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Manila Bulletin devider Philippines devider National devider CTA denies P25M tax refund sought by outsourced call center firm

CTA denies P25M tax refund sought by outsourced call center firm

Published Oct 28, 2023 02:46 am

The Court of Tax Appeals (CTA) has denied the petition filed by a firm engaged in outsourced call center services for a refund of P25.3 million in allegedly overpaid taxes in 2017.

Denied was the petition filed by Foundever Philippines Corporation, formerly Sitel Philippines Corporation) against the commissioner of the Bureau of Internal Revenue (BIR) which rejected the firm's administrative claim for refund.

In seeking the refund, Foundever told the office of the Value-Added Tax Credit Audit Division that the firm set up various sites in different locations within the Philippines and registered these as a "facility" with the BIR. 

It said the sites were intended to be a place where its contact center agents would be located and would perform contact center services, and no invoices or official receipts were being issued in these sites.

Its claim for refund was denied on Nov. 4, 2019.  It then filed a petition for review before the CTA.

In denying the petition, the CTA's special third division cited Section 9.236-1(a) of Revenue Regulation (RR) No. 16-2005, which states that registration must be made for every separate and distinct establishment or place of business.

"The same regulations define 'separate or distinct establishment' as any 'branch or facility where sales transaction occur.' By 'branch,' it means 'a fixed establishment in a locality which conducts sales operation of the business as an extension of the principal office,'" the CTA said.

The tax court pointed out that Foundever was non-compliant with the provisions of the said law and BIR regulations. 

"To the Court's mind, it was erroneous for the petitioner to limit the definition of 'conducting sales activity' to the issuance of invoices and official receipts, which is allegedly being done solely in its main office, when the primary revenue generating activities of the company are extended to its sites," it stressed. 

The 32-page decision was written by Associate Justice Maria Rowena A. Modesto-San Pedro with the concurrence of Associate Justices Ma. Belen M. Ringpis-Liban and Corazon G. Ferrer-Flores.

Related Tags

tax refund Court of Tax Appeal Call Center court case court of tax appeals
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