DEUTSCHE KNOWLEDGE SERVICES PTE. LTD. v. COMMISSIONER OF INTERNAL REVENUE (Consolidated with CTA Case No. 8656, 8661 and 8685)

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY THIRD DIVISION DEUTSCHE KNOWLEDGE SERVICES PTE. LTD., CTA CASE NOS. 8623, 8656, 8661, and 8685 Petitioner, Members: -versus- BAUTISTA, Chairperson FABON-VICTORINO, and RINGPIS-LIBAN, JJ. COMMISSIONER OF Promulgated: INTERNAL REVENUE, Respondent. AUG ') 2.~ 2{)17 x- - - - - - - - - - - - - - - - - - - - - -c.-.. - - - lt->;3-s -"'�-...-. - - - - - - -x DECISION Fabon-Victorino, J.: These four (4) consolidated Petitions for Review filed by petitioner Deutsche Knowledge Services Pte. Ltd. on different dates seek for the refund or issuance of tax credit certificate (TCC) in the total amount of P153,201,143.71, allegedly representing unutilized input value-added tax (VAT) arising from petitioner's domestic purchases of goods other than capital goods and services, purchases of capital goods, and purchases of services rendered by non-residents for the four quarters of calendar year (CY) 2011 which are attributable to its zero-rated sales, broken down, as follows: CTA Case No. CY 2011 Input VAT Claim 8623 p 30,987,110.541 8656 pt Quarter 8661 2nd Quarter 43,483,971.552 3rd Quarter 39,444,853.683 1 Petition for Review, docket, vol. 1, p . 16, CTA Case No. 8623. 2 Petition for Review, docket, p. 18, CTA Case No. 8656. J

DECISION CTA CASE NOS. 8623, 8656, 8661, and 8685 8685 I 4th Quarter 39,285,207.944 Total P153,201, 143.71 Petitioner Deutsche Knowledge Services Pte. Ltd. is a foreign corporation organized and existing under the laws of Singapore, with license to transact business in the Philippines with office address at Net Quad Center, 31st Street corner 4th Avenue, E-Square Zone Crescent Park West, Taguig City. 5 It is a VAT-registered taxpayer as of June 16, 2005, with Taxpayer Identification No. (TIN) 238- 763-115-000.6 Petitioner is also registered with the Securities and Exchange Commission (SEC) and is licensed to do business as a regional operating headquarters (ROHQ) in the Philippines. It is engaged in general administration and planning; business planning and coordination; sourcing/procurement of raw materials and components; corporate finance advisory services; marketing control and sales promotion; training and personnel management; logistic services; research and development services and product development; technical support and maintenance; data processing and communication and business development to its affiliates in the Philippines and abroadJ On the other hand, respondent is Commissioner of the Bureau of Internal Revenue (BIR), with power to decide, approve, and grant refunds of internal revenue taxes or issue a tax credit certificate. He holds office at the BIR National Office Building, BIR Road, Diliman, Quezon City. Petitioner filed with the BIR its Monthly VAT Declarations and Quarterly VAT Returns through the Electronic Filing and Payments System (EFPS), for the period beginning January 1, 2011 to December 31, 2011 as follows: 8 3 Petition for Review, docket, p. 18, CTA Case No. 8661. 4 Petition for Review, docket, p. 18, CTA Case No. 8685. 5 Par. 1, Joint Stipulation of Facts and Issues (JSFI), docket, vol. 1, p. 489. 6 Par. 4, JSFI, docket, vol. 1, unpaginated. 7 Par. 3, JSFI, docket, vol. 1, p. 489. 8 Par. 5, JSFI, docket, vol. 1, unpaginated.

DECISION CTA CASE NOS. 8623, 8656, 8661, and 8685 PERIOD COVERED DATE FILED January 2011 February 18L 20119 February 2011 First Quarter of 2011 March 9, 201!1� April 2011 April 25, 2011 11 May 2011 May 19, 2011 12 Second Quarter of 2011 June 17, 2011 13 July 2011 July 22, 2011 14 August 2011 August 18, 201 !15 Third Quarter of 2011 September 19, 2011 16 October 2011 October 26, 2011 17 November 2011 November 18, 2011 18 Fourth Quarter of 2011 December 19, 2011 19 January 20, 2012 (original)20 March 14, 2013 (amended)21 On October 31, 201222 , January 9, 2013 23 , January 23, 2013 24 and March 19, 2013 25, petitioner separately filed with the BIR Large Taxpayers Regular Audit Division 3 (LTRAD), its administrative claims for refund or issuance of TCC for its alleged unutilized input VAT attributable to zero-rated sales for the 1st, 2nd, 3rd, and 4th quarters of 2011 in the respective amounts of P30,987,110.54, P43,483,971.55, P39,444,853.68, and P39,285,207.94 or in the aggregate amount of P153,201, 143.71. 26 When no action was taken by respondent on its administrative claims for refund, petitioner filed with the Court four (4) separate Petitions for Review on March 27, 2013, May 20, 2013, June 19, 2013, and August 5, 2013, 9 Exhibit "P-4". 10 Exhibit "P-4-a". 11 Exhibit "P-5". 12 Exhibit "P-4-b". 13 Exhibit "P-4-c". 14 Exhibit "P-6". 15 Exhibit "P-4-d". 16 Exhibit "P-4-e". 17 Exhibit "P-7". 18 Exhibit "P-4-f". 19 Exhibit "P-4-g". 20 Exhibit "P-31". 21 Exhibit "P-8". 22 Exhibits "P-24" and "P-24-a". 23 Exhibits "P-25" and "P-25-a". 24 Exhibits "P-26" and "P-26-a". 25 Exhibits "P-27" and "P-27-a". 26 Par. 6, Joint Stipulation of Facts and Issues, docket, vol. 1, unpaginated.

DECISION CTA CASE NOS. 8623, 8656, 8661, and 8685 docketed as CTA Case Nos. 8623, 8656, 8661, and 8685, respectively. Respondent filed his Answer in CTA Case No. 8623 on June 14, 2013, 27 in CTA Case No. 8656 on July 19, 2013,28 in CTA Case No. 8661 on August 23, 2013,29 and in CTA Case No. 8685 on October 30, 2013. 30 To respondent's mind, the four cases for refund/tax credit should not be given due course for failure of petitioner to exhaust administrative remedies before elevating its cases to the Court. Allegedly, petitioner failed to submit complete supporting documents at the administrative level as mandated in Section 112 of the National Internal Revenue Code (NIRC), as amended, and Revenue Memorandum Order (RMO) No. 53-98. Further, to be entitled to refund, petitioner, who has the burden of proof, must prove compliance with all the requisites under existing law and jurisprudence including registration, invoicing and accounting requirements. After the parties submitted their Joint Stipulation of Facts and Issues31 , the Court issued the Pre-Trial Order32 on December 10, 2013. To prove its case, petitioner presented as witnesses (1) Rachel M. Concepcion33 ; and (2) Katherine 0. Constantino, the Court-commissioned Independent Certified Public Accountant (ICPA). 34 27 Docket, val. 1, pp. 67-82, CTA Case No. 8623. 28 Docket, pp. 53-64, CTA Case No. 8656. 29 Docket, pp. 55-67, CTA Case No. 8661. 30 Docket, pp. 76-89, CTA Case No. 8685. 31 Docket, val. 1, pp. 489-498. 32 Docket, val. 1, pp. 500-506. 33 Minutes of the hearing dated February 10, 2014, docket, val. 1, p. 519; Minutes of the hearing dated June 27, 2016, docket, val. 7, p. 3945. 34 Minutes of the hearing dated June 9, 2014, docket, val. 3, p. 1389; Minutes of the hearing dated June 15, 2015, docket, val. 6, p. 3672.

DECISION CTA CASE NOS. 8623, 8656, 8661, and 8685 Rachel M. Concepcion, the Finance Controller of petitioner testified 35 that she is familiar with the instant cases since she oversees, prepares and safekeeps petitioner's financial documents pertaining to its operations. Petitioner is registered with the Securities and Exchange Commission (SEC) and is licensed to operate as a Regional Operating Headquarters (ROHQ) in the country. Petitioner is likewise registered with the BIR with Certificate of Registration OCN No. 9RC0000270209 dated June 16, 2005. As a ROHQ, petitioner provides accounting, valuation and information systems maintenance and development services, among others, to entities in the Deutsche Bank Group. Thus, petitioner renders zero-rated services to its non-resident affiliates engaged in business outside the Philippines or nonresident persons not engaged in business who are outside the Philippines based on Section. 108(B)(2) of the NIRC. For services rendered, it is paid in acceptable foreign currency, i.e. Euros, inwardly remitted through Deutsche Bank Manila then credited to petitioner's account in said bank. Thus, petitioner incurred input VAT for domestic purchases of goods (other than capital goods) and services, purchases of capital goods, and purchases of services rendered by nonresidents attributable to zero-rated sale of services in the year 2011, based on Section 110(8) and Section 112(A) of the NIRC. The input VAT incurred by petitioner remained unutilized since it was not applied against any output VAT liability. Due to the inaction of respondent on petitioner's administrative claims for refund, petitioner filed four (4) separate administrative claims for refund of its unutilized input VAT for the year 2011 on October 31, 2012, January 9, 2013, January 23, 2013, and March 19, 2013. 35 See Minutes of the hearing dated February 10, 2014, docket vol. 1 p. 519; Judicial Affidavit dated November 15, 2013, docket vol. 1 pp. 135-167; no cross examination conducted.

DECISION CTA CASE NOS. 8623, 8656, 8661, and 8685 The Court-commissioned ICPA Katherine 0. Constantino testified 36 that she examined and verified the documentary evidence of petitioner in relation to the present cases. Thereafter, she prepared an ICPA Report which she submitted to the Court on May 29, 2014, indicating that of the pro-rated amount of input VAT attributable to petitioner's zero-rated sales of P158,201,143.71, only P62,454,876.86 was properly substantiated. She also examined the additional documents submitted by petitioner and submitted to the Court a supplemental report. 37 After petitioner rested, respondent manifested that he would not present any evidence in the absence of the investigation report from the BIR examiners. At the instance of petitioner, the cases were reopened for the recall of witness Rachel M. Concepcion, who identified38 additional documents to prove that petitioner rendered services to non-resident clients who are doing business outside the Philippines. In the Resolution 39 dated August 5, 2016, the cases were submitted for decision. THE ISSUES The parties submitted the following issues for this Court's resolution :40 1. Whether petitioner is entitled to a refund or issuance of tax credit certificate for its unutilized input VAT arising from purchases of goods (other than capital goods) and services, purchases of capital goods, and purchases of 36 See Minutes of the hearing dated June 9, 2014, docket vol. 3, p. 1389; Judicial Affidavit dated June 4, 2014, docket vol. 3, pp. 1383-1388; no cross examination was conducted. 37 See Minutes of the hearing dated June 15, 2015, docket val. 6, p. 3672; Judicial Affidavit dated March 27, 2015, docket vol. 6, pp. 3637-3645. 38 See Minutes of the hearing dated June 27, 2016, docket val. 7, p. 3945; Judicial Affidavit dated June 21, 2016, docket val. 7, pp. 3844-3848. 39 Docket, val. 7, pp. 4031-4032. 40 JSFI, docket, val. 1, p. 490.

DECISION CTA CASE NOS. 8623, 8656, 8661, and 8685 services rendered by non-residents attributable to zero-rated sales for the 1st, 2nd, 3rd, and 4th quarters of taxable year 2011 in the respective amounts of P30,987,110.54, P43,483,971.55, P39,444,853.68, and P39,285,207.94, or in the aggregate amount of P153,201, 143.71. 2. Whether the Court has jurisdiction over the Petitions for Review filed by petitioner. DISCUSSION/RULING First, the jurisdiction of the Court. Respondent claims that the Court lacks jurisdiction to determine the present petitions as petitioner failed to exhaust administrative remedies given that it failed to submit complete supporting documents at the administrative level, as mandated under Section 112 of the National Internal Revenue Code (NIRC), as amended, and Revenue Memorandum Order (RMO) No. 53-98, before resorting to judicial action. The issue has long been settled. There is nothing in the cited provisions that requires submission of complete documents enumerated in RMO No. 53-98 for a grant of a refund/tax credit of input VAT. In other words, the alleged flaw is not fatal to petitioner's cause. This much had been clarified by the Supreme Court in the following manner: The CIR's reliance on RMO 53-98 is misplaced. There is nothing in Section 112 of the NIRC, RR 3-88 or RMO 53-98 itself that requires submission of complete documents enumerated in RMO 53-98 for a grant of a refund or credit of input VAT. x x x Even assuming that RMO 53-98 applies, it specifically states that some documents are required to be submitted by the taxpayer "if applicable." Moreover, if TSC indeed failed to submit the complete documents in support of its application, the CIR could have informed TSC of its failure, consistent with Revenue Memorandum Circular No. (RMC) 42-03. 41 41 Commissioner of Internal Revenue vs. Team Sual Corporation (formerly Mirant Sual Corporation), G.R. No. 205055, July 18, 2014.

DECISION CfA CASE NOS. 8623, 8656, 8661, and 8685 In another case, the High Court elucidated on the matter, as follows: As explained earlier and underlined in Team Sua/ above, taxpayers cannot simply be faulted for failing to submit the complete documents enumerated in RMO No. 53-98, absent notice from a revenue officer or employee that other documents are required. Granting that the BIR found that the documents submitted by Total Gas were inadequate, it should have notified the latter of the inadequacy by sending it a request to produce the necessary documents in order to make a just and expeditious resolution of the claim. Indeed, a taxpayer's failure with the requirements listed under RMO No. 53-98 is not fatal to its claim for tax credit or refund of excess unutilized excess VAT. This holds especially true when the application for tax credit or refund of excess unutilized excess VAT has arrived at the judicial level. After all, in the judicial level or when the case is elevated to the Court, the Rules of Court governs. Simply put, the question of whether the evidence submitted by a party is sufficient to warrant the granting of its prayer lies within the sound discretion and judgment of the Court. 42 Thus, the alleged submission of complete documents at the administrative level is irrelevant when the claim for refund has already reached the Court. In Court, the basis of whether or not to grant the claim for refund will be dependent on the evidence presented pursuant to the Rules of Court, showing compliance with all the requisites under the applicable law and jurisprudence. On the merits of the claim, Sections 110(8) and 112(A) and (C) of the NIRC, as amended, provide: SEC. 110. Tax Credits. - XXX XXX XXX 42 Pilipinas Total Gas, Inc. vs. Commissioner of Internal Revenue, G.R. No. 207112, December 8, 2015.

DECISION CTA CASE NOS. 8623, 8656, 8661, and 8685 (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 or quarters: xxx Provided, however, That any input tax attributable to zero- rated sales by a VAT-registered person may at his option be refunded or credited against other internal revenue taxes, subject to the provisions of Section 112.43 SEC. 112. Refunds or Tax Credits of Input 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 106(A)(2)(a)(1), (2) and (b) and Section 108(B)(1) 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 108(B)(6), the input taxes shall be allocated ratably between his zero-rated and non-zero- rated sales. XXX XXX XXX (C) Period within which Refund or Tax Credit of Input Taxes shall be Made. - In proper cases, the Commissioner shall grant a refund or issue the tax credit certificate for creditable input taxes within one hundred twenty (120) days from the date of submission of complete documents in support of the application filed in accordance with Subsection (A) hereof. 43 As amended by Republic Act No. 9361, November 21, 2006.

DECISION CTA CASE NOS. 8623, 8656, 8661, and 8685 In case of full or partial denial of the claim for tax refund or tax credit, or the failure on the part of the Commissioner to act on the application within the period prescribed above, the taxpayer affected may, within thirty (30) days from the receipt of the decision denying the claim or after the expiration of the one hundred twenty day-period, appeal the decision or the unacted claim with the Court of Tax Appeals. Based on the foregoing prov1s1ons, to be entitled to a refund/tax credit of input VAT attributable to zero-rated or effectively zero-rated sales, the following requisites must be satisfied: 1. that the taxpayer is VAT-registered; 2. that the claim for refund was filed within the prescriptive periods; 3. that there must be zero-rated or effectively zero-rated sales; 4. that input taxes were incurred or paid; 5. that such input taxes are attributable to zero- rated or effectively zero-rated sales; and 6. that the input taxes were not applied against any output VAT liability. First Requisite: Taxpayer is a VAT-registered entity It is undisputed that petitioner is a VAT-registered taxpayer with TIN/VAT Registration No. 238-763-115-000 and BIR Certificate of Registration No. OCN 9RC0000270209 effective June 16, 2005 issued by the BIR Revenue District Office (RDO) No. 44. 44 Second Requisite: Timeliness of the administrative and judicial claims 44 Par. 4, JSFI, docket, vol. 1, unpaged (between pp. 489 and 490); Exhibit "P-2", docket, vol. 3, p. 1487.

DECISION CTA CASE NOS. 8623, 8656, 8661, and 8685 Applying Section 112(A) of the NIRC of 1997, as amended, the two (2)-year prescriptive period in filing an administrative claim is reckoned from the close of the taxable quarter when the zero-rated or effectively zero-rated sales were made; thus, petitioner's administrative claims for the 1st, 2nd, 3rd, and 4th quarters of 2011 were timely filed, as shown below: Taxable Close of the End of the 2- Filing of the Quarter taxable year period Administrative 1st Qtr of Quarter to file Claim 2011 Administrative 2nd Qtr of Claim 2011 3rd Qtr of Mar. 31, 2011 Mar. 31, 2013 Oct. 31, 201245 2011 Jun. 30, 2011 Jun. 30, 2013 Jan. 9 201346 4th Qtr of Sept. 30, 2011 Sept. 30, 2013 Jan. 23, 201347 2011 Dec. 31, 2011 Dec. 31, 2013 Mar. 19, 201348 As to the judicial claim, Section 112(C) of the NIRC of 1997, as amended, provides a 30-day period, from either the receipt of the adverse decision of respondent or the lapse of the 120-day period for respondent to act on the claim, within which to file a Petition for Review with the CTA. Since respondent failed to act on petitioner's administrative claims for refund, petitioner sought judicial intervention and filed the claims for the 1st, 2nd, 3rd, and 4th quarters of 2011 within the "120+30" day period, as shown below: Taxable Filing of End of 120- End of 30-day Filing of Quarter Administrative day period period Petition for 1st Qtr of 2011 Feb. 28, 2013 2nd Qtr of 2011 claim May 9, 2013 Apr. 1, 201349 Review 3rd Qtr of 2011 Oct. 31, 2012 May 23 2013 Jun. 10, 201350 Mar. 27, 2013 4th Qtr of 2011 Jan.9 2013 Jul. 17, 2013 Jun. 24, 201351 May 20, 2013 Jan. 23, 2013 Aug. 16,2013 Jun. 19 2013 Mar. 19, 2013 Aug. 5,2013 45 Exhibits "P-24" to "P-24-a", docket, vol. 3, pp. 1752-1758. 46 Exhibits "P-25" to "P-25-a", docket, vol. 3, pp. 1759-1764. 47 Exhibits "P-26" to "P-26-a", docket, vol. 3, pp. 1765-1771. 48 Exhibits "P-27" to "P-27-a", docket, vol. 3, pp. 1772-1777. 49 March 30, 2013 fell on a Saturday. 50 June 8, 2013 fell on a Saturday. 51 June 22, 2013 fell on a Saturday.

DECISION CTA CASE NOS. 8623, 8656, 8661, and 8685 Third Requisite: Existence of zero-rated or effectively zero-rated sales In its Quarterly VAT Returns for the four quarters of CY 2011, petitioner reported zero-rated sales in the amount of P6,757,540,662.07, as shown below: Exhibit � Quarter Zero-rated sales P-5-b (CTA Case No. 8623, Docket, Vo/.3, p. pt p 1 452 400,318.22 1506) P-6-b (CTA Case No. 8623, Docket, Vo/.3, p. 2nd 1 324 728,851.41 1519) 3rd 1 529 170,363.03 P-7-b (CTA Case No. 8623, Docket, Vo/.3, p. 4th 2 451 241,129.41 1528) P-8-c (CTA Case No. 8623, Docket, Vo/.3, p. P6,757,540,662.07 1543) Total Petitioner posits that its sales of services to its various non-resident affiliates, the consideration for which was paid in acceptable foreign currency and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP), are subject to zero percent (0�/o) VAT pursuant to Section 108(8)(2) of the NIRC of 1997, as amended, which provides: SEC. 108. Value-added Tax on Sale of Services and Use or Lease of Properties. - XXX XXX XXX (B) Transactions Subject to Zero Percent (0%) Rate. - The following services performed in the Philippines by VAT-registered persons shall be subject to zero percent (0�/o) rate: (1) Processing, manufacturing or repacking goods for other persons doing business outside the Philippines which goods are subsequently exported, where the services are paid for in acceptable foreign currency and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP);

DECISION CTA CASE NOS. 8623, 8656, 8661, and 8685 (2) Services other than those mentioned in the preceding paragraph rendered to a person engaged in business conducted outside the Philippines or to a nonresident person not engaged in business who is outside the Philippines when the services are performed, the consideration for which is paid for in acceptable foreign currency and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP); In the case of Commissioner of Internal Revenue vs. Burmeister and Wain Scandinavian Contractor Mindanao, Inc. 52, it was held that in order for the supply of services to be VAT zero-rated under Section 108(B)(2) of the NIRC of 1997, as amended, the following requisites must concur: 1. the services must be other than processing, manufacturing or repacking of goods; 2. the payment for such services must be in acceptable foreign currency accounted for in accordance with the BSP rules and regulations; and 3. the recipient of such services is doing business outside the Philippines. Petitioner satisfied the first condition. Petitioner is duly registered with the SEC and is licensed as ROHQ in the Philippines to provide qualifying services of general administration and planning, business planning and coordination, sourcing/procurement of raw materials and components, corporate finance advisory services, marketing control and sales promotion, training and personnel management, logistic services, research and development services and product development, technical support and maintenance, data processing and communication and business development to its affiliates in the Philippines and abroad. 53 Such services are not in the same category as "processing, manufacturing or repacking of goods". 52 G.R. No. 153205, January 22, 2007. 53 Par. 3, JSFI, docket, vol. 1, p. 489.

DECISION CTA CASE NOS. 8623, 8656, 8661, and 8685 To comply with the third requisite, petitioner presented the following documents showing that its foreign clients are non-resident foreign corporations doing business outside the Philippines: 1. SEC Certifications of Non-Registration of Company54 ; 2. Various Registration Documents {i.e., AMinet Company Profile Fact Sheet, Certificate of Registration/Certificate of Incorporation/Association )55 ; and 3. Intragroup Service Agreements56 � However, each of the aforesaid documents, standing alone, is inadequate proof that petitioner's clients are non- resident foreign corporations doing business outside the Philippines. While the Certificates of Registration/Foreign Incorporation/Association prove that the therein named entities were incorporated/organized abroad, these documents do not necessarily establish that such entities are not doing business in the Philippines. The same holds true for the SEC Certificates of Non- Registration which show that the named entities are not registered corporations/partnerships in the Philippines. However, they do not prove that such entities are non- resident foreign corporations doing business outside the Philippines. The service agreements only indicate the names and addresses of petitioner's customers to whom it rendered services but they do not establish that such customers are non-resident foreign corporations doing business outside the Philippines. 54 Exhibits "P-15" to "P-15-b" and "P-6113" to "P-6154". 55 Exhibits "P-13" to "P-13-b", "P-14" to "P-14-b", "P-6155" to "P-6156", "P-6167" to "P- 6168", "P-5992" to "P-6064", and "P-6200" to "P-6208". 56 Exhibits "P-11" to "P-11-b", "P-6065" to "P-6112", "P-6170" to "P-6171", and "P-6209" to "P-6212".

DECISION CTA CASE NOS. 8623, 8656, 8661, and 8685 In the case of Site/ Philippines Corporation (formerly Clientlogic Phils., Inc.) vs. Commissioner of Internal Revenue57, the Supreme Court held that while Sitel's documentary evidence, which includes Certifications issued by the Securities and Exchange Commission and Agreements between Sitel and its foreign clients, may have established that Sitel rendered services to foreign corporations and received payment therefor through inward remittances, the said documents failed to specifically prove that such foreign clients were doing business outside the Philippines or have a continuity of commercial dealings outside the Philippines. Therefore, to be considered as non-resident foreign corporation doing business outside the Philippines, each entity must be supported at the very least by both SEC Certificate of Non-Registration of Corporation/Partnership and Certificate/Articles of Foreign Incorporation/Association/Registration and that there is no other indication that the recipient of the services is doing business in the Philippines. On this account, the Court cannot give credence to the purported foreign business registration print-outs retrieved from the Deutsche Bank Global (the Head Office located in Germany) AMinet database. The said documents are insufficient to establish that the service recipients are non- resident foreign corporations doing business outside the Philippines, for they are self-serving and can be easily manipulated to favor petitioner in view of its affinity with the entity that maintains or keeps the said database. The following table will indicate whether petitioner complied with the third requisite with the presentation of the said SEC Certificate and Certificates of Registration/Foreign Incorporation/Association for each of the recipients of the services rendered: 57 G.R. No. 201326, February 8, 2017.

DECISION CfA CASE NOS. 8623, 8656, 8661, and 8685 AO DB Securities (Kazakhstan) SEC Certificate Certificate of DB Consorzio S. Cons. A.R.L. in Liquidazione of Non- DB Finance Inc. Registration I DB HedgeWorks, LLC Registration DB International (Asia) Limited Incorporation/ DB Securities Services NJ Inc. None DB Services New Jersey, Inc. Association DB Services Tennessee Inc. P-6154 DB Trust Company Limited Japan P-6113 None DBOI Global Services Private Limited P-6114 None Deutsche Asia Pacific Holdinqs Pte Ltd. P-6115 None Deutsche Asset Management Asia Limited None Deutsche Bank (Malaysia) Berhad None None Deutsche Bank Aktiengesellschaft None Deutsche Bank Aktiengesellschaft Inlandsbank P-6116 None Deutsche Bank Aktiengesellschaft Asia Pacific Head Office None Deutsche Bank Aktiengesellschaft Filiale Abu Dhabi None None Deutsche Bank Aktiengesellschaft Filiale Amsterdam None Deutsche Bank Aktienqesellschaft Filiale Bangkok P-6117 Deutsche Bank Aktiengesellschaft Filiale Dubai (DIFC) P-6156 Deutsche Bank Aktienqesellschaft Filiale Frankfurt A.M. Zurich None Deutsche Bank Aktiengesellschaft Filiale Ho-Chi-Minh City None Deutsche Bank Aktiengesellschaft Filiale Honqkong P-6118 None Deutsche Bank Aktiengesellschaft Filiale Jakarta P-13 I P-6169 Deutsche Bank Aktienqesellschaft Filiale Labuan None None Deutsche Bank Aktiengesellschaft Filiale London Deutsche Bank Aktienqesellschaft Filiale Mumbai P-6149 P-13-a Deutsche Bank Aktiengesellschaft Filiale New York Deutsche Bank Aktienqesellschaft Filiale Paris None None Deutsche Bank Aktiengesellschaft Filiale Prague None Deutsche Bank Aktienqesellschaft Filiale Riad P-6139 None Deutsche Bank Aktiengesellschaft Filiale Seoul P-15-a None Deutsche Bank Aktiengesellschaft Filiale Singapore None Deutsche Bank Aktiengesellschaft Filiale Taipei None None Deutsche Bank Aktiengesellschaft Filiale Tokyo None Deutsche Bank Aktiengesellschaft Filiale Wien P-6123 Deutsche Bank Aktiengesellschaft Filiale Zurich P-6124 P-6167 Deutsche Bank China Co. Ltd. Beijing Branch P-6125 Deutsche Bank China Co. Ltd. Guangzhou Branch P-6138 None Deutsche Bank China Co. Ltd. Shanqhai Branch P-6126 None Deutsche Bank International Limited P-6127 None Deutsche Bank Luxembourg S.A. P-6128 Deutsche Bank National Trust Company P-13-b Deutsche Bank PBC Spolka Akcyjna None Deutsche Bank Pgk Ag None P-6129 None P-6130 None None P-15 None P-6131 None P-6132 None P-6133 None P-6134 None P-15-b None P-6135 None P-6136 None P-6137 None None None None None P-6119 None P-6120 P-6121 / None P-6140 P-6141 P-6142 None

DECISION P-6143 None CTA CASE NOS. 8623, 8656, 8661, and 8685 P-6144 None Page 17 of 38 None P-6146 None Deutsche Bank Real Estate Japan YK None Deutsche Bank Securities Inc. None None Deutsche Bank Sociedad Anonima Espanola None Deutsche Bank Societa Per Azione P-6122 Deutsche Bank Suisse SA P-6145 P-6155 Deutsche Bank Trust Company Americas P-6147 Deutsche Group Services Ptv Limited P-6148 None Deutsche Securities Inc. None Deutsche Trustees Malaysia Berhad None None DWS Holding & Service GMBH None Global Markets Centre Private Limited P-6150 None Licorne Gestion None PT Deutsche Securities Indonesia None None RREEF Management GMBH None RREEF Manaqement LLC P-6151 Rued Blass and CIE AG P-6152 P-6153 None None Correspondingly, only the sales of services by petitioner to entities which have the said two required documents will be treated as subject to the 0�/o VAT rate, pursuant to Section 108(B)(2) of the NIRC of 1997, as amended. Corollary to the second requisite, Sections 113(A)(2), (B)(1), (2)(c) and (3) of the NIRC of 1997, as amended, as implemented by Sections 4.113-1(A)(2), (B)(1) and (2)(c) of Revenue Regulations (RR) No. 16-05, provide that a VAT taxpayer, like herein petitioner, shall for every lease of goods or properties and for every sale, barter or exchange of services issue a VAT official receipt which must contain the following information: "SEC. 113. Invoicing and Accounting Requirements for VAT-Registered Persons. - (A) Invoicing Requirements. A VAT- registered person shall issue: XXX XXX XXX (2) A VAT official receipt for every lease of goods or properties, and for every sale, barter or exchange of services.

DECISION CTA CASE NOS. 8623, 8656, 8661, and 8685 (B) Information Contained in the VAT Invoice or VAT Official Receipt. -The following information shall be indicated in the VAT invoice or VAT official receipt: (1) A statement that the seller is a VAT- registered person, followed by his Taxpayer's Identification Number (TIN); (2) The total amount which the purchaser pays or is obligated to pay to the seller with the indication that such amount includes the value- added tax: Provided, That: XXX XXX XXX (c) If the sale is subject to zero percent (0�/o) value-added tax, the term 'zero-rated sale' shall be written or printed prominently on the invoice or receipt; XXX XXX XXX (3) The date of transaction, quantity, unit cost and description of the goods or properties or nature of the service; and" (Emphasis supplied) "SECTION 4.113-1. Invoicing Requirements. (A) A VAT-registered person shall issue:- XXX XXX XXX (2) A VAT official receipt for every lease of goods or properties, and for every sale, barter or exchange of services.

DECISION CTA CASE NOS. 8623, 8656, 8661, and 8685 Only VAT-registered persons are required to print their TIN followed by the word 'VAT' in their invoice or official receipts. Said documents shall be considered as a 'VAT Invoice' or VAT official receipt. All purchases covered by invoices/receipts other than VAT Invoice/VAT Official Receipt shall not give rise to any input tax. VAT invoice/official receipt shall be prepared at least in duplicate, the original to be given to the buyer and the duplicate to be retained by the seller as part of his accounting records. (B) Information contained in VAT invoic~ 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: XXX XXX XXX (c) If the sale is subject to zero percent (0�/o) VAT, the term 'zero-rated sale' shall be written or printed prominently on the invoice or receipt;" (Emphasis supplied) Pursuant to Section 108(8)(2) of the NIRC of 1997, as amended, only the sales of services by petitioner to entities which have the two required documents will be treated as subject to the 0�/o VAT rate.

DECISION CTA CASE NOS. 8623, 8656, 8661, and 8685 To prove that petitioner rendered services to its foreign affiliates and was paid in foreign currency duly accounted for in accordance with the rules and regulations of the BSP for the four quarters of CY 2011, petitioner submitted in evidence its VAT zero-rated official receipts (ORs) and invoices58 issued to its alleged non-resident foreign clients and bank certification of inward remittances59 issued by Deutsche Bank AG Manila. Upon verification of the foregoing pieces of evidence, the Court finds that out of the P6,757,540,662.07 zero-rated sales declared per VAT Return for the four quarters of CY 2011, only the amount of 28,324,387.08 with peso equivalent of P1,691,367,779.99, as presented below, qualifies for VAT zero-rating under Section 108(8)(2) of the NIRC of 1997, as amended: Customer's Name O.R. Date O.R. OR OR Amount Amount in Peso No. Exhibit (in Euro) Deutsche Asia Pacific Holdings Pte Ltd 12-Jan-11 498,916.99 24-Jan-11 1176 No. 8 742.50 528 279.55 Deutsche Asia Pacific Holdings Pte Ltd 6-Apr-11 1208 P-51 8 742.50 2 369 559.97 7-Jul-11 1387 P-79 38 467.07 2 360,305.41 Deutsche Asia Pacific Holdings Pte Ltd 4-0ct-11 1578 P-250 38 467.08 3 759 125.80 1708 P-419 64 216.80 Deutsche Asia Pacific Holdings Pte Ltd P-540 5-Jan-11 1164 86 210.13 5 017 731.30 Deutsche Asia Pacific Holdings Pte Ltd P-40 Deutsche Bank Aktiengesellschaft, Asia Pacific 12-Jan-11 1178 70 855.00 4 075,367.04 Head Office P-53 Deutsche Bank Aktiengesellschaft, Asia Pacific 12-Jan-11 1179 34 640.00 1992 388.88 Head Office P-54 Deutsche Bank Aktiengesellschaft, Asia Pacific 12-Jan-11 1180 16 140.00 928 324.38 Head Office P-55 Deutsche Bank Aktiengesellschaft, Asia Pacific 12-Jan-11 1181 13 784.25 792 828.71 Head Office P-56 Deutsche Bank Aktiengesellschaft, Asia Pacific 12-Jan-11 1182 18 157.50 1 044 364.93 Head Office P-57 Deutsche Bank Aktiengesellschaft, Asia Pacific 12-Jan-11 1183 8 847.41 508 876.48 Head Office P-58 Deutsche Bank Aktiengesellschaft, Asia Pacific 12-Jan-11 1184 8 070.00 464 162.19 Head Office P-59 Deutsche Bank Aktiengesellschaft, Asia Pacific 7-Feb-11 1246 8 733.74 518 247.90 Head Office P-114 Deutsche Bank Aktiengesellschaft, Asia Pacific 7-Feb-11 1247 8 742.50 518 767.71 Head Office P-115 Deutsche Bank Aktiengesellschaft, Asia Pacific 7-Feb-11 1248 18,157.50 1 077 440.63 Head Office 7-Feb-11 1249 P-116 Deutsche Bank Aktiengesellschaft, Asia Pacific P-117 Head Office Deutsche Bank Aktiengesellschaft Asia Pacific 58 Exhibits "P-38" to "P-238", "P-244" to "P-403", "P-414" to "P-532", and "P-539" to "P-782". 59 Exhibits "P-17" to "P-17-c", docket, vol. 5, pp. 2729-2751.

DECISION CTA CASE NOS. 8623, 8656, 8661, and 8685 Head Office 9-Feb-11 1261 P-128 106,039.80 6,292,253.28 3-Mar-11 1293 P-157 347 187.05 20 608,606.66 Deutsche Bank Aktiengesellschaft, Asia Pacific 3-Mar-11 1294 P-158 731 092.86 44 139 512.09 Head Office 3-Mar-11 1295 P-159 344 808.75 20 817 724.84 Deutsche Bank Aktiengesellschaft, Asia Pacific 11-Mar-11 1321 P-184 Head Office 11-Mar-11 1322 P-185 29 988.26 1 810-'532.20 Deutsche Bank Aktiengesellschaft, Asia Pacific 11-Mar-11 1323 P-186 319.94 19 199.92 Head Office 11-Mar-11 1324 P-187 Deutsche Bank Aktiengesellschaft, Asia Pacific 11-Mar-11 1325 P-188 26 900.00 1614 295.90 Head Office 11-Mar-11 1326 P-189 103 349.80 6 202 124.85 Deutsche Bank Aktiengesellschaft, Asia Pacific 11-Mar-11 1327 P-190 Head Office 11-Mar-11 1328 P-191 16 140.00 968 577.54 Deutsche Bank Aktiengesellschaft, Asia Pacific 11-Mar-11 1329 P-192 26 900.00 1614 295.90 Head Office 11-Mar-11 1330 P-193 Deutsche Bank Aktiengesellschaft, Asia Pacific 11-Mar-11 1331 P-194 8 070.00 484,288.77 Head Office 11-Mar-11 1332 P-195 96 581.41 5 795 947.00 Deutsche Bank Aktiengesellschaft, Asia Pacific 11-Mar-11 1333 P-196 Head Office 11-Mar-11 1334 P-197 8 847.41 530 941.92 Deutsche Bank Aktiengesellschaft, Asia Pacific 11-Mar-11 1336 P-199 18 157.50 1 089 649.73 Head Office 11-Mar-11 1337 P-200 Deutsche Bank Aktiengesellschaft, Asia Pacific 11-Mar-11 1338 P-201 3 257.59 195 491.23 Head Office 4-Apr-11 1382 P-245 16 140.00 968,577.54 Deutsche Bank Aktiengesellschaft, Asia Pacific 14-Apr-11 1401 P-262 35 104.59 2 106 661.55 Head Office 9-May-11 1459 P-310 377 950.48 Deutsche Bank Aktiengesellschaft, Asia Pacific 9-May-11 1460 P-311 6 298.02 1 872 588.04 Head Office 9-May-11 1461 P-312 31 204.08 15 752 900.10 Deutsche Bank Aktiengesellschaft, Asia Pacific 9-May-11 1462 P-313 262 500.21 549 287.28 Head Office 9-May-11 1463 P-314 12 553 118.98 Deutsche Bank Aktiengesellschaft, Asia Pacific 9-May-11 1464 P-315 9 153.11 852 817.50 Head Office 9-May-11 1465 P-316 209 180.30 48 046 394.97 Deutsche Bank Aktiengesellschaft, Asia Pacific 2-Jun-11 1507 P-353 1 658 664.34 Head Office 2-Jun-11 1508 P-354 13 903.53 794 770.12 Deutsche Bank Aktiengesellschaft, Asia Pacific 766 230.31 1,449 869.84 Head Office 843 881.37 Deutsche Bank Aktiengesellschaft, Asia Pacific 27 081.03 9,344 411.26 Head Office 12 976.22 292 632.26 Deutsche Bank Aktiengesellschaft, Asia Pacific 23 672.04 45,570 075.63 Head Office 13 778.06 807 316.82 Deutsche Bank Aktiengesellschaft, Asia Pacific 152 566.30 1104 568.75 Head Office Deutsche Bank Aktiengesellschaft, Asia Pacific 4 777.81 Head Office 744 023.10 Deutsche Bank Aktiengesellschaft, Asia Pacific Head Office 12 976.22 Deutsche Bank Aktiengesellschaft, Asia Pacific 17 754.03 Head Office Deutsche Bank Aktiengesellschaft, Asia Pacific Head Office Deutsche Bank Aktiengesellschaft, Asia Pacific Head Office Deutsche Bank Aktiengesellschaft, Asia Pacific Head Office Deutsche Bank Aktiengesellschaft, Asia Pacific Head Office Deutsche Bank Aktiengesellschaft, Asia Pacific Head Office Deutsche Bank Aktiengesellschaft, Asia Pacific Head Office Deutsche Bank Aktiengesellschaft, Asia Pacific Head Office Deutsche Bank Aktiengesellschaft, Asia Pacific Head Office Deutsche Bank Aktiengesellschaft, Asia Pacific Head Office Deutsche Bank Aktiengesellschaft, Asia Pacific Head Office

DECISION CTA CASE NOS. 8623, 8656, 8661, and 8685 Deutsche Bank Aktiengesellschaft, Asia Pacific 2-Jun-11 1509 P-355 4 777.81 297 251.93 Head Office P-366 21 731.19 1 364 464.48 Deutsche Bank Aktiengesellschaft, Asia Pacific 10-Jun-11 1526 P-417 17 530.57 1 091667.16 Head Office P-482 Deutsche Bank Aktiengesellschaft, Asia Pacific 5-Jul-11 1576 P-483 4 777.81 286 037.45 Head Office P-484 12 976.22 776 859.04 Deutsche Bank Aktiengesellschaft, Asia Pacific 2-Sep-11 1653 P-485 148 620.96 8 897 624.77 Head Office P-486 17 754.03 1 062 896.49 Deutsche Bank Aktiengesellschaft, Asia Pacific 2-Sep-11 1654 P-497 499 692.82 Head Office P-510 8 346.59 7 835 526.82 Deutsche Bank Aktiengesellschaft, Asia Pacific 2-Sep-11 1655 P-511 131 616.75 43 968 251.15 Head Office P-512 737 573.83 41 431 767.11 Deutsche Bank Aktiengesellschaft, Asia Pacific 2-Sep-11 1656 P-513 695 023.94 32 276 932.90 Head Office P-514 541450.26 37 676 989.05 Deutsche Bank Aktiengesellschaft, Asia Pacific 2-Sep-11 1657 P-515 632 036.99 518 179.69 Head Office P-566 695 722.11 Deutsche Bank Aktiengesellschaft, Asia Pacific 6-Sep-11 1668 P-569 8 696.54 9 053 177.14 Head Office P-572 11 670.84 1 574 990.17 Deutsche Bank Aktiengesellschaft, Asia Pacific 20-Sep-11 1682 P-575 152 566.30 1404 682.24 Head Office P-576 26 542.11 1 232 068.97 Deutsche Bank Aktiengesellschaft, Asia Pacific 20-Sep-11 1683 P-577 23 672.04 488 128.03 Head Office P-578 20 763.12 384 159.05 Deutsche Bank Aktiengesellschaft, Asia Pacific 20-Sep-11 1684 P-579 1 229 097.25 Head Office P-580 8 226.05 1404 682.24 Deutsche Bank Aktiengesellschaft, Asia Pacific 20-Sep-11 1685 P-581 6 473.94 1404 682.24 Head Office P-583 20 713.04 Deutsche Bank Aktiengesellschaft, Asia Pacific 20-Sep-11 1686 P-584 23 672.04 3 195.73 Head Office P-585 23 672.04 262 845.20 Deutsche Bank Aktiengesellschaft, Asia Pacific 20-Sep-11 1687 P-586 3 195.73 1 520 781.95 Head Office P-587 4 429.53 1176 063.94 Deutsche Bank Aktiengesellschaft, Asia Pacific 18-0ct-11 1737 P-589 25 628.58 765 981.33 Head Office P-590 19 819.31 8 406 790.01 Deutsche Bank Aktiengesellschaft, Asia Pacific 18-0ct-11 1740 P-591 12 908.50 9 053 177.14 Head Office 141 673.23 1 275 918.93 Deutsche Bank Aktiengesellschaft, Asia Pacific 18-0ct-11 1743 152 566.30 283 511.89 Head Office 21,502.09 Deutsche Bank Aktiengesellschaft, Asia Pacific 18-0ct-11 1746 4,777.81 Head Office Deutsche Bank Aktiengesellschaft, Asia Pacific 18-0ct-11 1747 Head Office Deutsche Bank Aktiengesellschaft, Asia Pacific 18-0ct-11 1748 Head Office Deutsche Bank Aktiengesellschaft, Asia Pacific 18-0ct-11 1749 Head Office Deutsche Bank Aktiengesellschaft, Asia Pacific 18-0ct-11 1750 Head Office Deutsche Bank Aktiengesellschaft, Asia Pacific 18-0ct-11 1751 Head Office Deutsche Bank Aktiengesellschaft, Asia Pacific 18-0ct-11 1752 Head Office Deutsche Bank Aktiengesellschaft, Asia Pacific 18-0ct-11 1754 Head Office Deutsche Bank Aktiengesellschaft, Asia Pacific 18-0ct-11 1755 Head Office Deutsche Bank Aktiengesellschaft, Asia Pacific 18-0ct-11 1756 Head Office Deutsche Bank Aktiengesellschaft, Asia Pacific 18-0ct-11 1757 Head Office Deutsche Bank Aktiengesellschaft, Asia Pacific 18-0ct-11 1758 Head Office Deutsche Bank Aktiengesellschaft, Asia Pacific 18-0ct-11 1760 Head Office Deutsche Bank Aktiengesellschaft, Asia Pacific 18-0ct-11 1761 Head Office Deutsche Bank Aktiengesellschaft, Asia Pacific 18-0ct-11 1762 Head Office

DECISION CTA CASE NOS. 8623, 8656, 8661, and 8685 Deutsche Bank Aktiengesellschaft, Asia Pacific 18-0ct-11 1763 P-592 25 115.15 1,490 315.37 Head Office P-594 3 515.30 208 595.43 Deutsche Bank Aktiengesellschaft, Asia Pacific 18-0ct-11 1765 P-631 Head Office P-632 29 074.77 1 715 019.62 Deutsche Bank Aktiengesellschaft, Asia Pacific 8-Nov-11 1815 P-633 309 621.67 18 263 506.07 Head Office P-634 Deutsche Bank Aktiengesellschaft, Asia Pacific 8-Nov-11 1816 P-635 126.29 7 449.41 Head Office P-636 4,312.37 254 371.72 Deutsche Bank Aktiengesellschaft, Asia Pacific 8-Nov-11 1817 P-637 19,079.16 1125 413.33 Head Office P-638 25 628.58 1 511 740.85 Deutsche Bank Aktiengesellschaft, Asia Pacific 8-Nov-11 1818 P-639 8,226.05 485 226.10 Head Office P-640 25,115.15 1 481 455.40 Deutsche Bank Aktiengesellschaft, Asia Pacific 8-Nov-11 1819 P-641 12,610.97 743 877.28 Head Office P-642 2 162.05 127 531.81 Deutsche Bank Aktiengesellschaft, Asia Pacific 8-Nov-11 1820 P-669 141 673.23 8 356 811.38 Head Office P-671 12 908.50 761427.55 Deutsche Bank Aktiengesellschaft, Asia Pacific 8-Nov-11 1821 P-672 123 970.09 7 289 840.63 Head Office P-703 1 001,938.81 58 755 587.49 Deutsche Bank Aktiengesellschaft, Asia Pacific 8-Nov-11 1822 P-736 3 151.73 184 823.41 Head Office P-737 3 140.08 180 934.99 Deutsche Bank Aktiengesellschaft, Asia Pacific 8-Nov-11 1823 P-738 16 824.66 966 245.44 Head Office P-739 16 885.18 969 721.12 Deutsche Bank Aktiengesellschaft, Asia Pacific 8-Nov-11 1824 P-740 145 395.12 8 350 086.81 Head Office P-741 30 320.33 1 741 305.95 Deutsche Bank Aktiengesellschaft, Asia Pacific 8-Nov-11 1825 P-742 18 105.83 1 039 823.43 Head Office P-743 27 617.38 1 586 074.69 Deutsche Bank Aktiengesellschaft, Asia Pacific 8-Nov-11 1826 P-744 255 808.23 14 691145.95 Head Office P-781 8 325.06 478 110.78 Deutsche Bank Aktiengesellschaft, Asia Pacific 18-Nov-11 1855 P-231 8 489.36 487 546.58 Head Office P-122 7 503.79 442 622.49 Deutsche Bank Aktiengesellschaft, Asia Pacific 18-Nov-11 1857 P-123 16 650.05 953 237.01 Head Office P-125 15 942.04 946 300.36 Deutsche Bank Aktiengesellschaft, Asia Pacific 18-Nov-11 1858 P-232 4 842.00 287 415.31 Head Office P-705 2 690.00 159 675.17 Deutsche Bank Aktiengesellschaft, Asia Pacific 9-Dec-11 1893 P-706 16 650.05 988 326.99 Head Office 8 164.33 476 198.03 Deutsche Bank Aktiengesellschaft, Asia Pacific 14-Dec-11 1928 8 115.61 473 356.35 Head Office Deutsche Bank Aktiengesellschaft, Asia Pacific 14-Dec-11 1929 Head Office Deutsche Bank Aktiengesellschaft, Asia Pacific 14-Dec-11 1930 Head Office Deutsche Bank Aktiengesellschaft, Asia Pacific 14-Dec-11 1931 Head Office Deutsche Bank Aktiengesellschaft, Asia Pacific 14-Dec-11 1932 Head Office Deutsche Bank Aktiengesellschaft, Asia Pacific 14-Dec-11 1933 Head Office Deutsche Bank Aktiengesellschaft, Asia Pacific 14-Dec-11 1934 Head Office Deutsche Bank Aktiengesellschaft, Asia Pacific 14-Dec-11 1935 Head Office Deutsche Bank Aktiengesellschaft, Asia Pacific 14-Dec-11 1936 Head Office Deutsche Bank Aktiengesellschaft, Asia Pacific 8-Nov-11 1814 Head Office 7-Jan-11 1166 9-Feb-11 1255 Deutsche Bank Aktiengesellschaft Filiale Jakarta 9-Feb-11 1256 9-Feb-11 1258 Deutsche Bank Aktienqesellschaft Filiale Jakarta 9-Feb-11 1254 12-Dec-11 1897 Deutsche Bank Aktiengesellschaft, Filiale Jakarta 12-Dec-11 1898 Deutsche Bank Aktiengesellschaft Filiale Jakarta Deutsche Bank Aktienqesellschaft Filiale Jakarta Deutsche Bank Aktiengesellschaft, Filiale Jakarta Deutsche Bank Aktiengesellschaft Filiale Jakarta

DECISION CTA CASE NOS. 8623, 8656, 8661, and 8685 Deutsche Bank AktienQesellschaft Filiale Jakarta 12-Dec-11 1899 P-707 7 101.62 414 213.71 Deutsche Bank Aktiengesellschaft, Filiale Jakarta 12-Dec-11 1900 P-708 9 361.22 546 008.61 Deutsche Bank Aktiengesellschaft, Filiale Jakarta 12-Dec-11 1901 P-709 4 842.00 282 417.64 Deutsche Bank Aktiengesellschaft Filiale Jakarta 13-Dec-11 1902 P-710 7 101.61 414 213.13 Deutsche Bank Aktiengesellschaft Filiale Jakarta 13-Dec-11 1903 P-711 7 101.61 414 213.13 Deutsche Bank Aktiengesellschaft Filiale Jakarta 13-Dec-11 1904 P-712 8 115.61 473 356.35 Deutsche Bank Aktiengesellschaft Filiale Jakarta 13-Dec-11 1905 P-713 7 101.61 414 213.13 Deutsche Bank AktienQesellschaft Filiale New York 10-Jan-11 1172 P-47 441832.23 25 327 060.55 Deutsche Bank Aktiengesellschaft Filiale New York 20-Jan-11 1195 P-67 1 228.87 Deutsche Bank Aktiengesellschaft Filiale New York 24-Jan-11 1209 P-80 145 393.46 73 407.16 Deutsche Bank Aktiengesellschaft Filiale New York 18-Feb-11 1276 P-141 6 610.27 8 785 632.45 Deutsche Bank Aktiengesellschaft Filiale New York 3-Mar-11 1298 P-162 1,464 237.13 Deutsche Bank Aktiengesellschaft Filiale New York 7-Apr-11 1389 P-252 7 479.53 389 578.91 Deutsche Bank Aktiengesellschaft Filiale New York 5-May-11 1440 P-293 9 524.43 88 402 877.45 Deutsche Bank Aktiengesellschaft Filiale New York 15-Jun-11 1531 P-371 1 091949.00 Deutsche Bank AktienQesellschaft Filiale New York 24-Jun-11 1547 P-384 30 254.52 460 722.59 Deutsche Bank Aktiengesellschaft Filiale New York 4-Jul-11 1570 P-414 1,339 442.14 607 697.68 Deutsche Bank Aktiengesellschaft Filiale New York 23-Aug-11 1637 P-468 31 083.38 68 422 725.48 Deutsche Bank Aktiengesellschaft Filiale New York 2-Sep-11 1650 P-479 1920 418.99 1 861158.23 Deutsche Bank AktienQesellschaft Filiale New York 23-Sep-11 1694 P-521 62 916.13 83 751 566.58 Deutsche Bank Aktiengesellschaft, Filiale New York 26-Sep-11 1696 P-523 689 090.12 1 899 514.67 Deutsche Bank Aktiengesellschaft Filiale New York 25-0ct-11 1783 P-608 1,071 419.83 115 602 885.81 Deutsche Bank Aktiengesellschaft Filiale New York 2-Nov-11 1801 P-623 629 013.40 3 709 566.48 Deutsche Bank AktienQesellschaft Filiale New York 24-Nov-11 1875 P-688 3 3~S.04 40 598 279.84 Deutsche Bank Aktiengesellschaft Filiale New York 28-Nov-11 1883 P-694 626 365.95 64 377 412.23 Deutsche Bank Aktiengesellschaft Filiale New York 16-Dec-11 1948 P-756 621 062.04 36 676 676.87 Deutsche Bank Aktiengesellschaft Filiale New York 20-Dec-11 1963 P-767 1 047 662.31 193 988.60 Deutsche Securities Inc. 10-Feb-11 1265 P-132 2,367 688.53 36 513 078.54 Deutsche Securities Inc. 18-Feb-11 1278 P-143 713 521.06 35 602 282.69 Deutsche Securities Inc. 15-Apr-11 1409 P-270 358 026.33 60 013 512.49 Deutsche Securities Inc. 12-Sep-11 1671 P-500 516 744.23 141 384 626.42 Deutsche Securities Inc. 12-Dec-11 1906 P-714 1 870 536.33 42 051 649.08 Deutsche Securities Inc. 11-Jul-11 1581 P-422 481808.18 22 376 645.63 TOTAL VALID ZERO-RATED SALES 30 131 614.42 28,324,387.08 109 102 119.70 28 923 330.49 1,691 367,779.99 Fourth and Fifth Requisites: Petitioner had input taxes attributable to its zero-rated sales Having resolved that petitioner had VAT zero-rated sales for the four quarters of CY 2011 in the amount of P1,691,367,779.99, the Court shall proceed to determine the amount of input VAT attributable thereto.

DECISION CTA CASE NOS. 8623, 8656, 8661, and 8685 In its Quarterly VAT Returns for CY 2011, petitioner declared input VAT of P154,055,337.69 on its purchases of goods and services, of which the amount of P153,201,143.71 is the subject of the present claim, as shown below: lstQtr 2011 2nd Qtr 2011 3rd Qtr 2011 4th Qtr 2011 Total p 104 241.74 Purchase of Capital Goods p 41 088.23 p 81 582.20 p 55 201.28 p 282 113.45 not exceeding P1M 528 741.83 Domestic Purchases of 526 757.57 40 966 477.96 778 425.96 554 519.30 2,388 444.66 Goods Other than Capital 28 144 992.12 36 434 881.54 35 374 660.46 140 921 012.08 Goods 1987 882.52 Domestic Purchases of 1,997 755.77 2 130 215.31 3 304 374.40 9,420 228.00 Services P43 587 344.05 Services rendered by non- P30,710,593.69 P39,425,105.01 p 39,288,755.44 P153,011,798.19 residents 263 775.87 Total Input VAT on 276 516.85 P43,851,119.92 239 882.15 263 364.63 1 043 539.50 Purchases of Goods P30,987,110.54 1 335 913 939.24 and Services other 1 324 728 851.41 P39,664,987.16 p 39,552,120.07 P154,055,337 .69 than Capital Goods P30,987,110.54 P43,483,971.55 1 537,704 342.95 2 467 895 387.24 5 341,513 669.43 Add: Input VAT on 1 529 170 363.03 2,451 241129.41 5 305,140 343.85 Purchases of Capital P39,444,853.68 p 39,285,207.94 Goods exceeding P1 P153,201,143.71 Million Total Input VAT on Current Purchases of Goods and Services Divided by total declared sales Multiply by zero-rated sales Total To substantiate its claim that its input VAT on purchases of goods and services other than capital goods amounts to P153,011,798.19, petitioner presented various invoices and official receipts issued by its suppliers, BIR Forms No. 1600 and other documents60 which were all examined by the ICPA. From the !CPA's findings, the Court subscribes to the following exceptions: 61 Reference Original Supplemental TOTAL (Annex 9 Amount Amount (Exhibit ofiCPA (Exhibit P-29) Reports) P-6172) OTHER FINDINGS - Purchases of Goods 4Q-e p 124,347.80 p 124,347.80 1 Purchases of goods supported by TIN VAT REG invoices but not dated within the quarter of claim and without BIR permit to print 60 Exhibits "P-21" to "P-22-a" and "P-793" to "P-5991". 61 Exhibit "P-6172", Supplemental ICPA Report, Annexes 11 and 12.

DECISION CTA CASE NOS. 8623, 8656, 8661, and 8685 2 Purchases of goods supported by REG VAT TIN invoices but not dated 1Q-f; 2Q-f 4,144.98 4,144.98 within the year of claim and/or petitioner's TIN is not indicated 3 Purchases of goods supported by VAT REG TIN invoices but date is not clearly visible, without petitioner's 1Q-g; 4Q-g 5,364.10 5,364.10 TIN and VAT amount is not shown separately 4 Purchases of goods supported by VAT REG TIN invoices but not dated 1Q-h; 2Q- 500,588.39 p 189,417.16 690,005.55 within the year of claim, and/or h; 3Q-h; without petitioner's TIN and/or incorrect petitioner's TIN and/or VAT 4Q-h amount is not shown separately 5 Purchases of goods supported by VAT REG TIN invoices but no date 1Q-I; 3Q-I; 3,158.40 192.86 3,351.26 indicated and without petitioner's 4Q-i TIN 6 Purchases of goods supported by VAT REG TIN invoices but date is written on a computer generated 3Q-j 2,362.50 2,362.50 invoice and petitioner's TIN is not indicated 7 Purchases of goods supported by VAT REG TIN invoices but amount 2Q-k 825.00 825.00 per OR is not tie-up with the amount per schedule 8 Purchases of goods supported by VAT REG TIN invoices without BIR 2Q-I; 4Q-I 58,007.15 58,007.15 Permit to Print and/orprinting date 9 Purchases of goods supported by 3Q-m62 6,029.83 6,029.83 TIN invoices 10 Purchases of goods supported by TIN VAT invoices but not dated 1Q-n; 2Q- 63,866.32 63,866.32 within the year of claim and/or n; 3Q-n without petitioner's TIN 11 Purchases of goods supported by TIN VAT invoices with incorrect 1Q-o 15,953.22 15,953.22 petitioner's TIN 12 Purchases of goods supported by TIN VAT invoices with incorrect petitioner's TIN and/or VAT amount 1Q-p; 3Q-p 24,812.15 24,812.15 is not tie-up with the amount per schedule 13 Purchases of goods supported by 1Q-q; 2Q- 368,195.43 documents other than VAT invoices q; 4Q-q 319,313.37 48,882.06 14 Purchases of goods supported by 1Q-bu; 3Q- REG VAT TIN invoices where bu petitioner's TIN is not indicated 3,294.76 3,294.76 15 Purchases of goods supported by TIN VAT invoices but petitioner's TIN 1Q-bv; 3Q- 169,007.81 169,007.81 is not indicated and VAT amount is bv; 4Q-bv not shown separately 16 Purchases of goods supported by 2Q-r; 3Q-r; , 936 422.44 (817 898.61) 118,523.83 photocopied invoices 4Q-r (407.103.96) , 1,658,091.69 , 2,065.195.65 Sub-total 62 The annex referred to cannot actually be found. /

DECISION CTA CASE NOS. 8623, 8656, 8661, and 8685 OTHER FINDINGS - Purchases of Services - 1 Purchases of services supported by BIR TIN ORs with no BIR permit to 2Q-w p 26,756.57 p 26,756.57 print 2 Purchases of services supported by 27,487.02 p 1,019.60 28,506.62 VAT REG ORs but VAT amount is not 1Q-x; 3Q-x shown separately 3 Purchases of services supported by VAT REG ORs but not dated within the quarter of claim with incorrect 3Q-y 33.60 33.60 petitioner's TIN and VAT amount is not tied-up with the amount per schedule 4 Purchases of services supported by VAT REG ORs with incorrect petitioner's TIN and VAT amount is 1Q-z 1,982.20 1,982.20 40,793.14 not tied-up with the amount per 273,908.52 488,515.17 schedule 5 Purchases of services supported by VAT REG ORs with incorrect 1Q-aa; 2Q- 40,793.14 petitioner's TIN and VAT amount is aa; 3Q-aa not tied-up with the amount per schedule 6 Purchases of services supported by VAT REG TIN VAT ORs without 1Q-ab 273,908.52 petitioner's TIN and VAT amount is not shown separately 7 Purchases of services supported by VAT REG TIN ORs but not dated 1Q-ac; 2Q- 488,515.17 within the quarter of claim and/or ac; 3Q-ac petitioner's TIN and/or VAT amount is not shown separately 8 Purchases of services supported by VAT REG TIN ORs but not dated within the quarter of claim and 3Q-ad 3,756.70 3,756.70 incorrect petitioner's TIN and VAT amount per OR is not tied-up with the amount per schedule 9 Purchases of services supported by VAT REG TIN ORs but not dated 1Q-ae; 2Q- within the quarter of claim and VAT ae; 3Q-ae; 261,114.17 261,114.17 amount per OR is not tied-up with 4Q-ae the amount per schedule 10 Purchases of services supported by VAT REG TIN ORs but not dated 4Q-af 2,565,815.39 167,658.21 2,733,473.60 within the year of claim 11 Purchases of services supported by VAT REG TIN ORs but no date 1Q-ag; 4Q- 58,134.59 58,134.59 indicated and/or without petitioner's ag TIN 12 Purchases of services supported by VAT REG TIN ORs but no date indicated and with incorrect 1Q-ah 9,076.28 9,076.28 petitioner's TIN and VAT amount per OR is not tied-up with the amount per schedule 13 Purchases of services supported by VAT REG TIN ORs but no date 2Q-ai 2,090.98 2,090.98 indicated and VAT amount per OR is not tied-up with the amount per

DECISION CfA CASE NOS. 8623, 8656, 8661, and 8685 schedule 14 Purchases of services supported by VAT REG TIN ORs but no year 2Q-aj 182.04 182.04 11,523,808.61 indicated in the date 280,752.84 15 Purchases of services supported by 3,768,597.09 VAT REG TIN ORs but without 1Q-ak; 2Q- 78,019.20 2,225,215.82 petitioner's TIN and/or incorrect ak; 3Q-ak; 4,403,506.66 15,927,315.27 117,843.23 petitioner's TIN and/or VAT not 4Q-ak 32,350.37 28,382.14 shown separately 85,146.42 16 Purchases of services supported by 147,102.74 361,750.33 VAT REG TIN ORs without 1Q-al; 2Q- 19,529.67 petitioner's TIN and VAT amount is al; 3Q-al; 280,752.84 not tied-up with the amount per 4Q-al schedule 17 Purchases of services supported by VAT REG TIN ORs but incorrect 1Q-am; petitioner's TIN and VAT amount per 2Q-am; 3,768,597.09 OR is not tied-up with the amount 3Q-am per schedule 18 Purchases of services supported by VAT REG TIN ORs but without 3Q-an 78,019.20 countersignature on the alteration in the petitioner's TIN 19 Purchases of services supported by 1Q-ap; 2Q- VAT REG TIN ORs but VAT amount ap; 3Q-ap; per OR is not tied-up with the 2,225,215.82 amount per schedule 4Q-ap 20 Purchases of services supported by 1Q-aq; 3Q- 44,536.85 162,380.08 TIN ORs without petitioner's TIN and aq; 4Q-aq 32,350.37 VAT amount is not shown separately 28,382.14 21 Purchases of services supported by 1Q-ar TIN ORs 22 Purchases of services supported by TIN ORs but incorrect petitioner's TIN and VAT amount per OR is not 1Q-as tied-up with the amount per schedule 23 Purchases of services supported by TIN ORs but VAT amount per OR is 1Q-at; 2Q- 85,146.42 147,102.74 not tied-up with the amount per at; 4Q-at schedule 24 Purchases of services supported by TIN NON VAT and/or NON VAT REG 1Q-au; 2Q- TIN ORs and/or TIN VAT ZERO au; 4Q-au RATED 25 Purchases of services supported by TIN VAT ORs but not dated in the 1Q-av; 2Q- 361,750.33 quarter of claim and/or without av; 3Q-av petitioner's TIN and/or VAT not shown separately 26 Purchases of services supported by TIN VAT ORs but not dated in the 2Q-aw; 19,529.67 quarter of claim and VAT amount is 3Q-aw not tied-up with the amount per schedule

DECISION CTA CASE NOS. 8623, 8656, 8661, and 8685 27 Purchases of services supported by TIN VAT ORs but not dated in the 1Q-ax; 4Q- 41,344.20 1,712.68 43,056.88 2,563,712.39 4,650,934.98 7,214,647.37 year of the claim and/or VAT amount ax 483,858.45 97,598.70 483,858.45 is not shown separately 132,252.83 701,738.73 132,252.83 (27,122,791.74) 28 Purchases of services supported by 18,543.75 18,543.75 32,749.82 32,749.82 TIN VAT ORs but without petitioner's 1Q-ay; 2Q- 1,011,678.34 1,011,678.34 238,504.92 336,103.62 TIN or incorrect petitioner's TIN ay; 3Q-ay; 2,722,422.65 3,424,161.38 47,754,185.11 20,631,393.37 and/or VAT amount is not shown 4Q-ay separately 29 Purchases of services supported by TIN VAT ORs but without petitioner's 1Q-az; 2Q- TIN and VAT amount is not tied-up az; 4Q-az with the amount per schedule 30 Purchases of services supported by TIN VAT ORs but incorrect petitioner's TIN and VAT amount is 1Q-ba not tied-up with the amount per schedule 31 Purchases of services supported by TIN VAT ORs but without 3Q-bb countersignature on the alteration in the petitioner's TIN 32 Purchases of services supported by TIN VAT ORs but without BIR permit 2Q-bc to print and VAT amount is not tied- up with the amount per schedule 33 Purchases of services supported by 1Q-bd; 2Q- TIN VAT ORs but VAT amount is not bd; 3Q-bd; tied-up with the amount per schedule 4Q-bd 34 Purchases of services supported by 1Q-be; 2Q- tape receipts be� 3Q-be 35 Purchases of services supported by 1Q-bf; 2Q- other than OR bf; 3Q-bf; 4Q-bf 36 Purchases of services supported by 1Q-bg; 2Q- photocopied OR bg; 3Q-bg; 4Q-bg 37 Purchases of services supported by VAT REG TIN ORs but no date 4Q-bw 27,540.00 27,540.00 indicated and/or VAT amount is not 7,170.00 7,170.00 2,829.75 2,829.75 shown separately 224,318.09 224,318.09 38 Purchases of services supported by 24,130.00 24,130.00 NON VAT REG TIN ORs and VAT 4Q-bx 348,115.17 348,115.17 amount is not shown separately 39 Purchases of services supported by 3Q-by; 4Q- TIN NON VAT ORs and VAT amount by is not shown separately 40 Purchases of services supported by TIN VAT ORs but no date indicated 3Q-bz; 4Q- and VAT amount is not shown bz separately 41 Purchases of services supported by TIN VAT ZERO Rated ORs and VAT 3Q-ca amount is not shown separately 42 Purchases of services supported by 1Q-bt; 2Q- VAT REG TIN ORs/TIN VAT ORs bt; 3Q-bt; representing overstated VAT amount 4Q-bt Sub-total 1'77. 427,397.29 1'{16,419,982.32) 1'61,007. 414.97

DECISION CTA CASE NOS. 8623, 8656, 8661, and 8685 OTHER FINDINGS - Purchases of Capital Goods - not exceeding Pl Million 1 Purchases of capital goods not exceeding one million supported with 1Q-bj p 72,581.79 p 72,581.79 TIN VAT invoices dated not within the year of claim 2 Purchases of capital goods not exceeding one million supported with 2Q-bk 1,500.00 1,500.00 TIN VAT invoices not dated within the quarter of claim 3 Purchases of capital goods not exceeding one million supported by 4Q-bl 9,000.00 9,000.00 VAT REG TIN invoices not dated (91,686.42) (91,686.42) within the quarter of claim 177,070.37 - , 177,070.37 4 Purchases of capital goods not 1Q-bm; 168,465.74 , 168,465.74 10,960,023.58 exceeding one million supported by 2Q-bm; P(16,827,086.28) P73,793,995.98 10,960,023.58 documents other than VAT invoices 4Q-bm P90,621,082.26 5 Purchases of capital goods not 1Q-bn; 2Q- exceeding one million supported by bn; 4Q-bn documents other than VAT invoices Sub-total Purchases of services without supporting documents GRAND TOTAL Thus, the input VAT in the amount of P73,793,995.98 should be disallowed as they were not properly substantiated by VAT invoices or official receipts as prescribed under Sections 110(A) and 113(A) and (B) of the NIRC of 1997, as amended, in relation to Sections 4.110-2, 4.110-8, and 4.113-1 of Revenue Regulations (RR) No. 16- 05, as amended. Upon further verification, the Court finds that the additional input VAT of P5,382,960.55, as presented below, shall likewise be disallowed for petitioner's failure to meet the substantiation requirements prescribed under the aforesaid VAT law and regulations: Name of Supplier Exhibit Input VAT Amount 1 Supported by documents/exhibits which were denied admission by the Court Tierra International P-2704 p 331,200.00 6-3 Property Holdings Inc. P-4843 973,834.10 Trane Philippines P-2705 2,400.00 DHL Express (Philippines) Corp. P-3701 58.75 Subtotal P1,307,492.85 2 Purchases ofgoods supported by documents other than VAT invoice Reach Marketing P-3926 p 4,446.00

DECISION CTA CASE NOS. 8623, 8656, 8661, and 8685 Reach Marketing P-3927 10,017.86 subtotal p 14,463.86 3 Purchases ofgoods supported by VAT invoices but without petitioner's TIN and/or dated outside the year ofclaim JJED Philippines Inc P-1738 p 10,348.29 Bettilane Marketing Corporation P-2051 16,664.99 subtotal p 27,013.28 4 Purchases ofgoods supported by VAT invoice without SIR Permit to Print Hewlett-Packard Philippines P-5131 p 8,799.71 Hewlett-Packard Philippines P-5132 13,688.44 Papertech Inc P-5217 14,128.93 subtotal p 36,617.08 5 Purchases ofservices supported by VAT ORs but VAT amount was not separately shown or the VAT amount stated refers to withholding tax MGE UPS Systems Philippines Inc P-1170 p 18,480.00 MGE UPS Systems Philippines Inc P-1171 18,480.00 PSEI Firesafety System P-1334 17,280.00 PSEI Firesafety System P-1335 33,960.00 Realform Furniture Shop P-1344 15,000.00 Chloride Secure P-2296 17,142.86 Proffesional Skills Enrichment P-2524 3,000.00 Colliers International Philippines P-3552 2,888.44 International Elevator & Equipment Inc. P-3793 14,325.00 Exclusive Cars International P-5033 9,211.61 Asia Select Inc P-823 2,458.31 Asia Select Inc P-827 7,511.87 Asia Select Inc P-828 1,459.40 Asia Select Inc P-829 3,924.48 Asia Select Inc P-830 1,156.13 Asia Select Inc P-832 3,081.53 Asia Select Inc P-833 4,377.30 Asia Select Inc P-834 2,473.80 Asia Select Inc P-835 6,652.88 Asia Select Inc P-836 7,366.12 Asia Select Inc P-837 12,901.18 Colliers International Philippines P-899 36,720.00 subtotal p 239,850.91 6 Purchases ofservices supported by VAT ORs but input VAT amount per OR is lower than amount being claimed (overclaimed input VAT) DHL Express Phils Corp (P745.60-P33.60) P-972 p 712.00 DHL Express Phils Corp (P731.60-P33.60) P-975 698.00 DHL Express Phils Corp (P1,039.60-P33.60) P-979 1,006.00 DHL Express Phils Corp (P1,714.60-P33.60) P-980 1,681.00 DHL Express Phils Corp (P1,873.60-P33.60) P-981 1,840.00 DHL Express Phils Corp (P264.86-P33.60) P-982 231.26 DHL Express Phils Corp (P815.60-P33.60) P-983 782.00 Headstrong Philippines Inc (P12,960.00-P12,728.57) P-1095 231.43 Headstrong Philippines Inc (P25,200-P24,750) P-1096 450.00 Headstrong Philippines Inc (P41,040.00-P40,307.14) P-1097 732.86 Headstrong Philippines Inc (P14,130.00-P13,877.68) P-1098 252.32

DECISION CTA CASE NOS. 8623, 8656, 8661, and 8685 Headstrong Philippines Inc (P21,052.50-P20,676.56) P-1099 375.94 Headstrong Philippines Inc (P114,660.00-P112,612.50) P-1457 2,047.50 Colliers International Phillippines (P198,791.41 P33,131.90) P-2076 165,659.51 DHL Express Phils Corp (P899.60-P33.60) P-2096 DHL Express Phils Corp (P1,266.60-P33.60) P-2099 866.00 DHL Express Phils Corp (P728.60-P33.60) P-2099 1,233.00 DHL Express Phils Corp (P6,781.60-P33.60) P-2100 DHL Express Phils Corp (P4,226.00-P81.66) P-2106 695.00 DHL Express Phils Corp (P2,329.44-P2,029.44) P-2106 6,748.00 DHL Express Phils Corp (P897.00-P33.60) P-2107 4,144.34 DHL Express Phils Corp (P830.00-P33.60) P-2107 DHL Express Phils Corp (P816.60-P33.60) P-2110 300.00 DHL Express Phils Corp (P1,429.00-P33.60) P-2112 863.40 Colliers International Phillippines (P249,846.96-P41,641.73) P-2162 796.40 Colliers International Phillippines (P10,038.35-P1,673.06) P-2163 783.00 DHL Express Phils Corp (P838.60-P33.60) P-2169 1,395.40 DHL Express Phils Corp (P787.00-P33.60) P-2171 208,205.23 Servcom Incorporated (P7,873.92-P7,733.34) P-2275 8,365.29 Servcom Incorporated (P7,071.42-P6,945.00) P-2279 805.00 DHL Express Phils Corp (P633.60-P33.60) P-2301 753.40 Headstrong Philippines Inc (P12,071.25-P11,855.69) P-2307 140.58 Headstrong Philippines Inc (P61,320-P60,225) P-2312 126.42 Headstrong Philippines Inc (P53,010-P52,063) P-2313 600.00 IBM Philippines Inc (P26,006.40-P25,542.00) P-2329 215.56 Frasers Hospitality Investment (P2,753.10-P1,261.84) P-2231 1,095.00 Frasers Hospitality Investment (P3,670.80-P1,682.45) P-2232 947.00 Taurus Electrical Service (P6,428.57-P6,313.78) P-2276 464.40 Bigfish Restaurant Concepts (P13,794.64-P12,663.93) P-2297 1,491.26 Cedorada Glass & Aluminum Supply (P9,664.29-P1,610.71) P-2298 1,988.35 International Elevator (P54,016.88-P51,605.41) P-2335 114.79 Jebsen & Jessen Communications (P2,784.00-P2,360.91) P-2337 1,130.71 MGE UPS Systems Philippines Inc (P11,040.00-P10,842.86) P-2371 8,053.58 MGE UPS Systems Philippines Inc (P6,920.00-P6,796.83) P-2372 2,411.47 Misnet Education Inc (P18,857.14-P15,714.28) P-2374 423.09 Misnet Education Inc (P19,500.00-P19,151.79) P-2376 197.14 Professional Skills Enrichment (P11,460-P1,910) P-2523 123.17 Professional Skills Enrichment (P15,360-P2,560) P-2525 3,142.86 Professional Skills Enrichment (P900-P150) P-2526 348.21 Professional Skills Enrichment (P27,000-P4,500) P-2527 9,550.00 Professional Skills Enrichment (P3,000-P500) P-2529 12,800.00 Professional Skills Enrichment (P8,502-P1,417) P-2530 750.00 Professional Skills Enrichment (P13,080-P2,180) P-2531 22,500.00 Salvador & Associates (P9,112.29-P7,998.00) P-2548 2,500.00 DHL Express Phils Corp (P673.60-P33.60) P-2677 7,085.00 DHL Express Philippines Corp _{P1,229.60-P33.60) P-2678 10,900.00 Benchmark Consulting Co (P13,200.00-P12,964.28) P-3519 1,114.29 Asia Select Inc (P11,494.26-P11,289.00) P-3681 640.00 Premium Security & Investigation (P22,938.51-P3,671.75) P-3896 1,196.00 Taurus Electrical Service (P132,055.21-P129,697.19) P-4016 235.72 Headstrong Philippines Inc (P48,645.00-P47,776.40) P-4045 205.26 19,266.76 2,358.02 868.60

DECISION CTA CASE NOS. 8623, 8656, 8661, and 8685 Headstrong Philippines Inc (P45,360.00-P44,550.00) P-4046 810.00 Headstrong Philippines Inc (P8,100-P7,955) P-4047 145.00 6-24 Property Holdings Inc (P2,264,525.85-P2,201,607.81) P-4839 62,918.04 6-24 Property Holdings Inc (P973,834.10-P945,820.89) P-4843 28,013.21 Asia Select Inc (P13,335.87-P13,097.73) P-4907 238.14 Asia Select Inc (P12,698.25-P12,471.49) P-4914 226.76 Asia Select Inc (P10,717.74-P10,526.35) P-4919 191.39 Emerson Network Power (P65,207.99-P64,043.56) P-5016 1,164.43 Fuji Xerox Philippines Inc (P79,936.47-P77,766.97) P-5078 2,169.50 Headstrong Philippines Inc (P131,400-P129,054) P-5125 2,346.00 Headstrong Philippines Inc (P58,860.00-P57,808.00) P-5127 1,052.00 Headstrong Philippines Inc (P93,240.00-P91,575.00) P-5129 1,665.00 IBM Philippines Inc (P122,585.40-P12,585.40) P-5141 110,000.00 Manila Peninsula Hotel Inc (P3,780.00-P486.30) P-5191 3,293.70 MGE UPS Systems Philippines Inc (P31,920.01-P31,350.00) P-5200 570.01 MGE UPS Systems Philippines Inc (P27,945.16-P27,446.14) P-5202 499.02 MGE UPS Systems Philippines Inc (P59,865.16-P58,796.14) P-5203 1,069.02 Premium Security & Investigation (P12,565.86-P1,104.53) P-5279 11,461.33 subtotal p 755,469.07 7 Purchases ofservices supported by document with statement ''NOT ELIGIBLE FOR/NOT VALID AS SOURCE OF INPUT TAX" Accent Micro Technologies Inc P-1969 p 2,452.50 Shellsoft Technology Corp P-2563 1,366.07 SOP Printing House P-2623 321.43 Accent Micro Technologies Inc P-3432 1,227.27 Accent Micro Technologies Inc P-3436 3,000.00 Shellsoft Technology Corp P-3957 1,285.71 SOP Printing House P-4000 675.00 subtotal p 10,327.98 8 Purchases ofservices supported by documents other than VAT ORs FTL Hotels P-2682 p 15,114.60 FTL Hotels P-2683 15,114.60 6-24 Property Holdings Inc P-2686 2,033,861.39 6-24 Property Holdings Inc P-2687 352,341.02 ACCRA Law P-3445 86,400.00 Salvador & Associates P-4657 4,980.00 Nexstep Inc P-4669 26,136.00 Manila Peninsula Hotel Inc P-4670 2,116.80 Hospitality International Inc P-4672 15,918.37 Headstrong Philippines Inc P-4673 31,920.00 Headstrong Philippines Inc P-4674 26,880.00 Headstrong Philippines Inc P-4675 25,920.00 subtotal P2,636,702.78 9 Purchases ofservices supported by VAT OR with alteration on date or amount without countersignature Headstrong Philippines Inc P-3771 p 35,280.00 Sunvision Cable Inc P-5368 3,360.00 subtotal p 38,640.00 10 Purchase ofservices supported by VAT OR but without BIR Permit to print Federal Phoenix Assurance P-2229 p 316,382.74

DECISION CTA CASE NOS. 8623, 8656, 8661, and 8685 subtotal p 316,382.74 PS,382,960.55 Grand Total Moreover, part of the total input VAT of P154,055,337.69 is the amount of P1,043,539.50 representing input VAT on purchases of capital goods exceeding P1 Million. Pursuant to Section 110(A) of the NIRC of 1997, as amended, as implemented by Section 4.110-3 of RR No. 16-2005, input VAT claim on capital goods purchases attributable to zero-rated sales may be claimed either in full during the month of acquisition, or spread over a period of time, depending on the aggregate acquisition cost of the capital goods in the calendar month. If the aggregate acquisition cost exceeds P1 Million, the claim for input tax should be spread over 60 months or the estimated useful life of the capital goods, whichever is shorter. On the other hand, if aggregate acquisition cost does not exceed P1 Million, the total input taxes shall be allowed as credit/refund in the month of acquisition. Upon verification of the documents supporting the purchases on capital goods exceeding P1 Million, the Court finds that the amount of P243,537 .00 should be disallowed due to the following reasons: Annex 12 Original Supplemental Total of Exhibit Amount P-6172 Supported by VAT REG TIN invoices but VAT Annex 10 p 73,928.57 p 73,928.57 amount per invoice is not tie-up with the 2Q-b amount per schedule Annexes 10 4,595.14 p 19,557.43 24,152.57 Supported with TIN VAT Invoices not dated 1Q-d� 2Q-d 659,461.71 (542,890.28) 116,571.43 within the year of claim Annex 10 Supported with invoices but unable to verify to 2Q-f; 3Q-f 8,485.72 P(S23,332.85) 8,485.72 original copy (photocopied invoices) Annex 2Q- 20,398.71 20,398.71 Supported by documents other than VAT P766,869.85 p 243,537.00 invoices q�3Q-q Annexes 12- Without supporting documents I unaccounted A; 12-B; TOTAL Thus, while petitioner was able to substantiate the amount of P800,002.50 (P1,043,539.50 less P243,537.00), out of the total input VAT of P1,043,539.50 on purchases of capital goods exceeding P1 Million, only the amortization for CY 2011 in the amount of P132,943.20 may be claimed by

DECISION CTA CASE NOS. 8623, 8656, 8661, and 8685 petitioner as valid input tax credits for the same taxable year, as determined hereunder: Exhibit Name of Supplier Month Substantiated Monthly No. of Amortization acquired Input VAT Input VAT Months P-39 Accent Micro Technologies Inc. amortized p 57,385.72 P-40 Accent Micro Technologies Inc. January f 229,542.86 Credit63 1,526.79 P-793 Accent Micro Technologies Inc. January 6,107.14 12 1,526.79 P-1960 Accent Micro Technologies Inc. January 6,107.14 p 4,782.14 12 8,397.32 P-3679 Accent Micro Technologies Inc. February 36,642.86 127.23 12 1,562.50 P-1963 Accent Micro Technologies Inc. March 7,500.00 127.23 11 312.50 P-2002 Accent Micro Technologies Inc. March 1,500.00 763.39 10 312.50 P-1977 Accent Micro Technologies Inc. March 1,500.00 156.25 10 120.54 P-1978 Accent Micro Technologies Inc. 642.86 31.25 10 281.25 P-1979 Accent Micro Technologies Inc. April 1,500.00 31.25 9 64.29 P-1980 Accent Micro Technologies Inc. April 342.86 13.39 9 120.54 P-1982 Accent Micro Technologies Inc. April 642.86 31.25 9 64.29 P-1990 Accent Micro Technologies Inc. April 342.86 7.14 9 120.54 P-1991 Accent Micro Technologies Inc. April 642.86 13.39 9 90.40 P-3692 Accent Micro Technologies Inc. April 482.14 7.14 9 91.41 P-3696 Accent Micro Technologies Inc. April 487.50 13.39 9 281.25 P-1992 Accent Micro Technologies Inc. April 1,500.00 10.04 9 1,017.86 P-2663 Accent Micro Technologies Inc. April 6,107.14 10.16 9 4,642.86 P-3691 Accent Micro Technologies Inc. May 27,857.14 31.25 8 758.93 P-3697 Accent Micro Technologies Inc. May 4,553.57 127.23 8 P-1987 Accent Micro Technologies Inc. May 580.36 8 20,357.14 P-1988 Accent Micro Technologies Inc. May 122,142.86 94.87 8 93.22 P-3418 Accent Micro Technologies Inc. May 559.29 8 P-3693 Accent Micro Technologies Inc. May 2,544.64 8 3,687.50 P-3694 Accent Micro Technologies Inc. June 22,125.00 11.65 7 3,718.75 P-3695 Accent Micro Technologies Inc. June 25,500.00 7 P-3698 Accent Micro Technologies Inc. June 460.94 7 71.09 P-3419 Accent Micro Technologies Inc. June 487.50 531.25 7 71.09 P-3420 Accent Micro Technologies Inc. June 487.50 7 1,564.06 P-4849 Accent Micro Technologies Inc. July 10,725.00 10.16 6 1,533.59 P-4850 Accent Micro Technologies Inc. July 10,516.07 10.16 6 1,138.39 P-4851 Accent Micro Technologies Inc. September 9,107.14 223.44 4 42.86 P-4852 Accent Micro Technologies Inc. September 342.86 219.08 4 44.64 P-4630 Accent Micro Technologies Inc. September 535.71 189.73 4 14.02 Total September 168.21 7.14 4 379.46 October 4,553.57 11.16 3 21,508.93 258,107.14 3.50 40.18 1 642.86 94.87 p 132,943.20 p 800 002.50 5,377.23 13.39 Consequently, the unamortized input VAT of P667,059.30 (P800,002.50 less P132,943.20) pertaining to capital goods purchases exceeding Pl Million shall also be disallowed. 63 Based on useful life of 48 months.

DECISION CTA CASE NOS. 8623, 8656, 8661, and 8685 In sum, only the remaining amount of P73,967,784.86 represents petitioner's valid input VAT for the four quarters of 2011, as computed below: Total Input VAT per Returns P73 793,995.98 p 154 055,337.69 Less: Disallowed Input VAT 5 382,960.55 (79,176,956.53) On purchases ofgoods and services other p 243,537.00 (910,596.30) than capital goods 667,059.30 P73,967,784.86 Per ICPA Report Per this Court's Further Verification On purchases ofcapital goods exceeding Pl Million Per this Court's Further Verification Unamortized input VAT on capital goods exceeding P1 Million Valid In_put VAT However, a portion of the P73,967,784.86 shall be applied against the reported output VAT liability of P5,293,874.9564 � Consequently, only the remaining input VAT of P68,673,909.91 can be attributed to the entire zero- rated sales amounting to P6,757,540,662.07 and only the input VAT of P17,188,625.90 is attributable to the valid zero-rated sales of P1,691,367,779.99, computed as follows: Valid Input VAT p 73,967,784.86 Less: Output Tax Due 5,293,874.95 Total Divide by Total Zero-Rated Sales declared per return p 68,673,909.91 Multiply by Valid Zero-rated Sales 6,757,540,662.07 Excess Input VAT Attributable to Valid Zero-Rated Sales 1,691,367,779.99 p 17,188,625.90 Sixth Requisite: Excess input taxes were not applied against any output VAT liability Although the claimed input VAT was carried over by petitioner in its succeeding Quarterly VAT Returns65, the 64 Sum of the amounts in Line15B of Exhibits "P-5-a", "P-6-a", "P-7-a", and "P-8-b", docket, vol. 3, pp. 1506, 1519, 1528, and 1543, respectively. 65 Exhibits "P-6" to "P-8" and "P-19" to "P-20".

DECISION CTA CASE NOS. 8623, 8656, 8661, and 8685 same remained unutilized until it was deducted as "VAT Refund/TCC Claimed" in its Quarterly VAT Returns for the fourth quarter of CY 201266 and first quarter of CY 201367 � Therefore, the excess input VAT of P249,651,814.1968 as of the end of the fourth quarter of 2012, which was carried over to the succeeding first quarter of 2013, no longer included the subject first quarter claim and the input VAT of P147,996,613.2769 as of the end of the first quarter of 2013, which was carried over to the succeeding second quarter of 2013, no longer included the subject second, third, and fourth quarters claims. WHEREFORE, the present Petitions for Review are hereby PARTIALLY GRANTED. Accordingly, let a tax refund or a tax credit certificate be issued in favor of petitioner in the reduced amount of P17,188,625.90, representing its unutilized and excess input VAT attributable to zero-rated sales for the first, second, third, and fourth quarters of calendar year 2011. SO ORDERED. ESPE . FASON-VICTORINO We Concur: ~. ~ J L- l}! LOVELL BAUTISTA MA. BELEN M. RINGPIS-LIBAN Associate Justice Associate Justice 66 Exhibit "P-19-c", Line 230, docket, vol. 5, p. 2771. 67 Exhibit "P-20", Line 230, docket, vol. 5, p. 2776. 68 Exhibit "P-19-c", Line 29, docket, vol. 5, p. 2772. 69 Exhibit "P-20", Line 29, docket, vol. 5, p. 2777.

DECISION CTA CASE NOS. 8623, 8656, 8661, and 8685 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. LOVELLt BAUTISTA Associate Justice Chairperson CERTIFICATION Pursuant to Section 13 of Article VIII of the Constitution, and the Division 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