (taxpayer's copy) recommended by the CENTER for monetization shall be submitted to the BIR and BOC for their cancellation upon issuance of Notice of Payment Schedules (NPS).

The CENTER, through the TCCIAD, shall request the BIR and BOC for their respective master-lists of TCCs with NPS. The TCCIAD shall mark "CANCELLED" all duplicate copies of TCCs with NPS.

SECTION 6. Effectivity. — This Order shall take effect on July 17, 2012.

 

(SGD.) VILLAMOR VENTURA S. PLANExecutive Director

ATTACHMENT

VAT TCC Monetization Application Form