Philippine Court of Tax Appeals Clarifies Unutilized Input VAT Refund on Zero-Rated Sales

The Philippine Court of Tax Appeals Feb. 19 issued a decision in CTA Case No. 10826, clarifying an input VAT refund assessment on purchases of goods and services attributable to zero-rated sales. The taxpayer provided business process solutions, including zero-rated services, to nonresident entities. The taxpayer sought a refund of unutilized input VAT, which the Commissioner of Internal Revenue (CIR) partly denied. On appeal, the Court of Appeals, Third Division partially granted the taxpayer’s additional refund request, and stated that the taxpayer: 1) had unutilized input VAT attributable to services it provided to nonresident clients, which were subject to zero-rated ...