CTA allows partial VAT refund of P5.8 million for data processing firm

THE Court of Tax Appeals has ordered the Bureau of Internal Revenue to refund over P5.8 million to a data processing firm, partly granting the company’s petition for a refund of unutilized input Value-Added Tax (VAT).

Citco International Support Services Ltd - Philippine regional operating headquarters (ROHQ) had filed the petition for review the BIR’s assessment on input VAT from zero-rated sales for 2013.

In a decision promulgated on July 2, the tax appeals court said: "Respondent Commissioner of Internal Revenue is hereby ORDERED to refund in favor of petitioner Citco International Support Services Limited - Philippine ROHQ the amount of Five Million Eight Hundred Fifty-Seven Thousand One Hundred Ninety-Three Pesos and 91/100 (P5,857,193.91) representing the latter's unutilized input value-added tax arising from its zero-rated sales for calendar year 2013.”

Citco sought a refund or a tax credit certificate worth P7,895,079.66 but its request was only partly granted due to insufficient supporting documents.

The court also noted that Citco filed its claim within the prescribed period according to Section 112 of the National Internal Revenue Code of 1997 which states the any VAT-registered person may file its petition for refund or tax credits of input tax within two years after the taxable quarter.

Citco filed an administrative claim on March 27, 2015, or within two years of the close of the quarter, March 31, 2013.

Citco provides business and data processing, and business development services. —

The excess input tax worth P3,196,364.31 which was disallowed by the BIR as credit for the period as it claimed it should be carried over to the next quarters was cancelled by the Court due to lack of factual and legal basis.

The undeclared sales and disallowed input tax were retained by the court. —