INCOME TAX REFUND (Sec.

229 NIRC)
SECTION 229. Recovery of Tax Erroneously or Illegally Collected. - No suit or proceeding shall be maintained in
any court for the recovery of any national internal revenue tax hereafter alleged to have been erroneously or
illegally assessed or collected, or of any penalty claimed to have been collected without authority, or of any sum
alleged to have been excessively or in any manner wrongfully collected, until a claim for refund or credit has been
duly filed with the Commissioner; but such suit or proceeding may be maintained, whether or not such tax,
penalty, or sum has been paid under protest or duress.
"In any case, no such suit or proceeding shall be filed after the expiration of two (2) years from the date of
payment of the tax or penalty regardless of any supervening cause that may arise after payment: Provided,
however, That the Commissioner may, even without a written claim therefor, refund or credit any tax, where on
the face of the return upon which payment was made, such payment appears clearly to have been erroneously
paid.
National Internal Revenue Code; income tax; creditable withholding tax; refund; requisites. There are three
essential conditions for the grant of a claim for refund of creditable withholding income tax, to wit: (1) the claim is
filed with the Commissioner of Internal Revenue within the two-year period from the date of payment of the tax;
(2) it is shown on the return of the recipient that the income payment received was declared as part of the gross
income; and (3) the fact of withholding is established by a copy of a statement duly issued by the payor to the
payee showing the amount paid and the amount of the tax withheld therefrom. Commissioner of Internal Revenue
v. Team (Philippines) Operations Corporation (formerly Mirant Phils., Operation Corporation), G.R. No. 179260,
April 2, 2014.
National Internal Revenue Code; income tax; tax credit or refund; corporations; irrevocability rule. In case
the corporation is entitled to a tax credit or refund of the excess estimated quarterly income taxes paid, the excess
amount shown on its final adjustment return may be carried over and credited against the estimated quarterly
income tax liabilities for the taxable quarters of the succeeding taxable years. Once the option to carry-over and
apply the excess quarterly income tax against income tax due for the taxable quarters of the succeeding taxable
years has been made, such option shall be considered irrevocable for that taxable period and no application for
cash refund or issuance of a tax credit certificate shall be allowed therefor. Commissioner of Internal Revenue v.
Team (Philippines) Operations Corporation (formerly Mirant Phils., Operation Corporation), G.R. No. 179260,
April 2, 2014.
Court of Tax Appeals; findings and conclusions of the CTA are accorded highest respect. The findings and
conclusions of the Court of Tax Appeals (CTA) are accorded the highest respect and will not be lightly set aside.
The CTA, by the very nature of its functions, is dedicated exclusively to the resolution of tax problems and has
accordingly developed an expertise on the subject unless there has been an abusive or improvident exercise of
authority. Consequently, its conclusions will not be overturned unless there has been an abuse or improvident
exercise of authority. Its findings can only be disturbed on appeal if they are not supported by substantial
evidence or there is a showing of gross error or abuse on the part of the Tax Court. In the absence of any clear
and convincing proof to the contrary, the Court must presume that the CTA rendered a decision which is valid in
every respect. Commissioner of Internal Revenue v. Team (Philippines) Operations Corporation (formerly Mirant
Phils., Operation Corporation), G.R. No. 179260, April 2, 2014.

INPUT TAX REFUND FOR UNUTILIZED INPUT TAX CREDIT ON ZERO-RATED

TRANSACTIONS (Sec 112 of NIRC)
"SECTION 112. Refunds or Tax Credits of Input Tax. "(A) Zero-rated or Effectively Zero-rated Sales. - Any VAT-registered person, whose sales are zero-rated or
effectively zero-rated may, within two (2) years after the close of the taxable quarter when the sales were made,
apply for the issuance of a tax credit certificate or refund of creditable input tax due or paid attributable to such
sales.
National Internal Revenue Code; value-added tax; zero-rated or effectively zero-rated sales; unutilized
input value-added tax; claims for tax credit or refund; period to file appeal with the Court of Tax Appeals.
Section 112 (D) of the National Internal Revenue Code provides the Commissioner of Internal Revenue a 120-day
period from submission of complete documents in support of the administrative claim within which to act on claims
for refund/applications for issuance of the tax credit certificate. Upon denial of the claim or application, or upon
expiration of the 120-day period, the taxpayer only has 30 days within which to appeal said adverse decision or
unacted claim before the CTA, otherwise, said judicial claim shall be considered as filed out of
time. Commissioner of Internal Revenue v. Silicon Philippines, Inc. (formerly Intel Philippines Manufacturing,
Inc.), G.R. No. 169778, March 12, 2014.
National Internal Revenue Code; value-added tax; unutilized input VAT; claims for tax credit or refund;
prescriptive periods. (1) An administrative claim must be filed with the Commissioner of Internal Revenue (CIR)
within two years after the close of the taxable quarter when the zero-rated or effectively zero-rated sales were
made. (2) The CIR has 120 days from the date of submission of complete documents in support of the
administrative claim within which to decide whether to grant a refund or issue a tax credit certificate. The 120-day
period may extend beyond the two-year period from the filing of the administrative claim if the claim is filed in the
later part of the two-year period. If the 120-day period expires without any decision from the CIR, then the
administrative claim may be considered to be denied by inaction. (3) A judicial claim must be filed with the Court
of Tax Appeals (CTA) within 30 days from the receipt of the CIRs decision denying the administrative claim or
from the expiration of the 120-day period without any action from the CIR. (4) All taxpayers can rely on Bureau of
Internal Revenue Ruling No. DA-489-03 from the time of its issuance on December 10, 2003 up to its reversal by
the Court in the Aichi case on October 6, 2010, as an exception to the mandatory and jurisdictional 120+30 day
periods. Commissioner of Internal Revenue v. Silicon Philippines, Inc. (formerly Intel Philippines Manufacturing,
Inc.), G.R. No. 169778, March 12, 2014.

PROCEDURE IN CUSTOMS PROTEST CASES

COLLECTOR
Appraisal, Classification, Assessment &
Collection
Payment under protest within 30 days after discharge of last
package

PAY TARIFF AND DUTIES UNDER

PROTEST
Filing of Protest with the Collector within 15 days after payment
FILE PROTEST WITH THE COLLECTOR
Issuance of order of hearing within 15 days from
receipt of protest. When the protest is in proper form,
Collector shall re-examine the matter presented.

COLLECTOR CONDUCTS HEARING

CO LLE CTOR DEN IES PRO TEST

If the Collector denies the protest filed

by the taxpayer, the taxpayer must file
a Notice of Appeal to the Collector
within 15 days from notice, copy furnish
the Commissioner.

CO LLE CTOR SUST AINS

PRO TEST If the Collector grants
the protest filed by the taxpayer, the
decision is adverse to the government,
and hence, there will be an Automatic
Review by the Commissioner.
The records of the case shall be
elevated to the Commissioner of
Customs for Automatic Review within 5
days from the promulgation.

The Collector shall transmit all the

records of the proceeding to the
Commissioner.

AUTOMATIC REVIEW BY
THE COMMISSIONER

APPEAL TO THE
COMMISSIONER

(The Commissioner shall render a

decision within 30 days from
receipt of the records of the case.
If the Commissioner
AFFIRM S the decision of
the Collector granting the
protest or NO DECISION
was rendered within 30
days

If the commissioner renders

a decision ADVERSE to
the government, there will
be an automatic Appeal.

AUTOMATIC
AP PE AL TO THE
SEC. OF FINANCE

AUTOMATIC
R EV IE W TO THE
SEC. OF FINANCE

If the decision of the Sec. of Finance is still

If the Sec. of
adverse to Government or no decision after 30
If the Sec. of
Finance renders
days, the decision appealed from becomes
Finance
decision
FI NAL A ND EXECUTO RY.
renders
adverse to the
decision
taxpayer, he
adverse to the
may still file an
taxpayer, he
appeal with the
may still file
CTA.
an appeal with
APPEAL TO THE
the CTA.
If the Commissioner
CTA
If the commissioner
REVE RSED the
renders a decision
decision of the Collector,
adverse to the
the Taxpayer may
TAXPAYER, He may
appeal to the CTA within
appeal to the CTA within
30 days.
30 days

APPEAL TO
SC