For a claim based on erroneous payment of tax (Sec.

229), various cases decided by the Supreme

Court provides for the requirements as follows:

(1) There must be a written claim filled by the taxpayer with the CIR;
(2) The claim must also categorically demand for reimbursement; and
(3) The taxpayer must show proof of payment of the tax.

Grounds:
1. The tax was illegally collected There is no law that authorizes the collection of the tax
2. The tax was excessively collected There is a law that authorizes the collection but the tax
collected was more than what the law allows
3. The tax was paid through a mistaken belief that the taxpayer should pay the tax This is a case
of solutio indebiti
What are the requirements for a claim of a tax refund or a tax credit?
1. There is a tax collected erroneously or illegally, or a penalty collected without authority, or a sum
excessively or wrongfully collected (see Section 229, Tax Code)
2. There must be a written claim for refund filed by the taxpayer to the CIR (see Vda. De Aguinaldo
v. CIR [February 26, 1965])

Exceptions (no written claim required):

a. When on the face of the return upon which payment was made, such payment
appears clearly to have been erroneously paid, the CIR may refund or credit the
tax even without a written claim (Section 229, Tax Code)
b. A return filed showing an overpayment shall be considered as a written claim for
credit or refund. (Sec. 204(C), Tax Code)

3. The claim for refund must be filed within 2 years from the date of payment of the tax regardless of
any supervening cause (Section 229, Tax Code)
4. The taxpayer must show proof of payment of the tax (See CIR v. Li Yao [December 27, 1963])
Notes:

Payment under protest is not required in order to obtain a refund of erroneously or illegally
collected internal revenue taxes. (Section 229, Tax Code)

As to (3): The idea is first to afford the CIR an opportunity to correct the action of subordinate
officers and second to notify the Government that such taxes have been questioned and the
notice should then be borne in mind in estimating the revenue available for expenditure (see
Bermejo v. CIR [July 25, 1950])

As to (5), before recovery is allowed, it must be established that there was actual collection and
receipt by the government of the tax sought to be recovered and this required factual proof (CIR
v. Li Yao [December 27,1963])
See PHILAM Properties Corporation vs. Commissioner of Internal Revenue [CTA Case No. 7912,
January 12, 2012] where the CTA held that failure to prove that the income, related to the excess
creditable withholding being claimed as refund, was reported in the income tax return would result
in the denial of the claim.
See also Philippine Bank Of Communications Vs. Commissioner Of Internal Revenue [CTA Case
No. 7763, January 20, 2012]; Philam Insurance Agency and Call Center Services, Inc. vs.
Commissioner of Internal Revenue [CTA Eb No. 792, January 20, 2012]; Havi Food Services
Phils., Inc. vs. CIR., CTA Eb No. 800 (Cta Case No. 7735), June 28, 2012

In a claim for refund of excess income tax, failure to present the original annual income tax return
is fatal to the claim. Maunsell Philippines, Inc. vs. CIR, C.T.A. EB No.860, October 23, 2012