Case Digest (G.R. No. 152609)
Facts:
Commissioner of Internal Revenue v. American Express International, Inc. (Philippine Branch), G.R. No. 152609, June 29, 2005, Supreme Court Third Division, Panganiban, J., writing for the Court.
The petitioner is the Commissioner of Internal Revenue; the respondent is American Express International, Inc. (Philippine Branch) (Amex Philippines), a servicing branch that facilitates collection of receivables for its Hong Kong-based parent and remits payments to Philippine service establishments. Amex Philippines was a VAT-registered taxpayer and filed quarterly VAT returns for 1997, later amending them (filed March 23, 1999) to reclassify large portions of receipts as zero-rated sales and to claim excess input VAT. On April 13, 1999 Amex filed for a refund of its 1997 excess input taxes (about P3.75 million); when the BIR did not act, Amex filed a petition on April 15, 1999 with the Court of Tax Appeals (CTA).
The CTA (Presiding Judge Ernesto D. Acosta) ruled for respondent and ordered refund of P3,352,406.59, finding Amex’s servicing activities to be zero-rated under Section 102(b) of the Tax Code and implementing regulations (as reflected in Revenue Regulations). The Court of Appeals (Fifth Division) affirmed the CTA in a February 28, 2002 decision (CA-G.R. SP No. 62727), holding that Amex’s services fell within Section 4.102-2(b)(2) of RR 7-95 (as amended by RR 5-96) and that the BIR’s narrower administrative pronouncement requiring consumption abroad was ultra vires and, if applied retroactively, prejudicial. The Revenue, through this Rule 45 petition for review on certiorari, challeng...(Subscriber-Only)
Issues:
- Did the Court of Appeals err in holding that respondent is entitled to a refund of excess input VAT for 1997 because its services performed in the Philippines, paid in acceptable foreign currency and accounted for under BSP rules, are zero-rated under the Tax Code and its imple...(Subscriber-Only)
Ruling:
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Ratio:
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Doctrine:
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