CTA Case No. 9722, March 12, 2020.
CTA Second Division
Mindaro-Grulla, J.:
Lessons Applicable: VAT refund claim, zero-rated sales
Laws Applicable: Section 112 (A) and (C) of the NIRC of 1997, Sections 106(A)(2)(1) and (2); 106(B) and 108(B)(1) and (2)
FACTS:
- June 29, 2017: Macquarie Offshore Services Pty Ltd. (Philippines Branch) (MOS) filed with the BIR an Application for Tax Credits / Refunds with corresponding Checklist of Mandatory Requirements for Claims for VAT Credit/Refund, and the letter dated June 29, 2017, applying for refund of its alleged excess and unutilized input VAT in the total amount of P85,098,492.89 for the 1st to 4th quarters of the FY 2016.
- November 24, 2017: MOS filed the instant Petition for Review
HELD: Denied.
NO.
- Based on Section 112 (A) and (C) of the NIRC of 1997, as amended by RA 9337, jurisprudence has laid down certain requisites which the taxpayer-applicant must comply with to successfully obtain a credit/refund of input VAT – classified into certain categories, to wit:
1. As to the timeliness of the filing of the administrative and judicial claims: - met
- a. Claim is filed with the BIR within 2 years after the close of the taxable quarter when the sales were made – filed June 29, 2017
- b. In case of full or partial of the Commissioner to act on the said claim within a period of 120 days, the judicial claim has been filed with this Court, within 30 days from receipt of the decision or after the expiration of the said 120-day period – filed on November 24, 2017
- a. Taxpayer is a VAT-registered person – met since BIR Payment Forms, standing alone, may be considered as evidence of VAT registration
- a. Taxpayer is engaged in zero-rated or effectively zero-rated sales
- b. For zero-rated sales under Sections 106(A)(2)(1) and (2); 106(B) and 108(B)(1) and (2), the acceptable foreign currency exchange proceeds have been duly accounted for in accordance with BSP rules and regulations
- Essential elements must be present for a sale or supply of services to be subject to the VAT rate of zero percent (0%), under Section 108(B)(2) of the NIRC of 1997:
- 1) The services fall under any of the categories under Section 108(B)(2) or simply, the services rendered should be other than “processing, manufacturing or repacking goods. - met
- 2) Services must be performed in the Philippines by a VAT-registered person
- 3) Recipient of the services is a foreign corporation, and the said corporation is doing business outside the Philippines or is a non-resident person not engaged in business who is outside the Philippines when the services were performed; - not met since the documents presented: (1) Certification of Non-Registration of Company issued by the SEC, (2) Certificate/Articles of Foreign Incorporation/Registration and (3) Minor Services Agreements, standing alone is inadequate proof that its client is a non-resident doing business outside the Philippines.
- 4) The payment for such services should be in acceptable foreign currency accounted for in accordance with BSP rules
a. Input taxes are not transitional input taxes
b. Input taxes are due or paid
c. Input taxes have not been applied against output taxes during and n the succeeding quarters
d. Input taxes claimed are attributable to zero-rated or effectively zero-rated sales. However, where there are both zero-rated or effectively zero-rated sales and taxable or exempt sales, and the input taxes cannot be directly and entirely attributable to any of these sales, the input taxes shall be proportionately allocated on the sales volume
