Case Digest (G.R. No. 182364)
Facts:
The case involves AT&T Communications Services Philippines, Inc. (petitioner) as the appellant and the Commissioner of Internal Revenue (respondent). The events leading to the case began in 2002 when the petitioner, a domestic corporation engaged in providing various services to foreign corporations, incurred input Value Added Tax (VAT) amounting to P2,050,736.69 after generating zero-rated sales worth P56,898,744.05. The petitioner had entered into service agreements with several foreign entities, including AT&T Communications Services International Inc. and Acer, Inc., which were registered with the Philippine Economic Zone Authority (PEZA). The petitioner filed an application for tax refund and/or tax credit for the unutilized input VAT on March 26, 2004, claiming P1,801,826.82 attributable to its zero-rated sales.
To protect its claim from the prescriptive period, the petitioner subsequently filed a petition for review with the Court of Tax Appeals (CTA), which...
Case Digest (G.R. No. 182364)
Facts:
1. Parties Involved:
- Petitioner: AT&T Communications Services Philippines, Inc., a domestic corporation providing information, promotional, supportive, and liaison services to foreign corporations.
- Respondent: Commissioner of Internal Revenue.
2. Nature of Business:
- Petitioner is engaged in zero-rated sales under Service Agreements with foreign corporations, including AT&T Communications Services International Inc., AT&T Solutions, Inc., AT&T Singapore, Pte. Ltd., AT&T Global Communications Services, Inc., and Acer, Inc.
- Remuneration for services is paid in U.S. Dollars and remitted in accordance with Bangko Sentral ng Pilipinas (BSP) rules.
3. Tax Issue:
- For the calendar year 2002, petitioner incurred input VAT from zero-rated sales and purchases of capital goods, resulting in an unutilized input VAT of P2,050,736.69.
- After allocation, petitioner claimed P1,801,826.82 as input VAT attributable to zero-rated sales.
- On March 26, 2004, petitioner filed for a tax refund/credit of the unutilized input VAT.
4. Procedural History:
- Petitioner filed a petition for review with the Court of Tax Appeals (CTA) to prevent the running of the prescriptive period.
- The CTA First Division denied the claim, citing lack of substantiation, as petitioner submitted VAT invoices instead of VAT official receipts.
- The CTA En Banc affirmed the denial.
Issue:
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Ruling:
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Ratio:
Requirements for Tax Refund/Credit:
- A taxpayer engaged in zero-rated transactions may claim a refund or tax credit for unutilized input VAT if:
a. The taxpayer is engaged in zero-rated or effectively zero-rated sales.
b. The taxpayer is VAT-registered.
c. The claim is filed within two years after the close of the taxable quarter.
d. The input VAT is attributable to zero-rated sales.
e. Foreign currency exchange proceeds are accounted for under BSP rules.
- A taxpayer engaged in zero-rated transactions may claim a refund or tax credit for unutilized input VAT if:
Substantiation of Zero-Rated Sales:
- The Court ruled that VAT invoices are sufficient to substantiate zero-rated sales, provided they comply with Sections 113 and 237 of the Tax Code.
- The distinction between VAT invoices (for goods) and VAT official receipts (for services) is not absolute. Sales invoices are recognized commercial documents that prove business transactions.
Preponderance of Evidence:
- The standard of proof for tax refund claims is preponderance of evidence, not strict compliance with formal requirements.
- Petitioner submitted sufficient evidence, including Service Agreements, VAT invoices, and bank credit advices, to support its claim.
Remand to CTA:
- The Supreme Court remanded the case to the CTA for the computation of the refund/credit, as it is not a trier of facts.