THE Court of Tax Appeals partially granted a P3.1-million value-added tax (VAT) refund to the Philippine branch of Asurion Hong Kong Ltd.-Regional Operating Headquarters from P21.6 million, citing documentary deficiencies.
The 67-page decision, penned by Associate Justice Maria Belen M. Ringpis-Liban, ordered the Bureau of Internal Revenue (BIR) to refund Asurion P3.16 million, representing its excess and unutilized input VAT for 2018.
The technology company originally asked for a refund of P21.6 million, but the tax court denied the company the full amount due to a lack of proper documentation.
The tribunal said that Asurion met the legal requirements for a partial refund despite being unable to substantiate a portion of its declared zero-rated sales.
“Strict compliance with substantiation and invoicing requirements is necessary considering VAT’s nature and VAT system’s tax credit method, where tax payments are based on output and input taxes and where the seller’s output tax becomes the buyer’s input tax that is available as [a] tax credit or refund in the same transaction,” the decision publicized on Sept. 10 read.
“It ensures the proper collection of taxes at all stages of distribution, facilitates computation of tax credits, and provides accurate audit trail or evidence for BIR monitoring purposes,” it added.
The respondent, BIR, argued Asurion failed to justify its claim for a refund, citing incomplete documentation and the submission of photocopied invoices and receipts.
It added the taxes paid and collected are presumed to have been made under the laws and regulations, making them nonrefundable.
In defense, Asurion said its sales of services to clients outside the country qualified for zero-rated VAT status and the input VAT it had incurred should be refunded.
The tech firm refuted BIR’s claims that it did not provide the necessary documents to support its request. — Chloe Mari A. Hufana
