Court of Tax Appeals · First Division

Chevron Holdings Inc. [Formerly Caltex Limited] vs. Commissioner of Internal Revenue

CTA Case No. 8241 August 14, 2013

REPUBLIC OF THE PHILIPPINES

Court of Tax Appeals

QUEZON CITY

FIRST DIVISION

CHEVRON HOLDINGS INC.

(formerly CAl. TEX (ASIA)

LIMITED)

Petitioner,

-versus-

COMMISSIONER OF

INTERNAL REVENUE,

Respondent.

CTA CASE NO. 8241

Members:

DEL ROSARIO,PJ.

UY, and

MINDARO-GRULLA, JJ.

Promulgated:

DECISION

DEL ROSARIO, PJ:

This case involves a Petition for Review filed on March 23, 2011 by Chevron Holdings Inc. seeking for a refund or issuance of a tax credit certificate in the total amount of Fifty One Million One Hundred Ninety

Eight

Thousand

Nine

Hundred

Forty

Three

Pesos

and 8/100 (P51, 198,943.08) representing excess and unutilized input value-added tax (VAT) attributable to its zero-rated sales of services for the year 2009.

THE FACTS

Petitioner Chevron Holdings Inc., formerly Caltex (Asia) Limited, is a corporation organized and existing under the laws of the State of Delaware, United States of America. 1 The purpose for which petitioner was created is limited to general administration and planning; business planning and coordination; sourcing and procurement of raw materials and components; corporate finance advisory services; marketing control and sales promotion; ~~W/ 1 Par. 2, Admissions. Joint Stipulation of Facts and Issues (JSFI): p. 195, CTA Docket. 000454 training and development maintenance;

development. 2 personnel management; logistics services; research and services and product development; technical support and data processmg and communication;

and business Petitioner is licensed by the Securities and Exchange Commission (SEC) to transact business in the Philippines as a regional operating headquarters (ROHQ) under SEC Registration No. A199802486 dated June 3, 1998.3 Its office address is at the 35th Floor, Yuchengco Tower I, RCBC Plaza, 6819 Ayala A venue, Makati City. 4 As an ROHQ, petitioner is authorized to engage in the business of providing finance, human resources, information technology, and procurement services to affiliates.' Petitioner is also registered with the Bureau of Internal Revenue (BIR) as a large taxpayer and VAT-taxable entity under OCN 9RCOOOO 170259, with Taxpayer's Identification No. (TIN) 201-056-391-000. Respondent is the duly appointed Commissioner of the Bureau of Internal Revenue (CIR), vested with authority, among others, to decide, approve, and grant tax credits or reft.mds of overpaid or en·oneously paid internal revenue taxes. She holds office at the 5 1h Floor, BIR National Office Building, Diliman, Quezon City.6 Petitioner filed its Quarterly VAT Returns for taxable year 2009, through the Bureau of Internal Revenue's (BIR) Electronic Filing and Payment System (eFPS), on the following dates: 7

QUARTERLY VAT RETlJRN

DATE FILED

··-·-

First Quarter

_________ May 4, 200~--------------

Second Quarter

August 24, 2009 (amended)

·········-----·--·-·-···-- Third Quarter

October 20, 2009 '-------

Fourth Quarter

------ -------- Januarv 22.2010 On November 2, 2010, petitioner tiled an administrative claim for refund before the BIR and requested for the issuance of a tax credit certificate or tax refund of unutilizcd input taxes attributable to its zcro-ratc1tv/ 2 Par. 6, Admissions, JSFJ; pp. 195-196, CT A Docket. 3 Par. 2, Admissions, JSFJ; p. 195. CTA Docket. 4 Par. 3, Admissions, JSFI; p. 195, CT A Docket. 5 Exhibit "V".

6 Par. 1, Admissions, JSFI; p. 195, CTA Docket. 7 Par. 7, Admissions, .JSFI; p. 196, CT A Docket. 00045~ sales of services for taxable year 2009 in the aggregate amount of P51 ,198~943.08.

8 Respondent failed to act with finality on petitioner's administrative claim for refund. Thus, petitioner was constrained to file the instant Petition for Review on March 23, 2011.9 In her Answer 10 filed on .May 24~ 2011, respondent interposed the following special and aftirmative defenses: "4. Taxes paid and collected by the Bureau of Internal Revenue (BIR) are presumed to have been made in accordance with Jaw, rules and regulations and the burden to prove otherwise is upon petitioner. 5.

Petitioner's alleged claim for refund is subject to administrative routinary investigation/examination by the Bureau. 6.

Petitioner must prove it is entitled to a claim for refund under the strictest tern1s.

Petitioner must prove that it paid the alleged V A'r input taxes for the period in question.

Petitioner must prove that the same alleged VAT input taxes was [sic] not utilized against any output tax liability. 9.

Petitioner must prove that the alleged VAT input taxes for the period in question are attributable to its alleged VAT zero-rated sales.

10.

Petitioner must prove that the administrative and judicial claims were tiled within the period prescribed by law. ll.

Petitioner must prove that it [is] considered a Regional Operating Headquarterfs] within the purview of the National Internal Revenue Code (NIRC) of 1997 and as such, it is entitled to tile an application for tax refund and/or issuance of Tax Credit Certificate.

12.

Petitioner's assertion that its services rendered to its affiliates, subsidiaries or branches abroad are subject to zero (0%) percent VAT cannot be accorded weight. Plain allegations without any evidentiary document to support its claim will not justify petitioner's application for tax refund. 13.

Petitioner must prove that its sales are VAT zero-rated as contemplated under Section 112(A) of the Tax Code of 1997 0f"') 8 Exhibit ''X''.

9 Pars. 8 and 9, Admissions, JSFI; p. 196, CTA Docket. 10 pp. 1 04-112, CT A Docket.

000456

14.

The claim for refund in the amount of Fifty One Million One Hundred Ninety Eight Thousand Nine Hundred Forty Three Pesos and 8/100 (P51, 198,943.08) allegedly repn:scnting accumulated and unutilizcd VAT input taxes paid by it for the taxable year 2009 is not properly documented. To support its claim, it is indispensable for petitioner to prove the following: a) Registration requirements of a value-added taxpayer in compliance with Section 9.236.1 (a) of Revenue Regulations No. 16-2005 and Section 236 of the NIRC of 1997, as amended; b) Invoicing and accounting requirements for VAT- registered persons as well as the filing and payment of VAT pursuant to the provisions of Section[s] 113 and 114 of the 1997 Tax Code. as amended. Failure to comply with the invoicing requirements on the documents supporting the sale of goods and services will result in the disallowance of claim for input tax of the taxpayer claimant.

(Revenue

Memorandum

Circular No. 42-2003 );

c) Petitioner must prove that it has fully complied with the requirements of Section 9.236-l.a of RR No. 16-2005 and Revenue Memorandum Order No.

53-98, otherwise, there would be no suff1cient compliance with regard to the filing of administrative claim for tax credit/refund which is a condition sine qua non prior to the filing of judicial claim;

d) In relation thereto, Section 112 (C) of the NIRC of 1997. as amended, requires submission of complete documents in support of the application for tax refund filed with respondent before the one hundred twenty (120) day period shall apply and before petitioner could avail of the judicial remedies provided by law.

Ergo, petitioner's failure to submit proof of compliance with the aforesaid requirements warrants the dismissal of the instant Petition for Review~ 15.

In the case entitled 'San Roque Power Corp. vs. Commissioner of Internal Revenue', the Supreme Court had the occasion to say: 'In order to claim a refund or tax credit under Section 112 (A), petitioner must comply with the following criteria:

I. The taxpayer is VAT-registered: 1 000457

The taxpayer is engaged in zero-rated or effectively zero-rated sales;

The input taxes are due or paid;

The input taxes are not transitional input taxes: 5.

The input taxes have not [been] applied against output taxes during and in the succeeding quarters; 6.

The input taxes claimed are attributable to zero- rated or effectively zero-rated sales; 7.

For zero-rated sales under Section 106 (A) (2) (I) and (2); 106 (B), and 108 (B) (l) and (2), the acceptable foreign currency exchange proceeds have been duly accounted for in accordance with BSP mles and regulations;

Where there are both zero-rated or effectively zero- rated sales and taxable or exempt sales, and that the input taxes cannot be directly and entirely attributable to any of these sales. the input taxes shall be proportionately allocated on the basis of sales volume; and 9.

The claim is filed within 2 years after the close of the taxable quarter when such sales were made. • 16.

For a judicial claim for refund of input VAT to prosper. the petitioner must prove that there must be (a) zero-rated or effectively zero-rated sales; (b) that input taxes were incurred or paid; (c) that the input taxes are attributable to zero-rated or effectively zero-rated sales; (d) that the input taxes were not applied against any output VAT liability; and (e) the claim for refund/tax credit must be tiled within the two year prescriptive period. (EG & G Omni, Inc. v. CIR, CTA Case No. 5987, March 26, 200+) 17.

Corollary thereto, Section 4.110.8. of RR 16-2005 explicitly provides:

'[(a)] l.nput taxes for tie [sic] importation of goods or the domestic purchase of goods, properties or services is made in the course of trade or business, whether such input taxes shall be credited against zero-rated sale, non-zero-rated sales, or subjected to the 5% Final Withholding VAT[,] must be substantiated and supported by the following documents, and must be reported in the information returns required to be submitted to the Bureau: ( l) For the importation of goods - import entry or()'1 000458 other equivalent document showing actual payment of VAT on the imported goods; (2) For !the] domestic purchase of goods and properties - invoice showing the information required under Sections 113 and 237 ofthe Tax Code: 18.

The provision of law regarding prescriptive periods are jurisdictional, compliance with which is essential for this Honorable Court to exercise authority over the instant case. Such statutes or rules are construed as mandatory as they have been absolutely indispensable to the prevention of needless delays and to the orderly and speedy discharger [sic] of business and arc necessary incident[s] to the proper. efficient and orderly discharge of official functions.

19.

It is well-established in this jurisdiction that claims for refund are construed strictly against the claimant for the same partake of the nature of exemption from taxation and are therefore held against the claimant.

Petitioner must present clear and convincing evidence to merit a tax refund. The taxpayer bears the burden of establishing the factual basis of its claim for refund. 20.

Likewise. for a judicial claim to prosper, the party must not only prove that it is a VAT -registered entity, it must substantiate the input VAT paid by purchase invoices or official receipts

(Commissioner of Internal

Revenue

vs.

Manila

Mining

Corporation, 468 SC'RA 571). Such that failure to comply with the requirements for a valid request for refund including the requirement for a valid sales invoice is final to the claim for refund. (EG & G Onmi. Inc. vs. CIR. C'l:-4 Case No. 5987, March 26, 2004) 21.

Basic is the rule that tax refunds are regarded as tax exemptions that arc in derogation of the sovereign authority and are to be construed strictissimi juris against the person or entity claiming the exemption (Philippine Phmphate Fertilizer Corporation v. Commissioner of Internal Revenue, G.R. No. J..l/973, June 28, 2005).

The burden of proof is upon him who claims the exemption and he must be able to justify his claim by the clearest grant under Constitutional or statutory law and he cannot be permitted to rely upon vague implications. (BPI Leasing Corporation v. the Honorable Court of Appeals, et a/., G.R. No. 127624, November I8, 2003). The law does not look with favor on tax exemptions and that he who would seek to be thus privileged must justify it by words too plain to be mistaken and too categorical to be misinterpreted. (Sea-Land Service. T·:r;. Court of Appeals, 357 SCRA 444).

22.

All told, petitioner's claim for r~fund filed before the Honorable Court should be denied for lack of merit." (C'itotions omitted{/wl 000459 The case was then set for pre-trial conference on August 4, 2011. 11 Respondent tiled her Pre-trial Brief on July 29,2011. 12 When this case was called for pre-trial, only counsel for respondent, Atty. Janet L. Martinez, appeared; while counsel for petitioner failed to appear despite notice, and no Pre-trial Brief for petitioner was filed. Thus, upon motion of respondent, the case was dismissed for failure of petitioner to appear at the pre-trial and for its failure to tile its Pre-trial Brief as per this Court's Resolution dated August 4, 2011. 13 On August 22, 2011, a Motion for Reconsideration (Of Resolution dated August 4, 2011) with Motion to Admit Attached Pre-Trial Brief was filed by petitioner.

14 The Motion was granted via Resolution 15 dated October 5, 2011. Thus, the Resolution dated August 4, 2011 was set aside, the instant case was reinstated, and petitioner's Pre-trial Brief attached to the Motion was admitted. Consequently, a pre-trial conference was conducted on October 27, 2011.

On November 16, 2011, the parties tiled with this Court their Joint

Stipulation of Facts and Issues

16 which was later approved in a Resolution 17 dated November 18, 2011.

In the same Resolution, the pre-trial was considered terminated and the parties were ordered to proceed with the trial on the merits and present only evidence not covered by their Joint Stipulation of Facts and Issues.

During trial, petitioner presented and formally offered evidence in support of its claim for refund or issuance of tax credit certificate. On October 25, 2012, a Resolution was issued by this Court admitting as petitioner's evidence Exhibits HA" to "AAA" and "CCC" to "GGG". Exhibit "BBB" was not, however, admitted as evidence for petitioner's failure to submit the same in Court. 18 On the other hand, when it was respondent's turn to present evidence, counsel for respondent manifested that she has no witness to presentc1 11 p. I I 7, CT A Docket.

12 pp. 118-121, CTA Docket.

13 p. 126, CTA Docket.

14 pp. 127-145, CTA Docket.

15 Resolution dated October 5, 2011; pp. 185-188. CT A Docket. 16 pp. 194-197, CTA Docket.

17 p. 205, CTA Docket.

18 pp. 381-382, CTA Docket.

19 TSN taken on January 16, 2013; Minutes of the Hearing; p. 385, CTA Docket. 000460

Petitioner posted its Memorandum on March 15, 2013 20 while respondent filed her Memorandum on April t, 2013.21 On April 19, 2013, the case was submitted for decision.22

THE ISSUES

The parties submitted the following issues 23 for this Court's disposition:

.. I. Whether petitioner is entitled to its claim for refund and/or the issuance of tax credit certiticates for the amount of Php51, 198,943.08 representing its unutilized and/or unapplied input VAT for taxable year 2009.

2. Whether the administrative and judicial claims for refund were filed within the periods prescribed by law.

3. Whether the services rendered by petitioner to its affiliates, subsidiaries or branches abroad are subject to zero percent (0%) VAT.

4. Whether petitioner is considered as a Regional Operating Headquarters within the purview of the National Internal Revenue Code of 1997, as amended in order to be entitled to the tax refund being applied for."

THE COURT'S RULING

As aforestated, petitioner seeks the issuance of a tax credit certificate or the refund of unutilized input VAT paid on purchases of goods and services attributable to its zero-rated sales for taxable year 2009. Records show that for the four quarters of taxable year 2009, petitioner duly filed with the BIR its Quarterly VAT Returns declaring the followingir'l 20 pp. 400-42 I, CT A Docket.

21 pp. 424-445, CTA Docket.

22 pp. 447-448, CTA Docket.

23 Issues, JSFI; pp. 196-197, CT A Docket. 000461 f-----------------------------········-- 1st Quarter 2nd Quarter (E>:hibit "F") _____ fErhihll "G''!

V AToble Sales!Receipt:.:::.s __________ _ ---------+---'f>'--_:l.Q,~,50.i70.05 t' 38.97\l.l\08.53

Zero-Rated Sales/Receipts

Total Sales/Receipts

------+---- 620.20 1,395.33 p 661,052,165.38 508.595,X20.63 p 547,575,629.16 Output tax due ············f--·---~4.1..:.9.::.0;:,;2,"'-09;.:2:.:..4.:..:1+-----~~27_.?77~02

Less: Allowable Input Tax

From Previous Quarter

r---!?eferred on Capital Goods from Previous Quart.:r ___ _ <295,512.396.01 L __ _ (4-U9-U39.33) (306.610,968.RO) I 40.750.054. 9R) Current transactions f--.::c::.:..:=...::..::===------------------t-------··---··--···---····· -------------1 f---=.D.::.<>.:.:.m:;:;CS::::I:.::iC..:.P..::U::..:fC::::h:::aS::::::'C:..:O::.f...::C:..::'a.t::pii:.:.:la:.:.I...::G:.;;:O.:::.Od:::.:S:_:I.:.:.lO:.:.t.:::cx.::c.::.cc:.:'d:.:.in"-'lg'-'t"'-'l:.:.l\.:.:.1 _________ +-····-·················································----t---------j r-------Domcs_!i_<::X~r:_~~-l!:~e of Capitol Goods exceeding PI M ( 693.399.30 J '--____ll<.!_n_:t<:stic Purchase -~f Ooods (other than Capit!!j_Good~_L __________________ t--··-----':..:.9..:.9::.:2.:.:..3.:c.l9'-'-."-90'-'l-+-----'("-5"-18;..:.,5:..:2:.;.7-'-'.7_4-'-)l !-- . Domestic Purchase of Services ····----------------t----''-'l-'1.:.:..3..:.6-'-'4."'-0.:..6(:.:)·.:..94:..:.)-t----.:(.::.1=2.5_~!:~}},1?l Services Rendered by Non-residet~~-----· .. ··-·------+l--------+-----'--(1_4_9.'-9_6_2_._6 __ 3_c_) f----Tc..:.o=ta"-1 --------·---------·····--·-----------+ 1 i __ _,('-'-12::,,3;;.;;5:...:6"",3:.::8;;.:;0.:::..84::.l.l)-t----'-'(lc::.3"",8=83l?1.~:..8}l.' Total available input tax (352.263.llo.IRl (361.244.746.61) Less: Deductions ti·orn input tax ___ !!:!P~_tllX tlcter_r~_f~_t:!lC Sl.!~:_<:_~~-~i_!Jl?,£~Ei~~~----------------+----4'-'0-'-, 7...:c5..:..0•:.;.0.::..54.;.:.·c...97'--I-----"J.;.;7.'-'-7--78:c:..(.;;.:>3:...=6..:... 7-"2'-l VAT Refund/TCC claimed f----'..:...::..:.-=:.:.=~-=-=:c:.:.:.==-----------------t---------+--------·········-·--········· __

Total

~--------------------------------- Total All,m:_~_!Jie .!Er~~:...t l_:..;.a:.:..x'----·-·····-···-··-···-·--··----------------

Nct VAT Puvablc

40,750.054.97 37,778,636.72 -- --··-··---------------·- (P311,513,06 1.21 ) (P306,61 0, 968.80) (P323,466,1 09.8~1..

(P318, 788,532.87) ,------------------------------,-------------.---------------r----------------, t----------------------+--___;:3rd Quart~_r__ __ 4th Quarter _______ r--------.!_otl!!____ _ __

(Exhibit "H")

(Exhibit "/':;

J--------------------J----'-==::.:.:.._.:...:_..L._ __ +--.:..=:.:.:.::.:.= ...... .:....: ___ ., _____ +-----------··----·-·····-··- . VA]:ablcSales/Rc~£.!P.I2 .... ______________ -+-__:_P_...:.4..:..4!.:,1.::..0.:::..8•L:.7.::.5:::.:0,=2=-2+-__ P:..__·_:_I~I • .::;.69::.:':::..!,'.:.:.42=.:0:.:. .. ::..34~_.::_P_...:.I..::6:::.:5.:.:::6:::.:32::.:,c:..74_:_(.:..:)·..:..14..:....J·

Zero-Rated Sales/Receipts

469,176,463.98 472,288,095.56 2,070,261. 775.50 __ Tot a! Sales/~ecei£!~--- ___ . ____ .... ___ .

.....

P5 13.285,214.20 P513,981,515.90 P2,235,894,524.64 r-------------------------------------4--------------- ........... .

f--...::..:

Ou,::t"-pu~c:..tl::a:_:x::.. .:::d_t::J:e: ......................................................................... -.. -·-·······---··------------+---···---5~2_9_3,05~~- c-------------_?_,0_03_,~ 0.44 1 _________ J~·~?~.1-~~9~ ?() , ----------------------------------------4~----------------r------------------+--------------·---"

Less: Allowable Input Tax

f--i-..:,F="-ro::.:nc::.l.::.P,:.re:..:v..:..io:..:u:,:.s...:Q~u:.:a:;..:rt:,:.e=-r--:---::---:---:------l---.o.:(3:.;1:..:8~.7:..:8:.:8.::,5:.::3.=2.:.:::.8:.:.7.!)_+ _____ (.:..:.3_2 __ 8_,'--IQ0,952.19) Deferred on Capital Goods from Previous

I

Quarter

(37.778,636.72) I (3~,962,005.19) (295,512,396:21) J (44,394,339.33) i -------·-·~ Current transactions Domestic Purchase of Capital Goods not cxcccdingfJIM (16,714.89):

r----=~::..::..:::.:.:.:a'-:::-:.::....:-:-----::-::::---:--::-=--:-----·-·· ·-·--·-·-·-··--······------------·--r·---···--·······-···---·-····-····-----·-··

Domestic Purchase of Capital Goods

I

,- ..... __ exceeding PI M_ __________ ---····· __ _________________ _ _______ (I, 9 50, 154 ~---------'(,_4.;._,6_4-'1 'c....8?. _ _1_:_~Q2_,..__ _ _Q,?~?:~~?:~I)_j Domestic Purchase of Goods (other than

I

Capital Goods)

(464,809.92) I (714,585.69) il (2.690,243.25) i '----=D:..:o:..:m:;;;;ec.:cs.:.:.tic.:....:..P-"'ur:..cc.:.:.ha:..:s:.:c...:o.::.f...:S..:..e.:.:.rv..:..·ic:..:e:..:s ______ '-----'-'(1:...:0,357,158.40)! (9,302,682.03) (43.545.7J4:s3)-]

CJ/

000462 --

Services Rendered by Non-residents

Total

-- -(53~!:= - (62,862.49) -· (12,788,837.82) (14,722,021.71) ___________ .......

'-- - Total available in~ut tax (369,356,007.41) (378,784,979~(i?i .. \ ... --Q..2_l~7,69~}-~1. Less: Deductions from input tax In -~~ tax deferred for the succeeding period 35,962,005.19 .... ?.~_.n_~.866.21 36,736.866.21

I

----------... -............ -.......... . ......

VAT Refund/TCC claimed - - - --·-·················· ,..,_,

Total

I

36,736,866.21 36,7 36!~~~~~21 ·-- 35,962.005.~~ I __ ..

--- ·- '·-·-·-· Total A!lowable Input Tax .

--·---·-··~·- (P 33~,394,002.22) (P340,097, 958_.2~) __ _(P356,9_20,832.33) .~r-.1-~!...Y~T Payable!(Overpayrnent) (P328,100,952.19) (P337 ,044, 902.44) (P337 ,044,902.44) As indicated in petitioner's VAT returns, petitioner's excess input VAT arising from its domestic purchases of capital goods not exceeding PI Million, domestic purchases of goods other than capital goods, domestic purchases of services and amortization of input VAT on purchases of capital goods exceeding PlMillion for the tour quarters of 2009 amounted to P61 ,408,436.33, broken down as follows: --··-··-···--- _,~.~~ 2nd Quar-~~~ ., ~w·-•·~·--·-·· lst Quarter Input Tax Deferred on Capital Goods exceeding P1 Million from Previous J-... P 40,7?0.05-1.981

Quarter

p 44,394,339.3}_ Add: Input Tax on Capital Goods exceeding PI Million Purchased this

Quarter

- 693,399.3_(!_ w~-··----··-- Total: Unamortized Input Tax on Capital Goods exceeding PI Million 44,394,339.33 41,443,454.28 Less: Input Tax on Purchases of Capital Goods exceeding PI Million defen·ed for the succeeding; period 40,750,054.97 37.778,636.72 Amortization of Input Tax on Capital Goods exceeding PI Mil_~_?_'!__ ____________ ______ 3~~4-~!;?84.36 3,664,817.5_ti_

Add: Input Tax on:

Purchase ofCaoital Goods not exceeding PI Million - - f-· Domestic Purchases of Goods Other than Capital Goods 992.319.90 1 518,527.74

Domestic Purchase of Services

11,364,060.94 12.521,833.16

Services Rendered by Non-Residents

- 149,962.63

Total Allowable Input Tax Due

16,000.665.20 16,855,141.09

Less: Ouput Tax Due

Excess Input Tax

P16,000,665.20 Pl6,855,141.09 , - r-----------------.. -------·-·--.. ----......... -·--·-.. ·-----........ _ .... __ .. __ ....................... -....... _ ...... _,_ ----·--... -...... ,_ ................... -....... _ .. _ .. _. _______ .. __ ... ., ..

3rd Qu11rter 4th Quarter

Total

~ln~p~ut~T~·a-x~D~e~fu~rr~ed~o-n~c~·a-p~ita~l~u~·o-od7s_c_x-~·e-e~di~n-g>~P~l~M~il~li-ol-l~lh-H-n~P-re-vt~.o-us-·---+--~~~~~--+---~~~~---+----~~~------ I' 37,778.636.72 p 35.962.005.19 I' 44.394.339.33 -···--··-·-·--············-········ r-Quarter f- l: lnpu!Ta.x on Capital Goods ~xcceding f>l Million Purchased this Quarter 1.950, 15.f.61 4.641.891.50 7,285.H5.41 ~l'otal: Unamortiz.cd Input Tax on Capital Goods ~xeeedinv f"l Million 39.728.791.33 ·--·--------·_iQ_,_60_3_.8~Q:!t> _________ 5.!_.6_79_.7_8·1 .. 741 L~ss: Input Tax on Purchases of Capital Goods exceeding PI Million deferred for the suct:z.~':!!_l!g~!od ___ .. ~ ........ - ... _____________ .............. - ...................... _}.:?1:>62,Q2_~_12...+-. 3o. 736.866.21

36. 736,!166 .. 21_ Amortization of Input Tax on Capital Goods exceedim' PI Million J, 766.786.14 3.867,030.48 14.942.918.53 /\dd; Input Tax on:

Purchase of Capital Goods not exceeding Pl Million Donn:stic Purchases of GooJs Other than Capital Goods 16.714.89

I

464,809.92 i 16.714.89 714.585.69 2~?!!.243 .25

I

000463 ~ r----·

- -· -----···-············

Domestic Purchase of Services

I 0.357.15!!AO 9.302.682.03 43.545.734.53 --·-----··- -·-·--~···- ····--- •...• 1--~c:rvices Rcndcrl-d by Non-Residents .

62.862.49 212.825.12 _Iotal Allnwuhlc lnput_J.:!ix Due 14,605_..161).35 13,947J6ll.69 -~I ,408.~_36.33 _ -

Le-ss: Ounut Tux Due

Excess hrput_Tnx ··-·-·~·····-·· f'14,605,469.JS f'U,947,160.69 '1"61,408..436.33 ---- Out of the excess input VAT ofP6l ,408,436.33, petitioner is claiming for the refund or .issuance of tax credit certiticate in the amount of P51, 198,943.08, allegedly representing its excess and unutilized input VAT which are attributable to its zero-rated sales for the year 2009, broken down as follows:

.-------------------,-------····--··------, 2009

INI>UT VAT CLAIM

1-------·---------·+---------------1 1st Quarter P 15.011.879.59 1-----......;_-'·------- --·---· -- 2nd Quarter 1 5,000,516.35 l------='--"'---·----+-----···········-······--·--·--·- 3rd Quarter --1-------• 1_~_?_3_8_,0_8_6_._1 4 __ ._ 4th Quarter 9,648,4§1.:9_9 ___ _

TOTAL

P5l,l98,943.08 '-------···--·-·--·-·····-------'========="======' Petitioner cites Section 112(A) of the National Internal Revenue Code (NIRC) of 1997, as amended, as its basis in claiming for the refund or issuance of tax credit of its excess and unutilized input VAT which are attributable to its zero-rated or effectively zero-rated sales, to wit: ·'SEC. 112. Re.fimds or Tax Credits t?flnput Tax.- (A) Zero-Rated or E.ffectil·ely Zero-Rated Sales. - Any VAT- registered person, whose sales are zero-rated or effectively zero-rated may. within two (2) years after the close of the taxable quarter when the sales were made, apply for the issuance of a tax credit certificate or refund of creditable input tax due or paid attributable to such sales. except transitional input tax, to the extent that such input tax has not been applied against output tax: Provided, however, That in the case of zero-rated sales under Section 106(A)(2)(a)(l), (2) and (b) and Section 108(8)(1) and (2), the acceptable foreign currency exchange proceeds thereof had been duly accounted for in accordance with the rules and regulations of the 8angko Sentral ng Pilipinas (8SP): Provided further, That where the taxpayer is engaged in zero-rated or effectively zero-rated sale and also in taxable or exempt sale of goods of properties or services, and the amount of creditable input tax due or paid cannot be directly and entirely attributed to any one of the transactions, it shall be allocated proportionately on the basis of the volume of sales: Provided, finally, That for a person making sales that are zero-rated under Section 108(8)(6), the input taxes shall be allocated ratably between his zero-rated and non-zero-rated sales.~ 000464 Based on the aforequoted provision of law, the claimant must satisfy the following requisites in order to be entitled to a refund or tax credit of accumulated and unutilized input VAT which are attributable to zero-rated or effectively zero-rated sales:

1. lbere must be zero-rated or effectively zero-rated sales;

2. The input VAT were incurred or paid;

3. The input VAT are attributable to zero-rated or effectively zero-rated sales;

4. The input VAT were not applied against any output tax liability; and,

5. The administrative and judicial claims for refund were filed within the prescribed period. Timeliness of the filing of the administrative and judicial claims Before delving into the merits and substantiation of petitioner's claim for refund or tax credit of excess and unutilized input VAT in the amount of P51, 198,943.08, the Court shall first resolve petitioner's compliance with the fifth requirement pertaining to the timeliness of the tiling of the administrative and judicial claims. Anent the petitioner's administrative claim, Section 112 (A) of the NIRC of 1997, as amended, specifically requires that the taxpayer's application for refund or tax credit certificate of unutilized or excess creditable input VAT arising from its domestic purchases of goods and services and importations, which are attributable to its zero-rated or effectively zero-rated sales, must be made \Vithin two years atter the close of the taxable quarter when such sales were made. This was contirmed by the Supreme Court in the consolidated cases of Commissioner of Internal Revenue vs. San Roque Power Corporation, 24 Taganito Mining Corporation vs. Commissioner of Internal Revenue, 25 and Philex Mining Corporation vs. Commissioner of Internal Revenue,26 viz: 24 G.R. No. 187485, February 12, 2013. 25 G.R. No. 196113, February 12,2013. 26 G.R. No. 197156, February 12,2013. o4 000465

"Section 112 (A) clenrly, plainly, and unequivocally provides that the taxpayer "may, within two (2) years after the close of the taxable quarter when the sales were made, apply for the issuance of a tax credit certificate or refund of the creditable input tax due or paid to such sales." In short, the law states that the taxpayer may apply with the Commissioner for a refund or credit "within two (2) years," which means at anytime within two years. Thus, the application for refund or credit may be filed by the taxpayer with the Commissioner on the last day of the two-year prescriptive period and it will still strictly comply with the law. The two-year prescriptive period is a grace period in favor of the taxpayer and he can avail of the full period before his right to apply for a tax refund or credit is barred by prescription." (Emphases supplied) In this case, counting the two-year prescriptive period from the close of the four taxable quarters of 2009 when the relevant sales pertaining to the claimed input VAT were made, petitioner's administrative claim for refund or issuance of tax credit for the four (4) qum1ers of2009, which was filed on November 2, 20 l 027, was certainly filed within the two-year prescriptive period provided by law, as shown below: -······--····--------·--- .............. -....... -.... ~-··-· .•.

·-

Period /Quarter

Close of Taxable

Last Day for Filing

Date of Filing of

Covered

Quarter of Administrative

Administrative

Claim for Refund

Claim for

Refund

51 Quarter of 2009

··--•w······-·•··- . -· March 31, 2009 March 31, 2011 -·---- 2 11u Quarter of 2009 June 30, 2009 June 30, 2011 yo Quarter of 2009 September 30, September 30. 2011 Novcmber2, 2009 2010 !Ani----·-···--- .

4 Quarter of 2009

December 31, December 31, 2011 2009 ·-·-----------·--- ·-···· ··-·-···-······---"--···· The Court will now proceed to determine whether petitioner's judicial claim for refund or issuance of tax credit certificate was timely filed pursuant to Section ll of Republic Act No. (RA) 112528, as amended by RA No. 928229, which provides the period of limitation within which to appeal before this Court, in relation to Section 112(D) of the NIRC of 1997, to wit: "SEC. 11. Who May Appeal; lvlode ofAppeal; Effect ofAppeal. - Any party adversely affected by a decision, ruling or inaction of the Commissioner of lnternal Revenue, the Commissioner of Customs, the Secretary of Finance, the Secretary of Trade and Industry or the~ 27 Exhibit "X".

28 An Act Creating the Court of Tax Appeals. 29 An Act Expanding the Jurisdiction of the Court of Tax Appeals (CIA), Elevating Its Rank to the Level of a Collegiate Court with Special Jurisdiction and Enlarging its Membership Amending for the Purpose Cettain Sections of Republic Act No. 1125, as amended, otherwise known as the law creating the Court of Tax Appeals, and for Other Purposes.

0004G6

Secretary of Agriculture or the Central Board of Assessment Appeals or the Regional Trial Courts may file an appeal with the CT A within thirty

(30) days after the receipt of such decision or ruling or after the expiration ofthe period fixed by law for action as referred to in Section 7(a)(2) herein.

Appeal should be made by filing a petition for review under a procedure analogous to that provided for under Rule 42 of the 1997 Rules of Civil Procedure with the CT A within thirty (30) days from the receipt of the decision or ruling or in the case of inaction as herein provided, from the expiration of the period fixed by law to act thereon. xxx" (Emphasis supplied) ·'SEC. 112. Refunds or Tax Credits of Input Tax. --

XXX

(D) Period within which Refimd or Tax Credit of Input Taxes shall be Made. - In proper cases, the Commissioner shall grant a refund or issue the tax credit certificate for creditable input taxes within one hundred twenty (120) days from the date of submission of complete documents in support of the application filed in accordance with Subsections (A) and (B) hereof.

In case of full or partial denial of the claim for tax refund or tax credit, or the failure on the part of the Commissioner to act on the application within the period prescribed above, the taxpayer affected may, within thirty (30) days from the receipt of the decision denying the claim or after the expiration of the one hundred twenty day-period, appeal the decision or the unactcd claim with the Court of Tax Appeals." (Emphases supplied) It is significant to note that the Supreme Court, in the case of Commissioner of Internal Revenue vs. Aichi Forging Company of Asia Inc., 30 emphasized the importance of the periods provided under Section 112(0) of the NIRC of 1997 in the detennination of the timeliness of the filing of an appeal with this Comt, thus: "Section 112(D) of the NIRC clearly provides that the CIR has '120 days, from the date of the submission of the complete documents in support of the application [for tax refund/credit],' within which to grant or deny the claim. In case of full or partial denial by the CIR, the taxpayer's recourse is to tile an appeal before the CTA within 30 days from receipt of the decision of the CIR. However. if after the 120-day period the CIR fails to act on the application for tax refund/credit, the remedy of the taxpayer is to app(!al the inaction of the CIR to CT A within 30 days.cr'J 30 G.R. No. 184823, October 6, 2010. 000467

XXX

Respondent's assertion that the non-observance of the 120-day period is not fatal to the filing of a judicial claim as long as both the administrative and the judicial claims are filed within the two-year prescriptive period has no legal basis.

XXX

In fact, applying the two-year period to judicial claims would render nugatory Section 112(D) of the NIRC, which already provides for a specific period within which a taxpayer should appeal the decision or inaction of the ClR. The second paragraph of Section ll2(D) of the NIRC envisions two scenarios: (1) when a decision is issued by the CIR before the lapse of the 120-day period; and (2) when no decision is made after the 120-day period. In both instances, the taxpayer has 30 days within which to file an appeal with the CTA. As we sec it then, the 120-day period is crucial in filing an appeal with the CT A. xxx." (Emphasis supplied) Interestingly, respondent al1eged in her Memorandum that this Court has no jurisdiction to entertain the instant Petition for Review because no valid administrative claim was filed with respondent on account of petitioner's failure to submit supporting documents relative to its administrative claim for tax refund. According to respondent, Section 112 of the NIRC of 1997, as amended requires the submission of complete documents in support of the application filed with the BIR before the 120-day audit period shall apply, and before the taxpayer could avail of the judicial remedies.31 Contrary to respondent's allegation, records prove that petitioner was able to submit documents in support of its administrative c1aim for refund tiled on November 2, 2010. Specifically, petitioner's administrative claim for refund32 enumerated the suppmting documents submitted by petitioner: "In support of our request. we attach the following: 1.

Application for Tax Credit/Refund (BTR Form No. 1914) SEC Certificate of Registration as amended

Chevron's Articles of Incorporation

BIR Certilicale of Registration (BIR Fom1 No. 2303~ 31 pp. 429-443, CTA Docket.

32 Exhibit "X".

000468

CIA CASE NO. 8241

Annual Income Tax Return for taxable year 2009 (BIR Form No. 1702) 6.

Quarterly VAT returns for taxable year 2009 (BIR Form No.

2550Q)

Monthly VAT returns for taxable year 2009 (BIR Form No.

2550M)

Audited Financial Statements for year ended December 31, 2009 9.

Service Agreements with affiliates of Chevron 10.

Certificate of Inward Remittance from JP Morgan Chase Bank N.A.

11.

Summary List of Sales & Purchases (in DVD-R format) 12.

Certification showing amount of zero-rated sales, taxable sales and exempt sales'' Furthennore, it must be noted that Revenue Memorandum Circular No. 029-09 states that:

"III. Period within which Refund or Tax Credit of Input Taxes shall be Made.

Section 112 (C) of the Tax Code of 1997, as amended by Republic Act No. 9337, provides among others, that in proper cases, the Commissioner shall grant a refund or issue the tax credit certificate (TCC) for creditable input taxes within one hundred twenty (120) days from the date of submission of complete documents. For the purpose of defining 'proper cases' in the said provision, the taxpayer/claimant must have complied with the following conditions/requirements upon audit/verification of his/its claim: a.

Submission of complete documents necessary to determine and/or ascertain the correctness of the return and the amount to be refbnded/credited;

That all books of accounts and accounting records pc11aining to the claim are immediately available to the concerned Revenue Officer (RO) for audit/verification; c.

Any discrepancies/findings upon audit/verification shall be reconciled/explained in writing by the taxpayer/claimant within five (5) days from receipt of the notification from the RO; and d.

The taxpayer/claimant has signified his concurrence to the outcome of the audit/verification, which shall be evidenced by an Agreement Form.

In eases where taxpayer failed to comply with the above conditions/requirements. i.e., failure to present accounting books and records for audit/verification, additional documents to explain discrepancies/findings are not submitted, taxpayer refuses or incurs delay in the submission of the Agreement Form, the running of the 120-day period shall stop from the date of notification to thee?/ 000469 taxpayer. Likewise, the running of the 120-day period shall be suspended in case a question of law arises during the conduct of audit/verification and/or review of the claim for tax refund/credit, and the issue is referred to the Legal Division or the Legal Service, as the case may be, for resolution and issuance of legal opinion, which should be rendered within thirty (30) working days from rt~ccipt of the request." (Emphasis supplied) Considering that there is nothing in the records showing that a written notice was sent by the BIR infonning petitioner that the aforesaid documents are incomplete or requiring petitioner to submit additional documents, the 120-day period started and continued to run from November 2, 201 0, the date when petitioner filed its administrative claim together with the supporting documents.

Since petitioner submitted to respondent its administrative claim for refund together with its supporting documents on November 2, 2010/3 the 120-day period should be counted from the said date. Thus, respondent had 120 days from November 2, 2010, or until March 2, 2011, within which to grant or deny the administrative claim for refund. Considering, however, that respondent failed to act on the said claim within the 120-day period, petitioner had 30 days from the expiration of the 120-day period, or until April 1, 2011, within which to file its appeal before this Court. The instant Petition for Review filed on March 23, 2011 was clearly filed within the 30- day period provided by law to appeal. Existence of zero-rated sales Anent the first requisite, petitioner alleges that the services it rendered to its affiliates abroad are subject to zero percent (0%) VAT pursuant to Section 1 08(8)(2) of the NIRC of 1997, as amended, which states that: "SEC. 108. - Value-added Tax on Sale of Services and U\·e or Lease of Properties. -

XXX

(B) Transactions Subject to Zero Percent (0%) Rate. - The following services performed in the Philippines by VAT -registered persons shall be subject to zero percent (0%) rate:

(l) Processing, manufacturing or repacking goods for other persons doing business outside the Philippines which goods are subsequently exported, where the services are paid for in acceptable - ~ 33 Exhibit "X".

000470 foreign currency and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP);

(2) Services other than those mentioned in the preceding paragraph rendered to a person engaged in business conducted outside the Philippines or to a nonresident person not engaged in business who is outside the Philippines when the services are performed. the consideration for which is paid for in acceptable foreign currency and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP);" In the case of Commissioner of Internal Revenue vs. Burmeister and Wain Scandinavian Contractor Mindanao, Inc. 34 ("Burmeister case"), the Supreme Court enunciated that in order for the supply of services to be VAT zero-rated under Section 108(8)(2) of the NIRC of 1997, as amended, the claimant must be able to establish that: (1) the services must be other than processing. manufacturing or repacking of goodv; (2) the payment for such services must be in acceptable foreign currency accounted for in accordance with the BSP rules and regulations.: and, (3) the recipient of such services is doing business outside the Philippines. Pertinent pronouncements of the Supreme Court in the Burmeister case are quoted hereunder:

"The Tax Code not only requires that the services be other than "processing, manufacturing or repacking of goods .. and that payment for such services be in acceptable foreign currency accounted for in accordance with

BSP

rules.

Another

essential condition for qualification to zero-rating under Section 102 (b) (2) is that the recipient of such senrices is doing business outside the J>hilippincs. While this requirement is not expressly stated in the second paragraph of Section 102 (b), this is clearly provided in the first paragraph of Section 102 (b) where the listed services must be "for other persons doing business outside the Philippines." The phrase ''for other persons doing business outside the Philippines'' not only refers to the services enumerated in the first paragraph of Section 102 (b), but also pertains to the general term "services" appearing in the second paragraph of Section 102 (b). In short, services other than processing. manufi1cturing, or repacking of goods must likew·ise be performed for persons doing business outside the Philippines. This can only be the logical interpretation of Section 102 (b) (2). If the provider and recipient of the "other services" are both doing business in the Philippines. the payment of foreign currency is irrelevant. Xxx xxx xxx.

When Section J02(b)(2) stipulates payment in "acceptable foreign currency" under BSP rules, the law clearly envisions the payer- recipient of services to be doing business outside the Philippines. Only those not doing business in the Philippines can be required under BSP LY'1 34 G.R. No. 153205. January 22, 2007. 000471 rules to pay in acceptable foreign currency for their purchase of goods or services from the Philippines. In a domestic transaction, where the provider and recipient of services are both doing business in the Philippines, the BSP cannot require any party to make payment in foreign currency.

Services covered by Section 102 (b) ( 1) and (2) are in the nature of export sales since the payer·recipient of services is doing business outside the Philippines. Under BSP rules, the proceeds of export sales must be reported to the Bangko Sentral ng Pilipinas. Thus, there is reason to require the provider of services under Section 1 02 (b) ( 1) and

(2) to account for the foreign currency proceeds to the BSP. The same rationale does not apply if the provider and recipient of the services arc both doing business in the Philippines since their transaction is not in the nature of an export sale even if payment is denominated in foreign currency.

Further, when the provider and recipient of services are both doing business in the Philippines, their transaction falls squarely under Section 102 (a) governing domestic sale or exchange of services. Indeed, this is a purely local sale or exchange of services subject to the regular VAT, unless of course the transaction falls under the other provisions of Section 1 02 (b).

Thus, when Section 102 (b) (2) speaks of "[s]erviccs other than those mentioned in the preceding subparagraph," the legislative intent is that only the services are different between subparagraphs 1 and 2. The requirements for zero-rating, including the essential condition that the recipient of services is doing business outside the Philippines, remain the same under both subparagraphs. Significantly, the amended Section 108 (b) [previously Section 102 (b)] of the present Tax Code clarifies this legislative intent. Expressly included among the transactions subject to 0% VAT are "[s]ervices other than those mentioned in the [tlrst] paragraph [of Section 108 (b)} rendered to a person engaged in business conducted outside the Philippines or to a nonresident person not engaged in business who is outside the Philippines when the services are performed, the consideration for \Vhich is paid for in acceptable foreign currency and accounted for in accordance with the rules and regulations ofthe BSP."

XXX

The Court recognizes the rule that the VAT system generally follows the "destination principle" (exports arc zero-rated whereas imports are taxed). However, as the Court stated in American Express. ' there is an exception to this rule. This exception refers to the 0%> VAT on services enumerated in Section 102 and performed in the Philippines. For services covered by Section 102 (b) (1) and (2), the recipient of the services must be a person doing business outside the Philippines. Thus, to be exempt from the destination principle under Section 102 (b) (1) and (2), the services must be (a) perfonned in the Philippines; (b) for a person doing business outside the Philippines: and &1 000472

(c) paid in acceptable foreign currency accounted for in accordance with BSP rules.'' · In relation to the requirement that the payment for such services must be in acceptable foreign currency accounted for in accordance with the BSP rules and regulations, it is worthy to note that Sections 113(A)(2), (B)(J ), (2)(c) and (3) of the NIRC of 1997, as amended, and as implemented by Sections 4.113-l(A)(2), B(l) and (2)(c) of Revenue Regulations (RR) No. 16-05, provide that a VAT taxpayer, like herein petitJ~oner, stma for every lease of goods or properties and for every sale, bat1er or exchange of services, issue a VAT official receipt which must contain the following information:

"SEC. 113. Invoicing and Accounting Requiremenls for VAT- registered Persons.- (A) Invoicing Requirements. - A VAT-registered person shall issue:

XXX

(2) A VAT official receipt for every lease of goods or properties, and for every sale, barter or exchange of sen·ices. (B) ll1formation Contained in the VAT Invoice or VAT q{jicial Receipt. - The following information shall be indicated in the VAT invoice or VAT official receipt:

(1) A statement that the seller is a VAT-registered person, followed by his Taxpayer's Identification Number CriN):

(2) The total amount which the purchaser pays or is obligated to pay to the seller with the indication that such amount includes the value-added tax: Provided, That:

XXX

(c) If the sale is su~ject to zero percent (0%) value-added tax, the term 'zero-rated sale' shall be written or printed prominently on the invoice or receipt;

XXX

(3) The date of transaction, quantity. unit cost and description of the goods or properties or nature of the service; and" (Emphases supp/ied).(j¥\ 000473 ·'SEC. 4.113-1.

Invoicing Requirements.-

(A)

A VAT-registered per.wm slta/1 issue: -

XXX

(2) A VAT official receipt for every lease of goods or properties, and for every sale, barter or exchange of services. Only VAT-registered persons are required to print their TIN followed by the word •v AT' in their invoice or official receipts. Said documents shall be considered as a 'VAT Invoice' or 'VAT official' receipt. All purchases covered by invoices/receipts other than VAT lnvoiceN AT Official Receipt shall not give rise to any input tax. VAT invoice/official receipt shall be prepared at least in duplicate, the original to be given to the buyer and the duplicate to be retained by the seller as part of his accounting records. (B) Information contaillefl in VAT invoic:e or VAT official receipt. - The following information shall be indicated in VAT invoice or VAT official receipt:

(1) A statement that the seller is a VAT-registered person, followed by his TIN;

(2) The total amount which the purchaser pays or is obligated to pay to the seller with the indication that such amount includes the VAT; Provided, That:

XXX

(c) If the sale is subject to zero percent (0%) VAT, the term 'zero-rated sale' shall be written or printed prominently on the invoice or receipt;" (Emphases supplied) Hence, pursuant to the foregoing provtstons, the foreign currency remittances referred to under Section 1 08(B)(2) of the NIRC of 1997, as amended, must likewise be supported by VAT zero-rated official receipts. The Court shall now proceed to determine petitioner's compliance with the three requisites enunciated by the Supreme Court in the Burmeister caseOj 000474 Anent the first requisite, it is undisputed that petitioner is duly registered with the BIR as a VAT taxpayer35 and it renders the following services in the Philippines, through ROHQ, to wit: general administration and planning; business planning and c.oordination; sourcing and procurement of raw materials and components; corporate finance advisory services; marketing control and sales promotion; training and personnel management; logistics services; research and development services and product development; technical support and maintenance; data processing and communication; and business development. 36 The Court finds that aforesaid services are not in the same category as "processing, manufacturing or repacking of goods".

With regard to the second requisite, records reveal that for services rendered for the four taxable quarters of 2009, petitioner received US dollar payments with the peso equivalent of P2,070,253,775.02, 37 which were accounted for in accordance with the BSP rules and regulations as evidenced by the bank certification of inward remittances38 issued by JP Morgan Chase Bank N.A and duly supported by VAT zero-rated official receipts39 issued by petitioner to its affiliate-clients. Relative to the third requisite, to prove that petitioner's atliliate- clients are non-resident foreign corporations doing business outside the Philippines, petitioner presented Certifications of Non-Registration of Corporation/Pattnership issued by the SEC of the Republic of the Philippines,

Service

Agreements,

Articles

of Association, Articles/Certificate of Incorporation, and printed screenshots of the United States SEC website for company filings of Chevron Corporation, enumerated as follows:

SEC

Certificates of Non-

Service

Registration

Agreements

Name of Affiliate

(Exhibit)

Cabinda Gulf Oil Co. LTD c 30 Caltex Oil Products Co.

c . ··-- ............ -·---··----·-··-·--~··- 35 Par. 5, Admissions, JSFI; p. 195, CTA Docket. 36 Par. 6, Admissions, JSFI: pp. 195-196, CT A Docket. 37 Exhibit "EE", annexed to Exhibit "Y". 38 Exhibits "B" to "B-4".

39 Exhibits "UU-I" to ''UU-463".

State, J>ro,·incc or

Country in

which organized per Certificate./ printed

Articles of

screcnshots of

Association/

U.S. SEC I nl·orporation website

(Exhibit)

(Exhibit ''U")

Bermuda

T

--·--·--··-··-

...•

Caltex Oil Zambia LTD

Caltex Transport and Trading Corp

CGEI· Global Downstream Cost Allocation

Chevron (China) Investment Co.

Chevron (Mauritius) Limited

Chevron Athca Holdings Limited

Chevron Africa-Pakistan Services

Chevron ALKHALlJ TRADING

Chevron Asia South LTD

Chevron Australia PTY LTD

Chevron Bahrain

Chevron Bangladesh

Chevron Bangladesh BLK Twelve

Chevron Benin SA

Chevron Business Real Estate SVCS

Chevron Business Support Center

Chevron Cambodia LTD

Chevron Canada LTD

Chevron China Investment Co. LTD

Chevron Congo SA

Chevron Corporation

Chevron Cote D. lvoire

Chevron Egypt Lubricants SAE

Chevron Egypt SAE

Chevron Energy Technology Company

Chevron Environmental Mngt Co.

Chevron Exploration and Production

Chevron Geothermal Indonesia LTD

Chevron Geothermal Salak LTD

Chevron Global Downstream

Chevron Global Downstream LLC

Chevron Global Gas

Chevron Global Lubricants

Chevron Global Technology Services

Chevron Gulf Oil LTD

Chevron Holdings Inc.- Taiwan

Chevron HongKong LTD

Chevron Indonesia Co.

Chevron Information Tech Co

Chevron International EP Tech Service

Chevron lntemational Exploration Chevron lntemationa I Gas Inc

Chevron International LTD

Chevron International PTE LTD

C·······31

c -32

C-86

'l'-20

C-33

C-34

C-10

C-35

C-1

Australia

C-36

C-73

C-74

C-37

C-38

C-39

C-40

C-11

Canada

C-75

C-105

C-101

C-106

C-2

T-1

C-14

C-42

California

C-107

C-76

Bennuda

C-43

C-3

C-77

C-78

C-44

C-18

C-19

C-79

C-45

C-46

C-47

C-10

C-49

C-80

C-81

---····- ·················-····-·"···-··-· .. --

C1

00047fi

--- Chevron lntl E&P Tech Services

Chevron Inti Exploration Production

Chevron Inti Gas Inc Japan Branch

Chevron lntlt PE Tech LTD

Chevron Japan LTD

Chevron Kenya LTD

Chevron Korea Inc

Chevron Kuo Pte LTD

Chevron Lim itcd

Chevron Lubricants Egypt

Chevron Lubricants Lanka LTD

Chevron Lubricants Vietnam LTD

Chevron Malampaya LLC

Chevron Malawi LTD

Chevron Malaysia LTD

Chevron Marine Products LLC

Chevron NA Explo Prod Co.

Chevron Netherlands BY

Chevron New Zealand

Chevron North Sea LTD

Chevron Offshore (Thailand) LTD

Chevron Oil Nigeria

Chevron Oronite Co. LLC

Chevron Oronite Inti Trading Co

Chevron Oronite PTE LTD

Chevron Pakistan LTD

Chevron Petroleum India PVT LTD

Chevron Pipe Line Company

Chevron Policy Govt Public Affairs

Chevron Products Company

Chevron Puerto Rico Ll .C

Chevron Remittance Processing

Chevron Reunion LTD

Chevron Services Company

Chevron Shipping Co. LLC

Chevron Singapore PTE LTD

Chevron South Africa PTY LTD

Chevron South Asia LTD

Chevron Tankers LTD

Chevron Tanzania LTD

Chevron Texaco Corporation

Chevron Texaco China Energy Co.

Chevron Texaco Malampaya LLC

Chevron Texaco MEfNt\ Inc.

C-47

C-109

C-82

C-21

C-110

C-51

C-22

C-83

C-4

C-52

C-53

C-84

C-85

C-54

C-55

C-87

C-23

C-26

C-111

C-56

C-89

C-57

C-58

C-90

C-91

C-59

C-92

C-9

C-27

C-112

C-5, C-94

C-6

C-61

C-7,C-113

C-8

C-103

----···--- ·--···-

T-18

T-9

T-19

S-1

T-3

T-4

-· ·--

Delaware

New Zealand

Delaware

Singapore

Bahamas

Delaware

-······-···········""'""""""

J1

000477

DECISJON

Chevron Thailand Exploratjon and Prod

Chevron Thailand LTD

Chevron 'Tianjin Lubricants Co.

Chevron Ti1tnjin Lubricants Co. LTD

Chevron Togo SA

Chevron Trading PTE LTD

Che-vron Tran~port :and Tradin~ Corp Chcvrtm l!:f.\anda LTD

Chevron USA Singapore Branch

Chevron Vietnam Block LTD

CUSA- Global Lubricants Asia PAC

CXA Exports SARL

NNPC/Chevrun Joint Venture

Projects Resources Company

Pt. Chevron Pacific Indonesia

Star Holding Company LTD

Texaco Cameroun

UIC CIEP Branch

Unocal East China Sea LTD

,,.-··--·-,--···-,--'

C-114

C-95

T-22

Bahamas

I

C-1 IS

c- 62

C-96

C-ICY..J

C-63

C-97

S-11

C-64

C-66

C-72

C-67

C-68

C-99

T-23

Indonesia

C-69

T-14

C-70

C-100

C-71

Notably, each of the aforesaid documents, standing alone. is inadequate proof that petitioner's clients are non-resident foreign corporations doing business outside the Philippines.

While the SEC

Certificates of Non-Registration40 show that the entities named therein are not registered corporations/partnerships in the Philippines, the same do not prove that such entities are non-resident . foreign corporations doing business outside the Philippines. Likewise, the service agreements only indicate the names of petitioner's customers to whom petitioner renders services but the same do not establish that such customers are non-resident foreign corporations doing business outside the Philippines. Furthermore, the Articles of Association, Articles/Certificates of Incorporation and printed screenshots of the United States SEC website for company filings of Chevron Corporation only prove that the entities named therein were incorporated/organized abroad but they do not establish that such entities are not doing business in the Philippines. Hence, in order to be considered as non-resident foreign corporation doing business outside the Philippines, each entity must be supported at the very least by both SEC Certificate of Non-Registration of Corporation&Jl 40 Exhibits "C" to "C-115''.

000478

/Partnership and Certificates/ Articles of foreign incorporation/association or printed screenshots of US SEC website showing the state/province/country where the entity was organized.

After carefully reviewing the above-enumerated exhibits of petitioner, the Court finds that only the following clients of petitioner shall be considered as non-resident foreign corporations doing business outside the

Philippines:

-·-- --- ···················-········ State, Province

or Country in

which organized

SEC

Certificate/

per printed

Certificates

At·ticles of screenshots of

of Non-

Association/

U.S. SEC

Registration

Incorporation

website

Name of Affiliate

(Exhibit)

(Exhibit "U"J

Cabinda GulfOil Co. L'T'D c- 30

Bermuda

Caltcx Oil Products Co.

T

Chevron (Mauritius) Limited

c- 86

T-20

Chevron Australia PTY LTD

C-1

Australia

Chevron Canada LTD

C-11

Canada

Chevron Egypt SAE

C-2

T-1

Chevron Environmental Mngt Co.

C-42

California

Chevron Geothermal Indonesia LTD

C-76

Bermuda

Chevron Japan LTD

C-82

T-18

Chevron Limited

C-22

T-9

Chevron Malaysia LTD

C-84

T-19

Chevron Marine Products LLC

C-85

Delaware

Chevron New Zealand

C-87

New Zealand

Chevron Oronite Co. LLC

C-26

Delaware

Chevron Oronite PTE LTD

C-lll

Singapore

Chevron Pakistan LTD

C-56

Bahamas

I

Chevron Pipe Line Company

C-57

Delaware

--i

Chevron Tankers LTD

C-6

T-3

Chevron Texaco China Energy Co.

C-8

T-4

Chevron Thailand LTD

(' -95

T-22

Bahamas

Pt. Chevron Pacific Indonesia

C-99

T-23

Indonesia

Star Holding Company LTD

C-69

T-14

Accordingly, only the sales of services by petitioner to the afore- mentioned entities for the year 2009 in the amount ofP409,127,980.26 shall be subject to zero percent (0%) VAT pursuant to Section 1 08(8)(2) of the NIRC of 1997, as amended. The amount of f>409,127,980.26 is broken down as follows:cr\ 000479 !

I

;

..-------...-------.----------------.-----.----:----.----------

Sales

. ..::::.::..:.=_::__:_::__,__ __ ___:Nc.::a=m.;;_e-=-----:.cof'--'A-"--ffi=•"'-'li""-at-'--'c _____________ _,___;(,__il_!_ USD} {!!J:R!!I?L __ __,__=E=xh=i-"-b_i;_t, ___ 1 1--=-:.:::..;-=-.:..;;_::_:;_; ______ -----.-_________________________ -,--____ --,--________ ---.------1 - Chevron Texaco China Energy Co.

567.81 2~,974.35

UU-·1

Cabinda Gulf Oil Co. LTD I 84,246.18 8,744,479.35

UU-14

73,616.52

UU-19

---+-~~~--i-C~I~1e~v~ro~n~A=u~s~tr=al=ia=P=l='Y~LT~D~---+--~1,~55_~l.~10~+---~~~~--:~~:~_, 14,825.82

UU-23

--~··•·· ------- Chevron Texaco China Energy Co.

312.38 Pt. Chevron Pacific Indonesia 1,630.58 --------~-~----~---- 77,388.70

UU-18

387,645.56

UU-45

42,757.09

UU-51

.. ----· Caltex Oil Products Co.

-·--i.

8,202.58 ~~~--i~~~~-+~C~h~ev~r~on~L~im=i=te~d ________ ~~---9~0_4_~.74~---~~~~-- Chevron Oronite Co. LLC 15,874.22 750:199.44

UU-42

~~=---i~:.::_:.::..:.:.._~-+...::.:..:~...:::.:.:.....::..:..=:..:.....:::...:...;_;:.,;.:::;._;;:,._ ___ --i----':...::.L---'=+---__;_::..::..c.c:.__:_.:._ ____ ---------------- ~....:..;;;:,___;-+------:........:.---+--=C-"'h-"'ev~r...:..on~O_;_ro_n_it_e_P_T_E_l_T_D ____ -+-___ 2_6_5_.0--'--7-+----1_2-'--,5_26_:94 ---~!_V:S.9

Chevron Canada LTD

5.100.72 241,168.79 UU-2? __ ~---+-----+--C_h_ev_T_o_n _E_nv_'i_ro_n_m_e_nt_a_J M_ngl""-rt_C_o_._ --+------------=-3=18.:::.:·--=--60-=-+---...:1~5;,;:,,0..::..63::...: . ..::..83=----1-J}U-3]_

Chevron Limited

57,240.28 2,705,117.20

UU-38

~....:..;;;:,.:::..;: __ --i----=:__~..:;__-+..:;__~.:_;_,;_.::::..:.;_.:.__;_;_;__ __________ -t----'----1-----'--'----"--' --------- ------------------------------------- ~~__:_;;_--i~c.::_:.::..:.:.._~-+~C~h~ev~r--=-Ol:.:_l.:::_T-=an=k.:..::e::..::rs~l::...:;r;_:;o:________ __j;!_,893 .48 656,902.13

UU-2 7

Chevron Tankers LTD

301.58 14,2?9.10

UU-32 __

r--'--'-=---i--'---"~~-~-+~C-"'h...:..ev~r=on~T~ha_i_la_nc_i_L_T~D _________ ~--18~9-~,0~2~6~.8~44-----~8~,9::..::3::..::7~,4.:..::3~9=.2~4+-~U~l.~J-~25~ r-....:..;;;:,~__,~:........:._;;;;;.;_c:_..:;__--'--=S=ta=-r-=H--=-olding_~~~- LTD 112,979.43 ?}41,817.02 .__ __ l.}!:-1:?_~ !--=--=-:::=:..:..:::;c=-=-___ -,--_________________ ,.-----·----,---------- -------------- ~-=-=-~-+_.::._p.:_,--=-Fe::..:b:_-0::...:9--i...:.C::..:h~=eyron Japan LTD ----------t----6_0_3_.1_6-+-----·--~8,35_7:_~} ____ r __ l.}_I)::_~~---

20-Feb-09

Chevron Egypt SAE

-----r--------!.:.1?§:?_4 6_8:704.72__ Ul.}_:69 f---__:_::__:_..:_---t__:::2~3--=-F-=-eb~--=-0-=-9 -+---=-C.:..:.h::e_v~r--=-on:_:_:__Pakistan LTD 2,048,352.95 ____ ?7, 960,44 7.15

UU-91

24-Fcb-09

Chevron Australia PTY LTD

------· ) 14.40 58,497.11 UU-1 0 l f----------...:..;;__---t-2_4-_F...:.eb-=---'-0-'-9 -+---=-C=h=-e'.:..::'r=on:..:._:_M:::.a=la;..:..:;,;.y!si=-a =L-=-T=-D ______________ _2_~2_?_?2. 9Q__ _______ 3,687,5 1 9.2 7

UU-1 00

25-Feb-09

Chevron New Zealand

179,507.87 8,642,651.42

UU-74

~-=-=-~-4~2=-5-2 F-=-eb=----=-0-=-9-+~C~h=-ev.:..::r=on~Th~a~il=a=nd~LT-=-D=---------+---=-1-=-0-=-6,-=-7~58-=-.-=-56~----=-5~,1...:4~0,-=-0-=-36-=--··.:_59-t--U=-U~-7 __ 8::~

26-Feb-09

Cabinda Gulf Oil Co. LTD 3,565.71 171,263.69

UU-95

---------------------------- _________ ______:::__z=--::.::._:_:__-=--+---:__..:_:__=.=--:..:.-=-I-·-------------------

26-Feb-09

Chevron (Mauritius) Li!_fl_it_ed ___________ ;:_8_::_60;___.'--'58-t----------_!L?}~---=2~'--9-+ ___ U

: ____ U_:: - 9

________ 6 __ ,, __ · ____________ 1 J---=-=.::::..::__L...:.2:::-..:6:.-.=F__: e:::b:Q_~---- ~tar Hold i_!'l_gi::.::...o·c.::L=--:l:..::'D=---------'-----8=c2::2'-4-'---6=-=-3~. 7()__ _ ___________ 3.~260_, 7_92_.~L ___ V_l)::_?~---· 1--_.:;_::::::_ __ ,____::_25=--=-Mar-09 Cabinda Gu If Oi I Co. L }'D_____________________ _ ____ 4_12.Q9.:,?~--- . ____ 2_3_4,,_8_3 _I .} _ _i__r--I)~J-~_!.:~Q_

25-Mar-09

Chevron New Zealand

192,215.41 9,210,129.85

UU-120

__..:_=-=--:_+-2=-:-6-=--.:_M:::.a:::.r---=-09::__+--C-=-~:::.he~\='ro~n:::.C='a=n=a=da~Ll::.:'D=------+'---=-2·::::.3:::.83:::.:·:::.0·::.:'l +---_:1~1__:_4,!.:::2:::.3(_:_:_~-:::.69::_-+-U~lj_::_I_!_~--

26-Mar-09

Chevron Malaysia l,:.l:!;>_____ _ _________ 8::..:0:::..4.:...:0:..::5.::.:.2::.:::8-t---=-c3,::::.8=..542,)=--1::.:::9.::.:.6:..::5--+--=-U~U:_-::_11:__:1---l ~~---- j_~Mat::_Q_?._ ____ . Chcvii?!! Oronitc Co. LL<:__: _____________ ... _________ ]__:!?_~~Q.:~l. _____ 7_1_5,,'-26 __ 7_._0_2

UU-112

1310 __

26-Mar-09

C~evronPipeLineCompany 161.57 7,745.45

UU-117

~ __ 13_03 ______ _...:_26 __ -~M-~a,_r-~0_9 __ -r..::..C.:...:he:::.v~To.:::.:n.:._:·::.:rh~a:::.il~a:::.nd=-L~l::.:-o-=--------4-...:.1:..::0.:.:6::.:::,6~5:::.4·:::.7-=-0+-_~5~,1:__:1~2=-=,8~8::.:1.:::.1::.:1~U=-l=-J-~I__:_I:::.O~, __ .:...:13=-=0~2 ____

2_6_-_M_a_~_0_9

__ -r_S_ta_r_H_o_Jd_in~lg~C_'o_._L_T_D _______ ~---'-8_2~,4-=-6=-3.-'-7-'-0+---~3~,9::.:::6:..::6::.:::,5...:.0...:.7·:_94~---l=-JU=--...:I-=-0:.9 . _,.

1 ____ _J}_9Q___

27_-M

___ a ... _r-.;;_09_rc-"-~h'-'-'e'-'-v-"'ro:..:.n=P:..::a=k=is.::::.ta:.:.::n:::.L...:T~D'-------+---=-24--'-',=-5-=-T:..:.t'.5=--=3+--..::.l:..:,l__:_7::.:9,c:.34=4:::..0::..:5+__::U:.::U=--..::.](::.:)7:___; 1299

30-Mar-09

Chevron Australia PTY L1J? __________ ··--·--·---'-----·-------------------------5_{~Q1_}_l ..... __________ 26_0,_46_7_.-'--7-'---3+_U='--l-=-J __ -_: 1,..:0_. __ 6,, _____ "

Subtotal

172,457,718.97

Second Quarter of 20(J9

APRIL

~==--r------,----------------------------------.---------- ------------------------------------------r---------- ------------------· c--_}}~~---- --~:~e!::Q?,_t-C=':::.he-=-v--=-ro:..:n:..:A:..::t=ls=-tr-=a:::.Jia=--=-PT-=-Y-=---=L:..::T-=-D ____ !------=-1::..:1,~9-=-0'.:.:1.:::.5~:_) +----~5~7=5,::::.3.:_78:::._::..::93+__::U::..::U::_-_._1_4_:___:___1 1337

23-Apr-09

ChevronAustraliaPTYLTD

983.13 47,517.16

UU-144

'-- 1336

23-Apr-09

Chevron Limited

I ,648.89 79,695.02

UU-143

0004b0 &'\ 1340

Cabinda Gulf OH Co. LTD 2 42,805.14 II, 792,3 81. c4_l'JLU.-1.4·······7· ... f---=-=-..:.:;_--t--=..,;,__;:_:..:.;:....:;_;;_-+--=C_he-'-v-=ro-'-n_l..:...'e.:_x...:..a.:_co"-C_::::_::_c_hi"-n.:_a "-E_ne'-·r,.,.g·y ,_C_'o_._--+ ___ 9_8_3 ._1_3 +-----4_7_:_, 7_4_7 ._94 U ld:!_5~ __ 1345 Chevron Environmental MngtCo.

1,991.26 96,475.78

UU-181

Chevron Mal~ysia LTD ·-3-9'--"-,4-=6-'-5--. 1-'-1 +---. I :91~~_z9_69.J._? I UU-1_?_?~ 1375 1368 1364 f---=-=-.:;_;_--t--=--'--'-:I..:.....:;_;;_-+-_C __ h __ ev __ ro-'---n-'-N;_.;;_ew-'-'-Z'-'-ea"-l __ an_d ____________ +-_l __ l--'5 ,'-4 9_7_. :>_-3_+-···-········-·-· 5 ,59 5, 81 Q._?_§ JLld:l_?_l

Chevron Pipe Line Companv

I, I 03.92 53,484.50

UU-184

f--...:..:::...:_::_--+__;::_.;_;_:..:.;:....:;_;;_-+-_:;_:_:_::_:_:__:_:_:_=-.=_:_:::~--=-:--.:.L.=c.'------t----"-_;_--+-------·········-- ·----··-- 1378 1367 f---=-=-~--t--=--'-:;__::=_-=...::_-+--=C.:.:h.:_cv;_;_r.:_on.:_l.:_'l;.:.:la:.:.i l:.:.:a:.:.nd=-L=-'.:_I'D=-· -------+-----4'-'-7-'-",6-=2-'-9 . ___ 7-'---9 +----"2'-",3'-'0 __ 7-'-'-,6-'-4_4_ ·=--86._ -~dL-1 7 4 -----+----'---+-Pt_. _Chevron Pacific Indonesia ________ 65_9_.5_5_t ___ _:::_:311_2_~4_.9_4. ___ {d_~-193 1388 r--- 1366 f----'--'-'----t-=---=--L---1--St_a_r _H_o_ld_in_,.tg'-C_o_._L_T_D___ 84!2_?9.68_ _______ 4,118,201.55 _ UU-1 73 1371

Chevron Pakistan LTD

4_!?_?_§:.~7- _ 222,687.50

UU-178

1352 Chevron Canada lTD _________ ?..!_~1}} _ ..

257,041.18 ___ !)_l_J-_15_9_ 1361 1350 Chevron Oromte Co. LLC ....

_ _!0,6_4_3_.9_5-+-__ 1...:.,9 __ 6_9.;__, 1_8_3._62_ UU-152_ __ c:hevron Geotl~errnallndoncsia ---~--1 659.55

~J1954~94 UU-168

f---=-=-.:..:_--+--'---'-'-L..--'-=--!--=C_h-'-ev __ r-'-'on-'--'-Ta-'n-'-'-k-=er-=s-=L:..:l-='D'----···--··-- _________ ...... 983.13 47,632:~2 UU-165 1358 1359 Chevron Tankers lTD 842.45 39,944.28

UU-166

f--...::.=..::_:___J___;::_.:__:_=:_-=...::___J__:;_:_:.::..:.:_.:_.:_..:-=..;:..:.==-=-::::..::..:::::_______ -----"·-·-··-

MAY

f-C-=-=-==-----r-----,--------- ···-··--·--- ··--·-·-··---- f---'-I-=-39-=-0=----t--=-=--.:..::.:::..L...::.:_.=.-t---=-C=hcvron Japan_!: TD I ,966.26 1394 Chevron Australia PTY LTD ------·---·--·j---------:!~279.74 92,529.88

UU-194

2,054,937.94

UU-198

UU-199

1395

Chevron Australia PTY LTD

983.13 --------· --------+------'---+-----! 46,571.77 r-----1-"-39 __ 6 ___ -t-;_;_---"--'--'---t---=-C-"-he-=-v __ r-'---on---Pa=k-'-is'-'-ta-=-n_L_T __ D ____ ........... --. ----+----'-2'-'-,0:..:.5-'-5-'.0-'-4-+-------=---=----t--==-=-·-=- 96,526.07

UU-200

""--.--· f---"-l--40-'---0=----t-""'=-"6-'--.:M_:.:.:ar:-.Q.?_ Ch~_Y.~~!.!_~C'':~~~aland 189,566. 77_ ..

26-May-09

Chevron Oronite Co. LLC L _____ .;?J_.:.,0 __ 4 __ 6._5_6+--------+----! 8,874,848.78

UU-204

1408 1403 1423 !

....

1419 1418

JUNE

985.325.84

UU-212

26-May-09

Chevron Thailand LTD

I

I 12,853 .I 0 5.283,384.83

UU-207

·-·••w•••• .. •

27-May-09

Chevron (Mauritius) Limited

561.39 26,381.11

UU-227

-----·---·······-···--····- 4,209, 786.18

UU-223

27 -May-09

Chevron M_~~y-~i~_ L TO _____ _ -t---8_9-'-,5_8_4_.2_5-+---'-'----'-'---'----t-----'---i 5,182,804.04

UU-222

----·--····-················

27-May-09

Star Holding Co. L TO 1_10_,~2_9_0_.0_7-'---.:_.:_~.:_.:_...::...:.-'-.:::.. :-----I'-4=-29=----+--'1-=-9-=-J-=-un:..:.-...:..09=---+-=C.:..:h-=-e'::...:.'r-=-o'-=-1 =E,gyJ?!. . .:::S.:..:A.:..:E=----========: 1======9=8=0=.4=9:======---4.:..:72.::,-2;;5=-2-:.::.S.::.J_+ ___ U=U~--2:::.3~l--l- r--:..:I-=4_:.:45=---+--=2-=-5--=J-=-un::::..·.::..Ol=--9-+-=C.:..:h.::..:.ev_ron New Zealand 195,895.64 9,445.305.69 ___ t_JU:_?_4R __ 1450

25-Jun-09

Chevron Thailand LTD

103,863.72 5,007,893.92

UU-253

r--------t--'-----+--'---'---'--=--=-.=..:_;_.:_ ______ +-_.::..;:_;;;_,_;:_:::.::.::_:-=--j--_:;_;,:.::__:_:_:.::.:~_::__-=-+-----·-- ................ . ___ I-=44_8=---+--=2=--5--=-Ju=n-=--0-'-9 __ rS-'-'-'t=a-=-rH=::_ol-=d.:::.in~g':..:C~o-=-.=L-=-T=-D-----------+I---.:..:1::...:.1.:..:0,~2~5.~1.-=--49-+-----=52.::,3~1.::.5,~8-=-86~ . .::.6'=--9~l~JU~-~25l 1439

26-Jun-09

Chevron Canada LTD

2,724.80 130.937.05

UU-242

1435 1436 1440

26-Jun-09

Chevron Malaysia LTD

82,487.95 3,963,861.12 UU-238 i ' ') . 1 tJU-... 39 1

26-Jun-09

Chevron Oronite Co. LLC 27,928.47 I ,342,069.68

26-Jun-09

Chevron Pakistan LTD

2,055.04 98,752.52

UU-243

I

Subtotal

81,431,862.18 --'-------''---'---- ·-------····

I

-·----··--·· 156,412.36

Ul:-270

36,714.08

UU-297

36,714.08

UU-298 --·

91,741.50

UU-303

___ , ............ -.. --···· 12,607,942.56

UU-299

2,704,753.36 1 UU-280 2,061,165.07

UU-282

--- r------t----"-'--l-_;:..:__::_:_:_.:_.:_.:;..:..:;:===-:.:..:_~------t----=:.=.2.:-=-::::.::..::.+-----=3:.z.:,0::.::3:_0_.::_t:,2:::3.:::.:8·:_:_9_~~!J.:~? __ l------=----r--~~.:_:__-r=-=~~~==~~---------4----~~~----_.:..:3~9.:::.:3,~02~8~.3~1~~U~U~-2~88 ··- 45.958.75

UU-274

0004011 ···-·

-·-···-···- 1468

28-Jul-09

Star Holding Co. LTD

AUGUST

·- 1529

24-Aug-09

Chevron (Mauritius) Limited

1537

24-Aug-09

Chevron Australia PTY LTD

1538

24-Aug-09

Chevron Egypt SAE

1526

25-Aug-09

Cabinda Gulf Oil Co. LTD 1513

25-Aug-09

Chevron New Zealand

1523

25-Aug-09

Chevron Oronite Co. LLC 1517

25-Aug-09

Chevron Thailand LTD

1518

25-Aug-09

Star Holding Co. LTD 1531

26-Aug-09

Chevron Limited

1530

26-Aug-09

Chevron Malaysia LTD

1535

26-Aug-09

Chevron Tankers LTD

SEPTEMBER

1539

04-Sep-09

Chevron Marine Products LLC

1544

22-Sep-09

Chevron Australia PTY LTD

-·-·~- 1562

25-Sep-09

Cabinda Gulf Oil Co. LTD 1560

25-Sep-09

Chevron Limited

1549

25-Sep-09

Chevron New Zealand

1552 25-Se}l-09

Chevron Thailand LTD

1553

25-Scp-09

Star Holding Co. LTD 1567

28-Sep-09

Chevron Canada LTD

I

-~----

I

32,322.321 I ,550,231.18 I .uu-~J 652.48 31,551.26

UIJ-332

8,406.04 406,481.62

UU-340

1,159.47 56,067.21

UU-341

--- 3,877.06 186,486.77 lJU-329 242,454.16 11,662,056.76

UU-316

·-···-········· 33,604.35 I ,616,3 70.85

UU-326

127,330.41 6,124,598.85

UU-320 ----

114,016.44 5,484, I 96.25

UU-321

·- --~-.

60.060.60 2,919,815.26

UU-334

-··--···- I 03,521.78 5,032,658.24

UU-333

··-·-·---·--·-·-·- 637.31 30,982.50 lJU-338 - -·- -·-·--·-·--- 983.13 47,771.14

UU-342

·-- 8,833.78 420,856.60

UU-347

--·--- 3,830.56 '· 80,942.84

UU-365

8.782.82 414,871.04

UU-363

204,180.88 9,6442821.92

UU-352_ 1

113,274.8~ 5,350,726.50

UU-355 ·

72,201.30 3,410,547.95

UU-356

14,679.95 692,777.25

UU-370

- ----·---- 1564

28-Scp-09

C.hcvron Malaysia LTD t--- 89 570.64 4,227,024.07

UU-367

~"~-- r-- 1568

28-Sep-09

Chevron Oronite Co. LLC 9,750.12 460,128.36

UU-371

..... --··~-· ----·--··

Subtotal

81,116,633.45 - --

Fourth Quarter(){ 2009

"""··--·-... ··---·-- .................................... -.........••

OCTOBER

.. _. __ ...

-·---- 1577 16-0ct-09

Chevron Geothermal Indonesia LTD

757.69 35,094.~2_

UU-380

--·-··-·· ··-- --- 1579 21-0ct-09 Pt. Chevron Pacific Indonesia 757.69 35,274.21

UU-382

··--·-·-··--'--------- ............ _,,,_, ---·--·····--···--·-··-··- 1583 23-0ct-09 Cabinda Gulf Oil Co. LTD 155,932.50 7,249,302.65

UU-386

1584 23-0ct-09

Chevron Australia PTY LTD

4,801J~ 223,376.10

UU-387

···-··········--·--·-·.

-··· 1585 23-0ct-09

Chevron Limited

3,666.33 170,447.70

UU-388

·---- 1586 23-0ct-09

Chevron Limited

I ,894.22 88,062.30

UU-389

- - 1582 23-0ct-09

Chevron New Zealand

!86,684.34 8,678,955.83

UU-385

- 1621 26-0ct-09

Chevron Environmental

tgt Co.

250_:99 __ --- _______ _,_Jj)~~J...: 96

UU-420

··············-·····-·············· ........ 1628 27-0ct-09

Chevron Canada LTD

I ,889.77 88,430.98

UU-427

·-·-·-·-··---··-·-___ ._ 1623 27-0ct-09 _Ch~vron Malaysia LTD _______ 2 7' 4 !Q ___ j_,282,662.61

UU-422 I

-- ,,_, ...... ~---·------ ---··-··---- 1626 27-0ct-09 Chevron Oronite Co. LLC 12,045.85 563,680.39

UU-425 I

--- 1624 27-0ct-09

Chevron Tankers LTD

12,841.69 600,921.39

UU-423

---·--~-·-·~ r-------·----r----- .. -----·-- --·······-· 1589 28-0ct-09

Chevron Thailand LTD

33,811.23 1,588,127.29

UU-392

········-·------ ' --.... - .. ---··--··----··-···-······ .. ·· .. 1590 28-0ct-09

Chevron Pakistan LTD

4,339.09 203,808.83

UU-393

1592 29-0ct-09 Star Holding Co. LTD 80,532.06 3,809,463.58

UU-395

NOVEMBER

1636

25-Nov-09

Chevron New Zealand

238,349.84 I I, 169,158.39

LJU-435

·-·----------- .. ,_, ________ .. ___ i-""' ___ ' 1639

25-Nov-09

Chevron Thailand LTD

142,761.12 -~&~c?.,83(;:?}, UU-438 .. - .... ··-·--· .. -- ·····--· ---·-··-···-····-·················-··········- ---·-·- 1644

26-Nov-09

Chevron {Mauritius) Limited

640.30 30,075.15

UU-443

DECEMBER

1645

10-Dec-09

Chevron Egypt SAE

1,137.55 52,494.23

UU-444

-··-··- r/1 000482 ' 1650 1656 1659 1658

22-Dec-09

Chevron New Zealand

23-Dcc-09

Chevron Malaysia LTD

23-Dec-09

Chevron Thailand L TO

23-Dec-09

Star Holding Co. L TO --········· -··-·-· -- ------··----~ 224,458.68 I 0,454,526.32

UU-449

··········-·,.·-·-···"- 179, 141.2~- 8,328,278.94

UU-455

·-·~··~-· 120,891.07 5,620,226.4 I

UU-458

143,212.42 6,657,946.07

UU-457

-------

~3 28-Dec-09

Chevron Australia PTY LTD

10,549.45 489,760.91 ~~u-:~ ---

Subtotal

74,121,765.66 ···--- --- _Total Valid Zero-Rated Sales [!_Jr tile 1st, 21ld, 3rd a11d 41ft quarter !!.[_}f)(J9 409,127,980.26 The rest of petitioner's alleged zero-rated sales in the amount of Pl,661,133,795.24 (P2,070,261,775.50 less P409,127,980.26) shall not be considered by the Court as zero-rated sales as petitioner failed to prove that the entities to whom it rendered services are non-resident foreign corporations doing business outside the Philippines. Input VAT paid or incurred which are attributable to zero-rated sales As afore-discussed, petitioner had valid VAT zero-rated sales for the four quarters of2009 in the amount ofP409,127,980.26, therefore, the Court shall determine the amount of input VAT paid or incurred which are attributable thereto.

In support of its reported input VAT of P61 ,408,436.33, petitioner presented various invoices, official receipts and other documents 41 which were all examined by the Court-commissioned Independent CPA, Atty. Fredieric B. Landicho.

In his Report dated February 20, 2012, 42 Atty.

Landicho accounted for a total amount of P62,393,685.02 input VAT, broken down as follows:

·--··-·····-·-··---··..!

lsi Qtr 2nd Qlr -----~~_Q_t~---- 1---:!!!!__Qtr

Total

Valid Input VAT on Purchases of Services

--~!ld OIX>ds ~thcr than C!!2ital Goods'' t> 8.333.882.41 f' 11.840.107.27 f> Y.OJ4, 148.4()

Valid Input VAT on Purchases of Capital

Goods"

3.409.981.83 3 .51_21_43_,9_1__ _ ____ nl.4.-!Q11(>__t----

Exceptions on Petitioner's Input VAT on

--- Purcha~cs of Services and Goods other than Capital Goods " 5,225,862.81 1.139.562 70 1.8!!8,149.73

Exceptions on Petitioner's Input VAT on

_l'urchases of CaEilal Goods"' 281U80.59 30!!.028.32 2R8.180 5<l

Total

1"17.257,907.64 1"16,807.443.20 Pl-4,544.884.08 41 Exhibits "QQ-1" to "QQ-3932" and "RR-1 ''to "RR-1002". 42 Exhibits "Y'', "Y -2", and "Y -3''. 43 Exhibit "AA" attached to Exhibit "Y". 44 Exhibit "BB" attached to Exhibit ''Y". 45 Exhibit "CC" attached to Exhibit "Y". 46 Exhibit "DD'', attached to Exhibit "Y". -·---· p 8.524,816.40_ t> J7.732.95·1A8 ---.··-·······-.. -· .. -··-··-·-·---····-···· 3.419.183.14 1.1.683.315.25 1.545.479.32 __ 9,799.05·1.56- 2'>3,<l71.23 1.178 .. 16() 73 1"13, 783.450.09 1"62,393,685.02 000483 Petitioner reflected in its 2009 Quarterly VAT Returns the following input taxes in the total amount ofP61,408,436.33: - ""'"···· ···'·· ~ .. ,., ... ,._ 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr

Total

I

Total Input VAT per Return

P16,000.665.20 .!§_!_855, 141.09 14,605.469.35 ...... J 3, 94 7,160.69 P6._l_.~Q~.436._~~~j -·----·------·--··- It is significant to note, however, that the amount of petitioner's claim for refund or tax credit certificate is only P51,198,943.08, computed based on the lower input VAT ofP55,273,889.14, as shown below: ,----------.--------,-------~-.--------.---·-··---·····-···--··-~---······· VAI"ablc Sales

Zero-Rated Sales

Total Sales

% of Zero-rated

Salesrrotal Sales

Input tax Input tax attributable to zero- 1st Qtr p 40,850.770.05 620,201,395.33 p 661.052.165.38 94% P16,000,666.21 2nd Qtr I' 38.979,808.53 508,595,820.63 r 547.575.629.16 93% Pl6,150,186.15 3rd Qtr 4th Qtr

Total

I' 44.1 OS,750.22 ,. 41.693,4:20.43 t• 165.632.749.23 469.178.463.98 472.288,095.56 2,070.263.775.50 ,. 513.287,214.20 p 513.981,515.99 1'2.:23 5,8\!6,524. 7 J 91"'" 92% Pl2,622,813.17 1"10,500,223.61 p 55,273,889.14 '-'r:..::llc::tec:::d..:::sa:::.le:.::s ___ _.__--=..P_...:l:.::.:5•'-=-0~11:.!:,8::..:.7.:::.:9 •:.::.:59::....L._....:P'---"1:.::.:5,'-"-00::.::0:.!:,5...:.1:::.:.6·::.::35::....L.. _ ___,P'---'1...:.1 •=531!!..0.~§,1+_ _ ___ P 9,648,46 1.00 Since petitioner cannot be granted a refund or issued a tax credit certificate in an amount exceeding the amount prayed for in the Petition for Review and declared in its Quarterly VAT Returns, the Court shall use as reference point the lowest of the three figures, namely, the input VAT per petitioner's claim, the input VAT as reflected in its 2009 Quarterly VAT Returns and the input VAT as veri tied by the Independent CPA, in determining the amount to be refunded or the tax credit certificate to be issued in favor of petitioner, as shown below: - 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr

Total

!uta! Input V A'I" Claim 16,000.666.21 16,150,186.15 12.622.813.17 I 0,500,223.61 55.273.1:!89. 1-1

Total Input VAT per Return

16,000,665.20 16.85 5.141.09 14.605.469.35 13,947.160.69 61,408.436.33 Total Input VAT per !CPA Findings 17,257,907.64 16,8()7 ,443.20 14,544.884.08 13.783,45009 62.393.685.02 .I

Should-be Basis of Refundable Claim

16,000,665.20 16,150,186.15 12,622.813.17 10,500,223.61 55,27 3.888.1.~) Based on the Independent CPA's review and validation of petitioner's claimed input VAT, the Independent CPA noted the following exceptions amounting to Pl0,977,415.30:

I Exceptions un Pt'titioner's Claimt'd Input VAT on Purchast's ofSen•ices and Goods otlter titan I Cu Ita/ Goods Exhibits "SS-1" to "SS-47 2" ··-·····------····-··-··-··---··· ·-1

I

Jrd ..Qtr__ -- - - :!tlt_Q!!: .. _. __ . __ +_ ... ____ ...:.::..;.:;;.:.__ ____ ~

P

9.MI.9l ···-····--··-····-·-·-··-········-----·-······

Non

_ ____;_l.c_;71:.:..:.7.5 ..

~,?}3})_ No sales imoiccs and/or oHicial receipts 00048%1 ' oices and/or ollicial receipts arc daied outside the -----,-· - -------- ------------- Snles inv riod o fclaim cs evidenced hy tape receipis nor in the name of 469,662,~2_ 1------- .

414.43 -------- .tB!,QZ~?Q_ r

31JA2

13,004.99 52,271.99 93,770.78 I S9.3h\l.l K oiccs andlur otlicial receipts not in the name of ·- •r .

37,379.51 .. l:t.771.64 6,480.00 7!!.631.1:1 oices and/or ollkial receipts have no BlR permit h) titionc saiCsinv . pctitinnc Sab inv print .

--- 1,802.36 .. ~ .. --.... 6- 1,949.70 5,480.29 -- 6,721.31 ------'~,(!~~"~(:>._ cc on c_o._mputation of input VAT .. !l.if~~l_()!!.__ bronco

Suppm1

__ l££~ip_t_~ us TIN and registered address ______ cd by photocopies of sales invoices and/or oflicial -·---· 1rtinl! documents ...

····-·--··· N(lSU )( . Unsuppt

Subfotll

mcd input VAT on pal!!!£nls to non-residents

I

- --- 48,865.68 --·- t--·· 2,762,413.35 .

- 1"5,225,862.81 ........

34,686.23 - 23,069.04 18.149.59 _124. 7~0.5•1 33,274.76 1.353.753.65 1.31~,395.14 SA59,836.90 48.490.51 .

30,417.86 78.90837 -·-·-·· 7,101.46 ----~575.89 54,2~~-81 6h,941>.lh 86,655.99 .

...

~6.!·~~,(!~ .

PI,IJ9,56~.~?il .. ·--· P1,888,149.73 Pl,_';45,479.32 p 9,799.1154.56 ··-··············-·- ----------.. --

TOTAl

"TT-l" to ''TT-20") n.~ on Petitioner's Cluim,~d Input J'A T on__!l_!_t:chases o[Cuoiral Good.~ (E.thibits ---·---·-·-·· --- ··············--·~-~ ortin& invoices ____ .

p 3,684.83 .

p 5.2.(_)_~ 1--____! ___ .!:_8_~().6~ .. voices and/or otlicial receipts arc dated outside the I aim - 1,280.00 .

256.:Z5 _______ ___1_._:'1~2~ ·····-· --- chtim (indudcd in the purcha.~e of servkes) .

- .

3.12.53

332S1

-····~- ...... --·----.. -·-·· \'Cd unl(>rtizatron uf Input VAT on capital goods for ars ' ..

ortin~ documents

I

.• .... _ t> 288,180.59 28!1,180.59 p 288.1 !10.59 288.[80.59 1.152, 722.36 - - 14.8R2.90 - .

14_&~;?_,.'?!!._ p 2118.180.59 p 3118.028.32 p 288,180.59 p 293,971.23 p 1,178,3611.73 P5,51 4,043.40 Pl,447 ,.'i91.02 P2, 17(,,330.32 PI ,839,450-'15 PI0.977,41~.30 The Court sustains the above findings of the Independent CPA. The input taxes ofP10,977,415.30 are disallowed from petitioner's claim for not being properly substantiated by VAT invoices or receipts as prescribed under Sections 11 O(A) and 113(A) and (B) of the NIRC of 1997, as amended, in relation to Sections 4.110-1, 4.110-8, and 4.113-1 of RR No. 16-05.

Considering the aforesaid disallowances, out of the total input VAT claim of P55,273,888.13, only the amount of P44,296,472.84 is duly substantiated, computed as follows: rota! Input VAT Claim t> 16.000.665.20 f' 16.150.186.15 f' 12,622.813.17 t•lo.soo.223.61 t• 55.273,888 L\

Less:

Input

VAT

not properly substantiated by VAT invoices or official receipts per I CPA's findings 5.514.043.40 1.447.591.02 2,176,330.32 1.839.450.55 I 0,977,415.29

Properly Substantiated Input VAT

Pl0,486,621.80 Pl4,702,595.13 PI 0,446,482.85 P8,660, 77 3.06 P44,296.4 72.84 A portion of the P44,296,4 72.84 input VAT shall be applied against petitioner's reported output V Af liability for the four taxable quarters of 2009 in the amount of Pl9,875,929.90. Hence, for the four taxable quarters of 2009, only the remaining input VAl' of P24,420,542.94 can be attributed to the entire zero-rated sales declared by petitioner in the amount of P2,070,261 ,775.50. As discussed earlier, however, petitioner's valid zero- rated sales amount only to P409,127,980.26. The input VAT attributable to 0004~ !

petitioner's valid zero-rated sales amounts to P4,623,001.60 only, as computed below:

htQtr 2nd Qtr

Jrd Qtr

4th Qtr

Valid Input VAT

I"

I 0,486,621.80 I" 14,702,595.13 I' I 0,4·16,482.85 I' 8,660, 773.06 p

Less: Output VAT

4,902,092.41 4,677.577.02 5,293.050.03 5,003,210.44

Excess Input VAT

p 5,584,529.39 p 10,025,018.11 I" 5,153,432.82 p 3,657.562.62 p

Total

44,296,472.!<4 19,875,929.90 24,420,542.94

Valid Zero-Rated Sales

p 172,457,7111.97 p 81.431,862.18 I" 81,116.633.45 I' 74,121,765.66 I" 409,127,980.26 Divide hy Total Declared Zero-Rated 620,201,395.33 508,595,820.63 469,176,463.98 472,288,095.56 2,070,261, 775.50

Sales

Multiplied by Excess Input VAT

5,584,529.39 10.025,018.11

Excess Input VAT AUributablr to

Valid Zero-Rated Sates

,. 1,552,1174.93 p 1,605,117.19 Input VAT was not aPPlied against any output VAT liability in the succeeding quarters 5,153,432.82 3,657,562.62 p 890,984.85 .. 574,024.63 p Although the claimed input VAT was carried over by petitioner in its succeeding Quarterly VAT Returns,47 the same remained unutilized until the input VAT was deducted as "VAT Refund/TCC Claimed"48 in its Quarterly VAT Return for the fourth quarter of 20 l 0. Thus, the excess input VAT of P157,160,605.1849 as of the end ofthe fourth quarter of20l0, which was to be carried over to the succeeding first quarter of 2011, no longer included the subject claim.

In sum, petitioner has sufficiently proven its entitlement to a refund or issuance of tax credit certificate in the amount of P4,623,001.60, representing its unutilized excess input VAT for the four taxable quarters of 2009 which is attributable to its zero-rated sales for the same period.

WHEREFORE, premises considered, the instant Petition for Review is hereby

PARTIALLY

GRANTED.

Accordingly, respondent Commissioner of Internal Revenue is hereby ORDERED to RKFlJNJ) or to ISSUE A TAX CREDIT CERTIFICATE in the reduced amount of P4,623,001.60 to petitioner Chevron Holdings Inc., representing its excess and unutilized input VAT for the four taxable quarters of 2009 attributable to its zero-rated sales for the same pcriodCJ-'vf 47 Exhibits "II-1" to "Il-4".

48 Exhibit "II-4", Line 230.

49 Exhibit "II-4'', Line 29, Total Amount Payable (Overpayment). 24:120.542.94 4,623,(10 1.<10 000486 SO ORDERED.

WE CONCUR

ER~.UY

Associate Justice

L ROSARIO

Presiding Justice

fl.~l.t N, M,.;..~, b'vwt.Lr.

~TON.

MlNDARO-GRULLA

Associate Justice

CERTIFICATION

Pursuant to Article VIII, Section 13 of the Constitution, it is hereby certit1ed that the conclusions in the above decision were reached in consultation betore the case was assigned to the writer of the opinion of the Court in Division.

Presiding Justice

0004b7