CATEGORY ARCHIVES: TAX LAWApril 2014 Philippine Supreme Court Decisions on Tax Law Posted on May 9, 2014 by Carina C. Laforteza • Posted in Tax Law Here are select April 2014 rulings of the Supreme Court of the Philippines on tax law: National Internal Revenue Code; income tax; creditable withholding tax; refund; requisites. There are three essential conditions for the grant of a claim for refund of creditable withholding income tax, to wit: (1) the claim is filed with the Commissioner of Internal Revenue within the two-year period from the date of payment of the tax; (2) it is shown on the return of the recipient that the income payment received was declared as part of the gross income; and (3) the fact of withholding is established by a copy of a statement duly issued by the payor to the payee showing the amount paid and the amount of the tax withheld therefrom. Commissioner of Internal Revenue v. Team (Philippines) Operations Corporation (formerly Mirant Phils., Operation Corporation), G.R. No. 179260, April 2, 2014. National Internal Revenue Code; income tax; tax credit or refund; corporations; irrevocability rule. In case the corporation is entitled to a tax credit or refund of the excess estimated quarterly income taxes paid, the excess amount shown on its final adjustment return may be carried over and credited against the estimated quarterly income tax liabilities for the taxable quarters of the succeeding taxable years. Once the option to carry-over and apply the excess quarterly income tax against income tax due for the taxable quarters of the succeeding taxable years has been made, such option shall be considered irrevocable for that taxable period and no application for cash refund or issuance of a tax credit certificate shall be allowed therefor. Commissioner of Internal Revenue v. Team (Philippines) Operations Corporation (formerly Mirant Phils., Operation Corporation), G.R. No. 179260, April 2, 2014. Court of Tax Appeals; findings and conclusions of the CTA are accorded highest respect. The findings and conclusions of the Court of Tax Appeals (CTA) are accorded the highest respect and will not be lightly set aside. The CTA, by the very nature of its functions, is dedicated exclusively to the resolution of tax problems and has accordingly developed an expertise on the subject unless there has been an abusive or improvident exercise of authority. Consequently, its conclusions will not be overturned unless there has been an abuse or improvident exercise of authority. Its findings can only be disturbed on appeal if they are not supported by substantial evidence or there is a showing of gross error or abuse on the part of the Tax Court. In the absence of any clear and convincing proof to the contrary, the Court must presume that the CTA rendered a decision which is valid in every respect. Commissioner of Internal Revenue v. Team (Philippines) Operations Corporation (formerly Mirant Phils., Operation Corporation), G.R. No. 179260, April 2, 2014. (Caren thanks Charles Icasiano for assisting in the preparation of this post.) March 2014 Philippine Supreme Court Decisions on Tax Law Commissioner of Internal Revenue v.Law. March 12. 2014. DA-489-03 from the time of its issuance on December 10. Further.). Inc. Inc. National Internal Revenue Code. The appearance of the word “zero-rated” on the face of invoices covering zero-rated sales prevents buyers from falsely claiming input VAT from their purchases when no VAT was actually paid. value-added tax. (formerly Intel Philippines Manufacturing. Silicon Philippines.).Cases. 7-95. No. the taxpayer only has 30 days within which to appeal said adverse decision or unacted claim before the CTA. (1) An administrative claim must be filed with the Commissioner of Internal Revenue (CIR) within two years after the close of the taxable quarter when the zero-rated or effectively zero-rated sales were made. Inc.108-1 of Revenue Regulations No. prescriptive periods. (formerly Intel Philippines Manufacturing. otherwise. National Internal Revenue Code. Laforteza • Posted in Philippines . 2014. Commissioner of Internal Revenue v. While the Court considers the importance of imprinting the word “zero-rated” in said invoices. March 12. No. then the administrative claim may be considered to be denied by inaction. the same does not apply to the phrase “BIR authority to print. G. no law or Bureau of Internal Revenue rule or regulation requiring the taxpayerclaimant’s authority from the BIR to print its sales invoices (BIR authority to print) to be reflected or indicated therein. said judicial claim shall be considered as filed out of time. Tax Law Here are select March 2014 rulings of the Supreme Court of the Philippines on tax law: National Internal Revenue Code. Silicon Philippines.R. 2003 up to its reversal by the Court in the Aichi case on October 6. value-added tax. Commissioner of Internal Revenue v. Upon denial of the claim or application. zero-rated or effectively zero-rated sales. The absence or non-printing of the word “zerorated” in the claimant’s invoices is fatal to its claim for the refund and/or tax credit representing its unutilized input value-added tax (VAT) attributable to its zero-rated sales. Inc. unutilized input VAT. the printing of the word “zero-rated” on the invoice helps segregate sales that are subject to 12% VAT from those sales that are zero-rated. Section 4. unutilized input value-added tax. No.Posted on April 18. Inc. value-added tax. or upon expiration of the 120-day period. 2014. (formerly Intel Philippines Manufacturing.R. imprinting “BIR Authority to Print” in invoices. If the 120-day period expires without any decision from the CIR.R. claims for tax credit or refund. (3) A judicial claim must be filed with the Court of Tax Appeals (CTA) within 30 days from the receipt of the CIR’s decision denying the administrative claim or from the expiration of the 120-day period without any action from the CIR. (4) All taxpayers can rely on Bureau of Internal Revenue Ruling No. While entities engaged in . National Internal Revenue Code. claims for tax credit or refund. value-added tax. March 12. 169778. significance of imprinting the word “zero-rated” for zero-rated sales covered by its receipts or invoices. as an exception to the mandatory and jurisdictional 120+30 day periods. Section 112 (D) of the National Internal Revenue Code provides the Commissioner of Internal Revenue a 120-day period from submission of complete documents in support of the administrative claim within which to act on claims for refund/applications for issuance of the tax credit certificate. G. 2010. Inc. (2) The CIR has 120 days from the date of submission of complete documents in support of the administrative claim within which to decide whether to grant a refund or issue a tax credit certificate. period to file appeal with the Court of Tax Appeals.” There is no law or Bureau of Internal Revenue (BIR) rule or regulation requiring the taxpayer-claimant’s authority from the BIR to print its sales invoices (BIR authority to print) to be reflected or indicated therein. Philippines . 169778. 2014 by Carina C.). 169778. Silicon Philippines. The 120-day period may extend beyond the two-year period from the filing of the administrative claim if the claim is filed in the later part of the two-year period. G. Tax Law Here are select February 2014 rulings of the Supreme Court of the Philippines on tax law: Tax laws National Internal Revenue Code. In the previous decision of the Court in this case. the Court found that there was no basis to refund the excise taxes paid on petroleum products sold to tax-exempt international carriers as “erroneously or illegally paid” tax.G. However. It is a mere scrap of paper from which taxpayer cannot derive or acquire any right notwithstanding the supposed failure on the part of the Commissioner to raise the issue of non-compliance with the 120-day period in the proceedings before the CTA First Division. a petition for review that is filed with the CTA without waiting for the 120day mandatory period renders the same void.business are required to secure from the BIR an authority to print receipts or invoices and to issue duly registered receipts or invoices. Accordingly. February 5. taxpayer’s failure to comply with the 120-day mandatory period renders its petition for review with the CTA void. G.R. (Caren thanks Charles Icasiano for assisting in the preparation of this post. Silicon Philippines. Inc. excise tax. 169778. Team Sual Corporation (Formerly Mirant Sual Corporation). Philippines . A person committing a void act cannot claim or acquire any right from such void act.Commissioner of Internal Revenue v.). Inc. Philippines Law. As the Court opined in San Roque. 194105. Taxpayer submits that the requirement to exhaust the 12-day period under Section 112 (c) of the National Internal Revenue Code prior to filing the judicial claim with the Court of Tax Appeals (CTA) is a doctrine of “exhaustion of administrative remedies” and that the non-observance of the same merely results in lack of cause of action which may be waived for failure to timely invoke the same.Commissioner of Internal Revenue vs. Under the basic international law principle of pacta sunt servanda. (formerly Intel Philippines Manufacturing. and various bilateral air service agreements not to impose excise tax on aviation fuel purchased by international carriers from domestic manufacturers or suppliers. March 12. Section 135. there is a need to reexamine the effect of denying the domestic manufactures/sellers’ . the state has the duty to fulfill its treaty obligations in good faith. Doctrine of Exhaustion of Administrative Remedies. The Court maintains that Section 135 (a) prohibits the passing of the excise tax to international carriers who buys petroleum products from local manufacturers/sellers such as the respondent taxpayer. No.) February 2014 Philippine Supreme Court Decisions on Tax Law Posted on March 12. This entails harmonization of national legislation with treaty provisions. pacta sunt servanda. 2014. the Court interpreted Section 135 (a) as prohibiting domestic manufacturer or producer to pass on to international carriers the excise tax it had paid on petroleum products upon their removal from the place of production.Regulation.Cases. Section 135 (a) of the National Internal Revenue Code embodies the country’s compliance with its undertakings under the 1944 Chicago Convention on International Aviation (Chicago Convention). it is not required that the BIR authority to print be reflected or indicated therein. 2014 National Internal Revenue Code. No.R. Article 24 (9) of which has been interpreted to prohibit taxation of aircraft fuel consumed for international transport. Laforteza • Posted in Philippines . Thus. 2014 by Carina C. R. Otherwise. In view of the foregoing the Court held that respondent. the remedy of the taxpayer is to appeal the inaction of the CIR to CTA within 30 days. before a petition for review may be filed with the CTA. Specifically. G. in Commissioner of Internal Revenue v.. 2002. if after the 120–day period the CIR fails to act on the application for tax refund/credit.” within which to grant or deny the claim. value-added tax. No. the practice of “tankering” (i. 2002 and the petition for review with the CTA on April 1. February 19. Section 142 . prescriptive period for judicial and administrative claims. This does not augur well for the Philippines’ growing economy and the booming tourism industry. Moreover. should there be no decision fully or partially denying the claim. As held by the Court in Commissioner of Internal Revenue v Aichi Forging Company of Asia. fees. and charges shall accrue exclusively to the local government. the latter having been granted exemption from the payment of said excise tax under Section 135 (a) of the NIRC. Such taxes. San Roque Power Corporation.” Consistent with this constitutional mandate. and its serious implications on the Government’s commitment to the goals and objectives of the Chicago Convention. and charges subject to such guidelines and limitations as the Congress may provide. as the statutory taxpayer who is directly liable to pay the excise tax on its petroleum products is entitled to a refund or credit of the excise taxes it paid for petroleum products sold to international carriers. fees. In this case. from the date of the submission of the complete documents in support of the application [for tax refund/credit]. Pilipinas Shell Petroleum Corporation. taxes vs. refund of input value-added tax. Consequently. the phrase “within two years… apply for the issuance of a tax credit certificate or refund” refers to applications for refund or credit filed with the CIR and not to appeals made to the CTA. Evidently. With the process of declining sales of aviation jet fuel sales to international carriers on account of major domestic oil companies’ unwillingness to shoulder the burden of excise tax.. Article X of the 1987 Constitution provides that “[e]ach local government unit shall have the power to create its own sources of revenues and to levy taxes. 194105.R. Team Sual Corporation (Formerly Mirant Sual Corporation). carriers filling their aircraft as full as possible whenever they landed outside a jurisdiction that imposes tax on fuel to avoid paying tax) would not be discouraged. fees. Section 5. the petition would be rendered premature and without a cause of action. the CTA does not have the jurisdiction to take cognizance of a petition for review filed by the taxpayer– claimant should there be no decision by the CIR on the claim for refund/tax credit or the 120–day period had not yet lapsed.claim for refund of the excise taxes they already paid on petroleum products sold to international carriers. 2014 Local Government Code.e. National Internal Revenue Code. 188497. 2014. Worse. No. consistent with the basic policy of local autonomy. Inc. February 5. Commissioner of Internal Revenue v. construction of the tax exemption provision in question should give primary consideration to its broad implications on the country’s commitment under international agreements. the taxpayer filed an administrative claim for refund with the Bureau of Internal Revenue on March 11. In case of full or partial denial by the CIR. Commissioner of Internal Revenue vs. the Local Government Code (LGC) grants the taxing powers to each local government unit. the taxpayer’s recourse is to file an appeal before the CTA within 30 days from receipt of the decision of the CIR. the Government would be risking retaliatory action under several bilateral agreements with various countries. the Court emphasized that the 120–day period that is given to the CIR within which to decide claims for refund/tax credit of unutilized input value-added tax is mandatory and jurisdictional. The Court categorically held that the taxpayer–claimant must wait for the 120–day period to lapse. G. or of petroleum products being sold to said carriers by local manufacturers or sellers at still high prices. However. Section 112([C]) of the National Internal Revenue Code (NIRC) clearly provides that the Commissioner of Internal Revenue (CIR) has “120 days. Since the main purpose of Ordinance No. stringing. Section 143 of the LGC provides for the scale of taxes on business that may be imposed by municipalities while Section 147 of the same law provides for the fees and charges that may be imposed by municipalities on business and occupation. As clearly stated in its whereas clauses. Rule 65 and Rule 45. and provide for the correction. conduits. meters and other apparatus. the Municipality issued Ordinance No.” In this case. the primary purpose of Ordinance No. In accordance with the liberal spirit pervading the Rules of Court and in the interest of substantial justice. 18 are not impositions on the building or structure itself. conduits. 18 are primarily regulatory in nature. defective or otherwise hazardous to the welfare of the inhabitant[s].” It was also envisioned to address the foreseen “environmental depredation” to be brought about by these “special projects” to the Municipality. which is a continuation of the appellate process over the original case. electric. the Court has treated a petition for certiorari as a petition for review on certiorari. particularly (1) if the petition for certiorari was filed within the reglementary period within which to file a petition for review on certiorari. the CTA correctly dismissed the petition for lack of jurisdiction. speedy and adequate remedy in the ordinary course of law. electric. and charges not otherwise levied by provinces. as rents or fees against persons or property. such as the installation and construction of the structures. the purpose of the assailed Ordinance is to regulate the enumerated activities particularly related to the construction and maintenance of various structures. telegraph and telephone wires. Pursuant to these objectives. telegraph and telephone wires. 18 is to regulate certain construction activities of the identified special projects. the remedy of the aggrieved part is appeal. Smart Communications. There is no dispute that the assailed resolutions of the CA are in the nature of a final order as they disposed of the petition completely. the fees imposed in Ordinance No. Hence. Petitioners availed of the wrong remedy when they filed the special civil action for certiorari under Rule 65 of the Rules of Court with the Court in assailing the resolutions of the Court of Appeals (CA) which dismissed their petition filed with the said court and their motion for reconsideration of such dismissal. (2) when . February 18. Thus.R. v. which is entitled “An Ordinance Regulating the Establishment of Special Projects. installing. rather.” to regulate the “placing. the Municipality imposed fees on various structures. and not primarily revenue–raising. 18 are not taxes. installing. while the term “fee” means “a charge fixed by law or ordinance for the regulation or inspection of a business or activity. Clearly. they are impositions on the activity subject of government regulation. stringing. The fees in Ordinance No. 18 is to regulate the “placing. A special civil action forcertiorari under Rule 65 is an original or independent action based on grave abuse of discretion amounting to lack of excess of jurisdiction and it will lie only if there is no appeal or any other plain. It is settled that in cases where an assailed judgment or order is considered final. repair and construction of all gas mains. petitioner should have filed a petition for review on certiorari under Rule 45. in the instant case. condemnation or removal of the same when found to be dangerous. this effect is merely incidental. Municipality of Malvar.of the LGC grants municipalities the power to levy taxes. No. Inc. G. and petitioner is questioning the constitutionality of the same. the fees imposed in Ordinance No. which included petitioner’s telecommunications tower. 20442. Batangas. which included “cell sites” or telecommunications towers. repair and construction of all gas mains. attaching. which included telecommunications towers. 18 are not in the nature of local taxes. attaching. While the fees may contribute to the revenues of the Municipality. 2014 Tax Procedure Rules of Court. meters and other apparatus” listed therein. Considering that the fees in Ordinance No. The LGC defines the term “charges” as referring to pecuniary liability. fees. It cannot be a substitute for a lost appeal. 18. February 4. depends ultimately on whether the fees imposed under Ordinance No. 2014. Article VIII of the 1987 Constitution provides that judicial power shall be vested in one Supreme Court and in such lower courts as may be established by law and that judicial power includes the duty of the courts of justice to settle actual controversies involving rights which are legally demandable and enforceable. that an error of judgment is averred.errors of judgment are averred. 1125. the Court deemed it proper and justified to relax the rules and treat the petition for certiorari as a petition for review oncertiorari. Caridad H. While there is no express grant of such power. Republic Act No.) About these ads . et al. orders or resolutions of the Regional Trail Courts (RTCs) in local tax cases originally decided or resolved by them in the exercise of their original or appellate jurisdiction. Article VIII of the 1987 Constitution grants power to the Supreme Court. v. 129 (BP 129) gives the appellate court. jurisdiction over petitions for certiorari. sub–paragraph (3) of the law vests the CTA with the exclusive appellate jurisdiction over “decisions.. a writ of certiorari. v. With respect to the Court of Appeals. Inc. among others. also in the exercise of its original jurisdiction. 175723. Considering that the present petition was filed within the 15-day reglementary period for filing a petition for review on certiorari under Rule 45. follows that the CTA. 1125. G.” The question now is whether the trial court resolved a local tax case in order to fall within the ambit of the CTA’s appellate jurisdiction This question. While it is clearly stated that the Court of Tax Appeals (CTA) has exclusive appellate jurisdiction over decisions. Republic Act No. It. jurisdiction. Grecia-Cuerdo etc. G. the power to issue a writ of certiorari. Grecia-Cuerdo etc. 1125. et al. it can be fairly interpreted that the power of the CTA includes that of determining whether or not there has been grave abuse of discretion amounting to lack or excess of jurisdiction on the part of the RTC in issuing an interlocutory order in cases falling within the exclusive appellate jurisdiction of the tax court. No. G. by constitutional mandate. Court of Tax Appeals. which provides that the CTA has jurisdiction over petitions for certiorari assailing interlocutory orders issued by the RTC in local tax cases filed before it. thus. the power to issue. 20442. orders or resolutions of the Regional Trial Courts in local tax cases originally decided or resolved by them in the exercise of their original or appellate jurisdiction. as amended by Republic Act No. in turn. Section 5 (1). etc. to issue writs of certiorari. paragraph (a). v. there is no categorical statement under Republic Act No. Batangas. Section 9 (1) of Batas Pambansa Blg. and (3) when there is sufficient reason to justify the relaxation of the rules.R. et al. in the exercise of their original jurisdiction. Section 1. and to determine whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the Government. 2014 (Caren thanks Carlos P. The prevailing doctrine is that the authority to issue writs of certiorari involves the exercise of original jurisdiction which must be expressly conferred by the Constitution or by law and cannot be implied from the mere existence of appellate jurisdiction. Hon.R. February 18. is vested with jurisdiction to issue writs of certiorari in these cases. whether or not in aid of its appellate jurisdiction. Garcia for assisting in the preparation of this post. prohibition and mandamus. 175723. No. created the Court of Tax Appeals (CTA).. February 4. Municipality of Malvar. The City of Manila. Jurisdiction is conferred by law. Caridad H. with respect to the CTA. and because of the significance of the issue on jurisdiction. as amended. (RA) 1125 as well as the amendatory RA 9282. Hon. No.R. is provided under Section 21 of BP 129. 9282. Section 7. 2014 Republic Act No. On the strength of said constitutional provisions. Smart Communications. 18 are in fact taxes. Court of Tax Appeals. in the exercise of its original jurisdiction. The City of Manila. etc. et al. As to Regional Trial Courts. 183880.January 2014 Philippine Supreme Court Decisions on Tax Law Posted on February 24. Power. Commissioner of Internal Revenue v. prescriptive period. January 15. Solutio indebiti does not apply in this case because there exists a binding relation between petitioner and the CIR. apply for the issuance of a tax credit certificate or refund of creditable input tax due or paid attributable to such sales. Commissioner of Internal Revenue.R. Tax Law • Tagged Court of Tax Appeals. elements. by the very nature of its function of being dedicated exclusively to the resolution of tax problems. No. The doctrine in the case of Atlas Consolidated Mining and Development Corporation vs. The Court will not lightly set aside the conclusions reached by the CTA which. 2007 until its abandonment on September 12. 198729-30. The Atlas doctrine was limited to the . 2014 by Carina C.. reckoning point for two-year prescriptive period. unless there has been an abuse or improvident exercise of authority.. 191498. Philippines Law. In the absence of any clear and convincing proof to the contrary. Refund. Subsection (A) of the said provision states that “any VATregistered person whose sales are zero-rated may.Cases. Inc. 2014. findings of fact. There is solutio indebiti when: (1) Payment is made when there exists no binding relation between the payor. the former being a taxpayer obligated to pay VAT and the payment of input tax was not made through mistake since petitioner was legally obligated to pay for that liability. Value-added tax. Value-added tax.” The phrase “within two (2) years x x x apply for the issuance of a tax credit certificate or refund” refers to applications for refund/credit filed with the Commissioner of Internal Revenue (CIR) and not to appeals made to the Court of Tax Appeals (CTA). solutio indebiti. 2014. January 20. has accordingly developed an expertise on the subject.R.R. refund. Mirant Pagbilao Corporation. CBK Power Company Limited vs. Factual findings made by the CTA can only be disturbed on appeal if they are supp1ied by substantial evidence or there is a showing of gross error or abuse on the part of the CTA. and (2) Payment is made through mistake. Commissioner of Internal Revenue. No. Laforteza • Posted in Philippines . the Court must presume that the CTA rendered a decision which is valid in every respect. who has no duty to pay. January 15. the judicial claim need not fall within the two-year prescriptive period. VAT Here are select January 2014 rulings of the Supreme Court of the Philippines on tax law: Court of Tax Appeals. G. refund of input value-added tax. Commissioner of Internal Revenue vs. At the time of payment of the input VAT. Under Section 112 of the National Internal Revenue Code (NIRC). 2014. This is apparent in the first paragraph of subsection (D) of the same provision which states that the CIR has “120 days from the submission of complete documents in support of the application filed in accordance with Subsections (A) and (B)” within which to decide on the claim. and the person who received the payment. prescriptive period for judicial and administrative claims. should be effective only from its promulgation on June 8. which held that claims for refund or credit of input VAT must comply with the two-year prescriptive period under Section 229. and not through liberality or some other cause. 2008 in the case ofCommissioner of Internal Revenue vs. G. refund of input value-added tax. within two years after the close of the taxable quarter when the sales were made. No. G. Toledo. The entitlement to a refund or credit of excess input tax is solely based on the distinctive nature of the VAT system. it is only the administrative claim for refund of input value-added tax (VAT) that must be filed within the two-year prescriptive period. Mindanao II Geothermal Partnership. the amount paid was correct and proper. there is an exception to this rule. refund of input value-added tax. and the period of 30 days. specifically for the refund or credit of that tax only. is both mandatory and jurisdictional. 2010. 191498. The taxpayer can file the appeal in one of two ways: (1) file the judicial claim within thirty days after the Commissioner denies the claim within the 120-day period. The law states that a taxpayer affected may. when the 120+30 day periods were held to be mandatory and jurisdictional. but to cases of inaction by the CIR as well. 2003 declared that a taxpayer-claimant need not wait for the lapse of the 120-day period before it could seek judicial relief with the CTA by way of petition for review. Mindanao II Geothermal Partnership. San Roque Power Corporation.R. G. The 30-day period to appeal to the CTA. Commissioner of Internal Revenue vs. in cases of premature filing. The reckoning frame would always be the end of the quarter when the pertinent sale or transactions were made. administrative claim. Mindanao II Geothermal Partnership. regardless of when the .R. the law under Section 112(A) provides for a different reckoning point for the two-year prescriptive period.reckoning of the two-year prescriptive period from the date of payment of the output VAT. or (2) filed the judicial claim within thirty days from the expiration of the 120-day period if the Commissioner does not act within the 120-day period. 30-day period also applies to appeals from inaction. January 15.Commissioner of Internal Revenue vs. prescriptive period. a claim for the refund or credit of creditable input tax that is due or paid. Commissioner of Internal Revenue vs. as provided in the case of Commissioner of Internal Revenue vs. G. the claim for refund was filed on October 6.R. However. Value-added tax. 191498. Thus. refund of input value-added tax. within thirty (30) days from the receipt of the decision denying the claim or after the expiration of the one hundred twenty day period. Section 112 of the National Internal Revenue Code (NIRC) is the governing law. Therefore. January 15. prescriptive period. 191498. However. December 10. For the refund or credit of excess or unutilized input tax. prescriptive period. the two-year prescriptive period for claiming refund or credit of input VAT should be governed by Section 112(A) following the verba legis rule. Section 112(D) of the NIRC speaks of two periods: the period of 120 days. adopted the verba legis rule. taxpayers can rely on the BIR ruling from the time of its issuance. appeal the decision or the unacted claim with the CTA. Given the distinctive nature of creditable input tax. January 15. refund of input value-added tax. late filing is absolutely prohibited even during the time when the BIR ruling was in force. the proper reckoning date as provided in Section 112(A) of the NIRC is the close of the taxable quarter when the relevant sales were made. which abandoned the Atlasdoctrine. which serves as a waiting period to give time for the CIR to act on the administrative claim for refund or credit. The 30 day period applies not only to instances of actual denial by the CIR of the claim for refund or tax credit. which refers to the period for interposing an appeal with the CTA. and that is attributable to zero-rated or effectively zero-rated sales. exception. Mindanao II Geothermal Partnership. No. The Mirant ruling. 30-day period to appeal is mandatory and jurisdictional. No. In this case. Bureau of Internal Revenue (BIR) Ruling No. Thus. No. The value-added tax (VAT) law provides for a mechanism that would allow VATregistered persons to recover the excess input taxes over the output taxes they had paid in relation to their sales. 2005. thus applying Section 112(A) in computing the two-year prescriptive period in claiming refund or credit of input VAT. Value-added tax. Value-added tax. it is covered by the rule prior to the advent of either Atlas or Mirant. DA-489-03 dated December 10. 2014. Section 112(A) is clear that for VAT-registered persons whose sales are zero-rated or effectively zero-rated. Prior to theAtlas doctrine. G. must be filed within two years after the close of the taxable quarter when such sales were made. 2003 until its reversal by the Supreme Court on October 6. 2014. 2014. CBK Power Company Limited vs. whether full or partial. January 13. judicial claim. refund of input value-added tax. the taxpayer may appeal within 30 days from the receipt of the decision or from the expiration of the 120-day period within which the claim has not been acted upon. judicial claim. 190928. If he files his claim on the last day of the two-year prescriptive period. A VAT-registered taxpayer claiming for refund or tax credit of their excess and unutilized input VAT must file their administrative claim within two years from the close of the taxable quarter when the sales were made. prescriptive period.input VAT was paid. prescriptive period. judicial claim.” Team Energy Corporation (formerly Mirant Pagbilao Corp. the taxpayer must await the decision or ruling of denial of its claim. Commissioner of Internal Revenue. G. 190928. refund of input value-added tax. If the CIR decides the claim on the 120 th day or does not decide it on that day. Commissioner of Internal Revenue. Thereafter. If the CIR decides the claim on the 120 th day or does not decide it on that day. the remedy of the taxpayer is to appeal the inaction of the CIR to the CTA within thirty (30) days. reckoning point of the prescriptive period.” Team Energy Corporation (formerly Mirant Pagbilao Corp. After that.R. the taxpayer still has 30 days to file his judicial claim with the Court of Tax Appeals (CTA). In the Aichi case. January 13. The Commissioner of Internal Revenue (CIR) will then have 120 days from such filing to decide the claim. 2014. In other words. Value-added tax. reckoning point of the prescriptive period. reckoning point of the prescriptive period. his claim is still filed on time. Once the taxpayer receives the decision or ruling of denial or expiration of the 120-day period. No.) vs. or the expiration of the 120-day period from the submission of complete documents in support of such claim. The period of 120 days is a prerequisite for the commencement of the 30-day period to appeal to the CTA. The judicial claim. need not be filed within the two-year prescriptive period from the close of the taxable quarter but has to be filed within the required 30-day period after the expiration . Commissioner of Internal Revenue. refund of input value-added tax. the taxpayer still has 30 days to file his judicial claim with the Court of Tax Appeals (CTA). therefore. No. prescriptive period. G. refund of input value-added tax. Section 112(D) of the NIRC provides that the Commissioner of Internal Revenue (CIR) has to decide on an administrative claim within one hundred twenty (120) days from the date of submission of complete documents in support thereof. The taxpayer can file his administrative claim for refund or issuance of tax credit certificate anytime within the two-year prescriptive period. prescriptive period.R. the Court explained that if after the 120-day mandatory period. appeal the decision or the unacted claim with the [CTA]. G. 198729-30. The Commissioner of Internal Revenue (CIR) will then have 120 days from such filing to decide the claim. CBK Power Company Limited vs. 198729-30. 2014. No. Value-added tax.R. If he files his claim on the last day of the two-year prescriptive period. his claim is still filed on time. 2014.) vs. the taxpayer may “within thirty (30) days from receipt of the decision denying the claim or after the expiration of the one hundred twenty day period. compliance with both periods is jurisdictional. No. the taxpayer may “within thirty (30) days from receipt of the decision denying the claim or after the expiration of the one hundred twenty day period. Value-added tax. Value-added tax. The taxpayer can file his administrative claim for refund or issuance of tax credit certificate anytime within the two-year prescriptive period. the CIR fails to act on the application for tax refund or credit. 2014.R. The 120-30-day period in Section 112(C) of the NIRC is mandatory and its non-observance is fatal to the filing of a judicial claim with the CTA. January 15. appeal the decision or the unacted claim with the [CTA]. In other words. Commissioner of Internal Revenue. G. it may file its petition for review with the CTA within thirty (30) days. Given that the 30-day period to appeal to the Court of Tax Appeals (CTA) is dependent on the 120-day period. judicial claim. January 15. 2003 up to its reversal by the Court in Aichi on October 6. as provided in Section 112 of the NIRC. rules on the determination of the prescriptive period for filing. Since the CIR has exclusive and original jurisdiction to interpret tax laws. DA-489-03 where the BIR expressly ruled that the taxpayer need not wait for the expiration of the 120-day period before it could seek judicial relief with the CTA. prescriptive period. where the taxpayer did not wait for the lapse of the 120-day period. in fact. 2010 (promulgation of the Aichi doctrine which declared that the 120-+30 day periods are mandatory) All taxpayers. the taxpayer may. Inc.Team Energy Corporation (formerly Mirant Pagbilao Corp. Team Energy Corporation (formerly Mirant Pagbilao Corp. refund of input value-added tax. 183880. the rules on the determination of the prescriptive period for filing a tax refund or credit of unutilized input VAT. judicial claim. 2003 to October 6. The 120+30 day period is mandatory because the law is clear and unequivocal. taxpayers acting in good faith should not be made to suffer for adhering to general interpretative rules of the CIR interpreting tax laws. No. in good faith. No. In a nutshell..of the 120 day period. DA-489-03 from the time of its issuance on December 10. Indeed. Value-added tax. Value-added tax. DA-489-03. the agency was. Section 112 of the NIRC decrees that a VAT-registered person. January 13. reckoning point of the prescriptive period. Thus.. as an exception to the mandatory and jurisdictional 120+30 day periods. prescriptive period. should such interpretation later turn out to be erroneous and be reversed by the CIR or the Court. can rely on BIR Ruling No. relied on the BIR regulation or ruling prior to its reversal. the One Stop Shop Inter-Agency Tax Credit and Drawback Center of the Department of Finance. not by a particular taxpayer. Inc. asking the CIR what to do in cases like the tax claim of Lazi Bay Resources Development. G. DA-48903 on December 10. may apply for the issuance of a tax credit or refund creditable input tax due or paid attributable to such sales within two years after the close of the taxable quarter when the sales were made. January 20. that is. DA489-03 which states that the taxpayer need not wait for the 120-day period to expire before it could seek judicial relief) to October 6. Commissioner of Internal Revenue. Commissioner of Internal Revenue v. January 13. This government agency is also the addressee. Commissioner of Internal Revenue. are as follows: (1)An administrative . or the failure on the part of the CIR to act on the application within the given period. therefore. whose sales are zero-rated or effectively zero-rated.R. appeal with the CTA the decision or inaction of the CIR. or the entity responded to. exception. 2014.) vs. within 30 days from receipt of the decision denying the claim or after the expiration of the 120-day period. while this government agency mentions in its query to the CIR the administrative claim of Lazi Bay Resources Development. This rule. 2003 (issuance of BIR Ruling No. DA-489-03 is a general interpretative rule because it is a response to a query made. Value-added tax. Power. G. The exemption was premised on the fact that prior to the promulgation of theAichi decision. prescriptive period.R. Inc. in BIR Ruling No. 2014. From the date of submission of complete documents in support of its application. Toledo. the CIR has 120 days to decide whether or not to grant the claim for refund or issuance of tax credit certificate. however. In case of full or partial denial of the claim for tax refund or tax credit. BIR Ruling No.R. Strict compliance with the 120+30day periods is not necessary when the judicial claims are filed between December 10. but by a government agency tasked with processing tax refunds and credits. there was an existing interpretation laid down in BIR Ruling No. exception. No. 2010. 2010 when the Aichidoctrine was adopted. refund of input value-added tax. 2014. 190928.. refund of input value-added tax. G. 190928. The mandatory and jurisdictional nature of the 120+30-day rule does not apply on claims for refund that were prematurely filed during the interim period from the issuance of BIR Ruling No. Section 246 of the NIRC expressly provides that a reversal of a BIR regulation or ruling cannot adversely prejudice a taxpayer who.) vs. is not without exception. The 120-day period may extend beyond the two-year period from the filing of the administrative claim if the claim is filed in the later part of the two-year period. No. Commissioner of Internal Revenue v. January 20.) . invoicing requirements.. The words “zero-rated” must appear in the invoice covering zero-rated sales. Although the same was merely stamped and not pre-printed in the present case. 2014. Garcia for assisting in the preparation of this post. Power. Inc. Commissioner of Internal Revenue v.R. Toledo. Toledo. 2014. Value-added tax. G. refund of input value-added tax. (Caren thanks Carlos P. If the 120-day period expires without any decision from the CIR. the same is sufficient compliance with the law. however. No. January 20. as an exception to the mandatory and jurisdictional 120+30 day periods. G. Inc. to enable the Bureau of Internal Revenue to properly implement and enforce the other VAT provisions of the Tax Code.claim must be filed with the CIR within two years after the close of the taxable quarter when the zero-rated or effectively zero-rated sales were made (2)The CIR has 120 days from the date of submission of complete documents in support of the administrative claim within which to decide whether to grant a refund or issue a tax credit certificate. since the imprinting of the word “zero-rated” was required merely to distinguish sales subject to 10% VAT. can rely on BIR Ruling No. Power. 183880. 183880. DA-489-03 from the time of its issuance on 10 December 2003 up to its reversal by this Court in Aichi on 6 October 2010. those that are subject to 0% VAT (zerorated) and exempt sales. then the administrative claim may be considered to be denied by inaction (3) A judicial claim must be filed with the CTA within 30 days from the receipt of the CIR’s decision denying the administrative claim or from the expiration of the 120-day period without any action from the CIR (4) All taxpayers..R.