The Court of Tax Appeals (CTA) has denied the petition of Sony Philippines, Incorporated for a tax refund of P60 million representing alleged unutilized creditable withholding taxes (CWT) for the fiscal year that ended on March 31, 2019.

Sony Philippines filed an application for tax credits or refund for P60,157,273. When the Bureau of Internal Revenue (BIR) denied the application, the firm elevated its case before the CTA.

In its answer, the BIR told the tax court that Sony Philippines  failed to exhaust administrative remedies; it is  not entided to the claim for refund; it should prove that the alleged claim for refund was filed within the two (2)-year period;, it failed to prove that income related to CWT was declared in the annual income tax return; and  the claim for refund is tainted with procedural infirmity due to firm's failure to submit complete documents to support its administrative claim for refund.

In denying Sony Philippines' petition for lack of merit, the CTA ruled that the firm failed to prove that the income payments from which taxes were withheld were declared as part of its gross income in its annual income tax return (ITR).

"We cannot definitely rule that petitioner (Sony Philippines) complied with the third requisite (the income upon which the taxes were withheld must be included in the return of the recipient) for entitlement to a refund or an issuance of tax credit certificate for unutilized excess CWT," the CTA said. 

It pointed out that this non-compliance is "fatal" to its claim, as the petitioner had the burden of proof to establish the factual basis of his or her claim for tax credit or refund.

The 20-page decision was written by Associate Justice Ma. Belen M. Ringpis-Liban with the concurrence of Associate Justices Maria Rowena Modesto-San Pedro and Corazon G. Ferrer-Flores.