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Manila Bulletin devider Philippines devider National devider CTA denies P12.7-M tax refund sought by Nippon Express from BIR

CTA denies P12.7-M tax refund sought by Nippon Express from BIR

Published Feb 14, 2026 10:14 am
For lack of merit, the Court of Tax Appeals (CTA) has denied the P12.7 million tax refund sought by Nippon Express Philippines Corporation from the Bureau of Internal Revenue (BIR).
Nippon Express filed before the BIR’s Value-Added Tax Credit Audit Division (VCAD) an application for refund of unutilized input tax related to zero-rated sales for the period Oct. 1, 2020 to Dec. 31, 2020 amounting to P12,797,188.46.
The application was denied by the BIR on Feb. 14, 2022 for lack of factual and legal bases. Nippon Express then filed before the CTA a petition for review on March 28, 2023.
The firm told the tax court that its sales of services other than processing, manufacturing, or repacking of goods were rendered to a non-resident foreign corporation and paid for in acceptable foreign currency.
It added that freight revenue is attributable to export sales and that it has sales to economic zones or separate customs territories, Philippine Economic Zone Authority (PEZA) registered entities, Bases Conversion and Development Act, and Board of Investments (BOI) registered enterprises.
Also, it said it has sales of service to Asian Development Bank (ADB), Consular Office of Japan/Embassy of Japan, and Philippine Amusement and Gaming Corporation (PAGCOR).
However, the CTA said there was no "excess" unutilized input tax that may be claimed for refund.
"Petitioner (Nippon Express) computed its claim for refund in the aggregate amount of P12,797,188.46 by offering its output tax from taxable sales with its available input taxes for the 4th quarter of taxable year 2020," the CTA said in its decision.
The tax court also said: "It should be noted that the foregoing computation is based on its amended VAT Return for the subject taxable quarter. Clearly, the petitioner opted to claim for refund of its unutilized or 'excess' input tax, which is the amount after charging the input tax allocated to zero-rated sales against its output tax."
The CTA ruled: “Accordingly, in light of the foregoing considerations, the present Petition for Review is denied for lack of merit. So ordered.”
The 65-page decision was written by Presiding Justice Ma. Belen M. Ringpis-Liban with the concurrence of Associate Justice Maria Rowena A. Modesto-San Pedro.
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