Posts Tagged ‘TCC’
Revenue Memorandum Circular No. 21-2012 dated May 3, 2012 circularizes the full text of Executive order No. 68 dated March 27, 2012 (E.O. 68 – 2012) entitled “Monetization Program of Outstanding Value-added tax (VAT) tax Credits Certificates (TCs)”
For easy reference, hereunder are the summary of rules laid down in EO 68 – 2012:
- Five-year (2012-2016) VAT TCC monetization program is a mechanism to give the cash equivalent of outstanding VAT TCC for the government to promote conducive business environment and raise business credibility both locally and abroad;
- VAT TCCs covered are those TCCs secured under Section 112 (A) of republic Act No. 8424 (Tax reform Act), as amended, and drawback TCCs under Section 106 (e) of the Tariff and Customs Code of the Philippines (TCCP), as amended.
- Qualified VAT TCC holders shall have the following monetization options:
- Collect from a trustee bank a discounted value of their TCCs. Government Financing Institutions shall serve as trustee bank for the purpose and a special trust account shall be established; or
- Collect the full cash value of the TCCs upon certain maturity date, to be determined by the Bureau of Internal Revenue (BIR) or Bureau of Customs (BoC) in accordance with the implementing rules of EO 68-2012 to be issued jointly by BIR and BoC later;
- The funding requirements of the VAT TCC monetization shall be included in the National expenditure Program (NEP) of years 2012 to 2016 to be ensured by the Department of Budget and Management (DBM) in coordination with the Department of Finance (DOF);
- For the monetization, verification procedures shall be conducted by the BIR and/or BoC and after such process, a Notice of Payment Schedule shall be issued to qualified VAT TCC holders.
- Commission of Audit (COA) shall have the power and duty to examine the recording of all transactions relative to monetization of TCCs;
- Beginning 2012, the BIR or BoC shall no longer issue TCC for VAT refund unless applied for by the VAT taxpayer under Section 112 (A) of republic Act No. 8424 (Tax reform Act), as amended, and drawback TCCs under Section 106 (e) of the Tariff and Customs Code of the Philippines (TCCP), as amended.
On comment, this seem to be a surprising development in the midst of government’s collection struggles, but is most welcomed! For VAT TCC holder’s, this might be a good option to convert such TCCs to cash that you may use for funding the operations, settlement of obligations, and for other purposes.
In the meantime, let us await the joint implementing rules and regulations of the BIR and BoC. Let us determine the specific details of its implementation as our guide.
Consultancy and Assistance on Securing VAT TCC Monetization. Under this, we will guide you in determining whether or not your VAT TCC is qualified under the monetization program, determine application requirements and documentations, develop approaches to fast track the processing and approval of the monetization, and assist in securing such monetization. Please contact us for related concerns.(Post viewed 945 times)