DEUTSCHE KNOWLEDGE SERVICES PTE., LTD., v. COMMISSIONER OF INTERNAL REVENUE

REPUBLIC OF THE PHILIPPI NES COURT OF TAX APPEALS QUEZON CITY SPECIAL SECOND DIVISION DE UTSCH E KNOWLEDG E CTA CASE NO. 9496 SERVICES PTE., LTO., Petitioner, Members: -versus- CASTAN EDA, JR., Chairperson, and MANAHAN, JJ. COMMISSIONER OF INTERNAL Promulgated: REVENU E, L FEB 1z2019 Respondent. J / 7: n a �At � x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x DECISION CASTANEDA, JR., J.: THE CASE This is a Petition for Review1 filed on November 21, 2016 by Deutsche Knowledge Services Pte., Ltd. to seek the refund or issuance of tax credit certificate (TCC) in the amount of P27,065,518.44, allegedly representing its excess and unutilized input value-added tax (VAT) attributable to zero-rated sales for the second (2nd) quarter of calendar year (CY) 2014. THE FACTS Petitioner Deutsche Knowledge Services Pte., Ltd. is established as a regional operating headquarters (ROHQ) in the !<- 1 Docket, pp. 10-16.

DECISION CTA CASE NO. 9496 Philippines of a multinational company organized and existing under and by virtue of the laws of Singapore, with registered office address at One Raffles Quay, #17-10 South Tower, Singapore 048583. It is registered with the Bureau of Internal Revenue (BIR) as a VAT taxpayer, with Taxpayer Identification No. (TIN) 238-763-115-000. 2 Petitioner is licensed by the Securities and Exchange Commission (SEC) to engage in general administration and planning; business planning and coordination; sourcing/procurement of raw materials and components; corporate finance advisory services; marketing control and sales promotion; training and personnel management; logistic services; research and development services and product development; technical support and maintenance; data processing and communication and business development.3 On the other hand, respondent is the duly appointed Commissioner of the Bureau of Internal Revenue who has the power to decide disputed assessments, refunds of internal revenue taxes, fees or other charges, penalties imposed in relation thereto or other matters arising under the National Internal Revenue Code (NIRC) or other laws or portions thereof administered by the BIR. He holds office at the BIR National Office Building, Agham Road, Diliman, Quezon City. In the 2nd quarter of CY 2014, petitioner claims to have rendered services in the Philippines to persons engaged in businesses conducted outside the Philippines, the payments for which were made in Euro and other acceptable foreign currency and accounted for in accordance with the rules and regulations of Bangko Sentral ng Pilipinas (BSP).4 Petitioner filed its original VAT Return for the 2nd quarter of CY 2014 with the BIR through electronic filing and payment system (eFPS) on July 21, 2014,5 alleging that it accumulated excess input tax in the total amount of P27,178,784.99. And out of this total amount, P27,065,518.44 is purportedly attributable to its zero-rated sales, which remained unutilized and/or unapplied against its output VAT liability.6 ~ 2 Par. 2, Stipulated Facts, Joint Stipulation of Facts and Issues (JSFI), docket, p. 112. 3 Exhibit "P-1", Formal Offer of Evidence (FOE) Folder. 4 Par. 4, Petitioner's Memorandum, docket, pp. 300-301. 5 Exhibit "P-3", FOE Folder. 6 Par. 6, Petitioner's Memorandum, docket, p. 301.

DECISION CfA CASE NO. 9496 On June 24, 2016, petitioner filed with the BIR Large Taxpayers Regular Audit Division 3 (LTRAD 3) an application for tax credit/refund (BIR Form No. 1914) of its excess and unutilized input VAT for the 2nd quarter of CY 2014 in the amount of P27,065,518.44.7 There being no action taken by respondent on petitioner's administrative claim for refund, petitioner filed the present Petition for Review before the Court on November 21, 2016. Respondent filed his Answer8 on December 6, 2016, and interposed the following special and affirmative defenses: "SPECIAL AND AFFIRMATIVE DEFENSES 4. Petitioner's alleged claim for refund is subject to administrative routinary investigation/examination by the Bureau. 5. The amount of P27,065,518.44 allegedly representing excess and unutilized input VAT on alleged purchases of goods and services attributable to zero- rated sales for the 2nd quarter of calendar year 2014, was not properly documented. 6. In an action for refund, the burden of proof is on the taxpayer to establish its right to refund, and failure to sustain the burden is fatal to the claim for refund/credit. 7. Petitioner must show that it has complied with the provisions of Section 229 of the NIRC of 1997 on the prescriptive period for claiming tax refund/credit. 8. There is no record of petitioner ever submitting complete documents to substantiate its administrative claim for refund. Such is a requirement, otherwise, the administrative body will have sufficient reason to deny the claim. As held by the Honorable Supreme Court in the case of Atlas Consolidated Mining ?c- 7 Exhibit "P-4" and "P-4.a", FOE Folder. 8 Docket, pp. 50-57.

DECISION CTA CASE NO. 9496 and Development Corporation vs. Commissioner of Internal Revenue, G.R. 145526, 16 March 2007: XXX XXX XXX The implementing rule for these complete documents required by law is RMO No. 53-98. Annex B-1 of said RMO lists all the required documents as follows: XXX XXX XXX Far from complying with the checklist of requirements, petitioner merely stated that it submitted complete documents in support of its administrative claim for refund. This is not a claim for erroneously or illegally collected taxes where petitioner has the discretion of choosing the evidence it deems fit to prove its case. This is a claim for excess but legally collected, unutilized input taxes. It does not have to prove its case because the law already acknowledges it is entitled to refund. Thus, it merely has to substantiate the export sales and the excess/unutilized amount of input taxes attributable to the said export sales. Hence, petitioner's failure to comply with the duly mandated legal requirements in such claims for refund/tax credit warranted the denial by inaction of the administrative claim. The power to tax is the most effective instrument to raise needed revenues to finance and support the myriad activities of the government for the delivery of basic services essential to the promotion of the general welfare and enhancement of peace, progress, and prosperity of the people ( Mactan Cebu International Airport Authority vs. Marcos, 261 SCRA 667, 690). Consequently, any delay in implementing tax measures would be to the detriment of the public. It is for this reason that claims for refund are required to be done within certain time frames. In the instant petition, the failure of petitioner to comply with such periods is fatal to its cause. Moreover, petitioner's failure to submit documents supporting its claim for refund makes its administrative ~

DECISION CTA CASE NO. 9496 claim for refund pro-forma. This pro-forma administrative claim should not be taken as proper compliance with the requirements of the law that an administrative claim for refund should have been filed prior to the institution of a judicial claim for refund. Thus, without a validly and duly filed administrative claim for refund, the Honorable Court is without jurisdiction to entertain the Petition for Review. Petitioner's failure to comply with a condition precedent prior to the institution of its petition for review makes it dismissible for absence of jurisdiction on the part of the Honorable Court. The claimant has the burden of proof to establish the factual basis of his claim for tax credit or refund. After all tax refunds, like tax exemptions, are construed strictly against the taxpayer (Citibank N.A. vs. Court of Appeals and Commissioner of Internal Revenue, 280 SCRA 459; Commissioner of Internal Revenue vs. Tokyo Shipping Co., Ltd., 244 SCRA 332, both cited in Benguet Corporation vs. Commissioner of Internal Revenue, CTA Case No. 5392 promulgated October 30, 1998). Partaking of the nature of exemptions, claims for refund are strictly construed against the claimant and cannot be allowed unless granted in the most explicit and categorical language (Sps. Aguilar vs. Commissioner of Internal Revenue, et al., CA G.R.SP No. 16432, March 30, 1999). Being in the nature of tax exemptions, these claims are regarded as in derogation of sovereign authority and to be construed strictissimi juris against the claimant and liberally in favor of the taxing authority (Commissioner of Internal Revenue vs. Procter and Gamble Philippines Manufacturing Corporation, 204 SCRA 377). Claims for refund are construed strictly against the claimant for the same partake the nature of exemption from taxation (Commissioner of Internal Revenue vs. Ledesma, 31 SCRA 95) and such, they are looked upon with disfavor (Western Mino/co Corp. vs. Commissioner of Internal Revenue, 124 SCRA 1211}." pt-

DECISION CTA CASE NO. 9496 Respondent filed his Pre-Trial Brief on December 20, 2016, while petitioner's Pre-Trial Brief10 was filed on January 27, 2017. The pre-trial conference was held on February 2, 2017.11 The parties filed their Joint Stipulation of Facts and Issues12 on March 9, 2017, which the Court approved in its Pre-Trial Order13 dated March 20, 2017. Petitioner presented Ms. Rachel Concepcion14 and Mr. Emmanuel Y. Mendoza 15 the Court-commissioned Independent , Certified Public Accountant (ICPA), as its witnesses. On July 17, 2017, petitioner filed its Formal Offer of Evidence.16 Meanwhile, respondent's counsel manifested that the case has no report of investigation and upon motion, the parties were granted a period of thirty (30) days within which to file their respective memoranda. 17 The Court declared the case submitted for decision as of March 6, 2018,18 considering respondent's Memorandum19 filed on February 15, 2018 and petitioner's Memorandum20 filed on March 2, 2018. Hence, this decision. THE ISSUES The parties submitted the following issues21 for the Court's resolution: Whether or not petitioner is entitled to its claim for refund of or issuance of TCC for excess or unutilized input VAT in the amount of P27,065,518.44 for the 2nd quarter of CY 2014. ~ 9 Docket, pp. 61-63. 10 Docket, pp. 65-74. 11 Minutes of the Hearing, docket, p. 76. 12 Docket, pp. 112-120. 13 Docket, pp. 132-136. 14 Minutes of the Hearing dated March 20, 2017, docket, p. 137. 15 Minutes of the Hearing dated June 7, 2017, docket, p. 173. 16 Docket, pp. 182-230. 17 Minutes of the Hearing dated August 16, 2017, docket, p. 242. 18 Resolution, docket, p. 326. 19 Docket, pp. 291-297. 20 Docket, pp. 299-325. 21 Stipulated Issue, JSFI, docket, pp. 112-113.

DECISION CTA CASE NO. 9496 The main issue may be broken down into the following sub- issues: A. Whether or not petitioner incurred input VAT on its purchases of goods and services attributable to zero- rated sales for the 2nd quarter of CY 2014. B. Whether or not petitioner had zero-rated sales during the 2nd quarter of CY 2014, the consideration for which were paid for in acceptable foreign currency and accounted for in accordance with the rules and regulations of the BSP. C. Whether or not the input VAT incurred by petitioner for the 2nd quarter of CY 2014 is duly supported by VAT invoices and official receipts. D. Whether or not the input VAT incurred by petitioner for the 2nd quarter of CY 2014 amounting to P27,065,518.44 was applied against any output VAT or carried over to succeeding taxable periods. E. Whether or not petitioner's administrative and judicial claims for input VAT refund were filed within the periods prescribed under the Tax Code. DISCUSSION Pertinent to the resolution of the present case are the provisions of Sections 112(A) and (C) of the National Internal Revenue Code (NIRC) of 1997, as amended, which provide: "SEC. 112. Refunds or Tax Credits ofInput Tax.- (A) Zero-Rated or Effectively Zero-Rated Sales. - Any VAT-registered person, whose sales are zero-rated or effectively zero-rated may, within two (2) years after the close of the taxable quarter when the sales were made, Cfv

DECISION CTA CASE NO. 9496 apply for the issuance of a tax credit certificate or refund of creditable input tax due or paid attributable to such sales, except transitional input tax, to the extent that such input tax has not been applied against output tax: Provided, however, That in the case of zero-rated sales under Section 106(A)(2)(a)(1), (2) and (b) and Section 108(8)(1) and (2), the acceptable foreign currency exchange proceeds thereof had been duly accounted for in accordance with the rules and regulations of the 8angko Sentral ng Pilipinas (8SP): Provided, further, That where the taxpayer is engaged in zero-rated or effectively zero-rated sale and also in taxable or exempt sale of goods of properties or services, and the amount of creditable input tax due or paid cannot be directly and entirely attributed to any one of the transactions, it shall be allocated proportionately on the basis of the volume of sales: Provided, finally, That for a person making sales that are zero-rated under Section 108(8)(6), the input taxes shall be allocated ratably between his zero-rated and non-zero-rated sales. XXX XXX XXX (C) Period within which Refund or Tax Credit of Input Taxes shall be Made. - In proper cases, the Commissioner shall grant a refund or issue the tax credit certificate for creditable input taxes within one hundred twenty (120) days from the date of submission of complete documents in support of the application filed in accordance with Subsection (A) hereof. In case of full or partial denial of the claim for tax refund or tax credit, or the failure on the part of the Commissioner to act on the application within the period prescribed above, the taxpayer affected may, within thirty (30) days from the receipt of the decision denying the claim or after the expiration of the one hundred twenty day-period, appeal the decision or the unacted claim with the Court of Tax Appeals." Pursuant to the above-quoted provision, in order to be entitled to a refund or tax credit of unutilized input VAT attributable to zero- yL

DECISION CTA CASE NO. 9496 rated or effectively zero-rated sales, the following requisites must be satisfied: 1. that the taxpayer is VAT-registered; 2. that the claim for refund was filed within the prescriptive period; 3. that there must be zero-rated or effectively zero-rated sales; 4. that input taxes were incurred or paid; 5. that such input taxes are attributable to zero-rated or effectively zero-rated sales; and 6. that the input taxes were not applied against any output VAT liability. Petitioner is a VAT- registered entity It is undisputed that petitioner is a VAT-registered taxpayer, with Taxpayer Identification No. 238-763-115-000 and BIR Certificate of Registration No. OCN 9RC0000270209. 22 Petitioner's administrative and judicial claims were timely filed Pursuant to Section 112(A) of NIRC of 1997, as amended, the application for refund or tax credit of unutilized excess input VAT must be filed within two years after the close of the taxable quarter when the zero-rated or effectively zero-rated sales were made. The present claim covers the second quarter of CY 2014, which closed on June 30, 2014. Counting two years from the said date, petitioner had until June 30, 2016, within which to file its administrative claim for refund or tax credit. Thus, petitioner's administrative claim for the said quarter was seasonably filed on June 24, 2016. As to the timeliness of petitioner's judicial claim, Section 112(C) of the NIRC of 1997, as amended, provides that the Commissioner of Internal Revenue (CIR) has one hundred twenty (120) days from the ]4..- 22 Par. 2, Stipulated Facts, JSFI, docket, p. 112; Exhibit "P-2", FOE Folder.

DECISION CTA CASE NO. 9496 date of submission of the complete documents in support of the application for refund or tax credit certificate within which to grant or deny the claim. In case of full or partial denial by the CIR, the taxpayer's recourse is to file an appeal before the Court of Tax Appeals within 30 days from receipt of the decision of the CIR. However, if after the 120-day period the CIR fails to act on the application for tax refund/credit, the remedy of the taxpayer is to appeal the inaction of the CIR to the Court of Tax Appeals within 30 days. Accordingly, from filing of petitioner's administrative claim on June 24, 2016, respondent had 120 days or until October 22, 2016 to decide on petitioner's claim. Since respondent failed to act on the said claim, petitioner had until November 21, 2016, the last day of the 30-day period, within which to file its judicial claim. Clearly, petitioner likewise timely filed its judicial claim via Petition for Review on November 21, 2016. Petitioner had zero-rated sales during the second quarter ofCY2014 With regard to the third requisite, i.e., the existence of zero- rated sales, petitioner claims that it rendered services to non-resident entities not engaged in trade or business in the Philippines, the payments for which were made in Euro and other acceptable foreign currency and accounted for in accordance with the rules and regulations of the BSP. As such, these sales are subject to zero percent (0�/o) VAT pursuant to Section 108(8)(2) of the NIRC of 1997, as amended, which states: "SEC. 108. Value-added Tax on Sale ofServices and Use or Lease ofProperties. - XXX XXX XXX (B) Transactions Subject to Zero Percent (0%) Rate. - The following services performed in the Philippines by VAT-registered persons shall be subject to zero percent (0�/o) rate: ~

DECISION CTA CASE NO. 9496 (1) Processing, manufacturing or repacking goods for other persons doing business outside the Philippines which goods are subsequently exported, where the services are paid for in acceptable foreign currency and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP); (2) Services other than those mentioned in the preceding paragraph rendered to a person engaged in business conducted outside the Philippines or to a nonresident person not engaged in business who is outside the Philippines when the services are performed, the consideration for which is paid for in acceptable foreign currency and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP);" In the case of Commissioner of Internal Revenue v. Burmeister and Wain Scandinavian Contractor Mindanao, Inc.23, the Supreme Court held that in order for the supply of services to be VAT zero- rated under Section 108(8)(2) of the NIRC of 1997, as amended, the following requisites must be satisfied: 1. the services must be other than processing, manufacturing or repacking of goods; 2. the payment for such services must be in acceptable foreign currency accounted for in accordance with the BSP rules and regulations; and 3. the recipient of such services is doing business outside the Philippines. Petitioner is licensed by the Securities and Exchange Commission to do business as a regional operating headquarters (ROHQ) in the Philippines, pursuant to the Omnibus Investments Code of 1987, as amended by Republic Act (RA) No. 8756, and its implementing rules and regulations, particularly, to engage in general administration and planning; business planning and coordination; sourcing/procurement of raw materials and components; corporate finance advisory services; marketing control and sales promotion; p- 23 G.R. No. 153205, January 22, 2007.

DECISION CTA CASE NO. 9496 training and personnel development; logistic services; research and development services and product development; technical support and maintenance; data processing and communication and business development. 24 Such services are not in the same category as "processing, manufacturing or repacking of goods". Clearly, petitioner complied with the first requisite. In compliance with the third requisite, petitioner presented the following documents to prove that its clients/affiliates are non- resident foreign corporations doing business outside the Philippines: 1. SEC Certifications of Non-Registration of Company; 25 2. IntraGroup Service Agreements;26 3. Company Registration Documents (Certificate of Registration/Certificate of Incorporation/Association); 27 4. AMinet Company Profile Fact Sheets;28 and 5. Deutsche Bank Comprehensive List of Shareholdings 2013. 29 However, said documents are insufficient to prove that petitioner's client is a non-resident foreign corporation doing business outside the Philippines. The Certificates of Registration/Foreign Incorporation/ Association as well as the List of Shareholdings only prove that the named entities therein were incorporated/organized/domiciled abroad. However, they do not establish that such entities are not doing business in the Philippines. The SEC Certificates of Non-Registration show that the named entities therein are not registered corporations/partnerships in the Philippines. However, it does not necessarily follow that when an entity is not registered here, it is also a non-resident foreign corporations doing business outside the Philippines.lz- 24 Exhibit "P-1", FOE Folder. 25 Exhibits "P-5" to "P-5.52", FOE Folder. 26 Exhibits "P-6", "P-6.2", "P-6.4" to "P-6.14", "P-6.16" to "P-6.37", "P-6.40" to "P-6.51", FOE Folder. 27 Exhibits "P-7" to "P-7.11". 28 Exhibits "P-8" to "P-8.52", FOE Folder. 29 Exhibit "P-9", FOE Folder.

DECISION CTA CASE NO. 9496 Likewise, the Service Agreements only show the names and addresses of petitioner's clients to whom it renders services, but the same do not establish that such clients are non-resident foreign corporations doing business outside the Philippines. In the case of Site/ Philippines Corporation (formerly C/ientlogic Phils., Inc.) v. Commissioner of Internal Revenue0, the Supreme Court held that while Sitel's documentary evidence, which included Certifications issued by the Securities and Exchange Commission and Agreements between Sitel and its foreign clients, may have established that Sitel rendered services to foreign corporations and received payment therefor through inward remittances, the said documents failed to specifically prove that such foreign clients were doing business outside the Philippines or have a continuity of commercial dealings outside the Philippines. Meanwhile, the Court cannot give credence to the purported foreign business registration print-outs retrieved from the AMinet database, which is a database set up by Deutsche Bank Group. 31 Said documents are not sufficient to establish the fact that the service recipients are non-resident foreign corporations doing business outside the Philippines, as they may be considered self- serving and can be easily manipulated to favor petitioner in view of its affinity with the entity that maintains or keeps the said database. In addition, the business registration documents attached to their counterpart AMinet Company Profile Facts Sheets are not duly authenticated. The following table shows whether petitioner complied with the third requisite as it presented the admitted SEC Certificate of Non- Registration and Certificates of Registration/Foreign Incorporation/ Association for each of the recipients of the services rendered by petitioner: DB Consorzio S. Cons. a.r.l. SEC Certification Authenticated DB Energy Trading LLC of Non- Company DB International (Asia) Limited Registration Registration (Exhibit) (Exhibit) P-5 NONE P-5.1 NONE P-5.2 NONE 30 G.R. No. 201326, February 8, 2017. 31 Answer to Q51, Sworn Statement of Ms. Rachel Concepcion, Exhibit "P-10"; Par. 37, Petitioner's Memorandum, docket, p. 312.

DECISION P-5.3 NONE CTA CASE NO. 9496 P-5.4 NONE Page 14 of 31 P-5.5 NONE P-5.6 DB Services New Jersey, Inc. P-5.7 P-7 DBOI Global Services Private Limited P-5.8 DBOI Global Services UK Limited P-5.9 NONE Deutsche Asia Pacific Holdings Pte Ltd P-5.10 NONE Deutsche Asset Management Korea Company Limited Deutsche Bank (China) Co. Ltd., Shanghai Branch P-5.11 P-7.1 Deutsche Bank (Malaysia) Berhad P-5.12 Deutsche Bank (Suisse) SA P-5.13 NONE Deutsche Bank Aktiengesselschaft Asia Pacific Head P-5.14 Office P-7.2 Deutsche Bank Aktiengesselschaft, Filiale Amsterdam P-5.15 Deutsche Bank Aktiengesselschaft, Filiale Bangkok NONE Deutsche Bank Aktiengesselschaft, Filiale Brussel P-5.16 NONE Deutsche Bank Aktiengesselschaft, Filiale Cayman P-5.17 NONE Islands P-5.18 Deutsche Bank Aktiengesselschaft, Filiale Dubai P-5.19 NONE (DIFC) Deutsche Bank Aktiengesselschaft, Filiale Ho-Chi-Min P-5.20 NONE Deutsche Bank Aktiengesselschaft, Filiale HongKong P-5.21 NONE Deutsche Bank Aktiengesselschaft, Filiale Jakarta P-5.22 Deutsche Bank Aktiengesselschaft, Filiale P-5.23 P-7.3 Johannesburg P-5.24 Deutsche Bank Aktiengesselschaft, Filiale Labuan P-5.25 NONE Deutsche Bank Aktiengesselschaft, Filiale London P-5.26 Deutsche Bank Aktiengesselschaft, Filiale Mumbai P-5.27 NONE Deutsche Bank Aktiengesselschaft_L Filiale New York P-5.28 NONE Deutsche Bank Aktien_g_esselschaftL Filiale Paris P-5.29 Deutsche Bank Aktien_g_esselschaft, Filiale Prag_ P-5.30 P-7.11 Deutsche Bank Aktiengesselschaft, Filiale Seoul P-5.31 Deutsche Bank Aktiengesselschaft, Filiale Singapur P-5.32 NONE Deutsche Bank Aktiengesselschaft, Filiale Taipei P-5.33 Deutsche Bank Aktiengesselschaft, Filiale Wein P-5.34 P-7.4 Deutsche Bank Aktiengesselschaft Filiale Zurich P-5.35 Deutsche Bank Aktiengesselschaft Inlandsbank P-5.36 NONE Deutsche Bank Luxembourg S.A. P-5.37 NONE Deutsche Bank Netherland N.V. P-5.38 Deutsche Bank PGK AG P-5.39 P-7.5 Deutsche Bank Securities Inc. P-5.40 P-7.6 Deutsche Bank Societa per Azioni P-5.41 Deutsche Bank Trust Company Americas P-5.42 NONE Deutsche Bank Company Delaware P-5.43 NONE Deutsche Bank Trust Corporation P-5.44 NONE Deutsche Bank Sociedad Anonima Espanola P-5.45 Deutsche Group Services Pty Limited P-5.46 P-7.7 Deutsche Investment Management Americas Inc. P-5.47 Deutsche Securities Inc. P-5.48 NONE Deutsche Securities Korea Co. NONE Deutsche Trustees Malaysia Berhad NONE DWS Holding and Service GmbH DWS Investment S.A. P-7.8 NONE NONE NONE NONE NONE P-7.9 NONE P-7.10 NONE NONE NONE NONE

DECISION P-5.49 NONE CfA CASE NO. 9496 P-5.50 NONE Page 15 of 31 P-5.51 NONE P-5.52 NONE 000 "Deutsche Bank" PT Deutsche Securities Indonesia RREEF Management GmbH RREEF Management L.L.C. Consequently, only the sales of services by petitioner to entities which are duly supported by the two required documents will be treated as subject to the 0�/o VAT rate, pursuant to Section 108(8)(2) of the NIRC of 1997, as amended. In relation to the second requisite, Sections 113(A)(2), (B)(1), (2)(c) and (3) of the NIRC of 1997, as amended, as implemented by Sections 4.113-1(A)(2), (B)(1) and (2)(c) of Revenue Regulations (RR) No. 16-05, provide that a VAT taxpayer, like herein petitioner, shall for every lease of goods or properties and for every sale, barter or exchange of services issue a VAT official receipt which must contain the following information: "SEC. 113. Invoicing and Accounting Requirements for VAT-Registered Persons. - (A) Invoicing Requirements. - A VAT-registered person shall issue: XXX XXX XXX (2) A VAT official receipt for every lease of goods or properties, and for every sale, barter or exchange of services. (B) Information Contained in the VAT Invoice or VAT Official Receipt. - The following information shall be indicated in the VAT invoice or VAT official receipt: (1) A statement that the seller is a VAT-registered person, followed by his Taxpayer's Identification Number (TIN); (2) The total amount which the purchaser pays or is obligated to pay to the seller with the indication that such amount includes the value-added tax: Provided, That: $t.-

DECISION CTA CASE NO. 9496 XXX XXX XXX (c) If the sale is subject to zero percent (0�/o) value- added tax, the term 'zero-rated sale' shall be written or printed prominently on the invoice or receipt; XXX XXX XXX (3) The date of transaction, quantity, unit cost and description of the goods or properties or nature of the service; and" (Emphasis supplied) "SECTION 4.113-1. Invoicing Requirements.- (A) A VAT-registered person shall issue:- XXX XXX XXX (2) A VAT official receipt for every lease of goods or properties, and for every sale, barter or exchange of services. Only VAT-registered persons are required to print their TIN followed by the word 'VAT' in their invoice or official receipts. Said documents shall be considered as a 'VAT Invoice' or VAT official receipt. All purchases covered by invoices/receipts other than VAT Invoice/VAT Official Receipt shall not give rise to any input tax. VAT invoice/official receipt shall be prepared at least in duplicate, the original to be given to the buyer and the duplicate to be retained by the seller as part of his accounting records. (B) Information contained in VAT invoice or VAT official receipt -The following information shall be indicated in VAT invoice or VAT official receipt:~

DECISION CTA CASE NO. 9496 (1) A statement that the seller is a VAT-registered person, followed by his TIN; (2) The total amount which the purchaser pays or is obligated to pay to the seller with the indication that such amount includes the VAT; Provided, That: XXX XXX XXX (c) If the sale is subject to zero percent (0�/o) VAT, the term 'zero-rated sale' shall be written or printed prominently on the invoice or receipt;" (Emphasis supplied) Pursuant to the foregoing prov1s1ons, the foreign currency remittances referred to under Section 108(8)(2) of the NIRC of 1997, as amended, must likewise be supported by VAT zero-rated official receipts. To prove that it rendered services to its non-resident foreign clients/affiliates and was paid in Euro duly accounted for in accordance with the rules and regulations of the 8SP for the second quarter of CY 2014, petitioner presented its Schedule of Zero-Rated Sales32, and the related official receipts33, sales invoices34, and bank inward remittances. 35 Upon scrutiny of the documents submitted, the Court finds that out of the P1,400,103,099.7736 zero-rated sales declared per VAT Return for the second quarter of CY 2014, only the amount of 19,028,312.32 with peso equivalent of P1,146,413,520.86, as detailed below, qualifies for VAT zero-rating under Section 108(8)(2) of the NIRC of 1997, as amended: Customer's Name OR OR Exh. OR Amount in Inward Valid Zero-rated No. Ref. Euro Remittance Sales in Php Deutsche Securities Inc. 5258 P-12-3 109 714.89 6 754 632.86 Deutsche Bank Aktiengesellschaft, Exh. Ref Filiale Sinqapur 5264 P-12-5 257 171.95 P-12-36 15 820 755.45 P-12-56 32 Annex 1 of Exhibit "P-12" (ICPA Report). 33 Exhibits "P-12-1" to "P-12-184", CD 34 Exhibits "P-12-1a" to "P-12-184a", CD. 35 Exhibits "P-12-1b" to "P-12-184b", CD. 36 Exhibit "P-30-4", Line 17, CD.

DECISION CTA CASE NO. 9496 Deutsche Bank Aktiengesellschaft, 5265 P-12-6 421 607.37 P-12-6B 25 936 526.51 Filiale Hongkonq 5268 P-12-7 131460.94 P-12-7B 8 072 957.18 Deutsche Bank Aktiengesellschaft, 5271 P-12-10 P-12-10B 4 312 199.70 Filiale Singapur 5272 P-12-11 70 115.65 P-12-11B 1 518 852.59 5273 P-12-12 24 704.96 P-12-12B 5 796 180.19 Deutsche Group Services pty Limited 5281 P-12-17 94 278.01 P-12-17B Deutsche Bank Aktiengesellschaft, 5282 P-12-18 1 839 056.20 P-12-18B 112 925 848.28 Filiale Singapur 5283 P-12-19 421 558.95 P-12-19B 25 885 506.95 Deutsche Bank Aktiengesellschaft, 5289 P-12-23 161 455.54 P-12-23B 9L914 054.73 Filiale Hongkong 5292 P-12-26 23 606.23 P-12-26B 1447 934.60 Deutsche Bank Aktiengesellschaft, 5293 P-12-27 215 918.00 P-12-27B 13 243 755.67 Filiale London 5297 P-12-29 1194 457.68 P-12-29B 73 264 413.69 Deutsche Bank Aktiengesellschaft, 5298 P-12-30 28 760.30 P-12-30B 1 767 361.71 Filiale New York 5302 P-12-34 P-12-34B 545 832.54 5315 P-12-43 8 882.34 P-12-43B 73 026,573.07 Deutsche Bank Securities Inc. 5316 P-12-44 t182 412.81 P-12-44B 16 755 982.49 5321 P-12-46 P-12-46B 25 613 680.89 Deutsche Bank (Malaysia) Berhad 5323 P-12-48 280 595.65 P-12-48B 6 438 499.64 Deutsche Bank Aktiengesellschaft, Asia 5324 P-12-49 428 926.65 P-12-49B 8 002 115.25 Pacific Head Office 5326 P-12-50 107 897.61 P-12-50B 12 970 042.73 Deutsche Bank Aktiengesellschaft, Asia 5328 P-12-52 134 100.98 P-12-52B 2 425 256.75 Pacific Head Office 5331 P-12-53 217 354.46 P-12-53B 1412 843.72 Deutsche Bank Aktiengesellschaft, 5332 P-12-54 P-12-54B 1478 603.22 Filiale Seoul 5333 P-12-55 40 521.94 P-12-55B 67 850 348.39 5336 P-12-57 23,606.23 P-12-57B 25 296 958.86 Deutsche Asia Pacific Holdings pte Ltd 5342 P-12-62 24,704.96 P-12-62B 5 935 542.34 Deutsche Bank Aktiengesellschaft, 5345 P-12-64 1133,813.70 P-12-64B 1 722 722.67 Filiale London 5346 P-12-65 422 725.00 P-12-63B 4 947 249.51 Deutsche Bank Aktiengesellschaft, 5353 P-12-70 99 185.92 P-12-70B 10,981 133.01 Filiale Singapur 5358 P-12-72 28 760.30 P-12-72B 3 931 923.43 Deutsche Bank Aktiengesellschaft, 5369 P-12-81 82 852.00 P-12-81B Filiale Hon_g_kong 5370 P-12-82 183 901.95 P-12-82B 167 450 414.11 5390 P-12-102 66 066.40 P-12-102B 32 150 044.16 Deutsche Securities Inc. 5391 P-12-103 2,813 596.51 P-12-103B 6 439 762.03 Deutsche Bank Aktiengesellschaft, 5392 P-12-104 538 670.98 P-12-104B 1 465,207.64 Filiale Singapur 5405 P-12-116 107 897.61 P-12-116B 5 892 984.44 Deutsche Bank Aktiengesellschaft, Asia 5408 P-12-119 24 704.96 P-12-119B 12 913 793.12 Pacific Head Office 99 185.92 7 868 436.39 Deutsche Bank Aktiengesellschaft, 217 354.46 67 790 777.10 Filiale New York 132 435.12 Deutsche Bank(Malqysia)_ Berhad 1140~99.21 Deutsche Bank Aktiengesellschaft, Filiale Sing_~ur Deutsche Bank Aktiengesellschaft, Asia Pacific Head Office Deutsche Bank Aktiengesellschaft, Filiale New York Deutsche Bank Aktiengesellschaft, Filiale Hongkong Deutsche Bank Aktiengesellschaft, Filiale Seoul Deutsche Bank Aktiengesellschaft, Filiale London Deutsche Bank Securities Inc. Deutsche Bank Aktiengesellschaft, Filiale London Deutsche Bank Aktiengesellschaft, Filiale London Deutsche Securities Inc. Deutsche Securities Inc. Deutsche Bank Aktiengesellschaft, Filiale Singapur Deutsche Bank Aktiengesellschaft, Filiale Hongkong Deutsche Bank Aktiengesellschaft, Asia Pacific Head Office Deutsche Bank Aktiengesellschaft, Filiale Singapur Deutsche Bank Aktiengesellschaft, Filiale London

DECISION CTA CASE NO. 9496 Deutsche Bank Aktiengesellschaft, 5418 P-12-126 28 760.30 P-12-126B 1 709 570.64 Filiale Seoul 5420 P-12-128 23,606.23 P-12-128B 1403 202.26 Deutsche Bank (Malaysia) Berhad 5421 P-12-129 500,922.34 P-12-129B 29 775 841.26 Deutsche Bank Aktiengesellschaft, 5421 P-12-129 155 670.00 P-12-129B 9 253 340.97 Filiale New York 5428 P-12-136 369 116.84 P-12-136B 21 941 054.65 Deutsche Bank Securities Inc. Deutsche Bank Aktiengesellschaft, 5432 P-12-140 792,843.63 P-12-140B 47 128 235.63 Filiale Hongkong 5436 P-12-178 248,659.11 P-12-178B 14 780 802.53 Deutsche Bank Aktiengesellschaft, Asia 5437 P-12-179 P-12-179B 4 167 816.64 Pacific Head Office 70 115.65 5438 P-12-142B 15 326 726.46 Deutsche Group Services pty Limited P-12-142 257 843.25 5450 P-12-lSOB 98 586 582.75 Deutsche Group Services pty Limited 5455 P-12-150 1 646 757.94 P-12-lSSB 1 063 519.46 Deutsche Bank Aktiengesellschaft, 5267 P-12-155 17,764.68 P-12-158B Filiale Sinaapur 5330 P-12-158 P-12-168B 19 092 482.72 Deutsche Bank Aktiengesellschaft, P-12-168 310 779.13 4 216 637.28 Filiale London 70 452.88 1,146A13,520.8& Deutsche Asia Pacific Holdings Pte Ltd 19 028.31.2.32 Deutsche Group Services pty Limited Deutsche Group Services pty Limited TOTAL VALID ZERO;.RATED SALES On the other hand, the remaining amount of P253,689,578.94 shall be denied VAT zero-rating due to the following reasons: Inward OR OR Exh. OR Amount Remittance Disallowed No. Ref in Euro Exh. Ref. Zero-rated Sales Overclaimed zero-rated sales (Amount per inward remittance in Php is lower than the claimed zero-rated sales) Deutsche Securities Inc. 5258 P-12-3 109 714.89 P-12-3B p 1 011.04 Deutsche Group Services pty Limited 5271 P-12-10 70 115.65 P-12-lOB 7 600.98 Deutsche Bank Aktiengesellschaft, Filiale 5272 P-12-11 24 704.96 P-12-11B 502.70 Singapur Deutsche Bank Aktiengesellschaft, Filiale 5273 P-12-12 94 278.01 P-12-12B 1 918.37 Hongkonq Deutsche Bank (Malaysia) Berhad 5289 P-12-23 23 606.23 P-12-23B 3 337.24 Deutsche Bank Aktiengesellschaft, Asia 5292 P-12-26 215 918.00 P-12-26B 30 524.55 Pacific Head Office 5293 P-12-27 1194 457.68 P-12-27B 168 861.68 Deutsche Bank Aktiengesellschaft, Asia 5297 P-12-29 P-12-29B 12 941.71 Pacific Head Office 28,760.30 Deutsche Bank Aktiengesellschaft, Filiale Seoul Deutsche Asia Pacific Holdinqs Pte Ltd 5298 P-12-30 8 882.34 P-12-30B 3 996.92 Deutsche Bank Aktiengesellschaft, Filiale 5302 P-12-34 1182 412.81 P-12-34B 134 238.15 London 5326 P-12-50 P-12-SOB Deutsche Bank Aktiengesellschaft, Filiale 40 521.94 6 895.62 New York Deutsche Bank (Malaysia) Berhad 5328 P-12-52 23 606.23 P-12-52B 4 017.08 Deutsche Bank Aktiengesellschaft, Filiale 5331 P-12-53 24 704.96 P-12-53B 4,204.04 Sing_CIQ_ur 5342 P-12-62 28 760.30 P-12-62B 3 727.94 Deutsche Bank Aktiengesellschaft, Filiale 5353 P-12-70 66 066.40 P-12-70B Seoul 5358 P-12-72 2 813 596.51 P-12-72B 783.41 Deutsche Bank Aktiengesellschaft, Filiale 51 821.91 London Deutsche Bank Aktiengesellschaft, Filiale London Deutsche Securities Inc. 5369 P-12-81 538 670.98 P-12-81B 769/154.84 Deutsche Securities Inc. 5370 P-12-82 107 897.61 P-12-82B 72 383.12 Deutsche Bank Aktiengesellschaft, Filiale 5390 P-12-102 24 704.96 P-12-102B 4 039.07 Sinqapur

DECISION CTA CASE NO. 9496 Deutsche Bank Aktiengesellschaft, Filiale 5391 P-12-103 99 185.92 P-12-103B 5 773.84 Honqkonq P-12-104B 12 652.64 Deutsche Bank Aktiengesellschaft, Asia 5392 P-12-104 217 354.46 P-12-116B Pacific Head Office P-12-119B 7 709.32 Deutsche Bank Aktiengesellschaft, Filiale 5405 P-12-116 132 435.12 P-12-126B 109 382.66 Singapur Deutsche Bank Aktiengesellschaft, Filiale 5408 P-12-119 1140 999.21 854.16 London Deutsche Bank Aktiengesellschaft, Filiale 5418 P-12-126 28 760.30 Seoul Deutsche Bank (Malaysia) Berhad 5420 P-12-128 23,606.23 P-12-128B 701.09 Deutsche Bank Aktiengesellschaft, Filiale 5421 P-12-129 500 922.34 P-12-129B 99 989.73 New York Deutsche Bank Securities Inc. 5421 P-12-129 155 670.00 P-12-129B 201 098.21 Deutsche Bank Aktiengesellschaft, Filiale 5428 P-12-136 369 116.84 P-12-136B 880 314.35 Hong kong 5432 P-12-140 792,843.63 P-12-140B 1678 829.37 Deutsche Bank Aktiengesellschaft, Asia Pacific Head Office Deutsche Group Services Pty Limited 5436 P-12-178 248 659.11 P-12-178B 601[587.47 Deutsche Group Services Pty Limited 5437 P-12-179 70 115.65 P-12-179B 9 516.34 Deutsche Bank Aktiengesellschaft, Filiale 5438 P-12-142 257 843.25 P-12-142B 596 764.54 Sinqapur 5450 P-12-150 1646 757.94 P-12-150B 2 355 716.25 Deutsche Bank Aktiengesellschaft, Filiale London Deutsche Asia Pacific Holdings Pte Ltd 5455 P-12-155 17 764.68 P-12-155B 821.08 Deutsche Group Services Pty Limited 5330 P-12-168 70,452.88 P-12-168B 19 491.54 Sub-total p 7.863,162.96 Without supporting zero-rated official receipt Deutsche Bank Aktiengesellschaft, Filiale New York 5261 47 602.32 p 2 928 409.04 p 2928409.04 Sub-total Sull/l!)rted byphotocopied official receipt Deutsche Group Services Pty Limited 5329 P-12-183 340 145.38 P-12-183B p 20 423 242.58 Sub-total p 20,423,242.58 ORs issued were not in the name of Deutsche Bank Aktiengesel/schaft, Inlandsbank (issued to DB AG Domestic Bank) Deutsche Bank Aktiengesellschaft, 5371 P-12-83 35 096.88 P-12-83B p 2 171 871.45 Inlandsbank Deutsche Bank Aktiengesellschaft, Inlandsbank 5372 P-12-84 7 608.08 P-12-84B 470 804.58 Deutsche Bank Aktiengesellschaft, Inlandsbank 5373 P-12-85 386 522.37 P-12-85B 23 686 256.00 Deutsche Bank Aktiengesellschaft, Inlandsbank 5374 P-12-86 37 309.95 P-12-86B 2 308 821.04 Deutsche Bank Aktiengesellschaft, Inlandsbank 5375 P-12-87 91970.24 P-12-87B 5 691 318.95 Deutsche Bank Aktiengesellschaft, Inlandsbank 5376 P-12-88 227 988.06 P-12-88B 14 108 398.17 Deutsche Bank Aktiengesellschaft, Inlandsbank 5379 P-12-91 231 958.88 P-12-91B 14 325 525.33 Deutsche Bank Aktiengesellschaft, Inlandsbank 5380 P-12-92 35 519.77 P-12-92B 2 193 661.92 Deutsche Bank Aktiengesellschaft, Inlandsbank 5381 P-12-93 16 495.08 P-12-93B 1 018 718.00 Deutsche Bank Aktiengesellschaft, Inlandsbank 5382 P-12-94 34 309.93 P-12-94B 2 118 943.54 Deutsche Bank Aktiengesellschaft, Inlandsbank 5383 P-12-95 16 421.21 P-12-95B 1 014 155.87 Deutsche Bank Aktiengesellschaft, Inlandsbank 5384 P-12-96 16 118.48 P-12-96B 997 446.68 Deutsche Bank Aktiengesellschaft, Inlandsbank 5385 P-12-97 7 717.99 P-12-97B 476 654.58 Deutsche Bank Aktiengesellschaft, Inlandsbank 5393 P-12-105 88 761.44 P-12-105B 5 481808.90

DECISION CTA CASE NO. 9496 Deutsche Bank Aktiengesellschaft, 5395 P-12-107 132 843.97 P-12-107B 8 105 504.00 Inlandsbank 5396 P-12-108 34 309.93 P-12-108B 2 070 771.02 Deutsche Bank Aktiengesellschaft, 5397 P-12-109 P-12-109B 14 518 493.15 Inlandsbank 5398 P-12-110 240 552.18 P-12-110B Deutsche Bank Aktiengesellschaft, 5399 P-12-111 7 717.99 P-12-111B 465 818.21 Inlandsbank 5400 P-12-112 P-12-112B 995 558.24 Deutsche Bank Aktiengesellschaft, 5401 P-12-113 16 495.08 P-12-113B 2 143 790.75 Inlandsbank 5406 P-12-117 35 519.77 P-12-117B 991 099.83 Deutsche Bank Aktiengesellschaft, 5407 P-12-118 16 421.21 P-12-118B 1 715 339.38 Inlandsbank 5412 P-12-122 27 719.44 P-12-122B 3 590 036.48 Deutsche Bank Aktiengesellschaft, 5423 P-12-131 59 038.79 P-12-131 5 357 184.28 Inlandsbank 5424 P-12-132 88 761.44 P-12-132 976 597.77 Deutsche Bank Aktiengesellschaft, 5425 P-12-133 16 421.21 P-12-133 459 002.22 Inlandsbank 5426 P-12-134 P-12-134 980 990.94 Deutsche Bank Aktiengesellschaft, 5427 P-12-135 7 717.99 P-12-135 14 306 054.40 Inlandsbank 16 495.08 2 040 470.89 Deutsche Bank Aktiengesellschaft, 240 552.18 Inlandsbank 34 309.93 Deutsche Bank Aktiengesellschaft, Inlandsbank Deutsche Bank Aktiengesellschaft, Inlandsbank Deutsche Bank Aktiengesellschaft, Inlandsbank Deutsche Bank Aktiengesellschaft, Inlandsbank Deutsche Bank Aktiengesellschaft, Inlandsbank Deutsche Bank Aktiengesellschaft, Inlandsbank Sub-total 1#134,781,096.57 Sales to entities not considered as non-resident foreign corporations doing business outside the Philippines (without proofof foreign registration/incorporation) DB Consorzio S. Cons. a.r.l. 5274 4 728.64 ~ 291,709.44 DB Consorzio S. Cons. a.r.l. 5334 4 750.64 284 290.60 DB Consorzio S. Cons. a.r.l. 5447 4 750.64 282 528.79 DB Energy Trading LLC 5261 (28.52) (1 754.501 DB Energy Tradinq LLC 5318 442.48 26 423.03 DB Enerqy Trading LLC 5415 371.76 22 781.00 DB International (Asia) Limited 5253 13 512.94 837 188.81 DB International (Asia) Limited 5253 13 512.94 837 188.78 DB International (Asia) Limited 5308 13 543.78 835 219.19 DB International (Asia) Limited 5387 13 543.78 817 432.95 DB Services New Jersey, Inc. 5261 7 142.59 677 541.00 DB Services New Jersey, Inc. 5318 9 261.69 553 068.86 DB Services New Jersey, Inc. 5445 11 071.96 439 399.28 DBOI Global Services Private Limited 5279 4 914.15 301 749.66 DBOI Global Services Private Limited 5279 67 475.30 4 143 269.52 DBOI Global Services Private Limited 5386 4 914.15 302 514.13 DBOI Global Services Private Limited 5386 3 515.78 216 430.74 DBOI Global Services Private Limited 5386 5 067.35 311945.09 DBOI Global Services Private Limited 5386 84 314.84 5 190 405.31 DBOI Global Services UK Limited 5439 318.49 19 573.24 DBOI Global Services UK Limited 5439 3 987.04 245 029.03 DBOI Global Services UK Limited 5439 4 018.52 246 963.68 DBOI Global Services UK Limited 5439 1 850.11 113 701.06 Deutsche (Suisse) SA 5306 26 010.64 1 606 930.85 Deutsche Asset Management (Korea) 5351 4 142.60 253 461.03 Company Limited 5378 4 255.58 260 373.60 Deutsche Asset Management (Korea) Company Limited

DECISION CTA CASE NO. 9496 Deutsche Asset Management (Korea) 5378 4 255.58 260 373.60 Company Limited 5378 4 142.60 253 461.03 Deutsche Asset Management (Korea) 5312 7 638.26 461 006.11 Company Limited 5312 7 563.48 456 492.78 Deutsche Bank (China) Co. Ltd., Shanghai 5312 7 506.56 453 057.38 Branch 5312 7 506.56 453 057.38 Deutsche Bank (China) Co. Ltd., Shanghai 5312 8 062.31 486 599.59 Branch 5312 8 062.31 486 599.59 Deutsche Bank (China) Co. Ltd., Shanghai 5312 15 436.57 931 672.03 Branch 5312 15 436.57 931 672.02 Deutsche Bank (China) Co. Ltd., Shanghai 5356 15_1)17.75 947 876.71 Branch 5356 15/917.75 947 876.71 Deutsche Bank (China) Co. Ltd., Shanghai 5301 7 298.26 451 772.66 Branch 5276 Deutsche Bank (China) Co. Ltd., Shanghai 5278 22.38 1 374.23 Branch 5349 6,342.25 389 441.04 Deutsche Bank (China) Co. Ltd., Shanghai 5350 6 342.25 378 707.74 Branch 5430 Deutsche Bank (China) Co. Ltd., Shanghai 5270 252.81 15 095.76 Branch 5280 6 342.25 377 184.58 Deutsche Bank (China) Co. Ltd., Shanghai 5357 7 609.08 467 958.50 Branch 5360 21 856.46 1 342 079.32 Deutsche Bank (China) Co. Ltd., Shanghai 5440 7 609.08 453 108.62 Branch 5444 21 856.20 1 305 832.76 5305 20 892.33 1 291 799.00 Deutsche Bank (Suisse) SA 5317 7 609.08 452 525.16 Deutsche Bank Aktiengesellschaft, Filiale 5394 4 296.65 265 445.96 Amsterdam 5261 4 296.65 256 391.03 Deutsche Bank Aktiengesellschaft, Filiale 5318 4 296.65 255 872.77 Amsterdam 5421 37 305.25 Deutsche Bank Aktiengesellschaft, Filiale 5295 606.41 16 046.22 Amsterdam 5335 268.71 22 075.00 Deutsche Bank Aktiengesellschaft, Filiale 5451 359.04 262 979.13 Amsterdam 5307 255 982.06 Deutsche Bank Aktiengesellschaft, Filiale 5307 ~277.59 254 395.68 Amsterdam 390 607.61 Deutsche Bank Aktiengesellschaft, Filiale 4 277.59 Banqkok 4 277.59 Deutsche Bank Aktiengesellschaft, Filiale 6 334.03 Banqkok Deutsche Bank Aktiengesellschaft, Filiale Bangkok Deutsche Bank Aktiengesellschaft, Filiale Bangkok Deutsche Bank Aktiengesellschaft, Filiale Bangkok Deutsche Bank Aktiengesellschaft, Filiale Bangkok Deutsche Bank Aktiengesellschaft, Filiale Brussel Deutsche Bank Aktiengesellschaft, Filiale Brussel Deutsche Bank Aktiengesellschaft, Filiale Brussel Deutsche Bank Aktiengesellschaft, Filiale Cayman Islands Deutsche Bank Aktiengesellschaft, Filiale cayman Islands Deutsche Bank Aktiengesellschaft, Filiale Cayman Islands Deutsche Bank Aktiengesellschaft, Filiale Dubai (DIFC) Deutsche Bank Aktiengesellschaft, Filiale Dubai (DIFC) Deutsche Bank Aktiengesellschaft, Filiale Dubai (DIFC) Deutsche Bank Aktiengesellschaft, Filiale Ho-Chi-Min Deutsche Bank Aktiengesellschaft, Filiale

DECISION CTA CASE NO. 9496 Ho-Chi-Min 5307 8,409.00 518,570.15 5327 8 409.05 518 570.15 Deutsche Bank Aktiengesellschaft, Filiale 5314 8 409.05 504 716.48 Ho-Chi-Min 5252 6,975.66 416 556.84 Deutsche Bank Aktiengesellschaft, Filiale 5300 3 071.35 189 464.49 Ho-Chi-Min 5359 3 167.09 188 595.17 Deutsche Bank Aktiengesellschaft, Filiale 5446 3 167.09 195 596.00 Jakarta 5290 3 167.09 188 352.33 Deutsche Bank Aktiengesellschaft, Filiale 5344 1 365.27 83 934.54 Johannesburg 5417 1 365.27 81 955.72 Deutsche Bank Aktiengesellschaft, Filiale 5313 1 365.27 81194.97 Johannesburg 5313 9 393.56 566 517.73 Deutsche Bank Aktiengesellschaft, Filiale 5389 9 069.63 546,981.79 Johannesburg 5266 9 352.36 577 591.49 Deutsche Bank Aktiengesellschaft, Filiale 5325 3 822.92 234 763.80 Johannesburg 5354 3 822.92 229 454.07 Deutsche Bank Aktiengesellschaft, Filiale 5355 Labuan 5409 68.60 4 083.52 Deutsche Bank Aktiengesellschaft, Filiale 5294 99.02 5 894.32 Labuan 5320 3 822.92 227 355.67 Deutsche Bank Aktiengesellschaft, Filiale 5403 316.71 19 470.80 Labuan 5442 316.71 18 898.82 Deutsche Bank Aktiengesellschaft, Filiale 5442 316.71 18 835.29 Mumbai 5442 3 181.04 191 872.60 Deutsche Bank Aktiengesellschaft, Filiale 5442 3 071.35 185 256.37 Mumbai 5442 3,071.35 185 256.37 Deutsche Bank Aktiengesellschaft, Filiale 5443 3 167.09 191 031.17 Mumbai 5443 3,167.09 191 031.17 Deutsche Bank Aktiengesellschaft, Filiale 5443 (1 922.28) (115 947.26) Paris 5443 3 077.36 185 618.88 Deutsche Bank Aktiengesellschaft, Filiale 5443 2 957.32 178,378.36 Paris 5311 2 957.32 178 378.36 Deutsche Bank Aktiengesellschaft, Filiale 5263 2 957.32 178 378.36 Paris 5319 8 780.37 540 799.06 Deutsche Bank Aktiengesellschaft, Filiale 316.71 19 483.43 Paris Deutsche Bank Aktiengesellschaft, Filiale Paris Deutsche Bank Aktiengesellschaft, Filiale Prag Deutsche Bank Aktiengesellschaft, Filiale Prag Deutsche Bank Aktiengesellschaft, Filiale Prag Deutsche Bank Aktiengesellschaft, Filiale Taipei Deutsche Bank Aktiengesellschaft, Filiale Taipei Deutsche Bank Aktiengesellschaft, Filiale Taipei Deutsche Bank Aktiengesellschaft, Filiale Taipei Deutsche Bank Aktiengesellschaft, Filiale Taipei Deutsche Bank Aktiengesellschaft, Filiale Taipei Deutsche Bank Aktiengesellschaft, Filiale Taipei Deutsche Bank Aktiengesellschaft, Filiale Taipei Deutsche Bank Aktiengesellschaft, Filiale Taipei Deutsche Bank Aktiengesellschaft, Filiale Taipei Deutsche Bank Aktiengesellschaft, Filiale Tokyo Deutsche Bank Aktiengesellschaft, Filiale Wien Deutsche Bank Aktienqesellschaft Filiale

DECISION CTA CASE NO. 9496 Wien 5404 316.71 18,898.82 Deutsche Bank Aktiengesellschaft, Filiale 5366 316.71 18 835.29 Wien Deutsche Bank Aktiengesellschaft, Filiale 5367 3 262.10 196,883.59 Zurich Deutsche Bank Aktiengesellschaft, Filiale 5368 3 163.49 195 763.66 Zurich 5291 Deutsche Bank Aktiengesellschaft, Filiale 5322 3 262.10 201,463.71 Zurich 5411 4 594.30 282 449.94 Deutsche Bank Luxembourg SA 4 594.30 274 152.50 5452 4 594.30 273 230.97 Deutsche Bank LuxembourgSA 5261 Deutsche Bank Luxembourg SA 5275 4 142.60 246 367.59 Deutsche Bank Management (Korea) 5277 (56.86) (3 497.92) Company Limited 5347 102 864.38 Deutsche Bank National Trust Company 5348 1 675.20 1 057 385.94 5429 17 220.08 1 028 243.52 Deutsche Bank Netherland N.V. 5377 17 220.08 Deutsche Bank Netherland N.V. 5388 2 467.30 5402 41.32 1 024 107.98 Deutsche Bank Netherland N.V. 5422 17 220.08 Deutsche Bank Netherland N.V. 5433 54 039.00 Deutsche Bank Netherland N.V. 5435 881.57 39 744.00 5284 640.59 34 478.00 Deutsche Bank PGK AG 5284 560.53 37 423.00 5341 623.15 819 452.64 Deutsche Bank PGK AG 5341 13 778.86 831 621.17 Deutsche Bank PGK AG 5434 13 778.86 72 711.47 Deutsche Bank PGK AG 5318 1182.30 283 333.02 Deutsche Bank Societa Anonima Espanola 5254 4 607.04 351 838.70 Deutsche Bank Societa Anonima Espanola 5261 5 861.15 351 838.70 Deutsche Bank Societa per Azioni 5282 5 861.15 348 572.73 5318 5 861.15 25 256.78 Deutsche Bank Societa per Azioni 5337 422.95 1806 572.59 Deutsche Bank Societa per Azioni 5410 29 159.62 126 496.18 Deutsche Bank Societa per Azioni 5415 2 056.24 1 521 614.26 Deutsche Bank Societa per Azioni 5261 24 780.28 145 252.02 Deutsche Bank Trust Com_pany 5326 2 432.39 1483 967.07 5445 24,780.28 112 391.00 Deutsche Bank Trust Company Americas 5261 1 869.85 1 473 726.12 Deutsche Bank Trust Company Americas 5415 24 780.28 1 792 674.18 29_L_140.55 1 750 820.38 Deutsche Bank Trust Company Americas 5269 29,170.31 1 330 608.00 Deutsche Bank Trust Company Americas 21 520.00 122 678.36 5261 1,994.18 110,376.00 Deutsche Bank Trust Comjlany Americas 1 837.92 Deutsche Bank Trust Company Americas 5282 847 400.03 Deutsche Bank Trust Company Americas 13 756.86 5333 221,318.49 Deutsche Bank Trust Company Delaware 3 597.61 Deutsche Bank Trust Company Delaware 5421 3 547 349.97 Deutsche Bank Trust Company Delaware 5304 57 770.44 Deutsche Bank Trust Corporation 5361 3 457 132.76 Deutsche Bank Trust Corporation 5453 57 770.44 Deutsche Bank, Sociedad Anonima 3 435 708.01 Espanola 57 770.44 358 474.20 Deutsche Investment Management 5 793.60 346 147.67 Americas Inc. 5 793.60 344 555.41 Deutsche Investment Management 5 793.60 Americas Inc. Deutsche Investment Management Americas Inc. Deutsche Investment Management Americas Inc. Deutsche Securities Korea Co. Deutsche Securities Korea Co. Deutsche Securities Korea Co.

DECISION CTA CASE NO. 9496 Deutsche Trustees Malaysia Berhad 5287 682.64 41 967.58 680.51 41836.63 Deutsche Trustees Malaysia Berhad 5288 682.64 40 597.78 682.64 41 200.64 Deutsche Trustees Malaysia Berhad 5431 21466.20 1329 929.83 18 491.06 1141 987.53 Deutsche Trustees Malaysia Berhad 5441 18 491.06 1116 025.34 18 491.06 1 099 695.33 DWS Holding & Service GmbH 5255 4 898.04 301 318.61 4 067.28 250 511.22 DWS Holding & Service GmbH 5299 4 067.28 245 480.11 2 047.67 126 697.88 DWS Holdinq & Service GmbH 5364 6 408.15 383 752.07 6 408.15 384 674.52 DWS Holding & Service GmbH 5416 6 408.15 381 103.77 591.47 35 505.32 DWS Investment S.A. 5262 636.21 38 191.02 614.27 36 873.99 DWS Investment S.A. 5310 614.27 36 873.99 633.42 38 023.54 DWS Investment S.A. 5365 633.42 37 975.61 633.42 37 975.61 000 "Deutsche Bank" 5303 22_L_558.34 1L386 849.30 22 558.34 11343 387.27 000 "Deutsche Bank" 5338 14 461.44 887 993.74 14 461.44 866,023.33 000 "Deutsche Bank" 5339 14 461.44 860 046.86 I' 87. 693,667.79 000 "Deutsche Bank" 5449 P253,689,578.94 PT Deutsche Securities Indonesia 5340 PT Deutsche Securities Indonesia 5340 PT Deutsche Securities Indonesia 5340 PT Deutsche Securities Indonesia 5340 PT Deutsche Securities Indonesia 5340 PT Deutsche Securities Indonesia 5454 PT Deutsche Securities Indonesia 5454 RREEF Management GmbH 5286 RREEF Management GmbH 5419 RREEF Manaqement LLC 5282 RREEF Management LLC 5337 RREEF Management LLC 5415 Sub-total TOTAL DISALLOWED ZERO-RATED SALES Petitioner had input VAT attributable to its zero- rated sales and were not applied against any output VAT liability After determining that petitioner had valid VAT zero-rated sales for the second quarter of CY 2014 in the amount of P1,146,413,520.86, the Court shall now proceed to determine whether petitioner incurred corresponding input taxes and if said input taxes were not applied against any output VAT liability of petitioner. In its Quarterly VAT Return for the second quarter of CY 201437, petitioner declared input VAT of P27,881,900.36 on its '1- 37 Exhibit "P -3 0 - 4 11 CD. ,

DECISION CTA CASE NO. 9496 current purchases of goods and services, of which the amount of P27,065,518.44 is the subject of the present claim, as shown below: Input tax deferred on capital goods exceeding P1M from p 952,001.43 previous quarter Purchase of Capital Goods Exceeding P1M 172,246.92 Total Less: Input tax on capital goods exceeding P1M deferred for 1,124,248.35 the succeeding period Amortized input tax on cap_ital goods exceeding_ P1M 930,408.09 Add: Input tax on 193,840.26 Purchase of capital goods not exceeding P1M 84,908.46 Domestic _purchases of goods other than capital goods 79,350.84 Domestic purchases of services 26,871,989.32 Services rendered by non-residents 651,811.48 Total 27,688,060.10 27,881,900.36 Total input tax during the quarter Less: Output tax 703,115.37 Excess input tax 27,178,784.99 Divided b_y total declared sales 1 405,962,394.52 Multiply by total declared zero-rated sales 1 400,103,099.77 Input tax claimed for refund/TCC p 27,065,518.44 In support of its input VAT on purchases of goods and services other than capital goods amounting to P27,688,060.10, petitioner presented its Summary Lists of Purchases for the 2nd Quarter of CY 201438, and the related supporting invoices, official receipts, BIR Forms No. 1600 and other documents39, which were all examined by the Court-commissioned ICPA, Mr. Emmanuel Y. Mendoza. In his Report, the ICPA noted the following exceptions: 40 Input VAT on domestic purchases of goods other than Annex 3- capital goods supported by documents other than VAT Invoices G p 685.71 Input VAT on domestic purchases of services supported by documents such as invoices, provisional receipts, billing Annex 3- 71,022.82 statements, and statement of accounts Input VAT on domestic purchases of services supported by H documents dated outside the period of claim Input VAT on domestic purchases of goods other than Annex 3-I 3,986 174.24 caQital goods sup__Qorted by_ documents dated outside the Annex 3-J 14,378.68 38 Exhibit "P-34", CD. 39 Exhibits "P-14-1" to "P-14-207", "P-15-1" to "P-15-19", "P-16-1" to "P-16-6", "P-22-1" to "P-22- 31", "P-21-1" to "P-21-47", "P-17-1" to "P-17-11", "P-18-1" to "P-18-28", "P-23-1" to "P-23-8", "P-20-1", "P-19-1" to "P-19-10", and "P-24-1" to "P-24-15", CD. 40 Exhibit "P-12", ICPA Report, pp. 11-12.

DECISION CTA CASE NO. 9496 period of claim Annex 3- 39,196.73 K Input VAT on domestic purchases of goods not exceeding 1,313,758.22 Annex 3- 1million supported by documents dated outside the period L 19[088.20 of claim Annex 3- P5,444,304.60 Input VAT on domestic purchases of services and goods B with no supporting documents Excess of Input VAT per schedule over the amount of input VAT in the supporting VAT ORs Total not properly substantiated input VAT The above-noted exceptions found by the ICPA in the amount of P5,444,304.60 should be disallowed for not being properly substantiated by VAT invoices or official receipts as required under Sections 110(A) and 113(A) and (B), 237 and 238 of the NIRC of 1997, as amended, in relation to Sections 4.110-2, 4.110-8, and 4.113-1 of RR No. 16-05, as amended. Further verification of the ICPA report, together with the supporting documents, reveals that the additional input VAT of P2,173,945.53 should likewise be disallowed for the reasons stated below: Exhibit Supplier Input VAT Input VAT Disallowed per Schedule per OR Input VAT A. Overclaimed input VAT (Input VAT on purchases of services supported by official receipts wherein the amount of input VAT indicated therein is lower than the amount of claim) P-14-18 Asalus Corporation p 52 215.85 p 51 283.42 p 932.43 P-14-26 AsiaPeopleWorks! Inc. 21 014.41 20 639.14 375.27 P-14-27 AsiaPeopleWorks! Inc. 2 910.76 2 858.77 51.99 P-14-28 AsiaPeopleWorks! Inc. 11 872.74 11.660.73 212.01 P-14-29 AsiaPeopleWorks! Inc. 7 182.01 7 053.76 128.25 P-14-30 AsiaPeopleWorks! Inc. 1,547.00 1 519.37 27.63 P-14-31 AsiaPeopleWorks! Inc. 2,106.86 2 069.24 37.62 P-14-32 AsiaPeopleWorks! Inc. 21 002.04 20 627.01 375.03 P-14-45 BusinessWorks Inc. 23,940.00 23 512.50 427.50 P-14-46 BusinessWorks Inc. 9 000.00 8 631.28 368.72 P-14-47 BusinessWorks Inc. 18 660.00 18 326.78 333.22 P-14-50 CityWay Printing Services 5 269.18 5 175.09 94.09 P-14-84 ePLDT, Inc. 649 814.02 622 770.57 27 043.45 P-14-85 ePLDT Inc. 148.270.62 145 622.93 2 647.69 P-14-86 ePLDT, Inc. 1450 257.26 1144 791.02 305 466.24 P-14-87 ePLDT Inc. 649 814.02 638 210.20 11 603.82 P-14-94 Exclusive Cars International 26 245.83 26 219.53 26.30 P-14-98 Exclusive Cars International 23 526.65 23 470.57 56.08 P-14-99 Exclusive Cars International 12 091.82 12 015.30 76.52 P-14-117 Global City Car Lease & Transport Corp 33 226.07 30 982.27 2 243.80 P-14-180 Reuters Limited 329 459.93 323 576.72 5 883.21

DECISION CTA CASE NO. 9496 P-14-185 ) Santa Fe Movinq and Relocation 1130.40 1110.21 20.19 subtotal p 358431.06 B. Input VAT on purchase of services supported by Official Receipt but the amount of VAT is not separately indicated P-14-16 AIG Philippines Insurance Inc. p 1171 075.68 P-14-128 Headstrong Philippines Inc. 567 420.00 P-14-135 Innove Communications Inc. 62 070.22 subtotal P1,800,565.90 c. Input VAT on Purchase of Service SUMOrted byOfficial Receipt dated outside the period of claim P-14-149 Lantro Phils. Inc. p 600.00 P-14-150 Lantro Phils. Inc. 13 446.43 p 14,046.43 subtotal D. Input VAT on purchase of Service supported by documents other than VAT ORs P-14-6 Accent Micro Technologies Inc. p 482.14 P-14-164 Premium Security & Investiqation Aqency, Inc. 420.00 subtotal p 902.14 Total Disallowed Input VAT per this Court's further verification P2,173_L945.53 Moreover, part of the total input VAT claim is the amount of P193,840.25, representing the amortization of the input VAT on purchases of capital goods exceeding PlMillion, as shown below: Amortized Total Input VAT Input VAT Purchases ofcallftal_goods exceeding_P1M from previous quarters 2nd Quarter of CY 2010 p 824,557.71 p 7,939.83 3rd _Quarter of CY 2010 517,803.43 32,362.71 4th Quarter of CY 2010 1 230,911.56 76,931.97 1st Quarter of CY 2011 276,516.85 17,282.30 2nd Quarter of CY 2013 448,559.31 28,034.96 3rd Quarter of CY 2013 182,025.53 11,376.60 4th _Quarter of CY 2013 203 758.70 12 734.92 Purchases ofcapitalgoods exceeding P1M from current quarter 2nd _Quarter of CY 2014 172,246.92 7,176.96 TOTAL p 193,840.25 The ICPA accounted the amount of P193,840.25 as follows: Findings Reference Total Properly Substantiated to ICPA Amount Amortization of Input VAT on domestic purchase of Report capital goods (from 4th Quarter of CY 2013) supported by VAT invoice Annex 4-A p 11,541.72 Total properly substantiated Input VAT Annex 4-B p 11L_541.72 Not Properly Substantiated Amortization of Input VAT on domestic purchase of 173,928.38

DECISION Annex 4-C 6,638.54 CTA CASE NO. 9496 Page 29 of 31 Annex 4-D 1,731.61 capital goods (from 2010 to 4th quarter of CY 2013) p 182,298.53 with no available supporting VAT invoice p 193,840.25 Amortization of Input VAT on domestic purchase of capital goods (in 2nd quarter of CY 2014) with no available supportin_g VAT invoice Amortization of Input VAT on domestic purchase of capital goods where amount of purchase were expense out not recorded as capital asset Total not properly substantiated Input VAT Total Based on the foregoing, the Court finds that the input VAT amount of P182,298.53 should be disallowed because it was not properly substantiated. Further, upon scrutiny of the invoice supporting the input VAT of P11,541.72 under the caption "Properly Substantiated", the Court finds that it should likewise be disallowed because it is supported by invoice, the input VAT amount of which was not separately indicated. Thus, out of petitioner's total declared input VAT of P27,881,900.36 for the second quarter of CY 2014, only the amount of P20,069,809.98 represents its valid input VAT, as computed below: Input VAT per VAT Return p 27,881,900.36 Less: Disallowances P5,444,304.60 Per ICPA Report 182,298.53 Input VAT on purchases of goods and services other than capital goods exceeding P1M 2,173 945.53 Input VAT on purchases of capital goods exceeding P1M 11,541.72 7,812,090.38 Per this Court's further verification Input VAT on purchases of goods and services P20,069,809.98 other than capital goods exceeding P1M Input VAT on purchases of capital goods exceeding P1M Valid Input VAT A portion of the valid input VAT of P20,069,809.98, however, shall be applied against the reported output VAT liability of P703,115.3741 � Consequently, only the remaining input VAT of P19,366,694.61 can be attributed to the entire zero-rated sales amounting to P1,400,103,099.77 and only the input VAT of ~ 41 Line15B of Exhibit "P-30-4".

DECISION CTA CASE NO. 9496 P15,857,575.46 is attributable to the valid zero-rated sales of P1,146,413,520.86, computed as follows: Valid Input VAT p 20,069,809.98 Less: Output tax due 703,115.37 Excess Input VAT Divide by Total Declared Zero-Rated Sales 19,366,694.61 Multiply by Valid Zero-Rated Sales 1,400, 103,099.77 Excess Input VAT attributable to Valid Zero-Rated Sales 1,146,413,520.86 p 15,857,575.46 Even though the claimed input VAT was carried over by petitioner in its succeeding Quarterly VAT Returns42, the same remained unutilized until it was deducted as "VAT Refund/TCC Claimed'143 in its amended Quarterly VAT Return for the second quarter of CY 2016. Therefore, the subject claim no longer formed part of the excess input VAT of P164,806,025.9244 as of the end of the second quarter of CY 2016 that was carried over/applied to the succeeding third quarter of CY 201645 � As such, it eliminates the possibility that the present claim would be applied to future output VAT liability. WHEREFORE, premises considered, the instant Petition for Review is PARTIALLY GRANTED. Accordingly, respondent is ORDERED TO REFUND or ISSUE A TAX CREDIT CERTIFICATE in favor of petitioner in the amount of P15,857,575.46, representing the latter's unutilized excess input VAT attributable to its zero-rated sales for the second quarter of CY 2014. SO ORDERED. ~~14 c.~"!). I CONCUR: JUANITO C. CASTANEDA, JR. Associate Justice ~~/' - CATHERINE T. MANAHAN Associate Justice 42 Exhibits "P-3.4" to "P-3.24". 43 Line 23D of Exhibit "P-3.24". 44 Line 29 of Exhibit "P-3.24". 45 Line 20A of Exhibit "P-3.25".

DECISION CTA CASE NO. 9496 ATTESTATION I attest that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court's Division. ~ c:a.-..c{; c.~~"' ,% lffANITO C. CASTANEDA, JR. Associate Justice CERTIFICATION Pursuant to Section 13 of Article VIII of the Constitution, and the Divisior, Chairperson's Attestation, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court's Division. Presiding Justice