CTA partially grants Ayala Corp.’s tax refund claim

THE Court of Tax Appeals (CTA) partially granted Ayala Corp. its tax refund claim of P212.93 million for its total excess and unutilized creditable taxes for 2016 and 2017.

In a 33-page ruling dated Dec. 11, the CTA Special First Division determined that only P209.3 million can be refunded from the company’s requested sum covering its two-year creditable withholding taxes (CWTs).

For the CWTs in 2016, the appellate court granted a P93.61-million refund from the company’s requested sum of P95.99 million.

For 2017, a refund of P115.69 million was determined from the requested amount of P116.94 million.

The tax court ruled that income payments, exclusive of value-added tax (VAT), were accurately reported in the company’s general ledgers (GLs) and income tax returns (ITRs). It noted that the computation of CWTs was incorrect, as it was based on income payments inclusive of VAT instead of exclusive of VAT.

The Ayala Corp. “has sufficiently proven its entitlement to the issuance of TCC (tax credit certificate) in the total amount of P209,295,557.96 representing its excess and unutilized CWTs for calendar year 2016 and 2017,” read part of the ruling penned by CTA Presiding Judge Roman G. Del Rosario.

The corporation argued that it is entitled to a tax refund as its two-year unutilized CWTs were not carried over to 2018, citing that the tax court has previously granted similar claims in the past.

On the other hand, the commissioner of internal revenue (CIR) contended that Ayala Corp. did not provide sufficient time to verify the validity of its claim, citing that only six days were given from filing to take action on the claim.

Ayala Corp. filed a claim for the issuance of a TCC on March 28, 2019. Without waiting for the CIR’s action on its claim, the corporation filed a petition for review before the CTA on April 3, 2019. — Jomel R. Paguian