SYNGENTA PHILIPPINES, INC. v. COMMISSIONER OF INTERNAL REVENUE

CTA Form No. 8 111111111111 111111111111111 11111111111111111111 1111111111 11111 111111111111111111 23-000013-0061 REPUBLIC OF THE PH.lLLPPLNES COURT OF TAX APPEALS QUEZON C ITY FIRST DIVISION CTA CASE NO. 11067 SYNGENTA PHILIPPINES, INC., NOTICE OF DECISION Petitioner, - versus - COMMISSIONER OF INTERNAL REVENUE, Respondent To: OFFICE OF TH E SOLICITOR GE ERAL 134 Amorsolo St.. Lcgazpi Vi llage Makati City ATTY. AYESHA HA 'l AB. GUILl 'G-MATA OG ATTY. MARK JO EY S. L UCERO Bureau or Internal Revenue Room 703, Litigation Division, BIR National Ortice Building Sen. Miriam P. Derensor-Santiago Avenue Diliman. QueLon City FO RTUN NARVASA & SA LAZAR 23rd Floor, Multi national Bancorporation Centre 6805 Ayala Avenue, Makati C ity GREETINGS: You are hereby notified by these presents that on August 27, 2025, a Decision was rendered in the above-entitled case, copy of which is attached h ereto. Quezon C ity, Philippines, September I, 2025. Atty. Mara rette V. G uz n Exec utiv Clerk of Court ll

To REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY FIRST DIVISION SYNGENTA PHILIPPINES, CTA CASE NO.uo67 INC., Members: Petitioner, DEL ROSARIO, EJ., Chairperson, -versus- BACORRO-VILLENA, and CUI-DAVID,]]. COMMISSIONER OF Promulgated: INTERNAL REVENUE, AUG 2.;7 2<025; tf'j!JfJ!Jl Respondent. X- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - X DECISION BACORRO-VILLENA, L: At bar is an Amended Petition for Review1 filed by petitioner Syngenta Philippines, Inc. (petitioner/Syngenta) on o6 March 2023, invoking this Court's jurisdiction to review the inaction of respondent Commissioner of Internal Revenue (respondent/CIR) in cases involving refunds of internal revenue taxes, provided under Section 3(a)(2), Rule 4 of the Revised Rules of the Court of Tax Appeals (RRCTA). Specifically, petitioner seeks the refund of or issuance of a tax credit certificate (TCC) for PI52,522,734�12, representing the Withholding Value-Added Tax (WVAT) and Final Withholding Tax t (FWT) that it erroneously paid to the Bureau oflnternal Revenue (BIR). According to petitioner, the payment was based on the erroneou? computation of royalties on its sale of field corn seed with Bt-n traits. Division Docket, Volu me II , pp. 757-788. The original Petition for Review was fi led on II January 2023 ; see Division Docket, Volum e I, pp. 6-23.

CTA Case No. 11067 Syngenta Philippines, Inc. v. Commissioner of Internal Revenue DECISION X---------------------------------------------X PARTIES TO THE CASE Petitioner is a corporation organized and ex1stmg under Philippines laws, with principal office at the 9'h Floor, One Griffinstone Building, Commerce Avenue corner Spectrum Midway Extension, Alabang, Muntinlupa City.2 It is a wholly owned subsidiary ofSyngenta Crop Protection AG 3 (SCPAG), a corporation duly organized and existing under the laws ofSwitzerland.4 It is also registered with the BIR Revenue District Office (RDO) No. n6- Regular Large Taxpayers Audit Division I under Tax Identification Number (TIN) ooo-142-342-ooo.s Respondent, on the other hand, is the duly appointed CIR, who is tasked to assess and collect all national internal revenue taxes, fees and charges, and enforce all forfeitures, penalties, and fines connected therewith, with authority, among others, to decide, approve and grant tax credits and/or refunds of erroneously paid taxes. Respondent may be served with summonses, legal processes, orders and resolutions at Room 703 Litigation Division, BIR National Office Building, BIR Road, Diliman, Quezon City.6 FACTS OF THE CASE Petitioner was established in 1964 to manufacture and sell insecticides, fungicides, herbicides, seeds treatments, fertilizers, and other agricultural and environmental and public health related chemicals and products.? In 2003, petitioner and its parent company, SCPAG (then Syngenta Seeds AG) entered into a Corn Germplasm License Agreement8 (Corn Germplasm License Agreement) whereby SCPAG granted petitioner a license to use or utilize its proprietary rights, proprietary information, and trademarks to enable the latter to produce, promote, . and commercialize SCPAG's commercial hybrid seed within thet See Paragraph I, Joint Stipulation of Facts and Issues (JSFI), id., Volume II, p. 1290. Genera11nformation Sheet for 2022, Exhibit "P-11 ", id., Volume 111, p. 1546. Exhibit"P-13", id., pp. 1558-1559. BIR Certificate of Registration, Exhibit "P-12", id .. pp. 1554-1556. See Par. 2, JSFI, id., Volume II, p. 1290. Amended Articles of Incorporation dated 04 March 2022, Exhibit "P-10", id., Volume 111, pp. 1530 and 1536. Exhibit"P-14", id., pp. 1561-1571.

CTA Case No. 11067 Syngenta Philippines, Inc. v. Commissioner of Internal Revenue DECISION X---------------------------------------------X Philippines. In consideration of all the licenses granted, petitioner was to pay SCPAG a royalty equal to twelve percent (12%) of net sales from field corn, baby corn, waxy corn, and sweet corn varieties that were commercialized under the agreement. 9 This agreement covers the following field corn seeds varieties: NK 8840, NK 5468, and NK 5447.10 In 2oo8, petitioner and SCPAG also entered into a Trait License Agreement (BT-n Corn) 11 (Bt-u Trait License Agreement) whereby SCPAG granted to petitioner a license to produce and sell Bt-n transgenic corn and use all related intellectual property within the Philippines. Bt-n transgenic corn seeds contain genes which impart insect resistance in plants and tolerance to the herbicide glufosinate ammonium.12 In consideration of the licenses granted, petitioner was to pay SCPAG royalty equal to five percent (s%) of the net sales for the licensed BT-n Corn hybrid seed sold by petitioner under the agreement. 13 In January 2021, petitioner and SCPAG amended their previous two (2) agreements which amendments were made effective 01 January 2020. Relative to the first agreement, petitioner and SCPAG entered into an Amendment to Corn Germplasm License Agreement.'4 There, they agreed, among others, that for the field corn plant material (which are genetically modified (GM) by application of biotechnology, or with certain specific genes or other technologies), petitioner will pay SCPAG a royalty equal to twenty-five percent (25%) (from the previous 12%) of the net sales for the seed commercialized by petitioner under the agreement. The amendment also replaced the covered field corn seeds varieties, which is now composed of NK 306, NK 6410, NK 6414, NK t 6443, NK 8840, NK 6505, NK 6270 and provides that the list of covered field corn seeds varieties may be.changed from time to time and will be communicated by the parties.15 9 !d., p. !566. 10 !d., p. !570. II Exhibit "P-!6", id., pp. !585-!596. 12 !d., p. !585. 13 !d., p. !590. 14 Exhibit "P-15", id., pp. !575-!582. 15 !d., p. 1576.

CTA Case No. 11067 Syngenta Philippines, Inc. v. Commissioner of Internal Revenue DECISION x---------------------------------------------x Thereafter, petitioner and SCPAG also amended the Bt-11 Trait License Agreement'6 by increasing the royalty rate to twenty percent (2o%) from the old rate of s%. The amendments were reflected in petitioner's CY 2020 Audited Financial Statements (2020 AFS)'7 where it is shown that petitioner reported revenue from sales of seeds amounting to P3,I66,6w,3o2.oo. Petitioner claims that this amount included revenue from sales of GM corn field seeds amounting to P2,824A95,076.27, comprised of:'8 Field Corn BT (GM) Net Sales (in PHP) NK6410 BTGT-MO BIB NK884o BGT-MO RIB 1,357>427,133-40 NK6414 BTGT-MO BIB 469,125,021.44 NK3o6 BTGT-MO BIB 211,765,663.27 NK6414 BGT-MO-RIB 172,618,397�19 NK6410 BTGT-MO BIB-TRD 46,164,342�58 NK3o6 BTGT-MO BIB-TRD 19,819,043�24 SSG398 BTGT-TRD NK6514 BTGT-TRD 6,787,256.00 SSG278 BTGT-TRD NK6414 BGT-MO RIB-TRD 903,547�99 Release of unutilized rebates provision 6 55 ,o 72.2 9 Release of unutilized sales returns provision 265AJ7.22 Total 47,668.50 194,882,846.29 344,033,666.86 2,824,495,076.27 Petitioner also reported royalty expense ofPI,316,so2,134�0o in its 2020 AFS'9, computed as follows: 20 Description Sweetcorn Field Corn Rice Total 2020 Net Sales BT (GMO) Amounts in PHP 4,629,l10.79 2,824,495,076.27 !65.799.701.90 2,994.923,888.96 16 See Amendment to Trait License Agreement (Bt-11 Corn) signed in January 2021, Exhibit "P-17", id., pp. 1598-1600. 17 Audited Financial Statements for CY 2020, Exhibit "P-20", id., p. 1691. 18 Schedule of2020 Net Sales ofGM Field Corn Varieties, Exhibit "P-31 ", id., p. 1805. 19 Exhibit "P-20", supra at note 17, p. 1692. Schedule of Royalties Reported, Exhibit "P-3", id., p. 1495.

CTA Case No. 11067 Syngenta Philippines, Inc. v. Commissioner of Internal Revenue DECISION x---------------------------------------------x 1.5% Royalties 69-436�55 42,367-426.14 2,486,995�53 44.923,858�33 under the Syngenta Brand 555493�29 555�493�29 License 706,123,769.07 706,123,769.07 12% Royalties s 6 4 , 8 9 9 . o 1 5.2 5 564,899.015.25 under the Corn Germplasm License 624,929.96 1,313,390,210.47 2,486,995�53 1>J16,so2,135�95 Agreement 25% Royalties for GMO under the Corn Germplasm License Agreement 20% Royalties under the Bt-11 Trait License Agreement Total On n January 2021, petitioner remitted WVAT to the BIR amounting to P163,329.393�3121, computed as follows: Description Amount (in PHP) Royalties during 2020 1,J16,5o2,135�95 Add: 2019 Royalties billed in 2020 Total 44.576,141.56 Tax Rate WVAT 1.}6J,o78,z77�51 12% 163,329.393�31 In addition to the WVAT, on 28 January 2021, it also remitted FWT to the BIR in the amount of P2o5,792,031.94- Out of this amount, P204,161,741.64 pertains to FWT withhelq on petitioner's royalty payments to SCPAG, computed as follows:zzt 21 BIR Form 1600 and eFPS Payment Details. Exhibits "P-I" and "P-2", id., pp. 1490-1491 and 1493, respectively. 22 BIR Form 1601-FQ and eFPS Payment Details, Exhibits "P-4" and "P-5", id., pp. 1497-1498 and 1500, respectively.

CTA Case No. 11067 Syngenta Philippines, Inc. v. Commissioner of Internal Revenue DECISION X---------------------------------------------X Description Amount (in PHP) Royalties during 2020 1.316,so2,135�95 Add: 2019 Royalties billed in 2020 Total 44,576,141.56 Tax Rate 1,361,078,277�51 FWT 1S%2J 204,161,741.63 Later, sometime in September 2021, petitioner realized that its 2020 revenues from Field Corn BT (GMO) amounting to P2,824.495,o76.27 was subjected to both 25% royalty rate under the Corn Germplasm License Agreement amounting to P7o6,123,769.07 and 20% royalty rate under the Bt-11 Trait License Agreement amounting to Ps64,899,015.25. 24 To correct this, petitioner reversed the royalty expense of Ps64,899,015.25 and WVAT of P67,787,881.83 in its CY 2020 books and recognized the same amount as other income in CY 2021.25 It also amended its 2021 income tax return (ITR) and reported the reversal of the royalty expense and WVAT as other income.26 In January 2022, petitioner and SCPAG terminated the Bt-11 Trait License Agreement.27 On 29 December 2022, SCPAG returned the excess royalties (net of fifteen percent (15%) FWT and transfer fees) of P48o,163,525�96.28 On 09 January 2023, petitioner filed with the BIR two t (2) Applications for Tax Credits/Refund (BIR Form No. 1914) to recover the alleged erroneously paid WVAT and FyvT amounting to P67,787,881.83 and P84,734,852.29, respectively.29 Petitioner presented the Certificate of Residence (for Tax Treaty Relief) and the corresponding attachments (including the certification issued by the tax authority of Switzerland proving that SCPAG is a resident of Switzerland) that it submitted to the BIRon 23 April 202!. Thus, SCPAG 's royalty income may be subject to !5% FWT pursuant to the Philippines-Switzerland Tax Treaty in relation to Sections 28(8)(1) and 32(8)(5) of the NIRC of !997, as amended. Electronic mail dated 24 September 202!, Exhibit "P-22", id., p. !724. 25 Income Statement, Audited Financial Statements for CY 202! (202! AFS), Exhibit "P-23", id., p. !735. 26 Amended ITR forTY 202!, Exhibit "P-24", id., p. !784. 27 Termination Agreement to the Trait Licensing Agreement (Bt-l! Corn), Exhibit "P-26", id., p. !790. Citibank's Credit Advice dated 29 December 2022 and Citibank's Certification notarized on 16 February 2023, Exhibits "P-27" and "P-30", respectively, id., pp. !792-!793 and !803, respectively. Exhibits ''P-7" and "P-8", id., pp. !5!9 and !52!, respectively.

CTA Case No. 11067 Syngenta Philippines, Inc. v. Commissioner of Internal Revenue DECISION x---------------------------------------------x PROCEEDINGS BEFORE THE COURT To toll the two (2)-year prescriptive period under Section 2293� of the National Internal Revenue Code (NIRC) of 1997, as amended, petitioner elevated the matter to this Court by filing the instant Petition for Review3' on n January 2023. The case was raffled to the Second Division and docketed as CTA Case No. no67. On 01 February 2023, the Court issued Summons 32 ordering respondent to file an Answer within thirty (3o) days from service. Respondent received the Summons on 02 February 2023.33 On the same day, the Court also ordered petitioner to submit the judicial affidavits of its intended witnesses within ten (w) days from receipt.34 On 16 February 2023, petitiOner filed a motion praying for additional five (s) days or until 21 February 2023 to submit the judicial affidavits of its witnesses.3s Later, on 21 February 2023, it filed another motion praying for another additional five (s) days or until 26 February 2023 to submit the judicial affidavits.36 On 22 February 2023, the Court granted petitioner's 16 February 2023 motion.37 Yet again on 27 February 2023, petitioner filed a motion praying for additional five (s) days or until 04 March 2023 to file the judicial affidavits.38 On 28 February 2023, the Court granted its 21 February 2023 motion.39 Meanwhile, on 03 March 2023, respondent filed a motion (o3 March 2023 Motion) praying for additional 30 days or until 03 April 2023 to file his Answer.4o t On o6 March 2023, petitioner filed an Amended Petition for Review4', together with the judicial affidavits of its witnesses. 30 SEC. 229. Recovery of Tax Erroneously or !/legally Collected. 3I Division Docket, Volume l, pp. 6-23. 32 !d., Volume II, p. 619. 33 See Notification dated 14 February 2023, id., p. 620. 34 See Resolution dated 01 February 2023, id., pp. 617-618. 35 !d., pp. 621-622. 36 !d., pp. 624-626. 37 See Resolution dated 22 February 2023, id .� p. 628. 38 !d., pp. 629-630. ]9 See Resolution dated 28 February 2023, id., p. 632. 40 !d., pp. 633-636. 41 Supra at note !.

CTA Case No. 11067 Syngenta Philippines, Inc. v. Commissioner of Internal Revenue DECISION X---------------------------------------------X On 15 March 2023, the Court granted the CIR's 03 March 2023 Motion and ordered respondent to transmit to it the entire BIR case records within 10 days from the filing of his AnswerY On 29 March 2023, considering the filing of the amended petition, the Court gave respondent a fresh period of 30 days to file his answer thereto.43 On 03 April 2023, respondent filed his or her Answer to the petition.44 The CIR raised as defense that: (a) taxes paid and collected are presumed to have been made in accordance with law and implementing regulations, hence, not refundable; (b) the Court has no jurisdiction because respondent was not given ample opportunity to examine the administrative claim for refund considering that petitioner filed its administrative claim on 09 January 2023 and then filed its judicial claim with the Court two (2) days later; (c) the rules are to be relaxed only in the interest of justice and to benefit the deserving; and (d) assuming that the Court has jurisdiction, petitioner failed to exhaust all available administrative remedies. Respondent submitted the BIR Records on the same day he or she filed the Answer.4s On 26 May 2023, the Court issued the Notice of Pre-trial Conference setting the pre-trial on 03 October 2023 and ordering the parties to file their pre-trial briefs within three (3) days before the pre-trial. It also ordered the parties to submit the judicial affidavits of their witnesses not later than five (5) days before the pre-trial.46 t In the meantime, on 29 May 2023, pursuant to Administrative Circular No. 01-2023 (Reorganizing the Divisions of the Colfrt) dated 23 May 2023, the case was transferred to the First Division.47 42 See Resolution dated 15 March 2023, Division Docket, Volume II, p. 873. See Resolution dated 29 March 2023, id., pp. 875-876. The Answer filed was for the original petition but was also adopted (as the Answer) for the Amended Petition. \d., pp. 877-890. 45 See Compliance dated 03 April 2023, id., pp. 892-894. 46 Id., pp. 898-899. 47 Id., p. 897.

CTA Case No. 11067 Syngenta Philippines, Inc. v. Commissioner of Internal Revenue DECISION X---------------------------------------------X On 25 September 2023, respondent filed his Pre-trial Brief48, while petitioner filed its Pre-trial Brief on 29 September 2023.49 During the 03 October 2023 Pre-Trial Conference, the Court granted both parties forty (40) days, or until13 November 2023, within which to file their Joint Stipulation ofFacts and Issues (JSFI)_5a During the Commissioner's Hearing 51 on n October 2023, petitioner presented its exhibits for comparison and marking. Respondent stipulated that: (a) Exhibits "P-1", "P-3", "P-22", "P-24", "P-25", "P-27","P-28", and "P-31" are original computer print-outs 5z; (b) EXh1'bI'tS "P-2", "P-4", "P-5", "P-6", "P-7", "P-8", "P-9", "P-1}", "P-14", U "P-15", "P-17", "P-I8", "P-19", "P-21", "P-26", "P-29", "P-30", "P-34", ~ and "P-38" are faithful reproductions of the original documents. 53 48 !d., pp. 900-902. 49 Id., pp. 908-92 I. 50 See Order dated 03 October 2023, id., pp. 928-930. 51 Id., pp. 932-937. 52 Exhibit No. Description "P-I" Monthly Remittance Return of Value-Added Tax Withheld (BIR Form I600- VT) for the month of December 2020. "P-3" Schedule of Royalties Reported for the year 2020. "P-22" Email of Pei LiM to Anh Viet dated 24 Seotember 202 I "P-24" Petitioner's 2021 Amended ITR. "P-25'' Invoice No. 500030 dated 15 October 2022. "P-27'' Credit advice from Citibank showing refund of erroneously paid royalties by SCPAG dated 29 December 2022. "P-28" Email exchanges on the spot rate used by HSBC on 30 March 2021, relative to "P-31" the petitioner's remittance of royalties to SCPAG. Schedule of2020 Net Sales ofGM Field Corn Varieties. 53 Exhibit No. Description "P-2" Electronic Filing and Payment System (EFPS) Withholding Value-Added Tax !WVAT) PaYment Details. "P-4" Quarterly Remittance Return of Final Income Taxes Withheld (BIR Form 160 I- FQ) for the 4'h Quarter of2020. "P-5" EFPS Final Withholdino Tax PaYment Details. "P-6" Petitioner's administrative claim for refund dated 09 January 2023. "P-7" Bureau of Internal Revenue Form 1914 (Application for Refund/Tax Credit) of WVAT. "P-8" BIR Form 1914 (Application for Refund/Tax Credit) ofFWT. "P-9" Secretarv's Certificate dated OS January 2023. "P-13" Certificate of Residence of Svnoenta Croo Protection AG (SCPAG). "P-14" Corn Germolasm License Aoreement dated 23 December 2003. "P-15" Amendment to Corn Germnlasm License Agreement effective January 2020. "P-17" Amendment to Trait License Agreement (Bt-l! Corn) effective 0 I January 2020.

CTA Case No. 11067 Syngenta Philippines, Inc. v. Commissioner of Internal Revenue DECISION x---------------------------------------------x Meanwhile Exhib1'ts "P-10"' "P-11"' "P-12"' "P-16"' "P-20"' "P-23"' "P-32"' "P- 33", "P-35", and "P-36" inclusive of sub-markings were provisionally marked. On 13 October 2023, petitioner filed a motion (13 October 2023 Motion) asking for another setting in order to have its remaining documentary exhibits permanently marked.54 On 23 October 2023, petitioner filed a motion (23 October 2023 Motion) praying for an additional fifteen (15) days or until 07 November 2023 to submit the judicial affidavit of its witness, Yan Pei Ling (Ling). It also asked the Court to allow the taking of the testimony of one of its witnesses (Ling) via video conference because she was based in Singapore.ss On 27 October 2023, the Court issued an order granting petitioner's 13 October 2023 Motion, thereby setting another Commissioner Hearing on 16 January 2024. In the same order, the Court granted petitioner's 23 October 2023 Motion and set the presentation of Ling on 07 February 2024.56 On 03 November 2023, petitioner submitted a photocopy of Ling's Judicial Affidavit. 57 It then submitted the original on o6 Novembert "P-18" Notarized Certification from Hongkong and Shanghai Banking Corporation (HSBC) relative to petitioner's remittance ofUS$23,076,524.28 to SCPAG on "P-19" 30 March 2021. Petitioner's submission of Certificate of Residence for Tax Treaty (CORTT) "P-21" Relief forms with their corresponding attachments dated 23 April 2021. "P-26" Petitioner's 2020 Income Tax Return. Termination Agreement to the Trait License Agreement (Bt-11 Corn) dated "P-29'' January 2022. "P-30" Minutes dated 29 December 2022. "P-34" Notarized Certification from Citibank dated 16 Februarv 2023. "P-38" Biosafety Permit for Commercial Propagation No. 20-010 Propa dated 08 October 2020. Proof of Merger between Syngenta Seeds AG and SCPAG issued by the Commercial Register of the Canton of Basel-City and certified on 31 August 2023. 54 Division Docket, Volume II, pp. 939-941. 55 !d., pp. 943-946. 56 See Order dated 27 October 2023, id., p. 952. 57 !d., pp. 960-977.

CTA Case No. 11067 Syngenta Philippines, Inc. v. Commissioner of Internal Revenue DECISION x---------------------------------------------x 2023. 58 Later, it also filed an amended Pre-trial Brief. 59 Yet again, amended its Pre-trial Brief and filed the same on 13 November 2023.60 On 13 November 2023, the parties filed their JSFI to the Court.6' On 17 November 2023, petitioner filed the Amended Judicial Affidavits of Dante C. Abril (Abril), Karen Geneevive A. Santiago (Santiago), and Maria Caridad G. Dejito (Dejito).62 On 17 November 2023, the Court admitted and approved the parties' JSFI and terminated the pre-trial, and set the initial presentation of petitioner's evidence on 30 January 2024.63 During the Commissioner's Hearing 64 on 16 January 2024, petitioner presented additional exhibits for comparison and marking. Respondent stipulated that: (a) Exhibits "P-10" to "P-12", inclusive, "P-2o", "P-23", and "P-33" 65 are certified true copies of the original t documents; (b) Exhibit "P-17-d"66 was provisionally marked; (c) Exhibits . "P-32" and "P-35" 67 are faithful reproduction of the original; and 58 Exhibit "P-48", id., pp. 1129-1145. 59 ld .. pp. 1107-1120. 60 1d., pp. 1274-1288. 61 1d., pp. 1290-1298. 62 See "Ex Parte Manifestation", Volume Ill, pp. 1309-1403. 63 See Resolution dated 17 November 2023, id., pp. 1406-1407; See also Pre- Trial Order dated 30 January 2023, id., pp. 1414-1445. 64 See Commissioner's Report dated 16 January 2024, id., pp. 1410-141 I. Exhibit No. Description "P-10" Petitioner's Amended Articles oflncorporation. "P-11" Petitioner's 2022 General Information Sheet. "P-12" Petitioner's BIR Certificate of Registration with OCN No. 116RC2022000000037 I. "P-20" Petitioner's 2020 Audited Financial Statement (AFS). "P-23" Petitioner's 2021 AFS. "P-33" Biosafety Permit for Commercial Propagation No. 19-006 Propa dated 29 October2019. 66 Exhibit No. Description '�P-17-d" Screenshot showing transmittal of the Corn Germ plasm License Amendment, and the Bt-11 Trait License Amendment. 67 Exhibit No. Descriotion Biosafety Permit for Commercial Propagation No. 20-007 Propa dated 28 July "P-32" 2020.

CTA Case No. 11067 Syngenta Philippines, Inc. v. Commissioner of Internal Revenue DECISION X---------------------------------------------X (d) Exhibit "P-36"68, inclusive of sub-markings are original computer print-outs. On 30 January 2024, the Court issued the Pre-Trial Order.69 During the trial, Abril took the witness stand first. He is petitioner's Corporate Secretary, Treasurer, and Head of Statutory Finance. On the witness stand, Abril identified his Amended Judicial Affidavit dated 13 November 2023 7o where he testified that: (a) petitioner is a wholly owned subsidiary of SCPAG; (b) in 2021, it remitted royalties to SCPAG amounting to 'PI,U9,o26,8IS.s6, which included royalties amounting to '1'48o,I64,162.96 (12% WVAT and 15% Preferential FWT were remitted to the BIR amounting to '1'67, 787,881.83 and '1'84,734,852.29, respectively); (c) it found that there was an erroneous payment of royalties to SCPAG due to the double counting of royalties on the GMO Field Corn with Bt-u trait; and (d) to correct the double counting of royalties, petitioner adjusted its books of accounts, SCPAG refunded the excess royalties, and both petitioner and SCPAG terminated the Bt-n Trait License Agreement. On cross-examination, Abril confirmed that the administrative claim for refund with the BIR was filed only on 09 January 2023 and the judicial claim on u January 2023. According to him, at the time, he was t already aware of the allegedly erroneous payments of FWT (en;oneously referred to be EWT) and WVAT as early as September 2021.71 "P-35" Biosafety Permit for Commercial Propagation No. 20-009 Propa dated 14 Januar 2020. 68 Exhibit No. Descriotion "P-36" Email Exchanges relative to the amendment of the royalty agreements between "P-36-a" petitioner and SCPAG from September to December 2020 (;aoe I). "P-36-b" Email Exchanges relative to the amendment of the royalty agreements between "P-36-c" petitioner and SCPAG from September to December 2020 (page 2). "P-36-d" Email Exchanges relative to the amendment of the royalty agreements between petitioner and SCPAG from September to December 2020 (;age 3). Email Exchanges relative to the amendment of the royalty agreements between petitioner and SCPAG from September to December 2020 (page 4). Email Exchanges relative to the amendment of the royalty agreements between petitioner and SCPAG from September to December 2020 (;age 5). 69 Division Docket, Volume III, id., pp. 1414-1445. 70 Exhibit "P-45", id., pp. 1320-1354. 71 TSN dated 30 January 2024, pp. 14-15.

CTA Case No. 11067 Syngenta Philippines, Inc. v. Commissioner of Internal Revenue DECISION X---------------------------------------------X On redirect examination, Abril clarified that when petitiOner sought the refund of the erroneous payment of royalty from SCPAG, the latter initially refunded only half the amount. Petitioner wanted to make sure first that it gets the full amount sought to be refunded from SCPAG, which it did on 29 December 2022. It then filed the administrative and judicial claim for refund the following month.72 No cross-examination followed.73 Second to testify was Santiago, petitioner's CP Business Controller Commercial Finance from 2022 to present and its Finance Reporting and Compliance Lead from 2018 to 2021. During the hearing, Santiago identified her Amended Judicial Affidavit dated 13 November 202374 , wherein she corroborated in entirety the testimony of Abril. There were also no further cross-examinations conducted. Dejito, the third and last witness presented during the 30 January 2024 hearing was petitioner's Tax and Order to Cash Lead from November 2020 to April 2022 and Tax Team Lead from April 2022 to November 2022. Dejito identified her Amended Judicial Affidavit dated 16 November 2023 75, wherein she testified that: (a) petitioner paid WVAT for the month of December 2020 amounting to !'163,329,393�31 on u January 2021; (b) the WVAT payment arose from the royalties accrued in 2020 amounting to P1,36I,o78,277-58; (c) it paid the 4'h Quarter 2020 FWT amounting to P2o5,792,031.94 on 01 February 2021; (d) it submitted the Certificates of Residence for Tax Treaty Relief (CORTT) on 23 April2o21 to the Appellate Division of the BIR National Office and the Collection Section ofRDO No. 39; and (e) it filed a letter request for administrative claim for refund of WVAT and FWT on og January 2023 with the RDO No. u6 of the BIR-Regular Large Taxpayers Audit Division 1. On cross-examination, Dejito confirmed that petitioner had . already adjusted its 2021 ITR even before SCPAG completed the refundt 72 Id .� pp. 15-16. Id .� p. 16. Exhibit "P-46'', Division Docket, Volume III, pp. 1355-1385. 75 Exhibit "P-47'', id., pp. 1386-1402.

CTA Case No. 11067 Syngenta Philippines, Inc. v. Commissioner of Internal Revenue DECISION X---------------------------------------------X on 29 December 2022. There were no re-direct examination questions from petitioner.76 Thereafter, petitioner presented Ling via videoconference from Singapore. Ling is the Co-Head of Tax ofSyngenta Asia Pacific Pte. Ltd. (APAC), the regional headquarters that provide compliance support to petitioner and other Asia Pacific companies under the Syngenta AG Group. She identified her Judicial Affidavit dated 30 October 202377 wherein she corroborated Abril's and Santiago's testimonies regarding the erroneous payment of royalties, the adjustments made in petitioner's books, and the termination of the Bt-11 Trait License Agreement.78 On cross-examination, Ling declared that when petitiOner remitted the royalties to SCPAG, both the Corn Germplasm License Agreement and the Bt-11 Trait License Agreement were still in effect. Petitioner did not conduct any redirect examination.79 Upon clarificatory questions from the Court, Ling confirmed that at the time of the payment of the WVAT and FWT on the royalties, petitioner was unaware of the double imposition of royalties80 or that Citibank refunded the said royalties.8' On 12 February 2024, petitioner manifested that it would dispense with the presentation of the expert witness from the Bureau of Plant Industry of the Department of Agriculture.82 On 29 February 2024, petitioner filed its formal offer of evidence83 (FOE), offering Exhibits "P-1" to "P-48", inclusive of sub-markings. In its comment to the F0� 84, respondent interposed no objections to the _ documents offered, but only as to the manner they were identified andt 76 TSN dated 30 January 2024, pp. 41-42. 77 Exhibit "P-48", supra at note 58, pp. 1129-1145. 78 TSN dated 07 February 2024, pp. 6-7. 79 !d., pp. 7- I 0, see note at 24. 80 Id., pp. 10-!3. 8] !d., pp. 13-14. Division Docket, Volume Ill, pp. 1460-!461. 83 See "Offer of Exhibits", id., pp. 1465-1488. 84 See "Comment and Manifestation Re: Petitioner's Formal Offer of Evidence", filed on 13 March 2024, id., pp. 1840- !842.

CTA Case No. 11067 Syngenta Philippines, Inc. v. Commissioner of Internal Revenue DECISION X---------------------------------------------X compared with the originals. He or she further manifested that he or she will no longer present any witnesses. In its Resolution dated 09 July 202485, the Court admitted into evidence petitioner's offered documents. The Court also noted respondent's manifestation that he or she will no longer present a witness. As such, both parties were deemed to have rested their cases. Subsequently, on 12 August 2024, petitioner86 and respondent87 filed their memoranda. The case was, thus, considered submitted for decision on 21 August 2024.88 ISSUES I. WHETHER THE COURT HAS JURISDICTION OVER THE CASE; AND II. WHETHER PETITONER SYNGENTA PHILIPPINES, INC. IS ENTITLED TO THE REFUND OF ALLEGED ERRONEUSLY PAID WITHHOLDING VALUEoADDED TAX (WVAT) and FINAL WITHHOLDING TAX (FWT) AMOUNTING TO P67,787,881.83 AND P84,734,852.29, RESPECTIVELY.89 ARGUMENTS Respondent contends that this Court did not acquire jurisdiction over the case due to petitioner's failure to exhaust administrative remedies. He or she added that while petitioner filed its administrative claim on 09 January 2023 and its judicial claim on 11 January 2023, and both have fallen within the two (2)-year prescriptive period, he or she was not given ample opportunity to review its claim for refund with a . mere two (2) days left (of the period) to act on the matter. Respondentt 85 !d., pp. 1859-1860 !d., pp. 1861-1873. 87 !d., pp. 1876-1922. 88 See Resolution dated 21 August 2024, id., p. 1924. 89 Supra at note 61, pp. 1290-1291.

CTA Case No. 11067 Syngenta Philippines, Inc. v. Commissioner of Internal Revenue DECISION X---------------------------------------------X adds that the same is a condition precedent to the filing of a case in court. On the other hand, petitioner argues that the NIRC of 1997, as amended, or any law for that matter, does not require that respondent first resolves, or acts on the administrative claim, before judicial remedies may be availed. It pointed out that this Court and the Supreme Court have consistently ruled that a judicial claim for refund is validly filed as long as an administrative claim for refund was previously instituted, regardless of the length of interval between the two (2) claims, and as long as both were filed within the two (2)-year prescriptive period. Further, that the short interval does not violate the doctrine of exhaustion of administrative remedies. Lastly, petitioner, through its witness Abril was able to explain that it filed the administrative claim on 09 January 2023 because it only received the full remittance of the erroneously paid royalties from SCPAG on 29 December 2022. As to the other issue, petitioner claims that it has complied with all of the requirements for a successful claim for refund. First, there was a payment of tax which is the remittance of WVAT and FWT to the BIR on n January 2021 and 01 February 2021, respectively. Second, the said WVAT and FWT payments were erroneously made since they arose from the erroneous imposition of 20% royalties on GMO field corn seeds with Bt-n traits, a fact which respondent did not dispute. Third, the administrative claim for refund was filed on 09 January 2023 while the judicial claim for refund was filed on n January 2023, both ofwhich were with the two (2)-year prescriptive period under the NlRC of 1997, as amended. On the contrary, respondent claims that there was no erroneous payment of WVAT and FWT. He or she pointed out that petitioner's own witness, Ling, admitted during cross-examination that when petitioner remitted the royalties to SCPAG, both the Corn Germplasm License Agreement and the Bt-11 Trait License Agreement, with their amendments, were still in effect. Thus, there was a valid imposition of WVAT and FWT at the time the royalty payments were made since the agreements to which these taxes were based were both subsisting. Lastly, respondent argues that a tax refund is in the nature of tax exemptions, hence it should be interpreted in the strictest manner.. Thus, the validity of petitioner's claim should be meticulously verified.t

CTA Case No. 11067 Syngenta Philippines, Inc. v. Commissioner of Internal Revenue DECISION x---------------------------------------------x RULING OF THE COURT After a careful review of the records and the evidence, the Court finds merit in the petition. THE COURT HAS JURISDICTION OVER THE CASE. Sections 204 and 229 of the NIRC of1997, as amended, provide for the refund of erroneously collected taxes. Section 204 which applies to administrative claims for refund states that the CIR has the authority credit or refund taxes erroneously received but that "[n]o credit or refund of taxes or penalties shall be allowed unless the taxpayer files in writing with the Commissioner a claim for credit or refund within two (2) years after the payment of the tax or penalty." Meanwhile, Section 229 which applies to judicial claims for refund provides that no suit or proceeding shall be maintained in any court for the recovery of any national internal revenue tax alleged to have been erroneously assessed or collected until a claim for refund or credit has been duly filed with the CIR. As to the timeline of the judicial claim, the same section mandates that "no such suit or proceeding shall be filed after the expiration of two (2) years from the date of payment of the tax or penalty regardless of any supervening cause that may arise after payment." Thus, Sections 204 and 229 merely require that in cases of recovery of erroneously paid tax, both the claim for refund and the filing of the suit should be made before the expiration of two (2) years from the date of payment. In this case, petitioner timely filed its administrative and judicial claim for refund, as shown below: Date of Payment WVAT FWT Two (2) Years from 11 January 2021 28 January 2021 Date of Payment n January 2023 28 January 2023

CTA Case No. 11067 Syngenta Philippines, Inc. v. Commissioner of Internal Revenue DECISION x---------------------------------------------x Filing of 09 January 2023 09 January 2023 Administrative Claim n January 2023 n January 2023 Filing of Judicial Claim On the issue of exhaustion of administrative remedies under Sections 204 and 229 of the NIRC of1997, as amended, the Court deems this not novel. In Commissioner of Internal Revenue v. Carrier Air Conditioning Philippines, Inc. 90 (Carrier), the Supreme Court En Bane has explained that"[t]he principle of exhaustion of administrative remedies requires a party to first avail all the means provided by administrative processes before seeking the courts' intervention. It is a "form of courtesy, where the court defers to the administrative agency's expertise and waits for its resolution before hearing the case". Non-observance of the rule, however, does not affect the court's jurisdiction, but only the party's cause of action. Hence, it may be waived if not invoked at the proper time."91 In Carrier, the Supreme Court ruled as proper the taxpayer- claimant's filing of judicial claim w days after it had filed its administrative claim, even without the CIR's ruling. The Supreme Court cited the case CBK Power Company Limited v. Commissioner ofInternal Revenue92 (CBK) when it held that Section 229 of the NIRC of 1997, as amended, does not require that the Commissioner first act on the taxpayer's claim, and that the taxpayer cannot go to court without the Commissioner's action. In turn, CBK cited P.]. Kiener Company, Ltd. v. Saturnino David 93 , wherein the Supreme Court held that the administrative claim filed before the CIR was intended primarily as a notice of warning that unless the tax or penalty alleged to have been collected erroneously or illegally is refunded, court action will follow. In Commissioner of Internal Revenue v. Nanox Philippines, Inc. 94 (Nanox), the Supreme Court firmly declared that for as long as the . administrative claim and the judicial claim were filed within the twot 90 G.R. No. 226592,27 July 2021. 91 !d. G.R. Nos. 193383-84, 14 January 2015. 93 G.R. No. L-5163, 22 Apri\1953. " G.R. No. 230416 (Notice), 05 May 202\.

CTA Case No. 11067 Syngenta Philippines, Inc. v. Commissioner of Internal Revenue DECISION x---------------------------------------------x (2)-year prescriptive period, then there was exhaustion of the administrative remedies. From the foregoing, the law only mandates that both the administrative and judicial claims must be filed within the two (2)-year reglementary period, regardless of how far apart or close together these filings occur. Although respondent recognizes this, he or she maintains that the claim for refund must be filed at the earliest possible opportunity, to enable the review or action on the said claim (since the documents required to be submitted are readily available at the hands of the taxpayer).9s Unfortunately, as the Supreme Court held in Carrier, the silence or insufficiency in the law on the reasonable period for the CIR's action is one that can be addressed not by judicial pronouncement, but by appropriate legislation. PETITIONER SYNGENTA PHILIPPINES, INC. IS ENTITLED TO TAX REFUND. The Court shall now determine whether petitioner is entitled to a tax refund in the amount ofP152,522,734�12, representing the WVAT and FWT that it erroneously paid to the BIR due to the alleged erroneous computation of royalties on its sale of field corn seed with Bt-11 traits. According to Sections 204 and 229 of the NlRC of 1997, as amended, the following requirements must be complied with to entitle the claimant to tax refund or credit under these sections: 1. The claimant erroneously paid a tax; 2. The taxpayer filed a written claim for refund or credit with the ClR within two (2) years from the date of payment of the tax; and 3� t After a claim for refund or credit has been duly filed with the ClR, the taxpayer filed a judicial claim for refund still within two (2) years from the date of payment of the tax. 95 See Respondent's Memorandum, Division Docket, Volume Ill, p. 1865.

CTA Case No. 11067 Syngenta Philippines, Inc. v. Commissioner of Internal Revenue DECISION X---------------------------------------------X As previously discussed, petitioner has complied with the second and third requisites. We will proceed to resolve if petitioner made an erroneous payment of tax within the contemplation of Sections 204 and 209 of the NIRC of 1997, as amended. To recap, sometime in September 2021, petitioner found out that its 2020 revenues from Field Corn BT (GMO) amounting to P2,824A95,076.27 was subjected to both 25% royalty rate under the Corn Germp/asm License Agreement and 20% royalty rate under the Bt-11 Trait License Agreement. By the time it realized the mistake, it had already remitted the corresponding WVAT and FWT to the BIR. Both petitioner and SCPAG remedied the situation by the return of the 20% royalty under the Bt-11 Trait License Agreement. Petitioner now seeks the refund of the WVAT and FWT corresponding to the 20% royalty rate totaling P152,522,734.12. We find that petitioner is entitled to its claim as its situation is similar to that of the claimants in Nan ox and Carrier. In Nanox, Nanox already paid the BIR dividend tax (FWT) amounting to P9A95,774�38 when Nanox Japan, its parent company, ordered the discontinuance ofthe distribution of the cash dividend. As a result, Nanox did not release the cash dividends to Nanox Japan. There, the Supreme Court affirmed the CTA En Bane and CTA Division's ruling that the FWT on cash dividends distribution that did not materialize constitutes erroneously paid tax, which is refundable under the NIRC of 1997, as amended, thus, it is declared that Nanox is entitled to tax refund amounting to P9A95,774�38. Meanwhile in Carrier, Carrier paid Carrier B.V. cash dividends, net of w% FWT in 2009. However, an independent audit for the year 2009 revealed that the unrestricted retained earnings were insufficient to support a Pn3,955,742 of the P871,o84A18 dividends paid. Again, the Supreme Court did not disturb the CTA En Bane and CTA Division's ruling that there was an over-remittance _of FWT, hence, Carrier is entitled to tax refund worth P11,395,574�2o.t

CTA Case No. 11067 Syngenta Philippines, Inc. v. Commissioner of Internal Revenue DECISION X---------------------------------------------X We find petitioner's claim that it's payment ofWVAT and FWT corresponding to the 20% royalty rate under the Bt-n Trait License Agreement was erroneously made is supported by case records. Petitioner's Schedule of2020 Net Sales ofGM Field Corn Varieties96 shows that petitioner sold different varieties of genetically modified field corn seeds amounting to P2,824>495,076.27, comprised of: Field Corn BT (GM) Net Sales (in PHP) NK6410 BTGT-MO BIB NK884o BGT-MO RIB 1,357.427,133-40 NK6414 BTGT-MO BIB 469,125,021.44 NK3o6 BTGT-MO BIB 211,765,663.27 NK6414 BGT-MO-RIB 172,618,397�19 NK6410 BTGT-MO BIB-TRD 46,164,342�58 NK3o6 BTGT-MO BIB-TRD SSG398 BTGT-TRD 1g,81g,o43�24 NK6514 BTGT-TRD 6,787,256.00 SSG278 BTGT-TRD NK6414 BGT-MO RIB-TRD 903,547�99 Release of unutilized rebates provision 6 55 ,o72.2 9 Release of unutilized sales returns provision 265,417-22 Total 47,668.50 194,882,846.29 344,033,666.86 2,824,495,076.27 Abril, petitioner's witness, testified that these varieties of genetically modified field corn seeds possess two or three traits, one of which is the Bt-n Trait:97 Q8g: I note that the varieties have either "BTGT'' or "BGT" in their names, what does "BTGT" or "BGT" mean? A8g: BTGT means that the field corn variety is double-stacked. BGT means that the field corn variety is triple-stacked. But note that one of the stacks in those varieties is the Bt-n trait. Qgo: What do you mean by "double-stacked"? Ago: A field corn variety is double stacked when it possesses 2 traits. t Example, NK6410 BTGT-MO BIB means that the variety has both GA21 trait and Bt-u trait. All of our double stacked varieties listed in the Schedule contain GA21 and Bt-11 traits. 96 Exhibit "P-31"', Division Docket, Volume III, p. 1805. Exhibit "P-45", Amended Judicial Affidavit of Dante C. Abril dated 13 November 2023, supra at note 70, p. !344.

CTA Case No. 11067 Syngenta Philippines, Inc. v. Commissioner of Internal Revenue DECISION x---------------------------------------------x Q91: What do you mean by "triple stacked"? A91: It means that such field corn variety possesses 3 traits. Example, NK884o BGT-MO-RIB has GA21, TC1507, and Bt-u traits. All of our triple-stacked varieties as listed in the Schedule contain these 3 traits. Ling, another witness for petitioner, corroborated Abril's testimony that the varieties listed in the Schedule of 2020 Net Sales of GM Field Corn Varieties are double or triple stacked, and at least one of those stacks is the Bt-11 trait.98 With regards to the line items "Release of unutilized rebates provision" and "Release of unutilized sales returns provision" included in the Schedule of 2020 Net Sales of GM Field Corn Varieties, Abril explained that they refer to rebates which were taken up as sales deduction but were reverted back to sales after some customers did not achieve the target volume of purchased genetically modified corn field seeds.99 Abril's and Ling's testimonies were not controverted by respondent. Moreover, the Bureau of Plant Industry Biosafety PermitS100 presented by petitioner shows that petitioner indeed produced double and triple-stacked seed varieties in CY 2020 and corroborate the witnesses' assertion that the seed varieties listed in the Schedule oj2o2o Net Sales ofGM Field Corn Varieties are double or triple stacked.t " Exhibit "P-48", Judicial Affidavit ofYan Pei Ling dated 30 October 2023. supra at note 58, p. 1142. 99 Exhibit "P-45", supra at note 70, p. 1343. 100 Division Docket, Volume 1ll, pp. 1807-1817. Exhibits Description Seed Varieties "P-32" Biosafety Permit for Commercial Propagation No. 20- Bt-l! "P-33" 007 Prooa dated 28 Julv 2020. "P-34" Biosafety Permit for Commercial Propagation No. 19- Corn GA21 006 Prooa dated 29 October 2019. "P-35" Biosafety Permit for Commercial Propagation No. 20- Stacked trait product 0 I0 Propa dated 08 October 2020. Corn Bt-l! x TC\507 x GA21 and all orogenies Biosafety Permit for Commercial Propagation No. 20- Corn Bt-l! x MIR\62 x 009 Propa dated 14 January 2020. MON89034 X GA21 and all progenies from crosses

CTA Case No. 11067 Syngenta Philippines, Inc. v. Commissioner of Internal Revenue DECISION X---------------------------------------------X Petitioner claims that since all the varieties listed in the Schedule oj2o2o Net Sales ofGM Field Corn Varieties are genetically modified, the total sales off'2,824.495,076.27 was subjected to the 25% royalties under the Amendment to Corn Germplasm License Agreement which amounted to I'7o6,123,769.o7.101 In addition, since the same varieties possesses the Bt-n trait, petitioner alleges that the total sales off'2,824.495,o76.27 was likewise subjected to the 20% royalties under the Bt-11 Trait License Agreement which amounted to s64,899�015.25.102 We find petitioner's claims to be consistent with its 2020 AFS103 where petitioner reported royalty expense of I'1,316,so2,134 for CY 2020 and petitioner's Schedule of Royalties Reported'0 4 showing the 25% royalties amounting to I'7o6,123,769.07 and 2o% royalties amounting to Ps64,899�015.25, as part of the reported royalty expense off'1,316,so2,134� to wit: Schedule of Royalties Reported Description Sweetcorn Field Corn BT Rice Total (GMO) Amounts in PHP 2020 Net Sales 4,629,110.79 2,824,495,076. 165,799�701.9 2,994.923,888.9 27 0 6 1.5% Royalties 69,436�55 42,367,426.14 2,486,995�53 44,923,858.33 under the Syngenta Brand License 555.493-29 555.493-29 12% Royalties under the Corn 706,123,769.07 706,123,769.07 Germp/asm License Aqreement 564,899-015.25 s64,899-015.25 25% Royalties for GMO under the 624,929�96 1,313,390,210-47 2,486,995�53 I>316,5o2,IJ5�95 Corn Germp/asm License Aoreement 2o% Royalties under the Bt-n Trait License Aqreement Total 101 Supra at note 41, id., p. 764. I 0~ 1d. 103 Exhibit "P-20", supra at note 17, p. 1760. 10< Exhibit "P-3", supra at note 20, p. 1495.

CTA Case No. 11067 Syngenta Philippines, Inc. v. Commissioner of Internal Revenue DECISION x---------------------------------------------x Petitioner's WVAT Returnws dated n January 2021 shows that it remitted WVAT to the BIR amounting to P163,329,393-31, computed as follows: Description Amount (in PHP) Royalties during 2020 1,316,502,135�95 Add: 2019 Royalties billed in 2020 Total 44.576,141.56 Tax Rate 1,361,078,277�51 WVAT 12% 163,J29.J93�31 Thus, P67,787,881.83w6 of the P163>329,393�31 WVAT paid pertains to the 20% Royalties under the Bt-n Trait License Agreement, which amount is the subject of the present claim for refund. Petitioner's FWT Returnw7 dated on 28 January 2021 shows that petitioner also remitted FWT to the BIR in the amount of P205,792,031.94� Out of this amount, P2o4,161,74L64 pertains to FWT withheld on petitioner's royalty payments to SCPAG, computed as follows: Description Amount (in PHP) Royalties during 2020 1,316,502,135�95 Add: 2019 Royalties billed in 2020 Total 44.576,141.56 Tax Rate 1,]61,078,277-51 FWT 15%w8 204,161,741.63 I OS Exhibits "P-1" and "P-2", supra at note 21, pp. 1490-1491 and 1493, respectively. 106 20% Royalties under the Bt-11 Trait License Agreement amounting to !'564,899.0 15.25 multiplied by WVAT rate of 12%. I 07 Exhibits "P-4" and "P-5", supra at note 22, pp. 1497-1498 and 1500, respectively. I 08 Petitioner presented the Certificate of Residence (for Tax Treaty Relief) and the corresponding attachments (including the certification issued by the tax authority of Switzerland proving that SCPAG is a resident of Switzerland) that it submitted to the BIRon 23 Apri12021. Thus, SCPAG's royalty income may be subject to 15% FWT, pursuant to the Philippines-Switzerland Tax Treaty in relation to Sections 28(B)( I) and 32(8)(5) of the NIRC of 1997, as amended.

CTA Case No. 11067 Syngenta Philippines, Inc. v. Commissioner of Internal Revenue DECISION X---------------------------------------------X Thus, !'84,734,852.29109 of the !'205,792,031.94 FWT paid pertains to the 20% Royalties under the Bt-11 Trait License Agreement, which, in addition to the !'67,787,881.83 WVAT, is the subject of the present claim for refund. Petitioner's witness Ling testified that she discovered the double counting of royalties and on 24 September 2021, she informed, among others, Khuat Anh Viet, one of the executives of the Syngenta AG Group:'10 Q37: How did you and the team of Ms. Santiago come to a conclusion that there was an erroneous payment of royalties by SPI to SCPAG? A3T We realized that the Corn Germplasm Agreement and its Amendment, which impose 25% royalty rate on the Genetically-Modified BT-n Field Corn, already cover the BT-n Trait, which is the subject of a separate 20% Royalty Rate under the BT-n Trait License Agreement. This double imposition of royalties on the Genetically-Modified Field Corn with BT-n Trait was apparently overlooked by SPI and SCPAG when the parties were amending the BT-n Trait License Agreement. Qso: What did you do after you and Ms. Santiago's team realized the double recording/imposition of royalties of 25% and 2o%, respectively, under the Corn Germplasm Amendment and BT- u Trait License Amendment, in September 2021? Aso: I immediately emailed Khuat Anh Viet, one of the executives of the Syngenta AG Group, and informed him about the double payment of royalties on the Genetically Modified (GM) Field Corn BT-n trait, with emphasis that such was an unintended error on the part of SPI. Q51: What proof do you have if any, to support this? A51: I have a copy of the e-mail that I sent to Khuat Anh Viet on September 24, 2021. To correct the error, Abril testified that they reversed the royalty expense pertaining to the 20% royalties under the Bt-11 Trait Licenset 109 20% Royalties under the Bt-11 Trait License Agreement amounting to P564,899.0 15.25 multiplied by FWT rate of 15%. 110 Exhibit "P-48", supra at note 58, pp. 1139, 1142-1143.

CTA Case No. 11067 Syngenta Philippines, Inc. v. Commissioner of Internal Revenue DECISION X---------------------------------------------X Agreement amounting to Ps64,899-015.25 and the corresponding WVAT of'P67,787,88L83 in its CY 2020 books.m Again, respondent did not rebut Ling's and Abril's testimonies, and such testimonies were supported by documentary evidence presented by petitioner. Afterwards, petitioner's 2021 AFS 112 shows that petitiOner recognized P632,686,897 as "Income from royalty refund" in CY 2021. Petitioner also amended its 2021 ITR113 and reported the reversal of the royalty expense and WVAT as other income. Lastly, Petitioner and SCPAG terminated the Bt-11 Trait License Agreement in January 2o22114 and SCPAG returned the excess royalties (net ofFWT) of'P48o,I63,525.96 on 29 December 2o22.115 Taking the foregoing together, it is as if SCPAG did not receive royalty income from petitioner that would have been the proper subject ofWVAT and FWT. Respondent's contention that there was no erroneous payment of WVAT and FWT since the agreements to which these taxes were based were subsisting at the time of payment fails to convince Us. In Spouses Eduardo X. Gena to, et a/. v. Commissioner of Internal Revenue116, the CIR also argued that the capital gains taxes paid therein cannot be considered as erroneously or illegally collected taxes because at the time the same were paid, the contract was not yet rescinded and as such was very much legal and valid. This Court's First Division disagreed and ruled that the supposed gain that could have been realized from the contract had been abrogated due to the recission of the contract, and the basis for the imposition of capital gains tax failed t to exist. Similarly, the supposed royalty income that could have been . realized from the Bt-11 Trait License Agreement had been abrogated by Ill Exhibit "P-45"', supra at note 70, p. 1346. 112 Exhibit "P-23", supra at note 25, p. 1735. II J Exhibit "P-24", supra at note 26, p. 1784. 114 Exhibit "P-26", supra at note 27, p. 1790. l\5 Exhibits "P-27" and "P-30", supra at note 28, pp. 1792-1793, and 1803, respectively. 116 CTA Case Nos. 8919 and 8920,30 March 2017.

CTA Case No. 11067 Syngenta Philippines, Inc. v. Commissioner of Internal Revenue DECISION x---------------------------------------------x the termination of the contract and more importantly, by the full return of the 20% royalties from SCPAG to petitioner. Thus, the basis for the imposition of WVAT and FWT does not exist. Lastly, respondent argues that a tax refund is in the nature of tax exemptions, hence it should be interpreted in the strictest manner. We agree with respondent; thus, we meticulously verified petitioner's claim and find that the documentary and testimonial evidence that it has presented, which respondent did not controvert, adequately supports its claim that it has erroneously paid WVAT and FWT amounting to P67,787,881.83 and P84,734,852.29, respectively. WHEREFORE, premises considered, the instant Amended Petition for Review filed by petitioner Syngenta Philippines, Inc. on o6 March 2023, is hereby GRANTED. Accordingly, respondent Commissioner of Internal Revenue is ORDERED to refund or issue a tax credit certificate in favor of petitioner Syngenta Philippines, Inc. in the total amount of PIS2,S22,734�12, representing the erroneously paid Withholding Value-Added Tax and Final Withholding Tax. SO ORDERED. A. BACORRO-VILLENA WE CONCUR: ROMAN G. DEL ROSARIO Presiding Justice LA~~VID Associate Justice

CTA Case No. 11067 Syngenta Philippines, Inc. v. Commissioner of Internal Revenue DECISION x---------------------------------------------x 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's Division. Presiding Justice