March 2014 Philippine Supreme Court Decisions on Tax Law

Here are select March 2014 rulings of the Supreme Court of the Philippines on tax law:

National Internal Revenue Code; value-added tax; zero-rated or effectively zero-rated sales; unutilized input value-added tax; claims for tax credit or refund; period to file appeal with the Court of Tax Appeals. Section 112 (D) of the National Internal Revenue Code provides the Commissioner of Internal Revenue a 120-day period from submission of complete documents in support of the administrative claim within which to act on claims for refund/applications for issuance of the tax credit certificate. Upon denial of the claim or application, or upon expiration of the 120-day period, the taxpayer only has 30 days within which to appeal said adverse decision or unacted claim before the CTA, otherwise, said judicial claim shall be considered as filed out of time. Commissioner of Internal Revenue v. Silicon Philippines, Inc. (formerly Intel Philippines Manufacturing, Inc.), G.R. No. 169778, March 12, 2014.

National Internal Revenue Code; value-added tax; unutilized input VAT; claims for tax credit or refund; prescriptive periods.  (1) An administrative claim must be filed with the Commissioner of Internal Revenue (CIR) within two years after the close of the taxable quarter when the zero-rated or effectively zero-rated sales were made. (2) The  CIR  has  120  days  from  the  date  of  submission  of complete documents in support of the administrative claim within which to decide whether to grant a refund or issue a tax credit certificate.  The 120-day period may extend beyond the two-year period from the filing of the administrative claim if the claim is filed in the later part of the two-year period.  If the 120-day period expires without any decision from the CIR, then the administrative claim may be considered to be denied by inaction. (3) A judicial claim must be filed with the Court of Tax Appeals (CTA) within 30 days from the receipt of the CIR’s decision denying the administrative claim or from the expiration of the 120-day period without any action from the CIR. (4) All taxpayers can rely on Bureau of Internal Revenue Ruling No. DA-489-03 from the time of its issuance on December 10, 2003 up to its reversal by the Court in the Aichi case on October 6, 2010, as an exception to the mandatory and jurisdictional 120+30 day periods. Commissioner of Internal Revenue v. Silicon Philippines, Inc. (formerly Intel Philippines Manufacturing, Inc.), G.R. No. 169778, March 12, 2014.

National Internal Revenue Code; value-added tax; Section 4.108-1 of Revenue Regulations No. 7-95; significance  of imprinting the word “zero-rated” for zero-rated sales covered by its receipts or invoices. The absence or non-printing of the word “zero-rated” in the claimant’s invoices is fatal to its claim for the refund and/or tax credit representing its unutilized input value-added tax (VAT) attributable to its zero-rated sales. The  appearance  of  the  word  “zero-rated”  on  the  face  of invoices  covering  zero-rated  sales  prevents  buyers  from  falsely claiming input VAT from their purchases when no VAT was actually paid. Further, the printing of the word “zero-rated” on the invoice helps segregate sales that are subject to 12% VAT from those sales that are zero-rated. Commissioner of Internal Revenue v. Silicon Philippines, Inc. (formerly Intel Philippines Manufacturing, Inc.), G.R. No. 169778, March 12, 2014.

National Internal Revenue Code; value-added tax; imprinting “BIR Authority to Print” in invoices; no law or Bureau of Internal Revenue rule or regulation requiring the taxpayer-claimant’s authority from the BIR to print its sales invoices (BIR authority to print) to be reflected or indicated therein. While the Court considers the importance of imprinting the word “zero-rated” in said invoices, the same does not apply to the phrase “BIR authority to print.” There is no law or Bureau of Internal Revenue (BIR) rule or regulation requiring the taxpayer-claimant’s authority from the BIR to print its sales invoices (BIR authority to print) to be reflected or indicated therein. While entities engaged in business are required to secure from the BIR an authority to print receipts or invoices and to issue duly registered receipts or invoices, it is not required that the BIR authority to print be reflected or indicated therein. Commissioner of Internal Revenue v. Silicon Philippines, Inc. (formerly Intel Philippines Manufacturing, Inc.), G.R. No. 169778, March 12, 2014.

(Caren thanks Charles Icasiano for assisting in the preparation of this post.)

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