Japan firms buck BIR rule

MANILA, Philippines - Japanese businessmen in the Philippines are opposing a circular issued by the Bureau of Internal Revenue (BIR) which provides the rules for filing of tax refunds as well as moves of local governments to impose additional taxes citing that such may deter foreign investments.

Japanese Chamber of Commerce and Industry of the Philippines, Inc. (JCCIPI) president Tetsuo Tomino told reporters of particular concern is Revenue Memorandum Circular (RMC) 54-2014 which summarizes the rules on filing and processing of applications for value-added tax (VAT) refund or tax credit issued by the BIR last month amid rulings issued by the Supreme Court.

“This RMC may be big bilateral issue…Our request is (for government) to withdraw it,” he said.

JCCIPI secretary general Masazumi Nishizawa told reporters the group opposes the RMC because it removes the right of taxpayers to negotiate with the BIR for VAT refunds.

The RMC states that a taxpayer can file his administrative claim for VAT refund at anytime within two years after the close of the taxable quarter when the sales were made.

The BIR will have 120 days from the date of submission of application for VAT refund to decide on whether to grant or deny the claim.

If no action is taken by the BIR within the 120-day period, it shall be deemed a denial of the application.

In case of full or partial denial of the claim for tax refund, the RMC states that the affected taxpayer can file an appeal in two ways: file the petition with the Court of Tax Appeals (CTA) within 30 days from the receipt of BIR decision or file the claim within 30 days from the expiration of the 120-day period, if no action is taken by the BIR.

The RMC notes that in cases where the taxpayer has filed a petition for review with the CTA, the BIR Commissioner loses jurisdiction over the claim.

As the rules apply even to pending claims, Nishizawa said all the negotiations conducted by Japanese companies claiming refunds with the government will be useless.