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

The Philippine Court of Tax Appeals Nov. 19 issued a decision in CTA EB No. 2939, clarifying unutilized input VAT refunds regarding zero-rated sales. The taxpayer, a Hong Kong multinational company’s Philippine branch, sought a refund of the excess and unutilized input VAT incurred on its purchases of goods and services during 2016, attributable to its zero-rated sales. The taxpayer argued that its sales of services to nonresident foreign corporations (NRFCs) doing business outside the Philippines were subject to zero-rated VAT. The Commissioner of Internal Revenue (CIR) denied the taxpayer’s refund request, citing issues with the judicial claim’s timing and ...