The Court of Tax Appeals (CTA) has denied the P12.3-million refund of input value-added tax of the regional operating headquarters of Regus Service Centre, Philippines B.V. due to lack of merit.

In its decision promulgated Feb. 9, the CTA reiterated that “an applicant for a claim for tax refund or tax credit must not only prove entitlement to the claim but also compliance with all the documentary and evidentiary requirements.”

The tax court said in its statement that the management enterprise failed to present evidence for its claim to a tax refund.

The company is the regional office of a corporation based in the Netherlands. It is primarily engaged in the general administration and management of affiliate companies and is licensed by the Securities and Exchange Commission.

The claim for refund of P12,295,005.64 attributable to the company’s export sales for 2017 was not supported by proper documents, the court added.

The respondent, Commissioner of Internal Revenue, has the authority to decide on applications for a tax credit of excess payments.

“Petitioner failed to demonstrate that the tax, which is the subject of this case, was erroneously or illegally collected,” the CTA said in its decision. “

The case is a Petition For Review as an official of the Bureau of Internal Revenue had previously denied the company’s application for the VAT refund.

Testimonial and documentary evidence was presented by the petitioners, but the tax court found that the testimonies failed to corroborate with the documents presented.

The tax court added that regional operating headquarters are required to establish proof that they are seeking a refund of input VAT only to the extent of sales of services to foreign clients doing business outside the Philippines. — John Victor D. Ordoñez