CTA rejects BPO firm's P13-M tax refund claim

By Benjamin Pulta

December 20, 2023, 4:53 pm

MANILA – The Court of Tax Appeals (CTA) has affirmed the denial of a PHP13 million tax refund plea filed by a business process outsourcing (BPO) firm.

In its en banc decision dated Dec. 13 and written by Associate Justice Jean Marie Bacorro-Villena, the court “denied for lack of merit” the petition filed by BPO firm Foundever Philippines Corp. (formerly Sitel Phils.).

The tax court upheld the earlier ruling of its First Division which rejected the plea.

The firm had registered with the Philippine Economic Zone Authority (PEZA) as an information technology (IT) enterprise with numerous sites throughout the country.

However, its branch in Puerto Princesa City, Palawan is registered with the Bureau of Internal Revenue (BIR) merely as a “facility” but not registered with PEZA which would have entitled it to tax breaks as its location is not a PEZA site.

In 2018, it filed an administrative claim seeking the refund of unutilized input value-added tax but was denied by the BIR.

The court, in its ruling, said the firm “failed to meet the requisites to be entitled to the refund claimed”.

The court cited its First Division’s earlier ruling which did not agree with the firm’s argument that the registration of its Palawan site as a facility is sufficient for purposes of its refund claim.

The court said the value added tax registration is an indispensable requirement in a tax refund claim.

“The burden is on the taxpayer to show that he has strictly complied with the conditions for the grant of the tax refund or credit. Since taxes are the lifeblood of the government, tax laws must be faithfully and strictly implemented as they are not intended to be liberally construed,” the court said. (PNA)