MACQUARIE OFFSHORE SERVICES PTY LTD. - PHILIPPINE BRANCH v. COMMISSIONER OF INTERNAL REVENUE

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY THIRD DIVISION MACQUARIE OFFSHORE SERVICES PTY LTD. - CTA CASE NO. 8337 Members: PHILIPPINE BRANCH, Petitioner, -versus- BAUTISTA, Chairperson FABON-VICTORINO, and COMMISSIONER OF RINGPIS-LIBAN, JJ. INTERNAL REVENUE, Promulgated: Respondent. JUN 0 2 2016 x---------------------- _c...:;:~ �-- - 3.: ':..r-..l":. -_� -- -- -x AMENDED DECISION Fabon-Victorino, J.: In the Decision dated July 15, 2015, the Court denied petitioner's claim for refund of excess and unutilized input value-added tax (VAT) for the fiscal year covering the period April 1, 2009 to March 31, 2010, in the amount of P10,359,678.44. The ruling was based on the Court's finding that petitioner failed to prove that the services it rendered to Macquarie Financial Holdings Limited (rv1FHL) qualified as VAT zero-rated transactions under Section 108(8)(2) of the National Internal Revenue Code (NIRC) of 1997, as there was no evidence presented showing that MFHL was doing business outside the Philippines. On July 31, 2015, petitioner filed a Motion for New Trial to allegedly rectify the excusable lapses observed by the Court and indicated in the assailed Decision of July 15, 2015. Petitioner explained that the Securities and Exchange Commission (SEC), in issuing the Certification of Non - Registration of Company, inadvertently omitted the word "Limited" from the name of its foreign client Macquarie Financial Holdings Limited or MFHL. As a result thereof, the ; Court concluded that the said Certification was referring to

AMENDED DECISION CTA CASE NO. 8337 another company not licensed to do business in the Philippines but not to petitioner's client MFHL. Annexed to the Motion for New Trial were the Affidavits of Merit attesting that the law firm's paralegal applied for a Certificate of Non-Registration of MFHL upon instruction and that the SEC issued the requested Certification but omitted the word "Limited" in the name of the Company. The said omission was learned only after petitioner received its copy of the adverse Decision on July 16, 2015. Also attached to the Motion was the SEC Certificate of Non-Registration dated July 30, 2015 indicating that Macquarie Financial Holdings Limited is a non-resident foreign coporation not engaged in business in the Philippines. Petitioner prayed that the adverse Decision be set aside and a new trial be conducted for the presentation of the Certificate of Non-Registration dated July 30, 2015 for MFHL. In the Resolution dated September 22, 20151, the Court granted petitioner's motion to which respondent interposed no objection, despite notice. Consequently, a new trial was conducted on November 23, 2015, during which petitioner presented and the Court admitted, among others, the formally offered Certificate of Non-Registration of MFHL issued by the SEC bearing the correct name of its foreign client MFHL. Hence, this Amended Decision. In the assailed Decision of July 15, 2015, the Court ruled that both the administrative and the judicial claims for refund/tax credit were seasonably instituted by petitioner, pursuant to Section 112 (A) and (C) of the NIRC, as amended. The evidence as found by the Court also prove that petitioner is a duly registered VAT taxpayer2, which rendered services in the Philippines for the exclusive benefit of its non-resident foreign client, MFHL. The services rendered during the Fiscal Year 2010 were not in the same category as "processing, manufacturing or repacking of goods" for which petitioner was paid in Australian Dollars {AUD)3 duly / 1 Docket, Vol. 5, pp. 2561-2564. 2 Par. 3, Joint Stipulation of Facts and Issue, docket, p. 426; Exhibit B. 3 Exhibits BB, CC, DD, and EE.

AMENDED DECISION CTA CASE NO. 8337 accounted for in accordance with the BSP rules and regulations4 . Hence, the subject sales are VAT zero-rated pursuant to Section 108(8)(2) of the NIRC of 1997. In fine, petitioner was able to meet the requisites mandated under Section 112 (A) and (C) of the NIRC, as amended. However, the Court found petitioner unable to establish that MFHL, a non-resident foreign corporation is not doing business in the Philippines. The documents it presented at most showed that MFHL is registered and does business in Australia but they do not conclusively prove that MFHL does not do business in the Philippines. Moreover, the document that could have saved the day for petitioner, namely, the SEC Certificate of Non- registration of Company, was not considered by the Court as it referred to Macquarie Financial Holdings and not to Macquarie Financial Holdings, Limited (MFHL). To remedy the belatedly detected lapses, the Court, at the instance of petitioner and in the interest of justice, allowed the presentation of the Certification of Non- Registration of MFHL dated July 30, 20155 which sufficiently proved that MFHL, a foreign corporation, is not doing business in the Philippines. With the foregoing finding, the Court shall now determine whether petitioner was able to substantiate its zero-rated sales for the four quarters of FY 2010. In its VAT Returns for the four quarters of FY 2010, petitioner reflected the following zero-rated sales: Exhibit Period Amount Covered (FV p 61,913,339.95 c 2010) 74,958,221.29 D 1st Quarter 971514,333.46 E 2nd Quarter 147,984,025.89 F 3rd Quarter p 382,369,920.59 TOTAL 4th Quarter J 4 Exhibits MM, NN, 00, PP, QQ, RR, 55, TT, UU, and VV. 5 Exhibit CCC.

AMENDED DECISION CTA CASE NO. 8337 To prove that it generated zero-rated sales and that the corresponding foreign currency payments it received were accounted for in accordance with the rules and regulations of the BSP, petitioner offered in evidence its service invoices6 official receipts7 and debit memos8 issued to its client MFHL, as well as the bank certifications of inward remittances9 � The said amount consists of the following: Client Amount in Php Amount in Service Date Exhibit Official Date Exhibit AUD Invoice Receipt No. No. First Quarter MFHL 15 991 248.29 457 644.73 000010 5/26/2009 XX-10.1 000005 6/11/2009 XX-2.1 000011 6/30/2009 XX-10.2 000006 7/17/2009 XX-2.2 MFHL 21 042 562.71 556 865.67 000013 8/10/2009 XX-10.3 000007 8/24/2009 XX-2.3 MFHL 24 879 528.95 640 404.05 subtotal 6119131339.95 1 654 914.45 Second Quarter MFHL 27 581,893.12 687,226.31 000014 9/4/2009 XX- 000008 9/14/2009 XX- 20.1 2.4 596,780.09 000015 9/4/2009 XX- MFHL 24 629,437.62 541 522.03 000016 10/30/2009 20.2 MFHL 22 746 890.56 118251528.43 XX-20.3 000009 11/25/2009 XX-2.5 subtotal 74,958 221.30 Third Quarter MFHL 30 217 972.33 707 328.40 000017 11/13/2009 XX-30.1 000009 11/25/2009 XX-2.5 MFHL 30 438 755.02 706 022.66 000018 12/29/2009 XX-30.2 000010 3/28/2010 XX-2.6 MFHL 36 857 606.12 882 048.95 000019 1/29/2009 XX-30.3 212951400.01 I subtotal 97,514 333.47 Fourth Quarter MFHL 29 896 949.51 721 773.05 000020 2/22/2010 XX-40.1 000010 3/28/2010 XX-2.6 MFHL 39 471 287.73 951 927.86 000021 3/31/2010 XX-40.2 000013 5/18/2010 XX-2.7 000022 1/31/2010 XX-40.3 MFHL 3 186 584.79 76 930.63 000023 2/28/2010 XX-40.4 000014 8/8/2010 XX-2.8 47 777.16 000024 4/30/2010 XX-40.5 MFHL 1 981 059.72 1 123 052.04 000025 3/31/2010 XX-4Q.6 000013 5/18/2010 I 671 534.67 000029 6/30/2010 XX-40.7 000014 8/8/2010 MFHL 46 456 810.09 (19 043.19) 000015 8/23/2010 XX-2.7 3,573,952.22 XX-2.8 MFHL 27 779 085.54 9,349,795.11 XX-2.9 MFHL (787 751.49) subtotal 147,984,025.89 Total 382,369,920.6110 However, petitioner's zero-rated receipts in the total amount of P45,669,058.60 declared in the fourth quarter of FY 2010 and supported by zero-rated Service Invoice Nos. 000024 and 000029 are dated outside the period of claim, hence, must be disallowed. Thus, out of the P382,369,920.59 zero-rated receipts reported by petitioner, .; 6 Exhibits XX-1Q.1 to XX-1Q.3; XX-2Q.1 to XX-2Q.3; XX-3Q.1 to XX-3Q.3; XX-4Q.1 to XX-4Q.7. 7 Exhibits XX-2.1 to XX-2.9 8 Exhibits XX-3.1 to XX-3.16. 9 Exhibits NN, 00, PP, QQ, RR, SS, TT, UU and W. 10 Higher than P0.02 due to rounding off.

AMENDED DECISION CTA CASE NO. 8337 only the amount of P336,700,861.99 qualifies for VAT zero- rating under Section 108(B)(2) of the NIRC of 1997, as determined below: 1st Qtr 2nd Qtr 3rd Otr 4th Qtr TOTAL Zero-Rated Receipts Per p 61 913 339.95 p 74 958 221.29 p 97 514 333.46 p 147 984 025.89 p 382 369 920.59 Returns Less: Zero-Rated Receipts 46 456 810.09 46 456 810.09 supported by VAT (787 751.49l (787 751.4~1_ service invoices dated outside the period of 1'61,913,339.95 1'74,958,221.29 P97,514,333.46 P102,314,967.29 P336,700,861.99 claim -- 51 No. 000024 51 No. 000029 Valid Zero-Rated Receipts ----- After finding that petitioner had zero-rated receipts for the four quarters of FY 2010 in the total amount of P336,700,861.99, the Court must determine whether petitioner incurred or paid input taxes in connection therewith. In its Quarterly VAT Returns for the four quarters of FY 2010, petitioner declared input VAT on its purchases of services and goods other than capital goods in the aggregate amount P9,217,810.79, broken down as follows: 1st Qtr 2nd Qtr 3rd Otr 4th Qtr TOTAL Domestic Purchase of Goods p 148 822.92 p 223 987.72 p 567 274.27 p 1 115 035.99 p 2 055 120.90 other than Capital Goods Domestic Purchase of 1 134 201.71 1 766 288.59 1 754 315.98 2 494 889.80 7 149 696.08 Services Services Rendered by Non- - - - 12 993.81 12 993.81 residents P1.283,024.63 1'1.990.276.31 P2.321.590.25 P3 622 919.60 1'9,217,810.79 Total To prove the foregoing, petitioner offered in evidence BIR Form 1600 with bank payment slips; various sales invoices and official receipts11 issued by its various suppliers. All these were examined by Independent Certified Public Accountant (ICPA) Jerome Antonio B. Constantino, whose findings are summarized in his two (2) separate reports dated January 2, 2013 12 and July 10, 2013 13, to wit: j 11 Exhibits XX-5-lQ.l to XX-5-1Q.86; XX-5-2Q.1 to XX-5-2Q.125; XX-5-3Q.1 to XX-5-3Q.213; XX- 5-4Q.1 to XX-5-4Q.315. 12 Exhibit XX. 13 Exhibit ZZ.

AMENDED DECISION CfA CASE NO. 8337 Findings Ref. 1st Quarter 2"d Quarter 3rd Quarter 4th Quarter I (Annexed p 27,795.32 to Exhibit Total XX 8t ZZ} 930,182.59 15,617.59 I I. PROPERLY SUPPORTED BY VAT INVOICES, OFFICIAL RECEIPTS AND BIR FORM 1600 36,892.50 ! A. Input tax on domestic purchases of goods other than capital goods 11,937.54 p 70,075.40 1 Supported by "TIN 2-1Q-1; 27,628.49 p 10,638.82 p 4,012.77 42,182.14 VAT" invoices 2-2Q-1; p 14 051.14 1,345,807.32 2-3Q-3; 5,300.51 I 2-40-1 2,171.95 9,023.75 44,104.45 Supported by "TIN 94,002.00 91,975.32 VAT" invoices with 48,762.54 corrections on 261,604.18 Petitioner's name 2-1Q-2; 121,194.43 77,910.51 216,519.79 and/or TIN and/or 2-2Q-4; 16,248.75 2 address and/or VAT 2-3Q-4; 7,405.24 amount but with 2-4Q-3 2,171.95 countersignature of 12,990.16 the supplier 94,002.00 according to the J Petitioner 3 Supported by "VAT 2-2Q-3; 14,036.81 14,450.05 REG TIN" invoices 2-3Q-1; 2-40-2 Supported by "VAT REG TIN" invoices with corrections on Petitioner's name 2-3Q-5; 55,082.82 4 and/or address but 2-4Q-5 with countersignature of the supplier according to the Petitioner Supported by "VAT REG TIN" invoices with corrections on Petitioner's name 2-3Q-7; 36,825.00 and/or TIN with 2-4Q-13 countersignature of 5 the supplier according to the Petitioner and not dated within the taxable quarter but dated within the oeriod of claim Supported by "TIN VAT" invoices with corrections on Petitioner's name and/or TIN with countersignature of 2-2Q-5; 72,437.14 146,984.90 6 the supplier 2-3Q-8; 2-4Q-11 according to the Petitioner but not dated within the taxable quarter but dated within the period of claim Supported by "TIN 2-3Q-14; 2-40-12 VAT" invoices not 2 197.61 1-3Q-3; 2,104.73 7 dated within the 1-4Q-4 taxable quarter but dated within the period of claim Supported by "VAT REG TIN" invoices not 2-4Q-14 8 dated within the 1-3Q-2; taxable quarter but 1-4Q-7 dated within the 3,966.41 oeriod of claim Supported by "TIN VAT invoices with 9 corrections on 2-4Q-9 Petitioner's name with countersignature of the suoolier

AMENDED DECISION CTA CASE NO. 8337 according to the Petitioner and not dated within the taxable quarter but dated within the period of claim B. Input tax on domestic purchases of services 1 Supported by "TIN 2-1Q-4; 7,200.00 1,961.21 34,835.33 19,365.85 63,362.39 VAT" ORs 2-2Q-2; 25.50 316.72 58.92 563,664.24 401.14 2-3Q-2; 2-40-4 107,836.97 209,904.24 3 680.14 955,746.53 1-1Q-2; 19 442.40 16,492.93 23,122.54 1-2Q-1; 40,182.12 2,883.48 842,489.31 95,678.95 1-3Q-1 95,035.46 170,238.16 842,921.85 2 Supported by "VAT 2-1Q-3; 74,341.08 2,343,769.10 REG TIN" ORs 2-2Q-6; 2,209.82 2-3Q-1; 233,982.57 2-4Q-6 316.82 27,215.33 1,194.86 72,521.13 Supported by "TIN 1-2Q-3; 101.36 1-40-1 VAT" ORs with 2-1Q-5; 19,339.80 2-2Q-8; corrections on 2-3Q-13; 36,120.42 246,730.34 2-46-8� 51.21 Petitioner's name, 15,538.05 1-1Q-3; 718,309.91 and/or TIN and/or 1-3Q-5; 3,744.41 ~ 107,542.3"' 1-4Q-3 3 address and/or VAT 2-1Q-6; amount but with 2-2Q-7; 2-3Q-6; countersignature of 2-40-7 381.33 the supplier 1-1Q-1; 1-2Q-4; according to the 1-4Q-2 Petitioner Supported by "VAT REG TIN" ORs with corrections on 507,120.04 1,023,303.69 Petitioner's name and/or address 4 and/or TIN and/or date and/or VAT amount but with countersignature of 60,000.00 the supplier 27,215.33 70,311.31 according to the 101.36 Petitioner Supported by "VAT 2-3Q-9 REG TIN" ORs not 1-3Q-7; 1-4Q-6 5 dated within the taxable quarter but dated within the period of claim Supported "TIN VAT" 2-3Q-10 ORs with corrections 1-2Q-2 on Petitioner's name 2-1Q-7; 2-2Q-9; and/or address 2-3Q-11 and/or TIN and/or 1-2Q-5; 1-3Q-6; VAT amount with 1-4Q-8 6 countersignature of the supplier according to the 19,339.80 Petitioner and not dated within the taxable quarter but dated within the period of claim Supported "VAT REG TIN" ORs with 61,800.00 51,810.98 133,119.36 corrections on Petitioner's name and/or address with countersignature of 7 the supplier according to the Petitioner but not 5,160.00 10,061.23 dated within the taxable quarter but dated within the period of claim 8 Supported by "TIN 1-3Q-4; 106,347.47 VAT" ORs not dated 1-4Q-5

AMENDED DECISION CfA CASE NO. 8337 within the taxable quarter but dated within the period of claim C. Input tax on services rendered by non-residents 1 Supported by BIR 2-4Q-10 12 993.81 12,993.81 form 1600 2,916,838.43 7,056,114.53 Subtotal 1,050,415.45 988,193.52 2,100,667.13 2,256.70 52,742.98 II. OTHER FINDINGS 4,144.80 A. Input tax on domestic purchases of goods other than capital goods 1,283.15 1 Supported by "VAT 2-4Q-17 2 256.70 TIN" sales invoices 7,090.18 20,894.17 107,997.11 Supported by "VAT 840.00 REG TIN" invoices 15,150.80 13,071.43 with incomplete 2-3Q-15; 45,652.80 42,357.01 2 Petitioner's name 2-4Q-15 (e.g. Macquarie Offshore Services PTY LTD) Supported by "TIN VAT" invoices but with incomplete name (e.g. Macquarie Offshore Phils., 3 Macquarie Offshore 2-4Q-16 4,144.80 Services, Macquarie Offshore Services PTY LTD, Macquire Offshore Services, Macquarie Offshore Services) Supported by VAT invoices not in the name of the Petitioner (e.g. Macquarie Capital Securities Phils. Inc. 4 and Macquarie Office) 2-4Q-29 1,283.15 and not dated within the taxable quarter (e.g. first, second and third quarter) but dated within the period of claim Supported by VAT invoices with corrections on 2-2Q-21; 2-3Q-17; 5 Petitioner's name 2-4Q-19 600.00 17,583.46 2,710.71 without countersignature and/or VAT amount not shown separately Supported by VAT 2-3Q-19; 6,825.75 101,171.36 6 invoices but not an 2-4Q-28 466.07 840.00 oriainal coov 14,572.23 Supported by "TIN 7 VAT" without invoice 2-4Q-18 date Supported by 2-2Q-10; 2-3Q-18; 8 document other than 2-4Q-20 112.50 sales invoice (e.g. OR service receipt) Supported by "TIN VAT" invoice with 9 incomplete 2-3Q-30 13,071.43 Petitioner's name and VAT amount not shown separately Supported by "VAT REG TIN" invoices with incomplete 10 Petitioner's name 1-2Q-9; 18,255.29 24,101.72 (e.g. Macquarie 1-4Q-9 Offshore Services PTY LTD) but not dated within the taxable

AMENDED DECISION CTA CASE NO. 8337 quarter but dated within the period of claim Supported by "TIN VAT" invoices but with incomplete petitioner's name (e.g. Macquarie 11 Offshore Services 1-2Q-10 28,957.06 28,957.06 LTD only) but not 19 672.26 I dated within the 3,098.48 309.26 49,952.56 taxable quarter but 709.18 dated within the 28,872.97 287,436.57 period of claim 1,872.86 25,672.64 385.72 788.47 B. Input tax on domestic purchases of services 1,059.49 6,546.59 Supported by "TIN 2-1Q-8; 389,738.54 VAT" ORs but with 2-20-11 30 280.30 6,115.71 incomplete 471.43 203.14 Petitioner's name 1,059.49 (e.g. Macquarie Offshore Services PTY J LTD, Macquarie 1 Offshore Services and Macquarie Offshore) 1-3Q-8 28,872.97 and/or without 10,627.91 Petitioner's TIN and 1,383.54 incomplete/no 47,613.18 address and/or VAT 4,242.85 amount not shown 85.71 separately 203.14 Supported by tape 2-1Q-9; 2,643.73 9,302.52 receipts with 2-2Q-15; incomplete 2-3Q-22; 3,688.39 Petitioner's name 2-4Q-22 30,047.39 (e.g. Macquarie Offshore Services PTY 2 LTD, Macquarie Offshore and 1-1Q-6; 479.21 Macquarie Offshore 1-2Q-11 Services, Macquarie Securities) and/or without Petitioner's TIN and/or address 3 Supported by "VAT 2-1Q-10; 765.48 REG" ORs 2-2Q-17; 2-3Q-23; 2-4Q-25 Supported by "TIN 2-1Q-11; 24,641.40 ONLY", "TIN NON- 2-2Q-18; 4 VAT", with stamped 2-3Q-24; "TIN VAT" and "NON- 2-4Q-24 VAT REG TIN" ORs Supported by "VAT REG TIN" ORs but with incomplete 5 Petitioner's name 2-2Q-12; (e.g. Macquarie 2-3Q-21 Offshore Services PTY and Macquarie Offshore) Supported by VAT OR 2-2Q-14; 2-3Q-27 not in the name of 1-3Q-9 6 the Petitioner (e.g. Macquarie Securities Philippines Incorporated) Supported by "VAT REG TIN" OR but with incomplete 7 Petitioner's name 2-2Q-13 (e.g. Macquarie Offshore) and VAT amount not shown separately

AMENDED DECISION CTA CASE NO. 8337 Supported by VAT OR not in the name of the Petitioner and not 2-3Q-16; 2-4Q-26 8 dated within the 465.53 180.00 645.53 2-3Q-25; 196,720.36 taxable quarter but 2-4Q-27 2-2Q-16 9,811.61 dated within the 2-2Q-20; 533,201.69 2-3Q-29 taxable year of claim 2-1Q-12; 22,777.38 2-2Q-19; Supported by VAT 2-3Q-28; 6,586.91 2-4Q-23 ORs but dated 165,404.73 2-3Q-26 9 outside the taxable 7,601.27 189,119.09 52.18 2-1Q-14; 202.62 period of claim (e.g. 2-3Q-20; 1,270.04 2-4Q-21 3,278.20 FY March 2009) 2-1Q-13 44.69 Supported by "VAT 257.14 2-3Q-32 10 REG TIN" OR without 1-4Q-11 9,811.61 -;J ~---- 533,150.15 date Supported by VAT 11 ORs but not an 51.54 original copy Supported by document other than ORs (e.g. bank deposit slip, 12 collection receipt, 6,895.56 2,958.21 12,537.90 385.71 tape receipt, sales invoice, cash invoice, advertising contract and statement of account) Supported by VAT ORs with incomplete Petitioner's name (e.g. Macquarie Offshore Services) without Petitioner's TIN and/or address 13 and VAT amount is 6,586.91 not shown separately and not dated within the taxable quarter (e.g. second and fourth quarter) but dated within the period of claim Supported by "TIN VAT" ORs but with incomplete Petitioner's name and/or without 14 Petitioner's TIN 2,580.00 26,640.00 136,184.73 and/or address (e.g. 52.18 44.69 Macquarie Offshore Services PTY LTD, Macquarie Offshore Services and Macquarie Offshore) Supported by "TIN VAT" OR with corrections on Petitioner's name 15 with countersignature of the supplier according to the Petitioner but VAT amount not shown separately Supported by VAT 202.62 1,270.04 ORs but VAT amount 3,278.20 16 not shown separately and not dated within 257.14 the taxable quarter Supported by VAT 2-3Q-31 1-2Q-8 17 ORs but VAT amount 2-3Q-33 is not shown separately 18 Supported by tape receipts but not BIR

AMENDED DECISION CTA CASE NO. 8337 registered ! I Supported by tape 321.43 receipts with I incomplete Petitioner's name 19 (e.g. Macquarie only) 14Q-14 321.43 and not dated within 1-4Q-10 1-1Q-4 the taxable quarter 1-1Q-5 1-3Q-10 but dated within the 1-2Q-7; 1-4Q-13 period of claim 1-4Q-12 Supported by "VAT 1-4Q-16 REG TIN" ORs but 1-2Q-6 with incomplete Petitioner's name (e.g. Macquarie Offshore only) and/or incorrect Petitioner's 20 tin (e.g. 850) and/or 175.71 175.71 with corrections in the amounts and/or not dated within the taxable quarter (e.g. third quarter) but dated within the period of claim Supported by "VAT 21 REG TIN" OR but 64.29 64.29 without petitioner's 26.14 26.14 TIN and/or address 16.80 102.32 Supported by "TIN 7,227.60 22 VAT" OR but without petitioner's TIN and/or address Supported by "TIN VAT" OR with corrections on Petitioner's address 23 with countersignature 102.32 of the supplier according to the Petitioner but with incorrect petitioner's TIN Supported by "VAT REG TIN" ORs but VAT amount not shown separately and 24 not dated within the 11,742.91 11,759.71 taxable quarter (e.g. first quarter) but dated within the period of claim Supported by "VAT REG TIN" ORs with corrections on Petitioner's TIN without 25 countersignature 39,859.64 39,859.64 and/or not dated within the taxable quarter (e.g. third quarter) but dated within the period of claim Supported by "VAT REG TIN" ORs with corrections on Petitioner's name without 26 countersignature and 594.60 594.60 not dated within the taxable quarter (e.g. third quarter) but dated within the period of claim Supported by "TIN 27 VAT" ORs but not BIR 7,227.60 registered j--

AMENDED DECISION CfA CASE NO. 8337 Supported by "TIN 28 VAT" OR but with 1-4Q-15 49.82 49.82 incorrect Petitioner's 2-1Q-15; 66,464.27 TIN 2-2Q-22; 2-3Q-34; 1,114.62 C. Overclaimed Input 2-40-30 61,248.73 3,794.21 434.45 986.88 (11,504.85) VAT 1-2Q-12; 306,071.03 1-3Q-11; 2,161,696.16 1-4Q-17 8.38 214.28 891.96 P9,217,810.6914 1-3Q-12; (1 166.39) (10 338.46) D. Underclaimed Input 1-4Q-18 VAT 1-1Q-7; 102,932.16 82,602.46 (12,911.43) 133,447.84 E. The supporting 1-2Q-13; documents not available 1-3Q-13; at the time of 1-40-19 verification 232,609.18 1,002,082.78 220,923.15 706,081.05 Subtotal P1,283,024.63 P1,990,276.30 P2,321,590.28 P3,622,919.48 Total From the foregoing, the total amount of P2, 161,696.16 (under Item II. Other Findings) shall be disallowed outright for not being properly substantiated by proper supporting documents such as VAT invoices or official receipts prescribed under Sections 110(A), 113(A) and (B), 237 and 238 of the NIRC of 1997, as amended, and as implemented by Sections 4.110-1, 4.110-2, 4.110-8, 4.113-1 of RR No. 16-2005, as amended. In addition, the input VAT claim in the total amount of P3,767,195.26, as presented below, shall be disallowed for petitioner's failure to meet the substantiation requirements prescribed under the cited laws and regulations: Findings Exhibit 1st Otr 2nd Otr 3rd Otr 4th Otr Total A. Input tax on domestic purchases of goods other than capital goods 1. Supported by invoices with corrections on petitioner's name, and/or TIN, and/or address, and/or VAT amount but it cannot be ascertained whether the countersi!. natures thereon were made by the issuer Imavision Col])oration XX-5-1Q.3 p 2 160.00 p 2,160.00 Ultra Modular Concepts, XX-5-10.4 9 072.00 9 072.00 Inc. XX-5-1Q.5 Integrated Computer XX-5-1Q.6 86 924.57 86 924.57 Systems Inc. 18 996.43 18 996.43 Integrated Computer Systems Inc. Creative Trends Inc. XX-5-10.63 1 320.00 1 320.00 Integrated Computer XX-5-1Q.7 2 721.43 2 721.43 Systems Inc. XX-5-2Q.10 72 437.14 Integrated Computer XX-5-20.5 p 72 437.14 1 392.86 I Systems Inc. XX-5-2Q.6 1 392.86 Integrated Computer XX-5-2Q.7 376.71 376.71 I Systems Inc. 72 437.14 West Woods Marketing 72 437.14 Corp. Integrated Computer Systems Inc. Creative Trends.Inc. XX-5-2Q.76 820.80 820.80 ! 14 With PO.lO difference against per Returns due to rounding off. J

AMENDED DECISION CTA CASE NO. 8337 Minuteman Printers, XX-5-20.77 1 671.43 1 011.96 1 671.43 Inc. XX-5-2Q.78 108.00 2 667.86 108.00 XX-5-20.8 717.86 2 023.93 717.86 Creative Trends Inc. XX-5-2Q.9 385.71 75 924.64 385.71 Integrated Computer XX-5-3Q.1 p 11 923.71 Systems Inc. XX-5-30.10 1 011.96 West Woods Marketing XX-5-3Q.11 753.16 37 992.86 2 667.86 Corp. XX-5-30.12 2 258.71 42 182.14 2 023.93 Integrated Computer XX-5-3Q.13 60 000.00 75 924.64 Systems Inc. XX-5-3Q.14 921.43 42 026.79 11 923.71 Integrated Computer XX-5-30.15 8 410.71 42 026.79 Systems Inc. XX-5-3Q.16 1 211.14 42 026.79 753.16 Integrated Computer XX-5-3Q.17 3 471.11 2 258.71 Systems Inc. XX-5-30.2 10 821.21 2 023.93 Integrated Computer XX-5-3Q.3 11 923.71 679.29 921.43 Systems Inc. XX-5-3Q.4 18 996.43 8 410.71 Integrated Computer XX-5-30.5 72 437.14 8 035.71 1 211.14 Systems Inc. XX-5-3Q.52 45 554.79 535.73 3 471.11 West Woods Marketing XX-5-30.53 301.07 10 821.21 Corp. XX-5-3Q.54 171.43 216.96 11 923.71 West Woods Marketing XX-5-3Q.6 5 314.29 18 996.43 Corp. XX-5-30.62 6 728.57 72 437.14 West Woods Marketing XX-5-30.64 62 843.19 45 554.79 Corp. XX-5-3Q.7 16 339.29 Great Year Industries XX-5-30.8 1 796.25 171.43 Corp. XX-5-3Q.9 5 314.29 West Woods Marketing XX-5-4Q.10 p 6 728.57 Corp. XX-5-40.11 62 843.19 West Woods Marketing XX-5-4Q.12 16 339.29 Corp. XX-5-4Q.13 1,796.25 Integrated Computer XX-5-40.14 37 992.86 Systems Inc. XX-5-4Q.15 42 182.14 Integrated Computer XX-5-4Q.16 60 000.00 Systems Inc. XX-5-40.17 42 026.79 Integrated Computer XX-5-4Q.18 42 026.79 Systems Inc. XX-5-4Q.19 42 026.79 Integrated Computer XX-5-4Q.20 2 023.93 Systems Inc. XX-5-40.21 Integrated Computer XX-5-4Q.22 679.29 Systems Inc. 8 035.71 Integrated Computer Systems Inc. 535.73 301.07 Imavision Corporation 216.96 Great Year Industries Corp. I Datacraft Phils. Inc. Great Year Industries Corp. Integrated Computer Systems Inc. Integrated Computer Systems Inc. Integrated Computer Systems Inc. Integrated Computer Systems Inc. Integrated Computer Systems Inc. Integrated Computer Systems Inc. Integrated Computer Systems Inc. Integrated Computer Systems Inc. Integrated Computer Systems Inc. Integrated Computer Systems Inc. Integrated Computer Systems Inc. West Woods Marketing Corp. West Woods Marketing Corp. West Woods Marketinq

AMENDED DECISION CTA CASE NO. 8337 Corp. XX-5- 510.54 510.54 40.223 700.71 Innovend Corp. XX-5- 668.57 700.71 40.224 917.14 668.57 Innovend Coro. XX-5-40.23 917.14 West Woods Marketing XX-5- 80.36 Corp. 40.232 214.29 80.36 Ace Hardware Phils., XX-5-40.24 102.27 214.29 Inc. XX-5-40.25 407.15 102.27 West Woods Marketing XX-5-40.26 171.64 407.15 Corp. XX-5-40.27 2 405.36 171.64 West Woods Marketing XX-5-40.28 8 405.36 2 405.36 Corp. XX-5-40.29 112.50 8 405.36 West Woods Marketing XX-5-40.30 112.50 112.50 Coro. XX-5-40.31 225.00 112.50 West Woods Marketing XX-5-40.32 16 810.71 225.00 Corp. XX-5-40.33 36 666.96 16 810.71 Integrated Computer XX-5-40.34 112.50 36 666.96 Systems Inc. XX-5-40.35 42 026.79 112.50 Integrated Computer XX-5-40.36 1 202.68 42 026.79 Systems Inc. XX-5-40.37 2 405.36 1 202.68 Integrated Computer XX-5-40.38 2 405.36 Systems Inc. XX-5-40.39 26.79 Integrated Computer XX-5-40.40 9 498.21 26.79 Systems Inc. XX-5-40.41 12 222.32 9 498.21 Integrated Computer XX-5-40.42 42 026.79 12 222.32 Systems Inc. XX-5-40.43 75 648.21 42 026.79 Integrated Computer XX-5-40.44 1 350.00 75 648.21 Systems Inc. XX-5-40.45 67 242.86 1 350.00 Integrated Computer XX-5-40.46 16 810.71 67 242.86 Systems Inc. XX-5-40.47 8 405.36 16 810.71 Integrated Computer XX-5-40.48 1 675.71 8 405.36 Systems Inc. XX-5-40.49 2 458.55 1 675.71 Integrated Computer XX-5-40.50 2 458.55 Systems Inc. XX-5-40.51 257.46 Integrated Computer XX-5-40.52 96 768.00 257.46 Systems Inc. XX-5-40.78 96 768.00 Integrated Computer XX-5-40.89 8,657.14 Systems Inc. XX-5-40.9 246 105.00 8 657.14 Integrated Computer XX-5-40.90 246 105.00 Systems Inc. XX-5-40.91 21 679.29 Integrated Computer 1 011.96 21 679.29 Systems Inc. 1 011.96 Integrated Computer 37 460.36 Systems Inc. 1 639.29 37 460.36 Integrated Computer 1 639~29 Systems Inc. Integrated Computer Systems Inc. Integrated Computer Systems Inc. Integrated Computer Systems Inc. Integrated Computer Systems Inc. Integrated Computer Systems Inc. West Woods Marketing Corp. West Woods Marketing Coro. West Woods Marketing Corp. Datacraft Phils. Inc. Audio 4 Design N Technoloqy Integrated Computer Systems Inc. Integrated Computer Systems Inc. Integrated Computer Systems Inc. Integrated Computer Systems Inc. Integrated Computer Systems Inc.

AMENDED DECISION CTA CASE NO. 8337 Integrated Computer XX-5-4Q.92 8 548.39 8 548.39 Systems Inc. XX-5-4Q.94 24 053.57 24,053.57 Integrated Computer Systems Inc. Sub-total 121 194.43 150,347.65 363 504.66 1,075,852.42 1710899.16 130.03 130.03 2. Overclaimed Input VAT Rustan's Supercenter, Inc. (P221. 91-P91.88) XX-5-20.87 Sub-total - 130.03 - - 130.03 B. Input tax on domestic purchases of services 1. Supported by official receipts with corrections on petitioner's name, and/or TIN, and/or address, and/or VAT amount but it cannot be ascertained whether the countersianatures thereon were made by the issuer Jobstreet.com Philippines Inc. XX-5-1Q.13 7 200.00 7 200.00 John Clements Consultants Inc. XX-5-10.19 18 720.00 18 720.00 Business Process Outsourcing International Inc. XX-5-1Q.20 403.80 403.80 John Clements Consultants Inc. XX-5-1Q.21 7 800.00 7 800.00 Lantro Phils. Inc. XX-5-1Q.22 7 698.00 7 698.00 Lantro Phils. Inc. XX-5-1Q.23 8 995.46 8 995.46 Manila Bulletin XX-5-10.24 9 811.61 9 811.61 Publishinq Corp. XX-5-1Q.25 9 811.61 9 811.61 Manila Bulletin XX-5-1Q.26 9 811.61 9 811.61 Publishing Corp. XX-5-1Q.27 9 811.61 9 811.61 Manila Bulletin XX-5-10.28 9 811.61 9 811.61 Publishing Corp. XX-5-1Q.29 9 811.61 9 811.61 Manila Bulletin XX-5-1Q.30 9 811.61 9 811.61 Publishing Corp. Manila Bulletin Publishinq Corp. Manila Bulletin Publishing Corp. Manila Bulletin Publishinq Corp. Quest Highlands Inc. XX-5-1Q.31 60 000.00 60 000.00 Quest Highlands Inc. XX-5-1Q.32 29 700.00 29 700.00 Quest Hiqhlands Inc. XX-5-1Q.33 5 160.00 5 160.00 Skope Technology XX-5-1Q.70 1 339.29 1 339.29 Headstronq Phils. Inc. XX-5-10.73 74 928.00 74 928.00 King of Travel Inc. XX-5-1Q.74 52.18 52.18 Galang Jovina Munez & 1 800.00 1 800.00 Associates Law Offices XX-5-1Q.78 1 800.00 1 800.00 Galang Jovina Munez & 1 800.00 1 800.00 Associates Law Offices XX-5-1Q.79 45 632.35 Galang Jovina Munez & 45 632.35 2 091.62 Associates Law Offices XX-5-1Q.80 2 091.62 32 530.72 XX-5- 19 339.80 Regus Centres Inc. 2Q.101 32 530.72 60 000.00 XX-5- 19 339.80 5 160.00 Regus Centres Inc. 2Q.103 60 000.00 BT Communications XX-5- Phils. Inc. 2Q.107 5 160.00 XX-5- I-ZAPP Cebu Corp. 2Q.l14 XX-5- Ouest Hiohlands Inc. 2Q.118 XX-5- Quest Hiqhlands Inc. 20.119 Lantro Phils. Inc. XX-5-2Q.23 722.40 722.40 Manila Bulletin XX-5-2Q.27 9 811.61 9 811.61 I Publishing Corp.

AMENDED DECISION CTA CASE NO. 8337 Manila Bulletin XX-5-2Q.28 9 811.61 9 811.61 Publishing Corp. 46 800.00 46 800.00 XX-5-20.29 Quest Hiohlands Inc. 5 160.00 5 160.00 XX-5-20.30 32 370.00 32 370.00 Quest Highlands Inc. 60 000.00 60 000.00 XX-5-2Q.31 Quest Highlands Inc. 5 160.00 5 160.00 XX-5-20.32 109 610.88 109 610.88 Quest Hiohlands Inc. XX-5-2Q.33 20 280.00 20 280.00 Quest Highlands Inc. 52.07 52.07 XX-5-20.34 52.07 52.07 Headstronq Phils. Inc. John Clements XX-5-20.35 1 800.00 1 800.00 Consultants Inc. 1 800.00 1 800.00 XX-5-2Q.66 4 868.69 4 868.69 King of Travel Inc. 2 934.24 2 934.24 XX-5-20.67 1 378.81 Kino of Travel Inc. 1 378.81 1 350.06 Galang Jovina Munez & XX-5-20.69 1 350.06 Associates Law Offices 104.36 Galang Jovina Munez & XX-5-2Q.70 104.36 50.25 Associates Law Offices 50.25 XX-5-20.89 6 998.39 I-ZAPP Cebu Coro. 6 998.39 9 551.39 XX-5-2Q.95 9 551.39 81109.25 Regus Centres Inc. XX-5- 8 109.25 1 951.98 Bernardo Maintenance 3Q.148 1 951.98 131 534.40 Services XX-5- 131 534.40 137 550.24 Bernardo Maintenance 30.149 137 550.24 91 030.08 Services XX-5- 91 030.08 96 000.00 30.159 96 000.00 5 160.00 King of Travel Inc. XX-5- 5 160.00 2 362.30 3Q.160 2 362.30 Kino of Travel Inc. XX-5- 3 000.00 30.163 3 000.00 1 061.00 PhiiStar DailY. Inc. 1 061.00 XX-5-3Q.19 289.77 Forte Showroom Corp. XX-5- 289.77 75 000.00 30.212 75 000.00 60 000.00 Ascott Makati XX-5- 60 000.00 60 000.00 30.213 60 000.00 Reous Centres Inc. 5 160.00 XX-5-3Q.25 5 160.00 101.36 Headstrong Phils. Inc. 101.36 XX-5-3Q.26 110 619.36 Headstrong Phils. Inc. 110 619.36 11 700.00 XX-5-30.27 11.700.00 Headstrono Phils. Inc. XX-5-3Q.31 Quest Highlands Inc. XX-5-3Q.32 Quest Highlands Inc. XX-5-30.34 Asalus Corp. Santa Fe Moving & XX-5-3Q.43 Relocation Services Phils. Inc. XX-5-30.44 Asalus Coro. XX-5-30.45 Asalus Corp. XX-5-3Q.47 Quest Highlands Inc. XX-5-3Q.48 Quest Highlands Inc. XX-5-30.49 _Quest Highlands Inc. XX-5-30.50 Quest Hiohlands Inc. XX-5-3Q.56 King of Travel Inc. XX-5-3Q.57 Headstrong Phils. Inc. XX-5-30.58 Quest Hiohlands Inc.

AMENDED DECISION CTA CASE NO. 8337 Manila Bulletin XX-5-30.72 9 811.61 9 811.61 Publishing Corp. Avanti People XX-5- 14 040.00 14 040.00 Partnership 40.239 International 17 550.00 17 550.00 Avanti People XX-5- 600.00 600.00 Partnership 4Q.245 530.36 530.36 International XX-5- 40.248 5 303.57 5 303.57 Pest Away Corp. XX-5- 12 180.34 12 180.34 SPI Parking Services, 40.249 28 080.00 28 080.00 Inc. XX-5- 16 434.00 16 434.00 SPI Parking Services, 4Q.250 Inc. XX-5- 4 526.93 4 526.93 40.253 4 526.93 4 526.93 I-ZAPP Cebu Corp. XX-5- 4 526.93 4 526.93 Ksearch Asia 40.262 Consulting, Inc. 454.55 454.55 Oracle (Philippines) XX-5-4Q.56 525.48 525.48 Corp. 2 417.68 2 417.68 Canon Marketing XX-5-40.66 2 772.43 2 772.43 (Phils.), Inc. Canon Marketing XX-5-4Q.67 (Phils. ), Inc. Canon Marketing XX-5-4Q.68 (Phils. ), Inc. Canon Marketing XX-5-40.69 (Phils.), Inc. Canon Marketing XX-5-40.70 (Phils.), Inc. Canon Marketing XX-5-4Q.71 (Phils.) Inc. Canon Marketing XX-5-40.72 (Phils.) Inc. Asalus Corp. XX-5-4Q.76 1 345.08 1 345.08 Lantro Phils. Inc. XX-5-4Q.77 5 764.29 5 764.29 Quest Highlands Inc. XX-5-40.82 60 000.00 60 000.00 Santa Fe Moving & XX-5-4Q.84 377.14 377.14 Relocation Services Phils. Inc. Sub-total 296,078.00 475,988.06 829 874.61 181955.71 1 783 896.38 2. Supported by official receipts with corrections/insertions on petitioner's name, and/or TIN, and/or address, and/or VAT without countersignature of the issuer XX-5- Regus Centres Inc. 3Q.183 153.60 153.60 BT Communications XX-5- Phils. Inc. 30.150 857.16 857.16 Quest Highlands Inc. XX-5-4Q.60 9 750.00 9 750.00 Quest Highlands Inc. XX-5-4Q.61 158 850.00 158 850.00 168 600.00 169 610.76 Sub-total - - 1,010.76 3. Supported by official receipt not in the complete name of petitioner Sybase Solutions Corp. XX-5-1Q.41 28 928.57 28 928.57 28928.57 Sub-total 28,928.57 - - - - 80.36 4. Supported by undated official receipt 80.36 - 80.36 80.36 7 365.00 XX-5- 29 460.00 7,365.00 29 460.00 36 825.00 36 825.00 Rustan Coffee Corp. 2Q.109 7 365.00 Sub-total - :; 73,650.00 5. Supported by documents other than VAT ORs Audio 4 Design N Technology Corp. XX-5-3Q.18 Audio 4 Design N Technoloqy Coro. XX-5-3Q.51 Audio 4 Design N Technoloqy Corp. XX-5-4Q.88 Sub-total - - 66,285.00

AMENDED DECISION CTA CASE NO. 8337 [TOTAL I I [ P446,201.00 P626,546.10 [ P1,260,675.03 [ P1,433,773.13 [ P3,767,195.26 Hence, out of the claimed input VAT on domestic purchases of goods other than capital goods and services in the total amount of P9,217,810.79, only the input VAT of P3,288,919.37, as computed below, represents petitioner's valid input VAT on the said purchases: 1st Otr 2nd Otr 3rd Otr 4th_Qtr TOTAL p 1 283 024.63 P1 990 276.31 P2 321 590.25 Inout VAT Claim p 3 622 919.60 p 9 217 810.79 Less: Disallowances 232 609.18 1 002 082.78 220 923.15 706 081.05 2 161 696.16 446 201.00 626 546.10 1 260 675.03 1 433 773.13 3 767 195.26 oer ICPA Reoort p 604,214.45 P839,992.07 Pl 483 065.42 P3.288.919.37 per this Court's verification P361,647 .43 Substantiated Input VAT Next, the substantiation of the amortized portion of the input VAT on capital goods purchases exceeding PlMillion in the amount of P1,142,296.21, arose from the input tax deferred from the previous quarter in the amount of P475,083.86 and input VAT of P9,056,539.18 from purchases of capital goods during the four quarters of FY 2010, as shown below: Input Tax Deferred on Capital Goods exceeding P1 Million from p 188,588.20 p 475 083.86 Previous Quarter 688,252.50 Add: Input Tax on Capital Goods exceeding P1 Million 9 056 539.18 6,216,325.32 p 9 531 623.04 Purchased this Quarter 1,963,373.16 8 389 326.83 1st Quarter p 1 142,296.21 2"d Quarter 3'd Quarter 4th Quarter Total: Unamortized Input Tax on Capital Goods exceeding P1 Million Less: Input Tax on Purchases of Capital Goods exceeding P1 Million deferred for the succeeding period Amortization of Input Tax on Capital Goods exceeding Pl Million Based on the ICPA findings, the unamortized input VAT on capital goods from previous quarters amounts to P662,114.98, to wit: Findings Reference Input VAT to ICPA I. PROPERLY SUPPORTED Report Supported by "TIN-VAT" Official Receipts (Exhibit XX) II. OTHER FINDINGS Annex 5-A p 486,177.10 I Supported by Invoices not registered with Annex 5-B J 115,082.14 the BIR

AMENDED DECISION CfA CASE NO. 8337 Supported by VAT OR dated in the FY Annex 5-C 30 427.87 ended March 31, 2010 Annex 5-D 30,427.87 Supported by VAT OR dated outside the 175,937.88 period of claim (FY March 2011) P662,114.98 Subtotal Total Per the schedule of VAT amortization, 15 the input VAT of P115,082.14 was amortized over 5 years (60 months), while the remaining amount of P547,032.86 was amortized over 2 years and 5 months (29 months) from July 2008. Thus, as of the beginning of April 2009, the unamortized portion or the deferred input tax on capital goods from previous quarter amounts to P475,083.85, computed as follows: Findings Reference Input VAT Est. Life Monthly Amortization Deferred I. PROPERLY SUPPORTED to ICPA (in Amort. from July Input Tax Report 2008 to Supported by "TIN-VAT" (Exh. XX) months) p Official Receipts March 2009 335,294.55 II. OTHER FINDINGS 29 (9 mos.)_ Supported by Invoices 97,819.82 not registered with the Annex 5-A p 486,177.10 60 p p BIR 16 764.73 150 882.55 ! Supported by VAT OR 29 dated in the FY ended Annex 5-B 115,082.14 1,918.04 17,262.32 20,984.74 March 31 2010 29 Supported by VAT OR Annex 5-C 30,427.87 1,049.24 9,443.13 20,984.74 ! dated outside the period of claim (FY March 2011) Annex 5-D 30,427.87 1,049.24 9,443.13 139,789.30 P475,083.85 Subtotal 175,937.88 4,016.51 36,148.59 P662,114.98 Total P20,781.24 P187,031.13 However, a second look at the invoices and official receipts related to the foregoing input taxes shows that the input VAT of P28,770.54 (P239,754.50 x 12�/o) supported by Invoice No. 08 - 06 -1 44 16 which is part of the input VAT of , P115,082.14, is also duly supported by Official Receipt No. 1091. 17 Hence, the substantiated input VAT amounts to P514,947.64 (P486,177.10 + P28,770.54). Accordingly, the allowable input VAT for the four quarters of FY 2010 amounts to P206,930.84 (P51,732.71 per quarter), computed as follows: J 15 Exhibit XX-6. 16 Exhibit XX-10.4. 17 Exhibit XX-10.1, 1 of 2.

AMENDED DECISION CTA CASE NO. 8337 Inv No. Exhibit OR Exhibit Input VAT Estimated Allowable 08-06- XX- No. p 136,758.21 Life input VAT 10.1 1091 XX-10.1 29 for FY 2010 143 XX- 28[770.54 08-06- 10.4 1093 XX-10.2 191,461.50 60 p 56,589.60 XX- 1094 157,957.39 144 10.3 I XX- 29 5,754.11 08-08- XX- 10.2 10.3 29 79,225.45 145 08-08- 65,361.68 148 Total P514,947.64 P206,930.84 As to the input VAT on purchases of capital goods exceeding Plmillion for the four quarters of FY 2010 in the amount of P9,056,539.18, the ICPA summarized his findings as follows: Findings Reference 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Total I. PROPERLY SUPPORTED 4-2Q-1; 1 Supported by "TIN VAT" 4-3Q-1 p 96,428.57 p 2,083,651.63 p 2,180,080.20 invoices 2-3Q-2 4-4Q-4 77,142.86 77,142.86 Supported by "VAT REG 2-2Q-1; p 1,022.40 1,022.40 TIN" invoices 2-3Q-1 2 4-2Q-2; 94,602.91 4-3Q-3; 4-4Q:-1 19,437.17 75,165.74 2-2Q-3; 2-3Q-3; 29,035.54 49,607.14 10,092.65 88,735.33 2-4Q-1 3 Supported by "VAT REG 4-3Q-4; TIN" ORs 4-4Q-3 2-2Q-2; 4 Supported by "TIN VAT" 2-3Q-4; 57,456.00 100,800.00 19,152.00 177,408.00 ORs 2-4Q-2 265,414.29 2,068,182.00 52,167.85 2,120,349.85 153,750.00 4-2Q-4; 369,293.42 788,457.71 4-3Q-2 5 Supported by "TIN VAT" 9,409.50 9,409.50 18,819.00 invoices with corrections 4-4Q-6 on the Petitioner's name 1,369,343.16 1,369,343.16 but with 4-2Q-3 countersignature of the 211,071.43 211,071.43 supplier according to the Petitioner - --~ -y 6 Supported by "TIN VAT" and "VAT REG TIN" ORs with corrections on Petitioner's TIN but without countersignature of the supplier according to the petitioner 7 Supported by "TIN VAT" ORs with corrections on the amount but with countersignature of the supplier according to the Petitioner

AMENDED DECISION CfA CASE NO. 8337 8 Supported by "VAT REG 4-3Q-5 33,835.68 33,835.68 TIN" OR not dated within the taxable 4-3Q-6; 75,084.12 15,016.82 90,100.94 quarter (e.g. 4th 4-4Q-2 quarter) but within the 9,201.60 9,201.60 _Qeriod of claim 4-4Q-5 80,740.51 : 9 Supported by "TIN VAT" 4-3Q-7 invoices not dated 80,740.51 within the taxable 4-1Q-1; quarter but within the 4-4Q-7 - 688,252.50 5,022,912.60 1,629,746.48 7,340,911.58 period of claim 4-3Q-8; - 4-4Q-8 188,588.20 72,144.00 10 Supported by "VAT REG 2-3Q-5 260,732.20 TIN" invoices not dated 2-3Q-6; within the taxable 2-4Q-3 67,200.00 6,000.00 73,200.00 quarter (e.g. 2nd quarter) but within the 206,250.00 206,250.00 period of claim 919,962.72 255,482.68 i 11 Supported by ''VAT REG TIN" OR with correction 1,175,445.40 I on amount but with countersignature of the 188,588.20 - 1,193,412.72 333,626.68 1,715,627.60 supplier according to p 9,056,539.18 the Petitioner and not P188,588.20 p 688,252.50 P6,216,325.32 P1,963,373.16 dated within the taxable quarter (e.g. 4th quarter) but within the period of claim subtotal II. OTHER FINDINGS 1 Supported by "TIN VAT" invoice but not an oriainal copy 2 Supported by "VAT REG TIN" OR but not an original copy 3 Supported by "TIN VAT" OR but with incorrect Petitioner's TIN (e.g. 484) 4 The supporting documents are not available at the time of verification subtotal TOTAL With the foregoing, the input VAT of Pl, 715,627.60 should be disallowed as it is not supported by proper documents. In addition, the input VAT claim in the total amount of P3,091, 768.09, as presented below, should as well be disallowed for petitioner's failure to meet the substantiation requirements prescribed under the pertinent laws and regulations: Findings Exhibit 2nd Qtr 3rd Qtr 4th Qtr Total 1. Supported by ORs and/or invoices the input VAT amount was not separately shown 428.40 78 214.29 Barrington Carpets Inc. XX-9.4 p 428.40 p p Alecto General Technology Corp. XX- 428.40 :.; __78,642.6!!_ I 9.56 - 78 214.29 Sub-total 78,214.2JL

AMENDED DECISION CTA CASE NO. 8337 2. Supported by invoice with correction on petitioner's name without countersignature of the issuer Barrinaton Carpets Inc. XX-9.4 9 409.50 9 409.50 Sub-total 91409.50 - - 9,409.50 3. Supported by official receipts and/or invoices with corrections on petitioner's name andjor VAT amount but it cannot be ascertained whether the countersignatures thereon were made by the issuer Barrington Carpets Inc. XX- p 7 527.60 7 527.60 Barrinaton Carpets Inc. 9.24 1 881.90 Alecto General Technoloov Corp. XX- 1 881.90 156 428.57 Alecto General Technology Corp. 9.25 109 741.06 Alecto General Technoloav Corp, XX- 156 428.57 69 717.86 Lantro Phils. Inc. 9.30 16 352.32 Lantro Phils. Inc. XX- 109 741.06 2 094.64 Alecto General Technoloov Corp. 9.31 547 500.00 XX- 6~717.86 9.32 XX- 16 352.32 9.33 XX- 2 094.64 9.34 XX- 547 500.00 9.35 XX- Lantro Phils. Inc. 9.36 242 221.52 242 221.52 Lantro Phils. Inc. XX- 242L221.52 242 221.52 Lantro Phils. Inc. 9.37 242 221.52 242 221.52 Lantro Phils. Inc. XX- 9.38 1 816.92 1 816.92 XX- 9.39 XX- Lantro Phils. Inc. 9.45 80 740.51 442 500.00 80 740.51 Salemaire Industries Corp. XX- p 442 500.00 9.53 Salemaire Industries Corp. XX- 281 437.50 281 437.50 Alecto General Technoloav Coro. 9.54 384 093.71 384 093.71 XX- 9.55 Alecto General Technoloov Corp. XX- 54 870.53 54 870.53 9.57 XX- Salemaire Industries Corp. 9.58 14 812.50 14 812.50 Salemaire Industries Corp. XX- 63 214.29 63 214.29 9.59 Salemaire Industries Corp. XX- 42 321.43 42 321.43 9.60 Sub-total - 1 720,465.94 1 283,249.96 3,003,715.90 _!_OTAL P9,837.90 p 1,720,465.94 p 1,361,464.25 p 3,091,768.09 - Thus, out of the input tax of P9,056,539.18 on purchases of capital goods exceeding P1Million for the four quarters of FY 2010, only the amount of P4,249, 143.49, as detailed below, was properly substantiated by VAT invoices/official receipts, computed as follows: Input VAT on purchases of Capital 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Total Goods exceeding P1M P188,588.20 p 688,252.50 p 6,216,325.32 p 1,963,373.16 p 9,056,539.18 Less: Disallowances 188 588.20 - 1,193,412.72 333,626.68 1,715,627.60 Per !CPA Report 1,720,465.94 1,361,464.25 3,091,768.09 188,588.20 9,837.90 2,913,878.66 1,695,090.93 4,807,395.69 Per this Court's verification 9,837.90 p 3,302,446.66 p 268,282.23 p 4,249,143.49 Total p - P678,414.60 Total substantiated input VAT on capital goods exceeding PlM

AMENDED DECISION CTA CASE NO. 8337 Supplier Exhibit 2nd Otr 3rd Otr 4th Otr Total 96 428.57 Cornersteel Svstems CorP. XX-9.2 16 607.14 209 046.65 10 092.65 96 428.57 12 000.00 97 480.29 15 016.82 Walls in Motion XX-9.3 84 642.86 38 775.00 16 607.14 126 428.57 181 314.82 13 392.85 Automatic Fire Sprinkler System Co. Ltd. XX-9.5 360 720.00 12 000.00 1 022.40 Salemaire Industries Corp. XX-9.6 60 067.29 9 201.60 84 642.86 Salemaire Industries Corp. XX-9.7 145 051.86 7 878.91 126 428.57 Cornersteel Svstems Corp. XX-9.8 209 046.65 Cornersteel Systems Corp. XX-9.9 41 809.32 Cornersteel Systems Corp. XX-9.10 36 262.97 97 480.29 Cornersteel Systems CorP. XX-9.11 19 496.06 181 314.82 Cornersteel Systems Corp. XX-9.12 77,984.23 360 720.00 Cornersteel Systems Corp. XX-9.13 288 576.00 Cornersteel Systems Corp. XX-9.14 167 237.28 60 067.29 Cornersteel Systems Coro. XX-9.15 19 285.71 145 051.86 Cornersteel Svstems Corp. XX-9.16 102 180.00 Cornersteel Systems Corp. XX-9.17 251 853.43 41 809.32 Cornersteel Systems Corp. XX-9.18 25 285.72 36 262.97 Cornersteel Svstems Corp. XX-9.19 13 285.71 19,496.06 Cornersteel Svstems Corp. XX-9.20 33 000.00 77 984.23 Emerson Network Power (Phils) Inc. XX-9.21 288 576.00 Emerson Network Power (Phils) Inc. XX-9.22 3 321.43 167 237.28 Emerson Network Power (Phils) Inc. XX-9.23 117 857.14 19 285.71 Walls in Motion XX-9.26 102 180.00 Automatic Fire SPrinkler Svstem Co. Ltd. XX-9.27 3 750.00 251 853.43 128 571.43 25 285.72 Walls in Motion XX-9.28 187,687.50 13 285.71 RCW Construction & Development Corp. XX-9.29 33 000.00 33 750.00 Emerson Network Power (Phils) Inc. XX-9.40 85.68 3 321.43 Powergear Electrical Sales XX-9.41 117 857.14 RCW Construction & Development Corp. XX-9.42 75 084.12 Emerson Network Power (Phils) Inc. XX-9.43 3 750.00 Barrington Carpets Inc. XX-9.25 128,571.43 Cornersteel Systems Corp. XX-9.44 187 687.50 Lantro Phils. Inc. XX-9.47 33 750.00 85.68 Cornersteel Svstem XX-9.48 75 084.12 RCW Construction & Development Corp. XX-9.49 10 092.65 RCW Construction & Development Coro. XX-9.50 15 016.82 Functionsmith Sales & Services XX-9.51 38 775.00 Functionsmith Sales & Services XX-9.52 13,392.85 Lantro Phils. Inc. XX-9.61 1 022.40 Functionsmith Sales & Services XX-9.64 14 187.17 5 250.00 9 201.60 Functionsmith Sales & Services XX-9.65 DB & B Philippines Inc. XX-9.66 112 200.00 7 878.91 RCW Construction & Development Coro. XX-9.67 153 214.29 14 187.17 Meinhardt PhiliPPines Inc. XX-9.68 57 456.00 47 072.16 Functionsmith Sales & Services XX-9.69 5 250.00 _c__ 2 625.00 112 200.00 Functionsmith Sales & Services XX-9.70 18 375.00 153 214.29 Functionsmith Sales & Services XX-9.71 7 093.58 57 456.00 Functionsmith Sales & Services XX-9.72 77 142.86 47 072.16 Cornersteel System XX-9.73 2 625.00 18 375.00 v 7 093.58 77 142.86

AMENDED DECISION CfA CASE NO. 8337 Jones Lang Lasalle (Phils) Inc. XX-9.74 100 800.00 100 800.00 RCW Construction & Development Corp. XX-9.75 204 293.42 204 293.42 RCW Construction & Development Corp. XX-9.76 165 000.00 165 000.00 Meinhardt Philippines Inc. XX-9.78 19 152.00 19 152.00 RCW Construction & Development Corp. XX-9.79 41 250.00 41 250.00 RCW Construction & Development Corp. RCW Construction & Development Corp. XX-9.80 58 928.57 58 928.57 RCW Construction & Development Corp. TOTAL XX-9.81 6 696.43 6 696.43 XX-9.82 46 875.00 46 875.00 P678,414.60 P3 302 446.66 P268,282.23 1'4,249,143.49 However, pursuant to Section 110 (A) of the NIRC of 1997, as amended, as implemented by Section 4.110-3 of RR No. 16-2005, the input VAT claim on capital goods purchases attributable to zero-rated sales may be claimed either in full during the month of acquisition, or spread over a period of time, depending on the aggregate acquisition cost of the capital goods in the calendar month. If the aggregate acquisition cost exceeds P1 Million, the claim for input tax should be spread over 60 months or the estimated useful life of the capital goods, whichever is shorter. On the other hand, if the aggregate acquisition cost does not exceed P1 Million, the total input taxes shall be allowed as credit/refund in the month of acquisition Thus, while petitioner was able to substantiate the amount of P4,249,143.49, only the amortization 18 of the foregoing input taxes in the amount of P379,410.13, as detailed below, may be claimed by petitioner as valid input tax credits for the FY 2010: Supplier Annex Exhibit 2nd Qtr 3rd Qtr 4th Otr Total Cornersteel Systems Corp. of Exh XX-9.2 p 6 428.57 p 6 428.57 XX&ZZ 4-2Q-1 Walls in Motion 4-20-2 XX-9.3 1 897.96 1 897.96 Automatic Fire Sprinkler System 4-2Q-2 XX-9.5 1 371.43 1 371.43 Co. Ltd. Salemaire Industries Corp. 4-20-3 XX-9.6 9 673.47 9 673.47 Salemaire Industries Corp. 4-20-3 XX-9.7 14 448.98 14 448.98 Cornersteel Systems Corp. 4-3Q-1 XX-9.8 p 13 936.44 13 936.44 Cornersteel Systems Corp. 4-30-1 XX-9.9 6 498.69 6 498.69 Cornersteel Systems Corp. 4-30-1 XX-9.10 12 087.65 12 087.65 Cornersteel Systems Corp. 4-30-1 XX-9.11 24 048.00 24 048.00 Cornersteel Systems Corp. 4-3Q-1 XX-9.12 6 864.83 6 864.83 Cornersteel Svstems CorP. 4-30-1 XX-9.13 9,670.12 9A570.12 18 Based on the estimated life in months as presented in Annex 3a of the ICPA Report (Exhibit J XX).

AMENDED DECISION CfA CASE NO. 8337 Cornersteel Systems Corp. 4-30-1 XX-9.14 2 787.29 2 787.29 4-30-1 Cornersteel Systems Corp. XX-9.15 2 417.53 2 417.53 4-30-1 Cornersteel Systems Corp. XX-9.16 1 299.74 1 299.74 4-30-1 Cornersteel Systems Corp. 4-30-1 XX-9.17 5 198.95 5 198.95 Cornersteel Systems Corp. 4-30-1 XX-9.18 19 238.40 19 238.40 Cornersteel Systems Corp. XX-9.19 11149.15 11 149.15 4-30-1 Cornersteel Systems Coro. XX-9.20 1 285.72 1 285.72 Emerson Network Power (Phils) 4-30-1 XX-9.21 Inc. 11 677.72 11 677.72 Emerson Network Power (Phils) 4-30-1 XX-9.22 Inc. 28 783.24 28 783.24 Emerson Network Power (Phils) 4-30-1 XX-9.23 Inc. 2 889.80 2 889.80 4-30-3 XX-9.26 Walls in Motion 1 518.37 1 518.37 Automatic Fire Sprinkler System 4-30-3 XX-9.27 Co. Ltd. 4-30-3 XX-9.28 3 771.43 3 771.43 Walls in Motion 379.59 379.59 RCW Construction & 4-30-4 XX-9.29 Development Corp. 13 469.39 13 469.39 Emerson Network Power (Phils) 4-30-4 XX-9.40 Inc. 4-30-4 XX-9.41 428.57 428.57 Poweraear Electrical Sales 14 693.88 14 693.88 RCW Construction & 4-30-4 XX-9.42 Development Corp. 21 450.00 21 450.00 Emerson Network Power (Phils) 4-30-5 XX-9.43 Inc. 4-30-5 XX-9.25 3 857.16 3 857.16 Barrinaton Caroets Inc. XX-9.44 9.79 9.79 4-30-6 XX-9.47 Cornersteel Systems Corp. 4-40-1 XX-9.48 8 581.04 946.20 8 581.04 Lantro Phils. Inc. 4-40-2 p 750.84 946.20 Cornersteel System XX-9.49 750.84 RCW Construction & 4-40-3 3 421.32 Development Corp. XX-9.50 3 421.32 RCW Construction & 4-40-3 XX-9.51 1 181.72 Development Corp. 4-40-4 XX-9.52 34.08 1 181.72 Functionsmith Sales & Services 4-40-5 XX-9.61 34.08 Functionsmith Sales & Services 4-40-6 XX-9.64 460.08 Lantro Phils. Inc. 2-20-1 XX-9.65 738.66 460.08 Functionsmith Sales & Services 2-20-1 738.66 Functionsmith Sales & Services XX-9.66 945.81 945.81 2-20-2 350.00 350.00 DB & B Philippines Inc. XX-9.67 RCW Construction & 2-20-2 XX-9.68 12 822.86 12 822.86 Develooment Coro. 2-20-3 Meinhardt Philippines Inc. XX-9.69 17 510.20 17 510.20 2-30-1 XX-9.70 6 566.40 6 566.40 Functionsmith Sales & Services 2-30-1 Functionsmith Sales & Services XX-9.71 3 138.14 3 138.14 2-30-1 XX-9.72 175.00 175.00 Functionsmith Sales & Services 2-30-1 Functionsmith Sales & Services XX-9.73 1 225.00 1 225.00 2-30-2 XX-9.74 472.91 472.91 Cornersteel System 2-30-3 Jones Lana Lasalle (Phils) Inc. XX-9.75 5 142.86 5 142.86 RCW Construction & 2-30-4 11 520.00 11 520.00 Development Coro. XX-9.76 RCW Construction & 2-30-4 XX-9.78 23 347.82 23 347.82 Development Corp. 2-40-1 Meinhardt Philippines Inc. XX-9.79 18 857.14 18 857.14 RCW Construction & 2-40-2 598.50 Develooment Coro. XX-9.80 598.50 RCW Construction & 2-40-2 2 500.00 2 500.00 Development Corp. XX-9.81 1 841.52 RCW Construction & 2-40-2 1 841.52 Development Corp. 209.26 209.26 J

AMENDED DECISION CTA CASE NO. 8337 RCW Construction & 2-4Q-2 XX-9.82 2 840.91 2 840.91 Development Corp. p 72 015.68 p 291871.36 p 15 523.09 P379,410.13 TOTAL In sum, petitioner's total substantiated input VAT for the four quarters of FY 2010 amounts to P3,875,260.34 , as computed below: 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr TOTAL Input VAT on domestic purchases of goods p 604 214.45 p 361 647.43 p 839 992.07 p 1 483 065.42 p 3 288,919.37 other than capital goods and services Input VAT deferred on capital goods 51 732.71 51 732.71 51 732.71 51 732.71 206 930.84 exceedino P1M 72 015.68 291 871.36 15 523.09 379 410.13 Input VAT on capital goods exceeding P1M 1!(;~5L~47' ._!_(;_ J!4f.J5~95.82 P1183 596.14 p 1,550,321.22 P3,875,260.34 Total Substantiated Input VAT After applying petitioner's valid input VAT of P3,875,260.34 against its output VAT of P428.57 for the subject period of the claim, there remains an excess input VAT of P3,874,831.77, which can be attributed to the entire zero-rated sales/receipts declared by petitioner in the amount of P382,369,920.59. Accordingly, only the input VAT of P3,396,522.45 is attributable to the substantiated zero-rated sales of P336,700,861.99, as computed below: Substantiated input VAT p 655 947.16 p 485 395.82 p 1 183 596.14 p 1 550,321.22 p 3 875 260.34 Less: Outout VAT 655,947.16 485,395.82 1.183 596.14 428.57 428.57 1,549,892.65 3,874,831.77 Substantiated excess input VAT Multiply by substantiated zero-rated 61 913 339.95 74 958 221.29 97 514 333.46 102 314 967.29 336 700 861.99 sales Divided by total declared zero-rated 61 913 339.95 74 958 221.29 97 514 333.46 147 984 025.89 382 369 920.59 sales Excess input VAT Allocated to zero- p 655 947.16 p 485.395.82 P1.183.596.14 P1,071,583.33 P3,396,522.45 rated sales Although the claimed input VAT was carried-over by petitioner in its succeeding Quarterly VAT Returns19, it remained unutilized until it was deducted as "VAT Refund/TCC claimed" in its Quarterly VAT Return for the fourth quarter of FY 2011 20 � Thus, the excess input VAT of P20,711,496.1221 as of the end of the fourth quarter of FY 2011 which was carried-over to the succeeding first quarter of FY 201222 no longer included the subject claim. In fine, petitioner has sufficiently established its entitlement to refund or issuance of tax credit certificate 19 First Quarter of FY 2011 (Exhibit "G''), Second Quarter of FY 2011 (Exhibit "H''), Third Quarter../ of FY 2011 (Exhibit "I'') and Fourth Quarter of FY 2011 (Exhibit "J"). 20 Line 230 of Exhibit "J". 21 Line 29 of Exhibit "J". 22 Line 20A of Exhibit XX-11.

AMENDED DECISION CTA CASE NO. 8337 representing unutilized input VAT attributable to its zero- rated sales for the four quarters of Fiscal Year ended March 31, 2010 in the amount of P3,396,522.45. WHEREFORE, the Decision dated July 15, 2015 promulgated in the instant case is REVERSED and SET ASIDE. Consequently, the Petition For Review dated September 9, 2011 filed by Macquarie Offshore Services Pty Ltd. - Philippine Branch, is hereby PARTIALLY GRANTED. Respondent Commissioner of Internal Revenue is ORDERED TO REFUND to petitioner the amount of P3,396,522.45 representing its excess and unutilized input value-added tax (VAT) attributable to its zero-rated sales for the fiscal year covering the period of April 1, 2009 to March 31, 2010. SO ORDERED. We Concur: (On Leave) LOVELL R. MA. BELEN M. RINGPIS-LIBAN \ Associate Justice Associate Justice ATTESTATION ('s I attest that the conclusions in the above Amended Decision were reached in consultation before the case was assigned to the writer of the opinion of the Division. LOVELL R. BAUTISTA Chairperson

AMENDED DECISION CTA CASE NO. 8337 CERTIFICATION Pursuant to Article VIII, Section 13 of the Constitution, and the Division Chairperson's Attestation, it is hereby certified that the conclusions in the above Amended Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court. Presiding Justice