Streamlining VAT Refund Process for Enhanced Efficiency and Compliance
The Value Added Tax (VAT) refund application process is now more convenient for the taxpayer through the recent issuance of Revenue Memorandum Circular (RMC) No. 71-2023 and Revenue Memorandum Order (RMO) No. 23-2023 both effective July 1, 2023.
The following are notable changes in the filing of VAT refunds:
| Before RMC No. 71-2023 and RMO No. 23-2023 (old) | Effectivity of RMC No. 71-2023 and RMO No. 23-2023 (new & enhanced) | |
Venue | Direct Exporter – BIR national office’s VAT Credit Audit Large Taxpayers- Large Taxpayers VAT Audit Unit Other Taxpayers – Revenue District Offices (RDOs) (Section 112(a) of the NIRC, as amended) | Direct Exporter – BIR national office’s VAT Credit Audit Large Taxpayers- Large Taxpayers VAT Audit Unit Other Taxpayers – VAT Audit Section (VATAS) at the Regional Assessment Division or Regional District Offices, if without VATAS |
Requirements | 30 documentary requirements (RMO 47-2020) | The number of documents significantly decreased (now: 15-17 documentary requirements)You no longer have to submit quarterly VAT and annual income tax returns, as well as a copy of the Audited Financial Statements (AFS), together with the complete notes to the AFS, at the time of the claim, if the AFS/ITR was submitted through eAFS. Only a Delinquency Verification Certificate (DVC) for Accounts Receivable Monitoring Division (ARMD) is required for non-large taxpayers. |
| Before RMC No. 71-2023 and RMO No. 23-2023 | Effectivity of RMC No. 71-2023 and RMO No. 23-2023 | |
| For claims with input VAT on importations, a certification from the DOF-OSS Center that the claimant has not filed a similar claim/s covering the same period is deleted from the checklist due to the abolishment of the DOF-OSS Center. Proof of payment of input VAT on importations like the Statement of Settlement of Duties and Taxes (SSDT) is no longer required as the VAT Payment Certification to be issued by the BOC Revenue Accounting Division (RAD) will already suffice as proof of payment of the input VAT on importations. | ||
Submission of Copies | Submitting soft copies of documents saved on a different memory device is necessary. (RMO 47-2020) | Only original duplicate copies of sales invoices or official receipts issued for sales transactions and original copies of suppliers’ sales invoices or official receipts and other supporting documents are now required for the input of VAT from purchases. Submitting soft copies of documents saved on a different memory device is no longer necessary. |
| Prescribed Claims | Filed beyond the two (2) – year period, and a DVC showing delinquent taxes was not accepted. (RMO No. 47-2020) | Claims filed beyond the two (2) – year period may be accepted, but for outright denial for the taxpayer. |
Before, having strict procedures and numerous requirements, usually hindered taxpayers from filing a refund application. Now, the reduction of the BIR requirements for VAT refund applications is a great step towards ease of doing business in government offices. Furthermore, according to BIR Commissioner Lumagui, “We hope that with this landmark issuance, taxpayers will realize that the BIR is now a service-oriented agency, not merely a goal oriented one.”
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