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

The Philippine Court of Tax Appeals June 9 issued a decision in CTA Case No. 10731, clarifying unutilized input VAT refunds on zero-rated sales. The taxpayer, a VAT-registered power generation company, sought a refund of excess input VAT attributable to zero-rated sales of power generated from renewable resources. The Commissioner of Internal Revenue denied the refund, reclassifying ancillary fees as subject to VAT. On appeal, the Court of Tax Appeals, Special Third Division, found that: 1) sales of power generated from renewable energy sources include sales of power capacity generated from the same sources; 2) the taxpayer’s sales of ancillary ...