ASG Law

Tag: 120+30-Day Rule

  • VAT Refund Claims: Navigating the 120+30 Day Rule in the Philippines

    Understanding the Mandatory 120+30 Day Rule for VAT Refund Claims

    TAIHEI ALLTECH CONSTRUCTION (PHIL.) INC. VS. COMMISSIONER OF INTERNAL REVENUE, G.R. No. 258791, December 07, 2022

    Imagine a construction company diligently paying its taxes, only to find its legitimate VAT refund claim denied due to a procedural misstep. This scenario highlights the critical importance of understanding and adhering to the strict timelines governing VAT refund claims in the Philippines. The Supreme Court’s decision in Taihei Alltech Construction (Phil.) Inc. vs. Commissioner of Internal Revenue serves as a stark reminder of the mandatory nature of the 120+30 day rule for judicial appeals of VAT refund claims. This case underscores that even with valid claims, failure to comply with procedural deadlines can be fatal.

    This case clarifies the application of Section 112 of the National Internal Revenue Code (NIRC) concerning VAT refunds, specifically emphasizing the jurisdictional nature of the 120+30 day period for appealing the Commissioner of Internal Revenue’s (CIR) decisions or inaction.

    The Legal Framework for VAT Refund Claims

    The legal basis for VAT refunds is found in Section 112 of the National Internal Revenue Code (NIRC). This section allows VAT-registered entities with zero-rated or effectively zero-rated sales to apply for a refund or tax credit certificate for their input VAT. However, this right is subject to strict conditions and timelines.

    Section 112(A) of the NIRC states:

    “Any VAT-registered person, whose sales are zero-rated or effectively zero-rated may, within two (2) years after the close of the taxable quarter when the sales were made, apply for the issuance of a tax credit certificate or refund of creditable input tax due or paid attributable to such sales…”

    This means that the administrative claim for a VAT refund must be filed within two years from the end of the taxable quarter when the sales were made.

    Furthermore, Section 112(C) outlines the process and timeline for the CIR to act on these claims, and for taxpayers to appeal if necessary:

    “In proper cases, the Commissioner shall grant a refund or issue the tax credit certificate for creditable input taxes within one hundred twenty (120) days from the date of submission of complete documents… In case of full or partial denial of the claim for tax refund or tax credit, or the failure on the part of the Commissioner to act on the application within the period prescribed above, the taxpayer affected may, within thirty (30) days from the receipt of the decision denying the claim or after the expiration of the one hundred twenty day-period, appeal the decision or the unacted claim with the Court of Tax Appeals.”

    This provision establishes the now-famous “120+30 day rule.” The CIR has 120 days to decide on the refund claim. If the CIR denies the claim (explicitly or through inaction), the taxpayer has 30 days to appeal to the Court of Tax Appeals (CTA). Crucially, failure to file within this 30-day window deprives the CTA of jurisdiction.

    The Taihei Alltech Construction Case: A Procedural Pitfall

    Taihei Alltech Construction (Phil.) Inc., a company engaged in industrial plant construction, sought VAT refunds for the 3rd and 4th quarters of 2011. They filed their administrative claims in September and December of 2013, respectively. However, the CIR did not act within the prescribed 120-day period. Taihei, believing that Revenue Regulations No. 1-2017 revived their claims, only filed a Petition for Review with the CTA in July 2019, after receiving a formal denial letter.

    Here’s a breakdown of the timeline:

    • September 30, 2013: Taihei files administrative claim for 3rd quarter 2011.
    • December 23, 2013: Taihei files administrative claim for 4th quarter 2011.
    • January 28, 2014: End of 120-day period for 3rd quarter claim.
    • April 22, 2014: End of 120-day period for 4th quarter claim.
    • July 10, 2019: Taihei files Petition for Review with CTA.

    The CTA dismissed Taihei’s petition, citing its lack of jurisdiction due to the late filing. The CTA En Banc affirmed this decision, emphasizing that the 30-day period is triggered either by the CIR’s denial or by the expiration of the 120-day period, whichever comes first.

    The Supreme Court upheld the CTA’s ruling, reiterating the mandatory and jurisdictional nature of the 120+30 day rule. The Court emphasized that the CIR’s inaction for 120 days is already considered a “deemed denial,” triggering the 30-day period for appeal. As the Court stated:

    “A taxpayer must no longer wait for the Commissioner of Internal Revenue to come up with a decision as his 120-day inaction is the decision itself.”

    The Court further clarified that:

    “Any claim filed beyond the 120+30-day period provided by the National Internal Revenue Code is outside the jurisdiction of the Court of Tax Appeals.”

    The Supreme Court rejected Taihei’s argument that Revenue Regulations No. 1-2017 revived their claims, stating that the CIR lacks the power to revive lapsed claims and that administrative regulations cannot override statutory provisions.

    Key Lessons for Businesses and Taxpayers

    This case provides clear guidance for businesses seeking VAT refunds:

    • Strict Compliance: Adhere strictly to the 120+30 day rule.
    • Monitor Timelines: Closely monitor the 120-day period for the CIR to act.
    • Deemed Denial: Treat the expiration of the 120-day period as a denial, triggering the 30-day appeal period.
    • Don’t Wait for a Letter: Do not wait for a formal denial letter from the CIR before filing an appeal.
    • Seek Legal Advice: Consult with a tax lawyer to ensure compliance with all procedural requirements.

    Practical Implications: Avoiding the Taihei Trap

    The Taihei case serves as a cautionary tale. It underscores the importance of understanding not only the substantive requirements for a VAT refund but also the procedural rules governing the appeal process. Businesses should implement robust systems for tracking deadlines and ensuring timely action.

    Hypothetical Example: Suppose a company files a VAT refund claim on March 31. The 120-day period expires on July 29. If the CIR has not acted by July 29, the company must file an appeal with the CTA no later than August 28, even if they haven’t received a denial letter. Waiting for a denial letter in September would be fatal to their claim.

    Frequently Asked Questions

    Q: What is the 120+30 day rule?

    A: It’s the mandatory period for processing and appealing VAT refund claims. The CIR has 120 days to act on a claim, and if they don’t, the taxpayer has 30 days to appeal to the CTA.

    Q: When does the 30-day period start?

    A: It starts either from the receipt of the CIR’s denial or from the expiration of the 120-day period, whichever comes first.

    Q: What happens if I file my appeal late?

    A: The CTA loses jurisdiction over your claim, and your refund will be denied.

    Q: Does a denial letter from the CIR after 120 days change anything?

    A: No, the inaction within 120 days is already considered a denial, and the 30-day period is triggered regardless of any subsequent denial letter.

    Q: Can revenue regulations change the 120+30 day rule?

    A: No, administrative regulations cannot override or amend statutory provisions like Section 112 of the NIRC.

    Q: What should I do if the CIR doesn’t act on my claim within 120 days?

    A: File an appeal with the CTA within 30 days of the expiration of the 120-day period.

    Q: Is there any exception to the 120+30 day rule?

    A: The Supreme Court has consistently held that the 120+30 day rule is mandatory and jurisdictional, with very limited exceptions that are rarely applicable.

    ASG Law specializes in taxation law. Contact us or email hello@asglawpartners.com to schedule a consultation.

  • Navigating VAT Refund Timelines: Strict Compliance Under the Tax Code

    In a ruling with significant implications for businesses in the Philippines, the Supreme Court affirmed the strict application of the 120+30 day rule for value-added tax (VAT) refund claims. This rule dictates the period within which taxpayers must both file their administrative claim with the Commissioner of Internal Revenue (CIR) and, if denied or unacted upon, appeal to the Court of Tax Appeals (CTA). The Court denied the motion for reconsideration filed by Steag State Power, Inc., underscoring that failure to comply with these statutory deadlines results in the CTA losing jurisdiction over the refund claim. This decision reinforces the principle that claims for tax refunds, being in the nature of tax exemptions, are construed strictly against the claimant, and adherence to the prescribed procedures is mandatory.

    Can Belated Appeals Find Refuge? The Strict Timelines for VAT Refunds

    Steag State Power, Inc., a power generation company, sought a refund of unutilized input VAT payments on capital goods. After the CIR failed to act on its administrative claims, Steag State Power filed petitions for review with the CTA, but these were filed beyond the 120+30 day period stipulated in Section 112 of the National Internal Revenue Code (Tax Code). The CTA dismissed the petitions for lack of jurisdiction, a decision later affirmed by the CTA En Banc and initially by the Supreme Court. Steag State Power moved for reconsideration, arguing that its claims, though filed beyond the 120+30 day periods, were filed within the two-year period under Section 229 of the Tax Code, and that non-compliance with the 120+30 day periods should not be a jurisdictional defect. The Supreme Court’s resolution definitively addresses the interpretation and application of these timelines, providing clarity on the procedural requirements for VAT refund claims.

    The heart of the matter lies in Section 112(D) of the Tax Code, which prescribes the period within which the CIR must act on a refund claim and the period within which the taxpayer can appeal to the CTA:

    SECTION 112. Refunds or Tax Credits of Input Tax. –

    ….

    (D) Period within which Refund or Tax Credit of Input Taxes shall be Made. – In proper cases, the Commissioner shall grant a refund or issue the tax credit certificate for creditable input taxes within one hundred twenty (120) days from the date of submission of complete documents in support of the application filed in accordance with Subsections (A) and (B) hereof.

    In case of full or partial denial of the claim for tax refund or tax credit, or the failure on the part of the Commissioner to act on the application within the period prescribed above, the taxpayer affected may, within thirty (30) days from the receipt of the decision denying the claim or after the expiration of the one hundred twenty day-period, appeal the decision or the unacted claim with the Court of Tax Appeals.

    The Supreme Court, in line with established jurisprudence such as Commissioner of Internal Revenue v. Aichi Forging Company of Asia, Inc. and Commissioner of Internal Revenue v. San Roque Power Corporation, emphasized that this provision must be applied strictly. The 120-day period is for the CIR to process the refund claim, and the 30-day period is for the taxpayer to appeal to the CTA in case of denial or inaction. These periods are not merely directory but mandatory, as they define the CTA’s jurisdiction over the case.

    Steag State Power’s argument that it relied on Revenue Regulation No. 7-95, which seemingly allowed appeals to the CTA after the 120-day period but before the two-year period, was deemed untenable. The Court clarified that when Steag State Power filed its judicial claims in 2006, the prevailing rule was Revenue Regulation No. 16-2005, which mirrored the 120+30 day periods outlined in the Tax Code. Therefore, the claim of good faith reliance on an outdated regulation was misplaced. Moreover, the Court reiterated that the two-year prescriptive period under Section 112(A) of the Tax Code applies only to the filing of the administrative claim with the CIR, not to the judicial appeal before the CTA.

    The Supreme Court also addressed the argument that the window created in San Roque Power Corporation by BIR Ruling No. DA-489-03, which provided an exception for prematurely filed judicial claims, should also extend to belatedly filed claims. The Court rejected this argument, stating that BIR Ruling No. DA-489-03 specifically pertained to cases where the taxpayer did not wait for the lapse of the 120-day period before seeking judicial relief. It did not, in any way, imply that late filings of judicial claims would be acceptable. This distinction is crucial, as it underscores the importance of adhering to the precise timelines set forth in the Tax Code.

    A key principle highlighted in this case is that the right to appeal to the CTA is a statutory privilege, not a constitutional right. As such, it can only be invoked by strictly complying with the conditions set by law. Section 11 of Republic Act No. 1125, as amended, explicitly provides for a 30-day period to appeal either from receipt of the CIR’s adverse decision or from the lapse of the period fixed by law for action. Failure to comply with this period results in the CTA losing jurisdiction over the petition, a defect that cannot be waived.

    The implications of this ruling are far-reaching. Taxpayers seeking VAT refunds must meticulously observe the 120+30 day periods to ensure their claims are not dismissed for lack of jurisdiction. This requires careful planning and timely action, both in the preparation and submission of administrative claims and in the subsequent filing of judicial appeals. It is crucial for businesses to have robust systems in place to track these deadlines and to seek legal counsel if necessary. Otherwise, they risk forfeiting significant amounts of potential refunds.

    Furthermore, the Supreme Court emphasized that interpretations of law made by courts have retroactive effect. This means that the principles established in Aichi Forging Company of Asia, Inc. and San Roque Power Corporation apply not only to future cases but also to pending cases, as demonstrated by the denial of Philex Mining Corporation’s claim in San Roque Power Corporation due to late filing. This underscores the importance of staying abreast of the latest jurisprudence and adjusting practices accordingly.

    Ultimately, this case serves as a stark reminder of the importance of procedural compliance in tax matters. Claims for tax refunds are construed strictly against the claimant, and any deviation from the prescribed procedures can have dire consequences. Taxpayers must be vigilant in ensuring that they meet all the requirements of the law to successfully claim their refunds.

    FAQs

    What is the 120+30 day rule for VAT refunds? It refers to the 120-day period for the CIR to process a VAT refund claim and the subsequent 30-day period for the taxpayer to appeal to the CTA if the claim is denied or unacted upon.
    What happens if a taxpayer files an appeal to the CTA after the 30-day period? The CTA loses jurisdiction over the petition, and the appeal will be dismissed due to late filing.
    Does the two-year prescriptive period apply to judicial claims before the CTA? No, the two-year prescriptive period only applies to the filing of the administrative claim with the CIR. The judicial claim must be filed within 30 days from the denial of the administrative claim or after the expiration of the 120-day period for the CIR to act.
    What was the significance of BIR Ruling No. DA-489-03 in relation to VAT refunds? It allowed taxpayers to file judicial claims prematurely, without waiting for the 120-day period to lapse. However, this ruling does not apply to cases of late filing.
    Is the right to appeal to the CTA a constitutional right? No, it is a statutory privilege, and its exercise requires strict compliance with the conditions attached by the statute.
    What regulation was prevailing when Steag State Power filed its judicial claims? Revenue Regulation No. 16-2005, which mirrored the 120+30 day periods outlined in the Tax Code, was prevailing at the time.
    Can the CTA motu proprio pass upon the issue of the appeals’ timeliness? Yes, the CTA is not precluded to pass on this issue motu proprio, regardless of any purported stipulation made by the parties.
    Does this ruling apply retroactively? Yes, interpretations of law made by courts generally have retroactive effect.

    This case underscores the critical importance of adhering to procedural requirements in tax matters, particularly the strict timelines for VAT refund claims. Businesses must ensure they have robust systems in place to track deadlines and seek legal counsel when necessary to avoid the costly consequences of non-compliance.

    For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

    Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
    Source: STEAG STATE POWER, INC. VS. COMMISSIONER OF INTERNAL REVENUE, G.R. No. 205282, January 14, 2019

  • Navigating VAT Refund Claims: Strict Compliance with the 120+30 Day Rule

    The Supreme Court, in Team Sual Corporation v. Commissioner of Internal Revenue, emphasized the critical importance of adhering to the mandatory 120+30-day waiting period when claiming Value Added Tax (VAT) refunds. This ruling underscores that failure to strictly comply with this procedural requirement deprives the Court of Tax Appeals (CTA) of jurisdiction to hear a taxpayer’s claim. Thus, businesses seeking VAT refunds must meticulously observe these timelines to ensure their claims are valid and can be successfully pursued in court.

    The Clock is Ticking: How Premature VAT Refund Claims Can Cost You

    Team Sual Corporation (TSC), a power generation company, sought a refund for unutilized input VAT related to its zero-rated sales to the National Power Corporation (NPC). TSC filed an administrative claim with the Bureau of Internal Revenue (BIR) and, without waiting for the BIR’s decision, filed two separate petitions for review with the CTA. The Commissioner of Internal Revenue (CIR) contested the claims, arguing that the CTA lacked jurisdiction due to the premature filing of the petitions. The Supreme Court was tasked with determining whether the CTA had jurisdiction over TSC’s judicial claims for refund, given the timing of their filing relative to the mandatory waiting period for the CIR to act on the administrative claim.

    The legal framework for VAT refunds is governed by Section 112 of the National Internal Revenue Code (NIRC) of 1997. This provision outlines a specific procedure for taxpayers seeking a refund or tax credit for unutilized input VAT from zero-rated or effectively zero-rated sales. The process begins with filing an administrative claim with the BIR, which must be done within two years after the close of the taxable quarter when the sales were made. The CIR then has 120 days from the submission of complete documents to either grant or deny the claim. This 120-day period is crucial for the BIR to assess the validity of the refund claim.

    Crucially, the law stipulates that if the CIR denies the claim (either fully or partially) or fails to act on it within the 120-day period, the taxpayer-claimant has 30 days to file a judicial claim via petition for review with the CTA. This 120+30-day period is not merely a procedural formality; it is a jurisdictional requirement. The Supreme Court has consistently held that any judicial claim filed in contravention of this period is premature, stripping the CTA of its authority to hear the case. Failure to comply with the 120-day waiting period violates a mandatory provision of law.

    The Supreme Court emphasized the mandatory nature of the 120-day waiting period, referencing its previous ruling in Commissioner of Internal Revenue vs. San Roque Power Corporation, stating:

    Failure to comply with the 120-day waiting period violates a mandatory provision of law. It violates the doctrine of exhaustion of administrative remedies and renders the petition premature and thus without a cause of action, with the effect that the CTA does not acquire jurisdiction over the taxpayer’s petition. Philippine jurisprudence is replete with cases upholding and reiterating these doctrinal principles.

    In TSC’s case, the administrative claim was filed on March 20, 2003, giving the CIR until July 18, 2003, to act. However, TSC filed its first judicial claim on March 31, 2003 – a mere 11 days after filing the administrative claim. This premature filing rendered the judicial claim void, as the CTA lacked jurisdiction to hear it. The second judicial claim, filed on July 23, 2003, occurred five days after the 120-day period lapsed, making it timely. Therefore, the CTA only acquired jurisdiction over the second judicial claim.

    TSC argued that at the time of filing, jurisprudence suggested the 120-day period was permissive, not mandatory. The Court rejected this argument, clarifying that the cases TSC cited did not address the mandatory nature of the 120-day period. The Court also dismissed TSC’s claim that the CIR had waived the issue of non-compliance by failing to raise it earlier. The Supreme Court reiterated that non-compliance with a mandatory provision renders a judicial claim void, regardless of whether the opposing party raises the issue.

    The stringent application of the 120+30-day rule underscores the importance of strictly adhering to statutory procedures when claiming tax refunds. The Supreme Court’s decision serves as a reminder that tax refunds are a statutory privilege, not a matter of right. Taxpayers must diligently follow the prescribed rules and procedures to ensure their claims are valid and can be successfully pursued in court. The failure to do so can result in the loss of significant refunds, regardless of the merits of the underlying claim.

    FAQs

    What is the 120+30 day rule? This rule refers to the mandatory waiting period for VAT refund claims. Taxpayers must wait 120 days for the CIR to act on their administrative claim before they can file a judicial appeal with the CTA and the CTA must be filed within 30 days after the 120 day period.
    Why is the 120+30 day rule important? It is a jurisdictional requirement. Failure to comply deprives the CTA of the authority to hear the case.
    When does the 120-day period begin? It starts from the date of submission of complete documents in support of the administrative claim with the BIR.
    What happens if the CIR denies the claim within 120 days? The taxpayer has 30 days from the receipt of the denial to file a judicial appeal with the CTA.
    What if the CIR does not act within 120 days? The taxpayer has 30 days from the expiration of the 120-day period to file a judicial appeal with the CTA.
    Can the 120-day period be waived? No, the Supreme Court has consistently held that it is a mandatory and jurisdictional requirement that cannot be waived.
    What is the consequence of premature filing? Premature filing of a judicial claim renders it void, and the CTA lacks jurisdiction to hear the case.
    Does this rule apply to all tax refund claims? While the case specifically addresses VAT refunds, the principle of strict compliance with statutory procedures generally applies to all tax refund claims.

    The strict interpretation of the 120+30-day rule serves as a cautionary tale for taxpayers seeking VAT refunds. Businesses must carefully track and adhere to these timelines to avoid jeopardizing their claims. Understanding and complying with the prescribed procedures is essential for successfully navigating the complex landscape of tax refunds in the Philippines.

    For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

    Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
    Source: Team Sual Corporation v. CIR, G.R. Nos. 201225-26, 201132 & 201133, April 18, 2018

  • VAT Refund Denials: Strict Compliance with Deadlines and Documentation

    The Supreme Court affirmed the denial of Team Energy Corporation’s claim for a Value Added Tax (VAT) refund, emphasizing that strict compliance with statutory deadlines and documentation requirements is essential. The ruling reinforces that taxpayers must adhere to the 120+30-day periods for filing judicial claims and provide proper VAT invoices or official receipts to substantiate input VAT payments. This decision highlights the importance of meticulous record-keeping and timely action in pursuing tax refunds, providing clarity on the stringent standards expected of taxpayers seeking VAT refunds from the Bureau of Internal Revenue (BIR).

    Powering Down a Refund: Did Team Energy Miss the Deadline?

    This case revolves around Team Energy Corporation’s attempt to secure a refund for unutilized input VAT related to its zero-rated sales to the National Power Corporation (NPC) for the 2003 taxable year. Team Energy, a VAT-registered entity engaged in power generation, sought to recover P83,465,353.50 in unutilized input VAT. However, both the Court of Tax Appeals (CTA) Division and En Banc found deficiencies in Team Energy’s compliance with the procedural and documentary requirements for VAT refunds. The Commissioner of Internal Revenue contested the claim, citing issues with documentation, prescriptive periods, and the applicability of certain tax exemptions.

    At the heart of the dispute lies the interpretation and application of Section 112(D) of the 1997 National Internal Revenue Code (NIRC), which prescribes the period within which a taxpayer must seek a judicial remedy for VAT refund claims. This section clearly states that the taxpayer must appeal to the CTA within 30 days from either the receipt of the Commissioner’s decision denying the claim or after the expiration of the 120-day period given to the Commissioner to act on the claim. The Supreme Court’s consistent stance, as established in Commissioner of Internal Revenue v. Aichi Forging Company of Asia, Inc. and Commissioner of Internal Revenue v. San Roque Power Corporation, emphasizes that adherence to these 120+30-day periods is mandatory and jurisdictional.

    Section 112. Refunds or Tax Credits of Input Tax. —

    ….

    (D) Period within which Refund or Tax Credit, of Input Taxes shall be Made. — In proper cases, the Commissioner shall grant a refund or issue the tax credit certificate for creditable input taxes within one hundred twenty (120) days from the date of submission of complete documents in support of the application filed in accordance with Subsections (A) and (B) hereof.

    In case of full or partial denial of the claim for tax refund or tax credit, or the failure on the part of the Commissioner to act on the application within the period prescribed above, the taxpayer affected may, within thirty (30) days from the receipt of the decision denying the claim or after the expiration of the one hundred twenty day-period, appeal the decision or the unacted claim with the Court of Tax Appeals.

    The Court found that Team Energy filed its judicial claim beyond the 30-day period mandated by Section 112(D). The administrative claim was filed on December 17, 2004, giving the BIR until April 16, 2005, to act. Team Energy had until May 16, 2005, to file a petition with the CTA but filed its appeal only on July 22, 2005, rendering it untimely. Team Energy argued against the retroactive application of the Aichi doctrine, contending that it would violate the principle of non-retroactivity of judicial decisions. However, the Court rejected this argument, asserting that its interpretation of the law merely clarifies what the provision has always meant, and does not create new legal obligations.

    Moreover, the Supreme Court also addressed the issue of substantiation requirements, particularly the need for proper VAT invoices or official receipts. Section 110(A)(1) of the 1997 NIRC requires that creditable input tax must be evidenced by a VAT invoice or official receipt, reflecting the information required in Sections 113 and 237 of the Code. While Team Energy argued for the interchangeability of VAT invoices and official receipts, the Court clarified that purchase of goods or properties must be supported by VAT invoices, while purchase of services must be supported by VAT official receipts.

    Section 113. Invoicing and Accounting Requirements for VAT-Registered Persons. — A VAT-registered person shall, for every sale, issue an invoice or receipt. In addition to the information required under Section 237, the following information shall be indicated in the invoice or receipt:

    The Court cited its ruling in AT&T Communications Services Phils., Inc. v. Commissioner of Internal Revenue, emphasizing the need for clear delineation between official receipts and invoices. The CTA had disallowed P258,874.55 of Team Energy’s claimed input VAT due to the submission of improper documentation. The Supreme Court affirmed this disallowance, highlighting the importance of adhering to the specific substantiation requirements. The requirement ensures proper collection of taxes, facilitates computation of tax credits, and provides an accurate audit trail for BIR monitoring purposes. Revenue Memorandum Circular No. 42-03 further reinforces this point, explicitly stating that an invoice supports the claim of input tax on the purchase of goods, while an official receipt supports the claim for input tax on the purchase of services.

    Finally, the Supreme Court addressed the Commissioner’s argument that Team Energy failed to submit its Energy Regulatory Commission (ERC) Registration and Certificate of Compliance, disqualifying it from claiming a tax refund. The Court dismissed this argument because the issue was raised for the first time in a motion for partial reconsideration, violating the rule against raising new issues on appeal. Additionally, the Court noted that Team Energy’s claim was based on Section 108(B)(3) of the 1997 NIRC, in relation to NPC’s charter, rather than the Electrical Power Industry Reform Act (EPIRA). Under Section 108(B)(3), services rendered to entities with exemptions under special laws are subject to a zero percent VAT rate.

    In light of these considerations, the Supreme Court denied Team Energy’s petitions, affirming the CTA En Banc’s decision. The ruling underscores the significance of adhering to both the procedural and substantive requirements for VAT refunds. Strict compliance with the 120+30-day periods for filing judicial claims and the proper documentation of input VAT payments are essential for a successful refund claim. This case serves as a cautionary tale for taxpayers, emphasizing the need for meticulous record-keeping and timely action in pursuing tax refunds.

    FAQs

    What was the key issue in this case? The key issue was whether Team Energy Corporation was entitled to a refund of its unutilized input VAT for the taxable year 2003, considering issues of prescription, documentation, and eligibility for VAT zero-rating.
    What are the 120+30 day periods? The 120+30 day periods refer to the period within which a taxpayer must file a judicial claim for VAT refund with the CTA. The BIR has 120 days to act on the administrative claim, and the taxpayer has 30 days from receipt of the denial or lapse of the 120-day period to appeal to the CTA.
    Why was Team Energy’s claim denied? Team Energy’s claim was denied because it failed to file its judicial claim within the 30-day period after the expiration of the 120-day period for the BIR to act on its administrative claim. Additionally, some of its input VAT claims were disallowed due to improper documentation.
    What type of documentation is required for VAT refunds? For VAT refunds, the purchase of goods or properties must be supported by VAT invoices, while the purchase of services must be supported by VAT official receipts. These documents must contain specific information as required by Sections 113 and 237 of the NIRC.
    What is the significance of Revenue Memorandum Circular No. 42-03? Revenue Memorandum Circular No. 42-03 clarifies that an invoice is the supporting document for claiming input tax on the purchase of goods, while an official receipt is the supporting document for claiming input tax on the purchase of services. Failure to comply with these invoicing requirements can result in the disallowance of the claim for input tax.
    Was the ERC Certificate of Compliance relevant to the case? The ERC Certificate of Compliance was not relevant because Team Energy’s refund claim was premised on Section 108(B)(3) of the 1997 NIRC, in relation to NPC’s charter, rather than the EPIRA. The requirements under the EPIRA would apply only to claims for refund filed under the EPIRA.
    What is unjust enrichment in the context of tax refunds? Unjust enrichment refers to the government retaining taxes that were excessively, erroneously, or illegally collected. However, excess input tax is not considered excessively collected, and a claim for its refund is more akin to a tax exemption, requiring strict compliance with the law.
    What is the impact of strict compliance requirements? Strict compliance with substantiation and invoicing requirements is crucial for ensuring proper tax collection, facilitating computation of tax credits, and providing an accurate audit trail for BIR monitoring. It helps prevent the government from refunding taxes that were not actually paid.

    In conclusion, the Supreme Court’s decision in the Team Energy case serves as a strong reminder to taxpayers of the importance of adhering to both the procedural and documentary requirements for VAT refunds. Timely action and meticulous record-keeping are essential for a successful refund claim.

    For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

    Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
    Source: Team Energy Corporation v. Commissioner of Internal Revenue, G.R. Nos. 197663 & 197770, March 14, 2018

  • Navigating VAT Refunds: Strict Compliance with the 120+30 Day Rule

    In a ruling affecting taxpayers seeking VAT refunds, the Supreme Court affirmed the necessity of strict adherence to the 120+30 day rule outlined in Section 112(C) of the 1997 Tax Code. This rule dictates the timeline for both administrative claims with the Commissioner of Internal Revenue (CIR) and subsequent judicial appeals to the Court of Tax Appeals (CTA). The court emphasized that failure to comply with these mandatory periods is a jurisdictional defect, preventing the CTA from hearing the case. This decision reinforces the importance of taxpayers diligently observing these timelines when pursuing VAT refunds to avoid premature filings and potential dismissal of their claims.

    Marubeni’s VAT Refund Claim: A Lesson in Premature Litigation

    The case of Marubeni Philippines Corporation v. Commissioner of Internal Revenue revolves around Marubeni’s attempt to secure a refund for unutilized input Value-Added Tax (VAT) for the first quarter of Calendar Year 2000. Marubeni, a VAT-registered entity, filed an administrative claim for a refund and subsequently a petition for review with the Court of Tax Appeals (CTA). The central legal question was whether Marubeni prematurely filed its judicial claim with the CTA, failing to observe the mandatory waiting period for the CIR to act on its administrative claim.

    The factual backdrop reveals that Marubeni filed its administrative claim for refund on March 27, 2002, and then filed a petition for review with the CTA on April 25, 2002. The CTA En Banc ultimately ruled that Marubeni’s judicial claim was premature because it was filed before the expiration of the 120-day period granted to the CIR to act on the administrative claim, as mandated by Section 112(C) of the National Internal Revenue Code (NIRC) of 1997. This ruling was anchored on the principle established in Commissioner of Internal Revenue v. Aichi Forging Company of Asia, Inc., which underscores the mandatory nature of the 120+30 day periods.

    The Supreme Court, in affirming the CTA’s decision, underscored the significance of adhering to the statutory framework governing VAT refunds. The court rejected Marubeni’s argument that the earlier ruling in Atlas Consolidated Mining and Development Corporation v. Commissioner of Internal Revenue should apply. The ruling in Atlas stated that the two-year prescriptive period for filing refund claims should be counted from the date of filing the quarterly VAT return. The Supreme Court clarified that the applicable law at the time Marubeni filed its claims was the 1997 Tax Code, which took effect on January 1, 1998. The court emphasized that it is misleading to rely on the Atlas doctrine, given that the said doctrine was promulgated after Marubeni filed its administrative and judicial claims.

    The court’s analysis hinged on a strict interpretation of Section 112(C) of the NIRC, which explicitly outlines the process and timelines for VAT refund claims. The provision states:

    SEC. 112. Refunds or Tax Credits of Input Tax. –

    (C) Period within which Refund or Tax Credit of Input Taxes shall be Made. – In proper cases, the Commissioner shall grant a refund or issue the tax credit certificate for creditable input taxes within one hundred twenty (120) days from the date of submission of complete documents in support of the application filed in accordance with Subsection (A) hereof.

    In case of full or partial denial of the claim for tax refund or tax credit, or the failure on the part of the Commissioner to act on the application within the period prescribed above, the taxpayer affected may, within thirty (30) days from the receipt of the decision denying the claim or after the expiration of the one hundred twenty day-period, appeal the decision or the unacted claim with the Court of Tax Appeals.

    The Supreme Court, citing Commissioner of Internal Revenue v. San Roque Power Corp., reiterated that compliance with the 120+30 day periods is not merely procedural but jurisdictional. This means that the CTA only acquires jurisdiction over the case if the taxpayer adheres to these timelines. The 120-day period allows the CIR to evaluate the claim, while the subsequent 30-day period provides the taxpayer recourse to appeal to the CTA if the claim is denied or unacted upon.

    Marubeni further contended that the CIR waived the defense of non-exhaustion of administrative remedies by failing to raise the issue of prematurity in its answer before the CTA. The Court dismissed this argument, explaining that the failure to observe the 120-day waiting period is not simply a matter of non-exhaustion of administrative remedies but a jurisdictional defect that cannot be waived. In Applied Food Ingredients Company, Inc. v. Commissioner of Internal Revenue, the Court explicitly stated that “failure to observe 120 days prior to the filing of a judicial claim is not a mere non-exhaustion of administrative remedies, but is likewise considered jurisdictional.” This reaffirms that the prematurity of the judicial claim deprives the CTA of jurisdiction, an issue that can be raised at any stage of the proceedings or even motu proprio by the court itself.

    This case underscores a crucial lesson for taxpayers seeking VAT refunds: strict compliance with the timelines prescribed in Section 112(C) of the NIRC is paramount. The failure to observe the 120-day waiting period for the CIR to act on the administrative claim renders the subsequent judicial claim premature, depriving the CTA of jurisdiction. Taxpayers must diligently track these deadlines and ensure that they file their judicial claims only after the expiration of the 120-day period or within 30 days from the receipt of the CIR’s decision. The premature filing of a judicial claim is a fatal error that can result in the dismissal of the case, regardless of the merits of the underlying refund claim.

    FAQs

    What is the 120+30 day rule? The 120+30 day rule, as per Section 112(C) of the NIRC, mandates that the CIR has 120 days to decide on a VAT refund claim, and the taxpayer has 30 days from receipt of the decision or after the 120-day period to appeal to the CTA.
    Why is compliance with the 120+30 day rule considered jurisdictional? Compliance is jurisdictional because the CTA’s authority to hear the case is contingent on the taxpayer adhering to these timelines, ensuring that the administrative process is properly exhausted before judicial intervention.
    What happens if a taxpayer files a judicial claim before the 120-day period expires? If a judicial claim is filed before the 120-day period expires, the CTA lacks jurisdiction over the case, and the claim may be dismissed for being premature.
    Can the CIR waive the requirement of compliance with the 120+30 day rule? No, the CIR cannot waive this requirement because it is jurisdictional, meaning it pertains to the fundamental authority of the CTA to hear the case.
    Does the Atlas doctrine still apply to VAT refund claims? The Supreme Court clarified that the applicable law is the 1997 Tax Code and that reliance on the Atlas doctrine is misplaced when the administrative and judicial claims were filed before the doctrine was promulgated.
    What is the significance of the Aichi case in relation to VAT refunds? The Aichi case emphasized the mandatory nature of the 120+30 day periods, reinforcing the need for strict compliance to ensure the CTA’s jurisdiction over the refund claim.
    What should taxpayers do to ensure their VAT refund claims are not deemed premature? Taxpayers should meticulously observe the 120-day waiting period for the CIR to act on their administrative claim before filing a judicial claim with the CTA.
    What is the effect of BIR Ruling No. DA-489-03 on the 120+30 day rule? Taxpayers cannot benefit from BIR Ruling No. DA-489-03 if the ruling was issued after they had already filed their petition for review with the CTA.

    In conclusion, the Marubeni case serves as a stark reminder of the critical importance of procedural compliance in tax refund claims. The Supreme Court’s unwavering stance on the mandatory nature of the 120+30 day rule underscores the need for taxpayers to exercise diligence and precision in adhering to statutory timelines. Failure to do so can have significant consequences, potentially resulting in the dismissal of otherwise valid claims.

    For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

    Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
    Source: Marubeni Philippines Corporation vs. Commissioner of Internal Revenue, G.R. No. 198485, June 05, 2017

  • Equitable Estoppel and Tax Refund Claims: Understanding the Exception to the 120+30 Day Rule

    In Visayas Geothermal Power Company v. Commissioner of Internal Revenue, the Supreme Court addressed the timeliness of a judicial claim for tax refund, clarifying when taxpayers can seek judicial relief despite not fully complying with the mandatory waiting periods. The Court partly granted the petition, reversing the Court of Tax Appeals’ (CTA) dismissal and clarifying that the CTA erred in ruling that the judicial claim was prematurely filed. The ruling highlights the impact of a previously issued BIR ruling, which had allowed taxpayers to file judicial claims without waiting for the Commissioner’s decision, and provides guidance on the exception to the strict compliance rule for claims filed during the effectivity of that BIR ruling. The case was remanded to the CTA for a decision on the merits of the tax refund claim.

    Navigating Tax Refund Timelines: When Can Taxpayers Rely on BIR Rulings?

    The case revolves around Visayas Geothermal Power Company’s (VGPC) claim for a refund of unutilized input Value-Added Tax (VAT) for the taxable year 2007. VGPC filed an administrative claim for refund with the Bureau of Internal Revenue (BIR) on February 13, 2009, and, believing that the BIR would not act promptly, filed a petition for review with the Court of Tax Appeals (CTA) on March 30, 2009. VGPC argued that Section 6 of Republic Act (R.A.) No. 9136, also known as the “Electric Power Industry Reform Act of 2001,” provides for zero-rated VAT on sales of generated power, and referred to the 1997 National Internal Revenue Code (NIRC) as amended by R.A. No. 9337, which imposes a zero percent VAT rate on the sale of power generated through renewable sources of energy. The CTA First Division initially dismissed VGPC’s petition for being prematurely filed, a decision later affirmed by the CTA en banc.

    The core of the legal issue lies in the interpretation and application of Section 112(C) of the 1997 NIRC, which stipulates a 120-day period for the Commissioner of Internal Revenue (CIR) to decide on refund applications, followed by a 30-day period for the taxpayer to appeal to the CTA. The CTA ruled that VGPC’s petition was premature because it was filed only 45 days after the administrative claim, well before the 120-day period had lapsed. VGPC contended that it relied on BIR Ruling No. DA-489-03, which stated that a taxpayer-claimant need not wait for the 120-day period to expire before seeking judicial relief. This ruling became the crux of the Supreme Court’s analysis.

    The Supreme Court acknowledged the general rule requiring strict compliance with the 120+30-day periods as established in CIR v. San Roque Power Corporation. According to this rule, failure to adhere to the 120-day waiting period violates the doctrine of exhaustion of administrative remedies, rendering the petition premature and depriving the CTA of jurisdiction. The Court, however, also recognized an exception to this rule. The Court reiterated in San Roque that strict compliance with the 120+30-day periods is necessary, “except for the period from the issuance of BIR Ruling No. DA-489-03 on 10 December 2003 to 6 October 2010 when the Aichi doctrine was adopted, which again reinstated the 120+30-day periods as mandatory and jurisdictional.”

    BIR Ruling No. DA-489-03 explicitly stated that a taxpayer-claimant need not wait for the lapse of the 120-day period before seeking judicial relief with the CTA. The Court emphasized that this BIR ruling constituted a general interpretative rule applicable to all taxpayers, as it was a response to a query made by a government agency, not a specific taxpayer. This meant that all taxpayers could rely on it from its issuance on December 10, 2003, until its effective reversal by the Court in CIR v. Aichi Forging Company of Asia, Inc. on October 6, 2010, which reinstated the mandatory and jurisdictional nature of the 120+30-day periods. This reliance creates an instance of equitable estoppel.

    Applying this principle to VGPC’s case, the Supreme Court noted that both the administrative and judicial claims were filed in 2009, falling squarely within the period when BIR Ruling No. DA-489-03 was in effect. Consequently, the CTA en banc’s reliance on the general rule was misplaced. The Court stated that notwithstanding the fact that VGPC failed to wait for the expiration of the 120-day mandatory period, the CTA could still take cognizance of the petition for review. The decision underscores the importance of considering the prevailing BIR rulings at the time the claims are filed.

    Despite ruling in favor of VGPC on the procedural issue, the Supreme Court did not resolve the substantive issue of VGPC’s entitlement to the tax refund. The CTA First Division had identified the requisites for entitlement to tax refund: the existence of zero-rated or effectively zero-rated sales; incurrence or payment of input taxes; attributability of such input taxes to zero-rated sales; non-application of the input taxes against any output VAT liability; and timely filing of the claim for refund within the two-year prescriptive period. The Court found that these matters required factual findings that were not within its purview. Therefore, it remanded the case to the CTA for a determination of VGPC’s entitlement to the claimed tax refund.

    FAQs

    What was the central issue in this case? The central issue was whether Visayas Geothermal Power Company’s (VGPC) judicial claim for a tax refund was prematurely filed, considering it was filed before the 120-day period for the BIR to act on the administrative claim had lapsed. The court needed to determine if VGPC could rely on a BIR ruling allowing early filing.
    What is the 120+30 day rule? The 120+30 day rule, as per Section 112 of the NIRC, requires the Commissioner of Internal Revenue to grant a refund or issue a tax credit certificate within 120 days from the submission of complete documents. If the claim is denied or unacted upon, the taxpayer has 30 days from receipt of the denial or after the 120-day period to appeal to the Court of Tax Appeals.
    What is BIR Ruling No. DA-489-03? BIR Ruling No. DA-489-03, issued on December 10, 2003, stated that a taxpayer-claimant need not wait for the lapse of the 120-day period before seeking judicial relief with the CTA. This ruling allowed taxpayers to file judicial claims even before the BIR had acted on their administrative claims.
    What is the period covered by BIR Ruling No. DA-489-03? The period covered by BIR Ruling No. DA-489-03 is from December 10, 2003, to October 6, 2010. After October 6, 2010, the Supreme Court’s ruling in CIR v. Aichi Forging Company of Asia, Inc. reinstated the mandatory nature of the 120+30-day periods.
    What does equitable estoppel mean in this context? Equitable estoppel prevents the BIR from going back on its representation in BIR Ruling No. DA-489-03, on which taxpayers relied in good faith. Taxpayers who filed claims during the ruling’s effectivity are protected from having their claims dismissed for premature filing.
    What were the requisites for entitlement to tax refund mentioned in the case? The requisites include having zero-rated or effectively zero-rated sales, incurring or paying input taxes, the input taxes being attributable to zero-rated sales, the input taxes not being applied against any output VAT liability, and filing the claim for refund within the two-year prescriptive period.
    Why was the case remanded to the CTA? The case was remanded to the CTA because the Supreme Court determined that the CTA should have taken cognizance of the claim, but the CTA had not yet ruled on the merits of VGPC’s entitlement to the tax refund, specifically the factual findings required to establish such entitlement.
    What is the practical implication of this ruling for taxpayers? The practical implication is that taxpayers who filed claims for tax refunds during the effectivity of BIR Ruling No. DA-489-03 (December 10, 2003, to October 6, 2010) can still have their claims heard, even if they did not wait for the 120-day period to lapse before filing a judicial claim.

    In conclusion, the Supreme Court’s decision in Visayas Geothermal Power Company v. Commissioner of Internal Revenue provides important clarification on the application of tax refund rules, particularly concerning the effect of prior BIR rulings. The case serves as a reminder that tax regulations and their interpretations can evolve, and taxpayers should remain informed of these changes to ensure compliance. Taxpayers should also be prepared to substantiate their claims with solid evidence to prove their entitlement to tax refunds.

    For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

    Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
    Source: Visayas Geothermal Power Company v. Commissioner of Internal Revenue, G.R. No. 205279, April 26, 2017

  • Untimely Tax Refund Claims: Strict Adherence to the 120+30 Day Rule

    The Supreme Court has affirmed the necessity of strictly adhering to the 120+30 day rule when filing judicial claims for tax refunds. Prematurely filing a claim with the Court of Tax Appeals (CTA), before the Commissioner of Internal Revenue (CIR) has had the full 120 days to decide on the administrative claim, deprives the CTA of jurisdiction. This ruling emphasizes the importance of exhausting administrative remedies before seeking judicial intervention, safeguarding the CIR’s authority in tax-related matters.

    Mirant Pagbilao’s Missed Deadline: A Jurisdictional Quagmire

    The case revolves around Mirant Pagbilao Corporation (MPC), now Team Energy Corporation, which sought a refund for excess input Value-Added Tax (VAT) payments. MPC filed an administrative claim for a refund with the Bureau of Internal Revenue (BIR) on March 11, 2002. Anticipating a potential expiration of the period for filing a judicial claim, MPC filed a petition for review with the CTA on March 26, 2002, merely 15 days after filing its administrative claim and without waiting for the CIR’s decision.

    The CIR eventually granted MPC a partial refund, but both parties were dissatisfied and elevated the matter to the CTA en banc. The CTA en banc affirmed the amended decision of the CTA Second Division. The CIR then appealed to the Supreme Court, raising the issue of whether the CTA erred in granting MPC’s claim for a refund. The Supreme Court, however, identified a more fundamental issue: whether the CTA had jurisdiction to entertain MPC’s judicial claim, given its premature filing.

    The Supreme Court emphasized that jurisdiction is conferred by law and can be raised at any stage of the proceedings, even on appeal. The Court cited Sales, et al. v. Barro, underscoring that lack of jurisdiction affects the very authority of a court to render judgment. In tax cases, compliance with administrative claim requirements before initiating judicial action is crucial for the CTA to acquire jurisdiction.

    The Court examined Section 112 of the National Internal Revenue Code (NIRC) at the time of MPC’s filing, which prescribed the periods for filing and resolving refund claims:

    Sec. 112. Refunds or Tax Credits of Input Tax. —

    (D) Period within which Refund or Tax Credit of Input Taxes shall be Made. – In proper cases, the Commissioner shall grant a refund or issue the tax credit certificate for creditable input taxes within one hundred twenty (120) days from the date of submission of complete documents in support of the application filed in accordance with Subsections (A) and (B) hereof.

    In case of full or partial denial of the claim for tax refund or tax credit, or the failure on the part of the Commissioner to act on the application within the period prescribed above, the taxpayer affected may, within thirty (30) days from the receipt of the decision denying the claim or after the expiration of the one hundred twenty-day period, appeal the decision or the unacted claim with the [CTA].

    MPC’s action directly contravened the prescribed periods. The company initiated its petition for review with the CTA a mere 15 days after filing the administrative claim, failing to observe the 120-day waiting period for the CIR to act. This non-compliance, according to the Supreme Court, was fatal to MPC’s case. The Court in CIR v. San Roque Power Corporation clarified the mandatory and jurisdictional nature of the 120-day waiting period.

    Failure to comply with the 120-day waiting period violates a mandatory provision of law. It violates the doctrine of exhaustion of administrative remedies and renders the petition premature and thus without a cause of action, with the effect that the CTA does not acquire jurisdiction over the taxpayer’s petition.

    The Court emphasized that the 30-day period to appeal a denial or inaction by the CIR was specifically designed to replace the old rule that allowed taxpayers to file judicial claims preemptively if the two-year prescriptive period was nearing expiration. The 30-day period ensures that taxpayers always have an opportunity to seek judicial review, even if the CIR acts on the 120th day or not at all. This framework underscores the need for strict adherence to the prescribed periods.

    The Supreme Court acknowledged a prior exception to this rule based on BIR Ruling No. DA-489-03, but clarified that it was inapplicable to MPC’s case, as both its administrative and judicial claims were filed in March 2002, predating the ruling’s effectivity. This ruling thus reinforces that the 120-day period is mandatory and jurisdictional, and that the CTA does not acquire jurisdiction over a judicial claim filed before its expiration.

    The implications of this ruling are significant, particularly for taxpayers seeking VAT refunds. It underscores the importance of carefully observing the timelines prescribed by law, ensuring that administrative remedies are exhausted before resorting to judicial action. Failure to comply with these procedural requirements can result in the dismissal of a claim, regardless of its merits. Therefore, businesses and individuals alike must be diligent in adhering to the 120+30 day rule to preserve their right to seek judicial review of tax refund claims.

    FAQs

    What was the key issue in this case? The key issue was whether the Court of Tax Appeals (CTA) had jurisdiction to hear Mirant Pagbilao Corporation’s (MPC) claim for a tax refund, given that MPC filed its judicial claim before the Bureau of Internal Revenue (BIR) had 120 days to act on the administrative claim.
    What is the 120+30 day rule? The 120+30 day rule refers to the period provided under Section 112 of the National Internal Revenue Code (NIRC). It mandates that the CIR has 120 days to decide on a tax refund claim, and if the taxpayer is denied or the period expires without action, they have 30 days to appeal to the CTA.
    Why did the Supreme Court set aside the CTA’s decision? The Supreme Court set aside the CTA’s decision because MPC prematurely filed its judicial claim with the CTA only 15 days after filing its administrative claim with the BIR. This premature filing violated the mandatory 120-day waiting period, depriving the CTA of jurisdiction over the case.
    What happens if a taxpayer files a claim before the 120-day period expires? If a taxpayer files a judicial claim before the 120-day period expires, the CTA does not acquire jurisdiction over the claim, and the case is subject to dismissal. Compliance with the 120-day waiting period is considered mandatory and jurisdictional.
    Does the BIR have to decide on the refund claim within 120 days? Yes, the BIR is required to grant a refund or issue a tax credit certificate within 120 days from the submission of complete documents supporting the application. If the BIR fails to act within this period, it is considered a denial, which the taxpayer can then appeal.
    Can a taxpayer file a judicial claim immediately if the two-year prescriptive period is about to expire? No, the 30-day period was adopted precisely to do away with the old rule, so that under the VAT System the taxpayer will always have 30 days to file the judicial claim even if the Commissioner acts only on the 120th day, or does not act at all during the 120-day period.
    What is the effect of non-compliance with the 120+30 day rule? Non-compliance with the 120+30 day rule renders the petition premature and without a cause of action, which leads to the CTA not acquiring jurisdiction over the taxpayer’s petition. It is a violation of the doctrine of exhaustion of administrative remedies.
    Did the court consider the merits of Mirant Pagbilao’s refund claim? No, because the CTA lacked jurisdiction, the Court found it unnecessary and inappropriate to discuss the merits of MPC’s entitlement to the tax refund. The case was decided solely on the basis of the premature filing of the judicial claim.

    In conclusion, the Supreme Court’s decision in Commissioner of Internal Revenue v. Mirant Pagbilao Corporation serves as a crucial reminder of the importance of adhering to procedural requirements in tax refund claims. Taxpayers must ensure strict compliance with the 120+30 day rule to preserve their right to seek judicial review. This ruling not only reinforces the authority of the CIR but also provides clarity on the timeline for pursuing tax refund claims, safeguarding the integrity of the tax system.

    For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

    Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
    Source: COMMISSIONER OF INTERNAL REVENUE VS. MIRANT PAGBILAO CORPORATION, G.R. No. 180434, January 20, 2016

  • Navigating VAT Refund Timelines: Strict Compliance vs. Prior Rulings in Power Generation

    In Commissioner of Internal Revenue v. Toledo Power Company, the Supreme Court addressed the complexities of claiming value-added tax (VAT) refunds, particularly for power generation companies. The Court emphasized the mandatory nature of adhering to the 120+30 day period for administrative and judicial claims, as outlined in the National Internal Revenue Code (NIRC). While acknowledging a period where a prior BIR ruling allowed for premature filing of judicial claims, the Court ultimately ruled against Toledo Power Company (TPC) for failing to comply with the strict timelines, highlighting the importance of meticulous adherence to tax regulations.

    Powering Through Deadlines: Can Toledo Power Recover VAT Refunds?

    Toledo Power Company (TPC), a power generation firm, sought refunds for unutilized input VAT for 2003 and 2004. The Commissioner of Internal Revenue (CIR) contested these claims, leading to consolidated petitions before the Supreme Court. The core issue revolved around whether TPC was entitled to these refunds, considering the established timelines for filing such claims under the National Internal Revenue Code (NIRC) and the impact of a prior Bureau of Internal Revenue (BIR) ruling.

    The legal framework for claiming VAT refunds is rooted in Section 112 of the NIRC of 1997, which outlines specific requisites for claiming unutilized or excess input VAT. These requisites include being VAT-registered, engaging in zero-rated or effectively zero-rated sales, having creditable input taxes, ensuring the input tax hasn’t been applied against output tax, and filing the claim within the prescribed period. The Supreme Court, in Commissioner of Internal Revenue v. San Roque Power Corporation, underscored the mandatory observance of the 120+30 day period for administrative and judicial claims as jurisdictional.

    Summary of Rules on Prescriptive Periods Involving VAT

    We summarize the rules on the determination of the prescriptive period for filing a tax refund or credit of unutilized input VAT as provided in Section 112 of the 1997 Tax Code, as follows:

    1. An administrative claim must be filed with the 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 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, however, can rely on BIR Ruling No. DA-489-03 from the time of its issuance on 10 December 2003 up to its reversal by this Court in Aichi on 6 October 2010, as an exception to the mandatory and jurisdictional 120+30 day periods.

    In G.R. No. 195175, concerning the 2004 claims, TPC’s administrative claim was filed on December 23, 2004, within the two-year window from the close of the taxable quarters. While BIR Ruling No. DA-489-03 was in effect, allowing for premature judicial claims, TPC filed its petition with the CTA on April 24, 2006, well beyond the 30-day period after the 120-day period expired. This late filing proved fatal to their claim.

    In contrast, G.R. No. 199645, involving the 2003 claims, presented a mixed outcome. TPC’s administrative claim was timely filed on December 23, 2004. For C.T.A. Case No. 7233, the judicial claim was filed on April 22, 2005, which was within the period allowed by BIR Ruling No. DA-489-03. However, for C.T.A. Case No. 7294, the judicial claim was filed on July 22, 2005, which was 61 days late, resulting in the denial of the refund for the second quarter of 2003.

    The Supreme Court addressed TPC’s arguments regarding the applicability of cases like Aichi, Mirant, and Atlas. The Court clarified that Atlas and Mirant pertained only to the reckoning of the prescriptive period for administrative claims and were not material to TPC’s claim, as its administrative claim was filed within the prescribed period. The Court also emphasized that the mandatory nature of the 120+30 day period was explicit in the law, even without the Aichi ruling.

    Ultimately, the Supreme Court denied the petition in G.R. No. 195175 due to TPC’s failure to observe the prescriptive periods. In G.R. No. 199645, the Court partly granted the petition, remanding C.T.A. Case No. 7233 to the Court of Tax Appeals for the computation of the refundable input VAT attributable to the zero-rated or effectively zero-rated sales of TPC for the first quarter of 2003. This underscores the critical importance of strictly adhering to the prescribed timelines for claiming VAT refunds, even when prior rulings may seem to offer some flexibility.

    FAQs

    What was the key issue in this case? The central issue was whether Toledo Power Company (TPC) was entitled to a refund of its unutilized input VAT for the taxable years 2003 and 2004, considering the established timelines for filing such claims under the National Internal Revenue Code (NIRC).
    What is the 120+30 day rule? The 120+30 day rule refers to the period within which a taxpayer must file for a VAT refund. The CIR has 120 days to decide on the administrative claim, and if no decision is made, the taxpayer has 30 days from the expiration of the 120-day period to file a judicial claim with the CTA.
    What was BIR Ruling No. DA-489-03? BIR Ruling No. DA-489-03 was a ruling that allowed taxpayers to file a judicial claim with the CTA even before the 120-day period for the CIR to decide on the administrative claim had expired. This ruling was later reversed by the Supreme Court in CIR v. Aichi Forging Company of Asia, Inc.
    Why was TPC’s claim for 2004 denied? TPC’s claim for 2004 was denied because it filed its judicial claim with the CTA on April 24, 2006, which was beyond the 30-day period after the 120-day period expired. Even though BIR Ruling No. DA-489-03 was in effect, TPC’s filing was still considered late.
    What was the outcome for TPC’s 2003 claims? For the 2003 claims, the Supreme Court partly granted the petition. The case was remanded to the CTA for the computation of the refundable input VAT attributable to the zero-rated or effectively zero-rated sales of TPC for the first quarter of 2003.
    Did the Supreme Court apply the Aichi ruling retroactively? No, the Supreme Court did not need to apply the Aichi ruling retroactively. The Court stated that even without that ruling, the law is explicit on the mandatory and jurisdictional nature of the 120+30 day period.
    What is the significance of the San Roque case? The San Roque case (Commissioner of Internal Revenue v. San Roque Power Corporation) is significant because it affirmed the mandatory observance of the 120+30 day period for administrative and judicial claims as jurisdictional.
    What can other power generation companies learn from this case? Power generation companies can learn that it is crucial to strictly adhere to the prescribed timelines for claiming VAT refunds. Failure to comply with the 120+30 day rule can result in the denial of their claims, even if they meet all other requirements.

    The Toledo Power Company case serves as a crucial reminder of the importance of strict compliance with tax regulations, especially concerning VAT refunds. While the legal landscape may evolve with new rulings and interpretations, adhering to established timelines remains a fundamental requirement for taxpayers seeking to claim refunds and navigate the complexities of the Philippine tax system.

    For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

    Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
    Source: COMMISSIONER OF INTERNAL REVENUE VS. TOLEDO POWER COMPANY, G.R. No. 195175, August 10, 2015

  • Untangling the Deadlines: How VAT Refund Claims are Timed in the Philippines

    The Supreme Court clarified that strict adherence to the 120+30 day period is crucial for claiming VAT refunds. The court emphasized that failure to comply with these statutory deadlines results in the dismissal of the claim. This ruling underscores the importance for taxpayers to meticulously track and comply with the mandated timelines when seeking VAT refunds, and clarifies that missing these deadlines forfeits the right to claim refunds, emphasizing the need for diligent adherence to procedural requirements.

    Navigating Timelines: Did HEDCOR Miss Its Chance for a VAT Refund?

    This case revolves around HEDCOR, Inc.’s claim for a refund of excess input Value Added Tax (VAT) for the taxable year 2008. HEDCOR, a hydro-electric power plant operator, believed it was entitled to a zero-percent VAT rate on its sales of electric power to the National Power Corporation (NPC). After filing an administrative claim with the Bureau of Internal Revenue (BIR) and facing inaction, HEDCOR filed a Petition for Review with the Court of Tax Appeals (CTA). The central legal question is whether HEDCOR filed its judicial claim within the prescribed period, as mandated by the National Internal Revenue Code (NIRC).

    The legal framework governing VAT refunds is primarily found in Section 112 of the NIRC, which outlines the procedures and timelines for processing such claims. The critical provision, Section 112(C), specifies the period within which the Commissioner of Internal Revenue (CIR) must act on a refund claim and the subsequent period for the taxpayer to appeal to the CTA. It states:

    Sec. 112. Refunds or Tax Credits of Input Tax.

    (C) Period within which Refund or Tax Credit of Input Taxes shall be Made. — In proper cases, the Commissioner shall grant a refund or issue the tax credit certificate for creditable input taxes within one hundred twenty (120) days from the date of submission of complete documents in support of the application filed in accordance with Subsection (A) hereof.

    In case of full or partial denial of the claim for tax refund or tax credit, or the failure on the part of the Commissioner to act on the application within the period prescribed above, the taxpayer affected may, within thirty (30) days from the receipt of the decision denying the claim or after the expiration of the one hundred twenty-day period, appeal the decision or the unacted claim with the Court of Tax Appeals.

    The Supreme Court has consistently emphasized that compliance with these periods is jurisdictional. This means that failure to adhere to the 120-day period for the BIR to act and the subsequent 30-day period for the taxpayer to appeal deprives the CTA of its authority to hear the case. However, an exception was recognized in the San Roque case during a specific period, allowing for premature filing of judicial claims. This exception was in effect between December 10, 2003, and October 6, 2010.

    In HEDCOR’s case, the CTA ruled that the company’s judicial claim was filed beyond the mandatory 120+30 day prescriptive period. HEDCOR argued that the 120-day period should be counted from September 20, 2010, the date it claimed to have submitted the complete documents supporting its administrative claim. However, the Supreme Court rejected this argument, finding that the Transmittal Letter presented by HEDCOR was not a substantial submission that would warrant a change in the reckoning date.

    The Court emphasized that the burden of proving entitlement to a tax refund rests on the taxpayer. It found that the Transmittal Letter did not bear any stamp marking to show that it was legitimately received by the BIR. Moreover, the Court cautioned against allowing taxpayers to manipulate the reckoning period by submitting documents after the prescriptive period has lapsed. This approach would undermine the integrity of the tax refund system and create uncertainty for the BIR.

    The Supreme Court highlighted the case of Philex Mining Corporation v. Commissioner of Internal Revenue, which also involved the late filing of a judicial claim. The Court contrasted the situation in Philex with cases of premature filing, where taxpayers filed their judicial claims before the expiration of the 120-day period. In Philex, the taxpayer filed its judicial claim long after the expiration of the 120-day period, resulting in the dismissal of the claim. The Court stated:

    Unlike San Roque and Taganito, Philex’s case is not one of premature filing but of late filing. Philex did not file any petition with the CTA within the 120-day period. Philex did not also file any petition with the CTA within 30 days after the expiration of the 120-day period. Philex filed its judicial claim long after the expiration of the 120-day period, in fact 426 days after the lapse of the 120-day period. In any event, whether governed by jurisprudence before, during, or after the Atlas case, Philex’s judicial claim will have to be rejected because of late filing.

    Similar to Philex, HEDCOR filed its judicial claim beyond the prescribed period. The Supreme Court found that HEDCOR had only until May 27, 2010 (counting 120+30 days from the filing of the administrative claim on December 28, 2009), to appeal to the CTA. However, HEDCOR belatedly filed its judicial claim on July 6, 2010. This delay resulted in the dismissal of its claim for a VAT refund.

    The Court also addressed HEDCOR’s argument that Revenue Memorandum Circular (RMC) No. 49-2003 supports its position that the 120-day period should be counted from the receipt of complete documents. However, the Court noted that even if this argument were accepted, HEDCOR’s claim would still fail. RMC No. 49-2003 states that claims filed with the administrative agency are officially received only upon the submission of complete documents.

    Applying this principle to HEDCOR’s case, the Court pointed out that if the administrative claim were considered officially received only on September 20, 2010, the period for filing an administrative application for a refund would have already prescribed on June 30, 2010. Thus, HEDCOR’s claim would be time-barred, regardless of the reckoning date.

    The Supreme Court ultimately held that HEDCOR failed to comply with the statutory conditions for claiming a VAT refund. As a result, it lost its right to claim a refund or credit of its alleged excess input VAT attributable to zero-rated or effectively zero-rated sales for the second quarter of taxable year 2008. This ruling underscores the importance of adhering to the strict timelines prescribed by the NIRC for claiming VAT refunds.

    FAQs

    What was the key issue in this case? The central issue was whether HEDCOR filed its judicial claim for a VAT refund within the prescribed period, as mandated by Section 112 of the National Internal Revenue Code (NIRC).
    What is the 120+30 day rule? The 120+30 day rule refers to the period within which the Commissioner of Internal Revenue (CIR) has 120 days from the submission of complete documents to decide on a VAT refund claim. Subsequently, the taxpayer has 30 days from receipt of the decision or after the 120-day period to appeal to the Court of Tax Appeals (CTA).
    What happens if a taxpayer files a judicial claim prematurely? Premature filing, which is filing before the expiration of the 120-day period, was allowed during a specific period under the San Roque case. However, the Supreme Court has since clarified that strict compliance with the 120+30 day rule is generally required.
    What happens if a taxpayer files a judicial claim late? Late filing, which is filing after the expiration of the 120-day period plus the 30-day appeal period, results in the dismissal of the claim due to lack of jurisdiction by the CTA, as seen in the HEDCOR and Philex cases.
    What is the significance of Revenue Memorandum Circular (RMC) No. 49-2003? RMC No. 49-2003 states that administrative claims are officially received only upon the submission of complete documents. However, the Supreme Court noted that even if this principle were applied, HEDCOR’s claim would still fail because the period for filing an administrative application for a refund had already prescribed.
    Who has the burden of proving entitlement to a tax refund? The burden of proving entitlement to a tax refund rests on the taxpayer. This includes submitting complete supporting documents to prove entitlement for the refund.
    What was the Court’s ruling regarding HEDCOR’s Transmittal Letter? The Court found that the Transmittal Letter submitted by HEDCOR was not a substantial submission that would warrant a change in the reckoning date for the 120-day period. The letter did not bear any stamp marking to show that it was legitimately received by the BIR.
    Can taxpayers manipulate the reckoning period for the 120-day period? The Court cautioned against allowing taxpayers to manipulate the reckoning period by submitting documents after the prescriptive period has lapsed. This approach would undermine the integrity of the tax refund system.

    In conclusion, this case serves as a reminder of the importance of strict compliance with the timelines prescribed by the NIRC for claiming VAT refunds. Taxpayers must diligently track and comply with the mandated periods to avoid the dismissal of their claims.

    For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

    Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
    Source: HEDCOR, INC. VS. COMMISSIONER OF INTERNAL REVENUE, G.R. No. 207575, July 15, 2015

  • Untimely Appeals: Strict Deadlines for VAT Refund Claims in the Philippines

    In the Philippines, taxpayers seeking refunds for Value Added Tax (VAT) must strictly adhere to the timelines set by law. The Supreme Court’s decision in Nippon Express (Philippines) Corp. v. Commissioner of Internal Revenue underscores the importance of complying with the mandatory 120+30 day periods for filing judicial claims for VAT refunds. Failure to file within this period results in the Court of Tax Appeals (CTA) losing jurisdiction over the claim, effectively barring the refund. This ruling reinforces the principle that tax refunds are construed strictly against the taxpayer, and compliance with procedural rules is crucial for a successful claim.

    Missed Deadlines, Denied Refunds: The Nippon Express VAT Saga

    Nippon Express, a freight forwarding service provider, sought a Tax Credit Certificate (TCC) for excess input VAT from zero-rated sales in 2000. After the One-Stop Shop Inter-Agency Tax Credit and Duty Drawback Center of the Department of Finance (OSSAC-DOF) failed to act on their administrative claim, Nippon Express filed a petition with the CTA. The CTA denied the claim, citing non-compliance with substantiation requirements. On appeal, the CTA En Banc affirmed the decision, leading Nippon Express to seek recourse with the Supreme Court. However, the Supreme Court focused on a critical procedural aspect: the timeliness of the judicial claim.

    The Court emphasized that the jurisdiction of the CTA is determined by law, specifically Republic Act (R.A.) No. 1125, as amended by R.A. No. 9282, which grants the CTA exclusive appellate jurisdiction over decisions of the Commissioner of Internal Revenue involving refunds of internal revenue taxes. Section 11 of the same law mandates that an appeal must be filed with the CTA within thirty days after receiving the Commissioner’s decision or ruling. This requirement is further detailed in Section 112 of the National Internal Revenue Code (NIRC) of 1997, as amended, which governs refunds or tax credits of input tax.

    Section 112 of the NIRC of 1997, as amended, specifies the timelines for both administrative and judicial claims for VAT refunds. It states:

    SEC. 112.  Refunds or Tax Credits of Input Tax. –

    (D) Period within which Refund or Tax Credit of Input Taxes shall be Made. – In proper cases, the Commissioner shall grant a refund or issue the tax credit certificate for creditable input taxes within one hundred twenty (120) days from the date of submission of complete documents in support of the application filed in accordance with Subsections (A) hereof.

    In case of full or partial denial of the claim for tax refund or tax credit, or the failure on the part of the Commissioner to act on the application within the period prescribed above, the taxpayer affected may, within thirty (30) days from the receipt of the decision denying the claim or after the expiration of the one hundred twenty-day period, appeal the decision or the unacted claim with the Court of Tax Appeals.

    The Supreme Court, citing the landmark case of Commissioner of Internal Revenue v. San Roque Power Corporation, reiterated the strict interpretation of these timelines. The San Roque case established that compliance with the 120+30 day periods is mandatory and jurisdictional for judicial claims of VAT refunds.

    To repeat, a claim for tax refund or credit, like a claim for tax refund exemption, is construed strictly against the taxpayer.  One of the conditions for a judicial claim of refund or credit under the VAT System is compliance with the 120+30 day mandatory and jurisdictional periods.  Thus, strict compliance with the 120+30 day periods is necessary for such a claim to prosper.

    The Court’s analysis revealed that Nippon Express filed its administrative claims on September 24, 2001. Consequently, the 120-day period for the Commissioner to act expired on January 22, 2002. Nippon Express then had only 30 days, or until February 21, 2002, to file its judicial claim with the CTA. However, the petition for review was filed on April 24, 2002, well beyond the prescribed deadline. As a result, the Supreme Court ruled that the CTA lacked jurisdiction over the claim due to the untimely filing.

    The Supreme Court emphasized that jurisdiction over the subject matter is conferred by law and cannot be waived. Because Nippon Express failed to comply with the mandatory 30-day period, the CTA had no authority to hear the case on its merits. The Court stated:

    It must be emphasized that jurisdiction over the subject matter or nature of an action is fundamental for a court to act on a given controversy, and is conferred only by law and not by the consent or waiver upon a court which, otherwise, would have no jurisdiction over the subject matter or nature of an action. Lack of jurisdiction of the court over an action or the subject matter of an action cannot be cured by the silence, acquiescence, or even by express consent of the parties. If the court has no jurisdiction over the nature of an action, its only jurisdiction is to dismiss the case. The court could not decide the case on the merits.

    The High Court acknowledged the arguments surrounding the substantiation requirements for VAT refunds, particularly the distinction between VAT invoices and VAT official receipts. However, given the jurisdictional issue, the Court deemed it unnecessary to delve into the specifics of the documentary evidence presented by Nippon Express. The Court, however, briefly stated, that:

    in Kepco Philippines Corporation v. Commissioner of Internal Revenue, the High Court ruled that under the law, a VAT invoice is necessary for every sale, barter or exchange of goods or properties while a VAT official receipt properly pertains to every lease of goods or properties, and every sale, barter or exchange of services.

    The decision highlights the critical importance of adhering to procedural timelines in tax refund cases. Taxpayers must diligently track the 120-day period for the Commissioner to act on their administrative claims and be prepared to file a judicial appeal within 30 days of either receiving a denial or the expiration of the 120-day period.

    FAQs

    What was the key issue in this case? The key issue was whether Nippon Express filed its judicial claim for a VAT refund within the prescribed period, giving the Court of Tax Appeals (CTA) jurisdiction over the case.
    What are the mandatory periods for VAT refund claims? Taxpayers must file an administrative claim within two years from the close of the taxable quarter when the sales were made. If the Commissioner fails to act within 120 days, the taxpayer has 30 days to appeal to the CTA.
    What happens if a taxpayer misses the 30-day deadline to appeal? If the 30-day deadline is missed, the CTA loses jurisdiction over the case, and the refund claim is barred due to prescription.
    What is the significance of the San Roque case? The San Roque case clarified and reinforced the strict compliance with the 120+30 day mandatory and jurisdictional periods for VAT refund claims.
    Can the Court of Tax Appeals (CTA) hear a case even if the deadlines are missed? No, the CTA’s jurisdiction is conferred by law, and if the deadlines are missed, the CTA has no authority to hear the case on its merits.
    What is the difference between a VAT invoice and a VAT official receipt? A VAT invoice is for the sale of goods or properties, while a VAT official receipt is for the lease of goods or properties and the sale of services.
    What was the basis for the Supreme Court’s decision in this case? The Supreme Court’s decision was based on the fact that Nippon Express failed to file its judicial claim within the 30-day period following the expiration of the 120-day period for the Commissioner to act.
    Is it important to keep track of the deadlines for VAT refund claims? Yes, it is crucial to keep track of all deadlines, as failure to comply with the timelines can result in the loss of the right to claim a refund.

    The Nippon Express case serves as a stern reminder of the importance of strict adherence to procedural rules in tax matters. Taxpayers must be vigilant in monitoring deadlines and ensuring timely filing of judicial claims to protect their rights to VAT refunds. The complexities of tax law require diligence and careful planning to navigate successfully.

    For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

    Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
    Source: NIPPON EXPRESS (PHILIPPINES) CORP. VS. COMMISSIONER OF INTERNAL REVENUE, G.R. No. 185666, February 04, 2015