NIPPON EXPRESS PHILIPPINES CORPORATION v. COMMISSIONER OF INTERNAL REVENUE

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY SPECIAL SECOND DIVISION NIPPON EXPRESS CTA Case No. 10450 PHILIPPINES Members: CORPORATION, BACORRO-VILLENA, Acting Chairperson, MODESTO-SAN PEDRO', and Petitioner, CUI-DAVID,Jj. -versus- COMMISSIONER OF INTERNAL REVENUE, Promulgated: SEP 28~/ Respondent. 7 :, ------ X - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - r "'~ h ,.... X DECISION BACORRO-VILLENA, J.: Before the Court is the Petition for Review' filed by petitioner Nippon Express Philippines Corporation (petitioner) on 15 January 2021, praying for the refund or issuance of a tax credit certificate (TCC) in the amount of P43,o68,252�54, allegedly representing its unutilized input value-added tax (VAT) attributable to zero-rated sales made during the period covering 01 April 2018 to 30 June 2018. PARTIES OF THE CASE ssy Petitioner is a corporation duly organized and existing under and , by virtue of the laws of the Philippines, with principal address at Lot Designated as Special Member. Division Docket, Volume I, pp. 6-48.

CTA Case No. 10450 Nippon Express Philippines Corporation v. Commissioner of Internal Revenue DECISION x------------------------------------------------------x & B Avocado Road, Food Terminal Inc. Complex, East Service Road, Taguig City.2 It is organized primarily to engage in the business of forwarder for the combined transportation by air, sea, or land from one point of receipt to the point of destination; to operate container depot, warehousing, storage, hauling, and packing facilities; to engage in the business of international air and sea freight and cargo forwarders, hauling, carrying, handling, distributing, loading and unloading of general cargoes and all classes of goods, wares, and merchandise and to receive and collect fees for such services; and to engage in the operation of a Non-Vessel Operating Common Carrier (NVOCC).3 Petitioner is registered with the Bureau of Internal Revenue (BIR), with Taxpayer Identification Number (TIN) oo4-669-434-ooo.4 Respondent, on the other hand, is the Commissioner of Internal Revenue (respondent/CIR), duly empowered to perform the duties of his or her office, including acting upon on protest cases and approval of claims for refund or tax credit as provided by law and implementing regulations, with office address at BIR National Office Building, BIR Road, Diliman, Quezon City.s FACTS OF THE CASE Petitioner avers that during the period in question, it rendered services to entities registered with the Philippine Economic Zone Authority (PEZA), Board of Investments (BOI), Clark Development Corporation (CDC), Subic Bay Metropolitan Authority (SMBA), and Freeport Area ofBataan (FAB) which are subject to VAT at zero-percent (o%) rate under Section w8(B)(3) of the National Internal Revenue Code (NIRC) of1997, as amended by Republic Act (RA) No. 109636, otherwise 1 known as the Tax Reform for Acceleration and Inclusion Act (TRAIN)/ Exhibit "P-2", id., Volume II, pp. 651-661. Exhibit P-2-A, id., p. 651. 4 Exhibit "P-3", id., pp. 662-664. Paragraph 3.2, Parties, Petition for Review, id., Volume I, p. 8. AN ACT AMENDING SECTIONS 5, 6, 24, 25, 27, 31, 32, 33, 34, 51, 52, 56, 57, 58, 74, 79, 84, 86, 90, 91,97, 6 99,100,101,106,107,108,109,110,112,114,116,127,128,129,145,148,149,151,155,171,174,175, 177, 178,179, 180,181, 182, 183, 186,188, 189, 190, 191, 192. 193, 194, 195, 196, 197,232,236,237.249, 254,264,269, AND 288; CREATING NEW SECTIONS 51-A, 148-A, 150-A, 150-B, 237- A, 264-A, 264-B, AND 265-A; AND REPEALING SECTIONS 35, 62, AND 89; ALL UNDER REPUBLIC ACT NO. 8424, OTHERWISE KNOWN AS THE NATIONAL INTERNAL REVENUE CODE OF 1997, AS AMENDED, AND FOR OTHER PURPOSES.

CTA Case No. 10450 Nippon Express Philippines Corporation v. Commissioner of Internal Revenue DECISION Page 3 of68 x------------------------------------------------------x It also rendered services to foreign corporations not engaged in business in the Philippines and outside the Philippines when the services were performed. During the period in question, petitioner claims that it had excess input VAT credits arising from its local purchases of goods and services and amortization of deferred input taxes on capital goods exceeding f'1 Million, allocable to its zero-rated sales, in the aggregate amount of f'43,o68,252�54, which allegedly had not been applied against output tax as reported in its VAT Returns for the subject period. Under Section n2(A) of the NIRC of 1997, as amended, a VAT- registered person whose sales are zero-rated may, within two (2) years after the close of the taxable quarter when the sales were made, apply for a refund to the extent that such input tax attributable to zero-rated sales has not been applied against the output tax. Thus, on 01 September 2020, petitioner filed with the BIR - VAT Credit Audit Division (BIR-VCAD) its administrative claim, accompanied by an Application for Tax Credits/Refunds (BIR Form No. 1914), requesting for the refund and/or issuance of TCC amounting to P43,o68,252.54, allegedly representing excess/unutilized input VAT attributable to zero-rated sales made from 01 April2018 to 30 June 2018.7 Thereafter, an investigation was conducted under Tax Verification Notice (TVN) No. TVN2018oou63 dated 01 September 2020.8 On 16 December 2020, petitioner received the VAT Refund Notice dated 28 October 202o9, duly signed by Maria Luisa I. Belen, Assistant Commissioner of the Assessment Service (Asst. Comm. Belen), stating i that its application for VAT refund for the period 01 April2018 to 30 June 2018, is denied for lack of factual and legal basis. Exhibit "P-25", Division Docket, Volume II, p. 705. Exhibit "P-27", id., p. 728. 9 Exhibit "P-28", id., p. 729.

CTA Case No. 10450 Nippon Express Philippines Corporation v. Commissioner of Internal Revenue DECISION Page 4 of68 X------------------------------------------------------ X Aggrieved, petitioner elevated its claim before this Court via the instant Petition for Review10 filed on 15 January 2021. On 01 March 2021, respondent filed a "Motion for Extension of Time to File Answer"11, which the Court granted in the Order dated 03 March 2021." On 26 March 2021, respondent sought another extension by way of a "Final Motion for Extension of Time to File Answer"13 which the Court granted in the Order14 issued on 03 June 2021. In the same Order, the Court noted respondent's Compliance dated 24 May 2o211s, transmitting to this Court the entire BIR Records of the instant case. However, on 21 July 2021, the Court ordered the ex-parte presentation of petitioner's evidence on o8 September 2021, considering respondent's failure to file a hard copy of his or her Answer. 16 On 15 October 2021, the ex-parte presentation of petitioner's evidence set on o8 September 2021 was cancelled and reset to 24 November 2021, given the Enhanced Community Quarantine, Modified Enhanced Community Quarantine, and General Community Quarantine Alert Level 4 restrictions imposed in the National Capital Region (NCR) and considering the physical closure of the Court, under Supreme Court Administrative Circular No. 56-2021.17 On 25 October 2021, respondent filed a "Motion for Reconsideration Re: Resolution dated 21 July 2021"18 (MR on the Resolution dated 21 July 2021). In a Resolution19 issued on 17 November 2021, the same was, however, d e n i e 1� \0 Supra at note I. II Division Docket, Volume I, pp. 252-255. 12 !d., p. 257. 13 !d., pp. 258 to 26 I. 14 !d., p. 267. " !d., pp. 264-265. 16 See Resolution dated 21 July 2021, id., p. 270. 17 See Notice of Resetting dated October 15, 2021, id., p. 272. 18 !d., pp. 273-278. 19 !d., pp. 322-325.

CTA Case No. 10450 Nippon Express Philippines Corporation v. Commissioner of Internal Revenue DECISION Page 5 of68 x------------------------------------------------------x Not satisfied, respondent filed a Petition for Certiorari20 before the Court En Bane on 02 February 2022, contending that Resolutions dated 21 July 2021 and 17 November 2021, respectively, were issued in excess of the Court's jurisdiction. Meanwhile, a trial ensued during which petitioner presented its witnesses: (1) Elizabeth D. Quingquing (Quingquing), its Finance Manager; and, (2) Atty. Conrado M. Briones21 (Atty. Briones), the Court-commissioned Independent Certified Public Accountant22 (ICPA). By way of a Judicial Affidavit'3, Quingquing testified that she is currently petitioner's Finance Manager who is responsible for the general supervision of petitioner's tax compliance. In the performance of her duties and responsibilities, she maintains access to petitioner's financial statements, tax returns, BIR Certificate of Registration, permits, sales invoices, official receipts (ORs), and other accounting records, as well as its corporate documents such as the Articles of Incorporation (AOI), By-laws, General Information Sheet, and other reportorial requirements. According to Quingquing, and as indicated in petitioner's AOI, petitioner is engaged in the forwarding business for the combined transportation by air, sea, or land; to operate container depot, warehousing, storage, hauling, and packing facilities; to engage in the business of international air and sea freight and cargo forwarders, hauling, carrying, handling, distributing, loading and unloading of general cargoes and all classes of goods, wares, and merchandise and to receive and collect fees for such services; and, to engage in the operation of a NVOCC. Petitioner is also registered with the BIR as evidenced by its Certificate of Registration. Quingquing also declared that from 01 April 2018 to 30 June 2018, 1!J- petitioner rendered services to entities registered with PEZA, BOI, CDC, r SBMA, FAB, and other government agencies. During the said period, 20 ld., pp. 351-375. id., Volume II, pp. 474-560; Minutes of the hearing and Order both dated, 21 Exhibit "P-292", 16 May 2022, id., pp. 632-633. Oath of Commission held during the hearing on 24 November 2021; TSN dated 24 November2021, 22 pp. 4-5; Order dated 24 November 2021, Division Docket, Volume!, p. 326. 23 Exhibit P-29, id., pp. 129-154.

CTA Case No. 10450 Nippon Express Philippines Corporation v. Commissioner of Internal Revenue DECISION x------------------------------------------------------x also rendered services to non-resident foreign corporations (NRFCs) doing business outside the Philippines. Quingquing further testified that during the period from 01 April 2018 to 30 June 2018, petitioner filed with the BIR its monthly and quarterly VAT Returns. It also filed an Amended Quarterly VAT Return for the subject period, reporting VATable sales ofP6ss,677,764.29 and Output Tax Due for the quarter ofP78,681,331.72. In the same Quarterly VAT Return, petitioner reported VAT zero- rated sales ofP627,722,572.69, purchases of capital goods not exceeding P1 Million of P729,925.89, domestic purchases of goods other than capital goods of PIS,948,519.92, and domestic purchases of services of P813A67,180.12 (which generated input taxes for the subject period in the amount of Pl2I,749.584.26). According to her, petitioner was claiming a refund of the unutilized and unapplied input tax credits for the period from 01 April 2018 to 30 June 2018, allocable to its zero-rated sales in the aggregate amount ofP43,o68,252.54� Quingquing added the amount sought to be refunded was arrived at after deducting the input tax attributable to VATable sales in the amount of P62,2oo,774�70 from its output VAT liability of P78,681,J31.72 from said sales, resulting in a net output VAT payable ofPI6,480,557�o2. Considering that petitioner's input VAT attributable to VATable sales was not enough to cover its output VAT liability, the input VAT attributable to zero-rated sales was utilized against the remaining output VAT liability of P16A80,557�o2. As such, petitioner still has a net-refundable amount of P43,o68,252.54- Quingquing similarly testified that petitioner did not apply the input taxes sought to be refunded in the subsequent quarters as they were not carried over to the succeeding quarters (after they were deducted as "VAT Refund claimed" from the total available input taxes in its quarterly VAT Return for the second (2"d) quarter of taxable year (1Y) 2020 and were not carried over to the succeeding periods). According to Quingquing, on 01 September 2020, to recover the c20l18a, i~~ excess input VAT for the period from 01 April 2018 to 30 June petitioner filed with th e BIR through BIR-VCAD an administrative

CTA Case No. 10450 Nippon Express Philippines Corporation v. Commissioner of Internal Revenue DECISION Page 7 of68 x------------------------------------------------------x for tax refund amounting to P43,o68,252�54, as evidenced by BIR form No. 1914 which the BIR duly stamped "Received". Thereafter, petitioner received a TVN with No. TVN2o18oon6350 dated 01 September 2020, informing petitioner that Revenue Officers (ROs) Dexter C. Bustillos (Bustillos) and Denise R. Dayanan (Dayanan) of the VCAD were authorized to verify the supporting documents and/or pertinent records relative to petitioner's claim for VAT refund. After verification, or on 16 December 2020, petitioner received the VAT Refund Notice dated 28 October 202o24, stating that petitioner's claim for a VAT refund has been denied for lack of legal and factual basis. The ICPA who, on 16 May 2022, also testified by way of a Judicial Affidavit2s stated that he was duly commissioned to perform the duties and responsibilities of an ICPA under Rule 3226 of the Rules of Court (ROC) in relation to Rule 1327 of the Revised Rules of the Court of Tax Appeals (RRCTA). After his commissioning, he immediately started his examination of the supporting documents relative to petitioner's judicial claim for refund. Pursuant to the Court's directive and based on the procedures he performed, the ICPA prepared a written report containing his findings and conclusions which he later on submitted to the Court by registered mail. According to him, based on his examination and verification of petitioner's supporting documents, out of the amount ofP43,o68,252.54 input VAT being claimed for refund, the amount of input VAT that should be granted is P3,034,527.62. Later, or on 30 May 2022, petitioner filed its Formal Offer of � Evidence>8 (FOE) which the Court admitted in the Resolution dated~ 0 os July 2o22.29 24 Supra at note 9. 2S Exhibit P-292, supra at note 21. 26 Trial by Commissioner. 27 Trial by Commissioner. 28 !d., Volume II, pp. 634-646. 29 ld., pp. 747-748.

CTA Case No. 10450 Nippon Express Philippines Corporation v. Commissioner of Internal Revenue DECISION Page 8 of68 X� � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � � X On 02 August 2022, petitiOner filed its Memorandum3� in compliance with the Court's directive as stated in the Resolution dated 05 July 2022.3' On 05 August 2022, the instant case was submitted for decisionY ISSUE The Court is confronted with the resolution of this lone issue, to wit- WHETHER PETITIONER NIPPON EXPRESS PHILIPPINES CORPORATION IS ENTITLED TO THE CLAIM FOR REFUND ON THE EXCESS AND UNUTILIZED INPUT VALUE-ADDED TAX (VAT) FOR THE PERIOD 01 APRIL 2018 TO 30 JUNE 2018 IN THE TOTAL AMOUNT OF 1"43,o68,252.54�33 RULING OF THE COURT After a careful review of the records and the parties' contrasting arguments, We find no merit in petitioner's arguments and thus, the instant petition must fail. We essay the reasons below, in seriatim. Petitioner anchors its claim for refund on Section no(B), in relation to Section 112(A) and (C) of the NIRC of1997, as amended, by the TRAIN Law. The said provisions read as follows: Sec. no. Tax Credits. - (B) Excess Output or Input Tax. - If at the end of any taxable quarter the output tax exceeds the input tax, the excess shall be paid by the VAT-registered person. If the input tax exceeds the output tax, the excess shall be carried over to the succeeding quarter minapyuatttahxisaottprtiibountabbelerteo fzeuron- d' e~ or quarters: Provided, however, that any rated sales by a VAT-registered person 30 Id., pp. 749-843 3I Supra at note 29. 32 See Resolution dated 05 August 2022, Division Docket, Volume II, p. 845. ]] Petitioner's Memorandum, id., p. 755.

CTA Case No. 10450 Nippon Express Philippines Corporation v. Commissioner of Internal Revenue DECISION Page 9 of68 X------------------------------------------------------ X or credited against other internal revenue taxes, subject to the provisions of Section 112. 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, 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 w6(A}(2)(a}(1}, (2) and (b) and Section w8(B)(l) and (2}, the acceptable foreign currency exchange proceeds thereof had been duly accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP): 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 w8(B)(6}, the input taxes shall be allocated ratably between his zero-rated and non-zero-rated sales. (C) Period within which Refund ofInput Taxes shall be Made.- In proper cases, the Commissioner shall grant a refund for creditable input taxes within ninety (9o} days from the date of submission of the official receipts or invoices and other documents in support of the application filed in accordance with Subsections (A) and (B) hereof: Provided, That should the Commissioner find that the grant of refund is not proper, the Commissioner must state in writing the legal and factual basis for the denial. In case of full or partial denial of the claim for tax refund, the taxpayer affected may, within thirty (30) days from the receipt of the decision denying the claim, appeal the decision with the Court of Tax Appeals: Provided, however, That failure on the part of any official, agent, or employee of the BIR to act on the application within the ninety (9o}-day period shall be punishable under Section 269 of this Code. In Commissioner of Internal Revenue v. Deutsche Knowledge \ Services Pte. Ltd.34 (Deutsche Knowledge Services), the Supremf1- 34 G.R. No. 234445, 15 July 2020; Citations omitted.

CTA Case No. 10450 Nippon Express Philippines Corporation v. Commissioner of Internal Revenue DECISION x------------------------------------------------------x Court laid down the requisites for the entitlement to tax refund or credit of excess input VAT attributable to zero-rated sales, to wit: Under Section 4.112-1(a) of Revenue Regulations No. (RR) 16-os, otherwise known as the Consolidated VAT Regulations of2oos, in relation to Section 112 of the Tax Code, a claimant's entitlement to a tax refund or credit of excess input VAT attributable to zero-rated sales hinges upon the following requisites: "(1) the taxpayer must be VAT-registered; (2) the taxpayer must be engaged in sales which are zero-rated or effectively zero-rated; (3) the claim must be filed within two years after the close of the taxable quarter when such sales were made; and (4) the creditable input tax due or paid must be attributable to such sales, except the transitional input tax, to the extent that such input tax has not been applied against the output tax." Applying the foregoing principle, the Court shall now proceed to the determination of petitioner's compliance with the aforementioned requisites. FIRST (Isr) REQUISITE: PETITIONER MUST BE VALUE-ADDED TAX (VAT)-REGISTERED. Undisputedly, petitioner is a VAT-registered taxpayer with TIN 004-669-434-ooo, as evidenced by BIR Certificate of Registration No. OCN 125RC2o22ooooooo391.3s SECOND (2ND) REQUISITE: PETITIONER MUST BE ENGAGED IN SALES WHICH ARE ZERO-RATED OR EFFECTIVELY ZERO-RATED. The 2nd requisite requires that the taxpayer is engaged in zero- t rated or effectively zero-rated sales and, for zero-rated sales under;!!'- Exhibit "P-3", Division Docket, Volume II, pp. 662-664.

CTA Case No. 10450 Nippon Express Philippines Corporation v. Commissioner of Internal Revenue DECISION x------------------------------------------------------x Sections 106(A)(2)(a)(1) and (3)36, and w8(B)(1) and (2)37 of the NIR(38 of1997, as amended, the acceptable foreign currency exchange proceeds must have been duly accounted for in accordance with Bangko Sentral ng Pilipinas (BSP) rules and regulations. In petitioner's Quarterly VAT Return for the 2nd quarter of calendar year (CY) 2018, petitioner declared an aggregate amount of P1,283AOO,JJ6.98 sales/receipts which consisted of VATable sales/receipts of P6ss,677,764.29 and zero-rated sales/receipts of P627,722,572.69 as follows:39 VATable Sales/Receipts Amount Zero-Rated Sales/ReceiJ>ts p 6ss,6n764.29 Total Sales/Receipts 627,722,572.69 \ Pl,283,400,336.~ 36 Sec. 106. Value-Added Tax on Sale a[Goods or Properties.- (A) Rate and Base a[ Tax.- There shall be levied, assessed and collected on every sale, barter or exchange of goods or properties, value-added tax equivalent to twelve percent (12%) of the gross selling price or gross value in money of the goods or properties sold, bartered or exchanged, such tax to be paid by the seller or transferor. (2) The following sales by VAT-registered persons shall be subject to zero percent (0%) rate: (a) Export Sales.- The term 'export sales' means: (1) The sale and actual shipment of goods from the Philippines to a foreign country, irrespective of any shipping arrangement that may be agreed upon which may influence or determine the transfer of ownership of the goods so exported and paid for in acceptable foreign currency or its equivalent in goods or services, and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP); (3) Sale of raw materials or packaging materials to a nonresident buyer for delivery to a resident local export-oriented enterprise to be used in manufacturing, processing, packing or repacking in the Philippines of the said buyer's goods and paid for in acceptable foreign currency and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP)[.) 37 Sec. 108. Value-Added Tax on Sale a[Services and Use or Lease a[Properties.- (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%) rate: (I) 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)[.) 38 As amended by TRAIN. 39 Exhibit "P-16", Division Docket, Volume II, p. 679.

CTA Case No. 10450 Nippon Express Philippines Corporation v. Commissioner of Internal Revenue DECISION X������������������������������������������������������ X Upon examination of the documents supporting petitioner's reported zero-rated sales/receipts amounting to P627,722,572.69, the ICPA found that the said amount consisted of the following: Zero-Rated Sales/Receipts Amount Reference Sales of Services to Non-Resident Foreign l't62,005,980.74 Corporations Exh. "P-3>", Table 30, pp. 37 to 6> Sales of Services to PAGCOR, japan Embassy, JJ6, 761,226.67 ADB, BOI and Ecozone-registered t2B,gssa65�3' Exh. "P-3!", Table 29, pp. 22 to 36 enterprises 1'627,722>572-72 Exh. "P�31", Table 28, p. 22 in relation to Tables 24 to 27, pp. 20 to 22 Freight Revenues Total Zero-Rated Sales/Receipts Before we discuss whether petitioner's reported zero-rated sales/receipts have met all of the conditions for VAT zero-rating under Sections w8(B)(2) and (3) of the NlRC of 1997, as amended, it is more propitious to first determine whether petitioner complied with the pertinent invmcmg requirements contammg all the required information under Section 113(A) and (B) of the NIRC of 1997, as amended, as implemented by and Sections 4-113-1(A)(1), (B)(1) and (2)(c) of Revenue Regulations (RR) No. 16-200540 which provide: SEC. 113. Invoicing and Accounting Requirements for VAT-Registered Persons.- (A) Invoicing Requirements. -A VAT-registered person shall issue: 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 tltat such amount includes the ~~lue-added tax: Provided, That:~ 40 Consolidated Value-Added Tax Regulations of2005.

CTA Case No. 10450 Nippon Express Philippines Corporation v. Commissioner of Internal Revenue DECISION x------------------------------------------------------x c. If the sale is subject to zero percent (o%) value-added tax, the term 'zero-rated sale' shall be written or printed prominently on the invoice or receipt[.]4' SEC. 4�113-I. Invoicing Requirements.- (A) A VAT-registered person shall issue: - 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 InvoiceIVAT 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: 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: c. If the sale is subject to zero percent (o%) VAT, the term "zero-rated sale" shall be written or printed prominently on the invoice or receipt[.]42 Moreover, the ORs supporting petitioner's sale of services must be duly registered with the BIR and must contain all the required information, pursuan~to Section 237 of the NIRC ofl997, as amended, the provision states:# 41 Emphasis supplied and italics in the original text. 42 Emphasis supplied and italics in the original text.

CTA Case No. 10450 Nippon Express Philippines Corporation v. Commissioner of Internal Revenue DECISION Page 14 of 68 - - - - - ----- - - - - - - ----- - - - - - ------ - - - - - ----- x x----- ------- SEC. 237. Issuance of Receipts or Sales or Commercia/Invoices.- All persons subject to an internal revenue tax shall, for each sale or transfer of merchandise or for services rendered valued at Twenty-five pesos (P25.oo) or more, issue duly registered receipts or sales or commercial invoices, prepared at least in duplicate, showing the date of transaction, quantity, unit cost and description of merchandise or nature of service. Provided, however, That in the case of sales, receipts or transfers in the amount of One hundred pesos (P10o.oo) or more, or regardless of the amount, where the sale or transfer is made by a person liable to value-added tax to another person also liable to value-added tax; or where the receipt is issued to cover payment made as rentals, commissions, compensations or fees, receipts or invoices shall be issued which shall show the name, business style, if any, and address of the purchaser, customer or client: Provided, further, That where the purchaser is a VAT- registered person, in addition to the information herein required, the invoice or receipt shall further show the Taxpayer Identification Number (TIN) of the purchaser.43 To summarize the foregoing requirements, the following information should be reflected in the VAT invoice or OR: 1. A statement that the seller is a VAT-registered person, followed by its 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: (a) the amount of tax shall be shown as a separate item in the invoice or receipt; (b) if the sale is exempt from VAT, the term "VAT exempt sale" shall be written or printed prominently on the invoice or receipt; (c) if the sale is subject to zero percent (o%) VAT, the term "zero-rated sale" shall be written or printed prominently on the invoice or receipt; or, (d) if the sale involves goods, properties or services, some ofwhich are subject to and some ofwhich are VAT zero- rated or VAT-exempt, the invoice or receipt shall clearly indicate the breakdown of the sale price between its taxable, exempt and zero-rated components, and the calculation of the hoafsthtehesaoleptsihoanlltobeissshuoewsnepoanrattheeiinnvvooiicece,~ VAT on each portion or receipt. The seller 43 Emphasis and underscoring supplied and italics in the original text.

CTA Case No. 10450 Nippon Express Philippines Corporation v. Commissioner of Internal Revenue DECISION x------------------------------------------------------x or receipts for the taxable, exempt, and zero-rated components of the sale; 3� In the case of sales in the amount of one thousand pesos (Pl,ooo.oo) or more, where the sale or transfer is made to a VAT-registered person, the name, business style, if any, address and TIN of the purchaser, customer or client; 4� Date of transaction; and, s. Quantity, unit cost and description of merchandise or nature of service. Corollarily, Revenue Memorandum Circular (RMC) No. 42-0344 expressly provides that a taxpayer's failure to comply with the invoicing requirements will result in the disallowance of the claim for input tax, as follows: Q-13: Should penalty be imposed on TCC application for failure of claimant to comply with certain invoicing requirements, (e.g., sales invoices must bear the TIN ofthe seller)? A-13: Failure by the supplier to comply with the invoicing requirements on the documents supporting the sale of goods and services will result to the disallowance of the claim for input tax by the purchaser-claimant. If the claim for refund/[tax credit certificate] is based on the existence of zero-rated sales by the taxpayer but it fails to comply with the invoicing requirements in the issuance of sales invoices (e.g., failure to indicate the TIN), its claim for tax credit/refund of VAT on its purchases shall be denied considering that the invoice it is issuing to its customers does not depict its being a VAT-registered taxpayer whose sales are classified as zero-rated sales. Nonetheless, this treatment is without prejudice to the right of the taxpayer to charge the input taxes to the appropriate expense account or dbeeprreefceirarteidonb,ywthheicphreovceersissinagppolfifciacbelt e. '~ asset account subject to Moreover, the case shall 44 Clarifying Certain Issues Raised Relative to the Processing of Claims for Value-Added Tax (VAT) Credit/Refund, Including Those Filed with the Tax and Revenue Group, One-Stop Shop Inter- Agency Tax Credit and Duty Drawback Center, Department of Finance (OSS) by Direct Exporters.

CTA Case No. 10450 Nippon Express Philippines Corporation v. Commissioner of Internal Revenue DECISION Page 16 of 68 - -� � - -- - -- - -- - -- - -- � -- - -- - -- - -- - -- - -- - -- - -- - X X-- -------- the concerned BIR office for verification of other tax liabilities of the taxpayer.45 Based on the ICPA's review and validation, out of the amount of P627,722,572.72 that petitioner has been claiming as zero-rated sales/receipts, only the amount of 'P151,162,276.72 is duly supported by BIR-registered VAT ORs. The remaining amount of 'P476,s6o,296.oo falls among the following noted exceptions: (i) supported by BIR- registered VAT ORs dated in the subsequent quarter; (ii) supported by BIR-registered VAT ORs but dated outside the validity period of Authority to Print (ATP); (iii) supported by BIR-registered VAT ORs but with issues on invoicing requirements (sales not aligned in zero-rated line/no zero-rated stamp, missing date and corrections without countersignature); (iv) supported by BIR-registered VAT ORs but with issues on invoicing requirements and dated in the subsequent quarter; and, (v) without BIR-registered VAT ORs, as summarized below: Sales of Sales of Freight Total Services to Services to Revenues Declared Non-Resident PAGCOR, Zero-Rated Supported by SIR-registered Sales/Receipts Foreign Japan 1'1<;1,162,276�72 VAT ORs Corporations Embassy, ADB, Supported by SIR-registered 1'1,6Q8,472.';Q46 234.440,054-49 VAT ORs dated in the BOland subsequent quarter 94,116,489.1148 Ecozone- v ~' registered Supported by SIR-registered 47.404,789-4650 enterprises 47.404,789�46 VAT ORs but dated outside the validity period of 1'149,461,804-1147 Authorirv to Print (ATP) 140, 121,';65.1849 45 Emphasis and underscoring supplied and italics in the original text. 29 to 40, !CPA Report, Exhibit 46 Sum total of Exhibits "P-215 to "P-226", !CPA Findings numbers 47 "P-31 ",Table 30, pp. 46-48. to "P-133", "P-142" to "P-148", !CPA Findings numbers 1 to 11, 20 Sum total of Exhibits "P-123" 48 to 26, id., Table 29, pp. 23-25, and 27-28. "P-239" to "P-240", "P-243" to "P-263", ICPA Findings Sum total of Exhibits "P-187'' to "P-188", 49 numbers 1, 2, 53, 54,57-77, id., Table 30, pp. 37,52-58. I CPA Findings numbers 12 to 19, 56 Sum total of Exhibits "P-134" to "P-141 ", "P 178" to "P-184", 50 to 62, id., Table 29, pp. 25-27 and 35-36. !CPA Findings numbers 3 to 28, id., Table 30, pp. 37-45. Sum total of Exhibits "P-189" to "P-214",

CTA Case No. 10450 Corporation v. Commissioner of Internal Revenue Nippon Express Philippines DECISION Page 17 of 68 - - - - ------ - - - - - ------ - - - - - ----- - - - - - ------ - - - x x--------- Supported by SIR-registered I,1~8,oot.7Is1 10,117,8'i7�1'i5' U,49'i,8<;q.o6 VAT ORs but with issues on invoicing requirements (sales 177,189.3253 177,189.12 not aligned in zero-rated 17,2'i1,018.3<;54 36,636,ooo.m" l'u8,Q'i'i;~6<;.11'6 182,842,401.67 line/no zero-rated stamp, PJJ6,761,226.67 PuS, 955.365.31 1'627,722>572�72 missing date and corrections without countersignature) Supported by SIR-registered VAT ORs but with issues on invoicing requirements and dated in the subsequent quarter Without SIR-registered VAT ORs Total P162,oo5,98o.74 As the ICPA correctly found, the amount ofP182,842.403.67 must be disallowed for being devoid of support like the BIR-registered VAT ORs, which is in violation of Section 113(A)(2)S7 of the NIRC of 1997, as amended, and Section 4�113-1(A)(2) ofRR No. 16-os. Likewise, the claimed zero-rated sales/receipts of Pb2e3d4i.s4a4l0lo,0w5e4d�4. 9T,hPe4O7,R40s4s,7u8p9p�o4r6t,inPgHt,h4e9s5e,8as9m.oo6unatnsdfaPil3e7d7,1to89m.32eemt tuhset invoicing requirements under Section 113(B)58 of the NIRC of 1997, as amended, and Section 4�113-1(B) of RR No. 16-os. As regards the amount ofP151,162,276.72 which the ICPA found to have been supported by BIR-registered VAT ORs, the amounts of P818,761.62s9 and Plm,621,396.4o60 representing petitioner's claimed sales of services to NRFCs and sales of services to Philippine Amusement ' and Gaming Corporation (PAGCOR), Japan Embassy, ADB, BOI an2?3 51 Sum total of Exhibits "P-235" to "P-238", !CPA Findings numbers 49 to 52, id., Table 30, pp. 51- 52 52. total of Exhibits "P-149" to "P-155", "P171" to "P-177'' and "P-185", ICPA Findings numbers Sum Table 29, pp. 28-30 and 33-36. 53 27 to 33, 49 to 55 and 63, id., and "P-242", ICPA Findings numbers 55 and 56, id., Table 30, pp. 52 Sum total of Exhibits "P241" 54 and 53. of Exhibits "P227" to "P-234", "P-264" to "P-274", ICPA Findings numbers 41 to 48 and Sum total and 59-61. " 78 to 88, id., Table 30, pp. 49-50, "P-170" and "P-186", ICPA Findings numbers 34 to 48 and 64, Sum total of Exhibits "P-I 56" to id., Table 29, pp. 30-32 and 36. 56 ld., Table 28, p. 22. 57 Supra at p. 12. 58 SSSuuummprttaooattaatlpl o.olff2EE.xxhhibibititss""PP-2-11253"",,""PP-2-11275"", ,"P"P-2-11297",","P"P-2-2112"8,"", P"-P2-2133"0"a,nd"P"-P1-3232"4,"','PU-S14B2.", "P-143", 59 60 "P-145" and "P-146", id.

CTA Case No. 10450 Nippon Express Philippines Corporation v. Commissioner of Internal Revenue DECISION x------------------------------------------------------x Ecozone-registered enterprises, respectively, must be disallowed. Without the corresponding billing statements/invoices referred to in the ORs, the nature of the payments received by petitioner cannot be ascertained. In addition, the ORs supporting the following claimed zero-rated sales in the amounts ofPs,75o.oo and 'P)I,378.83 must be disallowed due to the following reasons: Sales ofServices to Non-Resident Foreiqn Corporations a) Amount of sales and name of buyer per OR do not match with the claimed zero-rated sales OFFICIAL RECEIPT AMOUNT Per !CPA's BILLING STATEMENT Summary EXH.NO. EXHIBIT EXHIBIT OF SALES P-226 CUSTOMER DATE NO. DATE NO. InPHP NIPPON EXPRESS CO. P-119-aky_ 2~-May-18 P-120-1-Zd 5�750.00 LTD. o2:Apr-18 5>750.00 NIPPON EXPRESS CO. LTD. Total Sales ofservices to PAGCOR, japan Embassy, ADB, 801 and Ecozone-registered enterprises a) Claimed zero-rated sales supported by an unreadable OR BILLING STATEMENT OFFICIAL RECEIPT AMOUN Per !CPA's AMOUNT Summary EXHIBIT EXHIBIT OF SALES EXH. NO. NO. NO. CUSTOMER DATE DATE InPHP UNREADABLE 16-Apr-18 P-u9-xr 29-May-18 P-120-1-xl UNREADABLE 16-Apr-18 P-119-XS 29-May-18 P-120-1-xl 383.22 P-131 UNREADABLE 16-Apr-18 P-U9-Xt 29-May-18 P-120-1-Xl UNREADABLE 16-Apr-18 P-119-XU 29-May-18 P-120-1-xl 1,243�64 P-131 UNREADABLE 16-Apr-18 P-U9-XV 29-May-18 P-120-1-Xl UNREADABLE 16-Apr-18 P-119-XW 29-May-18 P-120-1-Xl 5,565.76 P-131 UNREADABLE 16-Apr-18 P-u9-xx 29-May-18 P-120-1-xl UNREADABLE 16-Apr-18 P-U9-xy 29-May-18 P-120-1-Xl 107.40 P-131 UNREADABLE 16-Apr-18 P-u9-xz 29-May-18 P-120-1-Xl UNREADABLE 24-Apr-18 29-May-18 P-120-1-Xl 292�38 P-131 UNREADABLE 30-Apr-18 P-119-XXi 29-May-18 P-120-1-Xl UNREADABLE 30-Apr-18 29-May-18 P-120-1-Xl 586.84 P-131 UNREADABLE 30-Apr-18 P-u9-ya 29-May-18 P-120-1-Xl UNREADABLE 30-Apr-18 P-119-yb 29-May-18 P-120-1-Xl 1,167.26 P-131 UNREADABLE 30-Apr-18 P-U9-YC 29-May-18 P-120-1-Xl UNREADABLE 30-Apr-18 P-119-yd 29-May-18 P-120-1-Xl 19.28 P-131 UNREADABLE 30-Apr-18 P-u9-ye 29-May-18 P-120-1-Xl UNREADABLE 30-Apr-18 P-U9-yf 29-May-18 P-120-1-Xl 451-45 P-131 UNREADABLE 30-Apr-18 P-u9-yg 29-May-18 P-120-1-Xl UNREADABLE 30-Apr-18 P-119-yh 29-May-18 P-120-1-xl 101.32 P-131 UNREADABLE 30-Apr-18 P-U9-yi 29-May-18 P-120-1-XI Total P-u9-yj 184�30 P-131 P-119-yk 373�07 P-131 501.28 P-131 7,666.36 P-131 6,622.20 P-131 547�67 P-131 210.96 P-131 3�834-48 P-131 363-49 P-131 782.61 P-131 373�86 P-131,'v 31,J78.8J ~ {.../

CTA Case No. 10450 Corporation v. Commissioner of Internal Revenue Nippon Express Philippines DECISION -- - X Page 19 of 68 - - - -- -- -- -- -- -- -- -- -- -- -- - - - - - - - - - -- -- -- -- X--------- taAbhmyDeoSSsuI,uRTnmS-thOrouoelsfgf,taifhs>onte4nde7lray,eE8mdt1cho1oVe,uzoAon2reT8ntm.eo9O-foarfRie>snsg8a,iil7nset3ogtse,9awro6emfi0dtso:.e9eur7nvntsietcaroelpefsrfs>itsoo4ef8sPs,,eA6rw8Gv4aiC,cs9Oe8psR9rto.,o8pJ7Nae,rpRrlayeFnpCsrEsuempasepnbnodatrsittsnheyged, SLeuspsp: orWteditbhyouStIRS-IrReg-risetgeirsetderVedATbiOllRinsg Sales of Sales of Services Total statements Services to toPAGCOR, Amount of sales and name of Non-Resident 1'151,162,276�72 buyer per OR do not match with Japan Embassy, 102,440,158.02 the claimed zero-rated sales Foreign ADB, BOland Claimed zero-rated sales Corporations 5.750.00 supported by an OR with Ecozone- . 31,3]8.83. illegible customer name 1'1,698.472�59 registered p 48,684,989.87 enterprises Properly Supported by BIR- registered VAT ORs 1'149�463,804.13 818,761.62 101,621,396.40 5.750.00 - - 31,378.83 1'47,811,028.90 Pll73,96o.97 whichWareesphraolpl enrolywsdueptpeormrteindebwyhSeItRh-erregthisetearfeodreVsAtaTteOdRssalaerseosfusbejrevcitcetos zero percent (o%) VAT. From the foregoing, petitioner has two (2) sources of zero-rated sales, namely: (i) Export sale of services under Section 108(S)(2) of the NIRC oSsPpafhel1iec9lii9opa7flp,sianelsarewvsaismciesesonarpdeesiridnsg;toneanarnnstodaor,tyrioenunantlidtieearsgrSweeehcmotiseoenntes1x0et8mo(Sp)wt(i3oh)nicouhnf dtthheere (ii) NIRC of 1997, as amended. '2} Each source of zero-rated sales shall be discussed below, in seriatim.

CTA Case No. 10450 Corporation v. Commissioner of Internal Revenue Nippon Express Philippines DECISION Page 20 of 68 -.--.- �� -.--.- �� - ��������� _ ���� X X------ �� ------ ��� --.- �� (i) EXPORT SALE OF SERVICES UNDER SECTION 108(B)(2) OF THE NIRC OF 1997, AS AMENDED. r1Ne0Rn8Fd(C8er)Ps(ee2dnt)iotsoietofrtnvdheiocereinNscglIiaRnibCmtuhsoseiftnihP9eahs9tsi7lid,piuanpsriinatnhemgesettnhoPdehgeidl2loin,pdbwpaqilhnuiceaclsirhetensprttuasrotestfhsu:taahtneat rCetoYal2Sle0eg1c8et,dioliynt SEC. 108. Value-Added Tax on Sale ofServices and Use or Lease of Properties.- fpoelrlosownisn(Bgs)hsaTelrrlvabinecsesasucbtpijoeerncfstotrSomuzbeedjreocitnpettorhceZenePrtoh(iolP%ipe)prcirneaentest. (o%) Rate - The by VAT-registered ogfaotocrhoceodrirsndpa(ae1ran)erccscPeoseurnopwbsctsaieedtbshqolseuiinnethggnf,eotblrmyeuriusaegilnxnneupseofscasrauctnertourdduer,tniswrnceigydhgeeuoralrteanhtdrtiehoepnePaashcscciekloroiivfpnuipgnctihetnesgeedosaoBrdwefaosnhrpgiafcokiihdnro Sentral ng Pilipinas (BSP); pbnotfthurohoueserenticesnreiiceegrddsous(neis2inln)detscghseiuScdneroepeatrnPraernvdahrnpdiuaticceiglceyoritrrsspeneaaopdgponnifuhtndohl,eoranesautorrwictewostcnhitnhdodheiseecueannhrnngeottadtefihhtgsdheeettoohpdfssoeaePerairihdvnBiimiplncaifebpeeonrapusnrgscisotaknciiinreooonnesrneedSpsaenasceedogncnrracfwetigoernpehatrtdowomlatbhienitlienadhseg Pilipinas (BSP).6' ebtfaoanyncgdoaialipigcrte,iaFeerrdsrsageo,tioamentofoc"oproterehnwlntaetigaatnia[ridofdgnoneeefrrerrwsiorn,d'maserhtAdphaoiouemnntlg,eiebn]wnupgbdsao,iuerincesdnaeihtnrAsorsoeyOusfoissInrif6engf'ioc,,gneri,httietaspihrtnstnoesderalcatvtiogioniodemgane,,banphdlitoaintasiuehtnilrdraitintbatogrniufattdadniisnnessgdpspet,aoripilnrmaftarocaeatktaiiriogiidonlnhynig;t n~ 61 Emphasis supplied and italics in the original text. 62 Exhibit "P-2", Division Docket, Volume II, pp. 651-661.

CTA Case No. 10450 Corporation v. Commissioner of Internal Revenue Nippon Express Philippines DECISION Page 21 of 68 - - - - - -- -- -- -- -- - - - - - -- -- -- -- -- - - - -- -- -- -- -- - X X---------- ameCocnnotledhgenraaectrugerhlnyema,lntopihpdnalaeaidstnttiieehntdiegao"unnpoonderpfodreg'tcesroeeransntSrsaieeioetrncucnaegtrli,ievoocefnaomraf1aga0nsonne8derou(svBnfcia)-oac(vcenl2telsd)euscforsaaitefnllllfltsgehoceewlspaoNiesftrrsoIhaReritsnCrisneotupgohfcafe1hgcc9kooss9ciomen7odrgm,pvs,aeiocswoeonasffam,crsaeaeegrsrnnorvdiodaiecdenrtesd"do"s.. oucrlnaddiemerraIfSnonretDcmttehiuuoetsnsstc1aph0lree8os(KvBoen)f(ot2"hwo)eltoehfdfoegtrlheloseSewerNivrnIviRgciceCcesos"o6n3ftdo1, ti9thb9ieeo7n,Scsaou:snpsariemdmeeernedCdeodVu,ArttThheezltedarxotp-hraaaytteeirnd- rPosienehunritavdlsiciiepcdcrepoee.s.ir.dntdaheFar"seeintroocs"Ptrep,haatwiotilhdpiipateefhpronssiro[neoBinelnnlSsrePearew]scniichrsgdueeaeVlpngentAseattdbhpaTlene-eirrdnsesfeogorbrerinvseugtiinsuecgiorelnneastedtceisa.ounsrnrSegrsceaep.ocgneonecrnddyfdouia,rncnmttbdheeudeadsc.iso"cneuoerTtvsushisnicidrwtedeesh,dotathfhroieeesr In addition to the 19fo97re,gaosinagm, enadsedla, itdhed"oowthnerusnedrveircesS"ecmtiuosnt 108(B)(2)64 of the NIRC of be performed in the Philippines. As to the 1'' condition, it was previously established that petitioner is VAT-registered. swPSmuhuhcuipehlsirntpeAsepmteshsirentevareeibCsscgeleoiarossvurrhdircmtnsteootdushtpisasertercoen2ubv"gspdeeaseecgaredoefncodnlgtridhmaeiinegnteietbdo'tdswu,nssio,itninanw(tDe2uhbs)esisucuacshtasiosnnrcmaedehnsqpesiuoNsKinRcroneeoFuosnnCtwtstds,lhiuedtatdocehtgtweatethdhtiStee:teohrrPeuevhcitcsiicelpilidsaip6eeip5mn,ittntahhoeneesft ... (1) that their client was established under the laws of a \ country not the Philippines or, simply, is not a domestic corporation~ 63 Supra at note 34; Citation omitted and italics in the original text. 64 Supra at note 37. Citations omitted, emphasis supplied and italics in the original text. 65 Supra at note 34;

CNTipApoCnaEsexpNreos. s10P4h5il0ippines Corporation v. Commissioner of Internal Revenue DECISION of68 -- - -- x Page 22 ---- -- -- - -- -- - -- -- - -- -- - -- -- - -- x----- - -- -- - - - - -- -- and (z) that it btisshuhetnoraoweltsionemngagureasntgn,oeodtbt eidnoontsilrnuyagfdfbietcuhiosearintntbeustpshsirenioneostfcshleioienfPntthhsbieloitpaPhprheinioleifpsfo.ptriheneiegssne. To be sure, components: corporations, pRRCctaacterheoebhseeoxvvnessrsemecestoeenneiifnPcnspfuuistitPirhcseeoecasr.eicnnaitoltanaittieosIolipnopnynecofndpfuotn/aroittcmus(naphfSieVlen.aaeieperttAsrynsdhet.ot)e,iT/defnftstoirahehPchccaottnaalhaaahbmtisittltrtoeeelleiivnstdrAbp(sbh,eitopcu.e-ecsoieccmttnoe.ehafufa,ernaembefsmvitntftlnuaipihteeccCrlliceoainleetootaatn,ottoreritaspemepIngzt.dnaohoeatricsercn.rfevsa.oeeltnetvsatvm-h.caoiiCrioifomCatedssfonnitniedommdel)fntnmoiodsmiaaclicpr.mtatnseioerurHscaigolmssrlryo(iseiveebeopswisido.unop.ngoeniesfnr.gvtnero,ieeenrlorsnryteoeear,ohtinrsfetgrfetsthsesiIneIeecntnfhds)taultt.seCeeeebncrrrSsolTtdenoniEhusahanoCeriohlletndff pcRParroesehosgrgioopiliscfsiotptiBeorraparaatfeitsitioednbiodnooent/nst;ocohsenaor(wctntpDiohhdfemeeii,rccuapahttp(tose2erccn)sihaimeneonntahftKtbsaihennftea-ocipcwortir(hre1lorepe)evdyosetpgrphneareaaotcrbSitoetoyeifpnrvtvneehositoctiefhaettisotSowi,mEdnnhtCgoeehiricet'Cncshhrogeeacurtimltnsbiitefthuuirnectisstehsatsisetenib.aoeaeronfsaefusssritutlfioisfcioaiffnltdrieeNceessiitoegtahnnhornet-eef Philippines). p(werhtiacihAnswtoeearterhlepierfroopsllteoarwtleyidns,guppceputoisttriotoemndeerbr'sys:VreApTorOteRds)saalmesouonf tseedrvtiocePs8t7o3,N96R0F.C97s BILLING OFFICIAL RECEIPT AMOUNT Per EXHIBIT OF SALES !CPA's STATEMENT Summary EXHIBIT DATE NO. InPHP EXH.NO. CUSTOMER DATE NO. 18-jun-18 P-uo-1-anr <;,~68.48 P-218 AN CORPORATION AN CORPORATION 17-Mav-18 P-uq-zch 4.762.94 P-218 AN CORPORATION 2o-May- P-ug-zci 18-jun-18 P-120-1-anr AN CORPORATION 18 AN CORPORATION Total s,6g1.79 CITIZEN SYSTEMS jAPAN 2o-May- P-ug-zcj 18-jun-18 P-120-1-anr 4,827.23 P-218 CO. LTD. 18 P-ug-zck 18-jun-18 P-120-1-anr 20,650�44 P-218 23-May-18 28,7o<;.oo \ 28-May- P-119-ebp 2o-jun-18 P-120-1-agd P-21~ 18 0

CTA Case No. 10450 Corporation v. Commissioner of Internal Revenue Nippon Express Philippines DECISION Page 23 of 68 - - ----- - - - - - - ------ - - - - - ------ - - - - - ------ - - - - x x----- ---- BILLING OFFICIAL RECEIPT AMOUNT Per OF SALES STATEMENT EXHIBIT I CPA's InPHP Summary EXHIBIT NO. EXH.NO. CUSTOMER DATE NO. DATE CITIZEN SYSTEMS JAPAN 07-)un-18 P-uq-bml 2q-jun-18 P-120-1-agd (28,7Q'i.OO) P-218 CO. LTD. CITIZEN SYSTEMS JAPAN CO. LTD. 07-)un-18 P-u<>-eba 2o-Jun-18 P-120-1-agd 32,623.50 P-218 P-218 CITIZEN SYSTEMS JAPAN CO. LTD. Total 32,623.;0 29-May- INABATA & CO., LTD. 2q-jun-18 P-120-1-azd z8,ooo.oo 18 P-uq-ebx 29-May- P-120-1-azd 27,000.00 P-218 18 INABATA & CO., LTD. P-nq-ebv 2o-jun-18 INABATA & CO., LTD. 29-May- P-uo-ebz 29-)un-18 P-120-1-azd 10,500.00 P-218 18 P-uq-eca 2<)-jun-18 P-120-1-azd P-218 27,300.00 INABATA & CO., LTD. 11-May-18 9.z,8oo.oo INABATA & CO., LTD. Total MEKTEC CORPORATION 11-Mav-18 P-11()-CUP 2>;-jun-18 P-uo-t-auw <),042.00 P-218 SIN PTE LTD. MEKTEC CORPORATION SIN PTE LTD. "-Mav-18 P-uo-cua "-jun-18 P-uo-1-auw Q,16<;.66 P-218 MEKTEC CORPORATION 11-May-18 P-uq-cur 2'i�]un-18 P-uo-t-auw 9,191.9'i P-218 SIN PTE LTD. MEKTEC CORPORATION SIN PTE LTD. 11-Mav-18 P-uq-cus 2'i�)un-18 P-tzo-1-auw 10,04Q.86 P-218 MEKTEC CORPORATION o<>-Aor-18 P-11Q�Xfi 1<;-Mav-18 P-120-1-IDC 1,167�'>8 P-218 SIN PTE LTD. MEKTEC CORPORATION SIN PTE LTD. u-Aor-18 P-uo-xfi l'i-Mav-18 P-120-1-IDC 1,486.16 P-218 MEKTEC CORPORATION 24-Apr-18 P-ug-xtk 1'i-May-18 P-120-1-ffiC 3,8()7.21 P-218 SIN PTE LTD. MEKTEC CORPORATION SIN PTE LTD. 2q-Apr-18 P-uq-xfl 1'i�May-18 P-120-1-IDC 4,884.68 P-218 MEKTEC CORPORATION w-Aor-18 P-uo-sd 21-Mav-18 P-120-1-Sl 'lo422.24 P-218 SIN PTE LTD. MEKTEC CORPORATION SIN PTE LTD. w-Aor-18 P-uo-se >l-Mav-18 P-120-1-SI Q,644�16 P-218 MEKTEC CORPORATION 11-May-18 P-nq-sf 21-May-18 P-120-1-Sl g,g00.40 P-218 SIN PTE LTD. Total S.z,o;::z..Jo MEKTEC CORPORATION SIN PTE LTD P-220 NIPPON EXPRESS 2q-Aor-18 P-nq-wwk 14-]un-18 P-120-1-fv (62.13) P-226 CANADA LTD. 14-lun-18 P-120-1-yx (62.13) P-220 NIPPON EXPRESS CANADA LTD. Total w-May-18 (373�93) NIPPON EXPRESS U.S.A., INC. u-Aor-18 (1?'1�91) NIPPON EXPRESS U.S.A., INC. Total 27,118.oo NI'ITSU NEC LOGISTICS, LTD. w-Apr-18 P-uq-afw 2.7,118.oo NITTSU NEC LOGISTICS, LTD. Total P-222 PANASONIC INDUSTRIAL DEVICES SALES ASIA 1<;-Mav-18 P-nq-cbo 18-!un-18 P-tzo-t-anm 72,100.00 PANASONIC INDUSTRIAL n-Mav-18 P-no-cba 18-!un-18 P-uo-t-anm <;<;,6oo.oo P-222 DEVICES SALES ASIA 3o-May- P-no-cbr 18-Iun-18 P-tzo-t-anm PANASONIC INDUSTRIAL P-uq-cbs 18-jun-18 P-uo-1-ano 20,000.00 P-222 t DEVICES SALES ASIA 18 PANASONIC INDUSTRIAL 1,0'\1.40 P-u22~ DEVICES SALES ASIA 3o-May- 18

CTA Case No. 10450 Corporation v. Commissioner of Internal Revenue Nippon Express Philippines DECISION Page 24 of 68 - - - - - - - - - - - - - - - - - - - - - - - - ---------------------x x----- -- -- BILLING OFFICIAL RECEIPT AMOUNT Per STATEMENT OF SALES !CPA's EXHIBIT Summary EXHIBIT InPHP EXH.NO. NO. CUSTOMER DATE NO. DATE J.48,75'�40 PANASONIC INDUSTRIAL DEVICES ASIA SALES Total PANASONIC INDUSTRIAL DEVICES SALES (M) SDN BHD 10-May-18 P-119-dwa 29-)un-18 P-120-1-ayg 5,299�79 P-225 PANASONIC INDUSTRIAL 29-May- P-119-dwb 29-)un-18 P-120-1-ayg 5.JOO.J6 P-225 DEVICES SALES (M) SDN 18 BHD PANASONIC INDUSTRIAL DEVICES SALES (M) SDN 29-May- P-119-dwc 29-)un-18 P-120-1-ayg . 5�JOO.J6 P-225_ BHD 18 PANASONIC INDUSTRIAL 29-May- P-119-dwd 2<Hun-18 P-120-1-ayg '),~00.34 P-225 DEVICES SALES (M) SDN 18 BHD PANASONIC INDUSTRIAL DEVICES SALES (M) SDN 29-May- P-119-dwe 29-)un-18 P-120-1-ayg 5,JOO.J4 P-225 BHD 18 PANASONIC INDUSTRIAL 29-May- P-119-dwf 29-)un-18 P-120-1-ayg 5.JOO.J6 P-225 DEVICES SALES (M) SDN 18 BHD PANASONIC INDUSTRIAL DEVICES SALES (M) SDN 29-May- P-119-dwg 29:)un-18 P-120-1-ayg . 5.J00.02 P-225_ BHD 18 PANASONIC INDUSTRIAL 29-May- P-119-dwh 29-)un-18 P-120-1-ayg 5,300.02 P-225 DEVICES SALES (M) SDN 18 BHD PANASONIC INDUSTRIAL DEVICES SALES (M) SDN 29-May- P-119-dwi 29-)un-18 P-120-1-ayg 5.299�98 P-225 BHD 18 PANASONIC INDUSTRIAL 29-May- P-119-dwi 29:Jun-18 P-120-1-ayg . 5�300.02 P-225_ DEVICES SALES (M) SDN 18 BHD PANASONIC INDUSTRIAL DEVICES SALES (M) SDN 29-May- P-119-dwk 29-)un-18 P-120-1-ayg 5.300.02 P-225 BHD 18 PANASONIC INDUSTRIAL 29-May- P-119-dwl 29-)un-18 P-120-1-ayg 5�299�66 P-225_ DEVICES SALES (M) SDN 18 BHD PANASONIC INDUSTRIAL DEVICES SALES (M) SDN 29-May- P-119- 22:]un-18 P-12o-t-<1yg_ '),299.62 P-22<; BHD 18 dwm PANASONIC INDUSTRIAL 29-May- P-119-dwn 29-)un-18 P-120-1-ayg '),299.62 P-225 DEVICES SALES (M) SDN 18 BHD PANASONIC INDUSTRIAL DEVICES SALES (M) SDN 5>300.11 P-225_ BHD 31-May-18 P-119-dwo 29-)un-18 P-120-1-ayg PANASONIC INDUSTRIAL DEVICES SALES (M) SDN P-225 BHD 11-May_-18 P-119-dwp 29-)un-18 P-120-1-ayg 5,299�96 PANASONIC INDUSTRIAL 31-May-18 P-119-dwq 29-)un-18 P-120-1-ayg 5>299�85 \ DEVICES SALES (M) SDN BHD P-22~ D

CTA Case No. 10450 Corporation v. Commissioner of Internal Revenue Nippon Express Philippines DECISION Page 25 of 68 - - - --------------- - - - - - - - - - - - - - - - - -----------x x----- -- -- BILLING Per STATEMENT OFFICIAL RECEIPT AMOUNT !CPA's OF SALES Summary EXHIBIT EXHIBIT EXH.NO. lnPHP DATE NO. DATE NO. CUSTOMER PANASONIC INDUSTRIAL DEVICES SALES (M) SDN 5.299�93 P-225 BHD 31-May-18 P-n9-dwr 29-)un-18 P-120-1-ayg PANASONIC INDUSTRIAL DEVICES SALES (M) SDN 'i,wo.o�_ P-225 BHD 31-May-18 P-119-dws 29-)un-18 P-120-1-ayg PANASONIC INDUSTRIAL DEVICES SALES (M) SDN 5,299�83 P-225 BHD 13-Apr-18 P-n9-afa 30-May-18 P-120-1-yv PANASONIC INDUSTRIAL DEVICES SALES (M) SDN S,JOO.ll P-225 BHD 16-Apr-18 P-ug-afb 30-May-18 P-120-1-yv PANASONIC INDUSTRIAL DEVICES SALES (M) SDN 5,299.68 P-225 BHD 16-Apr-18 P-n9-afc 3o-May-18 P-120-1-yv PANASONIC INDUSTRIAL DEVICES SALES (M) SDN 5,3_00.ll P-225 BHD 16-AQr-18 P-n9-afd 30-May:-18 P-12o-1:yv PANASONIC INDUSTRIAL 16-Apr-18 P-n9-afe 30-May-18 P-120-1-yv '5,300,ll P-22<; DEVICES SALES (M) SDN BHD PANASONIC INDUSTRIAL DEVICES SALES (M) SDN 5.299�92 P-225 BHD 30-Apr-18 P-ug-aff 30-May-18 P-120-1-yv PANASONIC INDUSTRIAL _2>229-92 P-22'i DEVICES SALES (M) SDN BHD 30-Apr-18 P-119-afg 3o-Ma}'-18 P-12o-1:Y" PANASONIC INDUSTRIAL '),J00.36 P-225 DEVICES SALES (M) SDN BHD 3o-Apr-18 P-119-afh 30-May-18 P-120-1-yv PANASONIC INDUSTRIAL 5.299�71 P-225 DEVICES SALES (M) SDN BHD 30-Apr-18 P-ng-afi 30-May-18 P-120-1-yv PANASONIC INDUSTRIAL 30-Apr-18 P-ug-ali 30-May-18 P-12o+yv _5,2<lQ.71 P-22<; DEVICES SALES (M) SDN BHD PANASONIC INDUSTRIAL DEVICES SALES (M) SDN 30-Apr-18 P-ug-afk 30-May-18 P-120-1-yv 5,299.68 P-225 BHD PANASONIC INDUSTRIAL DEVICES SALES (M) SDN 30-Apr-18 P-n9-afl 3o-May-18 P-12o+yv _5,JOO.OO P-22'i BHD PANASONIC INDUSTRIAL DEVICES SALES (M) SDN 30-Apr-18 P-n9-afm 30-May-18 P-12o+yv 6,wo.o8 P-225 BHD PANASONIC INDUSTRIAL DEVICES SALES (M) SDN 30-Apr-18 P-ng-afn 30-May-18 P-120-1-yv 5.300.03 P-225 BHD PANASONIC INDUSTRIAL DEVICES SALES (M) SDN 30-Apr-18 P-n9-afo 30-May-18 P-12o+yv _ 'i,1QO.OJ P-225 BHD I PANASONIC INDUSTRIAL 5,)00.61 P-225. DEVICES SALES (M) SDN BHD 30-Aj>r-18 P-ng-afp 30-May-18 P-120-1-yv

CTA Case No. 10450 Corporation v. Commissioner of Internal Revenue Nippon Express Philippines DECISION Page 26 of 68 - - - - - ------ - - - - - - ----- - - - - - - ------ - - - - - -x x----- --------- BILLING OFFICIAL RECEIPT AMOUNT Per OF SALES !CPA's STATEMENT EXHIBIT lnPHP Summary EXHIBIT DATE NO. EXH.NO. CUSTOMER DATE NO. PANASONIC INDUSTRIAL DEVICES SALES (M) SDN BHD 30-Apr-18 P-n9-afq 30-May-18 P-120-1-yv 5.299�95 P-225 PANASONIC INDUSTRIAL DEVICES SALES (M) SDN BHD 30-Apr-18 P-ng-afr 30-May-18 P-120-1-yv 5,JOO.OJ P-225 PANASONIC INDUSTRIAL DEVICES SALES (M) SDN BHD _30-Apr-18 P-n9-afs 30-May-18 P-120-1-yv 5�299�98 P-225 PANASONIC INDUSTRIAL DEVICES SALES (M) SDN BHD _3o-Apr-18 P-ug-aft 30-May-18 P-120-1-yv 5.J00.08 P-225 PANASONIC INDUSTRIAL DEVICES SALES (M) SDN 5,J00.40 P-225 BHD 30-Apr-18 P-ng-afu 30-May-18 P-120-1-yv PANASONIC INDUSTRIAL DEVICES SALES (M) SDN BHD 16-May-18 P-ng-ebr 29-]un-18 P-uo-1-azc 1,500.00 P-225 PANASONIC INDUSTRIAL DEVICES SALES (M) SDN BHD 23-May-18 P-ng-ebs 29-]un-18 P-12o-t-azc 7,15o.oo P-225 PANASONIC INDUSTRIAL DEVICES SALES (M) SDN 7,1';0.00 P-225 BHD 21-May~18 P-nq-ebt 29-]un-18 P-120-1-azc PANASONIC INDUSTRIAL 28-May- P-ng-ebu 29-]un-18 P-12o-t-azc 14�420.00 P-225 DEVICES SALES (M) SDN 18 BHD PANASONIC INDUSTRIAL DEVICES SALES (M) SDN 29-May- P-ng-ebv 29-]un-18 P-uo-1-azc 8,2}0.00 P-222_ BHD 18 PANASONIC INDUSTRIAL 30-May- P-1!9:ebw 2q-]un-18 P-uo-1-azc 7,1)0.00 P-225 DEVICES SALES (M) SDN 18 SDN BHD Total 258, 6::o._71_ BHD P-t2o-t-ao P-216 PANASONIC IND'L DEVICES SALES (M) 1.400.00 P-216 P-120-1-tj STMICROELECTRONICS, 30-Apr-18 P-ng-1 10-Apr-18 1,400.00 INC. STMICROELECTRONICS, 30-May- INC. 18 P-n9-sx 22-May-18 STMICROELECTRONICS, 29-Apr-18 P-nq-bvg u-]un-18 P-120-1-ajf 4J7.12 P-218 INC. STMICRO ELECTRONICS, 417�36 P-218 INC. :>Q-Aj)f-18 P-nq-bvh n-Jun-18 P-120-1-ajf STMICROELECTRONICS, 29-Apr-18 P-ng-yqo u-]un-18 P-120-1-ajf . 5_0<;.76 P-218 INC. STMICROELECTRONICS, 505�76 P-218 INC. 29-Apr-18 P-ng-yqp n-)un-18 P-120-1-ajf STMICROELECTRONICS, 29-Apr-18 P-ng-yqq u-]un-18 P-120-1-ajf 1,274-30 P-218 INC. 29-Apr-18 P-nq-yqr u-]un-18 P-120-1-ajf 438.5o P-218 STMICROELECTRONICS, INC. P-218 STMICROELECTRONICS, INC. 2Q-Aj)f-18 P-nq-yqs n-]un-18 P-120-1-ajf 1,6)g.8o P-218~ STMICROELECTRONICS, 29-Apr-18 P-nq-y'lt n:)un-18 P-120-1-ajf 420.77 INC. u

CTA Case No. 10450 Corporation v. Commissioner of Internal Revenue Nippon Express Philippines DECISION Page 27 of 68 -- -- -- -- -- -- -- -- -- -- -- -- -- -- - - - - - - - - - - - - - - - - X X-- -------- BILLING OFFICIAL RECEIPT AMOUNT Per OF SALES STATEMENT EXHIBIT !CPA's InPHP Summary EXHIBIT NO. EXH.NO. CUSTOMER DATE NO. DATE STMICROELECTRONICS, 2<~-Apr-18 P-ng-yqu n-Jun-t8 P-120-1-ajf 422�33 P-218 INC. STMICROELECTRONICS, INC. 29-Apr-18 P-ng-yqv n-)un-18 P-120-1-ajf 607�43 P-218 STMICROELECTRONICS, 29-Apr-18 P-ng-yqw u-)un-18 P-120-1-ajf 1..5_02.1.5_ P-218 INC. STMICROELECTRONICS, INC. 2~-Apr-18 P-119-yqx u-Jun-t8 P-120-1-ajf 474�47 P-218 STMICROELECTRONICS, 29-Apr-18 P-ng-yqy n-jun-18 P-120-1-ajf 4.676.g6 P-218 INC. STMICROELECTRONICS, INC. 29-Apr-18 P-nq-yqz u-)un-18 P-120-1-ajf . 5_0<;.?6 P-218 STMICROELECTRONICS, 2<,!-Apr-18 P-ng-yra n-jun-18 P-120-1-ajf 505�76 P-218 INC. STMICROELECTRONICS, INC. 29-Apr-18 P-ng-yrb n-jun-18 P-120-1-ajf 2,030�33 P-218 STMICROELECTRONICS, 29-Apr-18 P-nq-yrc u-jun-18 P-120-1-ajf 4J2.24 P-218 INC. STMICROELECTRONICS, 442.67 P-218 INC. 29-Apr-18 P-ng-yrd n-jun-18 P-120-1-ajf STMICROELECTRONICS, 29_-Apr-18 P-ng-yre n-jun-18 P-120-1-ajf 678.86 P-218 INC. STMICROELECTRONICS, INC. 29-Apr-18 P-ng-yrf u-jun-18 P-120-1-ajf 423�38 P-218 STMICROELECTRONICS, 29-Apr-18 P-ng-yrg n-)un-18 P-120-1-ajf 48J.34 P-218 INC. STMICROELECTRONICS, 8o<;.o4 P-218 INC. 29-Apr-18 P-1_19:Yrh n:J!Jn-18 P-120-1-ajf STMICROELECTRONICS, 29-Apr-18 P-ng-yri u-Jun-t8 P-120-1-ajf 1,004�74 P-218 INC. STMICROELECTRONICS, INC. 29-Apr-18 P-ng-yrj n-jun-18 P-120-1-ajf 506.05 P-218 STMICROELECTRONICS, 29-Apr-18 P-n9-yrk u-)un-18 P-120-1-ajf 788.29 P-218 INC. STMICROELECTRONICS, 2,64>;.02 P-218 INC. 29-Apr-18 P-ng-yrl n-jun-18 P-120-1-ajf STMICROELECTRONICS, 29-Apr-18 P-nq-yrm n-Jun-18 P-120-1-ajf 474�70 P-218 INC. STMICROELECTRON!CS, INC. 29-Apr-18 P-ng-yrn u-Jun-t8 P-120-1-ajf 2,141.06 P-218 STMICROELECTRONICS, 29-Apr-18 P-ng-yro n-jun-18 P-120-1-ajf 455-44 P-218 INC. STMICROELECTRONICS, 428.84 P-218 INC. 29-Apr-18 P-ng-yrp n-jun-18 P-120-1-ajf STMICROELECTRONICS, 29-Apr-18 P-ng-yrq n=.Jun-t8 P-120-1-ajf 706.J8 P-218 INC. STMICROELECTRONICS, 648-9~ P-218 INC. 29-Apr-18 P-ng-yrr n-jun-18 P-120-1-ajf STMlCROELECTRONICS, 29-Apr-18 P-ng-yrs n-Jun-t8 P-120-1-ajf . 538,92 P-218 INC. STMICROELECTRONICS, P-218 INC. 29-Apr-18 P-ng-yrt n-]un-18 P-120-1-ajf . 507.89_ STMICROELECTRONICS, 29-Apr-18 P-n9-yru n-jun-18 P-120-1-ajf 747�18 uP-21~ INC.

CTA Case No. 10450 Corporation v. Commissioner of Internal Revenue Nippon Express Philippines DECISION Page 28 of 68 - - - - - ------ - - - - - - ----- - - - - - - ------ - - - - - - --x x----- ------- BILLING Per STATEMENT OFFICIAL RECEIPT AMOUNT !CPA's EXHIBIT OF SALES Summary EXHIBIT EXH.NO. DATE NO. InPHP DATE NO. CUSTOMER STMICROELECTRONICS, 29-Apr-18 P-ng-yrv n-jun-18 P-120-1-ajf 4.333�31 P-218 INC. STMICROELECTRONICS, 1,8863.1 P-218 INC. 29-Apr-18 P-n9-yrw n-jun-18 P-120-1-ajf STMICROELECTRONICS, 29-Apr-18 P-119~x n-jun-18 P-120-1-ajf 455�53 P-218 INC. STMICROELECTRONICS, 1,220.51 P-218 INC. 29-Apr-18 P-ng-yry n-jun-18 P-120-1-ajf STMICROELECTRONICS, 29-Apr-18 P-nq-yrz n-jun-18 P-120-1-ajf 4~6~ P-218 INC. STMICROELECTRONICS, 625.)4 P-218 INC. 29-Apr-18 P-nq-ysa n-jun-18 P-120-1-ajf STMICROELECTRONICS, 2~-Apr-18 P-n9-ysb n-jun-18 P-120-1-ajf 524.65 P-218 INC. STMICROELECTRONICS, 507,31 P-218 INC. 29-Apr-18 P-n9-ysc n-jun-18 P-120-1-ajf STMICROELECTRONICS, 29-Apr-18 P-ng-ysd n-jun-18 P-120-1-aif 1,422.04 P-218 INC. STMICROELECTRONICS, 2,298�59 P-218 INC. 29-Apr-18 P-n9-yse n-jun-18 P-120-1-ajf STMICROELECTRONICS, 29-Apr-18 P-ng-ysf n-jun-18 P-120-1-ajf 433�57 P-218 INC. STMICROELECTRONICS, P-218 INC. 29-Apr-18 P-ng-ysg n-jun-18 P-120-1-ajf 427.81 P-218 STMICROELECTRONICS, 29-Apr-18 P-ng-ysh n-jun-18 P-120-1-ajf 1,073.20 INC. STMICROELECTRONICS, 422.06 P-218 INC. 2.2-AJ'f-18 P-ll9:YSi n-jun-18 P-120-1-ajf STMICROELECTRONICS, 29-Apr-18 P-n9-ysj n-jun-18 P-120-1-ajf 1,990.02 P-218 INC. STMICROELECTRONICS, 42J.63 P-218 INC. 29-Apr-18 P-n9-ysk n-jun-18 P-120-1-ajf STMICROELECTRONICS, 29-Apr-18 P-nq-ysl n-jun-18 P-120-1-ajf 531.37 P-218 INC. 29-Apr-18 P-ng-ysm n-jun-18 P-120-1-ajf ')18.29 P-218 STMICROELECTRONICS, 2.2-AJ'f-18 P-1'9:YSD n-jun-18 P-120-1-ajf INC. 29-Apr-18 P-n9-yso n-jun-18 P-120-1-ajf 507.31 P-218 STMICROELECTRONICS, 29-Apr-18 P-ng-ysp n-jun-18 P-120-1-ajf INC. 22-Apr-18 P-1'9:YS~ n-jun-18 P-120-1-ajf 1,01J9.J~ P-218 STMICROELECTRONICS, 30-Apr-18 P-ng-bvi n-)un-18 INC. P-120-1-ajf 659�36 P-218 STMICROELECTRONICS, 30-Apr-18 P-n9-bvj n-jun-18 P-120-1-aif 1�170.67 P-218 INC. 30-Apr-18 P-ng-ysr n-jun-18 P-120-1-ajf STMICROELECTRONICS, 30-Apr-18 P-ng-yss n-jun-18 P-120-1-ajf 416.g6 P-218 INC. 30-Apr-18 P-ng-yst n-jun-18 P-120-1-ajf STMICROELECTRONICS, 416.1)6 P-218 INC. ')0'),')6 P-218 STMICROELECTRONICS, INC. 1,051.78 P-218 STMICROELECTRONICS, 2,041�54 INC. P-21~'� STMICROELECTRONICS, INC. u STMICROELECTRONICS, INC.

CTA Case No. 10450 Corporation v. Commissioner of Internal Revenue Nippon Express Philippines DECISION Page 29 of 68 - - . . ------ . . - - -- - --- . - --- - -- - -_ - --- _- _ -_ .. . - X X---------- BILLING Per STATEMENT OFFICIAL RECEIPT AMOUNT !CPA's OF SALES Summary EXHIBIT EXHIBIT EXH.NO. InPHP DATE NO. DATE NO. CUSTOMER 2,873�90 P-218 G STMJCROELECTRONJCS, 30-Apr-18 P-u9-ysu n-jun-18 P-120-1-ajf STMICROELECTRONJCS,INC. 30-Apr-18 P-ng-ysv u-)un-18 P-120-1-ajf 425.82 P-218 INC. STMICROELECTRONJCS, 440�94 P-218 INC. 30-Apr-18 P-U9-YSW u-jun-18 P-120-1-ajf STMICROELECTRONJCS, 30-Apr-18 P-n9-ysx n-jun-18 P-120-1-ajf 470.64 P-218 INC. STMJCROELECTRONJCS, 978.81 P-218 INC. 30-Apr-18 P-ng-ysy n-jun-18 P-120-1-ajf STMICROELECTRONJCS, 30-Apr-18 P-u9-ysz u-jun-18 P-120-1-ajf 648�37 P-218 INC. STMICROELECTRONJCS, 1,038.75 P-218 INC. 30-Apr-18 P-u9-yta u-jun-18 P-120-1-ajf STMICROELECTRONJCS, w-Apr-18 P-ng-ytb n-jun-18 P-120-1-ajf 433�12 P-218 INC. STMJCROELECTRONJCS, 492.01 P-218 INC. JO-Aj>r-18 P-ng-ytc u-jun-18 P-120-1-ajf STMICROELECTRONJCS, 30-Apr-18 P-n9-ytd n-jun-18 P-120-1-ajf 2,076.98 P-218 INC. STMICROELECTRONJCS, 477-77 P-218 INC. 30-Apr-18 P-u9-yte u-jun-18 P-120-1-ajf STMJCROELECTRONJCS, 30-Apr-18 P-ng-ytf n-jun-18 P-120-1-ajf 1,787.07 P-218 INC. STMICROELECTRONJCS, 422.30 P-218 INC. JO-AJ:lr-18 P-ng:}'tJl u-jun-18 P-120-1-ajf STMICROELECTRONJCS, 30-Apr-18 P-u9-yth n-jun-18 P-120-1-ajf 727�39 P-218 INC. STMJCROELECTRONICS, 458�93 P-218 INC. 30-Apr-18 P-ng-yti u-jun-18 P-120-1-ajf STMJCROELECTRONJCS, 30-Apr-18 P-ng-ytj u-jun-18 P-120-1-ajf 505.56 P-218 INC. STMICROELECTRONJCS, 865.19 P-218 INC. 10-Apr-18 P-ng-ytk u-jun-18 P-120-1-ajf STMICROELECTRONJCS, 30-Apr-18 P-1~9:Ytl n-jun-18 P-120-1-ajf 2,799�37 P-218 INC. STMICROELECTRONJCS, 2,095�75 P-218 INC. 30-Apr-18 P-119-ytm u-jun-18 P-120-1-ajf STMICROELECTRONJCS, 30-Apr-18 P-n9-ytn n-jun-18 P-120-1-ajf 419�57 P-218 INC. STMICROELECTRONICS, 871�45 P-218 INC. w-Apr-18 P-ng-yto u-jun-18 P-120-1-ajf STMICROELECTRONJCS, 30-Apr-18 P-u9-ytp u-jun-18 P-120-1-ajf 753�66 P-218 INC. STMICROELECTRONICS, 545�70 P-218 INC. 30-Apr-18 P-n9-ytq u-jun-18 P-120-1-ajf 420.61 P-218 STMICROELECTRONJCS, 30-Apr-18 P-n9-ytr u-jun-18 P-120-1-ajf INC. STMICROELECTRONJCS, 505.56 P-218 INC. 30-Apr-18 P-ng-yts u-jun-18 P-120-1-ajf STMICROELECTRONJCS, 30-Apr-18 P-ng-ytt u-jun-18 P-120-1-ajf 505�56 P-218 INC. STMICROELECTRONJCS, 505�56 P-21fiil. INC. w-Apr-18 P-ng-ytu u-jun-18 P-120-1-ajf

CTA Case No. 10450 Corporation v. Commissioner of Internal Revenue Nippon Express Philippines DECISION Page 30 of 68 - ----- - - - - - ----- - - - - - ----- - - - - ------ - - - - ----- x x----- -- -- BILLING OFFICIAL RECEIPT AMOUNT Per OF SALES !CPA's STATEMENT EXHIBIT Summary JnPHP EXH.NO. EXHIBIT NO. CUSTOMER DATE NO. DATE STMICROELECTRONJCS, ~o-Aor-18 P-nq-ytv n-jun-18 P-120-1-ajf 3.436�79 P-218 INC. 1,103�90 STMICROELECTRONICS, 10-Apr-18 P-no-vtw n-jun-18 P-120-1-aif 425.82 P-218 INC. 10-Aor-18 P-na-vtx n-jun-18 P-120-1-aif 478.46 P-218 STMICROELECTRONICS, ~o-Aor-18 P-na-vtv n-jun-18 P-120-1-ajf 2,334-45 P-218 INC. 30-Apr-18 P-nq-ytz n-jun-18 P-120-1-ajf P-218 STMICROELECTRONICS, INC. 419�57 STMICROELECTRONICS, 436.24 INC. 1,684.00 STMICROELECTRONICS, 10-Aor-18 P-na-vua n-jun-18 P-120-1-aif P-218 INC. P-218 P-218 STMICROELECTRONICS, ~o-Aor-18 P-na-vub n-jun-18 P-120-1-ajf INC. STMICROELECTRONICS, INC. 30-Apr-18 P-nq-yuc n-jun-18 P-120-1-ajf STMICROELECTRONICS, 10-Apr-18 P-na-vud n-jun-18 P-120-1-aif 859�98 P-218 INC. STMICROELECTRONICS, 20-May- 415�52 P-218 INC. P-na-bvk u-jun-18 P-120-1-aif 18 STMICROELECTRONICS, 20-May- P-nq-bvl n-jun-18 P-120-1-ajf 415�52 P-218 INC. 18 STMICROELECTRONICS, 20-May- P-nq-yue n-jun-18 P-120-1-ajf 7,107.11 P-218 INC. P-218 18 1,427.64 STMICROELECTRONICS, 20-May- P-nq-yuf n-jun-18 P-120-1-ajf 502.65 P-218 INC. 18 P-na-vue: n-jun-18 P-120-1-aif STMICROELECTRONICS, INC. 20-May- 18 STMICROELECTRONICS, 20-May- P-120-1-aif 2,250.02 P-218 INC. 18 P-120-1-ajf STMICROELECTRONICS, P-na-vuh n-jun-18 438�40 P-218 INC. 20-May- P-nq-yui n-jun-18 18 STMICROELECTRONICS, 2o-May- P-na-vui n-jun-18 P-120-1-ajf 944�16 P-218 INC. 421.30 P-218 18 STMICROELECTRONICS, 2o-May- P-na-vuk n-jun-18 P-120-1-ajf 819�79 P-218 INC. 18 P-na-vui n-jun-18 P-120-1-aif STMICROELECTRONICS, INC. 2o-May- 18 STMICROELECTRONICS, 2o-May- P-119-vum n-Iun-18 P-120-1-aif 496-44 P-218 INC. 18 STMICROELECTRONICS, 2o-May- P-nq-yun n-jun-18 P-120-1-ajf 502.65 P-218 INC. 18 P-na-vuo n-jun-18 P-120-1-ajf 2,561.28 P-218 STMICROELECTRONICS, INC. 2o-May- 18 STMICROELECTRONICS, 2o-May- P-no-vuo n-jun-18 P-120-1-aif 438.16 P-218 INC. 18 P-no-vua n-jun-18 P-120-1-aif STMICROELECTRONICS, 416.98 P-218 INC. 20-May- 18 STMICROELECTRONICS, 2o-May- P-nq-yur n-jun-18 P-120-1-aif 597�31 P-218 INC. 18 P-nq-yus n-jun-18 P-120-1-aif STMICROELECTRONICS, 416.98 P-218, INC. 2o-May- 18 STMICROELECTRONICS, 20-May- n-jun-18 P-120-1-aif 569-40 uP-218-'RC INC. 18 P-na-vut

CTA Case No. 10450 Corporation v. Commissioner of Internal Revenue Nippon Express Philippines DECISION Page 31 of 68 -- -- -- -- -- -- -- - - - - - - - - - - - - - - - - - - - - - - - - - -- -- - X X-- -- ------ BILLING OFFICIAL RECEIPT AMOUNT Per OF SALES I CPA's STATEMENT EXHIBIT Summary InPHP EXH.NO. EXHIBIT NO. CUSTOMER DATE NO. DATE STMICROELECTRONICS, 20-May- n-jun-18 P-120-1-aif 1,157�41 P-218 INC. 18 P-no-vuu STMICROELECTRONICS, 20-May- P-120-1-ajf 501.20 P-218 INC. 18 P-nq-yuv n-jun-18 STMICROELECTRONICS, 2o-May- P-nQ-yuw n-jun-18 P-120-1-aif 2,207�34 P-218 INC. 18 STMICROELECTRONICS, 20-May- n-jun-18 P-120-1-aif 1,095�92 P-218 INC. 18 P-no-vux STMICROELECTRONICS, 20-May- n-jun-18 P-120-1-ajf 501.20 P-218 INC. 18 P-no-vuv STMICROELECTRONICS, 2o-May- n-jun-18 P-120-1-ajf 5.363�37 P-218 INC. 18 P-nq-yuz STMICROELECTRONICS, 20-May- n-jun-18 P-120-1-aif 893�37 P-218 INC. 18 P-no-vva STMICROELECTRONICS, 20-May- n-jun-18 P-120-1-aif 502.75 P-218 INC. 18 P-no-vvb STMICROELECTRONICS, 20-May- n-jun-18 P-120-1-ajf 2,438.6o P-218 INC. 18 P-nQ-yvc STMICROELECTRONICS, 2o-May- P-nQ-vvd n-jun-18 P-120-1-ajf 507�93 P-218 INC. 18 P-no-vve n-jun-18 P-120-1-aif 506.90 P-218 STMICROELECTRONICS, INC. 2o-May- 18 STMICROELECTRONICS, 2o-May- P-no-vvf n-jun-18 P-120-1-aif 429.67 P-218 INC. 18 STMICROELECTRONICS, 20-May- P-119-yvg u-jun-18 P-120-1-ajf 438,48 P-218 INC. 18 P-nq-yvh n-jun-18 P-120-1-ajf 663,42 P-218 STMICROELECTRONICS, P-no-vvi n-)un-18 P-120-1-aif 1,297-82 P-218 INC. 2o-May- P-no-vvi n-jun-18 P-120-1-aif 502.75 P-218 STMICROELECTRONICS, 18 P-no-vvk u-jun-18 P-120-1-aif 2, 566. 36 P-218 INC. P-119-vvl n-jun-18 P-120-1-ajf P-218 STMICROELECTRONICS, 20-May- 980.11 INC. 18 STMICROELECTRONICS, INC. 20-May- STMICROELECTRONICS, 18 INC. 20-May- 18 20-May- 18 STMICROELECTRONICS, 2o-May- P-ng-yvm n-jun-18 P-120-1-ajf 2,973�57 P-218 INC. 18 STMICROELECTRONICS, 2o-May- P-no-vvn n-jun-18 P-120-1-ajf 434�74 P-218 INC. 18 P-no-vvo n-jun-18 P-120-1-aif 464.86 P-218 STMICROELECTRONICS, P-nq-yvp n-jun-18 P-120-1-ajf 2,206,41 P-218 INC. 20-May- P-nq-yvq u-jun-18 P-120-1-ajf P-218 STMICROELECTRONICS, 18 P-no-vvr n-jun-18 P-120-1-ajf 418.12 P-218 INC. P-no-vvs n-jun-18 P-120-1-ajf 470-58 P-218 STMICROELECTRONICS, 2o-May- n-jun-18 P-120-1-aif 450-32 P-218 INC. 18 P-no-vvt n-jun-18 P-120-1-aif 590.04 P-21~ STMICROELECTRONICS, P-no-vvu 519-92 INC. 20-May- 0 STMICROELECTRONICS, 18 INC. STMICROELECTRONICS, 20-May- INC. 18 STMICROELECTRONICS, 20-May- INC. 18 20-May- 18 2o-May- 18

CTA Case No. 10450 Corporation v. Commissioner of Internal Revenue Nippon Express Philippines DECISION Page 32 of 68 - - - - - - ------ - - - - - ------ - - - - - ------ - - - - - - x x----- -- ------- BILLING OFFICIAL RECEIPT AMOUNT Per OF SALES !CPA's STATEMENT EXHIBIT Summary EXHIBIT lnPHP EXH.NO. NO. 150,922.64 CUSTOMER DATE NO. DATE ST MICROELECTRONICS INC. Total P-uq-acno 25,J48.93 TEI)IN FRONTIER CO., 10-Apr-18 P-nq-dst 28-jun-18 P-120-1-axi 23�557-50 P-218 LTD. 48,qo6.43 09-May- P-uq-xkt 28-jun-18 P-120-1-axi P-218 TEl)IN FRONTIER CO., P-uq-xku 2,313-43 18 P-uq-xkv 24-Mav-18 P-120-1-te 1,272�35 P-216 LTD. P-UQ-VVV 24-May-18 P-120-1-te 2,371.85 P-216 TEI]IN FRONTIER CO., LTD. Total P-uo-vvw 24-May-18 1,4<;8.65 P-216 09-Aor-18 u-jun-18 P-120-1-te 2,266.68 P-216 TOKAI ENGEl CO., LTD. P-uq-yyw P-120-1-ai~ P-216 24-Apr-18 u-jun-18 2,268.83 TOKAI ENGEl CO., LTD. P-120-1-ajg P-216 24-Apr-18 u-jun-18 "�95'�79 TOKAI ENGEl CO., LTD. P-120-1-akb 873,960.97 29-Apr-18 TOKAI ENGEl CO., LTD. q-Mav-18 TOKAI ENGEl CO., LTD. 20-May- TOKAI ENGEl CO., LTD. 18 TOKAI ENGEl CO., LTD. Total Grand Total bCuesritnifeTiscosatipoornuostvsoeidfeNthoatnht-eRpeePgthiitsiitloirpanpteiiornnersae,nnddpeceroteintdisounsleaerrrvizicepedrsefsoetronetigeNdnRrFetChgeissitrdraoStiiEnoCgn documents, to wit: Philippines' SEC Proof of Foreign Certification of Incorporation/ Non-Registration of Registration/ Company Association (Exhibit No.) Customer (Exhibit No.) - AN CORPORATION P-278-b CITIZEN SYSTEMS jAPAN CO., LTD. P-278-e - P-278-f INABATA&CO., LTD. P-278-g - MEKTEC CORPORATION SIN PTE LTD. P-278-k NIPPON EXPRESS (CANADA) LTD. P-278-am - NIPPON EXPRESS U.S.A., INC. P-278-ao NJTTSU NEC LOGISTICS, LTD. - PANASONIC INDUSTRIAL DEVICES SALES (M) - SDNBHD P-278-ar P-27q-n PANASONIC INDUSTRIAL DEVICES SALES ASIA - STMICROELECTRONICS, INC. - P-27o-q TEI)IN FRONTIER CO., LTD. P-278-au P-278-av - TOKAI ENGEl CO., LTD. - -' -v 0

CTA Case No. 10450 Corporation v. Commissioner of Internal Revenue Nippon Express Philippines DECISION Page 33 of 68 - - - - - ----- - - - - - ----- - - - - - ----- - - - - - ----- - - x x----- -- ----- ibaPNtshmehIseiPunelPisnpopaOdptFpmeeorNiddonretm,etEecshidXo.tatuPbchtlNRayedfnoEetnfrwvSoboeSporerteutUgf(chr2oopo.e)Srilnomne.aAsssgfies.opd,s,treaaIeorrNbsmetfilCdnoeSe.,cfenaeipcstositenoiaiptolnnniyenteittNoid1NhtnR0iedIoe8PFonnr(CPBc'eesOu)rgdc(m'N2saola)teiinisnEomvagtXfelseebtP.dashRuHmezsEotieSNrnowraSeouIneRs-nvsUsrCaeat.orcStoo,eut.AiffditotsP1.sn,is93adh97IleNoe7w3s,u.tC9.ihlat3.desh,, iVipaaPsenmeAmnAattTiGooetPcruiuCzooEpHnneOnnrZtrtoineRosAworeeo-,'-rcfessfra,tvePistJPewgo4iaarn1i7lnh,psegs,ti8saotecoh1n,rwoh91nee2f,dis0i2CtshtE2h.esEao68mrllc4uv.lo9boriiboccttazssaeesonhrlssndoeoypetpitPu,uoserlEcErded"cuZxsAShtseApbThDsanoee-MsaBtrrdetiet,nIsrg"CleEgaSoicRtsnTBfelptOtaegMrOees.roEtrsIeIipoLiCdtfdriEiRoiseasCn,OdenaTepcEdwrRrtaL'oisnhOvEpdiiEsNCectaicrheITlitoCesniRisz.eSsc6Oos,6loenuNaIfnedNnITst-eCdCierhdteSrl.sev"ge,eriiidriecInsnvNfettoeisoCcttrrhhee.et"aseoed, 4CcrteuohgrurucreoltanInftcniidynovidntiiessaow,ninatdosnu,fdnapin.caeeecrt.,eicotetuirhosensanntateedrdrtyeh'srteefnoodsordeniren-vitcniteochremmeascpPiacnlhrioeeialrnitd"phcpapeeaniiwcncdeeoisftno"hwcr,tuirhirtenhersepa2nec"[acBccetecSipovPote]nfaldtbyhri.luteeiloe3fosrndr,eaatihngndend sorpeeferPmtv7iita2ciio3eInnsn,ionet3sorg8u'sN.ma3cmR3,lFaoosiCuhmusantel(tldowobfshfeatihPlcde1ehessnwPooi,8fee97rsd2ee32Vr,p.v96Ari64ocToeps.se9zhr7etalorlyoloEs-fbruceapopteziprtneooicgtnril.teoaeO-sndrseenibrfg'itysiehsdOtereeRaropenstod)dh,reettierhnndehtcealasrunpamddlreeio,ssdutehnosien.tf (ii) SALE OF SERVICES TO PAGCOR, JAPAN EMBASSY, ADB, BOI AND ECOZONE-REGISTERED ENTERPRISES. swweh8rv(icBich)eF(s3oa)rrtoeothfesetnuhtbisejtueiNebcsjtIeRrctCeotgpoizsefetre1rior9oe9dd7p,eowarfscitcehalnamtPimEe(nZo, d%Ape,)edtBiVbtOiyAoI,TntheCerpDuTaCrRl,sleAuSgaIBeNndMtlLyAtaowrae.nSndIedtceFatriAeolBdsnfJ\' 66 Exhibit "P-275-iq", USB.

CTA Case No. 10450 Corporation v. Commissioner of Internal Revenue Nippon Express Philippines DECISION Page 34 of 68 - - - - - - - - - - - - - - - - - - - - - - - - - - - ----x x----------------------- aCaNllolsIeRongCsbeudeolleafyrn19Otr9refe7fna,icdtaeeesdroaeafmdsJVeasnpAedaTrnev-d/izEc6e7em,rsowb-ahtrsoaisctyehAdopssfriaoaJlvnaepisdauDenns,edavaesenrlfdooSlpePlomcAwtieGosn:Cnt O10BR8a(wnBkh)(i3c()hAoDhfaBthv)ee, SEC. 108. Value-added Tax on Sale ofServices and Use or Lease of Properties. - fpoelrlosownisn(Bgs)hsaTellrrvabinecsesasucbtpijeoerncfstotroSmuzebedjreocintpettorhceeZnePtrho(iol%iPpe)prircnaeetnest: (o%) Rate. - The by VAT-registered ewsuxhpeimpclhpyt(tio3ho)fensuSuPcenhrhdvilsieiceprerpvssipincereeecssniatdiolselrzaaeewdrsosigtopnorearticponeertnyresrtone(nfaofst%eico)otnirrvaaeltleeyan[g.t]sirtueiebemsjeecwntshtsothstoee a. SALE OF SERVICES TO PAGCOR Section 13(2) of Presidential Decree (PD) No. 186968 or the PAGCOR Charter, as amended by RA 948769, the pertinent portion thereof provides: SEC. 13. Exemptions. - aocfCrutnooefhnoyrvlwemdlreekphenNcioarnutorate(dteae2ftdhitv)ooiioteosuarnIrrnnxnfaFo,ecndlrraooaeaemGrmtxnrrnu,occeirtchenivhenhapige,iscasntrsewornda.gFmmdheSForeeeaeutrrthnnaaicohventcthreterhcaroadthictantsNaihhxebsdxeaeyesrftsiswirhTnhto.oahaianm-lsxaellaelnl(o,bCtyabaeohf)eosrefwdriFwviLpuanCreeooayelorcnl(laiarasctaeptl%nohs,uioodis)fsrnteohaephpefataseefiHloar,ylrolncocaelbme;hblaedknalrneeinartinorgtsioq:sdnrseufsegNsosatssoohphosrrtaeeefoetldlralrtefgaxlavatraytxiionnhoeostedysenfoss \ - '{J 67 PCGAAeONANtNiDMtiSAoI1ONCn6L3TGe2IrD,'CFsRAOUMETRRLeIPTNAmOHGToREIrARVAanTENAdIDTOuMOmNAET,MN(HPpDEAaEIrNGN.FDC5GRI.OA7NRP,NGR)DC.EPiHvSRIiIESsDiESoEInANDNTEDINDoATcPLkIOAeDtWL,EVEDCRoERlSCuEOmREFEeNETIOIHN,.EpOp1PS8.H.67I915L.07I6OP-77PT-5IAHN8.E.E1R0AW6M7I-SUBES, E1KM0N6E7ON-WCT,NA13NA9D9S 68 69 PAGCOR CHARTER

CTA Case No. 10450 Corporation v. Commissioner of Internal Revenue Nippon Express Philippines DECISION Page 35 of 68 - - - - - ----- - - - - ----- - - - - - ----- - - - - ----- - - - - - --x x--------- levies, fees or assessments of any kind, nature or description, levied, established or collected by any municipal, provincial or national government authority. (GefPrtaoahmm/i.lii7np'VI,gpntAihCnTteehosuSer)pnucodpaHrersaeroetmsitRoeeAolnCf9(CPTo33ouhA7rerGp�t CoCrCurOooalmenRtidso)mencviq7.asu�tsTeeihognaenotnlerByidruc, aropelPeflaythIuinittlihotioepafrnpItneniPanrtAe'elsrGRnsAaeCalvmlOeeRsunReousviefesemsneve.xuervneeAimtc(cBeepIasstRinett)ddoe, PAGCOR are subject to zero percent (o%) VAT. b. SALE OF SERVICES TO EMBASSY OF JAPAN 10otTDA2hf.hceeDdcCepiobeaparacrblPdsosetreaimimemnrsirdgeboaolntesyVfit,rc,cArtoee2mhpTfr0ceet1iiFistp6fEisori7tEmico'rio,oexacbnitbneigiastymeoynsrensAp'nyA(s'tsastiofsiossftfaianlcesJeliotferadafsnpenCotfac[otiDfetnriCrVmFvsthieoAiAaeftrmyiTs]dvcimbaiecbntewexiyeesseiasnttmsishtoNiopenlnoetcuet.iOtlhorntu-fenetfdLir2iliec0eEndedg1maat61iohtl-0nbe5feSad9tPsePh5Jsrr2aheyvo6niiutlcuioioMpsepacfs,dproauJyaMiylenatdeopea2dsa2rf0,in01tslo1ohi6ss9ni)anets.. subject to zero percent (o%) VAT. c. SALE OF SERVICES TO ADB DR(HeegevaaerdloAdqipurnmtagicretlneetrthsBI'eXaA,ngkSHraeeeencamtddioeqthnnueta)3rG,4tseo(iravgs)enreondofmfotehnnett2ho2eAfDgthrAeeecseeRimamenepbnuetbrDlB1iec9ev6otew6fl,eothpepenrmoPevthhnidietleipsAp:Bsiainanensk ARTICLE IX Property of the Bank and Taxatioc5 70 G.R. No. 147295, 16 February 2007. 71 G.R. No. 172087, 15 March 2011. 72 Exhibit "P-275-bb", USB.

CTA Case No. 10450 Corporation v. Commissioner of Internal Revenue Nippon Express Philippines DECISION Page 36 of 68 � ---- - - - --- - - - ---- - - ---- - - - --- - - - ---- - - ---- x x----� ���-�- Section 34 The Bank, its property and its operations and transactions shall be exempt from: - (a) all taxation oafnfrodmaannytyaxotaebxsligooarrticodhnuaftroygr.etshTewhpehaicyBhmaneaknret,wwniolilthmhnoooltrdeicntlghaiaomnr collection exemption payments for public utility services[.] htAheDerBrduiAilrsienDcegBtfsf.'ses7ac3eltexiTveheomelfypgstzaoiesodtrdaogst-urraasanntiesdtdfosufuerrnetvhxdieecermerscpSo(teniiconftincirolmuinsdeiiwdnn8gtbe(yBrthpr)era(3estpt)oeodofnfpdtoetehtnimettieioNnanInRehriCts)hotaoortf 1997, as amended. d. SALE OF SERVICES TO BOI AND ECOZONE-REGISTERED ENTERPRISES ScopopenecsriiaadtRlieAnrEegcd7wo9s1nie6toph7ma4i,nricaattsheZecaoumnesecetoonAzmdocesntdeteosbrfyrair1teRo99rAei5ne, 8tsi7pat l4rneo8ddv75tit,hdoeeosctbheuetrshrtiawanitniesseEfsiCsekcsOnatolaZbwiOnlniNcsehEanmsStievTanehrtsees. Sections 8 and 23 of RA 7916 provide: SEC. 8. ECOZONE to be Operated and Managed as Separate bCyu stht oemPsETZeArraitsosrey.p-arTathe ecuEsCtoOmZsOtNerErSitosrhya.ll be managed and operated oicnprceeearntaittniiSvgnEegsCth.waes2i3tpE.hrxionpvFoiitrdshtceeadPlrfEooCcrIenOuscnsZeidnOntegNirvEeZPsSor.ensseih-daAelnluttihbBaoelursDiietnyene,ctsirstoeleredNtehsoott.oasb6e6ltih,psehtrhmoefievslncaitawslde.~, 73 VAOPHNPAEITLARICRAPTPuTIlINPiOnRENgOS,N,VAoCIDD.RM0IEN3AIG3NT-I0IFSN0OT,GRR0AF8TTOHSIROEepNTLtH.eEmAIGSNbAPeDLrUC2FR0ROP0AOO0SMR; EDDE,IWANTHOAITERTAIKPODHANINBLODIIFPRPMSIRPNEuEEClCiHnEIgAACLNONINoES.OCM0OMS4NI9FCO-O0MZ7RO,ICTN1H3E7E.A0ANCpUrERiTlSEH2AIO0NT0RIT7OI.HTNYE, 74 (PEZA), AND FOR OTHER PURPOSES. NO. 7916. OTHERWISE KNOWN AS THE "SPECIAL AN ACT AMENDING REPUBLIC ACT 75 ECONOMIC ZONE ACT OF 1995".

CTA Case No. 10450 Corporation v. Commissioner of Internal Revenue Nippon Express Philippines DECISION Page 37 of 68 -- -- -- - - - -- -- -- -- -- - - - -- -- -- -- -- -- - - - -- -- -- -- X X--------- under Book VI of Executive Order No. 226, otherwise known as the Omnibus Investment Code of1987. BpSraposevecsiisaRilCoAEnonc7tov2rene2ro7as7mti6ion,incgasZat hnoaedmneSeDnauenbdvidecedlCoSbplpaymerckeRinaAFtl reEA9e4ccpo0ton0roo7t7mf, Z1iooc9tn9hZe2e,orawnspeirssoeaevspikdawnreaoestlwelanacsusaissmCtoltiamlharekrs territories, to wit: SEC. 12. Subic Special Economic Zone. - ... (b) TmfeailmxshoawpepnooapSrogrrutrtoeebadvdmitciiodooaSeunsvptseaeomoicnffsieacternhleaptenwEatorScimafvoutegnbaesootiecocmrudSisiassucpltcesaoZc,hnmoicdansalaepcEstaiestcprhaorilattinaaltaolxolnmrbwdyeiaicetneohqZndpiuonseiun,predramii,tnuneeattgdoysn-twafaf.rrn.neee.d.edlel (c) Tcshohaneltlprarboryevisniimootnpwooisftehedsxtiaswntiidntihgnilgna,wtsnh,oerunSleaustbiaoicnndaSlrpeaegncuidlaaltliooEcncasol ntotoamtxheiesc Zone.... SEC. 15. Clark Special Economic Zone (CSEZ) and Clark Freeport Zone (CFZ).- ... ccwimuaepslptliotoamrlatTaseshtqtieeuoprinrCrpoiFotmvoZfierdrynasehwteawnlmislinutacbhrteeiiennnro,tgiiapivflneresetrsoeaatnafelsdnodudwccaahenopxdriptmaaomslroteavenqtdeaaumxgoipeeumdntatnoeaondfsfttah.g.edo.s.uoeCtdpyFsa-Zraf,arneatdees cimonpTtorhaseerydprnooovntiwsirioetnhgssitsoatefnredexidnisgtb,inungsoilnnaewastssi,orneuanllteeasrnpadnridlsoercseaglwutaliaxthteiisonnsshtahtolel $ the be CFZ .... 76 PAFABRONNAORSDAAETUCSCHTTCCISTOAAIPNVMCUVECERENEPURLODSSESEIINROESG,A,NPTCRRAIRNOENEGPVDAUITDDBTIIENHLNVIGEGCETLCFAHOUOCENPNTMDVBNSEEAONRTS.STHEI7SEAO2R2NCC7ETO,FONOOAFVFSRE1MAAR9NI9MSL2IDEI,OTNANFANDORADERYDNOF,DOTRORHEDTSEOEHERVTREHEPRVULEWAORRTIPPSPIOMOEUSNEREKNSPSNTO.OISNAWETUSNO.THAOOSTRHTITEHYRE 77

CTA Case No. 10450 Corporation v. Commissioner of Internal Revenue Nippon Express Philippines DECISION Page 38 of 68 -- -- -- -- -- - - - - - -- -- -- -- -- -- -- -- - - - - - - - -- -- -- - X X-- ------- ttRprhheueeegrpipSussotbpaeslemDriec,cuieaolrAlyeftcEgartaexucdgolNaminastooenti.en,mdri7eisa9cdtd1neu6Zbdr,tiuoynnsasgiseunisnpteahcestmeoresvnseebietnsnievedtieeecnrsdracpel:elraanitsPstereiredvospgevrstisioshhd,tvaaeeildttrdlh,ewebeddiTellPheeofEannoptZtrteeiAftrroluaperntsrdeihdtshaiteenolersl within the Special Economic Zones. artpIeenegrVtrreiciAsrtetnoTeSnarri-tylenr(decoaRge%raieetsnv)htdeeceVnrooeAeundpceTsoei.przdvTao.eetrhnriseTneeod,ogSnsbw'euhysxipibltprsehaeoagimlrnaetIlssentfhfiCtooceorotfimeuoagcrnaotof,t,ooziioidrosnensnvitegihaeEniewnnqdcceutoadihpssueaeemnsrPtovearnihfycftiCeolsisor(puePmpbithgoijmnienlecsias.tt)encs,rituooresiInttnnzoeocterrm.i7yrtoyo8s,,f explained: eERpisnnCrteeatpOleft.ieeurZAruptOeTcernoNithwtsfiiNEesahaSoslli.,l,tca7ahtCxa9rwxeo1ere6suhaVs,trti;atecaAbsbhoTluaina-tsmg,ewhgrxerreeoaenoesutmsdshtsl,ehepddirten,,echfwbnnoioceehtmwticciitceeeaoihvesunoesssifrta,me,hPrnpiEaoolotZyfttshEAebSsCae-ebrctOcteeahtgZuieioOssPlfentoiNEevorc8ZeEefadSApSoteeee-afdrcrnrtectethigeeoefrnwinospttsirr2e(tieas4hsrime%egiosdnne)f, territory. ... An ECOZONE or a Special Economic Zone has been described as - wibaPtznhnaohrdneodniuckcefshilosbtnalrmoglih(oaEu,aawlPnvi,t[niiZedSniovnssg]n)teed:,hsslua.eietfrsnmrcAetedtprneeeiuodanfsEttiltrtxe,CraaaenitdrOdnaoteeilduZaaeroslOzfisiorstNnttanwoa,Etdeniersebtcesmhleicaia(marn!ledhyEdiacietsgcteev)tioh,ndoeolnetulnyeoxtrabarpiplsyside,ontwde/rcrvPtaoheneiprmocnelyrorstsomeoepoicdaeeremteardsiacngoeslitrlitnaiooneoaalr-sg,lfl centers. The national territory of the Philippines outside of the proclaimed border~ the ECOZONE shall be referred to as the Customs Terntory.q 78 G.R. No. 150154,09 August 2005; Citations omitted and emphasis supplied.

CTA Case No. 10450 Corporation v. Commissioner of Internal Revenue Nippon Express Philippines DECISION Page 39 of 68 - - ------- - - - - - - ------- - - - - - - ------- - - - - - - ----x x----- ---- PtttftceeorhEororeZrrnmaiiAsttEooiptdsrCrhuShyeyerOaer;.celcCZAhltdthOaiusmouassaNnsaestor,Enra8emancisogntursoieeflTmttaRah,etapneisernopardpi.glrEteoutoACasptrrthccOymeiteho.rZaaNanCOdftsoieoieecN.nnrttbt7iEhvooy9ieenn1srat6Eshhst,etCaehulhalyOaplCse,tpZbuaslCOteamsihetluNeoeetrssrmnEitenmoEdSasmeCttaaThedOdssdee,eZarmTCrabOsiseutayeNornspaarrtEdiaynostar.omuaiterspetsyxespapTlctsoiehufehrrosaratrrtatilfeolttrtioimohgobrmneynse Given the preceding discussion, what would be the VAT implication of sales made by a supplier from the Customs Territory to an ECOZONE enterprise? DptecchaxoooernpuctsontturorteimrtTfnryroephtih,ftetmioeagoPrucnocihcsoawooitldsliristtbdbpheoiaopinnfnrifgndtdgrheeetoeoseroVePdwrAoohvshfTfiilidcitVcspeehhyApsse,siTtnftin;retenoaosmewxmsdVhihanAiafltdgeloThlh,rebsaetcehurPhoeatiohmhsnlsiloeslptbiuroopiedmstpteeyihipsdm.ntetiweipHnosCioeetndhrtsnooeotcsdfeueaosn,rttfBsopoaiueodfrcsreroeetcdiuregeomaonnrflrt (10%) VAT [now, twelve percent (12%)]. r1precee6rexggo-rpoiitpsissoeftt,eiWrrectrtariaeeeseitdddtsihao, mnmaormerteraoesnnapsdtuneeh"efurcciadvfstociacnetbcteusfoytsfirudeersRecmreart/Rlrepawe/ddrpsNhoeridoobecbu.ydxhycpu0seaoc4harer-,aVtr0Vll7ASAs7beTaw9Tec,l-e-threpriseoofe"rgf.gnoseiievscstTit4teidevh.re1rpeeese0drdf6ootH-shrdssuOa(uuopatIpnc)pp(etslsslami)i(el1eeru)rsoasytfttroeooeafRiraasRgusowHuHnoeNloOOdeo%sIsI-.-a,s the HOI subsequently re-issues, to wit: SEC. 4.1o6-5. Zero-Rated Sales ofGoods or Properties. - ... The following sales by VAT-registered persons shall be subject to zero percent (o%) rate: (a) Export Sales. - "Export Sales" shall mean: (s) Transactions considered export sales under Executive Order No. 226, known as the pmni b us Investments Code of1987, otherwise special laws.~ and other -------------------- 79 As Amended, Otherwise thCeeCrtaoinnsoPlirdoavtiesdioVnsalouef-ARedvdeenduTeaxReRgeuglualtaiotinosnsNoof.201065-2.005, Amending Known as

CTA Case No. 10450 Corporation v. Commissioner of Internal Revenue Nippon Express Philippines DECISION Page 40 of 68 -� �--- - - --� - --- - - ---- - - --- - - ---- - - --- - - ---- x x----- ---- - - 2fcptetosrtc2Ehereeezr7xhothBrwfoaecx6traoxoeOixpo9epmaehtmxaemdo"pnpdap0rngiloyexpfenneloordou3oeimsmrilipeornsserdcrh,MBascnto2rhttuotr"ttuteattuat2vne7aepeouth-tposClrtrenl6crlots9edorterrttlcayuuietpaieeptoeroih2:srorittpcssdr,mtlrxaia,r2iondebnlieseeosarei(uwliporpsu1ueso,sseunannsada)ione,ocsaodadh,btgnddutndrseaeslennbhoufessdecowtideugxdrapeieettCtcecrtdfleaptheplvoqsidroeulttthumeumntsnipsleoofoiudtomthcoslesodduchlrhryaetotAeectyeltieiaoenReheonptntlPeadrfixnonhonurdrreenmoautlsehlapeclwltotecreaiegpsffyyishngetdsobtaxidtlruir;saleomdohiiBnecoriapy(rcmbppsfnxnrgBteaxgttoPdontouilepihupgdbwuaerilbprstOmerdrcricaerosy,yrn/iyeaootnrieieerdeohCrramuasnvriAelxmrsdapdteanrlteeui)pfslapdsel;lcufawxaspr;parliloeaormteecnro(ntopitorcdJua(ronshrnsbegsteod(fado2eira,tru)unpRdreseisawt)diidruwnIsirtegafpsndlAtansusrcteuuFsacatrnnrhglee,aulpt)eodacrafleo.cosretdmeOremratlrtt,ctcendNhreonsosicttcEbe.uredionnsoueseBeacecntoetve;irxrasragnucrsoerud.dsrteesoRPl,ctseetros.etmetsxinivaletoidcArsrhtfnoeRdruT7np,lmeaoiieuieeectfi9nbcaaopgldevhx7tndtoyub1wbalcgnoivrlibi2apltdrmy6eoevttrlwwyeynso2icteoe,eezsemet,pnt7draosddadrdioahxoaeptur;ttneOna,rnniehospxhogueoetdotruoTsap(toeeuo,pdirreh4refatrrfncsrttahdtrrs(ougl)oarm.oh;ButaBnuarmrcmeiecusecesencst(Itttteaexortiaxsee3RarertptiidmunsnreaepcSia)Nassdnlpd)a,aviredrtrssstdoduienoecolsduesoeiilebaereibdaotgrkan.daltorntdysontrtliyranoegiloecfg,ndxdsf rTebptpAeouxoyhrgrnfopecoitlopsIhedeetrenareexsutrtvrsFpsticceiefaoootsedHilssrrnusecttOssaaebamoiptxtursIgriieuep-neonorsnroqtnen1epeirteul0gorott;tve0(iosfhatsB% neigrentcstaOtoehedledeoryIsixeex)dPosprrdmpsfrsewoeooo-farvhzsrintfdmshiteeipdecsecracraoeuodlhtolbnd-nedmrayu,ssdiaurnihfftugecaibicaanntsnlycscVlugtamltoctd,lbuAhloeneberynTnestee,htcsii-rBsidtosreg/ghsehOmpeonugaarrIomeeleieot.ldsx8dddids0tnpsaeauboseofrrlioceytxreeotrebdspintnrehooossfiredaufnantlewcpgeceBestoosphamosyomloloadeieeoeslersadsd.efd,r.r Nreog.isgteP-roueord8s'u,suasnpaptleltsioeroStfeocgatoiooHdnOs3,I-porerfgoRipseetevrtreienedsu,eenoMtriteysmewrovhrioacensesdupmmroaddOuercdbtseyrara(eRV1MAoOoTa)-;p, f 80 ETBmaOxpl-hTraersegiaisstmtseurepenpdtliMoefdaSnaaunlfdeascittoaulfriecGrssoi-onEdxtshp,eoPrortreoirpgseinrwtaiilethtsexa1tn0.d0%SeErvxipcoerst Made by VAT-registered Suppliers to Sales. "

CTA Case No. 10450 Corporation v. Commissioner of Internal Revenue Nippon Express Philippines DECISION Page 41 of 68 -- - -- -- - -- - -- - -- -- - -- - -- - -- -- - -- - -- - -- -- - -- - - X X--------- exported shall be accorded automatic VAT zero-rating, subject to the following reportorial and documentary requirements, to wit: VasReuAectvTuoe-rmnrienuaSggetEiisRcCateepTzgrpIeeuOrrdlooaNvs-taurioa3lpn�tpoisnlSifgNae,trlohe.tseio.7eo-aa.9,fp5Bpg,wOolsiiocuItd-habrstoje,ieuogcpntitsrttofneooperrecethderztesieesefrxiostoplyl-ooorrrwaottesifinrenargsgvphicpacaolelsynlsidbnpmiegrtioaaovfdcnoicedsro:ebrdadyneiadnd (1) The supplier must be VAT-registered; be VAT- (2) The SOl-registered buyer must likewise (3) TrpptsehhruhgoeareipdlsBlotubeboscureaeeeyr,rdgdea;orwooChfdmeoIfrnusotevisrfteiopcsnrbtaomeetidoeyuannecatttsSrsoOu(BtanhlrO-leiersIes)wgsefaiosfsnu%etdecbrtsweeemxdhqpuiucomsehrtntabetcnldeeyu.riftrsiaFesfc-iouictresuasdrttuiheoberiynsd/ (4) TbsCssTssrVRyuuahaetehRplpalAgetreeepmhptisTNislelftSitp-tioioVeeeoiOcBen.rrrAadSseOvsl7tT-adtoOi-Irotoi9;iw-hedclnr5V-geeeai.SrtirvgAehwTsteOaihgtToshiehlieltnae-rsierectionresenidhecafnugrvdomepiotscsbpdhpiehtoyucelseammeiyuareleebnlpoaprrdwedpfnlmsnilubieaisSettuefurnhhhfOavrsyicaecettelelstt-lrlshuriswaaheoker;ffsgaeeifuoatlwrirhwrlznsa/neeiteduosrimSxrsityeroeshphdesc-inoosnu.nrurrateed4itimta'teio.izy1ccnrnebf0ashgoree8tforedaor-f1-oroiro(dfnear5Bfuatt)ttOiehlicthhytodsehIs-ee'f (5) buyer. tJv CrtmaFabhenvoougaedarryinpi,setlfuotho(reoIfr3ilnarafe)slecotxttidpthwpoChuuebnoierornuer8bpmgB2tryeo,e/OmensdpctreeIrhio,fsioacetnisrdtsteidehsourSeietoenctinuixfeefBotpizrrpienOr;erodeseroIrm(ott2pfCah-)esrrreaIaoeanrttlCtdtehtiitmesuonefhricugseecnbtur.taas:tbubTtliuyajroh(ey1enuRnec)redlet'ercisvsttde~heoehpvrxneattritilupthhoflabeoiaedlcurstuafzteyvoecte.sreirdtvraorsoletFnwehiapisoasilersesomem/rsaeaiacenvwaueloeBildotnrdefhOoaeteri/o-tanI(strt-ocaRioroepextee/yxorpgsta)ophoaifrsdooyuaHaturreretttOccrreetteethhdItsids-oef;e. seller to claim for refund or tax credit. 82 G.R. No. 236325, 16 September 2020.

CTA Case No. 10450 Corporation v. Commissioner of Internal Revenue Nippon Express Philippines DECISION Page 42 of 68 - - - - - - - - - --------------- - - - - - - - - - - - - - - - - - - ---x x----- -- -- aspscanheoidotrdiruteSialosTdBgpneoMoenbrnpAce'dirs,eoidsnprv.iegee8sp3tatioPlAhtlriEoaotZcwetnaAdeiertdressCfascubleuuleerbsstectimxaofoiuamicftmsateesetierindosrtavnhavtieicraooeernfsviroaeVouilgniAfsdistTitChttheyeeezrsreeetpdairefomdirw-coioraoicauttdutihnoimntniPgnesEodnZfiiitssAcsPsa,o1ust,Buhee5ddtoO6sw5iIb,d,i7snye7Ct6tDhtt.hh6haCe1eet subject period of claim: CERTIFICATE BILLING OFFICIAL AMOUNT OF PER ICPA'S STATEMENT RECEIPT SALES SUMMARY EXH.NO. OFVATZERO- EXHIBIT NO. (IN PHP) CUSTOMER EXH. NO. RATING is valid onlv or the year 2016 Suvvortina PEZA Certi cation ofVAT zero-rutin SUM! PHILIPPINES P-ug-bet P-uo-1-aei 1,400.00 P-1~1 WIRING SYSTEMS P-27'i�is CORPORATION SUM! PHILIPPINES WIRING SYSTEMS CORPORATION P-27'>-iS 2016-o6o<; P-uq-cc P-120-1-gk P-131 SUMI PHILIPPINES P-27';-is P-uq-ayu P-uo-t- 8,02').00 P-131 WIRING SYSTEMS acv CORPORATION SUM! PHILIPPINES 2016-o6os P-uq-ayv P-120-I- 6,8oo.oo P-1}1 WIRING SYSTEMS CORPORATION acv SUM! PHILIPPINES P-27'i�is P-uq-ayw P-120-I- 6,8oo.oo WIRING SYSTEMS CORPORATION acv SUM! PHILIPPINES WIRING SYSTEMS P-27'>-iS 2016-o6o<; P-ug-sa P-120-1-Sb (2,100.00) P-131 CORPORATION SUM! PHILIPPINES P-120-I- P-n1 WIRING SYSTEMS P-27o;-is 2016-o6oo; P-uo-cvw awa 122,no.1o; P-126 CORPORATION VATzero-ratino is valid onl" for the vear 2017 P-126 Suvvortina PEZA Certification o P-uo-t- DENSO TECHNO PHILIPPINES, INC. P-27'i-ar P-uq-eoc bbf DENSO TECHNO P-120-I- PHILIPPINES, INC. P-uq-eod bbf HITACHI CABLE P-27'>-Ci P-uq-xut P-120-1-vk 2,0'\7�'>9 P-131 PHILIPPINES, INC. HITACHI CABLE P-uq-xuu P-120-1-vk P-131 PHILIPPINES, INC. P-27'>-Ci HITACHI CABLE P-27o;-ci P-UQ-XUV P-120-1-vk PHILIPPINES, INC. HITACHI CABLE P-uq-xuw P-120-1-vk P-131 PHILIPPINES, INC. P-27'>-Ci HITACHI CABLE P-uq-xux P-120-1-vk P-131 PHILIPPINES, INC. P-27'i�Ci HITACHI CABLE P-27'i�Ci P-uq-xuy P-120-1-vk 1.355�88 P-131 r PHILIPPINES, INC. P-27'>-Ci P-uq-xuz P-120-1-vk P-n~ HITACHI CABLE PHILIPPINES, INC. (_) 83 Exhibits "P-275-a" to "P-275-kl", USB.

CTA Case No. 10450 Corporation v. Commissioner of Internal Revenue Nippon Express Philippines DECISION Page 43 of68 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x x---------------� CERTIFICATE BILLING OFFICIAL AMOUNT OF PER ICPA'S OF VAT ZERO- STATEMENT RECEIPT SALES SUMMARY EXH.NO. RATING EXHIBIT NO. (IN PHP) EXH.NO. CUSTOMER HITACHI CABLE P-27'\�Ci 2017-0484 P-ug-xva P-120-1-vk 1,487.66 P-131 PHILIPPINES, INC. HITACHI CABLE P-27'\�Ci 2017�0484 P-ug-xvb P-120-1-vk 1,229.28 P-131 PHILIPPINES, INC. HITACHI CABLE P-275-cj 2017-0484 P-119-xvd P-uo-1-vn 1,2<;';.93 P-131 PHILIPPINES, INC. HITACHI CABLE P-27<;-cj 2017-0484 P-119-xve P-120-t-vn 1,2Q6.81 P-111 PHILIPPINES, INC. HITACHI CABLE P-27<;-cj 2017-0484 P-uq-xvf P-t20-t-vn 1,42Q.84 P-131 PHILIPPINES, INC. HITACHI CABLE P-27<;-cj 2017-0484 P-uq-xvg P-uo-1-vn 2,0';3.12 P-131 PHILIPPINES, INC. HITACHI CABLE P-27<;-cj 2017-0484 P-uq-xvh P-120-1-VO 1,964.60 P-131 PHILIPPINES, INC. HITACHI CABLE P-27<;-cj 2017-0484 P-uq-xvc P-120-1-vi 1,046.oo P-131 PHILIPPINES, INC. HITACHI CABLE P-27<;-cj 2017-0484 P-ug-ve P-120-1-vl 4,8oo.oo P-131 PHILIPPINES, INC. P-27<;-cj 2017-0484 P-uq-eqt P-uo-t- P-27-;-cj 2017-0484 P-uq-equ 1'\,';00,00 P-131 HITACHI CABLE P-27<;-ci 2017-0484 P-uq-eqv bbt PHILIPPINES, INC. P-27<;-ci 2017-0484 P-uq-eqw to,c;oo.oo P-131 P-27<;-ci 2017-0484 P-ug-eqx P-uo-1- HITACHI CABLE P-27<;-cj 2017-0484 P-uq-eqy 13,';00.00 P-131 PHILIPPINES, INC. P-uq-eqz bbt P-27<;-cj 2017-0484 1';,';00.00 P-131 HITACHI CABLE P-27<;-cj 2017-0484 P-uq-era P-t2o-t- PHILIPPINES, INC. P-27<;-cj 2017-0484 P-ng-adkk 24,3';0.00 P-131 P-27-;-cj 2017-0484 P-nq-adkh bbu HITACHI CABLE P-27<;-cj 2017-0484 P-nq-adki P-uo-t- 18,393.80 P-131 PHILIPPINES, INC. P-27<;-cj 2017-0484 P-nq-adki bbu n,c;oo.oo P-131 HITACHI CABLE PHILIPPINES, INC. P-120-I- 13,')00,00 P-131 HITACHI CABLE bbu 1,3')8.98 P-131 PHILIPPINES, INC. P-uo-t- 1,3'54�08 P-131 HITACHI CABLE bbu PHILIPPINES, INC. 1,047.80 P-131 P-120-I- HITACHI CABLE 1,145-90 P-131 PHILIPPINES, INC. bbu P-uo-t- HITACHI CABLE PHILIPPINES, INC. bbu HITACHI CABLE P-tzo-t- PHILIPPINES, INC. bbu HITACHI CABLE PHILIPPINES, INC. P-t2o-t- HITACHI CABLE bbt PHILIPPINES, INC. P-uo-t- bbt P-120-I- bbt HITACHI CABLE P-27<;-cj 2017-0484 P-ng-ft P-120-1-ki 1,400.00 P-131 PHILIPPINES, INC. HITACHI CABLE P-27<;-cj 2017-0484 P-n9-fu P-120-1-kj 1,400,00 P-n1 PHILIPPINES, INC. HITACHI CABLE P-27';-Cj 2017-0484 P-n9-fl P-120-1-ka 1,400.00 P-111 PHILIPPINES, INC. P-275-Ci 2017-0484 P-uo-chk 1,400.00 P-27<;-fi 2017�13()3 P-ug-bzi P-120-I- 1,400.00 P-131 HITACHI CABLE PHILIPPINES, INC. aos uP-131~ NAGASE PHILIPPINES INTERNATIONAL P-120-I- alo

CTA Case No. 10450 Corporation v. Commissioner of Internal Revenue Nippon Express Philippines DECISION Page 44 of 68 - - - - - - - - - - - - - - - - - - - ---------------- - - x x----------------- CERTIFICATE BILLING OFFICIAL AMOUNT OF PER !CPA'S OF VAT ZERO- STATEMENT RECEIPT SALES SUMMARY EXH.NO. EXH.NO. RATING EXHIBIT NO. (IN PHP) CUSTOMER SERVICES CORPORATION NAGASE PHILIPPINES INTERNATIONAL P-27<;-fj 2017-'391_ P-1~-enu P-t2o-t- 2J,300.00 P-131 SERVICES CORPORATION bbe NAGASE PHILIPPINES INTERNATIONAL P-uo-1- wo,Boo.oo P-131 SERVICES CORPORATION P-272-fL 2017-1393 P-119-env bbe NAGASE PHILIPPINES INTERNATIONAL P-275-fj 2017-1393 P-119-enw P-12o-1- 19,8oo.oo P-131 bbe SERVICES CORPORATION NAGASE PHILIPPINES INTERNATIONAL P-275-fi 2017-1393 P-119-enx P-120-1- 67,800.00 P-131 SERVICES CORPORATION bbe NAGASE PHILIPPINES INTERNATIONAL P-27<;-fi 2017-1191 P-ng-eny P-t2o-1- 23,,00.00 P-111 SERVICES bbe CORPORATION NAGASE PHILIPPINES INTERNATIONAL P-272-fi 2017-'39l P-ug-enz P-12o-1- <;2,66o.oo P-111 SERVICES CORPORATION bbe NAGASE PHILIPPINES INTERNATIONAL P-275-fi 2017-1393 P-119-eoa P-12o-1- 86,400.00 P-111 SERVICES CORPORATION bbe NAGASE PHILIPPINES INTERNATIONAL P-275-fj 2017-1393 P-119-eob P-tzo-t- . 35,300.00 P-131 SERVICES bbe CORPORATION NAGASE PHILIPPINES INTERNATIONAL P-275-fj 2017-1393 P-119-erw P-uo-1- 6,939�04 P-131 bcq SERVICES CORPORATION NAGASE PHILIPPINES INTERNATIONAL P-275-fj 2017-1393 P-119-cce P-12o-t- 21,8oo.oo P-131 SERVICES CORPORATION anz NAGASE PHILIPPINES INTERNATIONAL P-275-fj 2017-1393 P-119-ccf P-uo-1- 23,300.00 P-131 SERVICES anz CORPORATION NAGASE PHILIPPINES INTERNATIONAL P-27<;-fj 2017-1393 P-ng-ccg P-tzo-t- 69,8oo.oo P-_131 SERVICES anz ; CORPORATION NAGASE PHILIPPINES INTERNATIONAL P-275-fj 2017-1393 P-119-cch P-tzo-t- 2),]00.00 u P-111 SERVICES anz CORPORATION

CTACase No.10450 Corporation v. Commissioner of Internal Revenue Nippon Express Philippines DECISION Page 45 of 68 - - - - ------ - - - - - ------ - - - - - - ----- - - - - - - ------ - x x--------- CERTIFICATE BILLING OFFICIAL AMOUNT OF PERICPA'S OF VAT ZERO- STATEMENT RECEIPT SALES SUMMARY EXH.NO. RATING EXHIBIT NO. (IN PHP) EXH.NO. CUSTOMER NAGASE PHILIPPINES INTERNATIONAL P-275-fi 20'7-1393 P-ug-cci P-t2o-1- 37.300.00 P-131 SERVICES anz CORPORATION NAGASE PHILIPPINES INTERNATIONAL P-275-fj 2017-13g3 P-ug-ccj P-120-I- 23,g20.00 P-131 SERVICES anz CORPORATION NAGASE PHILIPPINES INTERNATIONAL P-275-fi 2017�1}g3 P-ng-cck P-uo-t- 37.300.00 P-131 anz SERVICES CORPORATION NAGASE PHILIPPINES INTERNATIONAL P-275-fj 2017-1393 P-ug-eel P-uo-1- 23,300.00 P-111 anz SERVICES CORPORATION NAGASE PHILIPPINES INTERNATIONAL P-275-fj 20'7-13g3 P-ug-cern P-uo-t- 35,)00.00 P-131 anz SERVICES CORPORATION NAGASE PHILIPPINES INTERNATIONAL P-275-fj 20'7-13g3 P-ng-ccn P-t2o-1- 21,300.00 P-131 SERVICES CORPORATION anz NAGASE PHILIPPINES INTERNATIONAL SERVICES P-275-fj 2017-13g3 P-ug-bow P-tzo-t- 1,400.00 P-131 CORPORATION P-275-iu 20'7�0670 P-ng-zlz agy P-131 P-27')-iu 2017�0670 P-ug-ejl 35,88p5 P-131 SUMINAC P-t2o-1- 8,888.16 PHILIPPINES, INC. aug SUMINAC P-uo-t- PHILIPPINES, INC. bal SUMINAC P-275-iu 20'7�0670 P-ng-xw_p. P-120-1-wk 20,37<p_S P-1]1 PHILIPPINES, INC. TAKETORA P-275-ic 20'7�0278 P-ng:xwc P-120-1-VV 24,'ilJ.62 P-126 PHILIPPINES, INC. P-126 P-uo-t- P-126 TAKETORA 24,926.2') PHILIPPINES, INC. P-27')-jc 2017�0278 P-ug-yyy akm P-120-1- TAKETORA 24,')06.62 P-275:ic 2017�0278 P-ug-yyz akm july 1, 2018 PHILIPPINES, INC. VAT zero-rating is valid only for the period to Supporting PEZA Certification of December 31, 2018 2018�2078- P-ug-cxm P-120-1-avi 4,100.00 P-126 PHILIPPINE P-275-gZ 0048 is valid only until March 31, 2018 MATSUDEN INC. Supporting PEZA Certi cation o(VAT zero-ratin GOSHI PHILIPPINES, P-275-cb 2018-oosg P-ug-wwr P-120-1-ha 4.510.12 P-131 INCORPORATED GOSHI PHILIPPINES, 2018-oo5g P-ug-wws P-120-1-ha 5.248�17 P-131 INCORPORATED P-275-cb 1,565,776.61 TOTAL Likewise, petitioner's claimed sales of services betodiCseanlaplroowe1~ Chemical Corporation in the amount of P11,773�13 shall

CTA Case No. 10450 Corporation v. Commissioner of Internal Revenue Nippon Express Philippines DECISION Page 46 of 68 - - - - -- - - - - � - � - � - - - - -- - - - - � - � - �- - - - --� - �-� - - -- X X�- �-�-�-- because the volume of exports identified in the supporting BOI Certification pertains to the years 2016 and 2017 and not for the year 2018: CERTIFICATE BILLING OFFICIAL AMOUNT OF PER OF VAT SALES ZERO- STATEMENT RECEIPT INPHP !CPA'S RATING SUMMARY EXH. EXHIBIT NO. EXH.NO. NO. CUSTOMER 2019-C197 P-no-zcv P-uo-1-anv 11,773.13 P-144 P- CENAPRO CHEMICAL 275" CORPORATION ac PcP3oE1rZ5r,eA8s1M/pB6o.oO1nr0Ied/osCinvhDgeorCu, l/pSdeBbtcMieetirAodtinifsieaocrlra'lstoirwcoeeneprdtoifrfitoceraodtpfisoeantlietsiooroefngfeVisrse'AtsrrvTafiatciieolzusnerrieno-ttrohawetpiinratogmhvoiodufen tttthhhoeeef following customers: BILLING OFFICIAL AMOUNT OF PERICPA'S STATEMENT RECEIPT SALES SUMMARY CUSTOMER EXHIBIT NO. (IN PHP) EXHIBIT ACBEL POLYTECH PHILS. INC. NO. AIR LIQUIDE PIPELINE P-nq-ax P-120-1-dn 1,400.00 UTILITIES SERVICES (ALPLUS), P-148 INC. P-no-uu P-120-1-UY 2,971.';0 P-148 ASTEC POWER PHILS. INC. P-ng-bv P-120-1-fk P-148 COMPETITIVE GLOBAL P-ng-btk P-120-1-aiu 1,400.00 MANUFACTURING PHILS. P-ug-sy P-120-1-tk P-148 CYPRES MFG. LTD. P-ug-sz P-120-Hl 13,024.06 P-148 CYPRES MFG. LTD. P-no-bvQ P-120-1-ajl P-148 CYPRESS SEMICONDUCTOR P-ug-aut P-120-1-abg 1,400.00 P-148 DENSO TEN SOLUTIONS PHILS. P-no-con P-120-1-auf 1,400.00 CORP. P-ng-np P-120-1-pd 1,400.00 P-148 FU)INAME PHILIPPINES, INC. P-148 GLOBAL MARINE SYSTEMS P-ng-nq P-120-1-pe o,612.w LIMITED P-148 GLOBAL MARINE SYSTEMS P-ng-b P-12o-1-d 2,8oo.oo P-148 LIMITED P-ug-t P-120-1-bg 2,942.25 GOTO DENSHI MFG. PHILS., 2,942.2S P-148 P-ng-ak P-120-1-Ck INC. 1,400.00 P-148 GOTO DENSHI MFG. PHILS., P-ng-cq P-120-1-hU 1,400.00 P-148 INC. P-ng-iy P-uo-1-na 1,400.00 GOTO DENSHI MFG. PHILS., P-148 INC. P-ng-te P-120-1-tq 1,400.00 GOTO DENSHI MFG. PHILS., P-148 1,400.00 INC. '� P-14~..- GOTO DENSHI MFG. PHILS., 1,400.00 INC. GOTO DENSHI MFG. PHILS., INC.

CTA Case No. 10450 Corporation v. Commissioner of Internal Revenue Nippon Express Philippines DECISION Page 47 of 68 - - ------------ - - - - - - - - - - - - ------------ - - - - - - - x x----- -- -- GOTO DENSHI MFG. PHILS., P-119-UW P-120-1-va 1,400.00 P-148 INC. P-119-bih P-120-1-afg 2,942.2'; P-148 GOTO DENSHI MFG. PHILS., P-119-bmc P-120-1-afs 1,400.00 P-148 INC. GOTO DENSHI MFG. PHILS., P-n9�bmd P-120-1-aft 1,400.00 P-148 INC. P-119-bme P-120-1-afu 1,400.00 P-148 GOTO DENSHI MFG. PHILS., P-119-cdb P-120-1-aof 1,400.00 P-148 INC. P-148 GOTO DENSHI MFG. PHILS., P-119�Vg P-120-1-VT s,68o.32 P-148 P-119-eqp P-120-1-bbm s,923.s6 P-148 INC. P-119-hc P-120-1-mb 4,200.00 P-148 GOTO DENSHI MFG. PHILS., P-119-CXW P-120-1-avx 4-2'11.96 P-148 P-n9�cme P-120-1-asr 1,312.00 P-148 INC. P-119-cmf 1,314.25 P-148 HITEC RCD PHILIPPINES, INC. P-119-cmg P-12o-t-asr P-148 HITEC RCD PHILIPPINES, INC. P-119-cmh P-t2o-t-asr 2,104�40 P-148 P-119-Cffii P-12o-t-asr P-148 INATEC CORPORATION P-119-Cffij P-12o-t-asr 2,106-40 P-148 P-uo-1-asr 1o316.so P-148 INATEC CORPORATION P-119-11i P-120-1-pa 1,315.50 P-148 INSULAR BOTANICALS INTL INC P-119-11j P-120-1-pa 1,JOJ.50 P-148 INSULAR BOTANICALS INTL INC P-119-11k P-120+I'_a 2,094-40 INSULAR BOTANICALS INTL INC P-119-11! P-120-1-pa 1,1Q8.2<; P-148 INSULAR BOTANICALS INTL INC P-119-11m P-12o+pa 1,291�75 P-148 INSULAR BOTANICALS INTL INC P-119-1111 P-120-1-pa 2,o66.8o P-148 INSULAR BOTANICALS INTL INC P-119-110 P-120-1-pa 1,298.50 P-148 INSULAR BOTANICALS INTL INC P-119-bu 2,077.60 P-148 INSULAR BOTANICALS INTL INC P-119-bkx P-120-1-fj 1,1QO.OO P-148 INSULAR BOTANICALS INTL INC P-119-bky P-120-1-afd P-148 INSULAR BOTANICALS INTL INC P-119-bkz P-120-1-afd 2,100.00 P-148 INSULAR BOTANICALS INTL INC P-119-bla P-120-1-afd P-148 INSULAR BOTANICALS INTL INC P-119-blb P-120-1-afd 1,J08.25 P-148 INSULAR BOTANICALS INTL INC P-119-blc P-120-1-afd 1,298.oo P-148 INSULAR BOTANICALS INTL INC P-119-bld P-120-1-afd P-148 P-119-ble P-120-1-afd 1,293,00 INSULAR BOTANICALS INTL INC P-120-1-afd INSULAR BOTANICALS lNTL INC P-ug-xin 2,076.8o INSULAR BOTANICALS INTL INC P-12o+qg 1,J00.25 INSULAR BOTANICALS INTL INC P-119-auy 2,09J.20 INSULAR BOTANICALS INTL INC P-120-1-ab11 2,09J.20 INSULAR BOTANICALS INTL INC P-119-ej INSULAR BOTANICALS INTL INC P-119-WO P-120-1-jO 12,654-04 P-148 INSULAR BOTANICALS INTL INC 4,200.00 P-148 ITO-SEISAKUSHO PHILIPPINES P-119-fq P-120-1-xa CORPORATION 2,955�75 P-148 JMS HEALTHCARE PHL INC. P-119-ajsv P-12o+kf P-148 P-119-ajsw 4,100.00 JT INTERNATIONAL ASIA P-119-bor P-120-1-bli P-119-dok P-120-1-bli 1,400.00 P-148 MANUFACTURING CORP. P-119-qm P-120-1-ags P-14_8 P-119-bW P-12o-1-awl 12,651.11 P-148 KKM WORKS, INC. P-119-clw P-12o+rl 11,7J6.90 P-148 P-119-amo P-120-1-fl 2,976.00 P-148 LIMA LOGISTICS P-uo-1-asm 6,590.28 P-148 P-119-ayrn P-120-1-zl 5.542.28 P-148 CORPORATION P-148 MOBILIA PRODUCTS, INC. P-120-1-acj 1,400.00 P-148 \ MOBILIA PRODUCTS, INC. NAGAI GOMU PHILS. CORP. 2,982.()9 P-148~ OAK LEATHER CLARK, INC. PHIL. SANYU CORPORATION 1,400.00 (./ PHILIPPINE SINTER CORP. 2,2]1.50 PILIPINAS KAO, INC. PLA MATELS (PHILS.), CORP. STANDARD UNITS SUPPLY PHILSCORP.

CTA Case No. 10450 Corporation v. Commissioner of Internal Revenue Nippon Express Philippines DECISION Page 48 of 68 - - - - ------ - - - - - - - ------ - - - - - - - ------ - - - - - - - --x x------- -- TEXAS INSTRUMENT PHILS INC. P-ug-iu P-120-I-IDW 1,400.00 P-148 TEXAS INSTRUMENT PHILS INC. P-ug-iv 1,400.00 P-148 TEXAS INSTRUMENT PHILS INC. P-ug-ks P-120-1-IDX P-148 TEXAS INSTRUMENT PHILS INC. P-ug-pw 1,400.00 P-148 TEXAS INSTRUMENT PHILS INC. P-ug-px P-120-1-0S P-148 TEXAS INSTRUMENT PHILS INC. P-ng-td 1,400,00 P-148 TEXAS INSTRUMENT PHILS INC. P-ug-fm P-120-1-qu 1,400.00 TEXAS INSTRUMENT PHILS INC. P-ug-ip P-120-1-qv 1,400,00 P-1~8 TEXAS INSTRUMENT PHILS INC. P-ug-ay P-120-1-tp 1,400.00 TEXAS INSTRUMENT PHILS INC. P-ug-az P-120-1-kb 1,400.00 P-148 TEXAS INSTRUMENT PHILS INC. P-ng-ba 1,400.00 P-148 TEXAS INSTRUMENT PHILS INC. P-ug-bd P-120-t-mr 1,400.00 P-148 TEXAS INSTRUMENT PHILS INC. P-ng-cda 1,400.00 P-148 TEXAS INSTRUMENT PHILS INC. P-ug-chi P-120-1-do 1,_400.00 P-148 P-ug-chm P-120-1-dp 1,400.00 P-148 TEXAS INSTRUMENT PHILS INC. P-120-1-dq P-148 TEXAS INSTRUMENT PHILS. P-ug-ayk P-120-1-dw 1,400.00 P-148 P-uo-t-aoe 1,400,00 INC. P-120-1-apt TEXAS INSTRUMENT PHILS. P-120-1-apu 1,400,00 P-148 INC. P-120-1-ach TEXAS INSTRUMENT PHILS. P-ng-cib P-120-1-aqf 1,400.00 P-148 INC. TEXAS INSTRUMENT PHILS. P-ng-cic P-120-1-aqg 1,400.00 P-148 INC. P-ng-cid P-120-1-aqh 1,400.00 P-148 TEXAS INSTRUMENT PHILS., P-ug-tb P-120-1-tn 1,400.00 P-148 INC. TEXAS INSTRUMENTS INC. P-ug-a P-120-I-C 1,400.00 P~148 TEXAS INSTRUMENTS INC. P-ug-at TEXAS INSTRUMENTS INC. P-ug-bs P-120-1-dd 1,400,00 P-148 TEXAS INSTRUMENTS INC. P-ng-cp P-120-1-fb P-148 TEXAS INSTRUMENTS INC. P-ng-bvr P-120-1-ht 1,400,00 P-148 TEXAS INSTRUMENTS INC. P-ug-bwt P-120-1-ajm P-148 TEXAS INSTRUMENTS INC. P-ng-bze P-120-1-akl 1,400,00 P-148 TEXAS INSTRUMENTS INC. P-ng-bzf P-120-1-alk P-1-t8 TEXAS INSTRUMENTS PHILS. P-120-1-all 1,400.00 P-148 INC. P-ug-tc TEXAS INSTRUMENTS PHILS. P-uo-1-to 1,400,00 INC. 1.400.00 TEXAS INSTRUMENTS PHILS. INC. 1,400,00 TEXAS INSTRUMENTS PHILS. INC. 1,400.00 P-148 TEXAS INSTRUMENTS PHILS. P-ug-j P-uo-t-ai 1,400.00 P-148 INC. TEXAS INSTRUMENTS PHILS. P-ug-u P-120-1-bh 1,400.00 P-148 INC. TEXAS INSTRUMENTS PHILS. P-ug-v P-120-1-bi 1,400.00 P-148 INC. TEXAS INSTRUMENTS PHILS. P-ug-w P-120-1-bj 1,400.00 P-148 INC. P-ug-z P-120-1-bn 1,400.00 P-148 TEXAS INSTRUMENTS PHILS. INC. P-ug-aj P-120-1-Cj 1,400.00 P-148 TEXAS INSTRUMENTS PHILS. INC. P-ug-bm P-120-1-eq 1,400.00 P-148 TEXAS INSTRUMENTS PHILS. P-ng-bn P-uo-t-es 1,400.00 P-148 INC. TEXAS INSTRUMENTS PHILS. P-ng-vc P-120-1-vg 1,400.00 P-148 INC. P-ug-bkv P-ng-bou P-120-1-afb 1,400.00 P-148 I. P-120-1-agw 1,400.00 P-14~!- v

CNTipApoCnaEsexpNreos. s10P4h5il0ippines .� 1 t erna 1 R nue CommiSSioner o In eve Corporation v. DECISION Page 49 of 68 - - - - - - --- - --- - - --- - --- - - - --- - --- - --- - - -- - - -X x----------- TEXAS INSTRUMENTS PHILS. P-119-bov P-120-1-agx 1,400.00 P-120-1-bct INC. 1,400.00 TEXAS INSTRUMENTS PHILS. P-120-1-fn 1,400.00 INC. 1,400.00 TEXAS INSTRUMENTS PHILS. P-120-1-fo 1,400.00 1,400.00 INC. P-120-1-gu TEXAS INSTRUMENTS PHILS. 1,400.00 INC. P-119-ebn P-120-1-ayz 1,71Vil TEXAS INSTRUMENTS PHILS. P-120-1-aza INC. 2,Q6v;o TEXAS INSTRUMENTS PHILS. P-119-abwi P-120-1-avg 1l.QQ INC. P-119-abwj P-120-1-avg TEXAS INSTRUMENTS PHILS. ';OQ.77 INC. P-119-abwk P-uo-t-avg 1,214-79 TL FORWARDING SERVICE (PHILS.) P-119-abwl P-120-1-avg P-148 TL FORWARDING SERVICE (PH!LS.) P-119-abwm P-120-1-avg 1,8o6.6s TL FORWARDING SERVICE lll.1Q (PHILS.) P-119-abwn P-120-1-avg TL FORWARDING SERVICE 372."3_ (PHILS.) P-119-abwo P-120-1-avg TL FORWARDING SERVICE (PHILS.) P-119-abwp P-120-1-avg TL FORWARDING SERVICE P-119-abwq P-120-1-avg (PHILS.) TL FORWARDING SERVICE P-119-abwr P-120-1-avg (PHILS.) TL FORWARDING SERVICE P-119-abws P-120-1-avg (PHILS.) TL FORWARDING SERVICE P-119-abwt P-120-1-avg (PHILS.) TL FORWARDING SERVICE P-119-abwu P-120-1-avg (PHILS.) TL FORWARDING SERVICE P-119-abwv P-120-1-avg (PHILS.) TL FORWARDING SERVICE P-119-abww P-120-1-avg (PHILS.) P-119-abwx P-120-1-avg TL FORWARDING SERVICE (PHILS.) P-119-abwy P-120-1-avg TL FORWARDING SERVICE (PHILS.) P-119-abwz P-120-1-avg TL FORWARDING SERVICE (PHILS.) P-119-abxa P-120-1-avg TL FORWARDING SERVICE (PHILS.) P-119-abxb P-120-1-avg TL FORWARDING SERVICE (PH!LS.) P-119-abxc P-120-1-avg TL FORWARDING SERVICE (PHILS.) P-119-abxd P-120-1-avg TL FORWARDING SERVICE (PHILS.) TL FORWARDING SERVICE (PHILS.) TL FORWARDING SERVICE (PHILS.) TL FORWARDING SERVICE (PHILS.)

CTA Case No. 10450 Corporation v. Commissioner of Internal Revenue Nippon Express Philippines DECISION Page 50 of 68 -- - - - -- -- -- -- -- - - - -- -- -- -- -- - - - - - -- -- -- -- -- - X X---------- TL FORWARDING SERVICE P-u9-abxe P-120-1-avg 14g.1' P-148 (PHILS.) P-120-1-avg TL FORWARDING SERVICE P-u9-abxf P-120-1-avg 1,207�79 P-148 (PHILS.) P-120-1-avg TL FORWARDING SERVICE P-u9-abxg P-120-1-avg 1,466.92 P-148 (PHILS.) P-uo-t-avg TL FORWARDING SERVICE P-u9-abxh P-120-1-avg 87.88 P-148 (PHILS.) P-120-1-avg TL FORWARDING SERVICE P-u9-abxi P-120-1-avg _214.08 P-148 (PHILS.) P-120-1-avg TL FORWARDING SERVICE P-u9-abxj P-120-1-avg 218-40 P-148 (PHILS.) P-120-1-ra TL FORWARDING SERVICE P-u9-abxk P-120-1-nd 207�48 P-148 P-120-1-bmy (PHILS.) TL FORWARDING SERVICE P-120-1-aff P-u9-abxl P-120-1-acb 1,742-22 P-148 P-120-1-acb (PHILS.) P-120-1-acb TL FORWARDING SERVICE P-120-1-acb P-u9-abxm P-120-1-acb 137�96 P-148 P-120-1-acb (PHILS.) P-120-1-acb TL FORWARDING SERVICE P-120-1-acb P-u9-abxn P-120-1-acb 468.02 P-148 P-120-1-bbj (PHILS.) P-120-1-bbj P-120-1-bbj TL FORWARDING SERVICE P-u9-abxo 17.18 P-148 P-uo-1-aji (PHILS.) TONG HSING ELECTRONICS P-120-1-fm PHILS. INC. P-uq-qc 1,400.00 P-148 TSUKASA ELECTRIC PHILS. INC. P-uo-t-zi 1,400.00 P-148 UNI-GREEN INC. P-119-jb P-148 P-ug-ajzo 4.401.16 YAMAZEN MACHINERY & P-ug-big 7,178.,7 P-148 TOOLS PHILS. INC. P-ug-yip 6o;6.8o P-148 YTP-LIMA MFG., INC. P-14c8 P-119-yiq 92�76 P-148 YTP-LIMA MFG., INC. P-119-yir 282.66 P-148 P-u9-yis 1q2.62 P-148 YTP-LIMA MFG., INC. P-u9-yit 271.81 P-148 YTP-LIMA MFG., INC. P-u9-yiu 277-80 P-148 P-ug-yiv 277-80 P-148 YTP-LIMA MFG., INC. P-ug-yiw 171.76 P-148 YTP-LIMA MFG., INC. P-U9�yix P-148 P-u9-adju 180.12 P-148 YTP-LIMA MFG., INC. P-u9-adjv P-148 YTP-LIMA MFG., INC. P-u9-adjw 92-76 93�57 YTP-LIMA MFG., INC. 373-25 YTP-LIMA MFG., INC. YTP-LIMA MFG., INC. YTP-LIMA MFG., INC. ZAMA PRECISION INDUSTRY MANUFACTURING PHILIPPINES, P-u9-bvn 2,201.60 P-148 INC. P-148 ZAMA PRECISION INDUSTRY 2,750.67 P-148 MFG. PHILS. INC. P-ug-bx 2,66t.82 315,816.10 ZAMA PRECISION INDUSTRY P-ug-ami MFG. PHILS. INC. TOTAL tosehefnaPrtvte4irp6cpTe,eortsoi6istt8eoiroe,s5P)cn8Aaeq5prGu�ia7rtCeuloiOplfaaioRetsre,stc,JefoaoodmprufaVpotnruAoEttfTehmtdehzbbee2anesrPdsloo6yq-w2,ur7Aaa,(D7rrtt2eBie2pnr,,r5gBoe7sfJO2eC"I.n7,Yt2ai2nnt0dgo1tpE8a,ecl toozinzteiloroynonte-ehr-rare'etseagsdmiasltsoeeasurleenosdtf

CTA Case No. 10450 Corporation v. Commissioner of Internal Revenue Nippon Express Philippines DECISION Page 51 of 68 -- -- -- -- -- - - - - - - - - - - - - - - - - - - - - - - - - - -- -- -- -- - X X-- -- ------ Sales of Services to PAGCOR, Japan Embassy, ADB, BOI and Ecozone- registered enterprises Declared Zero-Rated Sales Properly Supported with P47,8n,o28.go ASIdRd-:regS!IiCNaslPCteeAs.r,eoaudfnPSVdEeAeZrrTvAiScOeaenlRsetissttoyo,SfoTSrMeigrvIiCnicaRellsOytEocLlaNEsCsoinTfi-ReRdOebNsyiIdCtehSne,t 150,922.64 Foreign Corporations f'47�961,95!.54 Total 1,565,776.61 315,816.10 Less: Disallowances the supporting 11,773-13 zero-rating is Validity period indicated in P 46,o68,s85.7o PEZA Certification of VAT outside the subject period of claim WVrCeoegirtliuhtsimtofriuacettaitoioonafnnwyepixtehpsrotutahrptiespnosPriEttnoiZdnAigtch/aBetCOeydeI/erStaiiBrnfsiMca2tAht0i/1eoC6nDBaCOnodIf Valid 2017 Sales of Services to PAGCOR, Japan Zero-Rated ADB and Ecozone-registered Embassy, enterprises THIRD (3RD) REQUISITE: THE CLAIM MUST BE FILED WITHIN TWO (2) YEARS AFTER THE CLOSE OF THE TAXABLE QUARTER WHEN SUCH SALES WERE MADE. auasfntuaetmrilteIihnzneedadcecldcoinosberpyduoattfnhVtceheAeTTwRtaiAmtxhIauNbSslteeLcbaqtewiuo,fanitrlhet1ed1er2wa(wAdi)hmtheainnnthditshet(reCBa)ztIi8Rev4reoow-fcirtltaahhtiieemndNtfowIoRrroCerf(ef2oef)ufctn1yi9dve9aeo7rlys,f zero-rated sales were made. Petitioner's present claim covers the 2nd quarter of CY 2018. � Counting two (2) years from the close of the said quarter, the last da~ 84 Supra at p. 9.

CTA Case No. 10450 Corporation v. Commissioner of Internal Revenue Nippon Express Philippines DECISION Page 52 of 68 -- -- - - - -- -- -- -- -- - - - - - -- -- -- -- -- - - - -- -- -- -- -x x---------- for the filing of an administrative claim for the said 2nd quarter was 30 June 2020. On 19 June 2020, respondent issued RR No. 16-2o2o8S that extended the deadlines for filling of claims for VAT refunds, to wit: SECTION 2. Filing D ue Dates by Taxpayer-Claimant s.- Filing of Claims for VAT refund for th e following taxable quarters shall be until the herein specified due dates: Calendar Quarter ending March 31, 2018 -July 15, 2020 Fiscal Quarter ending April 30, 2018 -July 31, 2020 Fiscal Quarter ending May 31, 2018- August 15, 2020 Calendar Quarter ending June 30, 2018 -August 31, 2020 gbaefefnetehcrtiaerltdTychoa(i3smreohm)aosduwanoyeiftvsyetfarrqxoudmpaoareytashennert-iolcnitlefaatiispnmtpagatleyon.fttIotnoharewreEthhaCiescQhnaoocbtarosyvMeee,ottdshdtieefaictedeldaedraEedddCleiQtnaodeilbnsinehteahislnel, whichever comes later.86 the Hence, petitioner's administrative claim for refund/tax credit for tha subject period was timely filed on o1 September 202087, considering t 31 August 2020 was a regular holiday.88 As to the timeliness of petitioner's judicial claim, pursuant to the NIRC of 1997, as TRAIN Law amendment to Section m(C) of the date of submission amended, respondent had ninety (9o) days from the of the ORs or invoices administrative claim, or and other documents in support of the until 30 November 2020, to decide on petitioner's claim~ 85 PRatEE3hsremxIeogAhcApDuiemhbluseaaisgecttsisnuliVoasds"nrtaePassl2dtu-uiF02poeb25upnyA0r"ltiohedRaifsdednetredaphadSuenN"ubdPTNals-aitipa2citxoaet6ilAnno"(idaVc,nclsiaDtAnHli(ginTRvSet)ittr.hshaAoRieteoee.e)snDofo'NruuDfDinegoEodai.Dncym/C1kaae(0leltRraet9tg,eise6mexVg3intnu.ocP(llytTauuh.rRrmesHAueAoaIp1Nln1iptd, lapLtiocypaa).ws.tie)7oc0ntFi5ooo-nr7f 2TtIh7a1e.x2NaobiflneethtQye uT(a9ar0xte)-rCDsoaAdyeffPeoecfrtie1od9d9bt7oy, 86 87 88

CTA Case No. 10450 Corporation v. Commissioner of Internal Revenue Nippon Express Philippines DECISION Page 53 of 68 - -- -- - - - -- -- - -- -- - -- -- - -- -- - -- -- - -- -- - - - -- - - x x----- ----- aBprpwedereicmetltieehstiineiinvonnNieinssttdoteshPrturoeaae'esbntptdilivry1taetie6,pohspccDnerllreieaVfiscobicApamreetoTdmiRnwotebRdnhiveeteiirhrnfeftouiw2tynrn0(idf2ts3Vih0loNAee)d)d.oT-esdCteaoiacrimonydeeuef1pngdu5detoanrJi-tnidatdeoogn/dadtuayf;ha2rxhaorp8eyvmecnOerr2cie10coea6d2td,oc1iDstt9bwae0ee,td(hircwwsee2fohanmy0isn2icAbnoth&egipsmrseJtpt,ht2e.eidel0ttCyie2iaoton0bminm,oyoeaintvmrnhdee'gsee.r- stated third requisite. FOURTH (4TH) REQUISITE: THE CREDITABLE INPUT TAX DUE OR PAID MUST BE ATTRIBUTABLE TO SUCH SALES, EXCEPT THE TRANSITIONAL INPUT TAX, TO THE EXTENT THAT SUCH INPUT TAX HAS NOT BEEN APPLIED AGAINST THE OUTPUT TAX. To satisfy the fourth requisite, the following conditions must be satisfied: a. 1st condition: the input taxes are due or paid; b. 2rzsapnaaetrdtltroeerocpisd-bo,orunoraattrdtaineoiebddtnflifoeaoettrnhcetete:olifyvtfheieaanlecnlyptlyiiounvzcetepoalrufyttoeat-tzdxthraeeaoexrstsoneee-sdctrhcaasslentaaaelnlibedemosass,tseaaidsltbneheaodserfaewdsniaianhdrltpeeettcrsurai;ettxblyautthbataaexlebrneesldoerastereohenxazteblielmroreobtplhy-et c. 3rd condition: the input taxes are not transitional input taxes; and, d. 4th con dition: the inpu t taxes have not been applied against output taxes during and i n the succeeding quarters. Petitioner complied with 3' d and 4th condit ions, considering that its input taxes do not appear to be transitional ipneprusot ntasx. eAs ssinacerethseyu1l~ operate to benefit only newly VAT -registered 89 Exhibit "P-28", supra at note 9. 90 Supra at note I.

CTA Case No. 10450 Corporation v. Commissioner of Internal Revenue Nippon Express Philippines DECISION Page 54 of 68 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- - X X--------- pe1thes'4tte13a,tb2o1"l60ids8nhq,e2eru5da2irs.t5et4dhreaaoetsfmaCepY"deVt2iAtt0oiT2oonhR9ea1evrpfeurendcvdeoe/dTmnuCtcpinCtleigedCdtlhawtuihmsietethhd"ietnhicpenauritsrtyasm-VVoeAvAeTTarfoRtecferlttahuiimetrnwsafaooisdrf amount in the succeeding taxable quarters. ofdpcrfoauopmCrmciYtehasAial2ttss0sigec1octs8oou,podrtiufrshtreseehcnexha1trcasdvptesiccaeueedsortscinonhotdagaafnisltPdeigIaosloaMnlomoo,idwflopslcaireoabttionpilzet,tiiahtobaiteninrloropegnkruotethcoonlatfdaandsiixmnonpowcsouafnttpt1hia'eV1atsxa2tAcl1ffoTe,o7legrl4odoo9twinoh,n5dseg8p:s49,u212.nr'21dcd6hMoqaamuirslaieelsrissiotnteniogcr,f Purchases of Capital Goods Purchases Input Tax Exceeding PI Million P2J,4IO,OJ6.5I P2,8o9,204.38 Purchases of Capital Goods Not 729,925.89 87,591.11 Exceeding PI Million I5,948,5I9.92 I,9I3,822.J9 Domestic Purchases of Goods 8I3,467,I80.I2 97,6I6,o61.6I Other than Capital Goods Domestic Purchases of Services I79.638,24!.20 2I, 55 6,588.94 Domestic Purchases of Services (initially included in the I" quarter I,069,950.00 !28,394�00 of 2018 but supported by valid PI,034,263,853�64 PI24,111, 662,43 invoices and ORs dated 2nd quarter I,593,128.35 of 2018) 3,955,2o6.so f Purchases of Goods Other than Capital Goods (initially included in v P121,749�584.2693~ the I" quarter of 2018 but supported by valid invoices and ORs dated 2nd quarter of 20I8) Total Input Tax Deferred on Capital Goods Exceeding PI Million from Previous Quarter Less: Input Tax on Purchases of Capital Goods Exceeding PI Million deferred for the succeeding period Total Allowable input Tax 91 Exhibit "P-24", Line 23D, Division Docket, Volume !1, p. 704. 92 Par. 2, Petition for Review, id., Volume I, p. 30. 93 Should be 1'121,749,584.28.

CTA Case No. 10450 Corporation v. Commissioner of Internal Revenue Nippon Express Philippines DECISION Page 55 of 68 - ----- - - - - - - ----- - - - - - - ----- - - - - - - ----- - - - - - - x x----- -- -- ispptaaVtharsletAileotrdorVripTiceoAboafadaAuroTtmttitraltaioal,roonbenbiSngudblleeieunnorczttaegtetfainosVrbobtuodhlnAVel-eattzr4ATewtate.od1Tattree1hboazed0el-bien-enr4lrsiaeonasitola-teptsefsrlhdauRseaeltsteVRsteVsoasdAlaNAueatmTsobsoTnaa.tjodltaeboe1rulclfsa6aePnt,n-sno1taatsa52oslaaen,1comss1ad,thf72isfooo4%oazuP9nwrme6n,sV5ntr,2teh8oA,bnpo4e2-Tedre.0fl2apteo0P6ittewd,ote57ri.id:ios979otTn,4o4cd5s�etho74,aarumo8llcesa,ism8s,tlailiopnonolu9eegcpn.stsa5iuiatttn6fotiseogodribbnVnaotettpAhshhtruih'eTeesst Sales Percenta~~;e Allocated Input Tax Vatable Sales/Receipts f'6ss,6n764-29 51.09% Zero-Rated P62,2o0,774�7o Sales/Receiots 627,722,572.69 48�91% PI,28"t,40o, "t"t6.q8 59,548,809�56 Total P121,749�~84.26 Thereafter, petitioner deducted the input tax attributable to VlViaAAbTTilaistbtyilelol fds'Pau7lee8so,6fi8Pn11,t)6h3,41e8.7a02m,5f5roo7um�n02ts,aoicfdoPsm6apl2e,us2t0we0dh,7iac7sh4f�or7elolsouwflrtsoe:md95 its output VAT into a net output Outout VAT per VAT Return p 78,681,331.72 Input VAT attributable to VATable Sales 62,200,774�70 Outout VAT Still Due 1"16,480,557�02 siVwsnatAilhplelTiuscthhlwVCaiaiasAosbsniTtalhsniiatneodytetetstroureiifbbrnnePjuogefItuuc6atgtnh,b4ohdal8eaft0tbttop,ho5leee5ctz7ioiaet�nvi0rmoseo2tnro-.areuinCartnstt'osetcnodaiosnussefeptaq:pPlu9ueu46tes3tVna,VotAgl6AyaT8,iTn,2apstl5etit2tarti.ibht5biie4louirnttyaeaes,mbrlisaaethisnutosoietwnirlVtgniszAoebtTuhdealtaoptbthwulieett, Net Outout VAT payable P16,48o,5~7.02 Input VAT attributable to Zero-Rated Sales Net Refund Amount per Petition for Review 59,548,8o9.56 v P 43,o68,252.'<Ll' ~ 94 Par. 2, Petition for Review, Division Docket, Volume 1, p. 30. 9S I d. 96 I d.

CTA Case No. 10450 Corporation v. Commissioner of Internal Revenue Nippon Express Philippines DECISION Page 56 of 68 - - - - - ------ - - - - - ------ - - - - - ------ - - - - - -----x x----- ------ pipneaptiidutitionFVnoaAercTrcptobuorerdpihnaoangsvceeceslaswouifmibtshmeadtSiitsdetfuceytdriiinonsgngutupthohpe(eoAarstf)uionobrgejfestdcahtoiedpcNeucrlmoRinoeCddniotwtsifoe1tnro9e,9api7tc,roitasuvsacealrlmuythcedianautdletefhooderr. The provision reads: SEC. 110. Tax Credits. - (A) Creditable Input Tax.- (1) Any input tax evidenced by a VAT invoice or official receipt issued in accordance with Sec tion 113 hereof on the following transactions shall be creditab le against the output tax: a. Purchase or importation of goods: i. FpFFFFdoroooeoorrrrprdsurcuaueuosslcceseeniet;vaaafoetssoiirronrsmsunisoapatotnrlpeearlridiaiinenaemtslcosoilonurosrtdurtiiphzbinapenugtltsciiepioeonnadnuedcrsiikessnsdaeagtlohtfiloonfeorgbwfsouamewrsldmeihantuioeecpnfsrhaidssa;ereltdrosrveo;rtidfhcoueiras;cftoCiinrooindseh.feodr ii. iii. iv. v. b. Purchase of services on which a value-added tax has actually been paid. (2) The input tax on domestic purchase or importation of goods or properties by a VAT-registered person shall be creditable: a. To the purchaser upon consummation of sale and on iTtmhoeptohreretlaeimtaisopenoorotffergthoueopdogsnoooprdaspyrmforpoeemnrttiotehfse;thacenudvsatoludey-aodfdethdetaBxuprreiaour b. to of Customs. ifttctVhtncDohhhhooaAreeaeaewmpdTcnmiecaepetavsaagpfmoomehillPgvrnnerabeerro,gnetleceolhrodnTgir(vtboasatiiao3hzd)etdrt1tfiahaee,syosmatdet2penic,pra0iooarqef2icuTrennsou1sqtrahtf,haicuadh,saloehaiflietsootsftfaxeioievtwsotucrhrstieenheoestwerduideenemasshddiouenunisacicrcdnfpnitoOohhneduipstrmdnhetattutadrereptstxufaeathomopfshdpxViroeraiefritfsrtyAoleesuyltoceCniuTedl-orrinrcoasgnlsibhpitdsonwfhipueheeoeoaesgriandsltiisoo(llohhns5lofopdae9bsudputls:o)ehlns(surPnP,psbueralfur1eoctyoleoic,clhsrolsxovaceiapocbiwwzpessdorlee,ieeuehee,tddodatdaddihacioldii,nlonfheontlgugeorngo)pordv:wmuitoetaePtmhhtenhdpdoreVdelpepournyioAv,lcsityVionTurhtTditlvpnsAheeoet oeutdsdanTiirsn,fttl ~ '

CTA Case No. 10450 Corporation v. Commissioner of Internal Revenue Nippon Express Philippines DECISION Page 57 of 68 - - - - - - - ------ - - - - - - - ------ - - - - - - - ------ - - - - - x x---------- scsoaahfmsatelheleobafcespocsumrcrephcdeheindatassubaellteeiodoftnous,entrrthevinelictfpeauslul,,lryrcloehuyaatsasielletiyrzo,erolderu.ssfsrPeeereeoo.9vfo7iprdreloidcp,eenfrisntieaeelsl,yu,pthoTenhiapntapyiunmt tethanxet The above prov1s1ons are implemented by Sections 4.110-1 to 4.110-3 ofR R No. 16-2005, as a mended by RR No. 13-201898, whi ch provide as follows: SdlotiIsconhEtuufaceCipebananrc.jlntocoercp4onlacpouu.tntenordrbsrdocrtetieoahi-stpei1nadaoist.csnii,hnredepeaieCsnwubclrottVytiilehftntyAadahgepxTiaVoSutcetosAeottspdrcuTFtwil.sabru-,oxmshrsupreeitacrgaeIooonhnidffpsdrphctteatehaioutrtsrnhaetteietbeebdTriTlsatepeahp,daxrdeeoeepixrrrCsrooseut.soorrhec-mtdnbertielvoup'yo.Itinstancniaixepvntoisateuem,frbstiiilspabnnet.noaucpIoxyrlttutuer'astddimehtntiixaatnopeoelxgnalumtnatdlroelspaestfatnaottgsexahseoircaenmootcwcidVrtvilhisnuuiAoitedosycnTdeerh.s Aiancnvcyooiirncdepaunotcr etoafxwfioictnihatlhSreeeecfseo.ilpluot3wisiasnnugedtdra2b.n3y7saaocVftiAtohnTes-reTevgaiixdsteCenrocededdepbesyhrsaaolVlnAbiTne creditable against the output tax: a. Purchase or importation of goods 1. For sale; or into or intended to form part of a For conversion for sale, including packaging materials; 2.. finished product 3� or use as supplies in the course of business; or 4� For use as raw materials supplied in the sale of services; For 5� or for which deduction for For use in trade or business is allowed under the Tax depreciation or amortization b. Code. of real properties for which a VAT has actually Purchase c. been paid; which a VAT has actually been paid; d. Purchase of services in sale" under Sec. w6(B) of the Tax Tran~~s "deemed code;O 97 Emphasis supplied. (ACVcoacnleusleoe-lrAiadtdaiodteneddaVnTdaalxuInec-PAlruodsvidoiesndio(TnTsaRxAuRnIdNege)ru,"ltahFtieuornRtsheeoprfu2Ab0lmi0c5en)A,dcainst gA(RRmAeev)nedNneuode.. 98 Regulations Implementing the 10963, or the "Tax Reform for Regulations (RR) No. 16-2005

CTA Case No. 10450 Corporation v. Commissioner of Internal Revenue Nippon Express Philippines DECISION Page 58 of 68 - - - - - - ------- - - - - - - ------ - - - - - - - ------ - - - - - - x x---------- e. Transitional input tax allowed under Sec. 4.m (a) of these f. Regulations; input tax allowed under Sec. 4.m (b) of these Presumptive g. Regulations; input tax credits allowed under the transitory Transitional and other provisions ofthese Regulations. STgoEhoCed. is4n, .p1pu1r0to-tp2a.exrPtcieerrsesdoointr sosWnervhimiocpeCsoarbtnaytAiaovnaVioAl fTog-froteohgdeisstIeonrrpelduotcpaTelarpsxouCnrcrhsehadsaieltl.s - of be creditable: a. To the importer upon payment ofVAT prior to the release goods from customs custody; b. of the purchaser ofthe domestic goods or properties upon To c. cTpooanytsmhueemnpmtuoracftihtohaneseocrfootmhfpeseesnravslieac;teioosrno,rrtehnetalle,srsoeyeaoltryliocrefnesee.e upon SWwaeacExchqhcqCiueecu.erihisesd4iias.tta1irio1oeV0Onnd-A3ncec.Toepos-rCsrteteMlcogaoifaiiiflesmbltaiwleoscernhhefaidoccsahsprpepeetis(Irsteonsaxsoflpocngurlou(tpiPosnui1dTvcr,,eaoocsxhomhooaaef,soloelVntosaboAxeoD.Torcpo)eluiap}mri,irnpmpeocroeaseidregatcssaab,asrllcdteecahlnrepeeGdsidtsaaoairgoltgdaomgrgsfoeoa-ogintdanhttsshee,t output tax in the following manner: (a) oIpccobfrreayrterphimdi6mioetioaotdpelroaswegontroiiftdl-maolstdiaticxhotTiotesenyhmdsaeqc(mouu6qsifooenuetn)thfipiurcieuesmlentdtltoi.yitfnnaTwpextehiohtlelohsfshfeatboacaecntalcalapdtalphilbtiieeteatnnhalpadelsgmuapgotcrroooletoadaumadixsndmoetsissnhetfatovofohilenvrlbnebwpeliyenu(h5cprd)eocluianyhvvtieeaimdtarsthaeeerxasedsd monthly. (b) I(mtncsfhou)toemhmnyetmbceheaealesprryntsiioctmabef-laamsitngieoTsodnthohtbuedheys.seicnfdTcuapiohllvuemeiltnidfpdiectrnaaliogaxrsifimnmatshghoceatfanlohpltriehintbapeitelnsuhtgptasioumpttotraatdexhttaeeaidsdxbclyeueacsvspsrteeiheftntdeauhlliylatalngicofsotefnhouivadaoelasllf were acquired. WtoOhrnehieeemrxmepisiotlthlriinteoegndaogprdgefursierongisinas(ghtPee1adan,codyqoeuocp,iaroselioetcoinio.adonbaolrc)e,omctshatope(nietttoxahtclalgduloosioinevdspesunoptofuttaVrxceAehxsTac)w seeeoddf ~ <

CTA Case No. 10450 Nippon Express Philippines Corporation v. Commissioner of Internal Revenue DECISION Page 59 of68 x------------------------------------------------------x be allowable as credit against output tax in the month of acquisition. (c) The amortization of the input VAT shall only be allowed until December 31, 2021 after which taxpayers with unutilized input VAT on capital goods purchased or imported shall be allowed to apply the same as scheduled until fully utilized: Provided, That in the case of purchase of services, lease or use of properties, the input tax shall be creditable to the purchaser, lessee or licensee upon payment of the compensation, rental, royalty or fee.99 Meanwhile, Section 4.uo-8 of RR No. 16-2005 lays down the substantiation requirements of input tax credits, to wit: SEC. 4.uo-8. Substantiation ofInput Tax Credits. - a. Input taxes for the importation of goods or the domestic purchase ofgoods, properties or services is made in the course of trade or business, whether such input taxes shall be credited against zero- rated sale, non-zero-rated sales, or subjected to the s% Final Withholding VAT, must be substantiated and supported by the following documents, and must be reported in the information returns required to be submitted to the Bureau: 1. For the importation of goods - import entry or other equivalent document showing actual payment of VAT on the imported goods. 2. For the domestic purchase of goods and properties - invoice showing the information required under Sees. 113 and 237 of the Tax Code. 3� For the purchase of real property- public instrument i.e., deed of absolute sale, deed of conditional sale, contract/agreement to sell, etc., together with VAT invoice issued by the seller. 4� For the purchase of services - official receipt showing the information required under Sees. 113 and 237 of the Tax Code. A cash register machine tape issued to a registered buyer' shall constitute valid proof of substantiation of tax cred~ 99 Emphasis supplied and italics in the original text.

CTA Case No. 10450 Nippon Express Philippines Corporation v. Commissioner of Internal Revenue DECISION x------------------------------------------------------x only if it shows the information required under Sees. 113 and 237 of the Tax Code. 100 It is categorically mentioned in the above provisions that in order to be entitled to input tax credits, the same must be evidenced by VAT sales invoice or OR issued in accordance with the invoicing requirements.'01 As shown earlier, petitioner's excess input VAT claim of P43,o68,252.54 emanated from its claimed total allowable input tax of P121,749,584.28. Out of the allowable input tax of P121,749,s84.28, respondent only denied the amount ofP3s,842,199�81 with a breakdown ofP21,684,982.90 due to overclaimed input tax and disallowed input tax of P14,157,216.gi due to a violation of invoicing requirements (pursuant to Section 113 in relation to Section 110 of the NIRC ofl997, as amended). The disallowed portion of P3s,842,199�81 was pointed out in Annex A of respondent's decision, stating: Please be informed that the evaluation and verification of the claim was conducted based on the documents submitted upon filing of the application for VAT refund, as mandated under Section 11 of Revenue Memorandum Circular (RMC) No. 47-2019, which resulted in NIL amount of input tax available for VAT refund, inasmuch as the deductions exceeded the amount sought to be refunded. Details are shown on the attached sheet marked as Annex "A"." Annex A of respondent's decision states: ANNEX"A" NIPPON EXPRESS PHILIPPINES CORPORATION Claim for VAT Refund For the Period April 01, 2018 to June 30, 2018 VAT Refund Claimed Deductions from Claim Overclaimed input tax 100 Emphasis supplied and italics in the original text. 101 Supraatpp. 14-15.

CTA Case No. 10450 Nippon Express Philippines Corporation v. Commissioner of Internal Revenue DECISION X------------------------------------------------------ X [(Phpwo,o64,601.34- Php78,681,J31.70)- Php4J,o68,252�54] (t4,157�216.gt) Violation of invoicing requirements pursuant to Section 113 in relation to Section no of the NIRC of1997, as amended (Annex "A-t") (1S,S75�550.J2) Additional output tax on other taxable transactions (z,8oJ,522.6o) (Php129,796,252.67 X 12%) Input tax attributable to zero-rated sales without service contract (32,26s,Jopg) (Annex "A.2") Php(86,486,577�o2) Net VAT payable amount from previous quarter's claim (Annex Php(4J,4I8,J24�48) "A-3") Total Deductions from Claim Excess Deductions over Claim As can be gleaned from the foregoing VAT Refund Notice dated 28 October 2o2o10\ respondent found the input VAT ofP8s,907>384.47 (F121,749,584.28 less F3s,B42,199�81) to be properly substantiated and compliant with the invoicing requirements under Section 113(A) of the NIRC of 1997, as amended. This amount is not disputed nor has been raised as an issue by the parties. It bears noting that in reviewing administrative decisions, the reviewing court cannot re-examine or weigh once more the factual basis and sufficiency of evidence submitted before the administrative body and substitute its own judgment for that of said body.103 The general rule is that-courts will not disturb on appeal the factual findings of administrative agencies acting within the parameters of their own competence so long as such findings are supported by substantial evidence.104 Thus, what is left to be resolved is whether respondent erred in disallowing the input VAT of P3s,842,199�81. Petitioner submitted various suppliers' invoices and 0Rs'05 in support of the input VAT claim of P3s,842,199�81 which the Court- commissioned !CPA had examined~ 102 Exhibit "P-28", supra at note 9. 103 See Maynilad Water Services, Inc. v. The Secretary ofthe Department ofEnvironment and Natural Resources (DENR), eta/., G.R. No. 202897,06 August 2019. 104 Substantial evidence is more than a mere scintilla. It means such relevant evidence as a reasonable mind might make accept as adequate to support a conclusion. See Protector's Services Inc. v. Court ofAppeals. eta/., G.R. No. 118176, 12 April2000; Gelmart Industries (Phils.), Inc. v. Han. Vicente LeogardoJr., eta/., G.R. No. 70544, 05 November 1987; Ang Tibay, eta/. v. The Court ofIndustrial Relations, eta/, G.R. No. L-46496, 27 February 1940. 105 Exhibits "P-52" to "P-1 08", USB.

CTA Case No. 10450 Nippon Express Philippines Corporation v. Commissioner of Internal Revenue DECISION Page 62 of68 x------------------------------------------------------x A scrutiny of the ICPA Report'06 and petitioner's supporting documents shows that the input VAT claim off'33.398,7o4.57 must be disallowed: Exhibit Particulars Input VAT No. Disallowance On the input VAT claim o{f'2I,684,982.90 1'146,q16.oo S20,111-46 Domestic purchase of goods supported by VAT 162,671.02 P-53 invoices/purchase of services supported by VAT ORs JOO.OO with incorrect/incomplete Petitioner's name 8os,s66.2q Domestic purchase of goods supported by VAT 6,780,167.16 13,269,047-01 P-54 invoices/purchase of services supported by VAT ORs f'21, 684,982.94 with incorrect/missing/incomplete registered address 1'1,267.ll 7-408.96 Domestic purchase of goods supported by VAT S14,46q.n 71-427.21 P-ss invoices/purchase of services supported by VAT ORs with overclaimed input VAT ';12,146�41 Domestic purchase of goods supported by VAT invoices/purchase of services supported by VAT ORs P-s6 where VAT was separately shown but not aligned in "VAT amount" line item Domestic purchase of goods supported by VAT P-s7 invoices/purchase of services supported by VAT ORs with corrections but without counter-signature P-ss Domestic purchases where the supporting documents are not provided P- 52 Domestic purchases not reported in the VAT return Subtotal On the input VAT claim ojf'I4,157,216.g1 Domestic purchases of goods supported by VAT P-6o invoices/purchases of services supported by VAT ORs without/with incomplete date P-61, P-76 Domestic purchases of goods supported by VAT invoices/purchases of services supported by VAT ORs with incorrect/missing/complete registered address P-62, P-69, P-77, Domestic purchases of goods supported by VAT P-86, P-91, P-101, invoices/purchases of services supported by VAT ORs with overclaimed input VAT P-106 P-64, P-n P-83, Domestic purchases of goods not supported by VAT P-88, P-98 invoices/purchases of services not supported by VAT ORs P-65, P-74, P-84 Domestic purchases of goods supported by VAT invoices/purchases of services supported by VAT ORs dated outside the validity period of the Authority to Print (ATP) P-66, P-75, P-85, Domestic purchases of goods supported by VAT P-89, P-104 invoices/purchases of services supported by VAT ORs not dated within the same taxable year or dated in the 7.~176,851.57 ' subsequent quarter (i.e., advance claiming of input VAT) P-67 Domestic purchase of goods supported by VAT 716.61,~ invoices/purchase of services supported by VAT ORs {.) 106 Exhibit "P-31 ", Table 12, p. II.

CTA Case No. 10450 Nippon Express Philippines Corporation v. Commissioner of Internal Revenue DECISION Page 63 of68 x-------�-�------�-�--------------�-�------�-���-------x Exhibit Particulars Input VAT No. with the statement "This document is not valid for Disallowance claiming input taxes" P-68, P-9o, P-105 2,502,09 P-7o, P-8o, P-87, Domestic purchase of goods supported by VAT 2,<;8<;,7<;6.62 invoices/purchase of services supported by VAT ORs P-93, P-108 with incorrect/ incomplete petitioner's name 4,90';.01 P-78, P-102, Domestic purchases where the supporting documents 9,68<;.<;7 are not provided P-107 Domestic purchases of goods supported by VAT 269�90 invoices/purchases of services supported by VAT 0 Rs 4,29';-46 P-79, P-92 where VAT was separately shown but not aligned in P11,713,721.67 "VAT amount" line item 1'33>398,704-57 P-99 Domestic purchase of goods supported by VAT invoices/purchase of services supported by VAT ORs P-100 with corrections but without counter-signature Subtotal Domestic purchase of goods supported by VAT Total invoices/purchase of services supported by VAT ORs dated in the preceding quarter (i.e., late claiming of input VAT) Domestic purchase of goods supported by VAT invoices/purchase of services supported by VAT ORs where VAT is not separately shown As regards the properly substantiated domestic purchases, the same should be disallowed as it was not reported in petitioner's Amended 2nd Quarter VAT Return and for its equal failure to prove that the amount (supposedly declared as input VAT in petitioner's 1st Quarter CY 2018 VAT Return) had not been utilized, credited or applied for refund by petitioner. It is noted that petitioner never bothered to offer as evidence the Summary List of Purchases of the 1st Quarter of CY 2018 to prove that the said amount forms part of its "Input Tax Carried Over from Previous Period" of P3s,6g6,6s6.o6 (Line 2oA of Amended 2nd Quarter CY 2018 VAT Return). In addition, it bears noting that Section 4.no-8 ofRR No. 16-os, as amended, categorically states: SEC. 4.no-8. Substantiation ofInput Tax Credits. - (a) Input taxes for the importation of goods or the domestic purchase of goods, properties or services is made in the course of trade or business, whether such input taxes shall be credited against zero-rated sale, non-zero-rated sales, or subjected to the s% Final Withholding VAT, must be r substantiated and supported by the following documentsy

CTA Case No. 10450 Nippon Express Philippines Corporation v. Commissioner of Internal Revenue DECISION x------------------------------------------------------x and must be reported in the information returns required to be submitted to the Bureau[.]'"7 Summarizing the above findings relative to petitioner's compliance with the 1st condition, the Court finds that out of the P121,749,584.28 claimed total allowable input VAT for the 2nd quarter of CY 2018, only the amount ofP88,J50,879�71 represents petitioner's valid input VAT, as computed below: Total Allowable Input VAT per Claim I"I21,749,s8+z8 , , , >98, 704�57 Less: I Disallowances P88,35o,879�7� Valid Input VAT Pursuant to the 2"d condition, where there are both zero-rated or effectively zero-rated sales and taxable or exempt sales, and the input taxes cannot be directly and entirely attributable to any of these sales, the valid input taxes ofP88aso,879�71 shall be allocated proportionately on the basis of sales volume, as follows: VATable Sales/Receipts Amount Allocation Allocated Input {a] Factor VAT Valid Zero-Rated Sales/Receipts 1'655,677. 764.29 {c~a+b} {e~cxd] Invalid Zero-Rated 46,o68,585.7o Sales/Receipts 51. 0 9% 1'45,138,464�44 581,653.986.99 Total Reported Sales P1,283,400>J36.98 {b) 3�59% 3,171,796.58 45-32% 40,040,618.69 P88,JS0,879�71 {d) 100.00% In Chevron Holdings, Inc. (Formerly Caltex Asia Limited) v. Commissioner of Internal Revenue108 (Chevron), the Supreme Court ruled that: ... [T]he input tax attributable to zero-rated sales may, at the option of the VAT-registered taxpayer, be: (1) charged against i1 output tax from regular 12% VAT-able sales, and any unutilized or "excess" input tax may be claimed for refund or the issuance of tax credit certificate; or (2) claimed for refund or tax credit 107 Italics and underscoring supplied. 108 G.R. No. 215159, OS July 2022; Citation omitted, emphasis in the original text and supplied.

CTA Case No. 10450 Nippon Express Philippines Corporation v. Commissioner of Internal Revenue DECISION X------------------------------------------------------ X its entirety. It must be stressed that the remedies of charging the input tax against the output tax and applying for a refund or tax credit are alternative and cumulative. Furthermore, the option is vested with the taxpayer-claimant. It goes without saying that the CTA, and even the Court may not, on its own, deduct the input tax attributable to zero-rated sales from the output tax derived from the regular twelve percent (12%) VAT-able sales first and use the resultant amount as the basis in computing the allowable amount for refund. The courts cannot condition the refund of input taxes allocable to zero-rated sales on the existence of "excess" creditable input taxes, which includes the input taxes carried over from the previous periods, from the output taxes. These procedures find no basis in law and jurisprudence. Indubitably, with respect to its input taxes attributable to zero- rated sales, it is the taxpayer (and not the Court) who is given the option to either: 1. Charge a portion of its input taxes attributable to zero-rated sales to the output taxes, and refund the balance, if any; or, 2. Refund all of the input taxes attributable to zero-rated sales. In the present case, petitioner is deemed to have chosen the first option. As stated earlier, petitioner's claimed input VAT attributable to zero-rated sales in the amount of Ps9,548,8og.s6 was partially applied against its reported output VAT liability to the extent ofP16,480,557�02. Hence, only the excess amount of P43,o68,252.54 is being claimed for refund. Following the same computation, since petitioner's valid input VAT of P45,138.464-44 allocated to VATable sales/receipts fails to cover its output VAT liability ofP78,681,331.72109 for the said sales/receipts, the valid input VAT of P3,171,796.s8 allocated to valid zero-rated r sales/receipts'10 shall be utilized. Notwithstanding the same, the vali~ 109 Exhibit "P-17", Line 15B, Division Docket, Volume 11, p. 682. 110 With respect to the valid input VAT allocated to invalid zero-rated sales, taxpayer may claim the same as expense pursuantto Q-13 and A-13 ofRMC No. 42-03, which states: Q-13: Should penalty be imposed on TCC application for failure ofclaimant to comply with certain invoicing requirements, (e.g., sales invoices must bear the TIN ofthe seller)? A-13: Failure by the supplier to comply with the invoicing requirements on the documents supporting the sale of goods and services will result to the disallowance of the claim for input tax by the purchaser-claimant.

CTA Case No. 10450 Nippon Express Philippines Corporation v. Commissioner of Internal Revenue DECISION Page 66 of68 X------------------------------------------------------X input VAT allocated to valid zero-rated sales/receipts is still not enough to offset petitioner's "Output VAT Still Due", as computed below: Output Tax Due on Vatable Sales/Receipts P78,68I,331.72 Less: Valid Input VAT Allocated to Vatable Sales/Receipts 45,138.464�44 Output VAT Still Due 1"33>542,867.28 Valid Input VAT Allocated to Total Zero-Rated P3,171,796.58 Sales/Receipts 33.542,867.28 Less: Output VAT Still Due (I"JO,J71 1 0 7 0 , 7 0 ) (Output VAT Still Due) On a final note, the Court reiterates its consistent ruling that actions for tax refund or credit, as in the instant case, are in the nature of a claim for exemption and the law is not only construed in strictissimi juris against the taxpayer, but also the pieces of evidence presented entitling a taxpayer to an exemption is strictissimi scrutinized and must be duly proven.m 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.112 Since taxes are the lifeblood of the government, tax laws must be faithfully and strictly implemented as they are not intended to be liberally construed.113 Thus, in view of petitioner's failure to prove, to the satisfaction of the Court, its entitlement to the grant of tax refund or issuance of tax credit of input VAT in the amount ofP43,o68,252�54� the Court is constrained to deny the same. WHEREFORE, the foregoing premises considered, the Petition for Review filed by petitioner Nippon Express Philippines Corporation on 15 January 2021 is hereby DENIED for lack of merit.~ If the claim for refund/[tax credit certificate] is based on the existence of zero-rated sales by the taxpayer but it fails to comply with the invoicing requirements in the issuance of sales invoices (e.g., failure to indicate the TIN), its claim for tax credit/refund of VAT on its purchases shall be denied considering that the invoice it is issuing to its customers does not depict its being a VAT-registered taxpayer whose sales are classified as zero-rated sales. Nonetheless, this treatment is without prejudice to the right of the taxpayer to charge the input taxes to the appropriate expense account or asset account subject to depreciation, whichever is applicable. Moreover, the case shall be referred by the processing office to the concerned BIR office for verification of other tax liabilities of the taxpayer. (Emphasis supplied and italics in the original text). III Atlas Consolidated Mining and Development Corporation v. Commissioner of Internal Revenue, G.R. No. 159490, 18 February 2008. 112 Coca-Co/a Bottlers Philippines, Inc. v. Commissioner of Internal Revenue, G.R. No. 222428, 19 February 2018. 113 !d.

CTA Case No. 10450 Nippon Express Philippines Corporation v. Commissioner of Internal Revenue DECISION Page 67 of68 X-----------------------���-------�-�----��--------��-- X SO ORDERED. WE CONCUR: MARIA ROWE Associate Justice lb!un~ (Concur in the result) LANEE S. CUI-DAVID Associate Justice 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. -~sociate Justice Special 2nd Division Acting Chairperson

CTA Case No. 10450 Nippon Express Philippines Corporation v. Commissioner of Internal Revenue DECISION x----------- ------------------------------------------ -x CERTIFICATION Pursuant to Section 13, Article VIII of the Constitution, and the Special 2nd Division Acting 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