Deutsche Knowledge Services, et al. vs. Commissioner of Internal Revenue

decision

of the Commissioner of Internal Revenue on the tax case; Provided, further, that should the taxpayer opt to await the final decision of the Commissioner of Internal Revenue on the disputed assessments beyond the one hundred eighty day-period abovementioned, the taxpayer may appeal such final decision to the Court under Section 3(a), Rule 8 of these Rules; XXX XXX Rule 8. Sec. 4. Where to appeal; mode of appeal.-

(a) An appeal from a decision or ruling or the inaction of the Commissioner of Internal Revenue on disputed assessments or claim for refund of internal revenue taxes erroneously or illegally collected, the decision or ruling of the Commissioner of Customs, the Secretary of Finance, the Secretary of Trade & Industry, the Secretary of Agriculture, and the Regional Trial Court in the exercise of their original jurisdiction, shall be taken to the Court by filing before it a petition for review as provided in Rule 42 of the Rules of Court. The Court in Division shall act on the appeal.

XXX XXX

Deutsche Knowledge Services Pte Ltd. vs. CIR

VAT taxpayer with Taxpayer Identification No. (TIN) 238- 763-115-000.4 Petitioner is licensed to do business as a regional operating headquarters (ROHQ) in the Philippines, engaging in general administration and planning, business planning and coordination, sourcing/procurement of raw materials and components, corporate finance advisory services, marketing control and sales promotion, training and personnel management, logistic services, research and development services and product development, technical support and maintenance, data processing, and communication and business development. 5 Moreover, petitioner acts as a shared services center, which handles regional, as well as global and accounting and related controlling processes, such as accounting production work in the global general ledger in SAP, developing and operating inter-company clearing house, accounting and head office reporting for non-regulated entities and product control. 6 Respondent is the duly appointed Commissioner of the Bureau of Internal Revenue empowered to perform the duties of her office, including, among others, the duty to act upon and approve claims for refund or tax credit as provided by law. She holds office at the 5th Floor, BIR National Office Building, Agham Road, Diliman, Quezon City. Petitioner entered into several IntraGroup Service Agreements ("Service Agreements" for brevity) with its foreign clients. 7 On April 22, 2009, petitioner filed its original Quarterly VAT Return8 for the first quarter of calendar year 2009 with the BIR Revenue District Office (ROO) No. 47. On October 28, 2010, petitioner filed its Application for Taxc

Deutsche Knowledge Services Pte Ltd. vs. CIR

Credits/Refunds (BIR Form No. 1914)9 and administrative claim for refund or issuance of tax credit certificate. 10 The administrative claim for refund or issuance of tax credit certificate purportedly represented the unutilized input VAT attributable to its zero-rated sales of services to its foreign clients for the first quarter of calendar year 2009. There being no action taken by respondent on petitioner's administrative claim for refund or issuance of tax credit certificate, petitioner filed the present Petition for Review before this Court on March 25, 2011. In her Answer11 filed on May 2, 2011, respondent interposed the following Special and Affirmative Defenses: "4. Petitioner's alleged claim for issuance of tax credit certificate is still subject to administrative routinary investigation/examination by the respondent~ Bureau;

5. Taxes paid and collected are presumed to have been made in accordance with law, hence, not refundable.

6. Petitioner's claim for refund or issuance of tax credit certificate in the amount of P58,385,248.41, as alleged excess and unutilized input VAT on purchases of goods and services attributable to its zero-rated sales for the 1st quarter of taxable year 2009 were not fully substantiated by proper documents, such sales invoices, official receipts and others.

7. In an action for refund/credit, the burden of proof is upon petitioner to establish its right to the claimed refund and failure to adduce sufficient proof is fatal to its claim.~ 9 The application for tax credits/refunds was filed with BIR-RDO No. 44, Exhibit "L- 1".

10 The letter claim for refund/issuance of TCC was filed with the BIR ROO No. 44, Exhibit "L".

11 Docket, pp. 48-49.

CTA CiJse No. 8243 Deutsche Knowledge Services Pte Ltd. vs. CIR PEClSlON Page 5 of 44

8. Petitioner's sales of goods and services to various alleged clients/affiliates do not qualify as zero- rated VAT.

9. The amount subject of the claim for refund of petitioner does not pertain in full to its input VAT attributable to its zero-rated sales of goods and services for the 1st quarter of taxable year 2009. 10.

Petitioner failed to substantiation requirements Regulations No. 7-95 in relation 237 of the 1997 Tax Code. comply with the under Revenue to Section 113 and 11.

Petitioner failed to comply with the conditions/requirements under Section 112(C) of the 1997 Tax Code. Hence, this Honorable Court has no jurisdiction to entertain the instant case.

12. It is incumbent upon petitioner to show that it has complied with the provisions under Section 204

(c) in relation to Section 229 of the Tax Code. Otherwise, its failure to prove the same is fatal to its claim for refund·.

13.

Claims for refund are construed strictly against the claimant for the same partakes the nature of exemption from taxation (Commissioner of Internal Revenue vs. ~edesma, 31 SCRA 95) and as such, they are looked upon with disfavor (Western Minolco Corp. vs. Cpmmissioner of Internal Revenue, 124 SCRA 1211)." Respondent filed her Pre~ Trial Brief12 on May 11, 2011; while petitioner filed its Pre-Trial Brief13 on May 19, 2011. The Pre-Trial was held on June 3, 2011. 1~ 12 Docket, pp. 51-53. 13 Docket, pp. 57-65. 14 Minutes of the Pre-Trial; Docket, pp. 66-67.

CTA Case No. 8243 Page 6 of 44 Deutsche Knowledge Services Pte Ltd. vs. CIR DECISION Thereafter, as directed by the Court, the parties submitted their Joint Stipulation of Facts and Issues’? on July 8, 2011 as well as their Supplemental Joint Stipulation of Facts and Issues'® on July 29, 2011; which were approved by the Court in the Resolution’’ dated August 9, 2011.

During trial, petitioner presented and formally offered pieces of documentary and testimonial evidence,’® sans respondent’s comment.'? Ina Resolution”’ dated November 20, 2012, the Court admitted petitioner’s Exhibits “A”, “B", “CC”, “D", SE", “F’, “G", “G-1", “H", “I, “J”, “J-1-a", “J-1" to J-91", “J-92” to “J-286", “J-287” to “J-342", “J-343” to “J- 1521”, “J-1522” to “J-1523”, “J-1524” to “J-1542", “J-1543”" to “J-1546”, “J-1547” to J-1555”, “K”, “L”, “L-1”, “O”, “O-1”, “Q-2", “0-3”, “O-4”, “O-5”, “O-6", “O-7", “O-8", “0-9”, “O- 10”, “O-12", “0-14”, “O-15”, “O-16”, “O-17”, “O-18”, “O- 19”, “O-20”, “O-22”, “0-24”, “0-25”, “0-30”, “O-31", 0-32”, “0-33”, “0-34”, “0-35”, “O-36”, “0-37”, “O-38”, “O-39", “O- 40", “0-44”, “0-47”, °O0-48”, “P", “P-2”, “P-3”, “P-4", °P-5”, “P-6", “P-7", “P-8", “P-9", “P-10", “P-11”, “P-13”", “P-14”, “P- 16”, “P-18”", “P-20”, “P-21", “P-22”, “P-23.1”, “P-23.2”, “P 23.3", “P-23.4", “P-23.5", “P-23.6", “P-24", “P-25”", “P- 26" “P-27", “P-29”", “P-32”", “P-35", “Q”, “Q-1”, “R”", “R-1", “R-1- a”, and “R-1-b”.

Petitioner filed an Urgent Motion for Leave to Present Supplemental Evidence** on February 22, 2013, praying for the following: (1) grant petitioner’s prayer to present Supplemental documentary evidence; (2) set a Commissioner’s Hearing for the marking of petitioner’s supplemental documentary evidence; and (3) order the deferment of the submission of the parties’ respective Memoranda. Respondent filed her Comment/Opposition (To Petitioner's Urgent Motion for Leave to Present Supplemental¢ ? Docket, pp. 79-84.

‘© Docket, pp. 88-93.

” Docket, p. 102.

8 Formal Offer of Evidence filed on May 7, 2012, Docket, pp. 247-709. *? Records Verification dated September 27, 2012, Docket, p. 715.

*° Docket, pp. 717-718.

*) Docket, pp. 723-729.

Deutsche Knowledge Services Pte Ltd. vs. CIR Dt:CISION

Evidence) 22 on April 8, 2013. In a Resolution 23 dated May 17, 2013, the Court granted petitioner's Urgent Motion for Leave to Present Supplemental Evidence and ordered the setting of Commissioner's Hearing for the marking of petitioner's supplemental documentary evidence. On July 9, 2013, petitioner filed a Supplemental Formal Offer of Evidence. 24 Respondent failed to file her Comment to petitioner's Supplemental FOE. 25 In a Resolution 26 dated November 13, 2013, petitioner's Exhibits "0-49", "0-50", "0-51" "0-52" "0-53" "0-54" 0-55" 0-56" "0-57" "0- , I I ( I f f 58" "0-59" "0-60" "0-61" "0-62" "0-63" "0-64" "0- , ( , , , , , 65" "0-66" "0-67" "0-69" "0-70" "0-71" "0-72" "0- , , , , , , , 73", and "S" were admitted; while Exhibit "0-68" was denied admission for failure to correspond with the document described in the Supplemental FOE. On December 10, 2013, 27 petitioner filed a Motion for Reconsideration 28 without respondent's Comment29 • In a Resolution 30 dated March 17, 2014, the Court granted petitioner's Motion for Reconsideration and admitted Exhibit "0-68".

In the said Resolution, the parties were given a period of twenty (20) days from receipt of the Resolution within which to submit their respective Memoranda. Respondent filed her Memorandum31 on April 10, 2014; while petitioner filed its Memorandum (With Motion to Re- Open Trial) 32 on May 2, 2014, sans respondent's Comment, 33 for the purpose of presenting additional documentary evidence. In a Resolution 34 dated July 3, 2014, the Court granted petitioner's Motion to Re-Open Trial c. l2 .

Docket, pp. 760-764.

n Docket, pp. 769 771.

Deutsche Knowledge Services Pte Ltd. vs. CIR Dl:CISION for the sole purpose of presenting additional documentary evidence.

On August 22, 2014, petitioner filed a Motion to Admit Supplemental Formal Offer of Evidence with attached Supplemental FOE. 35 Respondent, however, failed to file her Comment on the said Motion. 36 The Court granted petitioner's Motion to Admit Supplemental Formal Offer of Evidence in a Resolution 37 dated November 6, 2014.

Respondent still failed to file her Comment on petitioner's Supplemental FOE. 38 In a Resolution39 dated January 23 1 2015, the Court admitted petitioner's Exhibits "J-1556"/ "J-1557"1 "J-1558"/ "J-1559"1 "T", and "T-1". In the same Resolution, the Court declared the case submitted for decision in view of the filing of petitioner's Memorandum (with Motion to Re-Open Trial) on May 2, 2014 and respondent's Memorandum on April 10, 2014.

Petitioner's documentary exhibits are as follows: Exhibit A B c D 35 Docket 1 pp. 1678-1688. Description Securities and Exchange Commission (SEC) Certificate of Registration and License (S.E.C. Reg. No. FS2005506950) Bureau of Internal Revenue (BIR) Certificate of Registration dated June 16, 2005 . Quarterly VAT Return for the 1st Quarter of calendar year (CY) 2009, filed on April 22, 2009 via the BIRrs EFPS with reference no. 100900002918295 Quarterly VAT Return for the 2nd Quarter of CY 2009, filed on July 17, 2009 via the.c

Deutsche Knowledge Services Pte Ltd. vs. CIR

BIR's EFPS with 100900003099684 Page 9 of 44 reference no.

E Quarterly VAT Return for the 3rd Quarter of CY 2009 1 filed on October 19 1 2009 via the BIR's EFPS with reference no.

100900003288515 F Quarterly VAT Return for the 4Lh Quarter of CY 2009 1 filed on January 25 1 2010 via the BIR's EFPS with reference no.

101000003509641 G Quarterly VAT Return for the 1 sL Quarter of CY 2010, filed on April 21, 2010 via the BIR's EFPS with reference no.

101000003734058 G-1 Amended Quarterly VAT Return for the 1st Quarter of CY 2010, filed on October 171 2011 via the BIR's EFPS with reference no. 101100005210798 H Quarterly VAT Return for the 2nd Quarter of CY 2010, filed on July 21, 2010 via the BIR's EFPS with reference no.

101000003951054 I Quarterly VAT Return for the 3rcJ Quarter of CY 2010, filed on October 20 1 2010 via the BIR's EFPS with reference no.

101000004171299 J Quarterly VAT Return for the 41h Quarter of CY 2010, filed on January 25, 2011 via the BIR's EFPS with reference no.

101000004425763 J-1-a Amended Quarterly VAT Return for the 4Lh Quarter of CY 2010, filed on February · 10, 2011 via the BIR's EFPS with reference no. 101100004487877 J-1 to J-91 Inward remittance advice and bank statements for the 1st quarter of CY 2009 J-92 to J-286 Service invoices relating to petitioner's zero-rated sales for the 1 sl quarter of CY 2009 c..

Deutsche Knowledge Services Pte Ltd. vs. CIR. Dt:CISION J-287 to J-342 Official receipts relating to petitioner's zero-rated sales for the 1st quarter of CY 2009 J-343 to J-1521 Suppliers' invoices and suppliers' official receipts for the 1st quarter of CY 2009 J-1522 to J-1523 VAT Returns for the CY 2009 J-1524 to J-1542 Audited Financial Statements as of and for the year ended December 31, 2009 J-1543 to J-1546 Certifications issued to petitioner by the SEC and Board of Investments (BOI) certifying the registered activities of petitioner J-1457 to J-1555 BIR Form 1600 (Monthly Remittance Return of VAT and other percentage taxes withheld) J-1556 J-1557 J-1558 J-1559 K Inward Remittance with Reference No. 02RS03160017 dated March 16, 2009 for the amount of EUR5,554,074.84 (Php339,648,338.69) Inward Remittance with Reference No. 02RS03160026 dated March 16, 2009 for the amount of EUR13,346.38 (Php816,171.18) corresponding to payments for service invoice with reference numbers 2009-SOM TMG APH0-001 (for the amount of EUR2,152.00), 2009-SOM TMG APH0- 002 (for the amount of EUR2,152.00), and INV 08-APH0-0396 Service Invoice with Reference No. 2009- SOM TMG APH0-001 for the amount of EUR2,152.00 Service Invoice with Reference No. 2009- . SOM TMG APH0-002 for the amount of EUR2, 152.00 Quarterly VAT Return for the l 5L Quarter of CY 2011, filed on April 25,2011 via(

Deutsche Knowledge Services Pte Ltd. vs. CIR DJ:CISION L L-1 0 0-1 0-2 0-3 0-4 0-5 0-6 the BIR's EFPS with reference no.

101100004711772 Administrative Claim for Refund of its unutilized input VAT for the 1 sL quarter of CY 2009 dated October 27, 2010 and filed with the BIRon October 28m 2010 Application for Tax Credits/Refunds (BTR Form No. 1914) for the 1st quarter of CY 2009 filed with the BIR on October 28, 2010 Authenticated Articles of Association of Deutsche Bank Aktiengesellschaft Authenticated License and Change Location issued by the Banking Department of the State of New York to Deutsche Bank AG, New York Branch Authenticated Certification from the Registrar of Companies for England and Wales that Deutsche Bank Aktiengesellschaft has established a branch and continues to maintain a branch in England and Wales Authenticated Certified True Copy of Certificate of Incorporation on Change of Name of Company from Deutsche Morgan Grenfell Asia Pacific Holdings Pte Ltd to Deutsche Asia Pacific Holdings Pte Ltd.

Authenticated Certified Copy of All Historical Registered Matters pertaining to Deutsche Securities Inc. based in 11-1 Sanno Park Tower, Nagatacho 2-chome, Chiyoda-ku, Tokyo Authenticated Certificate of Registration of Oversea Company of Deutsche Bank Aktiengesellschaft, frorn the Registrar of companies Hong Kong Authenticated Business Registration (NO.D.l5.6.2.30) of Deutsche Bank(

Deutsche Knowledge Services Pte Ltd. vs. CIR Ot:ClSION 0-7 0-8 0-9 0-10 0-12 0-14 0-15 0-16 0-17 0-18 Aktiengesellschaft/ Filiale Jakarta from the Menteri Keuangan, Indonesia Authenticated Certificate of Registration of Foreign Company of Deuthsche Bank Aktiengesellschaft issued by the Acting Registrar of Companies, Singapore Authenticated Certificate of Incorporation on change of Name of Deutsche Asset Management (Asia) Limited issued by the Assistant Registrar of Companies and Businesses/ Singapore Authenticated Certification from Deutsche Bank Aktiengesellschaft/ Asia Pacific Head Office in One Raffles Quay I #15-00 South Tower/ Singapore that it is a segment of Deutsche Bank Ag and that it is not a separate legal entity Authenticated Certificate of Registration of a Foreign Company of Deutsche Group Services Pty Limited (Australia) Certification of Non-Registration of Corporation/Partnership of Deutsche Bank Aktiengesellschaft/ Inlandsbank Certification of Non-Registration of Corporation/Partnership of Deutsche Bank Aktiengesellschaft/ Filiale London Certification of Non-Registration of Corporation/Partnership of Deutsche Asia Pacific Holdings Pte. Ltd. Certification of Non-Registration of Corporation/Partnership of Deutsche Group Services Pty Limited Certification of Non-Registration of Corporation/Partnership of Deutsche Securities Inc.

Certification of Non-Registration of Corporation/Partnership of Deutsche Bank Aktiengesellschaft Filiale Hong Kong(.

Deutsche Knowledge Services Pte Ltd. vs. CIR Dt:ClSION 0-19 0-20 0-22 0-24 0-25 0-30 0-31 0-32 0-33 0-34 0-35 0-36 Certification of Non-Registration of Corporation/Partnership of Deutsche Bank Aktiengesellschaft, Filiale Jakarta Certification of Non-Registration of Corporation/Partnership of Deutsche Bank Aktiengesellschaft, Filiale Singapur Certification of Non-Registration of Corporation/Partnership of Deutsche Asset Management (Asia) Limited Certification of !'Jon-Registration of Corporation/Partnership of DBOI Global Services Private Limited Certification of Non-Registration of Corporation/Partnership of Deutsche Bank Aktiengesellschaft, Filiale Bangkok Certification of Non-Registration of Corporation/Partnership of DB Finance Inc.

Certification of Non-Registration of Corporation/Partnership of DB Trust Company Limited Japan Certification of Non-Registration of Corporation/Partnership of Deutsche Bank Aktiengesellschaft, Filiale Prag Certification of Non-Registration of Corporation/Partnership of Deutsche Bank PBC Spolka Akcyjna Certification of Non-Registration of Corporation/Partnership of Deutsche Bank Luxembourg S.A.

Certification of Non-Registration of Corporation/Partnership of Deutsche Bank Trust Company Americas Certification of Non-Registration of Corporation/Partnership of Deutsche Bank (China) co. Ltd., Beijing Branch.('

Deutsche Knowledge Services Pte Ltd. vs. CIR D~CISION 0-37 0-38 0-39 0-40 0-44 0-47 0-48 p P-2 P-3 P-4 Certification of Non-Registration of Corporation/Partnership of Deutsche Bank Sociedad Anonima Espanola Certification of Non-Registration of Corporation/Partnership of PT Deutsche Securities Indonesia Certification of Non-Registration of Corporation/Partnership of DWS Holding & Service GMBH Certification of Non-Registration of Corporation/Partnership of Deutsche Bank Aktiengesellschaft, Filiale Wien from the SEC Certification of Non-Registration of Corporation/Partnership of Deutsche Bank Aktiengesellschaft, Filiale Zurich Certification of Non-Registration of Corporation/Partnership of Global Markets Centre Private Limited Certification of Non-Registration of Company of DB International (Asia) Limited IntraGroup Service Agreement between Petitioner and Deutsche Bank Aktiengesellschaft, Asia Pacific Head office Amendment and Accession Agreement between Petitioner and Deutsche Bank Aktiengesellschaft, New York Branch (with attached Service Agreement between the same parties) IntraGroup Service Agreement between Petitioner and Deutsche Bank Aktiengesellschaft, Filiale London IntraGroup Service Agreement between Petitioner and Deutsche Asia Pacific Holdings Pte Ltd C

Deutsche Knowledge Services Pte Ltd. vs. CIR

P-5 P-6 P-7 P-8 P-9 P-10 P-11 P-13 P-14 P-16 P-18 P-20 IntraGroup Service Agreement between Petitioner and Deutsche Group Services Pty Limited IntraGroup Service Agreement between Petitioner and Deutsche Securities Inc. IntraGroup Service Agreement between . Petitioner and Deutsche Bank Aktiengesellschaft, Hongkong Branch IntraGroup Service Agreement between Petitioner and Deutsche Bank Aktiengesellschaft Jakarta Branch IntraGroup Service Agreement between Petitioner and Deutsche Bank Aktiengesellschaft Singapore Branch IntraGroup Service Agreement between Petitioner and Deutsche Bank (China) Co., Ltd.

IntraGroup Service Agreement between Petitioner and Deutsche Asset Management (Asia) Limited IntraGroup Service Agreement between Petitioner and DBOI Global Services Private Limited IntraGroup Service Agreement between Petitioner and Deutsche Bank Aktiengesellschaft, Filiale Bangkok IntraGroup Service Agreement between Petitioner and Deutsche Bank Aktiengesellschaft, Filiale Seoul Branch IntraGroup Service Petitioner and Aktiengesellschaft, Office Agreement between Deutsche Bank Asia Pacific Head IntraGroup Service Level Agreement DB Trust between Petitioner and Company Limited Japant CTA C&lse No. 8243

Deutsche Knowledge Services Pte Ltd. vs. CIR

P-21 P-22 P-23.1 P-23.2 P-23.3 P-23.4 P-23.5 P-23.6 P-24 P-25 P-26 P-27 P-29 P-32 IntraGroup Service Agreement between Petitioner and Deutsche Bank AG Prague Branch IntraGroup Service Agreement between Petitioner and Deutsche Bank Polska S.A. IntraGroup Service Agreement between Petitioner and Deutsche Bank AG Luxembourg Branch ·IntraGroup Service Agreement between Petitioner and DWS Investment S.A. IntraGroup Service Agreement between Petitioner and Deutsche Bank Luxembourg SA IntraGroup Service Agreement between Petitioner and Deutsche Bank Re S.A. IntraGroup Service Agreement between Petitioner and Deutsche Bank Vita S.A. IntraGroup Service Agreement between Petitioner and Primelux Insurance IntraGroup Service Agreement between Petitioner and Deutsche Bank (China) Co. Ltd. Beijing Branch IntraGroup Service Agreement between Petitioner and Deutsche Bank SAE (Sociedad Anonima Espanola) IntraGroup Service Agreement between Petitioner and Deutsche Securities Indonesia IntraGroup Service Agreement between Petitioner and DWS Holding & Service GmbH Deutsche Bank List of Shareholdings 2008 IntraGroup Service Agreement between Petitioner and Deutsche Bank Aktiengesellschaft, Filiale Zurichc

Deutsche Knowledge Services Pte Ltd. vs. CIR Pt:CISION P-35 Q Q-1 R R-1 R-1-a R-1-b T T-1 IntraGroup Service between Petitioner and Deutsche Bank Al<tiengesellschaft, Filiale Zurich Sworn Statement of Mr. Romeo A. De Jesus to Questions propounded by Atty. Marvin B. Ibarra dated October 25, 2011 Signature of Mr. Romeo A. De Jesus Petitioner's Independent CPA Report dated September 22, 2011 Signature of Mr. Romeo A. De Jesus Sworn Statement of Ms.

Rachel Concepcion to Questions propounded by Atty. Marvin B. Ibarra dated January 27, 2012 Signature of Ms. Rachel Concepcion Supplemental Sworn Statement of Mr. Romeo A. De Jesus, Jr. to Questions Propounded by Atty. Marvin B. Ibarra dated August 6, 20 J 4 Signature of Romeo A. De Jesus, Jr. The parties submitted the following issue40 for this Court's resolution:

WHETHER OR NOT PETITIONER IS ENTITLED

TO THE CLAIM FOR REFUND OF OR ISSUANCE OF TAX CREDIT CERTIFICATE OF EXCESS OR

UNUTILIZED INPUT VAT IN THE AMOUNT OF

PHP58,385,248.41.

The main issue may be broken down into the following sub-issues: a.

40 Stipulated Issues for Resolution, JSFI, Docket, pp. 81-82.

CTA C"se No. 8243 Deutsche Knowledge Services Pte Ltd. vs. CIR A.

WHETHER OR NOT PETITIONER INCURRED

INPUT VAT ON ITS PURCHASES OF GOODS AND

SERVICES ATIRIBUTABLE TO ZERO-RATED SALES

FOR THE 1ST QUARTER OF CY 2009. B.

WHETHER OR NOT THE AMOUNT OF PHP58,385,248.41, BEING CLAIMED BY PETITIONER AS UN UTILIZED INPUT VAT PAID, FOR THE 1sT QUARTER OF CY 2009, PERTAINS IN FULL TO ITS ZERO-RATED SALES OF GOODS AND SERVICES. C.

WHETHER OR NOT PETITIONER HAD ZERO-

RATED SALES DURING THE 1sT QUARTER OF CY 2009, THE CONSIDERATION FOR WHICH IS PAID

FOR IN ACCEPTABLE

FOREIGN

CURRENCY AND

ACCOUNTED FOR IN ACCORDANCE WITH THE RULES

AND REGULATIONS OF THE BSP. D.

WHETHER OR NOT THE INPUT VAT INCURRED BY PETITIONER FOR THE 1sT QUARTER OF CY 2009 IS DULY SUPPORTED BY VAT INVOICES AND OFFICIAL RECEIPTS. E.

WHETHER OR NOT THE INPUT VAT INCURRED BY PETITIONER FOR THE 1sT QUARTER OF CY 2009 AMOUNTING TO PHP58,385,248.41 WAS

APPLIED AGAINST ANY OUTPUT VAT OR CARRIED

OVER TO SUCCEEDING TAXABLE PERIODS. F.

WHETHER OR NOT PETITIONER'S ADMINISTRATIVE AND JUDICIAL CLAIMS FOR

REFUND OR ISSUANCE OF TCC FOR ITS EXCESS

AND UNUTILIZED INPUT VAT ON PURCHASES OF

CAPITAL GOODS, NON-CAPITAL GOODS AND SERVICES ATIRIBUTABLE TO ITS ZERO-RATED

SALES WERE FILED WITHIN THE TWO-YEAR PERIOD

PRESCRIBED UNDER SECTIONS 110, 112 AND 229, TAX CODE.

G.

WHETHER OR NOT PETITIONER HAS

COMPLIED WITH THE INVOICING REQUIREMENTS

PRESCRIBED UNDER REVENUE REGULATIONS NO. 7·- 95 IN RELATION TO SECTIONS 113 AND 237 OF THE TAX CODE.(

Deutsche Knowledge Services Pte Ltd. vs. CIR

H.

WHETHER OR NOT PETITIONER HAS COMPLIED WITH THE REQUIREMENTS UNDER SECTION 112(A)(B)(C) OF THE TAX CODE. Petitioner alleges that during the first quarter of calendar year 2009, it rendered services in the Philippines to persons engaged in business conducted outside the Philippines, the payments for which were made in Euro and other acceptable foreign currency and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pi/ipinas (BSP). 41 Petitioner further claims that it accumulated excess input VAT in the amount of P58,385,248.41 attributable to its zero-rated sales, which remains unutilized and/or unapplied against its output tax liability. 42 Petitioner thus contends43 that it is entitled to a refund of the said input VAT attributable to its zero-rated sales for the first quarter of calendar year 2009 pursuant to Sections l08(B)(2) and ll2(A), in relation to Section llO(B) of National Internal Revenue Code (NIRC) of 1997, as amended, which are quoted hereunder for easy reference: "SEC. 108. Value-added Tax on Sale of Services and Use or Lease of Properties. - XXX XXX XXX (B) Transactions Subject to Zero Percent {0°/o) Rate.

- The following services performed in the Philippines by VAT-registered persons shall be subject to zero percent (0°/o) rate: XXX XXX XXX (2) Services other than those mentioned in the preceding paragraph rendered to a person engaged in('

Deutsche Knowledge Services Pte Ltd. vs. CIR OI:CISION 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);" "SEC. 112. Refunds or Tax Credits of Input Tax. - (A) Zero-Rated or Effectively 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 zerc~-rated sales under Section 106 (A) (2)

(a) (1), (2) and (b) and Section 108 (B) (1) and (2), the acceptable foreign currency exchange proceeds thereof had been duly accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP): 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." "SEC. 110. Tax Credits. - XXX XXX XXX (B) Excess Output or Input Tax. - If at the end of any taxable quarter the output tax exceeds the input tax, the excess shall be paid by the VAT- t:.

Deutsche Knowledge Services Pte Ltd. vs. CIR registered person. If the input tax exceeds the output tax, the excess shall be carried over to the succeeding quarter or quarters: xxx Provided, however, That any input tax attributable to zero-rated sales by a VAT- registered person may at his option be refunded or credited against other internal revenue taxes, subject to the provisions of Section 112." Based on the above-quoted provisions, in order to be entitled to a refund or tax credit of input VAT payments attributable to zero-rated or effectively zero-rated sales, the following requisites must be satisfied:

1. that the taxpayer must be VAT-registered;

2. that there must be zero-rated or effectively zero- rated sales;

3. that input taxes were incurred or paid;

4. that such input VAT payments are directly attributable to zero-rated sales or effectively zero- rated sales;

5. that the input VAT payments were not applied against any ·output VAT liability; and

6. that the claim for refund was filed within the two- year prescriptive period. Before discussing the other requisites mentioned in the preceding paragraph, the Court shall first rule on the timeliness of the filing of the instant claim. Respondent alleges that petitioner failed to comply with the conditions or requirements under Section 112(C) of the NIRC of 1997, as amended, which would mean that this Court has no jurisdiction to entertain the instant case. 44 In Commissioner of Internal Revenue vs. Aichi Forging Company of Asia, Inc. 45, the Supreme Court explained that in case of tax refunds under Section 112 of the NIRC of 1997, as amended, the phrase "within two years" applies( 44 Par. ll, Answer, Docket, p. 49. 4S G.R. No. 184823, October 6, 2010.

Deutsche Knowledge Services Pte Ltd. vs. CIR only to the filing of the administrative claim for refund and not to the filing of the judicial claim. The pertinent portions of the decision are quoted as follows: "There is nothing in Section 112 of the NIRC to support respondent's view. Subsection (A) of the said provision states that 'any VAT-registered person, whose sales are zero-rated or effectively zero-rated may, within two 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.' The phrase 'within two (2) years xxx apply for the issuance of a tax credit certificate or refund' refers to applications for refund/credit filed with the CIR and not to appeals made to the CTA. This is apparent in the first paragraph of subsection (D) of the same provision, which states that the CIR has '120 days from the submission of complete documents in support of the application filed in accordance with Subsections (A) and (B)' within which to decide on the claim.

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 CIR. The second paragraph of Section 112(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 see it then/ the 120-day period is crucial in filing an appeal with the CTA./f Accordingly, petitioner had two years from the close of the first quarter of calendar year 2009, or until March 31, 2011, within which to file its administrative claim with respondent.

Evidently, petitioner timely filed its refund claim with the BIRon October 28, 2010. 46(

Deutsche Knowledge Services Pte Ltd. vs. CIR DEClSION

As regards petitioner's judicial claim, the applicable provision is Section 112(C) of the NIRC of 1997, as amended, which reads as follows: "SEC. 112. Refunds or Tax Credits of Input Tax. - XXX XXX XXX (C) Period within which Refund 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 Subsection (A) 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 unacted claim with the Court of Tax Appeals." Based on the foregoing, the taxpayer may appeal to this Court within thirty (30) days from receipt of the decision or from inaction of respondent after the lapse of one hundred twenty (120) days from the filing of its administrative claim for refund. In this case, respondent failed to act on petitioner's claim filed on October 28, 2010 within the prescribed period, or until February 25, 2011. Thus, petitioner had thirty (30) days from February 25, 2011, or until March 27, 2011, within which to file with this Court its appeal of respondent's inaction. Accordingly, this Petition for Review filed on March 25, 2011 is well within the prescriptive period allowed by law. The Court shall now proceed to determine the merits of petitioner's claim for refund or tax credit. C Deutsche Knowledge Services Pte Ltd. vs. CIR DI:ClSlON Petitioner maintains that its sales of services to entities engaged in business conducted outside of the Philippines constitute zero-rated sales. In the case of Commissioner of Internal Revenue vs. Burmeister and Wain Scandinavian Contractor Mindanao, Inc. / 7 the Supreme Court held that in order for the supply of services to be VAT zero-rated under Section 102(B)(2) [now Section 108(B)(2)] of the NIRC of 1997, as amended, the following requisites must be satisfied:

1. the services must be other than processing, manufacturing or repacking of goods;

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 must be doing business outside the Philippines. It is undisputed that petitioner is licensed to do business as ROHQ in the Philippines to engage in general administration and planning, business planning and coordination, sourcing/procurement of raw materials and components, corporate finance advisory services, marketing control and sales promotion, training and personnel management, logistic services, research and development services and product development, technical support and maintenance, data processing and communication and business development. 48 Petitioner likewise acts as a shared services center, which handles regional, as well as global and accounting and related controlling processes, such as accounting production work in the global general ledger in SAP, developing and operating inter-company clearing house, accounting and head office reporting for non- regulated entities and product control. 49 Evidently, thee ~~ G.R. No. 153205, January 22, 2007. 48 Exhibit "A"; Par. 3, Admitted Facts, JSFI, Docket, p. 80. 49 Par. 4, Admitted Facts, JSFI, Docket, p. 80.

CTA Cctse N<>· 8243 Deutsche Knowledge Services Pte Ltd. vs. CIR Pt:CISION Page 25 of 44 services provided by petitioner are not in the same category as "processing, manufacturing or repacking of goods". For services rendered during the first quarter of calendar year 2009, petitioner received foreign currency payments (in Euro) which were accounted for in accordance with the BSP rules and regulations, as evidenced by sales invoices50 and official receipts51 issued by petitioner to its alleged non-resident foreign clients, various inward remittance ad vices, and bank statements. 52 To prove that petitioner rendered services to entities/affiliates engaged in business conducted outside the Philippines, it presented the following documents: (a) SEC Certificates of Non-Registration of Company53 ;

(b) Various registration documents (i.e., AMI.net Company Profile Fact Sheet, Authenticated Articles of Association, Certificate of Registration, and Certificate of Incorporation on Change of Name of Company) 54 ; and (c) Intragroup Service Agreements55 . However, this Court finds that each of the aforesaid documents, standing alone, is an inadequate proof that petitioner's client is a non-resident foreign corporation doing business outside the Philippines. While the SEC Certificates of Non-Registration show that the named entities therein are not registered corporations/partnerships in the Philippines, the same do not prove that such entities are non-resident foreign( 50 Exhibits "J92" to "J286". ~ 1 Exhibits "J287" to ".1342". 52 Exhibits "Jl" to "J91". 53 Exhibits "0-12", "0-14" to "0-20", "0-22", "0-24", "0-25", "0-30" to "0-40", "0- 44", "0-47", and "0-48". s-1 Exhibits "0" to "0-10" and "0-49" to "0-73". ~~Exhibits "P" "P-2" to "P-11" "P-13" "P-14" "P-16" "P-18" "P-20" to "P-27" "P- ' I I I · I - I I 32", and "P-35".

Deutsche Knowledge Services Pte Ltd. vs. CIR corporations doing business outside the Philippines.

Likewise, the Certificate of Association and Certificates of Registration/Incorporation of Foreign Company only prove that the named entities therein were incorporated/organized abroad but do not establish that such entities are not doing business in the Philippines. Also, the Service Agreements only show the names of petitioner's customers to whom it rendered services but the same do not establish that such customers are non-resident foreign corporations doing business outside the Philippines. 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/Partnership and Certificate/ Articles of Foreign Incorporation/ Association/Registration. Thus, only the following clients of petitioner shall be considered as non-resident foreign corporations doing business outside the Philippines: Entity Code 56 AMI. net Company Profile Fact Sheet, Articles of Association, Certificate of Registration, and Certification of Incorporation St:C Certificate on Change of of Non- Name of Client _____ ~-~istration ~_9!_11!~L_ Deutsche Bank Akt1engesellschaft, Inlandsbi!D_Is____ _ ___2_::!L_ ~~ _ _ ______ Q::_"!2 _____ ~ f--_.:_74_:_:3'-----+_:::::D=eu=ts=c~heBank Sociedad Anonima Espanola _____ O~]Z__ 0-50 744 Deutsche Bank Aktiengesellschaft, Filiale Zurich 044 0-51 747 Deutsche Bank Aktiengesellschaft, Filiale Wien 0~40 0~52 781 Deutsche Bank Aktiengesellschaft, Filiale Singapur 0~20 0-7 783 Deutsche Bank Aktieng~sellschaft, Filiale Bangkok __ ------~ 0~25_~----· -~-- o~~~-----~ 786 Del!tsche Bank Aktien__92sellschaft, Filiale Hong kong __ ---~_Q:JlL_~~. ~- ____ __2_:~---~- 788 Deutsche Bank Aktlengesellschaftliliale Jakar!~-- ____ .J2::l2. ___ ~--

-~ ~-_Q-6 ---~--~

801 840 Deutsche Asset Management (Asia) Limited Deutsche Bank Aktiengesellschaft, Filiale London 0-22 0-14 0~8 o~55 845 Deutsche Bank Aktiengesellschaft, Filiale Prag 0-32 0~56 871 _Deutsche Bank Luxembo!:![9 SA ____ ·------ ----~--~Q::.J1_____ _ ___ 0~57 _ ~--- 872 Deutsche Securi~1es Inc,_~~-------------~ -----~Q-:.E __ ~- --~-___Q::i_ _____ _ 910 Deutsche Bank (Chma) Co. Ltd., BeiJing Branch 0~36 0~59 ~

Deutsche Knowledge Services Pte Ltd. vs. CIR

935 DWS Holding & Service GmbH 0-39 0-60 5046 | Deutsche Asia Pacific Holdings Pte Ltd. 0-15 0-3 5157 __| PT Deutsche Securities Indonesia 0-38 | _ O-61 5180 Deutsche Group Services Pty Limited _0-16 _ 0-10 __| 5735 Deutsche Bank PBC Spolka Akcyjna 0-33 0-62 6201 Deutsche Bank Trust Company Americas 0-35 0-63 6502 DB Finance Inc. 0-30 0-64 | 6518 DB Trust Company Limited Japan _ 0-31 _ __0-65 6822 _| DB International (Asia) Limited 0-48 0-66 9478 _| DBOI Global Services Private Limited | 0-24 © ___0-67 9608 | Global Markets Centre Private Limited _ ii _0-47 0-68 Accordingly, petitioner’s sales of services to the afore- mentioned entities for the first quarter of calendar year 2009 in the amount of €4,634,848.23 with peso equivalent of P289,872,951.07, as presented below, qualify for VAT zero- rating under Section 108(B)(2) of the NIRC of 1997, as amended:

Inward Remittance Official Receipt Entity Exhibit Code | Exhibit No. Amount. - No. Amount 5180 j3 € = 12,541.00 J289 P 787,073.91 845 35 925.00 J287, || 60,012.77 | 6502 7 1,388.00; 3290 | 87,805.24 | 6518 18 1,388.00} 3291 89,671.27 5180 312 4,464.00 3293 280,165.95 786 314 — 665,050.31 3294 40,970,510.83 910 | J16 18,500.00 | 295 1,133,649.85 910 W7 18,500.00) 3296 1,133,649.85 788 J19 16,650.00 J298 1,070,275.32 | 872 320 911,272.00 3297 56,175,316.96 5180 J22 11,200.00 j299 679,119.84 | 5735 J24 _ 463.00 | J300 _ 28,146.00. | 5157 —J26- —_ 1,850.00 3301 118,110.62 | 840 J28 102,966.00 | J302 | 6, 464,764.79. 840 J30 142,311.00 J303 8,935,084.06 840 334 80,000.00 3305 5,022,838.10 840 137 127,751.60 3307 8,020,945.05 6201 341, 1,425.00 3309 86,309.97 | 6201 | 343 ; 688.00} —J310 ; 41,632.26 781 547 25,000.00 3312 1,549,353.33 747 354 925.00 3316 58,762.88 100 356 1,752,962.93 J317 109, 884,954.58 781 | J6l 16,174.71} 3321 989,132.04 | 840 367 98,686.00 3324 6,196,057.88

Deutsche Knowledge Services Pte Ltd. vs. CIR

845 J69 925.00 J327 801

---- -----J70

87_[500.07 J328 ----- 935 ]71 18,500.04 J329 Page 28 of 44 -- 60,012.77 -+--------=-5 ,69 7 f 165.4 3 _____ ___1204,54512_ 5,0~1,412.87 4!,102.26 11~)33.05 1 830 103.97 9478 747 - 5157 743 6518 . - 840 783 6822 J73 77(050.00 J330 J74 647.00 J331 J75 1,850.00 J332 J76 27 750.06 J333 ----- __

J7Z__ __ --+--__

1_~,3 __ 8_7_. 5Q__ ___ J334 J79 84(991.00 J335 J81 18,500.04 J336 J83 46,250.10 J338

______________ L __

L __

_, ___ _§_2,638. 97 _ 5(33§,~ 73.87 1,209{926.30 ?,9~4)65.14 6822 1--------- _J_81__ 123,233.87

J3J2__ __

-- ___ _ZL97J!L~1_6.89 359,387.78 7,972,750.92 9608 J85 5,551.00 J340 - ----- 840 r--- ]86 126,984.00 J337 +---- 871 J91 647.00 J342 41J72.31 TOTAL -~ - -- --- ------------ - _ ___ ~1,631r~4~~~~ _ __ ~2~~l~z2,~~!~Q7 _ The rest of petitioner's declared zero-rated sales in the amount of P863,838,977.32, that is P1,153,71l,928.39 less P289,872,951.07, shall be denied VAT zero-rating for petitioner's failure to prove that the entities to whom it rendered services are non-resident foreign corporations doing business outside the Philippines. Petitioner asserts that its input VAT for the first quarter of calendar year 2009 in the amount of P58,385,248.4l, as shown below, are duly substantiated by appropriate documentary evidence and are attributable to its zero-rated sales:

---------------~--------------- ---------------------- lnput VAT from Current Tr~nsactions Purchase of Capital Goods not exceeding P1 Million Purchase of C~pital Goods exceeding P1 Million Domestic Purchases of Goods Other than Capital Goods Domestic Purchases of Services Services Rendered b Non-Residents ---------- Totallnput VAT per Return p 4,464.22 1,500,608.79 In support of- its claim, petitioner presented various invoices and official receipts issued by its suppliers, BIR Form 1600, and other documents,S7 which were all examined~ ~

Deutsche Knowledge Services Pte Ltd. vs. CIR Dt:CISION by the Independent Certified Public Accountant (ICPA). The latter noted the following exceptions, which this Court finds in order; thus, shall be disallowed from petitioner's claim : 58 -~- ----~----~~-~--~------~------ -,-~- Disallowed Fiodin_g~ Purchase of goods not supported by suppli~r'~ sales invoj_~ce::o:::s~_ Purchase of services not supported by supplier's official receipts Input VAT on purchases with in~alid supporting documents Purchase of goods and services not within the l 5t quarter of CY 2009 Total Inp~tVAT f __ ~S3J.:~L +---4-'-'-148,408.2Z 477J87.39 503)90.09 In addition, the input VAT of P41,000,124.19, as detailed below 1 shall be disallowed for petitioner's failure to meet the substantiation requirements under Sections 110(A) and 113(A) and (B) of the NIRC of 1997 I as amended by Republic Act (RA) No. 93371 and as implemented by Sections 4.110-2, 4.110-3 1 4.110-8 and 4.113-1 of Revenue Regulations (RR) No. 16-05: lom~a Exhibit Supplier voice/ j .

1 R

. t Otsallowed Ioput ece1p VAT No.

--~--- -~---~~------ upporting invoicf!s or

1. Input VAT not separately indicated in the s official receipts J370 Ambassador Home and Electronics Cente 83521 p 238.93 ]388 JJED Philippines, Inc 66493 7,373.46 J389 JJED Philippines, Inc. 66848 8,276.25 J393 Michigan Enterprises Corporation 14730 7,232.14 J394 Michigan Enterprises Corporation 14731 10,285.71 J502 6-24 Property Holdings, Inc. 134 2,049,996.96 J503 6-24 Property Holdings, Inc. 204 372,726.72 - J504 6-24 Property Holdings, Inc. 205 1,384,566.21 ]505 6-24 Property Holdings, Inc. 217 2,049,996.96 ]506 6-3 Property Holdings, Inc 635 977,894.04 J509 6-3 Property Holdings, Inc. 648 2,081.88 J510 6-3 Property Holdings, Inc. 681 171,590.94 ]511 A. Soriano Corporation 19217 454,100.17 ]513 ACCRALAW 34999 28.07 J515

ACCRA LAW

34998 120.00 r--- ---~~~~ J516 ACCRALAW 34997 720.00 ]519 Air2100, Inc 42055 278.28 -- ]520 . Air2100, Inc 42061 283.76 ]532 i American Express Transnational, Inc ---------1 39806 15,845.09 1----- ]533 I Asia Select, Inc 4605 1,431.76

Deutsche Knowledge Services Pte Ltd. vs. CIR

]534 ]535 ]536 J537 ]538 r----- J539 ----- ]540 ------ J541 J542 ---- ]543 !-----· J544 ---- ]545 ]546 J547 J548 J549 ]550 r-- ]552 ]553 ]555 ]556 ]557 ]559 ]560 ]561 ]563 ]564 ]565 J566 ]568 r---- ]570 J571 J573 Asia Select, Inc.

Asia Select, Inc.

Asia Select, Inc.

Asia Select, Inc.

Asia Select, Inc. ----------- Audioman Enterprises t----------- 4606 4629 4674 4697 4776 1,149.03 2,522.83 1,071.33 1,348.83 1,128.91 28622 482.14 -----1------------ -------- 28664 1,232.14 Audioman Enterprises ------ -----------------1--------- ---------- Audioman Enterprises -- Audioman Enterprises 1--------------------- Autohome Business Solutions, Inc. Autohome Business Solutions, Inc. Autohome Business Solutions, Inc. Autohome Business Solutions, Inc. Barrington Carpets, Inc. Bayan Telecommunications, Inc. Bayan Telecommunications, Inc. 28713 5,357.14 28683 ---------------- 973 938 836 ··---··---------- 939 11276 297585 535.71 -------- 4)17.48 -------------- 1,899.24 ---------- 4,217.48 1,449,815.15 182.04 --------- 297654 182.04 ---------~--~---~ -------------~---- ----------------- Bayan Telecommunications, Inc. 306127 182.04 ---------------------------- ----------- Bayan Telecommunications, Inc. 297597 182.04 sayan Telecommunications, Inc. 305617 182.04 Sayan Telecommunications, Inc. 279282 182.04 Sayan Telecommunications, Inc. 297652 182.04 Sayan Telecommunications, Inc. 306146 182.04 Sayan Telecommunications, Inc. 279275 182.04 - Sayan Telecommunications, Inc. 297598 182.04 Sayan Telecommunications, Inc. 306124 182.04 Sayan Telecommunications, Inc. 306120 182.04 Sayan Telecommunications, Inc. 279276 182.04 Sayan Telecommunications, Inc. 297599 182.04 Bayan Telecommunications, Inc. 305607 182.04 Sayan Telecommunications, Inc. 306137 182.04 ---- ---~--- Bayan Telecommunications, Inc. 297656 182.04 ·-----1----------- ---------- Bayan Telecommunications, Inc. 305635 182.04 ------~---- Bayan Telecommunications, Inc. 182.04 !----------r--- 279271 297593 -------- ]577 Bayan Telecommunications, Inc. J578 Bayan Telecommunications, Inc. 1----- J580 Bayan Telecommunications, Inc. r---- --- J581 Bayan Telecommunications, Inc. J583 Bayan Telecommunications, Inc. J584 Bayan Telecommunications, Inc. ]586 Bayan Telecommunications, Inc. +-- ]587 Bayan Telecommunications, Inc. ]589 Bayan Telecommunications, Inc. ]590 Bayan Telecommunications, Inc. J591 Sayan Telecommunications, Inc. ]593 Sayan Telecommunications, Inc. ]594 Sayan Telecommunications, Inc. ]596 Sayan Telecommunications, Inc. 182.04 305632 182.04 297653 182.04 ------ 306125 182.04 ---------------------------- 297670 182.04 ------·--- ------------ 306126 182.04 297657 305619 279270 297658 305609 297580 306148 279264 ------------------1 182.04 ------------~ 182.04 182.04 -------- 182.04 182.04 182.04 182.04 182.04 ----------------c.

CTA Case No. 824l

Deutsche Knowledge Services Pte Ltd. vs. CIR

J597 J598 J600 J601 J602 ]604 ]605 Bayan Tclcco Bayan Tclcco Bayan Tclcco Bayan Tclcco mmunicaUons, Inc.

mmunications, Inc.

mmunications, Inc.

mmun1cations, Inc.

mmunications; Inc.

Bayan Tclcco 297672 306134 279269 297651 306121 182.04 182.04 182.04 182.04 182.04 ..

Bayan Teleco rnmunications, Inc. 297579 182.04 . -·-----------~-------·------ ----------------------------- --------------------·- rnmunications, Inc.

305616 182.04 Bayan Teleco ·--.. - 1-------- ]607 Bayan Teleco rnrnunications, Inc. 279263 182.04 -------------- --- --------- ~---------- ---------- ]608 Bayan Teleco rnrnunications, Inc. 297676 182.04 ----· ------------------------------------------------ ------------- J609 Bayan Teleco rnrnunications, Inc. 306122 182.04 1------1-- J611 Bayan Teleco mrnunications, Inc. 297581 182.04 -------·--- __ .... _ .. ________ .. ___ ...... -------·---- J612 Bayan Teleco rnmunications, Inc. 306133 182.04 ------------------- -·-------------- ----------------- ---------------------- J614 Bayan Teleco rnrnunications, Inc. 297662 182.04 ·-----+-· -------------------· ---------·-·-··--- ---··--·--···-·--- ......... J615 Bayan T eleco rnrnunications, Inc. 305613 182.04 ]617 ]618 ]619 1--·--- ]620 J622 J623 J624 J626 J627 .J629 J630 J631 J632 J634 J635 .J636 ]638 ]639 1-· ]641 f----- J642 ]643 J645 ---- ]646 ]649 ~- J650 1-- J651 Bayan Telec Bayan Telec Bayan Telec ornrnunications, Inc. ornrnunications, Inc. omrnunications, Inc.

ornrnunications, Inc. ommunications, Inc.

ommunications, Inc.

ommun1cations, Inc.

ommunications, Inc.

ommunications, Inc.

ommunications, Inc.

ommun1cations, Inc.

ommunications, Inc.

ommunications, Inc.

ommun1cations, Inc.

ommunications, Inc.

ommunications, Inc.

omrnunications, Inc.

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ornmunications, Inc.

Bayan Telec Bayan Tclcc Bayan Tclcc Bayan Tclcc Bayan Tclcc Bayan Tclcc Bayan Tclcc Bayan Tclcc Bayan Tclcc Bayan Tclcc Bayan Tclcc Bayan Tclcc Bayan Tclcc Bayan Telec Bayan Telec Bayan Telec 1----'----- Bayan Telec Bayan Telec Bayan Telec 1----'---· ornmunications, Inc.

Bayan Telec Bayan Telec 1---· Bayan Telec Bayan Telec J654 Bayan Telec ------~ ornrnunications, Inc. omrnunications, Inc.

ornmunications, Inc.

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J655 ! Bayan Telec 306141 182.04 ----1·--·--·-----· _____ ..

.. ...

279277 182.04 306144 -----.. -·--+---------- 306142 279283 297661 305622 297594 305633 279281 297565 297566 305634 279261 297595 305614 182.04 ---·------- 182.04 182.04 182.04 182.04 182.04 182.04 182.04 182.04 182.04 182.04 182.04 182.04 182.04 297582 182.04 ______ .. ____ .._ .... _ ---..... --.. .------ 306130 182.04 ... - ... ---------·-· ----·--------- 279262 182.04 297568 182.04 ...... _ ........ _________ -·--------·---j -- ---~~~1_31 ______ j_ _________ 1_82~~ 297577 182.04 297570 182.04 279260 182.04 . --------------- --------------- 297663 182.04 305610 182.04 279268 182.04 -·-----------·-------..... ------ 297674 182.04 f-.· l65Ur" Telec _______ .. ________ _ -----·-------·-· -----·----- J657 Bayan Tclcc J658 Bayan Tclcc ornrnunications, Inc. ommunications, Inc.

ommunications, Inc.

J781 Career Man agernent Consulting & Business Solution, Inc.

305601 297572 305623 91 ·---- ---·- ---------- - ----·- ----· -- -- 182.04 182.04 182.04 16,650.00 ------·-·· ------·- (

Deutsche Knowledge Services Pte Ltd. vs. CIR

Career Management Consulting & Business Solution,

782 92 21,750.00 783 pareer Management Consulting & Business Solution, 93 21,600.00 784 Career Management Consulting & Business Solution, 94 21,600.00 3792 CIBI Information, Inc. 19309 600.00 3793 | Colliers International Philippines, Inc. 11032 - 754.82 J794 Colliers International Philippines, Inc. 10834 151,431.82 3795 | Collicrs International Philippines, Inc. 10979 | 151,431.82.

; J796 Concept One Management Services __ o 219 _ ; 10,178.57 | 3797 | Cravings Food Services, Inc. 7017 5,785.71 3800 | CWC International Corp. : : ~) 27091 5,657,784.63 | 3801 | CWC International Corp. : : 27078 | 249,375.00.

_ 3802 | CWC International Corp. | mit “4,526,227.70 3806 | DB Wizards, Inc. 8989 19,800.00 | ‘Jgo7 | DBWizards, Inc -_ —— 9112 41,417.83 309 | Design & Creative Logic, Inc. | mi 3480 : 4,276.85 3810 | Design & Creative Logic, Inc. 3490 2,251.82 3812 | Design & Creative Logic, Inc. —_ 3479 : 2,673.43 J814 Design & Creative Logic, Inc. ; 3482 2,673.43 3816 | DHL Express Phils. Corp. Last 1,166.35 | 3818 | DHL Express Phils. Corp. 1250014 1,344.20 J820 | DHL Express Phils. Corp. 1250489 4,503.39 3822 | DHL Express Phils. Corp. 1250930 4,634.17 3824 | DHL Express Phils. Corp. 1251050 12,163.75 3827 | DHL Express Phils. Corp. 1251049 5,045.49 3834 | DHL Express Phils. Corp. 1250453 2,044.60 J836 | DHL Express Phils. Corp. 1251558 209.44 3837 | E.E. Black, Ltd. 1351 1,299,882.09 3838 | ELE. Black, Ltd. 1355 2,664,441.69 J840 | Electronic Security Systems Corporation 7727 . - 4,071.43 3841 | Electronic Security Systems Corporation 7733 3,642.86 J849 Exclusive Cars, Inc. . 2073 819.91 1850_| Exclusive Cars, Inc. 2079 1,776.66 | J851 Exclusive Cars, Inc. 2080 3,260.07 3852. | Exclusive Cars, Inc. 2081 3662.02 3853 | Exclusive Cars, Inc. —— 2082 3,162.19 3854 | Exclusive Cars, Inc. 2084 2,762.31 3855 | Exclusive Cars, Inc. : 2085. 505.72 J856 i Exclusive Cars, Inc. : 7 - . 2089 ; iE - 1,324.84 J861 Fxclusive Cars, Inc. 2100 2,946.09 3864 | Exclusive Cars, Inc. 243 2,442.06 J865 | Exclusive Cars, Inc. 7 2114 ; 2,715.57 3866 | Exclusive Cars, Inc. -2136—~Ott—«*YC*CS 367.23 3868 | Exclusive Cars, Inc. 7 [2440 2,356.87 1 3899 Facilities Managers, Inc. 7 : | 7 36677 7 25,253.81 3900 | Facilities Managers, Inc. 36780 | 27,872.23 J901 Facilities Managers, Inc. 36923 47.32 Deutsche Knowledge Services Pte Ltd. vs. CIR J902 Facilities Managers, Inc. 36924 1,746.42 J903 Facilities Managers, Inc. 36925 2,283.53 J904 Facilities Managers, Inc. 36926 320.88 j1212 | Goudie Associates Manila, Ltd. 1401 21,497.14 Ji213 | Goudic Associates Manila, Ltd. _ 1426 L - 42,994.28 J1215 Headstrong Philippines, Inc. _ 7 1043 _ 43,680.00 31216 | Headstrong Philippines, Inc. 1045 | 11,520.00 | 31217 | Headstrong Philippines, Inc. ; 1047 | 23,250.00 | J1218 | I.Systems Integrators, Inc. - 7 717 _ _ 399,167.14 | 31254 International Elevator & Equipment, Inc. 17623 533,571.43 | 31256. | Jones Lang LaSalle (Philippines) Inc. 3405 50,895.00 | Ji257 | Jones Lang LaSalle (Philippines) Inc. _ 3414 270,864.00 31258 | Jones Lang LaSalle (Philippines) Inc. 3406, 48,214.65 31259 | Jones Lang LaSalle (Philippines) Inc. 3464 135,432.00 31264 | Kapient Philippines, Inc. 1088 49,896.00 | 31265 | Kapient Philippines, Inc. 1089 41,580.00 31275 | Lane Moving & Storage, Inc. ~— g0478 it ~ 360.00 ' 31276 | Lane Moving & Storage, Inc. 7 30563. 480.00 Lantro Phils., Inc. . 1874 69,105.80 Lantro Phils., Inc. 1875 4,119,728.59 Lantro Phils., Inc. 1876 8,264.82 Mandarin Oriental Manila 21777 10,800.00 Mc Engincering, Inc. : 5261 ~ 103,243.19 Mc Engincering, Inc. 5263 119,732.14 Mc Enginecring, Inc. 5266 541,071.42 Mc Enginecring, Inc. 5264 2,422,229.74 Mc Engineering, Inc. 5272 3,494,265.27 Micro-D International, Inc. 24647 5,827.63 Micro-D International, Inc. 24615 4,845.80 Micro-D International, Inc. 24562 124,039.93 ) 31293 | Micro-D International, Inc. 24592 40,085.89 31294 | Micro-D International, Inc. 24614 151,640.91 31295 | Micro-D International, Inc. 24648 9208.93 31296 | Monolith Construction and Development Corporation 2448 259,244.85 | J1297 | Monolith Construction and Development Corporation | 2449 - 8,674.47 31298 | No Ka Oi (Philippines) International Inc. 16946 4,933.67 J1299 | No Ka Oi (Philippines) International Inc. 17080 2,466.84 308 |PUT | pwkoR000599041 151.09 31309 | PLDT ; ; PWKORO00596237 : 258.02 31310 | PLDT | PWKORO00596236 486.67 31317 | PLDT - PWKORO00599009 239.40 | 31318 | PLOT _ - PWKORO00599004 | 160.71 | 31320 | PLDT PWKORO00596238 151.09 31321 | PLDT PWKORON0599039 160.71 31324 | PLDT PWKORO00599002 160.71 31325 | PLDT PWKORO00599037 160.71 31326 | PLDT _ PWKORO00599022 _ 160.71 Deutsche Knowledge Services Pte Ltd. vs. CIR Jl329 PLOT PWKOR000599010 239.40 ]1340 PLOT PWKOR000599018 239.40 ]1347 PLOT PWKOR000599036 239.40 Jl349 PLOT PWKOR000599007 389.38 ]1352 PLOT -~~-~---- PWKOR000599032 239.40 ------+~ ~------- J1354 PLOT 239.40 PWKOR000599025 --+- ------- ]1357 PLDT PWKOR000599024 239.40 -- --+--- ]1359 PLDT PWKOR000599000 160.71 ---+~-------+------- J1362 PLDT --·-·· --- PWKOR000596241 31,482.18 --1--- ~~----~- ]1363 PLDT PWKOR000599020 160.71 J1364 PLDT PWKOR000599023 ]1368 PLDT J1369 PLDT -- J1371 PLDT

PWKOR0005990 19

239.36 ~-f--------- ]1372 PLDT PWKOR000596239 8,507.70 --- ---- J1373 PLDT PWKOR000599011 239.40 f------- ---- ]1374 PLOT

PWKOR0005990 16

217.68 --- ---- J1376 PLDT PWKOR000599014 239.40 ]1377 PLOT PWKOR000599006 239.40 Jl378 PLOT PWKOR000599013 239.40 Jl381 PLOT PWKOR000599904 239.40 Jl386 PLOT PWKOR000618366 160.71 Jl391 PLOT PWKOR000618373 239.40 J1398 PLOT PWKOR000619572 217.68 ]1416 PLOT PWKOR000619567 389.38 J1417 PLOT PWKOR000619571 389.38 J1418 PLOT PWKOR000619569 389.38 ]1426 PLOT PWKOR000619568 160.71 ]1427 PLOT PWKOR000624041 160.71 ]1431 PLOT

PWKOR00061836 7

217.68 r---~- J1438 PLDT PWKOR000618369 239.40 ~-- J1453 PLDT

PWKOR00062404 5

16,200.00 ]1454 PLDT PWKOR000624043 19,980.00 J1456 PLDT PWKOR000596240 25,804.97 J1459 Premium Security & Investigation Agency, Inc. 51515 2,890.14 J1461 Premium Security & Investigation Agency, Inc. 51166 2,704.11 J1463 Premium Security & Investigation Agency, Inc. 51474 3,191.70 ----~ J1465 Premium Security & Investigation Agency, Inc. 51477 5,756.52 J1467 Premium Security & Investigation Agency, Inc. 51774 5,756.52 ---~- J1468 Primover Consultancy Services, Inc. 2280 38,640.00 -------- --------- J1473 R.S. Ison & Associates 295 4,800.00 --~------- ------ ]1475 R.S. Bernaldo & Associates 2906 36,000.00 --~---- J1476 Real Form Furniture Shop 161 1,029.60 ]1477 Real Form Furniture Shop 173 4,365.00 ]1478 Regus Centres, Inc.

11424 12,213.00 ]1483 RP Reytas Industries 166 8,357.14 ]1492 Smclair Knight Merz 1197 19,440.00 ( ---------- -------

Deutsche Knowledge Services Pte Ltd. vs. CIR OI:CISION J1493 Sky Cable Corporation ]1500 Solstice Ventures, Inc. ]1501 SOP Printmg House J1502 SOP Pnnting House ]1506 Stagetek, Co.

--------~------ ]1507 Sycip Salazar Hernandez & Gatmaitan -- ]1510 Tempo Services, Inc.

]1511 Tempo Services, Inc.

r----- -- - ]1512 Tempo Services, Inc.

]1513 Tempo Services, Inc.

-- J1514 Tempo Services, Inc.

----t--- ]1515 Tempo Services, Inc.

--- J1516 Tempo Services, Inc.

--~----------~---- J1517 Tempo Services, Inc.

J1518 Tierra International Construction Corporatio n J1519 Trane Philippines J1520 Zero Eight DB Design Services 1--- Svb-tot~l Page 35 of 44

4805 14

3 95 96 33 9 5037 416 412 0 0 -~ 944 --- 41 -------- 94 48,192.00 12,857.14 1,125.00 1,735.71 535.71 --~-------- 2,700.00 --- 2,680.39 -~----- 2,808.67 ----- f-------~--~-- 416 42 418 84 ------- 16 420 420 23 421 368 149 263 26 -·------ 24 99 27 ---- 88 ----- 1 --------- 2,847.95 2,811.86 ~---------- 2,808.20 -- 3,349.34 -- 2,625.62 2,570.85 --~---~-- 432,000.00 ----------- f------- 188,244.00 9,000.00 --------~~ 38,125,23(i.(i7

2. Inpf.Jt V-4 T supported by official receipts date d not within the first q uarter of 2009 J514

ACCRA LAW

J521 A1r2100, Inc.

J522 Air2100, Inc.

J523 Air2100, Inc.

J524 Air2100, Inc.

J525 Air2100, Inc.

J526 Air2100, Inc.

J527 Air2100, Inc.

J528 Air2100, Inc.

J529 A1r2100, Inc.

J530 Air2100, Inc.

-----~- J551 Bayan Telecommunications, Inc. J554 Bayan Telecommunications, Inc. J558 Bayan Telecommunications, Inc. J562 Bayan Telecommunications, Inc. J567 Bayan Telecommunications, Inc. J569 Bayan Telecommunications, Inc. - ]572 Bayan Telecommunications, Inc. ]579 Bayan Telecommunications, Inc. ---+-----'---------------~-~--- ]582 Bayan Telecommunications, Inc. -1--------- ]585 Bayan Telecommunications, Inc. ]588 Bayan Telecommunications, Inc. ]592 Bayan Telecommunications, Inc. 29 359 473 473 473 473 473 473 473 473 473 47 79 80 81 82 83 84 85 86 87 388 ---1---------- 331 599 ----l---~------ 331 582 600 588 584 331 331 331 331 ----- 906 331 907 - - 5,400.00 438.71 129.21 399.63 505.62 131.20 431.42 208.48 104.24 108.45 108.45 ~-----~--- 182.04 -1----------- 182.04 -~ 182.04 --- 182.04 182.04 182.04 182.04 -- -------~----- 331 908 182.04 ----------- ------- ----- 331 909 182.04 ------ ,----------------~-~ 331 910 182.04 ----- 331 .911 182.04 ----f------------ 583 182.04 ------- 331 331 350 350 331 350 -- J595 Bayan Telecommunications, Inc. .912 182.04 J599 Bayan Telecommunications, Inc. 063 182.04 J603 Bayan Telecommunications, Inc. 064 182.04 J606 Bayan Telecommunications, Inc. 913 182.04 ]610 Bayan Telecommunications, Inc. 065 182.04 -- ---- -------------

Deutsche Knowledge Services Pte Ltd. vs. CIR

J613 J616 J621 J625 J628 r-----~ ]633 Bayan Telecom Bay an Telecom Bayan Telecom Bayan Telecom Bayan Telecom munications, Inc.

mun1cations, Inc.

mun1cations, Inc.

mun1cations, Inc.

331914 331592 331590 331915 mun1cations, Inc.

331591 !----~~~ ~--~~-~~~~- ---~- -- -~ -~ - ----------- 182.04 182.04 182.04 182.04 182.04 -------·--- -----·-··------ Bayan Telecom -1------------munications, Inc. 331598 182.04 J637 ----~ J640 ---- J644 r----- ]647 t---· J648 ~--~ J652 Bayan Telecom _,_ Bayan Telecom Bayan Telecom Bayan Telecom Bayan Telecom munications, Inc.

------~-~-------------~- munications, Inc.

munications, Inc.

331596 182.04 -----------·- ---------- ---------- ----------- 331595 182.04 ------------- --------------------------- 331593 182.04 ---~---------------------------- -- -·--- ------------- ---~------------~- munications, Inc.

331916 182.04 munications, Inc.

331917 182.04 ------ ----------------- - ------------------------ ---------------- ---~ Bayan Telecom r- -!-----~--~ munications, Inc.

331597 182.04 -----~-------------~---·---- -· ~-~------·--- ----~-------·--- J653 r------ J659 ~------ J790 ---~~ J832 ~--- ]839 r----- ]909 J915 J977 J984 Jl007 J1012 Jl015 Jl092 Jll03 Jll06 Jll80 Jl221 J1227 J1251 Bayan Telecom munications, Inc. 331918 269.22 Bayan Telecom munications, Inc. 331919 ~~-~------~---------------~~----·-· -·-·-- -------------·-----· Chef Concepts I ncorporated 15057 --------------~---------~--~-~---·---------- DHL Express Phi Is. Corp. 1308240 -------~------------~- ----------·--- --- ---------~-------~---- -····------ ·-------------- Electronic Secur ity Systems Corporation 7809 964.29 -----------------~--------------~~- -------·---··--··----- ·-----·--------- FMR Corporatio n FuJi Xerox Philip pmes, Inc. Inc.

Globe Telecom, Globe Telecom, Globe Telecom, Globe Telecom, Globe Telecom, Globe Telecom, Globe Telecom, Globe Telecom, Globe Telecom, Innove Commu Innove Commu Innove Cornmu Inc.

Inc.

Inc.

Inc.

Inc.

Inc.

Inc.

Inc.

nications, Inc.

n1cations, Inc.

5960 89299 GALXAF05083274 GALXAF05083270 GALXAF05083265 GALXAF05083268 GALXAF05083273 GALXAF05083266 GALXAF05083275 GALXAF05083267 1,210.71 64,807.35 204.00 204.00 204.00 204.00 128.75 204.00 204.00 204.00 GTWR£3005083272 204.00 2168 138.75 2167 138.75 -·-- ~----------- -- -----~-------· ----·--- -t----~~-- nications, Inc.

nications, Inc.

2166 138.75 Jl252 J1262 J1263 Jl266 1------- J1274 r---- ]1283 --~-~ J1486 J1487 J1503 ]1504 1----- ~----- Innove Commu 2165 138.75 Jones Lang LaS aile (Philippines) Inc. 3550 135,432.00 --- ~--------~------- ----~-------- Jones Lang LaS aile (Philippines) Inc. 3552 109,859.28 --~~--~-~ ------------ ----- Kapient Philippi nes, Inc. Storage, Inc.

1091 20,700.00 --------- ~------------- -------~--- Lane Moving & 80726 f--~--~~-~----~-----~~---~----- ---~-------- Loxon Philippin es, Inc. Santa Fe Mavin g and Relocation Services, Phils., Inc. Philippines), Inc.

SAS Institute ( t----~--~ -~- SOP Printing H ouse 20408 407 ---~--~------------- --~-------~- SOP Printing H ouse Sub-tot~ I 900.00 787.50

3. Input VAT supporte d by documents other than invoices or official receipts J396/7 J409 J424 J431 National Book National Book National Book National Book Store SSRDATED1/28/09 Store Store Store -- SSRDATEDl/ 14/09 SSRDATEDl/27/09

SSRDATED2/ 1/09

-~----------~-~- -- -~ --- -------~------- 5,343.00 5,345.43 5,356.88

Deutsche Knowledge Services Pte Ltd. vs. CIR Dt:CISION J442 National Book J452/3 National Book Store Store Store J467 National Book Jl305 PLOT Jl306 PLOT ]1307 PLOT -----------------~------- J1311 PLOT 1--- J1312 PLOT ----· 1---------- ]1313 PLOT f-·----- ]1314 PLDT J1315 PLOT Page 37 of 44 SSROATE02/3/09

SSROATE02/ 19/09

SSROATED 1/2/09

7160 4255 5,302.02 5,351.57 5,320.15 803.66 239.40 1----~ 6500 -·-·--- 1923 ----·~-----~ f.------ 9544 239.40 ------------------e-.------------- 9539 239.40 -- ---f----- 5900 581.12 -------~--- t------- 6784 1 -------·-------~----~------- - -------~-------- - J1316 PLOT r------- 1--------~- J1319 PLOT ---------------------·- ]1322 PLOT 1-------f-·----- ]1323 PLOT f------- ]1327 PLOT ---- J1328 PLOT ]1330 PLOT Jl331 PLOT J1332 PLOT Jl333 PLOT Jl334 PLOT Jl335 PLOT Jl336 PLOT Jl337 PLOT Jl338 PLOT J1339 PLOT Jl341 PLOT Jl342 PLOT Jl343 PLOT t----~-- J1344 PLOT - J1345 PLOT J1346 PLOT J1348 PLOT ]1350 PLOT J1351 PLOT ----1----------------- ]1353 PLOT ]1355 PLOT ]1356 PLOT 6782 1 ---~-------- ---~--- 3947 --------------f.------ 9537 --------------- 3945 ---- 4941 ------~ ~~- 9507 --- 9538 3946 9036 9510 9033 9032 9034 3951 5902 5899 5901 3948 3949 3952 ------- f-.-- 3950 5903 ---~------ ~------ 9545 --~--------- --- 9541 9542 -------- 1---~-- 9527 6400 -- 9511 239.40 239.40 2J 7.68 239.40 239.40 160.71 160.71 239.40 526.02 510.28 573.25 510.28 518.16 518.15 518.16 541.77 ------·-------------------\- ]1358 PLOT ]1360 PLOT 1----·-t---· ~--------- ]1361 PLOT Jl365 PLOT J1366 PLOT Jl367 PLOT J1370 PLOT J1375 PLOT -- 9509 3848 ----~---~ 3944 -----~--- 3846 9543 6059 3845 6470 ----------------------- C------ -- f----- ----- 160.71 160.71 217.68 239.40 239.40 239.40 - ~17.68_ {

Deutsche Knowledge Services Pte Ltd.

vs. CIR

31379 | PLOT 9535 239.40 31380 | PLOT 9536 239.40 31382 | PLDT 3844 16,200.00 31383 | PLDT 3847 19,980.00 31384 | PLOT - 6476 239.40 | 31385 | PLOT 4942 __ 160.71 31387 | PLDT } 6477 151.09 31388 | PLDT : 3838 ; 160.71. 31389 | PLDT 7 6493 239.40 | 31390 | PLOT : 1264 964.29 31392 | PLDT 7 : ~ 6399 160.71 PLDT” _ _ 4482 7 160.71 | lpior 1442 239.40 PLOT 3833 239.40 PLOT P3832 89.40 | PLDT 7 | 6495 239.40 PLDT 6478 239.40 PLDT 6471 239.40 PLDT 6475 160.71 PLDT 6497 160.71 PLOT 6469 239.40 PLDT 3840 239.40 PLDT 3836 239.40 PLDT 6403 239.40 PLOT 3843 239.40 PLOT 6487 239.40 PLOT 6483 239.40 PLOT 4943 239.40 PLOT 3839 239.40 PLOT _ 3841 239.40 PLDT 6694 239.40 | PLDT 6485 239.40 PLDT 6467 151.09 PLDT 6473 239.40 PLDT _ 6468 239.40 PLOT 6481 239.40 PLDT - ; 3842 239.40 PLOT i 6472 239.40 PLDT 6480 ~~ 160.71 PLOT — 6488 160.71 PLDT / 4944 33,815.43 PLOT : 6489 160.71 PLDT 6486 ~ 160.71 | PLDT 1297 239.40 PLDT 6401 239.40 PLOT 1441 239.40

PLDT 6492

217.68 | CTA Case NQ. 8243 Deutsche Knowledge Services Pte Ltd. vs. CIR Dl:CISION J1436 PLOT J1437 PLOT 11439 PLOT 11440 PLOT J1441 PLOT J1442 PLOT 6474 4744 6490 6498 4510 -~ 1-------- 6695 ----------~------1--------- J1443 PLOT 6402 --------- -~ --~-----~- J1444 PLOT 6491 ---------- J1445 PLOT 3837 J1446 PLOT 6496 ----- J1447 PLOT 6479 ------1--- --- J1448 PLOT 6693 -----· ----~---- -~------ Jl449 PLOT 3835 -- -------~----·-- J1450 PLOT 6484 - -----~---- J1451 PLOT 6483 ----- J1452 PLOT 6494 -----~-- J1455 PLOT 7135 J1457 PLOT 6783 J1458 PLOT 3834 J1494 Smart Communications, Inc. 17 ]1497 Smart Communications, Inc. 16 J1498 Smart Communications, Inc. 20 Sub-total

4. !nput VAT SU(Jported by ZERO RA TEO pf(icial receipt J1214 Great Year Industries Corporation Manila 530 Sub-total

5. Input VAT supported by TIIV official receipts J1280 Leaves & Branches Enterpnses 3714 J1281 Leaves & Branches Enterprises 3747 J1282 Leaves & Branches Enterprises 3895 --~ --------- Sub-tot1:1l

6. Input VAT supportfJd by official r(!ceipts aot in the name of petitioner J1301 P&L Resources, Inc.

3752 - Jl302 P&L Resources, Inc.

3753 --r--- J1303 P&L Resources, Inc.

3754 -~--r-- J1304 P&L Resources, Inc.

3755 ----- Sub-total -~---- ----- Page 39 of 44 239.40 239.40 239.40 8,303.31 160.71 ---------- --- 239.40 239.40 217.68 217.68 239.40 239.40 239.40 239.40 239.40 239.40 239.40 19,980.00 308.18 217.64 192.86 308.57 494.74 200,241.(}5 102,464.20 1 (}2,464.20 7,108.93 7,108.93 4,714.29 18,932.15 --+------ 2,734.29 4,191.43 5,776.07 --+------- 4,932.86 17,634.65

7. Input VAT supported by official receipts imprinted with the phrase "not v. a lid spurce of input tax" J1471 Product PrOviders, Inc. 24993 J1472 Product Providers, Inc. 25163 J1495 Smart Communications, Inc. 6776 J1496 Smart Communications, Inc. 4589 J1499 Smart Communications, Inc. 6777 Sub-toti11

8. Input VAT on purch1:1ses of services without suppprting official receipts I 6-3 Property Holdings, Inc: I 0647 1,128.00 1,128.00 375.00 375.00 192.86 3,198.86 140,066.10 .c

Deutsche Knowledge Services Pte Ltd. vs. CIR Pt:CISlON

--=-~--~~r-~·~--~---------_-_--~----- =t 7,776.00 6-3 Property Holdings, Inc. ----~--- - 6-3 Property Holdings, Inc. - 6-3 Property Holdings, Inc. -~----- -------~-~----· 6-3 Property Holdings, Inc. - Cravings Food Services, Inc. - CRV Aircon & Plumbing Services - DHL Express Phils. Corp. DHL Express Phils. Corp. - DHL Express Phils. Corp. DHL Express Phils. Corp. - Dig1tal Telecommunications - Digital Telecommunications - Digital Telecommunications - Digital Telecommunications - Dig1tal Telecommunications - Fuji Xerox Philippines, Inc. - Globe Telecom, Inc.

- ~~--~-- - Globe Telecom, Inc.

1-- -~----~-- - Globe Telecom, Inc.

-~-·---- - Globe Telecom, Inc.

--- -~----- - Innove Communications, Inc. - Innove Communications, Inc. - Innove Communications, Inc. - Innove Communications, Inc. - Innove Communications, Inc. 1----~ -- - Maxicare Healthcare Corp. - Maxicare Healthcare Corp. - Maxicare Healthcare Corp. - MMLDC Foundation, Inc. Philippine Vendmg Corporation PLDT PLDT - Prem1um Security & Investigation Agency, Inc. - Premium Security & Investigation Agency, Inc. - R.S. Bernaldo & Associates - - SGV & Co.

- Sinclair Knight Merz - Smart Communications, Inc. - I Smart Communications, Inc.

- I

Smart Commuoieatioos, Joe. - art Communications, Inc. Sub-total -~--- Grand Total --- ~--- -- --- --- - - -· ------ -- - -------------- -- ----- of the total 7098 1027 1250453 1250931 1251021 1308241 86608 GTWRBD08027907 8022718 8027798 6036089 6355190 6355561 6187557 -----~--~ 6184053 6354280 56804 65148 56018 8,678.57 13,676.79 100.80 6,251.80 3.60 967.60 189,017.28 189,017.28 189,979.20 193,586.40 193,626.48 40,529.45 204.00 -~---·-- 204.00 -~----~----- ---·---~~ 15729 17,098.20 50917 51153 2970 53471 1196 8 26 28 27 ---~--~~-~ 5,335.47 8,507.70 31,482.18 2,854.21 3,709.46 36,000.00 289.29 19,440.00 558.71 375.00 192.86 535.71 2,15~115.86 p 41,000,124.19 Moreover, P58,385,248.41 part is the amount input of VAT claim of Pl,500,608. 79,<

Deutsche Knowledge Services Pte Ltd. vs. CIR Dt:CISION representing petitioner's input VAT on purchases of capital goods exceeding Pl,OOO,OOO.OO. Pursuant to Section 110(A) of the NIRC of 1997, as amended, as implemented by Section 4.110-3 of RR No. 16-2005, input VAT claim on capital goods purchases attributable to zero-rated sales may be claimed either in full during the month of acquisition, or spread over a period of time, depending on the aggregate acquisition cost of the capital goods in the calendar month. If the aggregate acquisition cost exceeds Pl,OOO,OOO.OO, the claim for input tax should be spread over 60 months or the estimated useful life of the capital goods, whichever is shorter.

On the other hand, if aggregate acquisition cost does not exceed P1,000,000.00, the total input taxes shall be allowed as credit/refund in the month of acquisition. Thus, while petitioner was able to substantiate the amount of P1,472,164.08 out of the total claimed input VAT of P1,500,608. 79 on capital goods purchases exceeding P1,000,000.00, only the amortization for the first quarter of calendar year 2009 in the amount of P48,902.99 may be claimed by petitioner as valid input tax credits for the same taxable quarter, as determined below: Dale of A mounl or Monthly Input Tax Exhibit Supplie Invoice p Input VAT f..~~-- 2,078.~7 -~- / 018.~~ 91,90~.86 Credit 59 Amortization B13 Accent Micro Techr --~ lQQ!Qgies, In c.

19 Jan 09 J344 ~------+--Accent Micro _Tech ~ogies,ln nologies, 1 n 1oloqies, Ir lOIOgies, In nologies, In c.

19-Jan~09 J34~ B16 ---- J34/_ J348 r--1319 J3~0 J3~1 B52 1------ J3~3 _1}51_ J3~~ J3~6 _ _n_r;7__

J3~8 __

J3~9 B60 f--.:!36 I J367 Accent Micro Tech c.

Accent Micro Techr I C.

Accent Micro Tech1 c.

Accent Micro Tech c.

Accent Micro Techr I C.

-------- Accent Micro Tech c.

Accenl Micro Tech1 c.

noiQ~L In lologies, In 1ologj~Ir Accent Micro Techr I C.

~-~~~!!_btotaL __ Accent Micro Tech c.

Accent Micro Tech ---~~----------~- ~- 19-Jan-09 . 20 Jan 09 /0-Jan-09 70-Jan-09 26 Jan 09 ----- /9-Jan-09 /9-Jan-09 29 Jan 09 3-Fcb-09 _ _l£~~ 09 __ f--Ac~n_l_ MiC_!"_Q Tech_1 c.

~-Fcb-09 ____ o::.___ nologics, In noloqies, !!:

loiQg_ics, _ _!_n _ nologies, In noiO!Jies, Ir nologics, J n __ nologics, In nolo!~_!!:_ nolog!CS, In nologics, Jn Accent Micro Tech c.

1 0-Fcb-09 Accent Micro Tech --------~~-~ ~~:,____ t---1-Q Feb 09 _ ~ccenl Micro Tech c.

11-Fcb-09 Accent Micro Tech c.

19-Fcb-09 Accent Micro Tech 1<:_,__ ~9 Feb 09 +- Accenl Micro Tech c.

19-Fcb-09 Accent Micro Tech c.

/~-Fcb-09 ------~-- p 31.61 p 103.93 ··---~-- -~---~- __ _li:§i__ - ---- _ _!Q3 9::L ~----~----- _______ 8.0'"i -----~----~:1..!_') 8.0~ /4.1~ -- --~---------- ~----~- ~4 61 163.8/ 1-----!

_____ l'l~ill.Q,_QQ ___ _____1_26b~~- _____ __2J87.'"i0 _ ----~l:'!L~~- ------~c~ -----~-l~L!i 4,8/1.43 80.36 /41 .0/ -----·-__ ;-g,_!__~-83 ___ _l,!!_!i_Z.11 ----~61.29. -~-~---19_2,86 --- 2, ~82,30~,!Z _____ .1_09,!!~6.8§. --~---- ___ !~,493.84 31 ,/~0 00 3,1~0.00 6/.~0 1/~.00 1 J.62,61_b83 ____ !o3,'"ilZJ_1_~ ___ b_Z25,29 __ '"i,1'"iQ~Z__ +-----_ __2~2~1..:'!2. _____ J.,478c~L ~ ---~L!.'!__ ______ !!i22 6,/~0 00 1~0.00 1/ )0 1)00 ____ S!,2'lQ,_QQ~ ---·~-~7'lQJ!Q_ ______ 12,')0 _______ 25j!Q 1 ---- ------ ---·-- _J_~9,3h00 ~-----!§.J,!_Z~OO ~-2Llli~~ ____ 2.,'!JL~0_ ,Jit1~-f ~ ,~,;;;~f--j~a --~~j~ ~ ~ 9 This is based on the estimated useful life of 60 months since the Court cannot determine the actual life of the capital goods.

Deutsche Knowledge Services Pte Ltd. vs. CIR

3363

Accent Micro Technologies, Inc. 25 Feb 09 35,714.25 | 4,285.71. 71.13 + 142.86 J364 Accent Micro Technologies, Inc. ?/-Feb-09 1,857.17 | 2,147.86 3d./] /1.43 J365 Accent Micro Technologies, Inc. ?/-Feb-09 1,651,/85./5 198,214.29 3,303.57 6,607.14 _ Subtotal . ; 7,018,851.84 — 842,262.22, 28,075.41 | J366 Accent Micro Technologies, Inc. | 3-Mar-09 32,946.42? 3,953.5/ | 65.89 | 65.89 J36/ Accent Micro Technologies, Inc. 13-Mar-09 455,357.17 54,64? 86 910.71 910./1 J368 Accent. Micro Technologies, Inc. | 13 Mar 09 2,125,000.00 __ 255,000.00 4,250.00 4,250.00 J369 Accent Micro Technologies, Inc. 1/-Mar-09 | 53,5/1.47 | _ 6,478.57 | 107.14 | _10/.14 Subtotal 2,666,875.01 | 320,025.00 5,333.74 Grand Total P 12,268,034.02 |P 1,472,164.08 P 48,902.99 Accordingly, the unamortized portion of the input VAT in the amount of P1,423,261.09 (P1,472,164.08 less P48,902.99) shall be deducted from petitioner’s input VAT claim.

In sum, petitioner’s substantiated input VAT amounts to P10,795,843.81, and only the input VAT amount of P2,701,413.70 is attributable to petitioner's valid zero-rated receipts of P289,872,951.07, as computed below:

Inpul VAT claimed for Refund Less: Disallowances P 58,385,748.41 Per ICPA Findings (Annex A.1 to A.4) — }.

= “| P5,166,019.32 | Per this Court's Findings Input VAT on Purchases of Goods and Services 7 P41,000,127.19 | Unamorlized Input VAT on Capital Goods exceeding P1M 1,423,761 .09 42,493,385.78 47,589,404.60 Valid Input VAT P 10,795,843.81 Multiply by Valid Zero Rated Receipts 7 289,872,951.07 Divided by Total Declared Reccipts __ 1,198,439,045.31 Valid Input VAT attributable to valid zero-rated receipts _ a _ P 2,701,413.70 However, since petitioner did not submit the invoices/official receipts proving the existence of its reported input VAT from previous quarter, its output VAT liability for the first quarter in the amount of P567,254.03 shall be offset against the substantiated input VAT attributable to VATable receipts in the amount of P44,053.43, and to zero- rated receipts in the amount of P523,200.60, as herein determined:

VAT Allocation:

Per VAT Returns P4,727,116.92 | VATable Sales | = Zero-Rated Sales _ Total | _P1,153,711,928.39 21, 158,430,00531 | Valid Input VAT Allocation 44,053.43 , 10,751,790.38° 10,795,843.81 Output VAT Allocation 44,053.43 523,200.60" 9 p4,727,116.92/P1,158,439,045.31 x P10,795,843.81 ®' 21, 153,711,928.39/P1,158,439,045.31 x R10,795,843.81 567,254.03 | 4 Deutsche Knowledge Services Pte Ltd. vs. CIR Pt:CISION Hence, only the input VAT of P2, 178,213.10, as computed below, may be refunded to petitioner: Valid Input VAT attributable to valid zero-rated receipts Less: Output VAT allocated to zero-rated receipts P 2/0L413.70 523,200.60 ~~f~!l!i~lli~JnpytV~T _____ _ .... __ P~~J7~t~!~·!Q. Even though the claimed input VAT was carried over by petitioner in the succeeding Quarterly VAT Returns in 200963 and 2010 64 , the same remained unutilized until it was deducted65 from petitioner's total available input tax in the fourth quarter of 2010. Consequently, the subject claim no longer formed part of the excess input VAT of P264,856,936.5266 as of the fourth quarter of 2010 which was carried over/applied to the succeeding first quarter of 2011. 67

WHEREFORE, premises considered, the present Petition for Review is hereby PARTIALLY GRANTED. Accordingly, respondent is hereby ORDERED TO REFUND OR TO ISSUE A TAX CREDIT CERTIFICATE in favor of petitioner in the amount of P2,178,213.10 representing the latter's unutilized input VAT attributable to its zero-rated sales for the first quarter of 2009. 50 ORDERED.

62 P567,254.03- P44,053.43 63 Exhibits "D", "E", and "F". 64 Exhibits "G-1", "H", and "I". 65 Line 230, Exhibit "J-1-a". 66 Line 27, Exhibit "J 1-a". 67 Line 20E, Exhibit "K". GiLt N. M0LA..~ C~ CJt:LITO N. MiR'DARO-CiRULLA Associate Justice

Deutsche Knowledge Services Pte Ltd. vs. CIR

WE CONCUR:

ROMAN G. DEL ROSAR!O Presiding Justice CERTIFICATION Page 44 of 44 Pursuant to Article VIII, Section 13 of the Constitution, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court's Division. ROMAN G. DEl ROSAR!O Presiding Justice Chairperson, 1st Division