THE Supreme Court (SC) ruled in favor of Dohle Shipmanagement Philippines Corp. (Dohle) in a value-added tax (VAT) case, in which it clarified the prescriptive periods for filing VAT refund claims with the Bureau of Internal Revenue (BIR).
In a decision publicized on Feb. 5, 2025, and written by Associate Justice Alfredo Benjamin S. Caguioa, the SC’s Third Division affirmed that for VAT refund claims filed before June 11, 2014, the 120-day period for the BIR to resolve a claim starts when the taxpayer determines that its submission of documents is complete.
For claims filed before June 11, 2014, the 120-day period begins when the taxpayer files a complete claim or indicates no further documents will be submitted.
If the BIR requests additional documents, the taxpayer has 30 days to comply, and the 120-day period starts upon submission or after the 30 days.
Moreover, if the BIR does not notify the taxpayer of incomplete submissions, the 120-day period starts when the taxpayer voluntarily submits additional documents.
The administrative claim must be filed within two years from the end of the taxable quarter.
Meanwhile, for claims filed between June 11, 2014, and Dec. 31, 2017, the 120-day period starts when the complete claim is filed.
Taxpayers also cannot submit additional documents.
The administrative claim must be filed within two years from the end of the taxable quarter.
For claims filed beginning Jan. 1, 2018, the BIR has 90 days to resolve the claim from the date of filing with complete supporting documents.
The BIR will not request additional documents as incomplete claims will be rejected outright.
The administrative claim must be filed within two years from the end of the taxable quarter or the issuance of tax clearance when a business ceases operations.
The case stemmed from Dohle, which sought a refund for unutilized input VAT for 2012. Dohle filed its administrative claim with the BIR on March 31, 2014, and submitted additional documents on July 28, 2014.
According to the 1997 Tax Code, the BIR has 120 days to decide on an administrative claim from the date the taxpayer submits complete documents.
If the BIR denies or fails to act on the claim, the taxpayer has 30 days to file a judicial claim with the Court of Tax Appeals (CTA). This is known as the 120+30-day rule.
The BIR argued that the 120-day period started when Dohle filed its initial claim on March 31, 2014, making Dohle’s judicial claim, filed on Dec. 23, 2014, too late.
It also argued that BIR’s Memorandum Circular 49-2003 requires any additional documents to be submitted within 30 days of the initial filing.
However, both the CTA and the SC ruled in favor of Dohle, saying that the 120-day period began on July 28, 2014, when Dohle submitted additional documents.
The SC said the 120 days are intended to benefit taxpayers, ensuring the BIR acts on claims.
It also said the 30-day period for submitting additional documents only applies when the BIR determines the initial submission was incomplete.
In Dohle’s case, the additional documents were submitted voluntarily, making the 120-day period begin on that date. — Chloe Mari A. Hufana
