BIR updates tax refund, credit claim rules

The Bureau of Internal Revenue (BIR) has updated its procedures for tax credit and refund claims, clarifying where taxpayers should file applications and which offices are responsible for processing, reviewing and approving them.

The changes cover claims for excess or unutilized creditable withholding taxes (CWT), as well as taxes erroneously or illegally received or collected and penalties imposed without authority.

The BIR issued three related revenue issuances on 29 September — Revenue Memorandum Circular (RMC) Nos. 102-2026 and 103-2026 and Revenue Memorandum Order (RMO) No. 25-2026 — amending existing procedures for tax credit and refund applications.

“Taxpayers claiming a refund should not have to figure out which BIR office will accept their application, who is responsible for acting on it, or how long their claims will take to be processed,” BIR Commissioner Charlito Mendoza said.

“These amendments establish definite timelines and clear responsibilities within the Bureau to ensure that refund claims for unutilized creditable withholding taxes and erroneously/illegally collected taxes or penalties are handled consistently and in accordance with the law,” he added.

Under RMC No. 102-2026, the BIR updated the rules for claims involving excess or unutilized CWT on income, including filing and documentary requirements.

For regular refund applications, the 180-day processing period starts upon submission of the application and complete supporting documents.

Claims involving the dissolution or cessation of business, meanwhile, are subject to a special two-year processing period under Section 76(C) of the Tax Code, as amended.

RMC No. 103-2026 specifies where taxpayers should file claims involving taxes erroneously or illegally received or collected, or penalties imposed without authority.

Claims involving Capital Gains Tax on the sale of real property classified as a capital asset, along with the related Documentary Stamp Tax, must be filed with the Revenue District Office that has jurisdiction over the location of the property.

Other covered claims must be filed with the appropriate RDO, Large Taxpayers Audit Division or Large Taxpayers Division that has jurisdiction over the taxpayer-claimant.

RMO No. 25-2026, meanwhile, sets the processing, review and approval responsibilities of BIR offices regardless of the amount being claimed.

Designated revenue officers will receive applications and check whether the documentary requirements are complete.

The Assessment Division will review claims processed by RDOs, while the Regional Director will approve them.

For claims processed by the Large Taxpayers Audit Division or Large Taxpayers Division, the concerned Head Revenue Executive Assistant of the Large Taxpayers Service will conduct the review, while the Assistant Commissioner of the LTS will approve the claims.

The BIR said the updated guidelines are intended to improve refund administration by providing clearer filing procedures and defining the responsibilities of offices handling taxpayer claims.