ABC Corporation filed an administrative claim for refund of its unutilized excess tax credit on April 16, 2025 or within the mandatory two-year period under the National Internal Revenue Code (NIRC). The Commissioner of Internal Revenue (CIR), however, denied the claim on October 16, 2025 or after 183 days. Aggrieved, ABC Corporation filed a petition for review with the Court of Tax Appeals (CTA) 15 days from its receipt of the adverse decision on the same day. The CTA First Division dismissed the petition, ruling that ABC Corporation’s judicial claim was filed out of time. Was the dismissal of the petition proper? Reason(s).
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Yes, the dismissal of the petition was proper. Under Section 229 of the NIRC, both administrative and judicial claims for tax refund must be filed within the mandatory two-year prescriptive period. A taxpayer cannot wait for the CIR's decision if doing so
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Quick check
Under Section 229 of the NIRC, what period governs the filing of both administrative and judicial claims for tax refund?
Both administrative and judicial claims under Section 229 of the NIRC must be filed within the two-year period.
What must a taxpayer do if the two-year prescriptive period under Section 229 is about to expire without a decision from the CIR?
A taxpayer cannot wait for the CIR's late decision if doing so results in appealing to the CTA beyond the mandatory two-year period.
Under Section 112 of the NIRC, what is the legal consequence when the CIR fails to act on a refund claim within the statutory period?
Under Section 112, a taxpayer must file a petition for review within 30 days from the expiration of the statutory period for the CIR to act.
What is the legal character of the two-year prescriptive period for tax refunds under Section 229 of the NIRC?
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Does a late decision issued by the CIR after the expiration of the two-year period extend the taxpayer's time to appeal to the CTA?
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Learn more about these topics
1. Two-Year Prescriptive Period
Under Section 229 of the National Internal Revenue Code (NIRC), a claim for refund or credit of erroneously or illegally collected taxes must be filed within two years from the date of payment of the tax. This mandatory two-year prescriptive period applies to both the administrative claim filed before the Bureau of Internal Revenue and the judicial claim filed before the Court of Tax Appeals. Because the two-year period is jurisdictional, a taxpayer must ensure that its judicial appeal is instituted before the expiration of the two-year window regardless of administrative inaction.
2. Judicial Claim Timeliness
A taxpayer seeking a tax refund cannot wait indefinitely for the Commissioner of Internal Revenue to render a decision on an administrative claim. In claims governed by Section 229 of the NIRC, if the two-year prescriptive period is about to expire without a decision from the tax bureau, the taxpayer must file a judicial claim with the Court of Tax Appeals before the two-year period lapses. Waiting for a late administrative denial beyond the two-year threshold deprives the Court of Tax Appeals of jurisdiction to hear the petition.
3. CIR Inaction Effect
Under Section 112 of the NIRC governing unutilized input value-added tax refunds, the Commissioner of Internal Revenue is granted a specific statutory period to decide administrative claims. If the Commissioner fails to act within the prescribed period, such inaction is deemed a denial of the claim. The taxpayer is then given thirty days from the expiration of the statutory period to file a petition for review with the Court of Tax Appeals. Failure to file the judicial claim within thirty days renders the decision final.