ASURION HONG KONG LIMITED - ROHQ v. COMMISSIONER OF INTERNAL REVENUE

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS Q uezon City Svecial Third Division ~ ASURION HONG KONG LIMITED CTA CASE NO. 9852 - ROHQ, Members: Petitioner, UY, Chairperson -versus- RINGPIS-LIBAN, and MODESTO-SAN PE DRO ,]]. COMMISSIONER OF INTERNAL SEt 2022 Q REVENUE, Promul~ted : - - - -- - - - - /------ /(Pi Respondent. X - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - ~-=- -- a� ,.. ~ - - - - X RESOLUTION RINGPIS-LIBAN, ].: Before this Court is petitioner's Motion for Reconsideration flied on March 9, 2022, without respondent's comment as per Records Verification Report dated July 26, 2022. paptoteettrriJiftuboiounrmntOeaeebnr3dl's0e,iFncteo2labt0ihir1tmues6aPzrfehyfoorirolri9-prr,fepaaftii2uenli0ndne2dsgs,2aot,ltheofesthisodtesuifsffsupCienocrouisveuititinrcilvttielzeyecppdorpovoriremontrvipiuoneulnggttaothvthfeaaedwtlupheteha-ircaeidhoDsddsaeetiJcaddaitesntissuaoe:xanrrvy(i"cd1Vee,nA2wy0Tien1r"g6e) "WHEREFORE, in light of the foregoing considerations, the instant Petition for Review is DENIED for lack of merit. SO ORDERED." In its Motion, petitio ner primarily in sists that it was able to satisfactorily establish that the subject services were performed within the Philippines. Petitio ne r posits that the Court failed to consider the nature of petitioner';; �'10Pl0 83

RESOLUTION CTA Case No. 9852 business as a regional operating headquarters ("ROHQ") - that an ROHQ is allowed to derive income in the Philippines through the performance of services, which logically, is to be performed in the Philippines following the rules on situs of taxation. Petitioner also asserts that when it obtained its license as an ROHQ from the Securities and Exchange Commission ("SEC"), it was allowed to derive income within the Philippines by performing qualifying services in the Philippines to its affiliates, subsidiaries, or branches. It continues that since the income allowed to be derived by petitioner in the Philippines involves the performance of services, the services to be rendered therefore must necessarily be performed in the Philippines. Otherwise, if the same services were intended to be performed outside the Philippines, petitioner would not have applied for a license as an ROHQ in the Philippines. Petitioner further argues that the testimony of its witness stating that petitioner's services were performed in the Philippines was unrebutted by respondent. As such, petitioner claims that such unrebutted testimony is sufficient evidence and that a disputable presumption exist in its favor which should stand when no contrary evidence is presented. The Court finds petitioner's Motion for Reconsideration bereft of merit. Verily, it must be noted that the issue as to whether or not petitioner performed services in the Philippines is a question of fact. Accordingly, it must be proven by specific evidence. Petitioner cannot merely rely on the provision that ROHQs are licensed to do business in the Philippines to prove a fact in issue. It is not enough to show that petitioner is a ROHQ, it is still necessary on its part to prove that its services were performed in the Philippines. In the same vein, the testimony of petitioner's witness without corroboration with any specific evidence offered by petitioner, most notably, the Service Agreement between petitioner and Asurion Insurance Services, Inc. (AISI), fails to convincingly establish that the services rendered by petitioner were indeed performed in the Philippines. To reiterate, the Service Agreement docs not categorically state that the contracted Services shall be performed in the Philippines, and taking everything into consideration, the bulk of petitioner's evidence lacks sufficient indication that the subject services were performed in the Philippines. Again, the burden is on the taxpayer to show that he has strictly complied with the conditions for the grant of the tax refund or credit since actions for tax refund or credit, as in the present case, are in the nature of tax exemptions. As such, they are regarded as derogation of sovereign authority and to be construed strictissimi juris against the person or entity claiming the refund.1 The pieces of evidence presented entitling a taxpayer to an exemptio(v 1 Commissioner of Internal Revenue v. S.C. Johnson & Son, Inc., G.R. No. 127105, June 25, 1999.

RESOLUTION erA Case No. 9852 are also strictissimi scrutinized and must be duly proven. 2 Hence, an applicant for a claim for tax refund or tax credit must not only prove entitlement to the claim but also compliance with all the documentary and evidentiary requirements.3 In view of the foregoing disquisitions, there being no new matter or substantial issue raised by respondent in his Motion for Reconsideration, the Court finds no compelling reason to reverse, amend, or modify the Decision promulgated on February 9, 2022. WHEREFORE, in light of the foregoing considerations, petitioner's Motion for Reconsideration is DENIED for lack of merit. SO ORDERED. ~. ~. --~ MA. BELEN M. RINGPIS-LIBAN Associate Justice We Concur: MARIARO E~P.UY Associate Justice 2 Kepco Philippines Corporation v. Commissioner of Internal Revenue, G.R. No. 179961, January 31, 2011 citing Atlas Consolidated Mining and Development Corporation v. Commissioner of Internal Revenue, G.R. No. 159490, February 18, 2008. 3 Eastern Telecommunications Philippines, Inc. v. Commissioner of Internal Revenue, G.R. No. 183531, March 25, 2015 citing J.R.A. Philippines, Inc. v. Commissioner of Internal Revenue, G.R. No. 171307, August 28, 2013. �'lOrl005