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

The Philippine Court of Tax Appeals Sept. 2 issued a decision in CTA Case No. 10676, clarifying input VAT refunds on zero-rated sales. The taxpayer, a VAT-registered construction consortium, sought a refund of unutilized input VAT on purchases related to zero-rated sales to an entity registered with the Philippine Economic Zone Authority (PEZA). The Commissioner of Internal Revenue partially denied the refund, citing failure to submit required supporting documentation. On appeal, the Court of Tax Appeals, First Division, upheld the Commissioner’s decision, finding that: 1) sales to PEZA-registered entities aren’t automatically subject to VAT zero rating, but a taxpayer must ...