Case Digest (A.C. No. 5119)
Facts:
In Commissioner of Internal Revenue v. American Express International, Inc. (Philippine Branch), G.R. No. 152609, decided on June 29, 2005, the Philippine Branch of American Express (hereinafter “Amex Philippines”), a VAT-registered servicing unit of its Hong Kong parent, filed amended quarterly VAT returns for 1997 on March 23, 1999, reclassifying its foreign-currency–paid fees as zero-rated and reflecting excess input VAT of ₱3,763,060.43. On April 13, 1999, it formally requested a refund of ₱3,751,067.04, but the Commissioner of Internal Revenue took no action, prompting Amex Philippines to file a petition with the Court of Tax Appeals (CTA) on April 15, 1999. The CTA granted a refund of ₱3,352,406.59, which the Court of Appeals (CA) affirmed in CA-GR SP No. 62727 on February 28, 2002. The Commissioner then sought relief before the Supreme Court via a Rule 45 petition. Under the National Internal Revenue Code of 1986, as amended by RA Nos. 7716 (1994) and 8424 (1997), SectionCase Digest (A.C. No. 5119)
Facts:
- Parties and Registration
- Commissioner of Internal Revenue (petitioner) vs. American Express International, Inc. (Philippine Branch) (respondent).
- Respondent is a duly registered VAT taxpayer since March 1988 (RDO 47, VAT Reg. No. 32A-3-004868).
- Transactions and Tax Filings
- For 1997, respondent filed quarterly VAT returns reporting minimal taxable sales and no zero-rated sales.
- On March 23, 1999, respondent amended its 1997 returns to classify P80,309,633.20 of services as zero-rated, generating P3,763,060.43 of input VAT.
- On April 13, 1999, respondent applied for refund of excess input VAT of P3,751,067.04 under Section 110(B) of the 1997 Tax Code; petition filed April 15, 1999.
- Proceedings Below
- The Court of Tax Appeals (CTA) granted the refund of P3,352,406.59, finding respondent’s services zero-rated under Section 108(B) of the Tax Reform Act of 1997 and RR 5-96.
- The Court of Appeals (CA) affirmed the CTA, holding the service fell under Sec. 4.102-2(b)(2) of RR 7-95 as amended by RR 5-96.
- Petitioner elevated the case to the Supreme Court via Rule 45 petition, challenging entitlement to the refund.
Issues:
- Main Issue
- Whether the CA erred in affirming respondent’s entitlement to refund P3,352,406.59 as excess input VAT for 1997.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)