The Bureau of Internal Revenue (BIR) has clarified rules on tax credit and refund applications under Revenue Memorandum Circular (RMC) No. 14-2025. In time for the tax season and filing of returns this upcoming 15 April 2025; Here’s what businesses need to know:
When Does This Apply to Businesses?
Business Closure or Cessation – If a company is shutting down, it can apply for a tax credit or refund of excess/unutilized Creditable Withholding Taxes (CWT). Corporate taxpayers have two years from the date of dissolution to claim this under Section 76(C) of the Tax Code.
Overpayment of Taxes – If a business has excess withheld tax (CWT) exceeding its actual tax due, it may apply for a refund or use the overpaid amount as a tax credit for future obligations under Section 58(E).
Verification Process by the BIR – The BIR verifies the validity of BIR Form No. 2307 by cross-checking it with the Summary Alphalist of Withholding Agents (SAWT) and withholding agents’ reports to confirm legitimacy.
Restrictions on Amendments – Once a business files for a tax refund or credit, it cannot amend its tax returns related to the claim. This applies even if an Electronic Letter of Authority (eLA) has been issued. To avoid disallowance, businesses must ensure their tax returns are accurate and complete before filing.
Key Clarifications from RMC No. 14-2025
Are scanned copies of tax credit documents acceptable?
Yes. Scanned copies of BIR Form No. 2307 and other required documents can be submitted electronically via email, fax, or mobile devices. Physical copies are no longer mandatory.
Can I amend tax returns after filing for a tax credit or refund?
No. The BIR will only consider tax returns filed before the claim submission date during evaluation. Inaccurate or inconsistent filings may lead to partial or full disallowance.
Are there new documentation requirements for individual taxpayers?
Yes. Individual taxpayers can claim tax refunds under Section 58(E) of the Tax Code if excess withheld tax exceeds the tax due. Corporate taxpayers fall under Section 76(C), which grants a two-year refund window from business closure or dissolution—an exception to the usual 180-day processing period.
The general refund policies in RMC No. 75-2024 and RMO No. 25-2024 remain unchanged.
For full details, refer to RMC No. 14-2025. EPV