REVENUE REGULATIONS NO. 7-98

REVALIDATION OF TAX CREDITS

 

Q: What are the new rules on tax credits?

A: Under the 1997 Tax Code, all Tax Credit Certificate (TCC) issued by the BIR prior to January 1, 1998, which remains unutilized or has a creditable balance as of that date, are required to be presented for revalidation with the BIR on or before August 31, 1998.

 

Q: How will revalidation of TCCs be done?

A: The TCCs will be processed in accordance with the following procedure:

    1. The taxpayer must file a written application for revalidation with the Chief of the Appellate Division of the BIR. Together with the application form, he/it must surrender the original copy of the unutilized TCC, or the TCC which has a creditable balance, for verification and cancellation.

    2. The Appellate Division shall then prepare a Memorandum for approval or disapproval by the BIR Commissioner.

    3. If approved, the BIR will issue a new TCC reflecting the unutilized amount or the creditable balance of the TCC that is to be revalidated.

 

Q: Will this rule apply to TCCs to be issued on or after January 1, 1998?

A: Newly-revalidated TCCs and those issued starting January 1, 1998 will be valid within five (5) years from the date of its issuance. After this period, unless revalidated, it shall be considered invalid and shall not be allowed as payment for internal revenue tax liabilities of the taxpayer. The amount covered by the TCC shall revert to the General Fund of the Philippine government.

 

Q: Would refunds also be subject to revalidation?

A: A refund check or warrant which shall remain unclaimed or uncashed within five (5) years from the date the said warrant or checked was mailed or delivered, will be forfeited in favor of the Government, and the amount thereof shall also revert to the government coffers. Revalidation is not allowed.

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