CAPÍTULO II........................................................................................................... 19
3.5 Matriz de evaluación
3.5.3 Matriz de evaluación de enfoque global
GROUNDS FOR FILING A CLAIM FOR TAX REFUND OR TAX CREDIT
1. Tax is collected erroneously or illegally.
2. Penalty is collected without authority.
3. Sum collected is excessive.
TAX REFUND VS. TAX CREDIT
TAX REFUND TAX CREDIT
The taxpayer asks for restitution of the money paid as tax
The taxpayer asks that the money so paid be applied to his existing tax liability Two-year period to
file claim with the CIR starts after the payment of the tax or penalty
Two-year period starts from the date such credit was allowed (in case credit is wrongly made).
REQUISITES OF TAX REFUND OR TAX CREDIT
1. Claim must be in writing;
2. It must be filed with the
Commissioner within two (2) years after the payment of the tax or penalty.
Note: No suit or proceeding shall be
begun after the expiration of the said two (2) years regardless of any supervening cause that may arise after payment.
3. Show proof of payment.
COMMENCEMENT OF THE TWO (2) YEAR PERIOD (JURISPRUDENCE)
1. Tax sought to be refunded is illegally or erroneously collected - from the date the tax was paid.
(Commissioner vs. Victorias Milling, GR No. L-24108, January 31, 1968) 2. Tax is paid only in installments or
only in part
- from the date the last or final installment or payment because for tax purposes, there is no payment until the whole or entire tax liability is fully paid. (Collector vs. Prieto,
GR No. L-11976, August 29, 1961) 3. Taxpayer merely made a deposit
-
counted from the conversion of the deposit to payment (UnionGarment vs. Collector, CTA Case No. 416, November 17, 1958)
- Merely making a deposit is not equivalent to payment until the amount is actually applied to the specific purpose for which it was deposited.
4. Tax has been withheld from source (through the withholding tax system)
- counted from the date it falls due at the end of the taxable year
- A taxpayer who contributes to the withholding tax system does not really deposit an amount to the government, but in truth, performs and extinguishes his tax obligation for the year concerned. (Gibbs vs.
Commissioner, GR No. L-17406, November 29, 1965)
5. End of taxable year vs. date of the filing of the final adjusted return
- from the date when the final adjusted return was filed.
- the rationale in computing this period is the fact that it is only then the corporation can ascertain whether it made profits or incurred losses in its business operations.
(ACCRA Investments vs. Court of Appeals, GR No. 96322, December 20, 1991)
6. Date when quarterly income tax was paid vs. date when final adjusted return was filed
- from the date when final adjusted return was filed
- The filing of the quarterly income tax return (Sec. 68) and payment of quarterly income tax should only be
considered mere installments of the annual tax due. (Commissioner vs.
TMX Sales, GR No. 83736, January 15, 1992)
7. Date when the final adjustment return was actually filed (ex. Apr. 2) vs. Last day when the adjustment return could still be filed (ex. Apr. 15)
- from the date the final adjustment return was actually filed.
(Commissioner vs. Court of Appeals, GR No 117254, January 21, 1999) 8. Tax was not erroneously or illegally
paid but the taxpayer became entitled to refund because of supervening circumstances
- from the date the taxpayer becomes entitled to refund and not from the date of payment.
(Commissioner vs. Don Pedro Central Azucarera, GR No. L-28467, Feb. 28, 1973)
PAYMENT UNDER PROTEST IS NOT NECESSARY UNDER NIRC
A suit or proceeding for tax refund may be maintained “whether or not such tax, penalty or sum has been paid under protest or duress” (Sec. 229, NIRC).
Note: Similarly, payment under protest
is not necessary in refund for local taxes. (See Sec. 196, LGC).
However, payment under protest is necessary in claim for refund for real property taxes (Sec. 252, LGC) and for customs duties (Sec. 2308, TCC).
SUSPENSION OF THE TWO-YEAR PRESCRIPTIVE PERIOD
1. There is a pending litigation between the Government and the taxpayer; and
2. CIR in that litigated case agreed to abide by the decision of the SC as to the collection of taxes relative thereto (Panay Electric Co. vs.
Collector, GR No. L-10574, May 28, 1958).
INTEREST ON TAX REFUNDS General Rule:
Government cannot be required
to pay interest on taxes refunded to the
taxpayer in the absence of a statutory provision clearly or expressly directing or authorizing such payment. (Commissioner vs. Sweeney, GR No. L-
12178, August 29, 1959) Exceptions:
1. When the CIR acted with patent arbitrariness. Arbitrariness presupposes inexcusable or obstinate disregard of legal provisions.
(Commissioner vs. Victorias Milling, GR No. L-19667, Nov. 29, 1966)
2. Under Sec. 79(C)(2) with respect to income taxes withheld on the wages of the employees.
TAX CREDIT CERTIFICATE
1. May be applied against any internal revenue tax except withholding taxes,
2. Original copy is surrendered to the revenue office,
3. No tax refund will be given resulting from availment of incentives granted by law where no actual payment was made (Sec. 204C, 1997 NIRC).
FORFEITURE OF CASH REFUND/TAX CREDIT
1. Forfeiture of refund in favor of the government when a refund check or warrant remains unclaimed or uncashed within five (5) years from date of mailing or delivery.
2. Forfeiture of Tax Credit – a tax credit certificate which remains unutilized after five (5) years from date of issue, shall be invalid, unless revalidated (Sec. 230, 1997 NIRC).