The Court of Tax Appeals (CTA) has denied the petition of Foundever Philippines Corporation, a firm engaged in outsourced call center services, which sought P13 million tax refund from the Bureau of Internal Revenue (BIR) for unutilized input value-added tax (VAT) in 2016.
Foundever, formerly known as Sitel Philippines Corporation, asked the BIR to refund or to issue tax credits for unutilized input VAT arising from its domestic purchases of goods other than capital goods, services, and capital goods exceeding P1 million for 2016 in the amount of more than P13 million.
On March 21, 2019, the BIR informed Foundever that its claim was denied. Foundever then raised the issue to the CTA in a Petition for Review filed on April 26, 2019. However, the CTA’s first division denied its petition for lack of merit since Foundever failed to establish that it was a VAT-registered entity and that it was engaged in zero-rated or effectively zero-rated sales.
The CTA first division said that Foundever generated sales in its Palawan site, and it should have been registered with the BIR as a branch and not a facility.
Foundever elevated the case before the CTA as a full court (en banc). It insisted that is a VAT-registered entity and that it has complied with all requisites for its claim for refund. Foundever added that it properly registered its Palawan site as a facility since it is merely a "cost center" that incurs production costs but does not actually generate any sales.
But the CTA en banc was not convinced. "After a thorough examination of the records of the case and the parties' arguments, we find no cogent reason to deviate from the First Division's actions in petitioner's prior Petition for Review," it said.
It reiterated its first division ruling that Foundever’s Palawan site should be changed into a branch from a facility. "All told, we find no error with the First Division's conclusions. For the purpose of the instant refund claim, petitioner's Palawan site cannot be considered validly VAT-registered," it said.
The 27-page decision was written by Associate Justice Jean Marie A. Bacorro-Villena with the concurrence of Associate Justices Ma. Belen M. Ringpis-Liban, Catherine T. Manahan, Maria Rowena Modesto-San Pedro, Marian Ivy F. Reyes-Fajardo, Lanee S. Cui-David, Corazon G. Ferrer-Flores, and Henry S. Angeles.