The Court of Tax Appeals (CTA) has junked the petition filed by GHF PTY Ltd, a multinational corporation, which asked the Bureau of Internal Revenue (BIR) to refund P46.7 million in excess and unutilized creditable witholding taxes (CWT) paid in 2017.

“Since taxes are the lifeblood of the government, tax laws must be faithfully and strictly implemented, as they are not intended to be liberally construed,” declared the CTA's special first division in its decision penned by Associate Justice Catherine T. Manahan and promulgated on Dec. 19.

“The taxpayer has the burden to show that it has strictly complied with the conditions of the tax refund,” it ruled.

GHF PTY LTD, formerly Gutteridge Haskins & Davey PTY Ltd, is an Australian-based corporation engaged in technical management consultancy in mining, defense, water industry, public works, urban planning and developments, geotechnical, dams, and power and energy.

In denying the petition, the CA said that Section 76 of Republic Act (RA) 8424, the National Internal Revenue Code (NIRC) of 1997, provides three requisites to claim the refund, namely:

1. The claim for refund must be filed within the two-year prescriptive period as provided for under Sections 204(C) and 229 of NIRC of 1997.

2. The fact of withholding must be established by a copy of a statement duly issued by the payor to the payee, showing the amount paid and the amount of tax withheld.

3. The income upon which the taxes were withheld must be included in the return of the recipient.

The CTA said that GHF was able to comply with the first requisite and partially with the second requisite.

However, the tax court ruled that the petitioner filed to comply with the third requisite for the tax refund.

“Considering that the amount of revenue reported in the GL (general ledger) of petitioner does not tally with those reported in the AFS (audited financial statements) and Annual ITR (income tax return) for FY 2017, the Court finds that petitioner failed to comply with the third requisite,” the court said. 

“Thus, this Court is constrained to deny petitioner’s claim for refund or issuance of a tax credit certificate in the amount of P46,771,638,00, representing its alleged excess and unutilized CWT for the FY 2017,” it ruled.

The CTA stressed: "Actions for tax refund, as in the present case, are in the nature of a claim for exemption.”

“As such, the law is not only construed in strictissimi juris (according to the strictest interpretation of the law) against the tax payer, the pieces of evidence presented entitling a tax payer to an exemption must also be strictly scrutinized and must be duly proven,” it pointed out.