THE Court of Tax Appeals (CTA) has affirmed its ruling partially granting Manulife Data Services Inc. P1.31 million in excess value-added tax (VAT) traced to zero-rated sales for the calendar year 2013.
In a decision dated March 31 and made public on April 3, the CTA full court said the company sufficiently proved that the refunded amount was not applied against any output tax for the quarters after 2013.
“Although the claimed input VAT was carried over by the firm in its succeeding quarter VAT returns, the same remained unutilized until it was deducted as VAT refund in its quarter return for the first quarter of 2015,” according to the ruling penned by Associate Justice Lanee S. Cui-David.
The firm initially claimed P60.48 million excess VAT for the year 2013.
Manulife Data Services is engaged in corporate finance advisory services, training and personnel management.
Under the country’s tax code, zero-rated sales are transactions made by VAT-registered taxpayers with foreign clients not doing business in the Philippines. These sales do not translate to output tax.
The court denied the company’s motion for reconsideration for a full refund, citing the company’s failure to submit a Securities and Exchange Commission (SEC) certificate of non-registration of its client Manufacturers Life Insurance Company (MLIC), which would have proven that it did business outside the Philippines.
“The said basic documents are necessary because the Philippine SEC’s negative certification establishes that the recipient of the service has no registered business in the Philippines,” it said.
The petitioner argued that MLIC had filed with the Insurance Commission for the authority to close its Philippine business and withdraw its license in 2013. The CTA disagreed saying it did not submit proof to support the claim.
“We find that MDSI failed to raise any new or substantial matter persuasive enough to disturb the Court in Division’s findings in the assailed decision and resolution,” the tax tribunal said. — John Victor D. Ordonez