Philippines Court of Tax Appeals Issues Decision Clarifying Input VAT Refunds on Zero-Rated Sales

The Philippine Court of Tax Appeals Aug. 14 issued a decision in CTA Case No. 11072, clarifying input VAT refunds on zero-rated sales. The taxpayer, a VAT-registered provider of business outsourcing services, sought a refund of unutilized input VAT for Q3 2020 related to zero-rated sales to nonresident affiliates and Philippine Economic Zone Authority (PEZA) registered entities. The Commissioner of Internal Revenue partially denied the refund claim, citing insufficient documentation. On appeal, the Court of Tax Appeals, Second Division, partially held for the taxpayer and ordered the Commissioner to pay an additional input VAT refund amount, finding that: 1) the ...