Philippines Court of Tax Appeals Issues Decision Clarifying Refunds of Excess, Unutilized Input VAT

The Philippine Court of Tax Appeals Feb. 27 issued a decision in CTA EB No. 3023, clarifying unutilized input VAT refunds on zero-rated sales. The taxpayer, a renewable energy developer and biodiesel manufacturer, challenged the denial of a refund of unutilized input VAT attributable to zero-rated sales. On appeal, the Court of Tax Appeals, en banc, found that: 1) the renewable energy zero-rating VAT incentive applies to local purchases of goods, properties, and services used in power or non-power applications; 2) an amount of input VAT, therefore, was disallowed for input VAT refund purposes because it related to purchases entitled ...