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CIR v. Respondent (Seagate Corporation) is a foreign corporation engaged in the Issue: Entitlement of a VAT-Registered PEZA Enterprise
Seagate manufacture of recording components for computers for export. Their principal such as Seagate to a Refund of or Credit for Input VAT
Technology office is at a Special Economic Zone in Naga, Cebu. It is registered with the PEZA
(Philippines) and is likewise a VAT registered entity. Held: YES. As a PEZA registered enterprise, it is entitled to
the fiscal incentives and benefits granted to it by law.
Vat- Respondent filed VAT returns for the period of 1 April 1998 to 30 June 1999.
Registered Subsequently, an administrative claim for refund for unutilized VAT input taxes Preferential Tax Treatment Under Special Laws
PEZA was filed in October 1999 but Petitioner (CIR) did not act on the request. This
Enterprises prompted Respondent to file a Petition for Review to toll the running of the Under all the laws applicable - BCDA, Omnibus Investment
Sorry for the prescriptive period. Act, PD 66 (creating the export processing zone authority),
many and the Philippine Export Development Act - it is clear that
technical Petitioner, in its defense, claimed that Respondent has the burden of proof to petitioner enjoys preferential tax treatment. It is not subject
definitions establish the factual basis of its refund. It further argued that granting, without to internal revenue laws and regulations and is entitled to
admitting, that Respondent is a PEZA registered Ecozone Enterprise, then the tax credits. The VAT on capital goods is an internal revenue
business is not subject to VAT pursuant to Sec. 24 of RA 7916 in relation to Sec tax from which petitioner is exempt. Although transactions
103 of the Tax Code. As the business is not subject to VAT, the capital goods and involving such tax are not exempt, petitioner is entitled to
services purchased are considered not used in a VAT taxable business. Thus, their credits.
Respondent is not entitled to refund of input taxes on such goods.
Nature of the VAT; Tax Credit Method
The Tax Court rendered a decision granting the refund. CA affirmed the same for
the unutilized but substantiated input VAT paid on capital goods. The appellate VAT should be understood as a tax on consumption. It
court reasoned that Respondent availed only of the incentives under the Omnibus should not be understood in the context of the person or
Investment Code of 1987 (EO 226). It found that respondent was only exempt entity that is primarily, directly and legally liable for the
from income tax and not VAT. Having paid input VAT on capital goods it payment. Specifically, it is:
purchased, respondent correctly filed the admin/judicial claims for its refunds. - A uniform tax ranging from 0 to 10% levied on every
importation of goods, w/n in the course of business,
or imposed on each sale, barter, exchange, or
lease of goods of properties or on each rendition of
services in the course of trade or business as they
pass along the distribution and production chain,
the tax being limited only to the value added to such
Tax Exemptions
Panasonic Panasonic, petitioner, is registered with the Board of Investments as a preferred Issue:
Communicati pioneer enterprise under the Omnibus Investment Code. It is also registered as a Whether or not the CTA en banc correctly denied petitioner
ons Imaging valued-added tax enterprise. Petitioner was able to generate export sales Panasonics claim for refund of the VAT it paid as a zero-
Corporation amounting to 24M. Believing them to be zero-rated for VAT under Section rated taxpayer on the ground that its sales invoices did not
of the 106(A)(2)(a)(1) of the 1997 National Internal Revenue Code, Panasonic paid an state on their faces that its sales were zero-rated.
Philippines v. input VAT of around 9.3M total.
CIR Held:
Claiming such input VAT to be unutilized, they filed for a refund. However, BIR did
not act and this prompted Panasonic to file a petiton for review with the CTA. The Yes, the CTA was correct. Panasonic is NOT entitled to a
CTA denied their petition stating that petitioner’s sales did not qualify for the zero- refund.
rating because the word zero-rated was not printed on their invoices.
The VAT is a tax on consumption, an indirect tax that
Their MR was also denied. Hence, this petition. the provider of goods or services may pass on to his
customers. Under the VAT method of taxation, which is
invoice-based, an entity can subtract from the VAT
charged on its sales or outputs the VAT it paid on its
purchases, inputs and imports. For example, when a
seller charges VAT on its sale, it issues an invoice to
the buyer, indicating the amount of VAT he charged.
For his part, if the buyer is also a seller subjected to the
payment of VAT on his sales, he can use the invoice
issued to him by his supplier to get a reduction of his
own VAT liability. The difference in tax shown on
invoices passed and invoices received is the tax paid to
the government. In case the tax on invoices received
exceeds that on invoices passed, a tax refund may be
claimed.
CIR v. CIR seeks the reversal of the decision of the CA directing them to issue a tax Issue: W/N VAT Ruling No 008-92 should have a retroactive
Benguet credit to Benguet Corp in the amount of Php 49.7M representing input VAT/tax. It application, as such would not prejudice the respondent.
Corporation is petitioner’s sole contention that the CA erred in rejecting the retroactive
application of VAT Ruling No. 008-92, dated January 23, 1992, subjecting sales Held: NO.
of gold to the CB to 10% VAT to respondents sales of gold during the period from Rulings and circulars, rules and regulations, promulgated by
January 1, 1988 to July 31, 1989. the Commissioner of Internal Revenue, would have no
retroactive application if to so apply them would be
(five rulings from 1988 to 1990 reiterated and confirmed BIR’s position that the prejudicial to the taxpayers.. And the court held that to have
sale of gold by a VAT-registered taxpayer to the Central Bank is subject to the a retroactive application would prejudice Benguet Corp.
zero-rate VAT.)
Input VAT or input tax represents the actual payments,
costs and expenses incurred by a VAT-registered taxpayer
in connection with his purchase of goods and services.
Thus, input tax means the value-added tax paid by a VAT-
Acting on the belief that it was exempt from all national and local taxes, including Further, in indirect taxation, there is a need to
VAT, pursuant to Rep. Act No. 7227, petitioner filed two applications for tax refund distinguish between the liability for the tax and the
or tax credit of the VAT it paid burden of the tax. As earlier pointed out, the amount of
tax paid may be shifted or passed on by the seller to
the buyer. What is transferred in such instances is not
the liability for the tax, but the tax burden. In adding or
including the VAT due to the selling price, the seller
remains the person primarily and legally liable for the
payment of the tax. What is shifted only to the
intermediate buyer and ultimately to the final purchaser
is the burden of the tax. Stated differently, a seller who
is directly and legally liable for payment of an indirect
tax, such as the VAT on goods or services is not
necessarily the person who ultimately bears the burden
of the same tax. It is the final purchaser or consumer of
such goods or services who, although not directly and
legally liable for the payment thereof, ultimately bears the
burden of the tax.
CIR v. Pursuant to a government program of privatization, NCD decided to sell to private ISSUE: Is the sale of the vessels subject to VAT?
Magsaysay enterprise all of its shares in its wholly owned subsidiary, the National Marine
Lines, Inc Corporation (NMC). The NCD then decided to sell its NMC shares and 5 ships, NO. The Supreme Court found that any sale, barter or
which are Klockner type vessel ships. These were offered in a public bidding, with exchange of goods or services not in the course of trade or
a stipulation that the winning bidder was to pay VAT of 10% in the value of such business is not subject to VAT. In this case, the sale of the
vessels. Magsaysay Lines was the highest bidder. Then, there was a formal vessels was an isolated transaction, not done in the
request of whether or not the sale was subject to VAT. ordinary course of NDC’s business and is thus not subject
to VAT.
CIR v. CA, Commonwealth Management and Services Corporation (COMASERCO) is a ISSUE: whether COMASERCO was engaged in the sale of
GR No. corporation duly organized and existing under the laws of the Philippines. It is an services, and thus liable to pay VAT thereon
CIR v. Sony ● Sony Philippines engaged the services of several advertising companies Issue: W/N the dole-out given by Sony Singapore
Philippines, ● Due to Sony Philippines’ dire economic conditions, Sony International constituted a sale and whether Sony Philippines is liable to
Inc., Singapore handed Sony Philippines a dole-out to answer for the expenses pay VAT
payable to the advertising companies.
● CIR issued Letter of Authority to examine Sony’s books regarding revenue Held: NO
taxes for the period 1997 and unverified prior years ● Sonys deficiency VAT assessment stemmed from
● The deficiency VAT amounted to P11.1M the CIRs disallowance of the input VAT credits that
● The CTA-First Division disallowed the deficiency VAT assessment should have been realized from the advertising
because the subsidized advertising expense paid by Sony which was duly expense of the latter.
covered by a VAT invoice resulted in an input VAT credit. ● To begin with, the said subsidy termed by the CIR
as reimbursement was not even exclusively
earmarked for Sony’s advertising expense for it was
but an assistance or aid in view of Sony’s dire or
adverse economic conditions, and was only
equivalent to the latter’s (Sonys) advertising
expenses.
● Thus, there must be a sale, barter or exchange of
goods or properties before any VAT may be levied.
Certainly, there was no such sale, barter or
exchange in the subsidy given by SIS to Sony. It
was but a dole out by SIS and not in payment for
goods or properties sold, bartered or exchanged by
Sony.
Sec. 103 of the Code relied upon by the CIR relates to VAT-
exempt transactions. These are transactions exempted from
VAT by special laws or international agreements to which
the Philippines is a signatory. Since such transactions are
not subject to VAT, the sellers cannot pass on any output
VAT to the purchasers of goods, properties, or services,
and they may not claim tax credit/refund of the input VAT
they had paid thereon. This cannot apply to transactions of
Toshiba because although the said section recognizes that
transactions covered by special laws may be exempt from
VAT, the very same section provides that those falling
Toshiba In the case at bar, the CIR, in the Joint Stipulation of Facts Issue: W/N Toshiba is subject to 0% VAT
Information and Issues, admitted that Toshiba was a registered VAT
Equipment entity and that it was subject to 0% VAT on its export sales. Held: YES.
(Phils.), Inc. Later, in his Motion for Reconsideration of the adverse Court of Tax Appeals The Supreme Court ruled that Toshiba was a registered
v. CIR, GR decision, the CIR would argue that Toshiba was not entitled to its claim for tax VAT entity and its export sales were subject to 0% VAT.
No. 157594 refund/credit This was so because:
because it was VAT-exempt and its export sales were VAT-exempt transactions. 1) The CIR belatedly raised the issue of Toshiba being
a VAT-exempt entity. It raised the argument in the
Toshiba filed their amended VAT returns, indicating zero-rated Sales. It filed for a
tax refund/credit for its unused input VAT. CIR opposed this application.
In CTA level, the CIR admitted that Toshiba was a registered VAT entity and that it
was subject to 0% VAT on its export sales. The CTA ruled in favor of Toshiba, to
which the CIR filed an MR against such ruling. It avers that Toshiba is not entitled
to the tax credit/refund because it was VAT-exempt and its export sales were
VAT-exempt
transactions.
Intel Petitioner is a domestic corporation engaged primarily in the business of Issue: W/N the petitioner is entitled to tax credits/refunds
Technology developing, manufacturing, and exporting advanced and large-scale integrated
Philippines, circuit components. It is a VAT-registered entity, as well as being a PEZA Held: YES
Inc. v. CIR, accredited Ecozone enterprise.
GR No. “To the mind of the Court, these documentary evidence
166732 In 1999, it filed for VAT credit/refunds pertaining to domestic purchases of goods submitted by petitioner, e.g., summary of export sales, sales
and services directly used in its commercial operations. invoices, official receipts, airway bills and export
Its main point of contention was that said purchases were to its export sales; declarations, prove that it is engaged in the "sale and actual
consequently, such were not subject to 10% VAT because such were zero-rated shipment of goods from the Philippines to a foreign
sales. country." In short, petitioner is considered engaged in
export sales (a zero-rated transaction) if made by a
Due to the inaction of the respondent, the petitioner filed the claim before the CTA. VAT-registered entity. Moreover, the certification of inward
The petitioner likewise adduced several pieces of evidence such as invoices. remittances attests to the fact of payment "in acceptable
However, the CTA denied the claim because it held that the evidence presented foreign currency or its equivalent in goods or services, and
by petitioner was insufficient because the invoices did not indicate that it was BIR accounted for in accordance with the rules and regulations
authorized, which is something that the Tax Code strictly construes. CA affirmed. of the BSP." Thus, petitioner’s evidence, juxtaposed with
the requirements of Sections 106 (A)(2)(a)(1) and 112(A) of
[ ] On the latter point, the Court disagrees with the CTA and
CA. As correctly argued by petitioner, there is no law or BIR
rule or regulation requiring petitioner’s authority from the
BIR to print its sales invoices (BIR authority to print) to be
reflected or indicated therein.”
Atlas Atlas Consolidated (Petitioner) filed for the refund/credit of the input VAT on its Prescription
Consolidated purchases of capital goods and on its zero-rated sales. Petitioner is engaged in The prescriptive period for filing an application for tax
Mining and the business of mining, production, etc. refund/credit of input VAT on zero-rated sales made in 1990
Development and 1992 was governed by Sec 106(b) and (c) of the Tax
Corporation Atlas claimed that it was a zero-rated VAT person, thus it asked for a refund/credit Code of 1977. Under the NIRC, the two year prescriptive
v. CIR representing its input vat for the year of 1992. This was denied on the ground of period for filing the application for refund/credit of input VAT
prescription, insufficiency of evidence, and failure to comply with Section 230 of on zero-rated sales shall be determined from the close of
the Tax Code. the quarter when such sales were made.
In another case, Atlas asked for a refund for its purchases of capital goods and on Petitioner however contends that it should be counted from
its zero-rated sales made in the last three taxable quarters of 1990. the date of filing in accordance with Sec 110(b) of the Tax
Code of 1977.
There being a similarly of parties, subject matter, and issues, the Court
consolidated the cases and resolves to rule on the following issues: Held: It is more practical and reasonable to count the 2 year
1. Prescription of claims prescriptive period from the date of filing, according to the
2. Validity and Applicability of Revenue Regulations No. 2-88 imposing upon law then existing, should be made within 20 days from the
petitioner corporation, as a requirement for the VAT zero-rating of its sales, the end of each quarter. All of petitioner’s claims were filed
burden of proving that the buyer companies were not just BOI-registered but also within the prescriptive period, except for the 1929 input vat
exporting 70% of their total annual production refund because there was no showing that the same was
3. Sufficiency of evidence presented by petitioner corporation to establish that it is filed with the BIR and not just the CTA.
indeed entitled to input VAT refund/credit
4. Legal ground for granting the motion of petitioner corporation for re-opening Revenue Regulations NO. 2-88 and the 70% Export
of its cases or holding of new trial before the CTA so it could be given the Requirement
opportunity to present the required evidence
Sufficiency of Evidence
Summary of Findings
Mindanao II ● 3 cases consolidated Was Mindanao II’s administrative claim for refund/credit
Geothermal ● Mindanao II allegedly entered into a Built-Operate-Transfer (BOT) timely filed?
Partnership contract with the Philippine National Oil Corporation – Energy
v. CIR Development Company (PNOC-EDC) YES
(additional ● PNOC-EDC shall supply and deliver steam to Mindanao II at no cost.
case by ● Mindanao II shall convert the steam into electric capacity and energy for ● Pursuant to Section 112 (A) of the 1997 Tax Code,
Ma’am) PNOC-EDC and shall deliver the same to the National Power Corporation it is only the administrative claim which is to be filed within
(NPC) for and in behalf of PNOC-EDC the two-year prescriptive period, and the two-year
● Mindanao II alleges that its sale of generated power and delivery of prescriptive period begins to run from the close of the
electric capacity and energy of Mindanao II to NPC for and in behalf of taxable quarter when the sales were made
PNOC-EDC is its only revenue-generating activity which is in the ambit of ● Mindanao II filed its claim for refund/credit for the
VAT zero-rated sales under the EPIRA Law second, third, and fourth quarters of 2004 on Oct 6 2005.
● Mindanao II makes domestic purchases of goods and services and Such date is well within the two-year prescriptive period
accumulates therefrom creditable input taxes. which runs from June 30 2004 (2nd Quarter), Sept 30 2004
● Mindanao II alleges that it can use its accumulated input tax credits to (3rd Quarter) and Dec 31 2004 (4th Quarter).
offset its output tax liability. Considering, however that its only revenue- ● The Atlas case was not applicable because
generating activity is VAT zero-rated under the EPIRA Law, Mindanao II’s Mindanao II’s application for refund/credit was filed before
input tax credits remain unutilized. their promulgation.
● On the belief that its sales qualify for VAT zero-rating, Mindanao II
adopted the VAT zero-rating of the EPIRA in computing for its VAT Is Mindanao II’s judicial claim for refund/credit timely filed?
●CA ruled against Mindanao II - action for refund has already prescribed
[Quezon City FACTS: Under Section 31, Article 13 of the Quezon City Revenue Code of 1993, a ISSUE: Whether or not the phrase "in lieu of all taxes"
v. ABS-CBN franchise tax was imposed on businesses operating within its jurisdiction. The indicated in the franchise of the respondent appellee
Broadcasting provision states: (Section 8 of RA 7966) serves to exempt it from the
Corporation, payment of the local franchise tax imposed by the
GR No. Section 31. Imposition of Tax. - Any provision of special laws or grant of petitioners-appellants.
166408, tax exemption to the contrary notwithstanding, any person, corporation,
partnership or association enjoying a franchise whether issued by the HELD: No. The "in lieu of all taxes" clause in the franchise
national government or local government and, doing business in Quezon of ABS-CBN has become functus officio with the abolition of
City, shall pay a franchise tax at the rate of ten percent (10%) of one the franchise tax on broadcasting companies with yearly
percent (1%) for 1993-1994, twenty percent (20%) of one percent (1%) for gross receipts exceeding Ten Million Pesos.
1995, and thirty percent (30%) of one percent (1%) for 1996 and the
succeeding years thereafter, of gross receipts and sales derived from the At the time of the enactment of its franchise on May 3,
Sonza v. ABS-CBN and Mel and Jay Mngt. And Dev’t Corp. entered into an agreement The main issue in this case is WON an E-E relationship
ABS-CBN wherein it was agreed that Sonza’s services are exclusively available to ABS-CBN exists between Sonza and ABS-CBN and in ruling that there
Broadcasting as talent for radio and television. Sonza is given 310k per month on the first year is none the SC found it proper to highlight the different tax
Corporation, and 317k per month for the 2nd and 3rd years. But then, on the 3rd year, Sonza treatment of talents and broadcasters wherein it was said
GR rescinded the contract because of his irrevocable resignation due to events that the NIRC treats talents, television and radio
No.138051 concerning his program and career. Sonza filed a complaint against ABS before broadcasters differently. Under the NIRC, these
(VAT issue) the DOLE on the grounds that ABS-CBN did not pay his salaries, separation pay, professionals are subject to the 10% value-added tax (VAT)
service incentive leave pay, 13th month pay, signing bonus, travel allowance and on services they render. Exempted from the VAT are those
amounts due under the Employees Stock Option Plan. ABS-CBN countered that under an employer-employee relationship. This different tax
no E-E relationship exists. treatment accorded to talents and broadcasters bolters our
conclusion that they are independent contractors, provided
all the basic elements of a contractual relationship are
present as in this case.
CIR v. Respondent is the Philippine branch of American Express International. It is a WON it is entitled to a VAT refund. Yes.
American servicing unit of the HK branch and is engaged primarily to facilitate the collections
Express of HK branch receivables from card members situated in the Philippines and According to the NIRC, services performed by VAT-
International, payment to service establishments in the Philippines. It filed with the BIR a letter- registered persons in the Philippines, when paid in
CIR v. Acesite is the owner and operator of the Holiday Inn Manila Pavilion Hotel. It also ISSUE: W/N Acesite could refund the VAT it paid on its
Acesite caters food and beverages to PAGCORs casino patrons through the hotel rental income and sale of food and beverages
(Philippines) restaurants outlets. Acesite incurred VAT amounting to P30,152,892.02 from its
Hotel rental income and sale of food and beverages to PAGCOR during said period. HELD:
Corporation Acesite tried to shift the said taxes to PAGCOR by incorporating it in the amount YES. It is undisputed that P.D. 1869, the charter creating
assessed to PAGCOR but the latter refused to pay the taxes on account of its tax PAGCOR, grants the latter an exemption from the payment
exempt status. of taxes. This is pursuant to the express provision of Sec.
13, PD 1869.
Thus, PAGCOR paid the amount due to Acesite minus the P30,152,892.02 VAT
while the latter paid the VAT to the CIR as it feared the legal consequences of Sec. 13. Exemptions
non-payment of the tax. However, Acesite belatedly arrived at the conclusion that
its transaction with PAGCOR was subject to zero rate as it was rendered to a tax- Xxx
exempt entity. Acesite then filed an administrative claim for refund with the CIR but
the latter failed to resolve the same.
(2) Income and other taxes. (a) Franchise Holder: No tax of
Acesite then filed a petition with CTA, which was decided that Acesite is subject to any kind or form, income or otherwise, as well as fees,
0% tax insofar as its gross income from rentals and sales to PAGCOR, a tax charges or levies of whatever nature, whether National
exempt entity by virtue of a special law. Thus, CIR refunded petitioner the amount or Local, shall be assessed and collected under this
of VAT previously paid. Franchise from the Corporation; nor shall any form of
tax or charge attach in any way to the earnings of the
Corporation, except a Franchise Tax of five (5%) percent
Upon appeal, the CA affirmed the decision of the CTA holding that PAGCOR was of the gross revenue or earnings derived by the Corporation
not only exempt from direct taxes but was also exempt from indirect taxes like the from its operation under this Franchise.
VAT and consequently, the transactions between respondent Acesite and
PAGCOR were effectively zero-rated because they involved the rendition of Xxx
services to an entity exempt from indirect taxes.
(b) Others: The exemptions herein granted for earnings
derived from the operations conducted under the franchise
specifically from the payment of any tax, income or
otherwise, as well as any form of charges, fees or levies,
shall inure to the benefit of and extend to corporation(s),
association(s), agency(ies), or individual(s) with whom the
Corporation or operator has any contractual relationship in
Misamis Petitioner is a domestic corporation whose members are engaged in the buying ISSUE: W/N copra is an agricultural food or non-food
Oriental and selling of copra in Misamis Oriental. Petitioner alleges that prior to the product for purposes of the subject provision of the NIRC --
Association issuance of RMC 47-91, which implemented VAT Ruling 190-90, copra was
of Coco classified as an agricultural food product under Sec. 103(b) of the NIRC and, HELD:
Traders, Inc. therefore, exempt from VAT at all stages of production or distribution. The Court agrees with respondents. In interpreting Sec.
v. DOF 103(a) and (b), the CIR gave it a strict construction
Respondent CIR issued the circular in question, classifying copra as an consistent with the rule that tax exemptions must be strictly
agricultural non-food product and declaring it exempt from VAT only if the sale is construed against the taxpayer and liberally in favor of the
made by the primary producer pursuant to Sec. 103(a). state. Indeed, even Dr. Kintanar said that his classification
of copra as food was based on "the broader definition of
Petitioner contends that the Bureau of Food and Drug of the DOH and not the BIR food which includes agricultural commodities and other
is the competent government agency to determine the proper classification of food components used in the manufacture/processing of food."
products. Petitioner cites the opinion of Dr. Kintanar of the Bureau of Food and
[CIR v. The Philippine Health Care Providers, Inc., (PHCP) herein respondent, is a ISSUE: W/N PHCP is exempt for VAT
Philippine corporation organized and existing under the laws of the Republic of the
Health Care Philippines. Pursuant to its Articles of Incorporation, its primary purpose is To HELD: NO.
Providers, establish, maintain, conduct and operate a prepaid group practice health care
Inc., GR No. delivery system or a health maintenance organization to take care of the sick and SEC. 103. Exempt Transactions. The following shall be
168129, disabled persons enrolled in the health care plan and to provide for the exempt from the value-added tax:
administrative, legal, and financial responsibilities of the organization. xxx
(l) Medical, dental, hospital and veterinary services except
EO 273 imposed VAT on good and services. PHCP asked CIR if its services of those rendered by professionals
providing health care programs were exempt. CIR initially ruled that as a provider
of medical services, is exempt from the VAT coverage. The E-VAT law was The CTA made the following conclusions:
subsequently passed 2 years after.
The CIR issued a PAN against PHCP for deficiency VAT for 2 years. PHCP a) Respondent is not actually rendering medical service
protested the assessment but the CIR did not act upon it. The CTA eventually but merely acting as a conduit between the members and
ordered PHCP to pay deficiency VAT. their accredited and recognized hospitals and clinics.
b) It merely provides and arranges for the provision of
pre-need health care services to its members for a fixed
prepaid fee for a specified period of time.
c) It then contracts the services of physicians, medical
and dental practitioners, clinics and hospitals to perform
such services to its enrolled members; and
d) Respondent also enters into contract with clinics,
hospitals, medical professionals and then negotiates with
them regarding payment schemes, financing and other
Philippine Im 1977, PAGCOR was created pursuant to PD 1067-A, where, it was exempt Issue: Is RR 16-2005 void ab initio in so far as the said
Amusement from the payment of any type of tax except a franchise tax of 5% of gross revenue. regulation imposes VAT on Petitioner PAGCOR while its
& Gaming Thereafter, another law was passed expanding such exemption. To consolidate basic law, RA 9337, does not?
Corporation the laws pursuant to PAGCOR’s exemption, PD No. 1869 was issued.
v. CIR, GR Held: The provision is invalid, being contrary to RA 9337.
No. 172087, In 1988, the National Internal Revenue Code of 1977 took effect. Sec. 227(c) of RA 9337 is only clear on the removal of petitioner’s
said law provides that GOCCs must pay corporate income tax, except petitioner exemption from corporate income tax. Nowhere is it
PAGCOR and 3 others. Fast forward to 2005, RA 9337 was passed withdrawing provided that it can be subjected to VAT.
the exemption from the list of GOCCs exempt from paying said tax.
As pointed out by petitioner, although R.A. No. 9337
Various petitions were filed alleging the constitutionality of the latter law, but all introduced amendments to Section 108 of R.A. No. 8424 by
were denied. On the same ate, BIR issued RR 16-2005 specifically identifying imposing VAT on other services not previously covered, it
PAGCOR as one of the franchisees subject to 10% VAT imposed under Sec. 108 did not amend the portion of Section 108 (B) (3) that
of the NIRC. subjects to zero percent rate services performed by VAT-
registered persons to persons or entities whose exemption
under special laws or international agreements to which the
Philippines is a signatory effectively subjects the supply of
such services to 0% rate.
First Planters In a Pre-Assessment Notice, petitioner was informed by the BIR that it had VAT Issue: W/N the petitioner is liable for VAT
Pawnshop, and DST deficiencies for the year 2000, which was protested.
Inc. v. CIR, The Court saw that the petitioner’s tax liability depends on
GR No. It eventually received a Final Assessment Notice for almost the same amount. the tax treatment of a pawnshop business, which the
174134, 30 Petitioner appealed to the CTA, which upheld the assessment. petitioner is engaged in. Although such have been in
July 2008 existence for a long time, there have been no definite
pronouncements on the matter.
NPC, is exempt from all all taxes which, as ruled by the courts, includes both Yes, it has prescribed. Therefore, MPC can only refund 10M
direct and indirect taxes. instead of the total 149M initially sought.
In light of the tax exemption of NPC, MPC believes that its sales to NPC were According to the NIRC, refunds on zero-rated sales must be
zero-rated for VAT purposes. They filed an application for effective zero rating filed within two (2) years after the close of the taxable
which covered the building of the power plant. quarter when the sales were made, apply for the
issuance of a tax credit certificate or refund of
Not receiving a response, MPC refiled its application in the form of a request for creditable input tax due or paid attributable to such
ruling with the VAT review committee at the BIR National Office. The CIR released sales.
a ruling stating that the sale of electricity to NPC would be subject to zero percent
VAT. The above proviso clearly provides in no uncertain terms
that unutilized input VAT payments not otherwise used for
By reason of such ruling, MPC stopped paying the VAT due on its billings from any internal revenue tax due the taxpayer must be claimed
Mitsubishi. This prompted Mitsubishi to advance the VAT component. However, within two years reckoned from the close of the taxable
after a couple of years, MPC paid Mitsubishi the VAT component. quarter when the relevant sales were made pertaining
to the input VAT regardless of whether said tax was
While waiting for the approval of its application, MPC filed its quarter VAT return paid or not.
where it reflected an input VAT of 149M. Pursuant to a revenue regulation, MPC Prescriptive period commences from the close of the
filed an administrative claim for refund of unutilized input VAT. But, since the BIR taxable quarter when the sales were made and not from the
failed to act on the claim for refund and in order to stall the two-year prescriptive time the input VAT was paid nor from the time the official
period, MPC filed a petition for review with the CTA. However, in response to the receipt was issued.[22] Thus, when a zero-rated VAT
petitioenr, the BIR responded stating that MPC cannot refund because the sale of taxpayer pays its input VAT a year after the pertinent
electricity cannot be granted. transaction, said taxpayer only has a year to file a claim for
CIR v. Aichi FACTS: Respondent Aichi Forging Company of Asia, Inc., a corporation duly ISSUE: Whether or not the respondent’s judicial and
Forging organized and existing under the laws of the Republic of the Philippines, is administrative claims for tax refund/credit were filed within
Company of engaged in the manufacturing, producing, and processing of steel and its by- the two-year prescriptive period
Asia, Inc., products. It is registered with the Bureau of Internal Revenue (BIR) as a Value-
GR No. Added Tax (VAT) entity and its products, "close impression die steel forgings" and HELD: No. The two-year period to file a claim for tax
184823, "tool and dies," are registered with the Board of Investments (BOI) as a pioneer refund/credit for the period July 1, 2002 to September 30,
status. 2002 expired on September 30, 2004. Hence, Respondent’s
administrative claim was timely filed. The filing of the judicial
On September 30, 2004, respondent filed a claim for refund/credit of input VAT for claim was premature. However, notwithstanding the timely
the period July 1, 2002 to September 30, 2002 in the total amount of filing of the administrative claim, the Supreme Court is
₱3,891,123.82 with the petitioner Commissioner of Internal Revenue (CIR), constrained to deny the respondent’s claim for tax
through the Department of Finance (DOF) One-Stop Shop Inter-Agency Tax refund/credit for having been filed in violation of Section 112
Credit and Duty Drawback Center. (D). Section 112(D) of the NIRC clearly provides tha the
CIR has “120 days from the submission of complete
Petitioner maintains that respondent’s administrative and judicial claims for tax documents in support of the application filed for tax
refund/credit were filed in violation of Sections 112(A) and 229 of the NIRC. He refund/credit” within which to grant or deny the claim. In
posits that pursuant to Article 13 of the Civil Code, since the year 2004 was a leap case of full or partial denial by CIR, the taxpayer;s recourse
year, the filing of the claim for tax refund/credit on September 30, 2004 was is to file an appeal before CTA within 30 days from the
beyond the two-year period, which expired on September 29, 2004. receipt of the decision of the CIR. However, if after the 120-
day period the CIR fails to act on the application for tax
CIR v. San On October 11, 1997, San Roque Power Corporation (San Roque) entered into a · No. San Roque is not entitled to a tax refund because it
Roque Power Power Purchase Agreement (PPA) with the National Power Corporation (NPC) by failed to comply with the mandatory and jurisdictional
Corporation building the San Roque Multi-Purpose Project in San Manuel, Pangasinan. requirement of waiting 120 days before filing its judicial
The San Roque Multi-Purpose Project allegedly incurred, excess input VAT in the claim.
amount of P559,709,337.54 for taxable year 2001 which it declared in its Quarterly · On April 10, 2003, a mere 13 days after it filed its
VAT Returns filed for the same year. amended administrative claim with the CIR on March 28,
San Roque duly filed with the BIR separate claims for refund, amounting to 2003, San Roque filed a Petition for Review with the CTA,
P559,709,337.54, representing unutilized input taxes as declared in its VAT
which showed that San Roque did not wait for the 120-day
returns for taxable year 2001.
However, on March 28, 2003, San Roque filed amended Quarterly VAT Returns period to lapse before filing its judicial claim.
for the year 2001 since it increased its unutilized input VAT To the amount of · Compliance with the 120-day waiting period is
P560,200,283.14. San Roque filed with the BIR on the same date, separate mandatory and jurisdictional, under RA 8424 or the Tax
amended claims for refund in the aggregate amount of P560,200,283.14. Reform Act of 1997. Failure to comply renders the petition
On April 10, 2003, a mere 13 days after it filed its amended administrative claim void.
with the CIR on March 28, 2003, San Roque filed a Petition for Review with the · It violates the doctrine of exhaustion of administrative
CTA.
remedies and renders the petition premature and without a
CIR alleged that the claim by San Roque was prematurely filed with the CTA.
cause of action, with the effect that the CTA does not
acquire jurisdiction over the taxpayer’s petition.
· Article 5 of the Civil Code provides, "Acts executed
against provisions of mandatory or prohibitory laws shall be
void, except when the law itself authorizes their validity."
· Thus, San Roque’s petition with the CTA is a mere
scrap of paper.
· Well-settled is the rule that tax refunds or credits,
just like tax exemptions, are strictly construed against
CIR v. Manila Manila Mining Corp. is a VAT registered enterprise. It sold gold to the Central WON Manila Mining provided for sufficient evidence to
Mining Bank for around 200M. In line with this, it filed an application for tax refund for its prove its claim for refund. No.
AT&T Petitioner is a domestic corporation who entered into several Service Agreements ISSUE: WON Petitioner is entitled to a refund or issuance of
Communicati and Assignment Agreements with non-resident foreign corporations such as a tax credit certificate
ons Services AT&T-CSI and AT&T-SI, compensation for such services to be paid in US Dollars.
Philippines, HELD: NO. The Court clarified that there is a distinction as
Inc. v. CIR Petitioner filed with the BIR an application for refund and/or tax credit of its to an “invoice” and a “receipt”, as provided by specific
Petition dismissed.
Kepco ● KEPCO Philippines Corporation (Kepco) is a VAT-registered independent ISSUE: W/N zero-rated should be imprinted on invoices
Philippines power producer engaged in the business of generating electricity. It and/or official receipts as part of the invoicing requirement
Corporation exclusively sells electricity to National Power Corporation (NPC), an entity
v. CIR exempt from taxes HELD: YES
● Kepco filed an application for zero-rated sales with the Revenue District ● As it failed to indicate in its VAT invoices and
JRA Petitioner, a PEZA Corporation, filed applications for tax credit/refund of unutilized ISSUE: W/N the failure to print the word “zero-rated” on
Philippines, input VAT on its zero-rated sales for the taxable quarters of 2000. the invoices/ receipts is fatal to a claim for credit/refund of
Hitachi Hitachi is a domestic corporation engaged in the business of manufacturing and ISSUE: W/N Hitachi has sufficiently complied with the
Global exporting computer products. It is registered with the BIR as a VAT taxpayer. It is requirements for its claim for VAT refund
Storage also registered with the Export Processing Zone Authority as an Ecozone Export
Technologies Enterprise. HELD: NO.
Philippines We already settled the issue of printing the word zero-rated
Corporation Hitachi filed an administrative claim for refund or issuance of a tax credit certificate on the sales invoices in Panasonic v. CIR. In that case, we
v. CIR, GR before the BIR. The claim involved around P25M representing excess input VAT denied Panasonic’s claim for refund of the VAT it paid as a
No. 174212, attributable to Hitachi's zero-rated exports sales for the 4 taxable quarters of 1999. zero-rated taxpayer on the ground that its sales invoices did
not state on their face that its sales were zero-rated.
Due to BIR's inaction, Hitachi filed a petition for review with the CTA. However, the
CTA and the CTA En Banc, on appeal, both denied the claim. Likewise, in this case, when Hitachi filed its claim for refund
or tax credit, RR 7-95 was already in force. Both the CTA
Hitachi argues that Section 4.108-1 of RR 7-95 cannot expand the invoicing First Division and the CTA En Banc found that Hitachi's
requirements prescribed by Section 113(A) of the NIRC by imposing the additional export sales invoices did not indicate Hitachi's TIN followed