2017 (Taxation) Bar Exam Questions: Question 3

[Answer/discuss the question below, or see 2017 bar exam Taxation Instructions; 2016 Taxation Questions: 12456789101112131415161718, and 19; See also 2017 Bar Exam: Information, Discussions, Tips, Questions and Results]

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Vanderful, lnc.’s income tax return for taxable year 2015 showed an overpayment due to excess creditable withholding taxes in the amount of P750,000.00. The company opted to carry over the excess income tax credits as tax credit against its quarterly income tax liabilities for the next succeeding years. For taxable year 2016, the company’s income tax return showed an overpayment due to excess creditable withholding taxes in the amount of P1,100,000.00, which included the carry-over from year 2015 in the amount of P750,000.00 because its operations resulted in a net loss; hence, there was no application for any tax liability. This time, the company opted and marked the box “To be refunded’ in respect of the total amount of P1,100,000.00.

Vanderful, Inc. now files in the BIR a claim for refund of unutilized overpayments of P1,100,00.00. Is the claim meritorious? (4%)

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