THE Court of Tax Appeals (CTA) has upheld its denial of Amadeus Marketing Philippines, Inc.’s refund claim worth P16.82 million allegedly representing its excess value-added tax (VAT) traced to zero-rated sales for 2016.

In a 17-page decision made public on March 20, the tribunal said the firm’s sales did not qualify for 0% output VAT.

“In other words, instead of Amadeus IT Group S.A. (AGSA)  itself granting licenses to Subscribers, as the owner of the said Product, it is being done by the petitioner (Amadeus Marketing) on behalf of the former in the Philippines,” according to the ruling penned by Associate Justice Lanee S. Cui-David.

The tax court said the firm failed to prove that AGSA was doing business outside the Philippines.

Under the country’s revenue code, transactions with foreign corporations doing business outside the country are entitled to zero-rated sales that do not translate to output tax.

Sales and services must be other than processing, manufacturing or repacking of goods and are paid in acceptable foreign currency to qualify for 0% VAT.

The firm distributes computer software that allows its clients to book airline seats, travel tours, and hotel services, among others.

The court cited the Bureau of Internal Revenue’s finding that AGSA was doing business in the Philippines since it was in a domestic distribution agreement with Amadeus Marketing.

“It is imperative for petitioner to illustrate before this court not only that is entitled to a refund, but also that the commissioner of internal revenue should not have denied it in the first place,” the CTA said. — John Victor D. Ordoñez