The Bureau of Internal Revenue (BIR) issued Revenue Memorandum Order (RMO) 23-2024 to provide guidelines for implementing a risk-based approach in verifying VAT refund claims under Section 112(A) of the National Internal Revenue Code of 1997, as amended by Republic Act 11976, or the the Ease of Paying Taxes Act.
During audits implementing this approach, instances of missing or incomplete information such as no reference details and incomplete transaction details in sales and purchase schedules were observed. To address these issues and improve the efficiency of the VAT refund verification process, the BIR has released RMO 42-2024. Under this order, applications with incomplete or missing information in the sales and purchase schedules will be classified as high-risk and will require full verification.
The updated list below enumerates high-risk VAT refund claims that will require full verification:
a. Claims filed on April 27, 2024, to June 30, 2024;
b. Filed by first-time claimant which will remain as such for the succeeding three VAT refund claims;
c. The fourth claim following the three consecutive low-risk classifications of processed VAT refund claims;
d. Filed pursuant to Section 112(B) of the Tax Code;
e. Filed by taxpayer-claimant tagged as Cannot be Located;
f. Filed by taxpayer-claimants with complaints duly filed at the Department of Justice and/or those facing criminal cases before the Courts under the Run After Tax Evaders and Run After Fake Transactions programs;
g. Filed by taxpayer-claimant who has fully denied claim from its immediately preceding VAT refund claim;
h. Applications for VAT refund claim covering more than one taxable quarter where at least one taxable quarter is already prescribed; and
i. Applications with incomplete or missing information (e.g., no reference details, incomplete/no transaction details, etc.) on the schedules of sales and purchases following the prescribed format.
Please be guided accordingly.
Source:
P&A Grant Thornton
Certified Public Accountants