VALUE-ADDED TAX (VAT)

VAT is a form of consumption tax (from 0% to 12%) imposed on each

sale, exchange, or lease of goods, properties, or services in the course of
trade or business in the Philippines and importation of goods into the
Philippines, whether or not in the course of trade or business.
Standpoint of the buyer, it is a tax on the purchase price.
Standpoint of the seller, it is a tax on the value-added to a product or
service sold.
Sellers are legally liable for the payment of VAT. Except in case of
importation of goods or services.
Buyers are financially liable for the payment of VAT.
Rationale of VAT
1.
2.
3.
4.

Simplified Tax Administration

Fostering honesty
Higher government revenues
Fostering national progress

Characteristics of VAT
1.
2.
3.
4.

It is imposed on business transactions

Follows destination principle
Indirect tax, a privilege tax and an ad valorem tax
Cumulative

Rates of VAT
1. For Output VAT
a. Regular VAT rate of 12%
b. Zero percent (0%) rate
2. For Input VAT
a.
b.
c.
d.
e.

Regular VAT rate of 12%

Zero percent (0%) rate
Transitional input VAT rate of 2%
Presumptive input VAT rate of 4%
Final withholding VAT of 5% on sales of goods or services to
government

f. Standard input VAT of 7% allowed on sales of goods or

services to the government.
Determination of VAT amount
1. The amount of VAT shall be shown as a separate item in the invoice
or receipt.
2. In cases where the amount of VAT is erroneously billed or the
amount of VAT is not shown in the VAT invoice, the total invoice
amount is presumed to be comprised of the gross selling price or
gross receipts including the VAT.
Persons legally liable to pay VAT
1. Registered person under the VAT system
Any person who is registered under the value-added tax system in
the course of trade or business, sales, barters, exchanges of goods or
properties, rendering of services and leases shall be subject to 12%
VAT regardless of the amount of his gross annual sales or gross
receipts.
2. Non-VAT registered but required to be registered under the VAT
system
If his annual gross receipts or sales exceed P1,919,500. However, he
is not entitled to creditable input VAT because his registration is
non-VAT.
3. Franchise grantees of radio/television broadcasting are subject to
VAT if:
a. Opted to register under VAT system
b. When its annual gross receipts exceed P10,000,000
4. Importers of goods
For purposes of the threshold of P1,919,500 annual gross sales or receipts,
the husband and the wife shall be considered separate taxpayers.
However, the aggregation rule for each taxpayer shall apply.
EXEMPTION FROM VAT
VAT-exempt persons

A VAT-exempt person is not liable for the imposition of output VAT on its
sales, either because his transactions are not taxable transactions or he is
specifically exempt from VAT by specific provision of the Tax Code or by
special laws.
A VAT-exempt person may be exempted from levying of output VAT;
however, he may still be required by his VAT-registered supplier to pay
the VAT component on his purchases.
1. Persons engaged in non-VAT transactions
a. Those whose sales or receipts are exempt under Sec 109(v) of
NIRC
b. Those whose annual gross sales or receipts do not exceed
P1,919,500 and not registered under the VAT system
c. Non-stock/nonprofit organizations
A nonstock/nonprofit organizations which has no income but
collecting monthly dues from the members. However, it
becomes a VAT taxable person if it regularly conducts or
pursues a commercial or an economic activity.
2. Persons exempt from VAT under Special Laws
a. CDA-registered cooperatives
b. Enterprise registered with Special Economic Zones or Free
Ports in the Philippines
c. Regional or Area Headquarters established in the Philippines
by multinational corporations (BIR ruling 176-88)
d. Inventors (RA 7459; RR 19-93)
3. VAT-exempt under treaty
4. Vat-exempt Senior Citizen and PWDs
A senior citizen or elderly is a Filipino citizen who is a resident of the
Philippines, and sixty (60) years old and above. It includes senior
citizens with dual citizenship status provided they prove their Filipino
citizenship and have at least six (6) months residency in the
Philippines.
Senior citizens and PWDs are not subject to 20% discount and VATexempt on purchases of goods and services as long as they can show
proof of their status.
The purchases made by the senior citizen shall be processed separately
as an independent transaction from his or her non-eligible companions

to ensure that it is for his or her exclusive consumption. The most

expensive meal combination shall apply to the purchases by the senior
citizen. (RA 9998; RR 7-2010; RA 10754)
VAT declaration
BIR form 2550M must be filed and paid on or before the 20th day of the
month following the taxable month for the first two months of the
quarter.
The quarterly VAT return BIR form 2550Q is to be filed on or before the
25th of the month following the close of the quarter.
VAT on Goods and Properties
Agricultural and Marine Food Products
Importation and sale (in all stages of distribution) of agricultural and
marine food products in their original state are both exempt from VAT and
OPT.
Original State. Meat, fruit, vegetables and other agricultural and marine
ford products are considered in their original state even if they have
undergone the simple processes of preparation or preservation for the
market, such as freezing, drying, salting, broiling, roasting, smoking, or
stripping.
Polished and/or husked rice, corn grits, raw sugar cane and molasses,
ordinary salt, and copra shall be considered in their original state.
Advanced Packaging. As long as it do not essentially alter the original state
of the products exempt from VAT and OPT.
Imported meat. After undergoing the following process, is still considered
in its original state (BIR ruling 022-99)
1. Thaw and wash frozen meat
2. Cut into estimated 4x4x8 blocks
3. Boil on big kawans with clear plain water for about 45 minutes
4. Chop boiled meat into cubes (bite) size
5. Pack on a clean polyethylene bags, seal and label
6. Blast freeze the meat
Grounding and forming of 100% beef into patties without further
processing and without adding any preservatives thereto does not alter the

beef as an agricultural food product in its original state; hence importation

thereof is exempt for VAT. (BIR ruling 094-97, Aug 26,1997)
Malt (used as raw material in brewing beer) is considered as an
agricultural product in its original state. (VAT ruling 115-88, April 19,
1988)
Dried, deboned, smoked, or salted fish; ordinary rock salt; and fresh
alamang with little salt for sale into bagoong are considered original state.
(VAT ruling 16-88; BIR ruling 009-98 & 119-89
Fresh pineapple pulp that has undergone a sophisticated process, either
for use as a non-food agricultural product or as an agricultural food
product, is no longer in its original state. (VAT ruling 17-90, Jan 22, 1990)
A change in the for or composition of the product resulting from biological
process, such as that which occurs in transforming fresh eggs into penoy
and balut does not constitute manufacturing for VAT purposes, (VAT
ruling 110-98, April 28, 1988), but conversion of fresh eggs into salted
eggs constitute, thus no longer in original state. (Ngo Siek vs CIR, G.R. No.
L-8989)
Agricultural and Marine Food Production Inputs
Fertilizers are exempt from VAT; however, raw materials used in
formulation of fertilizers are not exempt. Accordingly, diatomaceous earth
which is used for the formulation of fertilization is subject to VAT. (BIR
Ruling 217-88; VAT ruling15-88)
Feeds
Ingredients, whether locally produced or imported, used in the
manufacture of fish, prawn, livestock, and poultry feeds are VAT exempt
(except specialty feeds for race horses, fighting cocks, aquarium fish, zoo
animals, and other animals generally considered as pets)
Soy bean meal and fish meal, as well as corn grit which are also used as
food for human consumption, are considered, are considered agricultural
food product in its original state are exempt from VAT.
Nonfood Agricultural, Marine and Forest Products
The sale of nonfood agricultural, marine and forest products in their
original state by the primary producer or the owner of the land where the
same are produced are now subject to VAT.

Fresh water (being naturally occurring inorganic substance found in nature

whether in solid, liquid, gaseous, or any intermediate state) is a mineral,
not an agricultural product as earlier ruled. The sale of water, therefore, is
taxable. (RMC 07-94, Feb 18, 1994)
The sale of cotton and cotton seeds in their original state is now subject to
VAT. (RA 9337)
VAT on Sale of Services
Sale or exchange of services in the course of business may be classified as
follows:
1. Services performed for a valuable consideration in relation to trade,
business, or profession, unless exempted by Code or special law.
2. Lease or use of personal properties (tangible or intangible) such as
rights, privileges, or properties, or the supply of knowledge or
information, assistance or services.
3. Lease of real properties
Services performed outside the Philippines, even if undertaken in the
course of business, are beyond the scope of the VAT and are VAT-exempt.
This tax situs is in accordance with the principle of consumption.
Requirements of Service Transactions subject to VAT
1. The service must be performed or is to be performed in the course of
business or trade in the Philippines.
2. The service is rendered for valuable consideration actually or
constructively received.
3. The service rendered is not exempt from VAT under the Tax Code,
other special laws, or international agreement.
Categories of Services
1. Professional/Technical Services
a. Performed or rendered by construction and service
contractors;
b. Stock, real estate, commercial customs, and immigration
brokers;
c. Persons engaged in milling, processing, manufacturing, or repacking;
d. Dealers in securities;
e. Lending investors;
f. Transportation contractors on their transport of goods or
cargoes, including persons who transport goods or cargoes for

hire and other domestic common carriers by land, air, and

water relative to their transport of goods or cargoes;
Include cross border movement (from the Philippines to
foreign port or vice versa) or a local movement (within the
Philippines) of cargoes. (RMC 35-2006, June 21, 2006)
Offshore destination or origin charges are not subject to VAT.
Offshore destination or Origin charges are charges of foreign
forwarders/agents billed to the forwarders for services
rendered abroad involving outbound or inbound movements
which are, in turn, billed by the forwards to their clients at
cost.
g. Travel agencies
The VAT on travel agencies is based on its gross receipts
which will not include the (a) cost of airline or ship tickets and
(b) the reimbursement of expenses of expenses for services
rendered by third party other than the travel agency and paid
to such party. (RMC 07-88, Feb 15, 1988)
Examples of reimbursement are passport and visa fees, hotel
room charges, bus and/car tour charges, guide fees, resort fees;
and meal charges to tourist.
h. Non-life insurance companies (except crop insurance),
including surety, fidelity, indemnity, and bonding companies;
and
Subject to VAT if acquired from domestic or foreign
companies authorized to transact risk business in the
Philippines.
If acquired from foreign companies not authorized to transact
business in the Philippines. Subject to OPT
i. Through an authorized agent 10% on the premium
collected.
ii. Direct purchased by property owner 5% on the
premium paid.
i. The supply of services by a nonresident person or his
employee in connection with the use of property or rights
belonging to, or the installation or operation of any brand,
machinery, or other apparatus purchased from such
nonresident person.

j. Medical Services
Medical, dental, hospital, and veterinary services are VATexempt (Sec 109 NIRC)
Hospital, laboratory services, and medicines used for inpatients in performing medical procedures by a hospitals
special units (e.g. operating and delivery rooms) are VATexempt.
The VAT-exemption does not cover the following medical
services:
i. Services rendered by health maintenance organizations
(HMOs). (CIR vs Phil Health Care, G.R. No. 168129,
April 29, 2007)
ii. Services rendered by medical professionals engaged in
the practice of their profession who are either VATregistered or VAT-registrable. (RA 9337)
iii. Sale of drugs and medicine by hospital pharmacy or
drug store not included in the hospital bill. (St. Lukes
Medical Center Inc vs. CIR. CTA case No. 5068, Mar
17, 1999)
k. Educational Services
Educational services refer to academic, technical, or
vocational education provided by private educational
institutions duly accredited by the DECS, CHED or TESDA and
those rendered by government educational institutions.
It does not include seminars, in-service trainings, review
classes, and other similar services rendered by persons who
are not accredited by the DECS, CHED, or TESDA. (Rev Regs
No. 6-97, Sec 109 NIRC, RA 9337)
l. Works of Art, Literary Works and Musical Compositions
Sale by the artist of his works of art, literary works, musical
compositions and similar creations, or his services performed
for the production of such works are now subject to VAT. (RA
9337)
m. Employees Services
Compensation income received by individuals derived from
an employer-employee relationship is exempt. Additional

compensation in form of commission income received by an

employee from his employer is not subject to VAT.
2. Transfer of Technology
a. The lease or use of any industrial, commercial knowledge or
information;
b. The supply of scientific, technical, industrial, or commercial
knowledge or information; and
c. The supply of any assistance that is ancillary and subsidiary to
and is furnished as a means of enabling the application or
employment of any such property, or right as mentioned in
subparagraph 2 or any such knowledge or information as in
mentioned in paragraph 3.
3. Lease or use of Intangible Property
4. Lease or use of Tangible Property
a. Lessors of property, whether personal or real;
Lease of commercial units are subject to 12% VAT, except
when the lessor is non-VAT and his total gross receipts do not
exceed P1,919,500 per year. (Sec 105, NIRC, RA 9337, Rev
Reg 16-2011, as amended) and 5% withholding income tax.
Lease of residential units are subject to the following rules:
1. If the monthly rental does not exceed P12,800 per unit per
month, regardless of the aggregate annual rentals, the lessor
shall be exempt from VAT and OPT;
2. If the monthly rental exceeds P12,800 per month per unit
but the aggregate annual rentals do not exceed P1,919,500,
the lessor is exempt from VAT. The lessor, however, is
subject to 3% OPT;
3. If the monthly rental exceeds P12,800 per month per unit
and the aggregate annual rentals exceed P1,919,500, the
lessor is subject to 12% VAT. (BIR Rulings No. 144-2006,
March 17, 2006, Rev Regs No. 16-2011 as amended)
b. Warehousing services;
c. Lessors/distributors of cinematographic films;
d. Proprietors, operators or keepers of hotels, motels, rest-houses,
pension houses, inns, and resorts;
The taxable base in the case of hotel and restaurant operators
includes, among others, charges for rooms, laundry, and valet
services, food, and beverages consumption, corkage, handling
charges for providing telephone, telex, cable, or fax services,

cake shop sales, lease to concessionaires, compensation, and

other service fees. (RMC 07-96)
The taxable base does not include the following:
1. Service charges billed separately and actually distributed to
waiters and employees;
2. Actual cost of long distance and overseas telephone calls,
and other charges of the telecommunication companies
collected by the establishment;
3. Local taxes
e. Proprietors, operators of restaurants, refreshment parlors, cafes
and other eating places, and caterers;
f. Books, magazines and newspapers
The sale, importation, printing, or publication of books and
any newspaper, magazine, review, or bulletin which (a)
appear at regular intervals (b) with fixed prices for subscription
and sale, and (c) which is not devoted principally to the
publication of advertisement, are VAT-exempt (Sec 109,
NIRC, VAT ruling 149-88)
Bindery services rendered by VAT-registered company for
another entity engaged in VAT-exempt book printing,
commercial printing jobs like the printing of calling cards,
office forms, labels, passbooks, etc., are subject to VAT. (VAT
ruling 117-88)
g. Agricultural Contract Growers and Millers of Agricultural
Products.
Services rendered by agricultural contract growers and milling
for others of palay into rice, corn into grits, and sugar cane
into raw cane sugar are exempt from VAT. (Sec 109 NIRC)
h. Services of franchise grantees of telephone and telegraph,
radio and television broadcasting and all other franchise
grantees except those under Sec 119 of the Tax Code;
The taxable base for VAT on transactions of
telecommunication companies is the gross receipts they derive
from their telephone, telegraph, telewriter exchange, wireless
and other communication facilities services, excluding the
amounts earmarked as the foreign administrations share
relating to the services performed outside of the Philippines.
(RMC 5-95, Jan 15, 1996)

Deposits for telephone instruments and the like are not subject
to VAT. However, if the said deposits are forfeited, they are
included in the taxable gross receipts of the
telecommunications company.
Amounts received for overseas dispatch, message, or
conversation originating in the Philippines which are subject
to the overseas communications tax do not form part of gross
receipts for VAT purposes. (Sec 120, NIRC)
i. The lease or the use of or the right or privilege to use any
copyright, patent, design or model, plan, secret formula or
process, goodwill, trademark brand or other like property or
right.
Zero-Rated or Effectively Zero-Rated Services
The Tax Code used the word export in describing the destination of
goods sold but not for the services supplied. It uses the phrase
performance of all kinds of services in the Philippines to be subject to
12% VAT. The law explicitly used one single criteria: the place where the
service was performed as the jurisdictional basis for the imposition of the
VAT on supply of services. (Sec 108 NIRC)
The Doctrine of Cross Border of VAT system provides that no VAT shall
be imposed to form part of the cost of goods sold destined for
consumption outside of the territorial border of the taxing authority. (RMC
No. 74-99)
Accordingly, services performed outside the Philippines are zero-rated or
effectively zero-rated VAT.
Zero-rated or Effectively Zero-rated Organizations
The Zero-rated VAT or effectively zero-rated VAT is applied on the supply
of services by a VAT-registered person to a person or entity who was
granted indirect tax exemption under special laws or international
agreements (Regs 7-95)
VAT-registered business is allowed to deduct the related input VAT but is
not allowed to collect output VAT on its sale of goods or services with
zero-rated VAT or effectively zero-rated VAT:
1. PEZA or SBMA-Registered Enterprises

The sale of goods and services to PEZA or SBMA-registered business

enterprises operating within the ECOZONE shall be effectively zerorated. (RA 7916; VAT Ruling No. 033-96; Oct 30, 1996; BIR Ruling
No. 033-99, Mar 23, 1999)
Under the cross border doctrine, a supply of service to PEZA-registered
enterprise shall be treated as effectively zero-rated (0%) VAT as long as
the performance of service is within the ECOZONE area, (RMC No. 7499; VAT Ruling 32-98). The ECOZONE area, under the fiction of
foreign territory, may be considered as a special customs (or foreign)
territory.
The sale for services should be rendered within the PEZA boundaries to
be entitled to the benefits of Section 24 of RA No. 7916. If the service is
outside PEZA boundaries, the service is subject t o12% VAT (BIR ruling
No. 33-99)
2. International Organizations
The gross receipts of a service contractor from an international
organization granted tax exemptions from all direct and indirect taxes
under special laws or international agreement in the Philippines are
subject to zero-rated VAT. (John Gotamco & Sons, Inc, CTA Case No.
1625, May 21, 1969)
3. Other organizations
a. Asian Development Bank (ADB); (EO 161)
b. International Rice Research Institute (IRRI); (RA 2707)
c. United States Agency for International Development; (USAID
1951 Agreement)
d. US Navy Supply Depot, Department of Navy; (RP-US Military
Base Agreement)
e. World Health Organization (Sec 12, Art IV Host Agreement
with the Government of the Philippines); and
f. International Labor Organization. (Sec 9, Art III Convention on
Privileges and Immunities of Specialized Agencies of United
Nations)
4. Domestic Corporations
a. Services rendered for a consideration paid in acceptable
foreign currency and accounted with rules and regulations of
the BSP;
b. Services rendered to persons or entities whose exemption is
under special laws or international agreements to which the
Philippines is a signatory. Example, foreign embassies with
reciprocity;

c. Services rendered to persons engaged in international shipping

or international air transport operations, including leases of
property for use thereof. (RA 9337, as amended)
d. Services performed by subcontractors and/or contractors in
processing, converting, or manufacturing goods for an
enterprise whose export sales exceed 70% of total annual
production;
e. Transport of passengers and cargo by air and sea vessels from
the Philippines to foreign country (vice versa)
Input VAT Credits and Refunds
An input VAT credits or Input Tax Credits are value-added taxes due from
or paid by a VAT-registered person in the course of his trade or business
on local purchase of goods and services, including lease or use of property
from a VAT-registered person. It also includes VAT imposed on the
importation of goods or services. (Sec 110 [B], NIRC)
The input VAT is primarily intended to reduce the amount of output VAT
in computing the VAT payable for the taxable period. It is creditable
against (i.e. deductible from) the output VAT if the related goods or service
from which it arises are used in the conduct of business.
At the end of any taxable period, if the output VAT exceeds the input VAT,
only such excess amount is payable by the taxpayer to the BIR.
Under RA 9361 that amended R.A. 9337, if the input VAT, inclusive of
input tax carried over from the previous quarter(s) exceeds the output
VAT, the excess input VAT shall be carried over to the succeeding quarter
or quarters or may be applied for tax refund.
Rules on Creditable Input VAT
1.
2.
3.
4.

Proper documentations
Delivery receipts not allowed
No double input tax credit is allowed
Ignore erroneous VAT rate.
A VAT invoice or receipt containing an erroneous rate does not
deprive the purchaser of claiming the correct input VAT arising from
purchase. (BIR Ruling 141-99, Sept 13, 1999)

Sources of Input VAT

1. Purchases of goods/properties or services to other VAT-registered
business;

2. Purchases of goods or services which are otherwise exempt from

VAT but the seller issued a VAT invoice or receipt;
3. Importation of goods (for business use or for sale locally)
Except those exempt under Sec. 4 of Reg 6-97, all importations are
subject to 12% VAT, but not all input VAT paid on importations are
creditable against output VAT.
All subject to 12% VAT
Importation by a VAT person for business
use
Importation by a VAT person for personal
use
Importation by a non-VAT person for
business use
Importation by a non-VAT person for
personal use

Creditable as INPUT
VAT
Yes
No
No
No

4. Transitional input VAT;

Transitional Input VAT (TIV) is allowed on the inventory on hand
(goods, materials and supplies) of a person who, for the first time
becomes liable to VAT or elects to be VAT-registered.
The TIV is equivalent to 2% of the value of such inventory or the
actual input VAT paid on such inventory, whichever is higher,
which shall be creditable against the output VAT. Goods exempt
from VAST shall be excluded in the computation of transitional
input VAT. (Sec 111, NIRC; RA 9337; RMC 62-2005 dated October
18, 2005)
5. Presumptive input VAT (on VAT-exempt Prime Materials); and
Presumptive Input VAT (PIV) is an amount allowed by the Tax Code
as input tax on purchase of a VAT-registered person despite that
there is no actual VAT payment made on VAT-exempt transactions.
(Sec 111[B], NIRC; RA 9337)
The PIV is 4% on the purchases of VAT-exempt primary agricultural
and marine food products at their original state which are used as
inputs to the processing of:
a. Sardines, mackerel;
b. Milk; refined sugar;
c. Cooking oil; and

d. Packed noodle based instant meals. (RA 9337)

The term processing shall mean pasteurization, canning, and
activities which through physical or chemical process alter the
exterior texture, form, or inner substance of a product in such
manner as to prepare it for special use to which it could not have
been put in its original form or condition.
6. Standard input VAT on sales to the government.
Input VAT of Zero-Rated Person
Any input VAT attributable to the zero-rated or effectively zero-rated sales
by a VAT-registered person may at his option be applied for (a) tax refund,
or (b) issuance of tax credit certificate (TCC) which may be used in the
payment of internal revenue taxes (RA 9361 took effect on December 31,
2006), subject to the following conditions:
1. The taxpayers is VAT-registered;
2. The claim is made within 2 years after the close of the taxable
quarter when claim is made;
3. The creditable input tax must be attributable to the zero-rated or
effectively zero-rated sales, not transitional input tax (or presumptive
input VAT), and not yet applies against output VAT; and
4. In case of zero rate sales under Section 106 (A)(2)(a)(1), (2) and (b)
and Section 108(B)(1) and (2), the acceptable foreign currency
exchange proceeds thereof had been duly accounted for in
accordance with BSP rules and regulations. (Sec 112, NIRC)
VAT refund or Tax Credit Certificate
Allowed for VAT refund or Tax Credit Certificate. Under RA 9337, the
following VAT-registered taxpayers are allowed by law to apply for VAT
refund or issuance of tax credit certificate (TCC) to the extent that such
input VAT has not been applied against output VAT:
1. Those with zero-rate and effectively zero-rated sales; and
2. Those who would be cancelling their VAT registration. (Sec 112,
NIRC)
Not allowed for VAT refund or Tax Credit Certificate. The following are
not allowed to apply for VAT refund or issuance of tax credit certificate;
1. Presumptive Input VAT (Sec 111, NIRC);
2. Transitional Input VAT (Ibib.);

3. Actual input VAT on capital goods, importation, or purchases of

continuing VAT-registered persons to the extent of their sales not
subject to zero-rated, effectively zero-rated or business cancelling
their VAT registration. (Sec 112, NIRC)
The VAT-registered taxpayer may use these input taxes as (a) direct tax
credit against his output VAT due and (b) carry-over any excess input VAT
to the succeeding quarters for application against its future output VAT
liabilities.
Tax Credit Certificate or VAT refund period
A VAT-registered person may apply for input VAT refund or issuance of
TCC within 2 years after the close of the taxable quarter when the sales
were made. (Sec 112(A), NIRC; CIR vs Migrant Pagbilao Corporation, G.R.
No. 172129, September 12, 2008)
SUMMARY OF RULES ON PRESCRIPTIVE PERIODS FOR CLAIMING
REFUND OR CREDIT OF INPUT VAT (CIR vs Mindanao Geothermal II)
The lessons of this case may be summed up as follows:
Two-Year Prescriptive Period
It is only the administrative claim that must be filed within the
two-year prescriptive period. (Aichi)
The proper reckoning date for the two-year prescriptive period
is the close of the taxable quarter when the relevant sales were
made. (San Roque)
The only other rule is the Atlas ruling, which applied only
from 8 June 2007 to 12 September 2008. Atlas states that the
two-year prescriptive period for filing a claim for tax refund or
credit of unutilized input VAT payments should be counted
from the date of filing of the VAT return and payment of the
tax. (San Roque)
B. 120+30 Day Period
The taxpayer can file an appeal in one of two ways: (1) file the
judicial claim within thirty days after the Commissioner denies
the claim within the 120-day period, or (2) file the judicial
claim within thirty days from the expiration of the 120-day
period if the Commissioner does not act within the 120-day
period.
The 30-day period always applies, whether there is a denial or
inaction on the part of the CIR.

As a general rule, the 30-day period to appeal is both

mandatory and jurisdictional. (Aichi and San Roque)
As an exception to the general rule, premature filing is
allowed only if filed between 10 December 2003 and 5
October 2010, when BIR Ruling No. DA-489-03 was still in
force. (San Roque)
Late filing is absolutely prohibited, even during the time when
BIR Ruling No. DA-489-03 was in force. (San Roque)