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

Republic of t he Philippines COURT OF TAX APPEALS Quezon City FIRST DIVISION DEUTSCHE KNOWLEDGE CTA Case No. 8861 SERVICES PTE., LTO., For: Refund Petitioner, Members: -versus- DEL ROSARIO, P.J., Chairperson, UY, and COMMISSIONER OF MINDARO- GRULLA, JJ. INTERNAL REVENUE, Promu lgated: Respondent. .JUL 10 - x- - - - - - - - - - DECISION MINDARO-GRULLA, J.: This is a Petition for Review filed by Deutsche Knowledge Services Pte., Ltd. as petitioner, against Commissioner of Internal Revenue as respondent, before the Court in Division, pursuant to Section 7(a)(2) of Republic Act (RA) No. 1125, An Act Creating the Court of Tax Appeals, as amended\ as well as Ru le 4, Section 3(a)(2), 1 Sec. 7. Jurisdiction. - The CTA shall exercise: (a) Exclusive appellate jurisdiction to review by appeal, as herein provided: XXX XXX (2) Inaction by the Commissioner of Internal Revenue in cases involving disputed assessments, refunds or internal revenue taxes, fees of other charges, penalties in relation thereto, or other matters arising under the National Internal Revenue Code or other laws administered by the Bureau of Internal Revenue, where the National Internal Revenue Code provides a specific period for action, in which case the inaction shall be deemed a denial; XXX XXX (

CTA case No. 8861 Page 2 of 42 Deutsche Knowledge Services Pte., Ltd. vs. CIR DECISION in relation to Rule 8, Section 4(a) of the Revised Rules of the Court of Tax Appeals (RRCTA)2, as amended. Petitioner seeks for refund or issuance of tax credit certificate in the amount of P20,881,608.09, allegedly representing petitioner's excess and unutilized input value-added tax (VAT) on purchases of goods and services attributable to its zero-rated sales for the 1st quarter of calendar year (CY) 2013. Petitioner Deutsche Knowledge Services Pte., Ltd. is the Philippine branch of a multinational company organized and existing 2 Rule 4, Sec. 3. Cases within the jurisdiction of the Court in Division. -The Court in Division shall exercise: (a) Exclusive original over or appellate jurisdiction to review by appeal the following: XXX XXX (2) Inaction by the Commissioner of Internal Revenue in cases involving disputed assessments, refunds of internal revenue taxes, fees or other charges, penalties in relation thereto, or other matters arising under the National Internal Revenue Code or other laws administered by the Bureau of Internal Revenue, where the National Internal Revenue Code or other applicable law provides a specific period for action: Provided, that in case of disputed assessments, the inaction of the Commissioner of Internal Revenue within the one hundred eighty day-period under Section 228 of the National Internal Revenue Code shall be deemed a denial for purposes of allowing the taxpayer to appeal his case to the Court and does not necessarily constitute a formal decision of the Commissioner of Internal Revenue on the tax case; Provided, further, that should the taxpayer opt to await the final decision of the Commissioner of Internal Revenue on the disputed assessments beyond the one hundred eighty day-period abovementioned, the taxpayer may appeal such final decision to the Court under Section 3(a), Rule 8 of these Rules; XXX XXX Rule 8. Sec. 4. Where to appeal; mode of appeal.- (a) An appeal from a decision or ruling or the inaction of the Commissioner of Internal Revenue on disputed assessments or claim for refund of internal revenue taxes erroneously or illegally collected, the decision or ruling of the Commissioner of Customs, the Secretary of Finance, the Secretary of Trade & Industry, the Secretary of Agriculture, and the Regional Trial Court in the exercise of their original jurisdiction, shall be taken to the Court by filing before it a petition for review as provided in Rule 42 of the Rules of Court. The Court in Division shall act on the appeal. XXX XXX (.

CTA Case No. 8861 Page 3 of 42 Deutsche Knowledge Services Pte., Ltd. vs. CIR DECISION under and by virtue of the laws of Singapore, with registered office address at One Raffles Quay, #17-10 South Tower, Singapore 048583.3 It was registered with the Bureau of Internal Revenue (BIR) on June 16, 2005 as a VAT taxpayer with Taxpayer Identification No. (TIN) 238-763-115-000.4 Petitioner is licensed to do business as a regional operating headquarters (ROHQ) in the Philippines by the Securities and Exchange Commission (SEC), pursuant to the Omnibus Investments Code of 1987, as amended by Republic Act No. 8756 and its implementing rules and regulations, to engage in general administration and planning; business planning and coordination; sourcing/procurement of raw materials and components; corporate finance advisory services; marketing control and sales promotion; training and personnel management; logistic services; research and development services and product development; technical support and maintenance; data processing; and communication and business development.5 On the other hand, respondent is the duly appointed Commissioner of the Bureau of Internal Revenue empowered to perform the duties of his office, including, among others, the duty to act upon and approve claims for refund or tax credit as provided by law. He holds office at the 5th Floor, BIR National Office Building, Agham Road, Diliman, Quezon City. On April 18, 2013, petitioner filed with the BIR, through eFiling and Payment System (eFPS), its Quarterly VAT Return for the 1st quarter of CY 2013.6 On March 13, 20147, petitioner filed with the SIR-Large Taxpayers Regular Audit Division 3 (LTRAD 3) an Application for Tax Credits/Refund (BIR Form No. 1914) of its excess and unutilized input VAT for the 1st quarter of CY 2013 in the total amount of P20,881,608.09. 8 3 Par. 1, Stipulated Facts, Joint Stipulation of Facts and Issues (JSFI), Docket, vol. II, p. 1445. 4 Par. 4, Stipulated Facts, JSFI, Docket, vol. II, p. 1446; Exhibit "P-2", Docket, vol. II, p. 1670. 5 Par. 3, Stipulated Facts, JSFI, Docket, vol. II, pp. 1445-1446; Exhibit "P-1", Docket, vol. II, pp. 1652-1669. 6 Par. 5, Stipulated Facts, JSFI, Docket, vol. II, p. 1446; Exhibit "P-3", Docket, vol. II, pp. 1671- 1674. 7 Exhibits "P-4" and "P-4-a", Docket, vol. II, pp. 1697-1702. 8 Par. 6, Stipulated Facts, JSFI, Docket, vol. II, p. 1446. (

CTA Case No. 8861 Page 4 of 42 Deutsche Knowledge Services Pte., Ltd. vs. CIR DECISION To date, respondent had not acted with finality on petitioner's administrative claim for refund of unutilized input VAT for the 1st quarter of CY 2013.9 Hence, this instant Petition for Review was filed on August 8, 2014. In his Answer10 filed on September 9, 2014, respondent interposed the following Special and Affirmative Defenses: "4. Petitioner's alleged claim for refund is subject to administrative routinary investigation/examination by the Bureau; 5. The amount of P20,881,608.09, representing alleged excess and unutilized input VAT on purchases of goods and services attributable to its zero-rated sales for the 1st quarter of calendar year 2013 was not properly documented. 6. In an action for refund, the burden of proof is on the taxpayer to establish its right to refund and failure to sustain the burden is fatal to the claim for refund/credit. 7. Petitioner must show that it has complied with the provisions of Section 112 of the NIRC of 1997 on the prescriptive period for claiming tax refund/credit. 8. Petitioner must prove that it paid the alleged VAT input taxes for the periods stated. 9. Petitioner must prove that its sale of services is subject to VAT at zero percent (0�/o). 10. Petitioner must prove that its alleged unutilized input VAT has not been applied against any output tax liabilities both in the current or succeeding year. 11. There is no record of petitioner ever submitting complete documents to substantiate its administrative claim for 9 Par. 7, Stipulated Facts, JSFI, Docket, val. II, p. 1446. 10 Docket, val. I, pp. 41-48. ~

CTA Case No. 8861 Page 5 of 42 Deutsche Knowledge Services Pte., Ltd. vs. CIR DECISION refund. Such is a requirement, otherwise, the administrative body will have sufficient reason to deny the claim. As held by the Honorable Supreme Court in the case of Atlas Consolidated Mining and Development Corporation vs. Commissioner of Internal Revenue, G.R. 145526, 16 March 2007: XXX XXX XXX 11. The implementing rule for these complete documents required by law is RMO No. 53-98. Annex B-1 of said RMO lists all the required documents as follows: XXX XXX XXX 12. As stated above, the first documentary requirement is that provided in Annex B of the said RMO. Annex B provides for more requirements as follows: XXX XXX XXX 13. Far from complying with the checklist of requirements, petitioner merely submitted eleven (11) documents in support of its administrative claim for refund. This is not a claim for erroneously or illegally collected taxes where petitioner has the discretion of choosing the evidence it deems fit to prove its case. This is a claim for excess but legally collected, unutilized input taxes. It does not have to prove its case because the law already acknowledges it is entitled to refund. Thus, it merely has to substantiate the export sales and the excess amount. Hence, petitioner's failure to comply with the duly mandated legal requirements in such claims for refund/tax credit warranted the denial by inaction of the administrative claim. 14. The power to tax is the most effective instrument to raise needed revenues to finance and support myriad activities of the government for the delivery of basic services essential to the promotion of the general welfare and enhancement of peace, progress, and prosperity of the people. ( Mactan Cebu International Airport Authority vs. Marcos, 261 SCRA 667, 690). Consequently, any delay in implementing tax measures would be to the detriment of the (

CTA Case No. 8861 Page 6 of 42 Deutsche Knowledge Services Pte., Ltd. vs. CIR DECISION public. It is for this reason that claims for refund are required to be done within certain time frames. In the instant petition, the failure of petitioner to comply with such periods is fatal to its cause. 15. Moreover, petitioner's failure to submit documents supporting its claim for refund makes its administrative claim for refund pro-forma. This pro-forma administrative claim should not be taken as proper compliance with the requirements of the law that an administrative claim for refund should have been filed prior to the institution of a judicial claim for refund. Thus, without a validly and duly filed administrative claim for refund, the Honorable Court is without jurisdiction to entertain the Petition for Review. Petitioner's failure to comply with a condition precedent prior to the institution of its petition for review makes it dismissible for absence of jurisdiction on the part of the Honorable Court. 16. The claimant has the burden of proof to establish the factual basis of his claim for tax credit or refund. After all tax refunds, like tax exemptions, are construed strictly against the taxpayer (Citibank N.A. vs. Court of Appeals and Commissioner of Internal Revenue, 280 SCRA 459; Commissioner of Internal Revenue vs. Tokyo Shipping Co., Ltd., 244 SCRA 332, both cited in Benguet Corporation vs. Commissioner of Internal Revenue, CTA Case No. 5392 promulgated October 30, 1998). 17. Partaking of the nature of exemptions, claims for refund are strictly construed against the claimant and cannot be allowed unless granted in the most explicit and categorical language (Sps. Aguilar vs. Commissioner of Internal Revenue, et al., CA G.R.SP No. 16432, March 30, 1999). Being in the nature of tax exemptions, these claims are regarded as in derogation of sovereign authority and to be construed strictissimi juris against the claimant and liberally in favor of the taxing authority (Commissioner of Internal Revenue vs. Procter and Gamble Philippines Manufacturing Corporation, 204 SCRA 377). 18. Claims for refund are construed strictly against the claimant for the same partake the nature of exemption from taxation (Commissioner of Internal Revenue vs. Ledesma, 31 SCRA 95) and such, they are looked upon with disfavor t.

CTA Case No. 8861 Page 7 of 42 Deutsche Knowledge Services Pte., Ltd. vs. CIR DECISION (Western Minolco Corp. vs. Commissioner ofInternal Revenue, 124 SCRA 1211)." A Notice of Pre-Trial Conference was issued by the Court on September 15, 2014, setting the case for pre-trial conference on November 6, 2014. 11 Accordingly, Respondent's Pre-Trial Brief12 was filed on September 25, 2014; while petitioner's Pre-Trial Brief13 was filed on October 31, 2014. Pre-trial conference ensued. The parties submitted their Joint Stipulation of Facts and Issues14 on December 9, 2014. Thereafter, on January 29, 2015, the Court issued a Pre-Trial Order15 adopting the parties' joint stipulations and the pre-trial was deemed terminated. Meanwhile, upon petitioner's motion16, this Court commissioned Ms. Katherine 0. Constantino as the Independent Certified Public Accountant (CPA) for the case. 17 During trial, petitioner presented (1) Ms. Rachel Concepcion18, petitioner's Legal Entity Controller; and (2) Ms. Katherine 0. Constantino19, the Independent CPA, as its witnesses. Petitioner filed its Formal Offer of Evidence20 on May 14, 2015. In the Resolutions dated August 28, 201521, December 18, 201522, and August 4, 201623, the Court admitted all of petitioner's evidence except 11 Docket, val. I, p. 50. 12 Docket, val. I, pp. 51-54. 13 Docket, val. II, pp. 1420-1429. 14 Docket, val. II, pp. 1445-1452. 15 Docket, val. II, pp. 1517-1522. 16 Motion to Commission Independent Certified Public Accountant filed on January 20, 2015, Docket, val. II, pp. 1482-1485. 17 Minutes of the Hearing dated January 29, 2015, Docket, val. II, p. 1523-1525. 18 Minutes of the Hearing dated February 17, 2015, Docket, val. II, pp. 1539-1542; Exhibit "P-11", Docket, val. I, pp. 60-93. 19 Minutes of the Hearing dated April 7, 2015, Docket, val. II, pp. 1565-1568; Exhibit "P-757", Docket, val. II, pp. 1555-1563. 2o Docket, val. II, pp. 1613-1651. 21 Docket, val. IV, pp. 3219-3221. 22 Docket, val. IV, pp. 3259-3261. 23 Docket, val. IV, pp. 3932-3935. ~

CTA Case No. 8861 Page 8 of 42 Deutsche Knowledge Services Pte., Ltd. vs. CIR DECISION for Exhibits "P-6.20", "P-8.25" to "P-8.27'124, "P-8.29" to "P-8.32", "P- 8.34", and "P-8.37". Petitioner's documentary evidence are as follows: Exhibit Description P-1 Petitioner's Securities and Exchange (SEC) Certificate of P-2 Registration and License dated April 25, 2005 (S.E.C. reg. No. P-3 FS2005506950) P-3.1 Petitioner's Certificate of Registration issued by the Bureau of P-3.2 Internal Revenue (BIR) P-3.3 Original Quarterly VAT Return for the 1st Quarter of CY 2013, P-3.4 filed on April 18, 2013 with filing reference no. P-3.5 101300007197460 P-3.6 Original Quarterly VAT Return for the 2nd Quarter of CY 2013, P-3.7 filed on July 19, 2013 with filing reference no. 101300007570564 P-4 Original Quarterly VAT Return for the 3rd Quarter of CY 2013, P-4-a filed on October 18, 2013 with filing reference no. P-5 101300007952415 P-5.1 Original Quarterly VAT Return for the 4th Quarter of CY 2013, P-5.2 filed on January 21' 2014 with filing reference no. 101400008384284 Amended Quarterly VAT Return for the 4th Quarter of CY 2013, filed on January 23, 2014 with filing reference no. 101400008398108 Original Quarterly VAT Return for the 1st Quarter of CY 2014, filed on April 21, 2014 with filing reference no. 101400008874963 Original Quarterly VAT Return for the 2nd Quarter of CY 2014, filed on July 21, 2014 with filing reference no. 101400009334461 Amended Quarterly VAT Return for the 2nd Quarter of CY 2014, filed on October 15, 2014 with filing reference no. 10140000989213 Petitioner's Application for Tax Credits/Refunds (BIR Form No. 1914) for the 1st quarter of CY 2013 filed with the BIRon March 13, 2014 Petitioner's Letter-Claim for Refund of its unutilized input VAT for the 1st Quarter of CY 2013 dated March 13, 2014 and filed with the BIRon even date Certification of Non-Registration in the Philippines of Deutsche Bank Aktiengesellschaft Filiale lnlandsbank issued by the SEC Certification of Non- Registration in the Philippines of Deutsche Bank Aktiengesellschaft Filiale Amsterdam issued by the Securities and Exchange Commission Certification of Non- Registration in the Philippines of Deutsche Bank Aktiengesellschaft Filiale Riad issued by the Securities and Exchange Commission 24 Exhibit "P-8.28" was already admitted in evidence in the Resolution dated August 28, 2015, Docket, vol. IV, p. 3219. ~

CTA Case No. 8861 Page 9 of 42 Deutsche Knowledge Services Pte., Ltd. vs. CIR DECISION Exhibit Description P-5.3 P-5.4 Certification of Non- Registration in the Philippines of Deutsche P-5.5 Bank Aktiengesellschaft Filiale Dubai (DIFC) issued by the P-5.6 Securities and Exchange Commission P-5.7 Certification of Non-Registration in the Philippines of Deutsche P-5.8 Bank Sociedad Anonima Espanola issued by the Securities and P-5.9 Exchange Commission P-5.10 Certification of Non-Registration in the Philippines of Deutsche P-5.11 Bank Aktiengesellschaft Filiale Zurich issued by the Securities P-5.12 and Exchange Commission P-5.13 Certification of Non-Registration in the Philippines of Deutsche P-5.14 Bank Aktiengesellschaft Filiale Wien issued by the Securities P-5.15 and Exchange Commission P-5.16 Certification of Non-Registration in the Philippines of Deutsche P-5.17 Bank Aktiengesellschaft Filiale Asia Pacific Head Office issued P-5.18 by the Securities and Exchange Commission P-5.19 Certification of Non-Registration in the Philippines of Deutsche Bank Aktiengesellschaft Filiale Singapur issued by the i Securities and Exchange Commission Certification of Non-Registration in the Philippines of Deutsche 1 Bank Aktiengesellschaft Filiale Bangkok issued by the Securities and Exchange Commission Certification of Non-Registration in the Philippines of Deutsche Bank Aktiengesellschaft Filiale Mumbai issued by the Securities and Exchange Commission Certification of Non-Registration in the Philippines of Deutsche Bank Aktiengesellschaft Filiale Hong Kong issued by the Securities and Exchange Commission Certification of Non-Registration in the Philippines of Deutsche Bank Aktiengesellschaft Filiale Jakarta issued by the Securities and Exchange Commission Certification of Non-Registration in the Philippines of Deutsche Bank Aktiengesellschaft Filiale Ho-Chi Minh City issued by the Securities and Exchange Commission Certification of Non-Registration in the Philippines of Deutsche Bank Aktiengesellschaft Filiale Seoul issued by the Securities and Exchange Commission Certification of Non-Registration in the Philippines of Deutsche Bank Aktiengesellschaft Filiale Labuan issued by the Securities and Exchange Commission Certification of Non-Registration in the Philippines of Deutsche Bank Aktiengesellschaft Filiale Brussel issued by the Securities and Exchange Commission Certification of Non-Registration in the Philippines of Deutsche Bank (Malaysia) Berhad issued by the Securities and Exchange Commission Certification of Non-Registration in the Philippines of Deutsche Bank Aktiengesellschaft Filiale New York issued by the Securities and Exchange Commission Certification of Non-Registration in the Philippines of Deutsche Bank Aktiengesellschaft Filiale London issued by the Securities and Exchange Commission L

CTA Case No. 8861 Page 10 of 42 Deutsche Knowledge Services Pte., Ltd. vs. CIR DECISION Exhibit Description P-5.20 P-5.21 Certification of Non-Registration in the Philippines of Deutsche P-5.22 Bank Aktiengesellschaft Filiale Tokyo issued by the Securities P-5.23 and Exchange Commission P-5.24 Certification of Non-Registration in the Philippines of Deutsche P-5.25 Bank Aktiengesellschaft Filiale Paris issued by the Securities P-5.26 and Exchange Commission P-5.27 Certification of Non-Registration in the Philippines of Deutsche P-5.28 Bank Aktiengesellschaft Filiale Prague issued by the Securities P-5.29 and Exchange Commission P-5.30 Certification of Non-Registration in the Philippines of Deutsche P-5.31 Bank Luxembourg S.A. issued by the Securities and Exchange P-5.32 Commission P-5.33 Certification of Non-Registration in the Philippines of Deutsche P-5.34 Securities Inc. issued by the Securities and Exchange P-5.35 Commission P-5.36 Certification of Non-Registration in the Philippines of Deutsche Bank PBC Spolka Akcyjna issued by the Securities and Exchange Commission Certification of Non-Registration in the Philippines of Deutsche Bank Suisse SA issued by the Securities and Exchange Commission Certification of Non-Registration in the Philippines of Deutsche Bank Societa Per Azioni issued by the Securities and Exchange Commission Certification of Non-Registration in the Philippines of Deutsche Asset Management Investmentgesselchaft issued by the Securities and Exchange Commission Certification of Non-Registration in the Philippines of Deutsche Bank China Co Ltd Shanghai Branch issued by the Securities and Exchange Commission Certification of Non-Registration in the Philippines of DWS Holding and Service Gmbh issued by the Securities and Exchange Commission Certification of Non-Registration in the Philippines of RREEF Management Gmbh issued by the Securities and Exchange Commission Certification of Non-Registration in the Philippines of Deutsche Bank Real Estate (Japan) YK issued by the Securities and Exchange Commission Certification of Non-Registration in the Philippines of RREEF Management LLC issued by the Securities and Exchange Commission Certification of Non-Registration in the Philippines of Deutsche Bank Securities Inc. issued by the Securities and Exchange Commission Certification of Non-Registration in the Philippines of Deutsche Asia Pacific Holdings Pte Ltd issued by the Securities and Exchange Commission Certification of Non-Registration in the Philippines of PT Deutsche Securities Indonesia issued by the Securities and Exchange Commission ~

CTA Case No. 8861 Page 11 of 42 Deutsche Knowledge Services pte., Ltd. vs. CIR DECISION Exhibit Description P-5.37 Certification of Non-Registration in the Philippines of Deutsche P-5.38 Group Services Pty Limited issued by the Securities and Exchange Commission P-5.39 Certification of Non-Registration in the Philippines of Deutsche Bank Trust Company Americas issued by the Securities and P-5.40 Exchange Commission Certification of Non-Registration in the Philippines of DB P-5.41 Services New Jersey Inc issued by the Securities and Exchange Commission P-5.42 Certification of Non-Registration in the Philippines of DB International (Asia) Limited issued by the Securities and P-5.43 Exchange Commission Certification of Non-Registration in the Philippines of DBOI P-5.44 Global Services Private Limited issued by the Securities and Exchange Commission P-6 Certification of Non-Registration in the Philippines of Global P-6.1 Markets Centre Private Limited issued by the Securities and P-6.2 Exchange Commission P-6.3 Certification of Non-Registration in the Philippines of Deutsche P-6.4 Trustees Malaysia Berhad issued by the Securities and P-6.5 Exchange Commission P-6.6 Certification of Non-Registration in the Philippines of DB P-6.7 Consorzio S. Cons. a.r.l. issued by the Securities and Exchange P-6.8 Commission P-6.9 IntraGroup Service Agreement between Petitioner and Deutsche Bank Aktiengesellschaft lnlandsbank P-6.10 IntraGroup Service Agreement between Petitioner and P-6.11 Deutsche Bank Aktiengesellschaft Filiale Johannesburg P-6.12 IntraGroup Service Agreement between Petitioner and P-6.13 Deutsche Bank Aktiengesellschaft Filiale Amsterdam IntraGroup Service Agreement between Petitioner and Deutsche Bank Aktiengesellschaft Filiale Riad IntraGroup Service Agreement between Petitioner and Deutsche Bank Aktiengesellschaft Filiale Dubai (DIFC) IntraGroup Service Agreement between Petitioner and 000 Deutsche Bank IntraGroup Service Agreement between Petitioner and Deutsche Bank Sociedad Anonima Espanola IntraGroup Service Agreement between Petitioner and Deutsche Bank Aktiengesellschaft Filiale Zurich IntraGroup Service Agreement between Petitioner and Deutsche Bank Aktiengesellschaft Filiale Wien IntraGroup Service Agreement between Petitioner and Deutsche Bank Aktiengesellschaft Filiale Asia Pacific Head Office IntraGroup Service Agreement between Petitioner and Deutsche Bank Aktiengesellschaft Filiale Singapur IntraGroup Service Agreement between Petitioner and Deutsche Bank Aktiengesellschaft Filiale Bangkok IntraGroup Service Agreement between Petitioner and Deutsche Bank Aktiengesellschaft Filiale Mumbai IntraGroup Service Agreement between Petitioner and Deutsche Bank Aktiengesellschaft Filiale Hong Kong (

CTA Case No. 8861 Page 12 of 42 Deutsche Knowledge Services Pte., Ltd. vs. CIR DECISION Exhibit Description P-6.14 P-6.15 IntraGroup Service Agreement between Petitioner and P-6.16 Deutsche Bank Aktiengesellschaft Filiale Jakarta P-6.17 IntraGroup Service Agreement between Petitioner and Deutsche Bank Aktiengesellschaft Filiale Ho-Chi Minh City P-6.18 IntraGroup Service Agreement between Petitioner and P-6.19 Deutsche Bank Aktiengesellschaft Filiale Seoul P-6.21 IntraGroup Service Agreement between Petitioner and P-6.22 Deutsche Bank (Malaysia) Berhad, Deutsche Bank P-6.23 Aktiengesellschaft Filiale Labuan, DB Trustees Malaysia P-6.24 Berhad, et. AI. P-6.25 IntraGroup Service Agreement between Petitioner and DWS P-6.26 Investment SA P-6.27 Amendment to UK OKS Schedules of Services P-6.28 IntraGroup Service Agreement between Petitioner and P-6.29 Deutsche Bank Aktiengesellschaft Filiale London P-6.30 IntraGroup Service Agreement between Petitioner and P-6.31 Deutsche Bank Aktiengesellschaft Filiale Tokyo P-6.32 IntraGroup Service Agreement between Petitioner and P-6.33 Deutsche Bank Aktiengesellschaft Filiale Paris P-6.34 IntraGroup Service Agreement between Petitioner and P-6.35 Deutsche Bank Aktiengesellschaft Filiale Prague P-6.36 IntraGroup Service Agreement between Petitioner and P-6.37 Deutsche Bank Luxembourg SA P-6.38 IntraGroup Service Agreement between Petitioner and P-6.39 Deutsche Securities Inc. P-6.40 IntraGroup Service Agreement between Petitioner and Deutsche Bank Polska Spolka Akcyjna IntraGroup Service Agreement between Petitioner and Deutsche Bank Suisse SA IntraGroup Service Agreement between Petitioner and Deutsche Bank Societa Per Azioni IntraGroup Service Agreement between Petitioner and Deutsche Bank China Co Ltd IntraGroup Service Agreement between Petitioner and DWS Holding and Service GMBH IntraGroup Service Agreement between Petitioner and RREEF Management GMBH IntraGroup Service Agreement between Petitioner and Deutsche Bank Real Estate (Japan) YK IntraGroup Service Agreement between Petitioner and Deutsche Asset Management Korea Company Limited IntraGroup Service Agreement between Petitioner and Deutsche Asia Pacific Holdings Pte Ltd IntraGroup Service Agreement between Petitioner and PT Deutsche Securities Indonesia IntraGroup Service Agreement between Petitioner and Deutsche Group Services Pty Limited IntraGroup Service Agreement between Petitioner and Deutsche Bank Polska S.A. IntraGroup Service Agreement between Petitioner and Deutsche Securities Korea Co IntraGroup Service Agreement between Petitioner and DB International (Asia) Limited (

CfA Case No. 8861 Page 13 of 42 Deutsche Knowledge Services Pte., Ltd. vs. CIR DECISION Exhibit Description P-6.41 P-6.42 IntraGroup Service Agreement between Petitioner and DBOI Global Services Private Limited P-6.43 IntraGroup Service Agreement between Petitioner and Global P-6.44 Markets Centre Private Limited/Deutsche Cl B Centre Private P-7 Limited P-7.1 IntraGroup Service Agreement between Petitioner and P-7.2 Deutsche Bank Netherlands N V P-7.3 IntraGroup Service Agreement between Petitioner and DB P-7.4 Consorzio S. Cons. a.r.l. P-7.5 Authenticated Company Registration Document of Deutsche P-7.6 Bank Aktiengesellschaft lnlandsbank P-8 Authenticated Company Registration Document of Deutsche P-8.1 Bank Aktiengesellschaft Filiale Hongkong P-8.2 Authenticated Company Registration Document of Deutsche P-8.3 Bank Aktiengesellschaft Filiale Jakarta P-8.4 Authenticated Company Registration Document of Deutsche P-8.5 Bank Aktiengesellschaft Filiale London P-8.6 Authenticated Company Registration Document of Deutsche P-8.7 Securities Inc. P-8.8 Authenticated Company Registration Document of Deutsche P-8.9 Asia Pacific Holdings Pte Ltd P-8.10 Authenticated Company Registration Document of Deutsche P-8.11 Group Services Pty Limited P-8.12 Company Registration Document of Deutsche Bank P-8.13 Aktiengesellschaft Filiale Johannesburg stored in AMinet P-8.14 Company Registration Document of Deutsche Bank Aktiengesellschaft Filiale Riad stored in AMI net Company Registration Document of Deutsche Bank Aktiengesellschaft Filiale Dubai (DIFC) stored in AMinet Company Registration Document of 000 Deutsche Bank stored in AMI net Company Registration Document of Deutsche Bank Sociedad Anonima Espanola stored in AMI net Company Registration Document of Deutsche Bank Aktiengesellschaft Filiale Zurich stored in AMI net Company Registration Document of Deutsche Bank Aktiengesellschaft Filiale Singapur stored in AMI net Company Registration Document of Deutsche Bank Aktiengesellschaft Filiale Bangkok stored in AMI net Company Registration Document of Deutsche Bank Aktiengesellschaft Filiale Mumbai stored in AMinet Company Registration Document of Deutsche Bank Aktiengesellschaft Filiale Hongkong stored in AMI net Company Registration Document of Deutsche Bank Aktiengesellschaft Filiale Jakarta stored in AMI net Company Registration Document of Deutsche Bank Aktiengesellschaft Filiale Ho-Chi-Minh City stored in AMinet Company Registration Document of Deutsche Bank Aktiengesellschaft Filiale Seoul stored in AMI net Company Registration Document of Deutsche Bank Aktiengesellschaft Filiale Labuan stored in AMI net Company Registration Document of DWS Investment SA stored in AMinet (

CTA Case No. 8861 Page 14 of 42 Deutsche Knowledge Services Pte., Ltd. vs. CIR DECISION Exhibit Description P-8.15 P-8.16 Company Registration Document of Deutsche Bank Americas P-8.17 P-8.18 Holding Corp stored in AMinet P-8.19 P-8.20 Company Registration Document of Deutsche Bank P-8.21 P-8.22 Aktiengesellschaft Filiale Brussel stored in AMI net P-8.23 P-8.24 Company Registration Document of Deutsche Bank P-8.33 P-8.34 Aktiengesellschaft Filiale London stored in AMI net P-8.36 P-8.38 Company Registration Document of Deutsche Bank 1 P-8.39 P-8.40 Aktiengesellschaft Filiale Tokyo stored in AMinet i P-8.41 P-9 Company Registration Document of Deutsche Bank j P-9.1 Aktiengesellschaft Filiale Paris stored in AMI net P-9.2 P-9.3 Company Registration Document of Deutsche Bank P-9.4 P-9.5 Luxembourg SA stored in AMinet P-9.6 P-9.7 Company Registration Document of Deutsche Securities Inc. stored in AMinet Company Registration Document of Deutsche Bank Societa Per Azioni stored in AMinet Company Registration Document of DWS Holding and Service GMBH stored in AMI net Company Registration Document of RREEF Management GMBH stored in AMI net Company Registration Document of Deutsche Securities Korea Co stored in AMI net Company Registration Document of Deutsche Bank Trust Company Americas stored in AMI net Company Registration Document of DB Energy Trading LLC stored in AMI net Company Registration Document of Global Markets Centre Private Limited/Deutsche CIB Centre Private Limited stored in AMI net Company Registration Document of Deutsche Trustees Malaysia Berhad stored in AMI net Company Registration Document of Deutsche Bank Netherlands NV stored in AMinet Company Registration Document of DB Consorzio S. Cons. a.r.l. stored in AMinet Original computer printout of AMinet Company Profile Fact Sheet of Deutsche Bank Aktiengesellschaft lnlandsbank Original computer printout of AMinet Company Profile Fact Sheet of Deutsche Bank Aktiengesellschaft Filiale Johannesburg Original computer printout of AMinet Company Profile Fact Sheet of Deutsche Bank Aktieng_esellschaft Filiale Amsterdam Original computer printout of AMinet Company Profile Fact Sheet of Deutsche Bank Aktiengesellschaft Filiale Riad Original computer printout of AMinet Company Profile Fact Sheet of Deutsche Bank Aktiengesellschaft Filiale Dubai (DIFC) Original computer printout of AMinet Company Profile Fact Sheet of 000 Deutsche Bank Original computer printout of AMinet Company Profile Fact Sheet of Deutsche Bank Sociedad Anonima Espanola Original computer printout of AMinet Company Profile Fact Sheet of Deutsche Bank Aktiengesellschaft Filiale Zurich (

CTA Case No. 8861 Page 15 of 42 Deutsche Knowledge Services Pte., Ltd. vs. CIR DECISION Exhibit Description P-9.8 P-9.9 Original computer printout of AMinet Company Profile Fact Sheet of Deutsche Bank Aktiengesellschaft Filiale Wien P-9.10 Original computer printout of AMinet Company Profile Fact P-9.11 Sheet of Deutsche Bank Aktiengesellschaft Filiale Asia Pacific P-9.12 Head Office P-9.13 Original computer printout of AMinet Company Profile Fact P-9.14 Sheet of Deutsche Bank Aktiengesellschaft Filiale Singapur P-9.15 Original computer printout of AMinet Company Profile Fact Sheet of Deutsche Bank Aktieng_esellschaft Filiale Bangkok P-9.16 Original computer printout of AMinet Company Profile Fact P-9.17 Sheet of Deutsche Bank Aktiengesellschaft Filiale Mumbai P-9.18 Original computer printout of AMinet Company Profile Fact P-9.19 Sheet of Deutsche Bank Aktiengesellschaft Filiale Hongkong P-9.20 Original computer printout of AMinet Company Profile Fact P-9.21 Sheet of Deutsche Bank Aktieng_esellschaft Filiale Jakarta P-9.22 Original computer printout of AMinet Company Profile Fact P-9.23 Sheet of Deutsche Bank Aktiengesellschaft Filiale Ho-Chi-Minh P-9.24 City P-9.25 Original computer printout of AMinet Company Profile Fact P-9.26 Sheet of Deutsche Bank Aktiengesellschaft Filiale Seoul P-9.27 Original computer printout of AMinet Company Profile Fact P-9.28 Sheet of Deutsche Bank Aktiengesellschaft Filiale Labuan P-9.29 Original computer printout of AMinet Company Profile Fact P-9.30 Sheet of DWS Investment SA P-9.31 Original computer printout of AMinet Company Profile Fact P-9.32 Sheet of Deutsche Bank Americas Holding Corp Original computer printout of AMinet Company Profile Fact Sheet of Deutsche Bank Aktiengesellschaft Filiale Brussel Original computer printout of AMinet Company Profile Fact Sheet of Deutsche Bank (Malaysia) Berhad Original computer printout of AMinet Company Profile Fact Sheet of Deutsche Bank Aktiengesellschaft Filiale New York Original computer printout of AMinet Company Profile Fact Sheet of Deutsche Bank Aktiengesellschaft Filiale London Original computer printout of AMinet Company Profile Fact Sheet of Deutsche Bank Aktiengesellschaft Filiale Tokyo Original computer printout of AMinet Company Profile Fact Sheet of Deutsche Bank Aktiengesellschaft Filiale Paris Original computer printout of AMinet Company Profile Fact Sheet of Deutsche Bank Aktiengesellschaft Filiale Prague Original computer printout of AMinet Company Profile Fact Sheet of Deutsche Bank Luxembourg SA Original computer printout of AMinet Company Profile Fact Sheet of Deutsche Securities Inc. Original computer printout of AMinet Company Profile Fact Sheet of Deutsche Bank Polska Spolka Akcyjna Original computer printout of AMinet Company Profile Fact Sheet of Deutsche Bank Suisse SA Original computer printout of AMinet Company Profile Fact Sheet of Deutsche Bank Societa Per Azioni Original computer printout of AMinet Company Profile Fact Sheet of Deutsche Asset Management lnvestmentgesselchaft (.

CTA Case No. 8861 Page 16 of 42 Deutsche Knowledge Services Pte., Ltd. vs. CIR DECISION Exhibit Description P-9.33 mbH vormals DEGEF Deutsche Gesellschaft fOr P-9.34 Fondsverwaltung P-9.35 Original computer printout of Deutsche Bank China Co Ltd P-9.36 Shanghai Branch P-9.37 Original computer printout of AMinet Company Profile Fact P-9.38 Sheet of DWS Holding and Service GMBH P-9.39 Original computer printout of AMinet Company Profile Fact P-9.40 Sheet of RREEF Management GMBH P-9.41 Original computer printout of AMinet Company Profile Fact P-9.42 Sheet of Deutsche Bank Real Estate (Japan) YK P-9.43 Original computer printout of AMinet Company Profile Fact P-9.44 Sheet of Deutsche Investment Management Americas Inc. P-9.45 Original computer printout of AMinet Company Profile Fact P-9.46 Sheet of RREEF Management LLC P-9.47 Original computer printout of AMinet Company Profile Fact P-9.48 Sheet of Deutsche Asset Management Korea Company Limited P-9.49 Original computer printout of AMinet Company Profile Fact P-9.50 Sheet of Deutsche Bank Securities Inc. P-9.51 Original computer printout of AMinet Company Profile Fact P-9.52 Sheet of Deutsche Asia Pacific Holdings Pte Ltd P-9.53 Original computer printout of AMinet Company Profile Fact Sheet of PT Deutsche Securities Indonesia P-9.54 Original computer printout of AMinet Company Profile Fact P-9.55 Sheet of Deutsche Group Services Pty Limited P-9.56 Original computer printout of AMinet Company Profile Fact P-10 Sheet of Deutsche Bank PBC Spolka Akcyjna Original computer printout of AMinet Company Profile Fact Sheet of Deutsche Securities Korea Co Original computer printout of AMinet Company Profile Fact Sheet of Deutsche Bank Trust Company Americas Original computer printout of AMinet Company Profile Fact Sheet of DB Services New Jersey Inc Original computer printout of AMinet Company Profile Fact Sheet of DB Investment Partners Inc Original computer printout of AMinet Company Profile Fact Sheet of Bankers International Corporation Original computer printout of AMinet Company Profile Fact Sheet of DB International (Asia) Limited Original computer printout of AMinet Company Profile Fact Sheet of DB Energy Trading LLC Original computer printout of AMinet Company Profile Fact Sheet of DBOI Global Services Private Limited Original computer printout of AMinet Company Profile Fact Sheet of Global Markets Centre Private Limited/Deutsche CIB Centre Private Limited Original computer printout of AMinet Company Profile Fact Sheet of Deutsche Trustees Malaysia Berhad Original computer printout of AMinet Company Profile Fact Sheet of Deutsche Bank Netherlands N V Original computer printout of AMinet Company Profile Fact Sheet of DB Consorzio S. Cons. a.r.l. Deutsche Bank Comprehensive List of Shareholdings 2013 (Gesamtverzeichnis des Anteilsbesitzes 2013) c.

CTA Case No. 8861 Page 17 of 42 Deutsche Knowledge Services Pte., Ltd. vs. CIR DECISION I Description Exhibit Sworn Statement of Ms. Rachel Concepcion to Questions P-11 Propounded by Atty. Nathan Michael 0. Pico dated October 31, P-11-a P-12 2014 P-12-1 P-13 Signature of Ms. Concepcion as found in her Sworn Statement P-14 P-15 dated October 31, 2014 P-16 P-17 Petitioner's Independent CPA Report dated March 2, 2015 P-18 P-19 Signature of Ms. Constantino P-20 P-21 Sales Schedule P-22 P-23 Printer's Certificate of Delivery and/or Invoices dated March 20, P-24 2012 P-25 P-26 Summary of Purchases P-27 P-28 Reconciliation schedule of inR_ut VAT P-29 P-30 Schedule of Amortization of Input VAT P-31 Journal Entries on Input Tax in Capital Goods P-32 P-33 Monthly VAT Return for January 2013 filed on February 19, P-34 2013 with filing reference no. 091300006959006 P-35 Monthly VAT Return for February 2013 filed on March 12, 2013 with filing reference no. 091300007050156 Certificate of Inward Remittance dated October 25, 2013 Authority to Print with OCN No. 8AU0000168406 dated March 20, 2012 covering official receipts serial numbers 1203 to 1405 I Amended Quarterly VAT Return for the 3rd Quarter of CY 2014, ! filed on January 20, 2015 with filing reference no. 101500010378365 I Quarterly VAT Return for the 41h Quarter of CY 2014, filed on January 23, 2015 with filing reference no. 101500010401784 Sales Invoice No. 115913 of Accent Micro Technologies Inc. dated November 3, 2010 issued to Petitioner Third Amended and Restated Schedule of Services for Project OKS TOV FAS Asset Management Americas IntraGroup Service Agreement of Deutsche Bank PBC S.A. and Petitioner Third Amended and Restated Schedule of Services for Project OKS TOV FAS Asset Management Americas Third Amended and Restated Schedule of Services for Project OKS TOV FAS Asset Management Americas Third Amended and Restated Schedule of Services for Project OKS TOV FAS Asset Management Americas Certificate of Non-Registration of Bankers International Corporation issued by the Securities and Exchange Commission Certificate of Non-Registration of DB Energy Trading LLC issued by the Securities and Exchange Commission Sales Invoice No. 113013 of Accent Micro Technologies Inc. dated August 6, 2010 issued to Petitioner Certificate of Non-Registration of Deutsche Asset Management Korea Company Limited issued by the Securities and Exchange Commission Certificate of Non-Registration of Deutsche Bank Aktienesellschaft lnlandsbank Filiale Johannesburg South Africa issued by the Securities and Exchange Commission L.

CTA Case No. 8861 Page 18 of 42 Deutsche Knowledge Services Pte., Ltd. vs. CIR DECISION Exhibit Description P-36 Certificate of Non-Registration of Deutsche Bank Americas Holding Corp issued by the Securities and Exchange P-37 Commission P-38 Certificate of Non-Registration of Deutsche Bank Netherlands P-39 N.V. issued by the Securities and Exchange Commission Certificate of Non-Registration of Deutsche Bank Polska Spolka P-40 Akcyjna issued by the Securities and Exchange Commission P-41 Certificate of Non-Registration of Deutsche Investment P-42 Management Americas Inc. issued by the Securities and P-43 Exchange Commission Certificate of Non-Registration of Deutsche Securities Korea Co. P-44 issued by the Securities and Exchan_B_e Commission Certificate of Non-Registration of DWS Investment SA issued by P-45 the Securities and Exchange Commission Certificate of Non-Registration of 000 Deutsche Bank issued P-46 by the Securities and Exchange Commission Certificate of registration of the Corporation/Association Duly I P-47 Consularized with the Philippine Consulate of DB International . (Asia) Limited P-48 Certificate of registration of the Corporation/Association Duly Consularized with the Philippine Consulate of Deutsche Bank P-49 (Malaysia) Berhad Certificate of registration of the Corporation/Association Duly P-50 Consularized with the Philippine Consulate of Deutsche Bank P-51 Aktiengesellschaft, Asia Pacific Head Office P-52 to P- Certificate of registration of the Corporation/Association Duly 226 Consularized with the Philippine Consulate of Deutsche Bank P-227 to P- AG New York Branch 229 Certificate of registration of the Corporation/Association Duly P-230 to 736 Consularized with the Philippine Consulate of Deutsche Bank Aktiengesellschaft, Seoul Branch P-737 Certificate of registration of the Corporation/Association Duly Consularized with the Philippine Consulate of Deutsche Bank Aktiengesellschaft Certificate of registration of the Corporation/Association Duly Consularized with the Philippine Consulate of Deutsche Bank Securities Inc. Sales Invoice No. 114022 of Accent Micro Technologies Inc. dated August 27, 2010 issued to Petitioner Sales Invoice No. 115040 of Accent Micro Technologies Inc. dated November 4, 2010 issued to Petitioner Official Receipts with Attached Invoices- Zero-Rated Sales Official Receipts with Attached Invoices- Vatable 12% Sales Official Receipts with Attached Invoices- Input VAT supports for Purchase of Services, Goods Other than Capital Goods, Capital Goods Not Exceeding P1 Million, Capital Goods Exceeding P1 Million and Services Rendered by Non Resident Citizens Sales Invoice No. 117706 of Accent Micro Technologies Inc. dated January 18, 2011 issued to Petitioner (.

CTA Case No. 8861 Page 19 of 42 Deutsche Knowledge Services Pte., Ltd. vs. CIR DECISION Exhibit Description P-738 Sales Invoice No. 11703 of Accent Micro Technologies Inc. dated January 18, 2011 issued to Petitioner P-739 Sales Invoice No. 117705 of Accent Micro Technologies Inc. dated January 18, 2011 issued to Petitioner P-740 to P- Official Receipts with Attached Invoices- Input VAT supports 756 for Purchase of Services, Goods Other than Capital Goods, Capital Goods Not Exceeding P1 Million, Capital Goods Exceeding P1 Million and Services Rendered by Non Resident Citizens P-757 Sworn Statement of Ms. Katherine 0. Constantino to Questions Propounded by Atty. Nathan Michael 0. Pico dated Ap_ril1, 2015 P-757-a Signature of Ms. Katherine 0. Constantino On the other hand, respondent manifested that he will no longer present evidence. 25 The case was submitted for decision on August 4, 201626, considering respondent's Memorandum27 filed on September 28, 2015 and petitioner's Memorandum28 filed on May 30, 2016. The parties submitted the following issue29 for this Court's resolution: Whether or not petitioner is entitled to the claim for refund of or issuance of Tax Credit Certificate (TCC) for excess or unutilized input VAT in the amount of P20,881,608.09 for the 1st quarter of CY 2013. Petitioner anchors its claim on Section 108(8)(2) in relation to Sections 110(8) and 112(A) and (C) of the National Internal Revenue Code (NIRC) of 1997, as amended, which state: "SEC. 108. Value-added Tax on Sale ofServices and Use or Lease ofProperties. - 25 Minutes of the Hearing dated April 7, 2015, Docket, val. II, pp. 1565-1568. 26 Resolution dated August 4, 2016, Docket, val. IV, pp. 3932-3935. 27 Docket, val. IV, pp. 3239-3248. 28 Docket, vol. IV, pp. 3894-3918. 29 Issues, JSFI, Docket, val. II, p. 1446. c.

CTA Case No. 8861 Page 20 of 42 Deutsche Knowledge Services Pte., Ltd. vs. CIR DECISION 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); (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); SEC. 110. Tax Credits. - XXX XXX XXX (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 112.30 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 30 As amended by Republic Act No. 9361, November 21, 2006. c.

CfA Case No. 8861 Page 21 of 42 Deutsche Knowledge Services Pte., Ltd. vs. CIR DECISION issuance of a tax credit certificate or refund of creditable input tax due or paid attributable to such sales, except transitional input tax, to the extent that such input tax has not been applied against output tax: Provided, however, That in the case of zero- rated sales under Section 106(A)(2)(a)(1), (2) and (b) and Section 108(8)(1) and (2), the acceptable foreign currency exchange proceeds thereof had been duly accounted for in accordance with the rules and regulations of the 8angko Sentral ng Pilipinas (8SP): Provided, further, That where the taxpayer is engaged in zero-rated or effectively zero-rated sale and also in taxable or exempt sale of goods of properties or services, and the amount of creditable input tax due or paid cannot be directly and entirely attributed to any one of the transactions, it shall be allocated proportionately on the basis of the volume of sales: Provided, finally, That for a person making sales that are zero-rated under Section 108(8)(6), the input taxes shall be allocated ratably between his zero-rated and non-zero-rated sales. XXX XXX XXX (C) Period within which Refund or Tax Credit of Input Taxes shall be Made. - In proper cases, the Commissioner shall grant a refund or issue the tax credit certificate for creditable input taxes within one hundred twenty (120) days from the date of submission of complete documents in support of the application filed in accordance with Subsection (A) hereof. In case of full or partial denial of the claim for tax refund or tax credit, or the failure on the part of the Commissioner to act on the application within the period prescribed above, the taxpayer affected may, within thirty (30) days from the receipt of the decision denying the claim or after the expiration of the one hundred twenty day-period, appeal the decision or the unacted claim with the Court of Tax Appeals." From the foregoing provisions, in order to be entitled to a tax credit or refund of excess 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; c

CTA Case No. 8861 Page 22 of 42 Deutsche Knowledge Services Pte., Ltd. vs. CIR DECISION 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: The first requisite requires that the taxpayer is VAT-registered. In the JSFI, the parties agreed that petitioner was registered with the BIR on June 16, 2005 as VAT-registered taxpayer with Taxpayer Identification No. 238-763-115-00031 � Second Requisite: The second requisite requires that the claim for refund/tax credit must be filed within the prescriptive period, both in the administrative and judicial levels. Petitioner's administrative claim for refund/tax credit is governed by Section 112(A) of the NIRC of 1997, as amended, which categorically provides that the application for tax credit certificate/refund must be filed within two years after the close of the taxable quarter when the zero-rated or effectively zero-rated sales were made. The present claim covers the first quarter of CY 2013, which closed on March 31, 2013. Counting two years from the said date, petitioner had until March 31, 2015, within which to file its administrative claim for refund/tax credit. Thus, petitioner's administrative claim filed on March 13, 201432, together with its supporting documents, with the LTRAD 3 of the BIR, was seasonably filed. 31 Par. 4, Stipulated Facts, JSFI, Docket, vol. II, p. 1446; Exhibit "P-2", Docket, vol. II, p. 1670. 32 Exhibits "P-4" and "P-4-a", Docket, vol. II, pp. 1697-1702. c

CTA Case No. 8861 Page 23 of 42 Deutsche Knowledge Services Pte., Ltd. vs. CIR DECISION On the other hand, the timeliness of petitioner's judicial appeal is governed by Section 112(C) of the NIRC of 1997, as amended, which provides that the CIR has 120 days from the date of the submission of the complete documents in support of the application for refund/tax credit within which to grant or deny the claim. In case of full or partial denial by the CIR, the taxpayer's recourse is to file an appeal before the Court of Tax Appeals within 30 days from receipt of the decision of the CIR. However, if after the 120-day period the CIR fails to act on the application for refund/tax credit, the remedy of the taxpayer is to appeal the inaction of the CIR to the CTA within 30 days. Applying the foregoing to the present claim, from March 13, 2014, the date when petitioner filed its administrative claim and submitted its complete documents in support of its application for refund/tax credit certificate, respondent had 120 days, or until July 11, 2014 to decide on petitioner's claim. Considering that respondent did not act on petitioner's claim on or before July 11, 2014, the latter had until August 11, 201433, the last day of the 30-day period, within which to file its judicial claim. Evidently, petitioner likewise seasonably filed its judicial claim when it filed the instant Petition for Review on August 8, 2014. Third Requisite: The third requisite requires that the taxpayer be engaged in zero- rated or effectively zero-rated sales under Sections 106(A)(2)(a)(1), (2) and (b) and 108(8)(1) and (2), and the acceptable foreign currency exchange proceeds have been duly accounted for in accordance with Bangko Sentral ng Pilipinas (8SP) rules and regulations. In the case of Commissioner ofInternal Revenue vs. Burmeister and Wain Scandinavian Contractor Mindanao, Inc.34, the Supreme Court held that in order for the supply of services to be VAT zero-rated under Section 108(8)(2) of the NIRC of 1997, as amended, the following requisites must be met: 1. the services must be other than processing, manufacturing or repacking of goods; 33 August 10, 2014 being a Sunday. 34 G.R. No. 153205, January 22, 2007. (.

CTA Case No. 8861 Page 24 of 42 Deutsche Knowledge Services Pte., Ltd. vs. CIR DECISION 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 requisite. It is undisputed that petitioner is licensed to do business as ROHQ in the Philippines by the SEC pursuant to the Omnibus Investments Code of 1987, as amended by Republic Act No. 8756 and its implementing rules and regulations, to engage in general administration and planning; business planning and coordination; sourcing/procurement of raw materials and components; corporate finance advisory services; marketing control and sales promotion; training and personnel management; logistics services; research and development services and product development; technical support and maintenance; data processing and communication and business development.35 Such services are not in the same category as "processing, manufacturing or repacking of goods". In compliance with the third requisite, petitioner presented the following documents showing its client-affiliates are non-resident foreign corporations doing business outside the Philippines: 1. SEC Certifications of Non-Registration of Company36; 2. Certificates/Articles of Association/Registration/Foreign Incorporation37; 3. Printout of AMinet Company Profile Fact Sheets38; and 4. Intragroup Service Agreements39 35 Par. 3, Stipulated Facts, JSFI, Docket, vol. II, pp. 1445-1446; Exhibit "P-1", Docket, vol. II, pp. 1652-1669. 36 Exhibits "P-5" to "P-5.44", "P-31" to "P-32", and "P-34" to "P-42", Docket, vol. II, pp. 1703-1747, and Folder 12, Box 1. 37 Exhibits "P-7" to P-7.6", "P-8" to "P-8.41" (though Exhibits "P-8.25" to "P-8.27", "P-8.29" to "P- 8.32", "P-8.34" and "P-8.37" were denied admission), and "P-43" to P-49", Docket vol. II, pp. 2003-2076, Docket, vol. 11-111, pp. 2077-3063, and Folder 13, Box 1. 38 Exhibits "P-9" to "P-9.56", Docket, vol. III, pp. 3064-3140. 39 Exhibits "P-6" to "P-6.44" (though Exhibit "P-6.20" was denied admission); "P-26" to "P-30", Docket vol. II, pp. 1748-2002, and Folder 11, Box 1. c.

CTA Case No. 8861 Page 25 of 42 Deutsche Knowledge Services Pte., Ltd. vs. CIR DECISION Each of the aforesaid documents, standing alone, is inadequate proof that petitioner's client is a non-resident foreign corporation doing business outside the Philippines. While the SEC Certificates of Non-Registration show that the named entities therein are not registered corporations/partnerships in the Philippines, the same do not prove that such entities are non- resident foreign corporations doing business outside the Philippines. Likewise, the service agreements only show the names and addresses of petitioner's customers to whom it renders services but the same do not establish that such customers are non-resident foreign corporations doing business outside the Philippines. Also, the Certificates/Articles of Association/Registration/Foreign Incorporation only prove that the named entities therein were incorporated/organized abroad but do not establish that such entities are not doing business in the Philippines. In order 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 and Certificates/Articles of Association/Registration/Foreign Incorporation, and that there is no other indication that the recipient of the services is doing business in the Philippines. This Court, however, cannot give credence to the purported foreign business registration print-outs retrieved from the AMinet database which is a database set up by Deutsche Bank Global (the Head Office located in Germany). The said documents are not sufficient to establish the fact that the service recipients are non- resident foreign corporations doing business outside the Philippines, as they may be considered self-serving and can be easily manipulated to favor petitioner in view of its affinity with the entity that maintains or keeps the said database. In this case, the table below shows whether petitioner complied with the third requisite: c.

CTA Case No. 8861 Page 26 of 42 Deutsche Knowledge Services pte., Ltd. vs. CIR DECISION ' SEC Certificate of Certificate/Article of Non-Registration Association/ Registration/ Deutsche Bank Aktiengesellschaft Inlandsbank Deutsche Bank Aktiengesellschaft Filiale (Exhibit No.) Foreign Incorporation/ Johannesburg P-5 (Exhibit No.) Deutsche Bank Aktiengesellschaft Filiale Amsterdam P-7 Deutsche Bank Aktiengesellschaft Filiale Riad P-35 Deutsche Bank Aktiengesellschaft, Filiale Dubai P-5.1 P-8 (DIFC) P-5.2 000 Deutsche Bank None Deutsche Bank Sociedad Anonima Es_l)_anola P-5.3 Deutsche Bank Aktiengesellschaft, Filiale Zurich P-42 P-8.1 Deutsche Bank Aktiengesellschaft, Filiale Wien P-5.4 Deutsche Bank Aktiengesellschaft, Asia Pacific Head P-5.5 None Office P-5.6 None Deutsche Bank Aktiengesellschaft, Filiale Singapore None Deutsche Bank Aktiengesellschaft, Filiale Bangkok P-5.7 None Deutsche Bank Aktiengesellschaft, Filiale Mumbai P-5.8 None Deutsche Bank Aktiengesellschaft, Filiale Hongkong P-5.9 Deutsche Bank Aktiengesellschaft Filiale Jakarta P-5.10 P-45 Deutsche Bank Aktiengesellschaft, Filiale Ho-Chi-Minh P-5.11 P-8.6 City P-5.12 P-8.7 Deutsche Bank Aktiengesellschaft Filiale Seoul P-8.8 Deutsche Bank Aktiengesellschaft Filiale Labuan P-5.13 DWS Investment SA P-5.14 P-7.1 I P-8.9 Deutsche Bank Americas Holding Corp P-5.15 Deutsche Bank Aktiengesellschaft Filiale Brussel P-41 P-7.2 Deutsche Bank (Mala_y_sia) Berhad P-36 Deutsche Bank Aktiengesellschaft Filiale New York P-5.16 P-8.11 Deutsche Bank Aktiengesellschaft Filiale London P-5.17 P-47 Deutsche Bank Aktiengesellschaft, Filiale Tokyo P-5.18 P-8.13 Deutsche Bank Aktiengesellschaft, Filiale Paris P-5.19 Deutsche Bank Aktiengesellschaft, Filiale Prague P-5.20 None Deutsche Bank Luxembourg S.A. P-5.21 Deutsche Securities Inc. P-5.22 P-8.15 Deutsche Bank Polska Spolka Akcyjna P-5.23 Deutsche Bank Suisse SA P-5.24 None Deutsche Bank Societa Per Azione P-38 Deutsche Asset Management Investmentgesselchaft P-5.26 P-44 Deutsche Bank China Co. Ltd. Shanghai Branch P-5.27 P-46 DWS Holding & Service GMBH P-5.28 RREEF Management GMBH P-5.29 P-7.3 I P-8.17 Deutsche Bank Real Estate Japan YK P-5.30 None Deutsche Investment Management Americas Inc. P-5.31 RREEF Management LLC P-5.32 P-8.19 Deutsche Asset Management Korea Company Limited Deutsche Bank Securities Inc. P-39 None Deutsche Asia Pacific Holdings Pte Ltd. P-5.33 P-34 P-8.20 P-5.34 P-7.4 P-5.35 None None None None None P-8.23 P-8.24 None None None P-8.28 P-49 P-7.5 (.,

CTA Case No. 8861 Page 27 of 42 Deutsche Knowledge Services pte,, Ltd. vs. CIR DECISION P-5.36 None P-5.37 PT Deutsche Securities Indonesia P-5.25 P-7.6 I Deutsche Group Services Pty Limited P-40 Deutsche Bank PBC Spolka Akcyjna P-5.38 None I Deutsche Securities Korea Co P-5.39 Deutsche Bank Trust Company Americas P-8.33 I DB Services New Jersey, Inc. None DB Investment Partners Inc None I Bankers International Corporation P-31 DB International {_AsiaJ Limited P-5.40 None I DB Energy Trading LLC P-32 DBOI Global Services Private Limited P-5.41 P-8.35 Global Markets Centre Private Limited P-5.42 Deutsche Global Markets Limited None I Deutsche Trustees Malaysia Berhad None Deutsche Bank Netherlands N V P-43 DB Consorzio S. Cons. A.R.L. P-5.43 Deutsche Bank Aktiengesellschaft P-37 P-8.36 P-5.44 None None None P-8.38 P-8.39 P-8.40 None P-48 Correspondingly, only the sales of services by petitioner to entities which have the said two (2) required documents will be treated as subject to the 0�/o VAT rate, pursuant to Section 108(8)(2) of the NIRC of 1997, as amended. Corollary to the second requisite, Sections 113(A)(2), (8)(1), (2)(c) and (3) of the NIRC of 1997, as amended, as implemented by Sections 4.113-1(A)(2), (8)(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. c

CTA Case No. 8861 Page 28 of 42 Deutsche Knowledge Services Pte., Ltd. vs. CIR DECISION (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. 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. ~

CfA Case No. 8861 Page 29 of 42 Deutsche Knowledge Services Pte., Ltd. vs. CIR DECISION 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: XXX XXX XXX (c) If the sale is subject to zero percent (0�/o) VAT, the term "zero-rated sale" shall be written or printed prominently on the invoice or receipt; (Emphasis supplied) Pursuant to the foregoing provisions, the foreign currency remittances referred to under Section 108(8)(2) of the NIRC of 1997, as amended, must likewise be supported by VAT zero-rated official receipts. To prove that 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 1st quarter of CY 2013, petitioner submitted documents such as Sales Schedule40, Zero-rated official receipts with attached Invoices41, and Certificate of Inward Remittance42 issued by Deutsche Bank AG Manila. Upon verification of the foregoing pieces of evidence, the Court finds that out of the P1,413,943,646.13 zero-rated sales declared per VAT Return for the 1st quarter of CY 2013, only the amount of 25,282,504.57 with peso equivalent of P1,347,489,133.11, as 40 Exhibit "P-13". 41 Exhibits "P-52" to "P-226". 42 Exhibit "P-21". c,

crA Case No. 8861 Page 30 of 42 Deutsche Knowledge Services Pte., Ltd. vs. CIR DECISION 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) DB Energy Trading LLC 25-Mar-13 3129 1-Feb-13 3016 No. 4,209.08 223,353.61 DB International (Asia) Limited 1-Feb-13 3017 P-217 16,164.20 896,255.43 1-Feb-13 3015 P-110 114,097.07 6,326,333.39 DB International (Asia) Limited 28-Feb-13 3085 P-111 12,638.95 700,791.10 31-Jan-13 3014 P-109 11,133.69 595,159.19 Deutsche Asia Pacific Holdings Pte Ltd P-175 26-Feb-13 3076 P-108 9,100.32 501,665.51 Deutsche Asia Pacific Holdings Pte Ltd Deutsche Asset Management (Korea) 22-Mar-13 3127 P-166 4,934.44 261,535.09 Company Limited 23-Jan-13 2999 Deutsche Asset Management (Korea) 23-Jan-13 3000 P-215 7,197.99 379,407.14 Company Limited 23-Jan-13 3001 P-93 Deutsche Asset Management (Korea) 27-Feb-13 3080 P-94 7,841.35 423,462.15 Company Limited 27-Feb-13 3084 P-95 26,292.30 1,419,882.27 25-Mar-13 3130 P-170 Deutsche Bank (Malaysia) Berhad 25-Mar-13 3131 P-174 7,101.60 383,512.89 25-Mar-13 3132 P-218 26,837.64 1,429,712.74 Deutsche Bank (Malaysia) Berhad 14-Jan-13 2967 P-219 P-220 3,945.34 210,178.80 Deutsche Bank (Malaysia) Berhad 6-Feb-13 3022 P-65 3,457.29 183,460.09 15,590.45 827,302.71 Deutsche Bank (Malaysia) Berhad 13-Feb-13 3029 P-116 5,752.27 305,242.54 Deutsche Bank (Malaysia) Berhad 18-Feb-13 3051 P-122 728,239.09 39,557,750.74 Deutsche Bank (Malaysia) Berhad 13-Mar-13 3095 P-143 211.90 11,649.79 Deutsche Bank (Malaysia) Berhad 19-Mar-13 3118 P-183 868,236.66 47,541,209.98 Deutsche Bank (Malaysia) Berhad 20-Mar-13 3121 P-206 260,748.24 14,117,535.51 Deutsche Bank Aktiengesellschaft, Asia Pacific Head Office 18-Jan-13 2979 P-209 43,865.20 2,324,942.45 Deutsche Bank Aktiengesellschaft, Asia Pacific Head Office 24-Jan-13 3004 P-77 67,081.94 3,530,554.70 Deutsche Bank Aktiengesellschaft, Asia Pacific Head Office 21-Feb-13 3064 P-98 618,029.94 32,461,015.21 Deutsche Bank Aktiengesellschaft, Asia Pacific Head Office 18-Mar-13 3106 P-156 8,859.58 478,861.10 Deutsche Bank Aktiengesellschaft, Asia Pacific Head Office 13-Feb-13 3026 P-194 17,705.68 956,525.99 Deutsche Bank Aktiengesellschaft, Asia Pacific Head Office 15-Jan-13 2969 P-119 8,803.10 475,446.36 Deutsche Bank Aktiengesellschaft, Asia Pacific Head Office 4-Feb-13 3020 P-67 671.09 35,357.40 Deutsche Bank Aktiengesellschaft, Filiale Bangkok P-114 5,714.24 312,889.21 Deutsche Bank Aktiengesellschaft, Filiale Bangkok 122,847.44 6,654,282.20 Deutsche Bank Aktiengesellschaft, Filiale Banqkok 81.30 4,490.00 Deutsche Bank Aktiengesellschaft, Filiale Bangkok Deutsche Bank Aktiengesellschaft, Filiale Ho-Chi-Minh-Citv Deutsche Bank Aktiengesellschaft, Filiale Hongkong Deutsche Bank Aktiengesellschaft, Filiale Hongkong ~

CTA Case No. 8861 Page 31 of 42 Deutsche Knowledge Services Pte., Ltd. vs. CIR DECISION Deutsche Bank Aktiengesellschaft, 4-Feb-13 3021 P-115 1,468.69 81,112.04 Filiale Hongkonq 124,130.92 6,724,067.67 Deutsche Bank Aktiengesellschaft, 15-Feb-13 3042 P-134 248,207.02 13,343,517.56 Filiale Hongkonq 1,044,111.60 54,952,094.68 Deutsche Bank Aktiengesellschaft, 22-Feb-13 3073 P-163 Filiale Hongkong 7,653.07 413,334.43 Deutsche Bank Aktiengesellschaft, 19-Mar-13 3119 P-207 8,146.91 437,974.88 Filiale Hol}g_kong 3,281.00 180,338.95 Deutsche Bank Aktiengesellschaft, 21-Feb-13 3062 P-154 3,281.00 175,388.15 Filiale Jakarta Deutsche Bank Aktiengesellschaft, 22-Feb-13 3069 P-159 789.07 42,785.95 Filiale Jakarta 2,117.13 114,375.15 Deutsche Bank Aktiengesellschaft, 28-Jan-13 3008 P-102 2,166.70 118,173.38 Filiale Johannesburg Deutsche Bank Aktiengesellschaft, 28-Feb-13 3081 P-171 570.65 30,112.51 Filiale Johannesburg 1,125,553.88 59,853,117.20 Deutsche Bank Aktiengesellschaft, 2-Jan-13 2951 P-52 1,094,122.64 59,063,475.41 Filiale Labuan 1,773,241.65 96,055,010.66 Deutsche Bank Aktiengesellschaft, 24-Jan-13 3003 P-97 Filiale Labuan 136,078.12 7,367,596.02 Deutsche Bank Aktiengesellschaft, 20-Feb-13 3060 P-152 5,816.97 315,530.37 Filiale Labuan Deutsche Bank Aktiengesellschaft, 26-Mar-13 3137 P-224 69,671.00 3,667,356.03 Filiale Labuan 7,378,283.58 388,322,604.81 Deutsche Bank Aktiengesellschaft, 10-Jan-13 2961 P-59 Filiale London 65,875.15 3,581,362.26 Deutsche Bank Aktiengesellschaft, 17-Jan-13 2975 P-73 16,785.47 914,343.04 Filiale London 53,522.73 Deutsche Bank Aktiengesellschaft, 15-Feb-13 3043 P-135 35,742.64 2,915,777.01 Filiale London 40,102.46 1,941,530.55 Deutsche Bank Aktiengesellschaft, 18-Feb-13 3048 P-140 2,178,354.80 Filiale London 59.55 Deutsche Bank Aktiengesellschaft, 19-Feb-13 3053 P-145 512,605.61 3,214.66 Filiale London 27,682,614.97 Deutsche Bank Aktiengesellschaft, 14-Mar-13 3097 P-185 4,183.01 Filiale London 17,951.43 231,017.06 Deutsche Bank Aktiengesellschaft, 19-Mar-13 3117 P-205 514,757.92 976,924.36 Filiale London 27,707,225.97 Deutsche Bank Aktiengesellschaft, 14-Jan-13 2964 P-62 Filiale Mumbai Deutsche Bank Aktiengesellschaft, 14-Feb-13 3034 P-126 Filiale Mumbai Deutsche Bank Aktiengesellschaft, 14-Feb-13 3035 P-127 Filiale Mumbai Deutsche Bank Aktiengesellschaft, 14-Jan-13 2963 P-61 Filiale New York Deutsche Bank Aktiengesellschaft, 15-Jan-13 2968 P-66 Filiale New York Deutsche Bank Aktiengesellschaft, 16-Jan-13 2972 P-70 Filiale New York Deutsche Bank Aktiengesellschaft, 23-Jan-13 2997 P-91 Filiale New York Deutsche Bank Aktiengesellschaft, 4-Feb-13 3018 P-112 Filiale New York Deutsche Bank Aktiengesellschaft, 14-Feb-13 3032 P-124 Filiale New York Deutsche Bank Aktiengesellschaft, 25-Feb-13 3075 P-165 Filiale New York a.

CTA case No. 8861 Page 32 of 42 Deutsche Knowledge Services Pte., Ltd. vs. CIR DECISION Deutsche Bank Aktiengesellschaft, 21-Mar-13 3122 P-210 16,793.69 884,336.23 Filiale New York 22-Mar-13 3125 P-213 95,506.14 5,034,142.97 Deutsche Bank Aktiengesellschaft, 25-Mar-13 3129 P-217 470,864.86 24,986,307.27 Filiale New York 25-Mar-13 3129 P-217 1,050,879.36 55,764,608.48 Deutsche Bank Aktiengesellschaft, 25-Mar-13 3129 P-217 (288,899.90) (15,330,389.43) Filiale New York 17-Jan-13 2974 P-72 Deutsche Bank Aktiengesellschaft, 14-Feb-13 3033 P-125 4,706.91 254,360.68 Filiale New York 18-Feb-13 3050 P-142 4,706.91 256,424.12 Deutsche Bank Aktiengesellschaft, 1-Mar-13 3088 P-178 14,407.15 780,037.68 Filiale New York 7-Mar-13 3093 P-181 19,884.77 1,059,288.54 Deutsche Bank Aktiengesellschaft, 27-Mar-13 3142 P-211 74,307.14 3,939,028.92 Filiale Paris 14-Jan-13 2962 P-60 8,195.76 428,834.62 Deutsche Bank Aktiengesellschaft, 15-Jan-13 2970 P-68 247,187.74 13,427,171.30 Filiale Paris 14-Feb-13 3037 P-129 165,236.37 8,950,365.06 Deutsche Bank Aktiengesellschaft, 14-Feb-13 3038 P-130 175,221.85 9,535,646.67 Filiale Riad 14-Feb-13 3039 P-131 3,981.20 216,658.58 Deutsche Bank Aktiengesellschaft, 14-Feb-13 3040 P-132 14,566.27 792,702.53 Filiale Seoul 19-Mar-13 3120 P-208 159,116.41 8,659,181.86 Deutsche Bank Aktiengesellschaft, 22-Mar-13 3128 P-216 39,021.27 2,053,708.17 Filiale Seoul 21-Jan-13 2983 P-81 1,200,994.00 63,304,573.89 Deutsche Bank Aktiengesellschaft, 21-Jan-13 2984 P-82 40,746.87 2,209,234.58 Filiale Seoul 21-Jan-13 2985 P-83 8,573.81 464,859.20 Deutsche Bank Aktiengesellschaft, 21-Jan-13 2986 P-84 131,578.31 7,133,979.92 Filiale Singapur 20-Feb-13 3055 P-147 Deutsche Bank Aktiengesellschaft, 20-Feb-13 3056 P-148 828.60 44,925.46 Filiale Sinqapur 20-Feb-13 3057 P-149 25,286.04 1,379,118.84 Deutsche Bank Aktiengesellschaft, 20-Feb-13 3058 P-150 269,520.66 14,699,850.94 Filiale Singapur 20-Feb-13 3059 P-151 244,280.15 13,323,215.34 Deutsche Bank Aktiengesellschaft, 19-Mar-13 3107 P-195 118,748.05 6,476,604.15 Filiale Sinqapur Deutsche Bank Aktiengesellschaft, 8,697.76 474,382.10 Filiale Singapur 113,072.10 5,951,038. 90 Deutsche Bank Aktiengesellschaft, Filiale Sinqapur Deutsche Bank Aktiengesellschaft, Filiale Sinqapur Deutsche Bank Aktiengesellschaft, Filiale Singapur Deutsche Bank Aktiengesellschaft, Inlandsbank Deutsche Bank Aktiengesellschaft, Inlandsbank Deutsche Bank Aktiengesellschaft, Inlandsbank Deutsche Bank Aktiengesellschaft, Inlandsbank Deutsche Bank Aktiengesellschaft, Inlandsbank Deutsche Bank Aktiengesellschaft, Inlandsbank Deutsche Bank Aktiengesellschaft, Inlandsbank Deutsche Bank Aktiengesellschaft, Inlandsbank Deutsche Bank Aktiengesellschaft, Inlandsbank Deutsche Bank Aktiengesellschaft, Inlandsbank L.

CTA case No. 8861 Page 33 of 42 Deutsche Knowledge Services Pte., Ltd. vs. CIR DECISION Deutsche Bank Aktiengesellschaft, 19-Mar-13 3108 P-196 1,102.32 58,015.63 Inlandsbank Deutsche Bank Aktiengesellschaft, 19-Mar-13 3109 P-197 1,502,480.57 79,076,273.59 Inlandsbank Deutsche Bank Aktiengesellschaft, 19-Mar-13 3110 P-198 41,526.66 2,185,568.05 Inlandsbank Deutsche Bank Aktiengesellschaft, 19-Mar-13 3111 P-199 320,070.53 16,845,465.63 Inlandsbank Deutsche Bank Aktiengesellschaft, 19-Mar-13 3112 P-200 12,450.70 655,286.32 Inlandsbank Deutsche Bank Aktiengesellschaft, 19-Mar-13 3113 P-201 84,899.03 4,468,276.70 Inlandsbank Deutsche Bank Aktiengesellschaft, 19-Mar-13 3114 P-202 84,899.03 4,468,276.70 Inlandsbank Deutsche Bank Aktiengesellschaft, 19-Mar-13 3115 P-203 835.86 43,991.71 Inlandsbank Deutsche Bank Aktiengesellschaft, 22-Mar-13 3126 P-214 53,794.40 2,835,510.89 Inlandsbank Deutsche Bank Americas Holdinq Corp 15-Jan-13 2968 P-66 53.03 2,880.58 Deutsche Bank Luxembourg S.A. 17-Jan-13 2976 P-74 3,609.10 194,828.24 Deutsche Bank Luxembourg S.A. 21-Feb-13 3068 P-158 3,609.10 194,923.78 Deutsche Bank Netherland N.V. 9-Jan-13 2957 P-55 1,274.15 Deutsche Bank Netherland N.V. 9-Jan-13 2958 P-56 2,631.59 68,002.98 Deutsche Bank Netherland N.V. 22-Jan-13 2992 P-88 13,124.00 140,451.25 Deutsche Bank Netherland N.V. 22-Jan-13 2993 P-89 4,751.45 705,541.40 Deutsche Bank Netherland N.V. 21-Feb-13 3067 P-157 4,751.45 257,751.15 Deutsche Bank Netherland N.V. 22-Feb-13 3071 P-161 13,124.00 256,620.92 Deutsche Bank Netherland N.V. 15-Mar-13 3101 P-189 711,935.53 Deutsche Bank Netherland N.V. 15-Mar-13 3102 P-190 430.89 Deutsche Bank Securities Inc. 18-Jan-13 2978 P-76 4,397.62 22,803.46 Deutsche Bank Securities Inc. 22-Mar-13 3125 P-213 4,847.11 232,729.83 Deutsche Group Services Pty Limited 15-Jan-13 2971 P-69 9,744.48 261,986.73 � Deutsche Group Services Pty Limited 17-Jan-13 2977 P-75 15,215.88 513,633.00 Deutsche Group Services Ptv Limited 15-Feb-13 3046 P-138 121,973.07 827,188.66 Deutsche Group Services Pty Limited 14-Mar-13 3098 P-186 318,183.50 6,599,411.67 Deutsche Group Services Pty Limited 25-Mar-13 3134 P-222 193,875.30 17,242,504.07 Deutsche Securities Inc. 10-Jan-13 2959 P-57 18,325.25 10,211,826.60 Deutsche Securities Inc. 15-Feb-13 3044 P-136 21,762.40 975,699.23 Deutsche Securities Inc. 15-Feb-13 3045 P-137 416,644.18 1,157,250.22 Deutsche Securities Korea Co. 8-Feb-13 3023 P-117 144,649.58 22,569,265.25 Deutsche Securities Korea Co. 1-Mar-13 3086 P-176 9,116.67 7,835,546.27 Deutsche Securities Korea Co. 27-Mar-13 3140 P-104 6,704.16 497,214.70 Deutsche Trustees Malaysia Berhad 23-Jan-13 2998 P-92 1,966.87 357,139.65 Deutsche Trustees Malaysia Berhad 27-Feb-13 3079 P-169 1,038.97 102,914.43 Deutsche Trustees Malaysia Berhad 26-Mar-13 3136 P-223 1,083.35 DWS Holding & Service GmbH 21-Jan-13 2987 P-85 56,108.26 DWS Holding & Service GmbH 25-Mar-13 3133 P-221 889.46 57,712.95 DWS Holdinq & Service GmbH 27-Mar-13 3139 P-226 19,912.46 46,935.73 RREEF Management GmbH 31-Jan-13 3012 P-106 19,867.64 1,079,623.91 RREEF Manaqement GmbH 4-Mar-13 3089 P-179 1,056,648.91 4,324.50 227,321.44 TOTAL 18,214.87 999,452.83 24,672.19 1,314,320.87 25,282,504.57 1,347,489,133.11 (

CTA Case No. 8861 Page 34 of 42 Deutsche Knowledge Services Pte., Ltd. vs. CIR DECISION Fourth and Fifth Requisites: Having resolved that petitioner had VAT zero-rated receipts for the pt quarter of CY 2013 in the amount of P1,347,489,133.11, the Court proceeds to determine the amount of input VAT attributable thereto. In its Quarterly VAT Return for the 1st quarter of CY 201343, petitioner reported input VAT in the aggregate amount of P20,964,520.35, of which the amount of P20,881,608.09 is the subject of the present claim, as computed below: Purchases of Capital Goods not exceeding P1M p 38,047.30 Purchases of Capital Goods Exceeding P1M 448,559.31 Domestic Purchases of Goods Other than Capital Goods 125,844.00 Domestic Purchases of Services 19,833 171.53 Services rendered by non-residents TOTAL 518,898.21 Divided by total declared sales p 20,964,520.35 Multiply by zero-rated sales _!l!p_ut VAT claimed for Refund/TCC 1,419,557,833.96 1,413,943 646.13 p 20,881,608.09 In support of its input VAT claim, petitioner presented the corresponding invoices, official receipts, BIR Forms No. 1600 and other documents44 issued by its suppliers; which were examined by the Court-commissioned Independent CPA, Ms. Katherine 0. Constantino. The Independent CPA summarized her findings as follows: 45 FINDINGS Reference to Amount I ICPA Report PROPERLY SUPPORTED INPUT TAX p 45 895.62 I Purchases of goods with properly supported Invoices Annex 9-a Purchases of services with properly supported Official Annex 9-b 18,5571115.54 Receipts (ORs) Purchases of capital goods not exceeding one (1) million Annex 9-c 38,047.30 with properly supported Invoices 43 Exhibit "P-3", Docket, vol. II, pp. 1671-1674. 44 Exhibits "P-230" to "P-736" and "P-740" to "P-756", Folder 17, Box 2. 45 Exhibit "P-12", pp. 13-14 and 17. l.

CTA Case No. 8861 Page 35 of 42 Deutsche Knowledge Services Pte., Ltd. vs. CIR DECISION Services rendered to non-resident citizen with properly Annex 9-d 518,898.21 supported BIR Forms 1600 and payment confirmation forms Annex 10-a 254,666.91 Purchases of Capital Goods exceeding one (1) Million with Annex 9-e p 19,414,623.58 properly supported Invoices. Annex 9-f Annex 9-g p 8,192.15 I Total Annex 9-h I I Annex 9-i Annex 9-j 68,708.01 OTHER FINDINGS Annex 9-k Annex 9-1 I Purchases of Goods other than Capital Goods Annex 9-m 1 Purchases of goods supported by VAT REG. TIN Invoices Annex 9-n 3,048.22 Annex 9-o without VAT breakdown Annex 9-p p 79,948.38 2 Purchases of goods supported by VAT REG. TIN Invoices Annex 9-q Annex 9-r p 45,523.06 with date not within the year of claim Annex 9-s 3 Purchases of goods supported by VAT REG. TIN Invoices 125,061.57 with date not within the year of claim and without VAT 2,697.86 breakdown 93,943.43 subtotal 12,527.88 Purchases of Services 87,019.41 1 Purchases of services supported by VAT REG. TIN. ORs 6,723.21 with date not within the year of claim 2 Purchases of services supported by VAT REG. TIN. ORs 2,970.00 with note that states "Not to be used for claim of Input 2,128.50 Tax" 3 Purchases of services supported by NON-VAT REG. TIN 2,264.00 ORs without VAT breakdown 259,039.60 4 Purchases of services supported by TIN NO. VAT I VAT 1,027.00 REG. TIN ORs with incorrect VAT breakdown 5 Purchases of services supported by VAT REG. TIN. ORs with incorrect Petitioner's TIN and date not within the quarter of claim 6 Purchases of services supported by VAT REG. TIN. ORs with incorrect VAT breakdown and date not within the quarter of claim 7 Purchases of services supported by VAT REG. TIN. ORs with note that states "Not to be used for claim of Input Tax" and date not within the quarter of claim 8 Purchases of services supported by VAT REG. TIN. ORs with unclear Petitioner's TIN but with correct VAT breakdown when computed indeQ_endently_ 9 Purchases of services supported by VAT REG. TIN ORs with date not within the quarter of claim and a correct VAT breakdown when computed independently 10 Purchases of services supported by VAT REG. TIN ORs with incomplete Petitioner's Name and without Petitioner's TIN 11 Purchases of services supported by certified true copy VAT REG. TIN ORs without Petitioner's TIN and a correct VAT breakdown when computed independently 12 Purchases of services supported by VAT REG. TIN ORs with abbreviated Petitioner's Name but without Petitioner's TIN and a date not within the year of claim (

CTA Case No. 8861 Page 36 of 42 Deutsche Knowledge Services Pte., Ltd. vs. CIR DECISION 13 Purchases of services supported by Certified True Copy Annex 9-t 33,659.89 VAT REG. TIN ORS with date not within the quarter of Annex 9-u claim. Annex 9-v 75,717.96 371,559.49 14 Purchases of services supported by Certified True Copy Annex 10-b 154,193.13 VAT REG. TIN ORS p 1,276,055.99 15 Purchases of services supported by documents other 193,892.40 than VAT ORs p 1,549,896.77 p 20,964,520.35 16 Purchases of services without support documents subtotal Purchases of Capital Goods exceeding one (1) million Purchases of capital goods exceeding one (1) million supported by VAT REG. TIN Invoices dated not within the year of claim. Total Grand Total From the foregoing, the Court finds that the input VAT in the amount of P1,549,896.77 should be disallowed for not being 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 RR No. 16-05, as amended. In addition, the input VAT in the amount of P2,910,858.21, as detailed below, shall be disallowed for petitioner's failure to meet the substantiation requirements prescribed under the aforesaid VAT law and regulations: FINDINGS Date of Invoice I Disallowed Exhibit Invoice Input VAT /Official Official Receipt Receipt No. A. PURCHASES OF CAPITAL GOODS NOT EXCEEDING 1MILLION Documents submitted do not clearly reflect the breakdown ofthe amount ofpurchases as well as the corresponding Input VAT Accent Micro Technologies, Inc. 18-Mar-13 146658 p 6,292.99 P-338 Accent Micro Technologies, Inc. 18-Mar-13 146659 6,292.99 P-339 Accent Micro Technologies, Inc. 14-Mar-13 146461 42.86 P-340 Accent Micro Technologies, Inc. 14-Mar-13 146454 803.57 P-341 Accent Micro Technologies, Inc. 14-Mar-13 146452 482.14 P-342 Accent Micro Technologies, Inc. 14-Mar-13 146455 321.43 P-343 Accent Micro Technologies, Inc. 14-Mar-13 146456 321.43 P-344 Accent Micro Technologies, Inc. 14-Mar-13 146462 42.86 P-345 Total p 14,600.27 B. PURCHASES OF SERVICES - ---- ------------------------- (

CTA Case No. 8861 Page 37 of 42 Deutsche Knowledge Services Pte., Ltd. vs. CIR DECISION 1. Not dated within the period ofclaim 10-Apr-13 3595 p 377,508.24 P-239 6-24 Property Holdings, Inc. 6-24 Property Holdings, Inc. 10-Apr-13 3596 1,928,106.96 P-240 6-3 Property Holdings, Inc. 10-Apr-13 3127 471.43 P-241 Baniqued & Baniqued 17-Apr-13 3846 7,800.00 P-369 Baniqued & Baniqued 17-Apr-13 3845 1 7,800.00 P-370 I Chittick Fire & Security 17-Apr-13 8104 695.52 P-392 Cibi Information, Inc. 22-May-13 32121 1,786.86 P-395 Crown Worldwide Movers, Inc. 3-Apr-13 26606 19,512.00 P-402 DHL Express (Philippines) Corp 17-Apr-13 2243607 1,660.00 P-427 Exclusive Cars International 3-Apr-13 9160 18,771.43 P-459 Federal Phoenix Assurance 4-0ct-13 101756 301,026.27 P-465 Makati Shangri-La Hotel 3-Apr-13 200633 14,493.00 P-533 Mesco Express Service Corp. 6-Sep-13 8400 5,403.44 P-539 IBM Philippines, Inc. 22-May-13 24293 (618.48) P-536 Zuniega Olaso Macapundag 10-Apr-13 1520 4,620.00 P-627 Subtotal p 2,689,036.67 2. VAT not separately indicated 13-Feb-13 15666 p 27,120.00 P-580 Professional Skills Enrichment Subtotal p 27,120.00 3. No BIR Authority to Print 8-Feb-13 802393 p 6.43 P-667 PLDT PLDT 30-Jan-13 1148736 353.57 P-668 PLDT 8-Feb-13 802390 1.91 P-669 PLDT 30-Jan-13 1148730 105.13 P-670 PLDT 8-Feb-13 802381 4.27 P-671 PLDT 30-Jan-13 1148728 235.13 P-672 PLDT 8-Feb-13 802385 582.86 P-673 PLDT 30-Jan-13 1148724 32,057.14 P-674 PLDT 8-Feb-13 802380 4.27 P-675 PLDT 30-Jan-13 1148726 235.13 P-676 PLDT 8-Feb-13 802383 4.27 P-677 PLDT 30-Jan-13 1148731 235.13 P-678 PLDT 8-Feb-13 802386 2.72 P-679 PLDT 30-Jan-13 1148735 148.41 P-680 PLDT 8-Feb-13 802382 2.83 P-681 PLDT 30-Jan-14 1148729 157.84 P-682 PLDT 8-Feb-13 802389 1.91 P-683 PLDT 30-Jan-14 1148727 105.13 P-684 PLDT 8-Feb-13 802392 6.43 P-689 PLDT 8-Feb-13 802384 4.27 P-685 PLDT 30-Jan-13 1148725 235.13 P-686 PLDT 30-Jan-13 1148732 302.18 P-686 p 34,792.09 Subtotal 4. Over-claimed Input VAT {The input VAT amount being claimed is more than the input VATperORs) (

CTA Case No. 8861 Page 38 of 42 Deutsche Knowledge Services Pte., Ltd. vs. CIR DECISION ASIAPEOPLEWORKS! INC. perc/aim 1,875.62 6-Mar-13 390 p 34.35 P-364 per Official Receipt 1,841.27 Johnson Controls IFM Phils. Co perc/aim 71,430.99 23-Jan-13 3185 64,415.45 P-524 per Official Receipt 7,015.54 Johnson Controls IFM Phils. Co perc/aim 3,177.56 6-Feb-13 3144 2,865.48 P-525 per Official Receipt 312.08 Johnson Controls IFM Phils. Co perc/aim 262,393.50 6-Feb-13 3145 4,685.61 P-526 per Official Receipt 257,707.89 Johnson Controls IFM Phils. Co perc/aim 72,898.29 20-Feb-13 3204 1,301.76 P-527 per Official Receipt 71,596.53 Papertone Corporation perc/aim 13,545.53 27-Feb-13 868 241.88 P-549 per Official Receipt 13,303.65 Papertone Corporation perc/aim 977.57 13-Mar-13 218 17.45 P-551 per Official Receipt 960.12 Papertone Corporation perc/aim 1,028.57 13-Mar-13 217 18.36 P-552 per Official Receipt 1,010.21 Taurus Electrical Services perc/aim 34,610.12 9-Jan-13 63 618.04 P-612 per Official Receipt 33,992.08 Taurus Electrical Services perc/aim 157,122.65 30-Jan-13 69 2,805.72 P-613 per Official Receipt 154,316.93 Taurus Electrical Services perc/aim 18,435.92 6-Feb-13 71 329.21 P-614 per Official Receipt 18,106.71 Taurus Electrical Services perc/aim 61,460.52 13-Mar-13 76 1,097.51 P-615 per Official Receipt 60,363.01 Subtotal p 78,430.82 Total P2,829,379.58 C. PURCHASES OF CAPITAL GOODS EXCEEDING lMILLION Document submitted does not reflect the breakdown ofthe amount ofpurchase as well as the Input VAT Accent Micro Technologies, Inc. 4-Jan-13 143444 p 7,810.27 P-275 Accent Micro Technologies, Inc. 4-Jan-13 143443 11,715.41 P-287 Accent Micro Technologies, Inc. 11-Jan-13 143705 482.14 P-299 Accent Micro Technologies, Inc. 17-Jan-13 143919 15,620.55 P-301 Accent Micro Technologies, Inc. 22-Jan-13 144082 267.86 P-308 c

CTA Case No. 8861 Page 39 of 42 Deutsche Knowledge Services pte,, Ltd. vs. CIR DECISION Accent Micro Technologies, Inc. 30-Jan-13 144449 2,871.43 P-311 143916 18,878.98 P-313 Accent Micro Technologies, Inc. 17-Jan-13 144774 3,199.11 P-317 144840 P-320 Accent Micro Technologies, Inc. 4-Feb-13 144959 2,833.50 P-321 3,199.11 Accent Micro Technologies, Inc. 5-Feb-13 p 66,878.36 Accent Micro Technologies, Inc. 8-Feb-13 p 2,910,858.21 Total Total Additional Disallowances per this Court's Findings ----���-� -- Thus, out of petitioner's total reported input VAT of P20,964,520.35 for the first quarter of CY 2013, only the amount of P16,503,765.37 represents valid input VAT, computed as follows: Input VAT per VAT Return Domestic Domestic Domestic Services Domestic Total Purchases of Purchases Purchase of Rendered by Purchase of Less: Disallowances of Goods p 20,964,520.3~ Per ICPA Report Capital Other than Services Non- Capital Per this Court's Goods not residents Goods 1,549,896.7: further verification exceeding Pl Capital p 19,833,171.53 exceeding Pl 2,910,858.2: Total Goods p 518,898.21 million 4,460,754. 9. million P16,503,765.3; Valid Input VAT p 38,047.30 p 125,844.00 p 448,559.31 79,948.38 1,276,055.99 193,892.40 2,829,379.58 14,600.27 4,105,435.57 66,878.36 P15,727,735.96 14,600.27 79,948.38 - 260,770.76 p 23,447.03 p 45,895.62 P518,898.21 p 187,788.55 While the above valid input taxes are duly substantiated by documents, the same are not entirely creditable for the subject period of claim. It must be noted that part of the above valid input VAT is the amount of P187,788.55, 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 tax credit/refund in the month of acquisition. While petitioner was able to substantiate the amount of P187,788.55 out of the total claimed input VAT of P448,559.31 on [.

CTA case No. 8861 Page 40 of 42 Deutsche Knowledge Services Pte., Ltd. vs. CIR DECISION capital goods purchases exceeding P1 Million, only the amortization46 for the first quarter of 2013 in the amount of P11,274.91 may be claimed by petitioner as valid input tax credits for the same taxable quarter, as determined below: Exhibit Registered Name of Date of Invoice Input VAT No of Amortization Invoice Number Applied for Life Months No. Supplier p 488.14 143456 Refund Amortized 976.28 143445 393.31 P-277 Accent Micro Tech. Inc. 1/4/2013 143524 p 7,810.27 48 3 P-278 Accent Micro Tech. Inc. 1/4/2013 143478 1464.43 P-279 Accent Micro Tech. Inc. 1/7/2013 143446 15,620.55 48 3 2 684.78 P-289 Accent Micro Tech. Inc. 1/4/2013 143917 P-292 Accent Micro Tech. Inc. 1/4/2013 143924 6,292.99 48 3 244.07 P-295 Accent Micro Tech. Inc. 1/17/2013 143918 244.07 P-296 Accent Micro Tech. Inc. 1/17/2013 143925 23,430.82 48 3 488.14 P-297 Accent Micro Tech. Inc. 1/17/2013 143923 199.94 P-298 Accent Micro Tech. Inc. 1/17/2013 143920 42,956.50 48 3 732.21 P-302 Accent Micro Tech. Inc. 1/17/2013 144083 786.62 P-303 Accent Micro Tech. Inc. 1/17/2013 144084 3,905.14 48 3 244.07 P-304 Accent Micro Tech. Inc. 1/22/2013 144085 393.31 P-309 Accent Micro Tech. Inc. 1/22/2013 144086 3,905.14 48 3 488.14 P-305 Accent Micro Tech. Inc. 1/22/2013 144087 244.07 P-306 Accent Micro Tech. Inc. 1/22/2013 144019 7,810.27 48 3 244.07 P-310 Accent Micro Tech. Inc. 1/22/2013 144277 P-307 Accent Micro Tech. Inc. 1/21/2013 144826 3,199.11 48 3 5.36 P-312 Accent Micro Tech. Inc. 1/25/2013 144778 30.13 P-315 Accent Micro Tech. Inc. 2/5/2013 144775 11,715.41 48 3 53.07 P-316 Accent Micro Tech. Inc. 2/4/2013 144833 162.71 P-318 Accent Micro Tech. Inc. 2/4/2013 145068 12,585.98 48 3 262.21 P-319 Accent Micro Tech. Inc. 2/5/2013 145066 P-322 Accent Micro Tech. Inc. 2/12/2013 145067 3,905.14 48 3 1.79 P-323 Accent Micro Tech. Inc. 2/12/2013 145269 80.36 P-324 Accent Micro Tech. Inc. 2/12/2013 6,292.99 48 3 80.36 P-325 Accent Micro Tech. Inc. 2/18/2013 120.54 TOTAL 7,810.27 48 3 162.71 P11,274.91 3,905.14 48 3 3,905.14 48 3 85.71 48 3 482.14 48 3 1,273.71 48 2 3,905.14 48 2 6,292.99 48 2 42.86 48 2 1,928.57 48 2 1,928.57 48 2 2,892.86 48 2 3,905.14 48 2 P187,788.55 As such, only the remaining amount of P16,327,251.73, as computed below, represents petitioner's valid input VAT for the first quarter of CY 2013: Domestic Purchases of Capital Goods not exceeding Pl million p 23,447.03! Domestic Purchases of Goods Other than Capital Goods 45,895.62 46 Based on estimated useful life of 48 months as used by petitioner.

CTA case No. 8861 Page 41 of 42 Deutsche Knowledge Services Pte., Ltd. vs. CIR DECISION 15,727,735.96 518,898.21 Domestic Purchase of Services 11,274.91 Services Rendered by Non-residents Domestic Purchases of Capital Goods exceeding P1 million P16,327,251.73 Total A portion, however, of the P16,327,251.73 shall be applied against the reported output VAT liability of P673,702.54. As a result, only the remaining input VAT of P15,653,549.19 can be attributed to the entire zero-rated receipts amounting to P1,413,943,646.13 and only the input VAT of P14,917,841.65 is attributable to the valid zero- rated receipts of P1,347,489,133.11, computed as follows: Valid Input VAT p 16,327,251.73 Less: Output Tax Due 673,702.54 Total Divide by Total Zero-Rated Sales declared per return p 15,653,549.19 Multiply by Valid Zero-rated Sales Excess Input VAT Attributable to Valid Zero-Rated Sales 1,413,943,646.13 1,347,489,133.11 p 14,917,841.65 Sixth Requisite: Even though the claimed input VATwas carried over by petitioner in its succeeding Quarterly VAT Returns47, the same remained unutilized until it was deducted as "VAT Refund/TCC Claimed"48 in its Quarterly VAT Return for the first quarter of CY 2014. Consequently, the subject claim no longer formed part of the excess input VAT of P83,094,023.3349 as of the end of the first quarter of CY 2014 which was to be carried over to the succeeding second quarter50 of CY 2014. In fine, petitioner has sufficiently proven its entitlement to a refund or issuance of a tax credit certificate in the amount of P14,917,841.65, representing its unutilized and excess input VAT attributable to its zero-rated receipts for the 1st quarter of CY 2013. WHEREFORE, premises considered, the instant Petition for Review is PARTIALLY GRANTED. Accordingly, respondent is 47 Exhibits "P-3.1" to "P-3.5", Docket, val. II, pp. 1675-1692. 48 Exhibit "P-3.5", Line 23D, Docket, val. II, p. 1688. 49 Exhibit "P-3.5", Line 29, Total Amount Payable (Overpayment), Docket, val. II, p. 1689. 50 Exhibit "P-3.7", Line 20E, Docket, val. II, p. 1695.

CTA Case No. 8861 Page 42 of 42 Deutsche Knowledge Services Pte., Ltd. vs. CIR DECISION ORDERED TO REFUND OR TO ISSUE A TAX CREDIT CERTIFICATE to petitioner in the reduced amount of P14,917,841.65, representing petitioner's unutilized input taxes for the 1st quarter of CY 2013 attributable to its zero-rated sales. SO ORDERED. ~N_ M~-C~ WE CONCUR: CIELITO N. MINDARO-GRULLA Associate Justice (With17fi'lr:Urr7ng & ~enting Opinion) ER~P.UY ROMAN G. DEL ROSARIO Associate Justice Presiding Justice CERTIFICATION Pursuant to Article VIII, Section 13 of the Constitution, 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. Presiding Justice Chairperson, 1st Division

REPUBLIC OF THE PHILIPPINES Court of Tax Appeals QUEZON CITY FIRST DIVISION DEUTSCHE KNOWLEDGE CTA CASE NO. 8861 Members: SERVICES PTE, LTO., Petitioner, -versus- DEL ROSARIO, P.J., Chairperson, UY, and MINDARO-GRULLA, JJ. COMMISSIONER OF INTERNAL REVENUE, Promulgated: Respondent. �� � ><-------------------------------------------------------------------~~~------------>< CONCURRING & DISSENTING OPINION DEL ROSARIO, P.J.: While I agree with the ponencia's conclusion that Deutsche Knowledge Services Pte. Ltd. (Deutsche Knowledge) is entitled to a partial refund of its input value-added tax (VAT), with due respect, I am constrained to withhold my assent on the ruling that effectively declares as indispensable both a certificate of nonregistration of corporation/partnership issued by the Philippine Securities and Exchange Commission (SEC) and certificate/articles of foreign incorporation/association in proving that a nonresident foreign corporation is doing business outside the Philippines. I submit that the SEC Certifications of Non-Registration of Company and Intra- Group Service Agreements presented by Deutsche Knowledge were sufficient to prove that its clients are doing business outside the Philippines. On this point, I reiterate the position I have previously taken in Deutsche Knowledge Services Pte. Ltd. vs. Commissioner of Internal C1l

Concurring & Dissenting Opinion CTA Case No. 8861 Revenue, 1 involving the same parties in this case albeit relating to a different taxable period: "It was the conclusion of the Court in Division that in order 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 I partnership and certificate /articles of foreign incorporation /association /registration. The ponencia agrees with the Court in Division in holding that it cannot be determined if the alleged non-resident foreign clients are existing, operating and registered in a foreign country without proof of their incorporation, association or registration in a foreign country, notwithstanding the presence of SEC Certifications of Non-Registration of Company, and Intra-Group Service Agreements which were presented by petitioner to prove that its clients are nonresident foreign corporation. With due respect, while it is indispensable to present the SEC certificate of non- registration of corporation/partnership, the other evidence presented by petitioner, that is --the Intra-Group Service Agreements, should appropriately be given probative value in lieu of the certificate/articles of foreign incorporation/association/registration required by the Court. The Intra-Group Service Agreements do not only show the names of petitioner's customers to whom it rendered service. More importantly, these documents confirm that the entities mentioned therein are doing business outside the Philippines as they specify the nature of services that petitioner renders in support of its customers' business process." (Boldfacing supplied) 1 CTA EB No. 1290, August 16, 2016; also quoted in Commissioner of Internal Revenue vs. Deutsche Knowledge Services Pte. Ltd. I Deutsche Knowledge Services Pte. Ltd. vs. Commissioner of Internal Revenue, CTA EB Nos. 1297 & 1302, May 18, 2017. ~

Concurring & Dissenting Opinion CTA Case No. 8861 Thus, aside from those clients of petitioner already considered by the Court in Division in the assailed Decision as nonresident foreign corporations, certain clients of petitioner whose identities are supported with the corresponding SEC Certificates of Non- Registration and Intra-Group Service Agreements may still be considered as non- resident foreign corporation for zero-rating purpose." Consistent with the foregoing, I submit that Deutsche Knowledge's sale of services to entities which are supported by SEC Certifications of Non-Registration of Company and Intra-Group Service Agreements, proving that the services were rendered to nonresident foreign corporations doing business outside the Philippines, also qualify for zero-rating. I also find it necessary to address the ponencia's conclusion that the foreign business registration print-outs retrieved from the AMI net database are self-serving, viz.: "This Court, however, cannot give credence to the purported foreign business registration print-outs retrieved from the AMinet database which is a database set up by Deutsche Bank Global (the Head Office located in Germany). The said documents are not sufficient to establish the fact that the service recipients are non- resident foreign corporations doing business outside the Philippines, as they may be considered self-serving and can be easily manipulated to favor petitioner in view of its affinity with the entity that maintains or keeps the said database." (Boldfacing supplied) The declaration in People of the Philippines vs. Mary Lou Omictin y Singco2 about the nature of a self-serving evidence is instructive: "xxx The phrase self-serving evidence is a concept which has a well-defined judicial meaning. Hernandez v. Court of Appeals clarified what self-serving evidence is and what it is not, thus: The common objection known as "self-serving" is not correct because almost all testimonies are self- serving. The proper basis for objection is "hearsay" (Wenke, Making and Meeting Objections, 69). 2 G.R. No. 188130, July 26, 2010. ~

Concurring & Dissenting Opinion CTA Case No. 8861 Petitioner fails to take into account the distinction between self-serving statements and testimonies made in court. Self-serving statements are those made by a party out of court advocating his own interest; they do not include a party's testimony as a witness in court (National Development Co. v. Workmen's Compensation Commission, 19 SCRA 861 [1967]). Self-serving statements are inadmissible because the adverse party is not given the opportunity for cross-examination, and their admission would encourage fabrication of testimony. This cannot be said of a party's testimony in court made under oath, with full opportunity on the part of the opposing party for cross-examination. This principle was reiterated in the more recent People v. Villarama, where the Court ruled, "x x x [A] self-serving declaration is one that is made by a party, out of court and in his favor. It does not include the testimony he gives as a witness in court." Assayed against the foregoing standards, Ambrosio's testimony is not self- serving and is admissible in evidence." (Boldfacing supplied) Applying by analogy Omictin to the case at bar, the documents testified on by Deutsche Knowledge's witness, Ms. Rachel Concepcion, may not be denied evidentiary weight for being self- serving, as the Commissioner of Internal Revenue (CIR) has been given the opportunity to cross-examine and test the credibility of Ms. Concepcion. In truth, the CIR had all the opportunity to object to and rebut the exhibits submitted by Deutsche Knowledge in Court, which were identified by Ms. Concepcion in her Sworn Statement filed on October 31, 2014,3 and which were the subject of her testimony on February 17, 2015.4 To be specific, in petitioner's Formal Offer of Evidence, the foreign business registration print-outs retrieved from the AMI net database, marked as Exhibits "P-8" to "P-8.41 ," and the companies' profile fact sheets also retrieved from the AMinet database, marked as Exhibits "P-9" to "P-9.56," were specifically offered by petitioner for the purpose of proving that: "petitioner's clients which are non-resident foreign corporations are actually doing business outside the Philippines." 5 In CIR's Comment (on petitioner's Formal Offer of Evidence), the CIR interposed no objection to the admission of aforestated exhibits for the purposes for which they were offered, subject only to the condition that the same are faithful reproductions of the 3 CTA Docket, pp. 57-93. 4 CTA Docket, p. 1539. 5 CTA Docket, pp. 1626-1636. rf1

Concurring & Dissenting Opinion CTA Case No. 8861 originals upon due comparison. 6 The case was even submitted for decision sans respondent presenting any evidence in refutation of the testimony of Ms. Concepcion. 7 Indeed, Ms. Concepcion's unrebutted testimony vis-a-vis the documents she identified is entitled to full faith and credit, there being no inherent improbability in the substance thereof All told, I vote to PARTIALLY GRANT the Petition for Review filed by Deutsche Knowledge with modification to include the sales of services of Deutsche Knowledge to its clients whose identities are supported by their respective SEC Certifications of Non-Registration of Company and Intra-Group Service Agreements. Presiding Justice 6 CTA Docket, p. 3200. 7 CTA Docket, p. 3935.