06-02-2019, 02:45 PM
Where the refund of a tax illegally or erroneously collected or overpaid by a taxpayer is barred by prescription, a tax presently being assessed against a taxpayer may be recouped or set-off against the tax already barred by prescription.
This doctrine is pertinent only to taxes arising from the SAME transaction on which an overpayment is made and underpayment is due.
Equitable recoupment is allowed ONLY in common law countries, not in the Philippines
Reason:
If allowed, both the collecting agency and the taxpayer might be tempted to delay and neglect the pursuit of their respective claims which the period prescribed by law (Collector vs. UST, 104 Phil. 1062).
This doctrine is pertinent only to taxes arising from the SAME transaction on which an overpayment is made and underpayment is due.
Equitable recoupment is allowed ONLY in common law countries, not in the Philippines
Reason:
If allowed, both the collecting agency and the taxpayer might be tempted to delay and neglect the pursuit of their respective claims which the period prescribed by law (Collector vs. UST, 104 Phil. 1062).