The Court of Tax Appeals (CTA) has denied the appeal of Chevron Holdings Inc. (formerly Caltex Asia Ltd.) for a tax refund amounting P177 million, representing alleged input value-added tax (VAT) in 2008.
In the case of Chevron Holdings Inc. v. Commissioner of Internal Revenue, the CTA en banc ruled the oil firm failed to substantiate its claim that the services it rendered were zero-rated transactions and, thus, any input VAT incurred in rendering those services may be refunded.
Chevron Holdings is a foreign corporation licensed to do business in the Philippines as a regional operating headquarters and renders services to its affiliates and subsidia-ries or branches in the Asia-Pacific and the North America regions.
The oil firm claimed that the services it rendered to its affiliates, pursuant to service agreements that were presented to the court as evidence, were zero-rated VAT transactions and, therefore, input VAT incurred in providing the services can be refunded.
It argued the transactions qualified as zero-rated VAT transactions, because the recipients of those services were proven to be outside of the Philippines when the services were performed.
“In short, the petitioner justifies that it is the fact that the customer is located outside the Philippines when the services were performed that is relevant, regardless of whether the customer is engaged in business
or not,” the CTA summarized
Chevron’s arguments.
But the CTA said the petitioner was not able to prove through evidence that the transactions were, indeed, zero-rated VAT transactions.
Chevron presented as documentary evidence the Securities and Exchange Commission’s (SEC) Certificates of Non-Registration of Corporation/Partnership of its clients, service agreements, articles of incorporation of its clients and printed screenshots of the United States SEC for company filings of Chevron Corp. to prove that the
recipients of services it rendered were nonresident foreign corporations doing business outside
the Philippines.
However, the CTA en banc upheld the Special Third Division that each of the said documents, “standing alone, is inadequate to prove that the recipient of the services rendered by petitioner is not doing business in the Philippines and that said entity is outside the Philippines.”