article banner
Tax Notes

Clarifying the issuance of Delinquency Verification Certificate for VAT claims

THE Bureau of Internal Revenue (BIR) issued on June 18, 2019 Revenue Memorandum Circular (RMC) 64-2019, clarifying the issuance of Delinquency Verification Certificate (DVC) for claims of value-added tax (VAT) credit/refund.

In filing for claims of VAT credit/refund, taxpayers will have no outstanding tax liabilities as further defined in Revenue Memorandum Order (RMO) 11-2014. With this, “open-stop-filer cases” and deficiency tax assessments that are timely protested, subject of reconsideration/reinvestigation, or pending appeal with the Appellate Division or the Court of Tax Appeals (CTA)/Supreme Court (SC) will not be considered Accounts Receivable/Delinquent Account (AR/DA).

Therefore, the existence of such circumstances will not prevent the processing of VAT refund.

AR/DA refers to the amount of tax due from a taxpayer who failed to pay for the same within the time prescribed for its payment arising from the following circumstances:

a. Self-assessed tax liability, as follows:

-Dishonored check (check used to pay the tax liability, but was later dishonored by the concerned depository bank of the delinquent taxpayer);

-Tax due per return filed by taxpayer who failed to pay the same within the time prescribed for its payment; and

-Nonpayment of the second installment due from individual taxpayers who availed of installment payment of income tax.

b. Deficiency assessment issued by the BIR, which became final and executory due to any of the following applicable instances:

-Failure to file request for reinvestigation/reconsideration within 30 days from the receipt of the Final Assessment Notice (FAN);

-Failure to submit documents in support of the request for reinvestigation within 60 days from filing the request;

-Failure to appeal to the CT within three days from receipt of the decision denying the request for reinvestigation/reconsideration or, in case of inaction on the part of the BIR, from the lapse of the 180 days from the submission of the required documents;

-Failure to appeal CTA’s decision on the case with the higher court as a result of which the decision became final and executory; and

-Decision/resolution by the CTA/ SC in favor of the BIR that became final and executory.

For compliance, only the following offices will issue the Delinquency Verification Certificate to claimants of credit/refund:

a. For Non-Large Taxpayers

-Collection Division of the respective Regional Office and Accounts Receivable Monitoring Division (ARMD)

b. For Large Taxpayers:

-Large Taxpayers Collection Enforcement Division (LTCED) (for large taxpayers under the jurisdiction of the Large Taxpayers Service in the National Office), and

-Large Taxpayers Division-Cebu/LT Division-Davao and ARMD (for large taxpayers under the jurisdiction of Large Taxpayers Division-Cebu or Davao, wherever is applicable).

Please be guided accordingly.


P&A Grant Thornton

Certified Public Accountants



As published in SunStar Cebu, dated 09 July 2019