Global

Details

  • Service: Tax, Global Indirect Tax, Global Compliance Management Services
  • Type: Regulatory update
  • Date: 7/10/2012

Philippines - Monetization of VAT credit certificates 

July 10:   Various Philippines government agencies issued a joint circular (No. 2-2012) providing guidelines for the monetization of value added tax (VAT) credit certificates as issued by the Bureau of Internal Revenue.

Under the program, holders of valid and unexpired VAT credit certificates may apply to participate in the monetization program by filing an application within three months from the effective date of the joint circular (published on 2 July 2012, and effective 15 days after publication).


Once the requirements to participate in the program are satisfied, the Bureau of Internal Revenue will issue a “notice of payment schedule” that will include information such as the refundable amount. The holder of this notice can then:


  • Sell the refundable amount at a discount, using rates as determined by the government or
  • Hold the “notice of payment schedule” until maturity, to be paid by the Bureau of Internal Revenue at face value based on an established payment schedule

Unclaimed amounts will be deemed forfeited within five years from the date of issuance of the check. The “notice of payment schedule” must be presented 30 days before the maturity date to avoid being forfeited.


Holders of VAT credit certificates (or other tax credit certificates) that do not elect to participate in the monetization program will be able to:


  • Credit the amounts against their tax liabilities pursuant to current tax credit use rules
  • Apply for revalidation and / or cash conversion of the tax credits

Read a July 2012 report [PDF 85 KB] prepared by the KPMG member firm in the Philippines: Monetization schedule for value added tax (VAT) credit certificates issued by the Bureau of Internal Revenue



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1801 K Street NW
Washington, DC 20006.
 

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