AMMEX I-SUPPORT CORPORATION v. COMMISSIONER OF INTERNAL REVENUE

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS Quezon City SPECIAL SECOND DIVISION AMMEX I-SUPPORT CTA CASE NO . 10147 CORPORATION, Petitioner, - versus - Members: BACORRO-VILLENA, Acting Chairperson CUI-DAVID,]]. COMMISSIONER OF INTERNAL REVENUE, Promulgated: Respondent. AUG 0 2 2122 x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - f!'x RESOLUTION BACORRO-VILLENA, L_: For the Court's resolution is petitioner Ammex !-Support Corporation's (petitioner's) "Motion for Reconstderation111 (MR) , filed on 02 February 2022, with respondent Commissioner of Internal Revenue's (respondent's) "Opposition (Re: Motion for Reconsideration of the Decision promulgated 9 December 2 2021)" (Opposition) thereto, filed on 03 March 2022. Petitioner seeks the reversal of this Court's Decision promulgated on 09 December 20213 (assailed Decision) in the above- captioned case. The dispositive portion of which reads/ Division Docket, pp. 408-5 13, with annexes. Id ., pp. 5 16-5 20. ld ., pp. 379-404.

RESOLUTION CTA CASE NO . .1.0.1.4.Z Ammex !-Support Corporation v. CIR X------ - ----------- - --------- - -X WHEREFORE, premises considered, the instant Petition for Review filed on 01 August 2019 by petitioner Ammex !-Support Corporation is hereby DENIED for lack of merit. SO ORDERED. In its MR4, petitioner insists that this Court erred in ruling that it failed to substantiate its alleged zero-rated sales as it unsuccessfully proved that it rendered services to non-resident foreign corporations (NRFCs) doing business outside the Philippines considering the non- admission into evidence of Exhibits "ICPA P-14.5", "ICPA P-15", "ICPA P-15.1" and "ICPA P-15.2"5, initially for failure to identifl and, upon further review, since the identification thereof does not correspond to the description of the exhibits as marked and stated in its Formal Offer of Evidence (FO E).7 In respect of the non-admission of the aforementioned exhibits, petitioner argues that the same have been taken into consideration by the court-commissioned Independent Certified Public Accountant oy (ICPA), Lorenz Samuel D. Gomez (Gomez), in his ICPA Report dated � 13 January 20208, which was duly identified during the presentation Supra at note I. Exhibit No. Description Identification "!CPA P-14.5" Identified as Certificate of Non- Cert ific ate of Corporate Registration of Echez So luti ons Sdn "!CPA P-15" Bhd. in the Judicial Affidavit of " !CPA P-15 . 1" Filing/I nformation - Echez So lutions Lorenz Samue l Gomez dated 20 January 2020. " !CPA P-15 .2" Sdn Bhd. Identified as Certificate of Non- Registration of Ammex Corporation - Certificate of Incorporation - Ammex in the Judicial Affidavit of Lorenz Corporation . Samuel Gomez dated 20 January 2020. Identified as Certificate of Non- Certificate of Incorporation - Registration of C loudstaff HK CloudstaffHK Limited. Limited in the Judicial Affidavit of Lorenz Samuel Gomez dated 20 Certificate from State of Florida January 2020. Department of State - Echez Inc. Identified as Certificate of Non- Registration of Elk River Systems, Inc. ("DBA Ticket Printing") in the Judicial Affidavit of Lorenz Samuel Gomez dated 20 January 2020. 6 See Resolution dated 14 February 2020, Division Docket, pp. 302-304. See Resolution dated 02 October 2020, id ., pp. 343-347 . Exhibit "P-I 0", id., pp. 229-295 .

RESOLUTION CTA CASE N0 . 1.0.1.4.Z. Ammex !-Support Corporation v. CIR X----- - - - - -- -- - ----------------X his testimonial, and the said denied exhibits were also incorporated therein. Respondent, in his Opposition9, echoes this Court's ruling that petitioner failed to prove the two-fold requirement for zero-rating under Section 1o8(B)(2)10 of the National Internal Revenue Code (NIRC) of 1997, as amended, namely: (1) that the taxpayer-claimant's clients or affiliates are foreign corporations (which can be proven by the SEC Certifications of Non-Registration of Company); and, (2) that said clients or affiliates are not doing business in the Philippines (the prima facie proof of which is the articles of association/ certificates of incorporation stating that these affiliates are registered to operate in their respective home countries. outside the Philippines). Respondent also asserts that petitioner has the burden of proving entitlement to the tax refund sought as claims for refund are in the nature of tax exemptions, which are construed strictissimi juris against the taxpayer-claimant. We rule below. Mter due consideration of petitioner's arguments, this Court still finds no merit in its MR. It is well-settled that the Court is not bound by the findings of the ICPA. Section 3, Rule 13 of the Revised Rules of the Court of Tax Appeals (RRCTA) provides: RULE 13 TRIAL BY COMMISSIONE/ 9 Supra at note 2. 10 SEC. 108. Value-Added Tax on Sale ofServices and Use or Lease ofProperties. - (B) Transactions Subj ect to Zero Percent (0%) Rate - The fo llowing services performed in the Philippines by VAT-registered persons shall be subject to zero percent (0%) rate. (2) Services oth er than those mentioned in the preceding paragraph , re ndered to a person engaged in bu siness conducted outside the Ph ilippines or to a nonresident person not enga ged in busin ess who is outside the Philippines when the services are pe rform ed, the consideration for which is paid for in acceptable foreign currency and accounted for in accordance with the rules and regulation s of th e Bangko Sentral ng Pilipin as (BSP). (Emphas is suppli ed.)

RESOLUTION CTA CASE NO.l.!ll.i.Z Ammex !-Support Corporation v. CIR x------------------------------x SEC. 3� Findings of independent CPA. - The submission by the independent CPA of pre-marked documentary exhibits shall be subject to verification and comparison with the original documents, the availability of which shall be the primary responsibility of the party possessing such documents and, secondarily, by the independent CPA. The findings and conclusions of the independent CPA may be challenged by the parties and shall not be conclusive upon the Court, which may, in whole or in part, adopt such findings and conclusions subject to verification." Clearly from the foregoing, the report submitted by the ICPA is a tool or guide to aid the Court in the resolution of the case. The determination of the merit or the probative value of such report is still within the province of the Court. Thus, herein petitioner cannot insist that the ICPA Gomez's findings alone are sufficient to support its refund claim. It is essential for petitioner to present documents to support its compliance with the above two-fold requirement for zero- rating under Section 1o8(B)(2) of the NIRC of 1997, as amended, and the rest of the requisites for the grant of refund, because the Court cannot solely rely on the ICPA Report. Time and again, the Court has held that the ICPA is commissioned merely to assist the Court in the determination of the merit of taxpayer's claims. The Court may (or may not) adopt totally or partially the !CPA's Report depending on its own appreciation of the documents upon which the ICPA Report is based. In other words, the Court will still examine and verify the documents audited or examined by the ICPA. The Court, in its sound discretion, may render judgment without considering the ICPA Report. The ICPA Report is only persuasive in nature and not conclusive upon the Court.12 We reiterate, for emphasis, that based on this Court's independent verification, petitioner failed to prove that it rendered services to NRFCs doing business outside the Philippines because (1) it did not submit the Certificates of Foreign Registration of five (s) out of , its seven (7) NRFC clients and (2) the Certificates of Foreig/ II Italics in the original text; Emphasis suppli ed. 12 See Tanduay Distillers, Inc. v. Commissioner of Internal Revenue, CTA EB No . 210 I, 14 October 2020; Commissioner of Internal Revenue v. Next Mobile, Inc., CTA EB Nos. 1864 & 1865, 28 February 2020.

RESOLUTION CTA CASE NO.l!Ufl Ammex !-Support Corporation v. CIR Page5of5 x------------------------------x Registration of the other two (2) NRFC clients (marked as Exhibits "ICPA P-15" and "ICPA P-15.1") were not admitted into evidenceY No other evidence was proffered to prove that petitioner's NRFC clients were not doing business in the Philippines aside from the aforesaid denied exhibits. Consequently, petitioner failed to discharge the burden of proving that its sales are entitled to VAT zero-rating as contemplated under Section 1o8(B)(2) of the NIRC of 1997, as amended. All told, this Court finds no justifiable reason to reverse or modify the conclusions reached in the assailed Decision. WHEREFORE, premises considered, petitioner's Motion for Reconsideration filed on 02 February 2022 is DENIED for lack of merit. SO ORDERED. '- VILLENA I CONCUR: ~-MIL LANEE S. CUI-DAVID Associate Justice 13 Certificate of Foreign Per Resolution dated 02 October Registered Name of Client Registration 2020 I AMMEX CORPORATION Exhibit No. Denied admi ssion. 2 CLASS IC ACCESSORI ES, INC. 3 CLOUDSTAFF HK LTO. " !C PA P-1 5" Denied ad mi ssion. 4 COP IERS NORTHWEST INC. 5 CSG SERV ICES CORPORAT ION - 6 FIBERF IX LLC 7 COSTLESS EXPRESS LTO. DBA LYKKI " !CPA P-1 5. 1" - - - -