The Court of Tax Appeals (CTA) has denied anew the petition of Oceanagold Philippines, Inc. (OGPI) for a tax refund or tax credit of P407 million which it allegedly paid erroneously for the period July 2015 to December 2016.

The ruling issued by the CTA as a full court affirmed the decision and resolution handed down by the tax court’s second division in 2023 and 2024, respectively.

As a result of the division’s ruling, OGPI appealed before the CTA as a full court in a petition filed on Feb. 21, 2024. It reiterated its claim for a total tax refund or issuance of tax credit for P407,374,710.75 representing excise taxes.

In June 1994, the government entered into a Financial or Technical Assistance Agreement (FTAA) with Arimco Mining Corporation which was later renamed as Climax-Arimco Mining Corporation (CAMC).

The FTAA involved the mineral exploration and large-scale development and commercial utilization of mineral deposits existing within Nueva Vizcaya and Quirino. The operation is known as the Didipio Gold-Copper project.

In December1996, CAMC entered into an assignment, accession and assumption agreement with OGPI.

While the Bureau of Internal Revenue (BIR) confirmed OGPI’s stand that it is exempt from payment of excise taxes on minerals from the date of the approval of the project up to the end of the recovery period, the mining firm halted its mining activities in 2008 only to resume in December 2010.

The BIR later issued a circular clarifying the taxes due from FTAA contractors during "recovery periods" on Feb. 15, 2013.

OGPI filed a letter before the Department of Environment and Natural Resources (DENR) on March 27, 2013. It said its date of commencement of commercial production was on April 1, 2013.

When the issue reached the CTA, the tax court’s second division denied OGPI’s petition with a ruling that the firm failed to prove the appropriate reckoning point of the recovery period.

Undaunted, OGPI elevated its case before the CTA as a full court.

In its decision, the CTA’s full court said that the arguments for OGPI are a "mere rehash" of the issues it already raised before the CTA second division which did not err in finding that firm failed to prove that the subject claim is still within the recovery period.

For failure of OGPI to prove that it has valid pre-operating expenses to recover, the CTA’s full court said it cannot grant the petition for review and is constrained to uphold the denial of the claim for refund or issuance of tax credit certificate.

It ruled: "All told, the Court En Banc finds no reason to disturb the findings of the Court in Division. The denial of the Petition for Review is in order."

The 18-page decision was written by Associate Justice Maria Rowena Modesto-San Pedro with the concurrence of Presiding Justice Roman G. Del Rosario and Associate Justices Ma. Belen M. Ringpis-Liban, Catherine T. Manahan, Jean Marie A. Bacorro-Villena, Marian Ivy F. Reyes-Fajardo, Lanee S. Cui-David, and Corazon G. Ferrer-Flores.