[UPON FILING BY THE TAXPAYER OF HIS COMPLETE DOCUMENTS TO SUPPORT HIS APPLICATION, OR EXPIRATION OF THE PERIOD GIVEN, THE CIR HAS 120 DAYS WITHIN WHICH TO DECIDE THE CLAIM FOR TAX CREDIT OR REFUND] [AMORTIZATION OF INPUT VAT ON DEPRECIABLE CAPITAL GOODS WITH AGGREGATE ACQUISITION COST OF MORE THAN PHP 1 MILLION FOR THE MONTH OF PURCHASE DOES NOT DEPRIVE THE TAXPAYER OF ANY TAX CREDIT, BUT MERELY DELAYS THE CREDITING OF THE SAME BY SPREADING IT OUT OVER THE AMORTIZATION PERIOD]

Commissioner of Internal Revenue (CIR) and Taganito Mining Corporation (TMC) filed their separate Petitions for Review on Certiorari seeking the reversal of the CTA EN Banc’s earlier Decision and Resolution affirming the Decision of CTA Division ordering CIR to refund or issue a Tax Credit Certificate (TCC) in favor of TMC. CIR contended that the judicial claim of TMC was prematurely filed. The controversy lies in the 120+30 day period, with the CIR insisting that the 120-day period had not commenced at all because TMC did not submit the complete documents. In Total Gas case, since Total Gas did not receive any notice from the BIR that its submitted documents were in any way inadequate, the Court found that Total Gas had submitted complete documents in support of its claim on August 28, 2008 and started counting the 120-day period from said date. Here, TMC is deemed to have already submitted its complete documents together with its administrative claim on December 1, 2009. Similar to Total Gas, the BIR did not give any notice to TMC that it lacked supporting documents and/or that TMC needed to submit additional documents. As the Court also declared in Total Gas, such written notice from the taxing authority is essential. Hence, the 120-day period for the BIR to act on the administrative claim of TMC commenced to run on December 1, 2009, and expired on March 31, 2010. Given the inaction of the BIR by the end of the period, TMC had 30 days from March 31, 2010, or until April 30, 2010, to file its judicial claim. TMC then timely filed its Petition on April 21, 2010. On the other hand, TMC asserted that CTA En banc committed error in affirming the CTA Division ruling that the refund granted to a 100% zero-rated taxpayer of its input tax on depreciable goods amounting to more than P1 Million is subject to amortization. In ruling, the Court held that TMC is not deprived of any of the input tax attributable to its zero-rated sales when the amount of tax refund or credit granted to it for the input VAT on depreciable capital goods attributable to its zero-rated sales, with aggregate acquisition cost exceeding Php 1 Million for the month of purchase or importation, is amortized for 60 months or the estimated useful life of the capital goods, whichever is shorter. Ultimately, TMC will still be able to receive the full amount of the input VAT granted as tax refund or credit by the end of the amortization period. Consequently, the Petitions were both DENIED for lack of merit. [COMMISSIONER OF INTERNAL REVENUE VS. TAGANITO MINING CORPORATION, G.R. NOS. 219630-31 & TAGANITO MINING CORPORATION VS. COMMISSIONER OF INTERNAL REVENUE, G.R. NOS. 219635-36, DATED DECEMBER 7, 2021, UPLOADED MARCH 23, 2022]

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A HOLDING COMPANY WHICH IS NOT A BANK OR FINANCIAL INSTITUTION IS NOT LIABLE FOR LBT

Petitioner City of Makati and the City Treasurer of Makati City filed a Petition for Review on Certiorari assailing the earlier Decision and Resolution of the Court of Tax Appeals (CTA) En Banc ordering the refund of erroneously paid or illegally collected Local Business Tax (LBT) on dividends and interest income in favor of the Respondent Metro Pacific Investments Corporation. Petitioner argued that Respondent is clearly engaged in activities enumerated in Sec. 3A.02(h) of the Revised Makati Revenue Code (RMRC), thus, subject to LBT. On the other hand, Respondent countered that the imposition of LBT should be consistent with the RMRC's definition of a holding company as a controlling company that has one or more subsidiaries and confines its activities primarily to their management. In ruling, the Court held that Petitioner may not impose business taxes on the Respondent’s dividend and interest as there is no showing that it is a bank or financial institution or engaged in similar investment and financial activities. With the failure of Petitioner to justify the imposition of LBT on Respondent’s income on dividends and interests, the latter is clearly entitled to a refund of the erroneously paid LBT. Thus, the Petition was DENIED for lack of merit, and the earlier Decision and Resolution were AFFIRMED. [CITY OF MAKATI & THE CITY TREASURER OF MAKATI CITY VS. METRO PACIFIC INVESTMENTS CORPORATION, G.R. NO. 241796, NOVEMBER 11, 2021, UPLOADED MARCH 23, 2022]

TAX REFUNDS, LIKE TAX EXEMPTIONS, ARE CONSTRUED STRICTLY AGAINST THE TAXPAYER

Petitioner Commissioner of Internal Revenue filed a Petition for Review on Certiorari alleging that Respondent Macquarie Offshore Services Pty. Ltd. failed to prove that MFHL, the recipient of its services, was doing business outside the Philippines so that such sale of services would qualify as zero-rated transactions. On the other hand, Respondent countered that it has presented more than enough proof to show that its client MFHL is a foreign entity doing business outside the Philippines and the CTA had correctly considered its evidence in their totality. In ruling, the Court held that with both the CTA Division and the CTA En Banc, in this case, giving weight and credence to Respondent's documentary evidence as sufficient proof that MFHL is an NRFC, the Court shall not disturb such finding, absent any showing of grave abuse of discretion. Hence, the Petition was DENIED for lack of merit. [COMMISSIONER OF INTERNAL REVENUE VS. MACQUARIE OFFSHORE SERVICES PTY LTD-PHILIPPINE BRANCH, G.R. NO. 225 169, DATED OCTOBER 6, 2021, UPLOADED MARCH 11, 2022]

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