Corporate News

Nokia Philippines earns P27.6-million refund from Court of Tax Appeals

Posted on July 21, 2014

THE COURT of Tax Appeals has ordered the Bureau of Internal Review (BIR) to return P27.6 million to Nokia Philippines, awarding a little less than half of the company’s requested refund of nearly P58 million.

THE NOKIA Lumia 630 model phone featuring Microsoft software
The tax refund request dates to December 2011 and concerns the portion of the company’s sales eligible for 0% value-added tax (VAT). Companies with so-called zero-rated sales are permitted to claim a refund or credit on the input tax connected to the items sold, but Nokia’s full claim was initially denied by the BIR on the grounds of insufficient documentation.

The BIR further questioned Nokia Philippines on certain marketing-related transactions with its Finnish parent company Nokia OYJ for which the local unit claimed zero-rated status.

An independent accountant hired at Nokia Philippines’ request produced a report estimating the amount of input VAT properly accounted for as P29 million, which the court eventually cut down to P27.6 million. -- Reden D. Madrid