CTA denies P55-M tax refund sought by call center firm
The Court of Tax Appeals (CTA) has denied the P55-million tax refund sought from the Bureau of Internal Revenue (BIR) by a firm engaged in call center services.
In a 20-page decision promulgated last Dec. 11 and penned by Presiding Justice Roman G. Del Rosario, the CTA's first division denied "for lack of merit" the petition for review filed by Foundever Philippine Corporation, formerly known as Sitel Philippines Corporation.
Foundever sought to refund from the BIR the amount of P55,390,420.62 which represents unutilized input value-added tax (VAT) that arose from “petitioner’s domestic purchases of goods (other than capital goods) and services and purchases of capital goods attributable to its zero-rated transactions for the first (1st) to fourth (4th) quarters of taxable year (TY) 2019.”
The firm provides outsourced call center services from the Philippines to domestic and offshore businesses including but not limited to tactical telemarketing campaigns and programs and customer relationship management services.
The CTA found that the zero-rated sales subject of the refund were generated by Foundever’s sites in Puerto Princesa and One Julia Vargas (OJV) Technopoint site in Pasig City.
To be entitled for tax refund under Section 112 of the the National Internal Revenue Code (NIRC) of 1997, the CTA cited that one of the requirements that should be met was that the “taxpayer-claimant must be VAT-registered.”
It pointed out that the law’s Consolidated VAT Regulations of 2005 provides that: “Any person who maintains a head or main office and branches in different places shall register with the RDO (Regional District Office) which has jurisdiction over the place wherein the main or head office or branch is located.”
“The records, however, are bereft of any proof that petitioner registered its Palawan and OJV Technopoint Sites as branches,” it said.
“Instead, a perusal of the records reveals that petitioner registered these sites as facilities as shown by the Certificates of Registration of Facility issued on Aug. 9, 2017 and Oct. 31, 2019, respectively,” it added.
Thus, the court said that “petitioner cannot be considered to have complied with the second requisite to successfully obtain a refund of input VAT.”