90-day period to refund

In proper cases, the Commissioner of Internal Revenue shall grant refund for creditable input
vat within ninety (90) days (previously 120 days), as amended under RA No. 10963-TRAIN Law, from the
date of submission of the official receipts or invoices and other documents in support of the application
filed. Provided, that should the Commissioner find that the grant of refund is not proper, the
Commissioner must state in writing the legal and factual basis of the denial.

The ninety (90) day period under the TRAIN Law to process and decide, pending the
establishment of the enhanced VAT Refund System shall only be up to the date of approval of the
Recommendation Report on such application for VAT refund by the Commissioner or his duly authorized
representative; Provided; that all claims for refund/tax credit certificate filed prior to January 1, 2018
will be governed by the one-hundred twenty (120)-day processing period.

In case of full or partial denial of the claim for tax refund, the taxpayer affected, may, within
thirty (30) days from receipt of the decision denying the claim, appeal the decision of the Court of Tax
Appeals; Provided, however, that failure on the part of any official, agent or employee of the BIR to act
on the application with the 90-day period shall be punishable under Section 269 of the Tax Code, as
amended.

Refunds shall be made upon warrants drawn by the CIR or by his authorized representative
without the necessity of being countersigned by the Chairman, Commission on Audit (COA), the
provision of the Revised Administrative Code to the contrary, notwithstanding; Provided, that refunds
under these paragraph shall be subject to post audit by the COA.

SUSPENSION OF THE 90-DAY PERIOD DURING COVID-19 PANDEMIC

RR 16-2020 dated June 25, 2020:

Pursuant to RA 11469 , otherwise known as the “BAYANIHAN TO HEAL AS ONE ACT”, declaring the
existence of National Emergency, arising from the Corona Virus Disease 2019 (COVID-19) and in
consideration of the plight of the taxpayer-claimants who are greatly affected by the restrictions
imposed by the government, the 90-day period of processing vat refund claims shall be suspended in
areas where Enhanced Community Quarantine (ECQ) or Modified Enhanced Community Quarantine
(MECQ) is still in forced.

EXPORT SALE BY A NON-VAT REGISTERED ENTITY

Export sale by a non-vat registered entity is a vat-exempt transaction. Under Section 109 of the
Tax Code, a vat exempt sale refers to sale of goods, properties or services or the use or lease of
properties that is not subject to VAT (output tax) and the seller/supplier is not allowed any tax credit of
VAT (input tax) on purchases related to such exempt transaction.

Gross Sales Pxx

x Vat Rate N/A Vat Exempt
OUTPUT VAT P0
INPUT VAT N/A Not Allowed
VAT PAYABLE -