Taxation Law Digests Edited

7/18/2019 Taxation Law Digests Edited

http://slidepdf.com/reader/full/taxation-law-digests-edited 1/13

G.R. No. 172509, February 04, 2015

CHINA BANKING CORPORATION, Petitioner , v. COMMIION!R OF

INT!RNA" R!#!N$!, Respondent.

Tax Law; Statute of Limitations. A request for reinvestigation alone will notsuspend the statute of limitations. Two things must concur: there must e a

request for reinvestigation and the !"R must have granted it.

!R!NO, C.J.

FACT%Petitioner CBC is a universal bank duly organized and existing under

the laws of the Philippines. For the taxable years 19! to 19", CBC wasengaged in transa#tions involving sales of foreign ex#hange to the Central

Bank of the Philippines $now #ang$o Sentral ng Pilipinas%, #o&&only knownas '()P transa#tions. Petitioner did not *le tax returns or pay tax on the'()P transa#tions for those taxable years. +hus, CBC re#eived anassess&ent fro& B- of de*#ien#y do#u&entary sta&p tax on the a&ount of P11,,1"/./0 plus in#re&ents a##ruing thereto.

+he petitioner, through its vi#epresident, sent a letter of protest tothe B-. CBC raised the following defenses2 $1% doule taxation, as the bank had previously paid the 3'+ on all its transa#tions involving sales of foreignbills of ex#hange to the Central Bank4 $!% asence of liailit%& as the liabilityfor the 3'+ in a sale of foreign ex#hange through telegraphi# transfers to

the Central Bank falls on the buyer and in this #ase, the Central Bank4$% due process violation, as the bank5s re#ords were never for&allyexa&ined by the B- exa&iners4 $6% validit% of the assessment, as it did notin#lude the fa#tual basis therefore4 $/% exemption& as neither the taxexe&ptentity nor the other party was liable for the pay&ent of 3'+ before thee7e#tivity of Presidential 3e#ree 8os. $P3% 11 and 191 for the years19! to 19". n the protest, the taxpayer re:uested a reinvestigation so asto substantiate its assertions. ;n 11 <ar#h !00!, the C- *led an )nswerwith a de&and for CBC to pay the assessed 3'+. 'ore than () %ears after the *ling of the protest , the Co&&issioner of nternal -evenue $C-%rendered a de#ision reiterating the de*#ien#y 3'+ assess&ent and ordered

the pay&ent thereof plus in#re&ents within 0 days fro& re#eipt of the3e#ision. CBC *led a petition for review before the C+), but the sa&e wasdenied, ruling that a '()P arrange&ent should be treated as a telegraphi#transfer, and thus sub=e#t to do#u&entary sta&p tax. +he subse:uent<otion for -e#onsideration of CBC was denied. +he C+) >n Ban# likewisedis&issed the appeal of CBC, and the subse:uent <-. ?en#e, this petition.

I$!%



(hether or not the right of the B- to #olle#t the assessed 3'+ fro&CBC is already barred by pres#ription

H!"&%

AFFIRMATI#!. +he petition is granted on the ground that the rightof the B- to #olle#t the assessed 3'+ is barred by the statute of li&itations.

+he B-5s )nswer in the #ase *led before the C+) #ould not, by any &eans,

have :uali*ed as a #olle#tion #ase as re:uired by law. @nder the rule

prevailing at the ti&e the B- *led its )nswer, the regular #ourts, and not

the C+), had =urisdi#tion over =udi#ial a#tions for #olle#tion of internal

revenue taxes. t was only on ! )pril !006, when -epubli# )#t 8u&ber

9!! took e7e#t, that the =urisdi#tion of the C+) was expanded to in#lude,

a&ong others, original =urisdi#tion over #olle#tion #ases in whi#h the

prin#ipal a&ount involved is one &illion pesos or &ore.

Further&ore, the fa#t that the taxpayer in this #ase &ay have

re:uested a reinvestigation did not toll the running of the threeyear

pres#riptive period.

@nder 'e#tion !0 of the 19 +ax Code, a re:uest for reinvestigation

alone will not suspend the statute of li&itations. +wo things &ust #on#ur2

there &ust be a re:uest for reinvestigation and the C- &ust have granted

it. )lso, in the #ase of -epubli# vs. Aan#ay#o, the Court ruled that +$t%he a#t

of re:uesting a reinvestigation alone does not suspend the period. +he

re:uest should *rst be granted, in order to e7e#t suspension.

+here is no showing fro& the re#ords that the C- ever granted there:uest for reinvestigation *led by CBC. +hat being the #ase, it #annot be

said that the running of the threeyear pres#riptive period was e7e#tively

suspended.



G.R. No. 19'75( )a*uary 1+, 2015BANCO &! ORO, BANK OF COMM!RC!, CHINA BANKING

CORPORATION, M!TROPO"ITAN BANK TR$T COMPAN-,

PHI"IPPIN! BANK OF COMM$NICATION, PHI"IPPIN! NATIONA"

BANK, PHI"IPPIN! #!T!RAN BANK AN& P"ANT!R

&!#!"OPM!NT BANK, RIA" COMM!RCIA" BANKING

CORPORATION AN& RCBC CAPITA" CORPORATION, CA$C$ OF

&!#!"OPM!NT NGO N!T/ORK, vs. R!P$B"IC OF TH!

PHI"IPPIN!, TH! COMMIION!R OF INT!RNA" R!#!N$!,

B$R!A$ OF INT!RNA" R!#!N$!, !CR!TAR- OF FINANC!,

&!PARTM!NT OF FINANC!, TH! NATIONA" TR!A$R!R AN&

B$R!A$ OF TR!A$R-

Taxation; ,eposit sustitute; Requirement in #orrowing -unds. "n deposit

sustitutes& the orrowing of funds must e otained from twent% )/0 or more individuals or corporate lenders at an% one time. 1ere& +at an% one

time2 for purposes of determining the +)/ or more lenders2 would mean

ever% transaction executed in the primar% or secondar% mar$et in

connection with the purchase or sale of securities.

LEONEN, J.:

FACT%

+he Cau#us of 3evelop&ent 8A; 8etworks $C;3>8A;% re:uestedan approval fro& the 3epart&ent of Finan#e for the issuan#e by the Bureauof +reasury of 10year zero#oupon +reasury Certi*#ates $+notes%. +hese +notes would initially be pur#hased by a spe#ial purpose vehi#le on behalf of C;3>8A;, repa#kaged and sold at a pre&iu& to investors as the P>)CeBonds.

+he Bureau of nternal -evenue, in reply to C;3>8A;, issued aruling on the tax treat&ent of the proposed P>)Ce Bonds #on*r&ing thatthe said bonds would not be #lassi*ed as deposit substitutes and would notbe sub=e#ted to the #orresponding withholding tax reiterating that in orderfor the bond to be #lassi*ed as deposit substitutes, the borrowing of funds

&ust be obtained fro& twenty $!0% or &ore individuals or #orporate lendersat any one ti&e. +he said P>)Ce Bonds will be issued only to Code 8A; asone entity, thus the sa&e #annot be #onsidered as deposit substitutes sin#eit did not satisfy the said re:uire&ent. ?en#e, the withholding tax ondeposit substitutes will not apply.

+he tax treat&ent of the proposed P>)Ce Bonds in B- -uling 8o.0!0!001 was subse:uently reiterated in B- -uling 8o. 0/!001and B- -uling 8o. 3)1/01 pronoun#ing that to be able to deter&ine whether the



*nan#ial assets, i.e., debt instru&ents and se#urities are deposit substitutes,the !0 or &ore individual or #orporate lenders rule &ust apply. <oreover,the deter&ination of the phrase at any one ti&e for purposes of deter&ining the !0 or &ore lenders is to be deter&ined at the ti&e of theoriginal issuan#e. 'u#h being the #ase, the P>)Ce Bonds were

not to be treated as deposit substitutes.'ubse:uently, the Bureau of +reasury announ#ed that P0.0B worthof 10year Dero Coupon Bonds would be au#tioned .+he noti#e stated thatthe Bonds shall be issued to not &ore than 19 buyersElenders hen#e, thene#essity of a &anual au#tion for this &aiden issue. astly, it stated thatthe issue being li&ited to 19 lenders and while taxable shall not be sub=e#tto the !0G *nal withholding tax.

+he Bureau of +reasury also released a &e&o on the For&ula for theDeroCoupon Bond. +he &e&o stated in part that the for&ula indeter&ining the pur#hase pri#e and settle&ent a&ount is only appli#able tothe zeroes that are not sub=e#t to the !0G *nal withholding due to the 19

buyerElender li&it.+he Bureau of +reasury held an au#tion for the 10year zero#oupon

bonds and issued another &e&orandu& :uoting ex#erpts of the rulingissued by the Bureau of nternal -evenue #on#erning the Bonds5 exe&ptionfro& !0G *nal withholding tax and the opinion of the <onetary Board onreserve eligibility.

)fter the au#tion, -CBC whi#h parti#ipated on behalf of C;3>8A;was de#lared as the winning bidder. +he Bureau of +reasury issued P/billion worth of Bonds at yieldto&aturity of 1!./G to -CBC forapproxi&ately P10.1 billion resulting in a dis#ount of approxi&atelyP!6. billion.

-CBC Capital entered into an underwriting agree&ent with C;3>8A;, whereby -CBC Capital was appointed as the ssue <anager and ead@nderwriter for the o7ering of the P>)Ce Bonds. -CBC Capital agreed tounderwrite on a *r& basis the o7ering, distribution and sale of the P/billion Bonds at the pri#e of P11,99/,/1,1"./1. n 'e#tion $r% of theunderwriting agree&ent, C;3>8A; represented that all in#o&e derivedfro& the Bonds, are exe&pt fro& all for&s of taxation as #on*r&ed byBureau of nternal -evenue letter rulings.

-CBC Capital sold the Aovern&ent Bonds in the se#ondary &arket foran issue pri#e of P11,99/,/1,1"./1. Petitioners pur#hased the P>)CeBonds on di7erent dates.

I$!% (hether the P>)Ce Bonds are deposit substitutes and thussub=e#t to !0G *nal withholding tax under the 199 8ational nternal-evenue Code.

H!"&% N!GATI#!. @nder the 199 8ational nternal -evenue Code, a*nal withholding tax at the rate of !0G is i&posed on interest on any



#urren#y bank deposit and yield or any other &onetary bene*t fro& depositsubstitutes and fro& trust funds and si&ilar arrange&ents.

+his tax treat&ent of interest fro& bank deposits and yield fro&deposit substitutes was *rst introdu#ed in the 19 8ational nternal-evenue Code. +he 8-C #onsidered the following borrowings as deposit

substitutes2

$a% )ll interbank borrowings by or a&ong banks and nonbank *nan#ial institutions authorized to engage in :uasibankingfun#tions eviden#ed by deposit substitutes instru&ents, ex#eptinterbank #all loans to #over de*#ien#y in reserves againstdeposit liabilities as eviden#ed by interbank loan advi#e orrepay&ent transfer ti#kets.

$b% )ll borrowings of the national and lo#al govern&ent and itsinstru&entalities in#luding the Central Bank of the Philippines,

eviden#ed by debt instru&ents denoted as treasury bonds, bills,notes, #erti*#ates of indebtedness and si&ilar instru&ents.

$#% )ll borrowings of banks, nonbank *nan#ial inter&ediaries,*nan#e #o&panies, invest&ent #o&panies, trust #o&panies,in#luding the trust depart&ent of banks and invest&ent houses,eviden#ed by deposit substitutes instru&ents.

+he de*nition of deposit substitutes was a&ended under the 1998ational nternal -evenue Code with the addition of the :ualifying phrasefor publi# H orrowing from )/ or more individual or corporate lenders at

an% one time. @nder the 199 8ational nternal -evenue Code, Congressspe#i*#ally de*ned publi# to &ean twenty $!0% or &ore individual or#orporate lenders at any one ti&e. ?en#e, the nu&ber of lenders isdeter&inative of whether a debt instru&ent should be #onsidered a depositsubstitute and #onse:uently sub=e#t to the !0G *nal withholding tax.

Petitioners #ontend that there is only one lender $i.e. -CBC% to who&the B+r issued the Aovern&ent Bonds. ;n the other hand, respondentstheorize that the word any indi#ates that the period #onte&plated is theentire ter& of the bond and not &erely the point of origination or issuan#esu#h that if the debt instru&ents were subse:uently sold in se#ondary&arkets and so on, in su#h a way that twenty $!0% or &ore buyers

eventually own the instru&ents, then it be#o&es indubitable that fundswould be obtained fro& the publi# as de*ned in 'e#tion !!$I% of the8-C.

+he 'C explained that the phrase at any one ti&e for purposes of deter&ining the !0 or &ore lenders would &ean every transa#tionexe#uted in the pri&ary or se#ondary &arket in #onne#tion with thepur#hase or sale of se#urities.



Fro& the fa#tual ba#kground, it &ay see& that there was only onelender J -CBC on behalf of C;3>8A; J to who& the P>)Ce Bonds wereissued at the ti&e of origination. ?owever, a reading of the underwritingagree&ent and -CBC ter& sheet reveals that the settle&ent dates for thesale and distribution by -CBC Capital $as underwriter for C;3>8A;% of

the P>)Ce Bonds to various undis#losed investors at a pur#hase pri#e of approxi&ately P11.99" would fall on the sa&e day, ;#tober 1, !001, whenthe P>)Ce Bonds were supposedly issued to C;3>8A;E-CBC. n reality,therefore, the entire P10.! billion borrowing re#eived by the Bureau of +reasury in ex#hange for the P/ billion worth of P>)Ce Bonds was sour#eddire#tly fro& the undis#losed nu&ber of investors to who& -CBCCapitalEC;3>8A; distributed the P>)Ce Bonds J all at the ti&e of origination or issuan#e.

P>)Ce Bonds, therefore are not deposit substitutes. -espondentBureau of +reasury is hereby OR&!R!& to i&&ediately release and pay tothe bondholders the a&ount #orresponding to the !0G *nal withholding tax

that it withheld.



G.R. No. 17+241 Mar 25, 2015

I"ICON PHI"IPPIN!, INC. FORM!R"- INT!" PHI"IPPIN!

MAN$FACT$RING, INC.3 # COMMIION!R OF INT!RNA"

R!#!N$!

Taxation; Period 3ithin 3hich Refund or Tax !redit of "nput Taxes Shall e

'ade. "n proper cases& the !ommissioner shall grant a refund or issue the

tax credit certi*cate for creditale input taxes within one hundred twenty

(120) days from the date of sumission of complete documents in support

of the application. The taxpa%er can *le an appeal in one of two wa%s: (0

*le the 4udicial claim within thirt% da%s after the !ommissioner denies the

claim within the ()/5da% period& or )0 *le the 4udicial claim within thirt%

da%s from the expiration of the ()/5da% period if the !ommissioner does not

act within the ()/5da% period.

Same; Strict !onstruction of Tax !redit or Tax 6xemption against Taxpa%er.

The taxpa%er claiming the tax credit or refund has the urden of proving

that he is entitled to the refund % showing that he has strictl% complied

with the conditions for the grant of the tax refund or credit. Strict

compliance with the mandator% and 4urisdictional conditions prescried %

law to claim such tax refund or credit is essential and necessar% for such

claim to prosper.

LEONARDO-DE CASTRO, J.:

FACT%

'ili#on Philippines n#. $'P%, for&erly known as ntel Philippines

<anufa#turing, n#., is a #orporation duly organized and existing under

Philippine laws, and engaged in the business of designing, developing,

&anufa#turing, and exporting advan#e and larges#ale integrated #ir#uit

#o&ponents, #o&&only referred to in the industry as ntegrated Cir#uits orCs. t is registered with the Bureau of nternal -evenue $B-% as a K)+

taxpayer.

'P *led on <ay ", 1999 with the ;ne'top 'hop nter)gen#y +ax

Credit and 3uty 3rawba#k Center of the 3epart&ent of Finan#e an



)ppli#ation for +ax CreditE-efund of Kalue)dded +ax Paid #overing the

+hird Luarter of 199 a&ounting to a su& of P!/,/1,1!..

(hen respondent Co&&issioner of nternal -evenue $C-% failed to

a#t upon its aforesaid )ppli#ation for +ax Credit or -efund, 'P *led on

'epte&ber !9, !000 a Petition for -eview before the C+) 3ivision.

+he C+) 3ivision rendered a 3e#ision on 8ove&ber !6, !00 onlypartially granting the #lai& of 'P for tax #redit or refund. +he C+) 3ivision disallowed the #lai& of 'P for tax #reditErefund of input K)+ in thea&ount of P!,10/,/6. for failure of 'P to properly substantiate thezerorated sales to whi#h it attributed said taxes. +he C+) 3ivisionparti#ularly pointed out the failure of 'P to #o&ply with invoi#ingre:uire&ents under 'e#tions 11, !, and ! of the 8ational nternal-evenue Code of 199 $199 +ax Code%. )s for the #lai& of 'P for tax

#reditErefund of input K)+ on its pur#hases of #apital goods in the a&ount of P!,6!/,"6.00, the C+) 3ivision held that 'e#tion 11!$B% of the 199 +axCode did not re:uire that su#h a #lai& be attributable to zerorated sales4and that 'P was able to #o&ply with all the re:uire&ents under saidprovision.

'P sought re#ourse fro& the C+) en anc by *ling a Petition for-eview assailing the 3e#ision but it was dis&issed for la#k of &erit.

I$!% (hether or not 'P #an #lai& its tax #redit or refund.

H!"&%N!GATI#!. n the #ase of !ommissioner of "nternal Revenue v. 'indanao "" 7eothermal Partnership& the Court, #onstruing 'e#tion 11! of the 199 +ax Code in a series of #ases, su&&arized the rules onpres#riptive periods for #lai&ing #redit or refund of input K)+, to wit2

For the o6year re8r:e ero;21. t is only the ad&inistrative #lai& that &ust be *led within the two

year pres#riptive period.!. +he proper re#koning of the date for the twoyear pres#riptive

period is the #lose of the taxable :uarter when the relevant sales were

&ade.. +he only other rule is the Atlas ruling, whi#h applied only fro& Mune

, !00 to 'epte&ber , !00. )tlas states that the twoyear pres#riptiveperiod for *ling a #lai& for tax refund or #redit of the unutilized input K)+pay&ents should be #ounted fro& the date of *ling of the K)+ return andpay&ent of the tax.

For the 120+0 day ero;2



1. +he taxpayer #an *le an appeal in one of the two ways2 $1% *le the =udi#ial #lai& within thirty days after the Co&&issioner denies the #lai&within the 1!0 day period, or4 $!% *le the =udi#ial #lai& within thirty daysfro& the expiration of the 1!0day period if the Co&&issioner does not a#twithin the 1!0day period.

!. +he 0day period always apply, whether there is a denial orina#tion on the part of the C-.. )s a general rule, the 0day period to appeal is both &andatory

and =urisdi#tional.6. )s an ex#eption to the general rule, pre&ature *ling is allowed only

if *led between 3e#e&ber 10, !00 and ;#tober /, !010 when B- -uling8o. 3)690 was still in for#e.

/. ate *ling is absolutely prohibited, even during the ti&e when B- -uling 8o. 3)690 was in for#e.

n the present #ase, 'P *led on May (, 1999 its ad&inistrative #lai&

for tax #reditErefund of the input K)+ attributable to its zerorated sales andon its pur#hases of #apital goods for the +hird Luarter of 199. +he two year pres#riptive period for *ling an ad&inistrative #lai&, re#koned fro&the #lose of the taxable :uarter, pres#ribed on ee<ber +0, 2000.>vidently, 'P belatedly *led its =udi#ial #lai&. t *led its Petition for-eview with the C+) +91 ;ay8 after the lapse of the 1!0day period withoutthe C- a#ting on its appli#ation for tax #reditErefund, way beyond the 0day period under 'e#tion 11! of the 199 +ax Code.

)pplying the said rules in the #ase at bar, Be#ause the 0day periodfor *ling its =udi#ial #lai& had already pres#ribed by the ti&e 'P *led itsPetition for -eview with the C+) 3ivision, the C+) 3ivision never a#:uired

=urisdi#tion over the said Petition.+he Court stresses that the 1!0E0day pres#riptive periods are

&andatory and =urisdi#tional, and are not &ere te#hni#al re:uire&ents.+he Court should not establish the pre#edent that non#o&plian#e with&andatory and =urisdi#tional #onditions #an be ex#used if the #lai& isotherwise &eritorious, parti#ularly in #lai&s for tax refunds or #redit. 'u#hpre#edent will render &eaningless #o&plian#e with &andatory and =urisdi#tional re:uire&ents.

+he 'C also e&phasized that a tax #redit or refund, like taxexe&ption, is stri#tly #onstrued against the taxpayer. +he taxpayer #lai&ingthe tax #redit or refund has the burden of proving that he is entitled to the

refund by showing that he has stri#tly #o&plied with the #onditions for thegrant of the tax refund or #redit. 'tri#t #o&plian#e with the &andatory and =urisdi#tional #onditions pres#ribed by law to #lai& su#h tax refund or #reditis essential and ne#essary for su#h #lai& to prosper. 8on#o&plian#e withthe &andatory periods, nonobservan#e of the pres#riptive periods, andnonadheren#e to exhaustion of ad&inistrative re&edies bar a taxpayer5s#lai& for tax refund or #redit, whether or not the C- :uestions thenu&eri#al #orre#tness of the #lai& of the taxpayer. For failure of 'ili#on to



#o&ply with the provisions of 8-C, its =udi#ial #lai&s for tax refund or#redit should have been dis&issed by the C+) for la#k of =urisdi#tion.



G.R. No. 1'+5+1 Mar 25, 2015

!AT!RN T!"!COMM$NICATION PHI"IPPIN!, INC. #

COMMIION!R OF INT!RNA" R!#!N$!

Taxation; Tax !laims; -ailure to !ompl% with the "nvoicing Requirements. -ailure % the supplier to compl% with the invoicing requirements on the

documents supporting the sale of goods and services will result to the

disallowance of the claim for input tax % the purchaser5claimant.

RE!ES, J.:

FACT%

>astern +ele#o&&uni#ations Philippines, n#. $>+P% is a do&esti#

#orporation lo#ated at the +ele#o&s Plaza Building, 8o. 1", 'en. Ail Puyat

)venue, 'al#edo Killage, <akati City. t registered with the Bureau of

nternal -evenue $B-% as a K)+ taxpayer with Certi*#ate of -egistration.

)s a tele#o&&uni#ations #o&pany, >+P entered into various

international servi#e agree&ents with international tele#o&&uni#ations

#arriers and handles in#o&ing tele#o&&uni#ations servi#es for nonresident

foreign tele#o&&uni#ation #o&panies and the relay of said international

#alls within and around other pla#es in the Philippines.

>+P seasonably *led its Luarterly K)+ -eturns for the year 199whi#h were, however, si&ultaneously a&ended to #orre#t its input K)+ ondo&esti# pur#hases of goods and servi#es and on i&portation of goods andto reNe#t its zerorated and exe&pt sales for said year.

>+P then *led an ad&inistrative #lai& with the B- for the refund of the a&ount of P9,!"/,91.6! representing ex#ess input tax attributable toits e7e#tively zerorated sales in 199 pursuant to 'e#tion 11 of the-epubli# )#t $-.).% 8o. 6!6, also known as the 8ational nternal -evenueCode of 199 $8-C%.

Pending review by the B-, >+P *led a Petition for -eview before the

C+). n its 3e#ision, the C+) denied the petition be#ause the K)+ o7i#ialre#eipts presented by >+P to support its #lai& failed to i&print the wordzerorated on its fa#e in violation of the invoi#ing re:uire&ents under'e#tion 6.101 of -- 8o. 9/ whi#h reads2

e. 4.10'61. "nvoicing Requirements.H )ll K)+registeredpersons shall, for every sale or lease of goods or properties



or servi#es, issue duly registered re#eipts or sales or#o&&er#ial invoi#es whi#h &ust show2

1. the na&e, +8 and address of seller4!. date of transa#tion4. :uantity, unit #ost and des#ription of &er#handise or nature

of servi#e46. the na&e, +8, business style, if any, and address of the K)+registered pur#haser, #usto&er or #lient4

/. e or; =>ero6rae;? <r*e; o* e *:oeo:er*@ >ero6rae; 8ae84 and

". the invoi#e value or #onsideration.

@ndaunted, >+P *led a petition before the Court of )ppeals $C)%whi#h referred the #ase to the C+) en anc rendering a 3e#ision de#laringthat K)+registered persons &ust #o&ply with the invoi#ing re:uire&ents.<oreover, the invoi#ing re:uire&ents enu&erated in 'e#tion 6.101 of

-- 8o. 9/ are &andatory due to the word shall and not &ay. ?en#e,non#o&plian#e with any thereof would disallow any #lai& for tax #redit or K)+ refund.

?en#e, this petition.

I$!% (hether or not the C+) erred in denying >+P5s #lai& for refund of input taxes resulting fro& its zerorated sales.

H!"&%N!GATI#!. +he word zerorated is re:uired on the invoi#es or

re#eipts issued by K)+registered taxpayers. K)+ invoi#ing re:uire&ents

provided by tax laws and regulations is &andatory. ) #lai& for unutilizedinput taxes attributable to zerorated sales will be given due #ourse4otherwise, the #lai& should be stru#k o7 for failure to do so, su#h as what>+P did in this #ase.

)n appli#ant for a #lai& for tax refund or tax #redit &ust notonly prove entitle&ent to the #lai& but also #o&plian#e with all thedo#u&entary and evidentiary re:uire&ents. Conse:uently, the old C+), asa7ir&ed by the C+) en anc, #orre#tly ruled that a #lai& for the refund of #reditable input taxes &ust be eviden#ed by a K)+ invoi#e or o7i#ial re#eiptin a##ordan#e with 'e#tion 110$)%$1% of the 8-C. 'e#tions ! and ! of the sa&e Code as well as 'e#tion 6.101 of -- 8o. 9/ provide for the

invoi#ing re:uire&ents that all K)+registered taxpayers should observe,su#h as2 $a% the B- Per&it to Print4 $b% the +ax denti*#ation 8u&ber of the K)+registered pur#haser4 and 3 e or; =>ero6rae;? <r*e;ereo*. +hus, the failure to indi#ate the words zerorated on theinvoi#es and re#eipts issued by a taxpayer would result in the denial of the #lai& for refund or tax #redit.

-evenue <e&orandu& Cir#ular 8o. 6!!00 pointed that the failureby the supplier to #o&ply with the invoi#ing re:uire&ents on the do#u&ents



supporting the sale of goods and servi#es will result to the disallowan#e of the #lai& for input tax by the pur#haser#lai&ant.

f the #lai& for refundE+CC is based on the existen#e of zeroratedsales by the taxpayer but it fails to #o&ply with the invoi#ing re:uire&entsin the issuan#e of sales invoi#es $e.g. failure to indi#ate the +8%, its #lai&

for tax #reditErefund of K)+ on its pur#hases shall be denied #onsideringthat the invoi#e it is issuing to its #usto&ers does not depi#t its being a K)+registered taxpayer whose sales are #lassi*ed as zerorated sales.

Taxation Law Digests Edited

Documents

Transcript of Taxation Law Digests Edited