CHARTIS TECHNOLOGY & OPERATIONS MANAGEMENT CORPORATION (PHILIPPINES) v. COMMISSIONER OF INTERNAL REVENUE (consolidated with CTA Case No. 8498, 8534 & 8581)

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY SPECIAL SECOND DIVISION CHARTIS TECHNOLOGY & CTA CASE NOS. 8432, 8498, OPERATIONS MANAGEMENT 8534 & 8581 CORPORATION (PHILIPPINES), Members: Petitioner, CASTANEDA, JR., and -versus- CASANOVA. COMMISSIONER OF INTERNAL Promulgated: REVENUE , FEB ZZ2017 / r/ Respondent. ;o �� uT.0 If:. "' . x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x AMENDED DECISION CASANOVA, J.: For resolution is petitioner's Motion for Reconsideration with Motion for New Trial \ filed on November 24, 2015, without respondent's comment despite notice per Records Verification2 dated January 12, 2016. Petitioner seeks reconsideration of this Court's Decision3, promulgated on November 6, 2015, which dismissed petitioner's claim for refund or issuance of tax credit certificates (TCC) of its alleged excess and unutilized Input Value Added Tax (VAT) in the total amount of P56,815,398. 78 for fiscal year (FY) 2010 ended November 30, 2010.~ 1 CTA Case No. 8432, Docket (Vol. V), pp. 2350-2360. 2 CTA Case No. 8432, Docket (Vol. V), p. 2527. 3 CTA Case No. 8432, Docket (Vol. V), pp. 2318-2349.

AMENDED DECISION CTA CASE NOS. 8432, 8498, 8534 & 8581 In the assailed Decision, the Court denied petitioner's claim for VAT refund for its failure to submit sufficient documents to prove that its clients are non-resident foreign corporations doing business outside the Philippines. In the Motion for Reconsideration with Motion for New Trial, petitioner manifests that it has fifty-one (51) non-resident foreign clients for FY ended November 30, 2010 in different territories scattered around the world. Petitioner requested its clients to furnish it with their consularized copies of incorporation documents, but the requests went unheeded. Petitioner was allegedly constrained to finish the presentation of its documentary and testimonial evidence without relevant incorporation documents. Petitioner avers that despite reasonable diligence and repeated reminders to its foreign clients, petitioner failed to receive the consularized copies of their incorporation papers. Moreover, petitioner does not have absolute control over these foreign affiliates, at most, it can only request, but it does not have the authority to procure the documents from its source. Since the consularized documents remain unavailable, petitioner has gathered printed screenshots of the official online websites of the foreign government company registries, which are attached to its motion. Petitioner learned that, in recent cases, this Court has accepted printed screenshots as evidence to prove the fact that a non-resident foreign corporation is doing business outside the Philippines. Petitioner argues that the said printed screenshots are akin to newly discovered evidence that shall materially alter the outcome of the case. Thus, petitioner prays that the Court grant its Motion for New Trial and admit these documents into evidence so that petitioner's claim for VAT refund may be granted in its entirety. In the Resolution4 dated February 12, 2016, the Court granted petitioner's Motion for New Trial and held in abeyance the resolution of petitioner's Motion for Reconsideration�~ 4 CTA Case No. 8432, Docket (Vol. V.), pp. 2529-2531.

AMENDED DECISION CTA CASE NOS. 8432, 8498, 8534 & 8581 Consequently, petitioner recalled its witness, Ms. Mary Cris Barayuga, petitioner's Senior Manager for Finance and Accounting. 5 Thereafter, petitioner filed its Supplemental Formal Offer of Evidence6 on August 1, 2016. In the Resolution7 dated September 20, 2016, the Court admitted as evidence Exhibits "M-1-a", "M-2-a", "M-3- a", "M-4-a", "M-6-a", "M-6-b", "M-7-a", "M-8-a", "M-8-b", "M-8-c", "M-9-a", "M-9-b", "M-9-c", "M-9-d", "M-10-a", "M- 11-a", "M-11-b", "M-12-a", "M-12-b", "M-13-a", "M-14-b", "M-15-a", "M-16-a", "M-17-a", "M-17-b", "M-17-c", "M-18- a", "M-18-b", "M-18-c", "M-18-d", "M-20-a", "M-20-b", "M- 21-a", "M-21-b", "M-21-c", "M-23-a", "M-23-b", "M-23-c", "M-24-a", "M-24-b", "M-24-c", "M-24-d", "M-24-e", "M-25- a", "M-26-a", "M-27-a", "M-29-a", "M-31-a", "M-31-b", "M- 31-c", "M-32-a", "M-32-b", "M-33-a", "M-33-b", "M-33-c", "M-34-a", "M-35-b", "M-36-a", "M-37-a", "M-38-a", "M-39- a", "M-40-a", "M-41-a", "M-43-a", "M-44-a", "M-44-b", "M- 47-a", "M-48-a", "M-49-a", "M-50-a", "M-51-a", "M-60", "M- 61", and "M-61-a". Petitioner filed the Supplemental Memorandum (in support of Petitioner's Motion for Reconsideration dated 23 November 2015)8 on October 27, 2016, while respondent failed to file his supplemental memorandum despite notice per Records Verification9 dated November 21, 2016. In the Supplemental Memorandum, petitioner asserts that its witness, Ms. Barayuga reiterated that petitioner's clients are foreign corporations existing, operating and doing business in foreign countries. In support of her testimony, Ms. Barayuga presented the consularized Certificates and Articles of Incorporation and similar documents, as well as printouts of the websites of various foreign government registries, showing that petitioner's clients are existing, operating and doing business in foreign countries. Petitioner maintains that it duly substantiated its claim for refund. Thus, taking into account the additional evidence presented, petitioner submits that it is entitled to the refund or issuance of a tax 4 5 Minutes of the Hearing dated July 20, 2016, CTA Case No. 8432, Docket (Vol. V), p. 2607; Exhibit "M-61" 6 CTA Case No. 8432, Docket (Vol. V), pp. 2610-2628. 7 CTA Case No. 8432, Docket (Vol. VI), pp. 3083-3084. 8 CTA Case No. 8432, Docket (Vol. VI), pp. 3085-3099. 9 CTA Case No. 8432, Docket (Vol. VI), p. 3100.

AMENDED DECISION CTA CASE NOS. 8432, 8498, 8534 & 8581 credit certificate for its unutilized/excess input VAT for the 1st to 4th quarters of FY 2010 amounting to P56,815,398. 78. To reiterate, the denial of the claim was mainly due to petitioner's failure to prove that it rendered zero-rated sales of services in accordance with Section 108(8)(2) of the National Internal Revenue Code (NIRC) of 1997, as amended. More particularly, petitioner failed to present proof of its foreign clients' incorporation, association or registration in a foreign country which should have satisfied the 2nd requisite to establish that the supply of services are considered VAT zero-rated as laid down in Commissioner of Internal Revenue vs. Burmeister and Wain Scandinavian Contractor Mindanao, Inc. 10 These requisites are as follows: 1. the services must be other than processing, manufacturing or repacking of goods; 2. the recipient of such services is doing business outside the Philippines; and 3. payment for such services must be in acceptable foreign currency accounted for in accordance with the BSP rules and regulations. Hence, in the Supplemental Formal Offer of Evidence, petitioner presented consularized foreign incorporation/registration documents and/or screenshots from various foreign government websites to prove its clients' foreign incorporation or registration. 11 With the admission of these documents12, the Court will now proceed in verifying petitioner's refundable claim. As stated in the assailed Decision, in order to be entitled to a refund or issuance of a tax credit certificate of input VAT paid, petitioner must prove the following: 1. the taxpayer is VAT registered;41L 10 G.R. No. 153205, January 22, 2007. 11 Exhibits "M-1-a" to "M-61-a" 12 Resolution dated September 20, 2016, CTA Case No. 8432, Docket (Vol. VI), pp. 3083-3084.

AMENDED DECISION CTA CASE NOS. 8432, 8498, 8534 & 8581 2. the taxpayer is engaged in zero-rated or effectively zero- rated sales; 3. the input taxes are due or paid; 4. the input taxes are not transitional input taxes; 5. the input taxes have not been applied against output taxes during and in the succeeding quarters; 6. the input taxes claimed are attributable to zero-rated or effectively zero-rated sales; 7. for zero-rated sales under Section 106(A)(2)(1) and (2); 106(8); and 108(8)(1) and (2), the acceptable foreign currency exchange proceeds have been duly accounted for in accordance with 8SP rules and regulations; 8. where there are both zero-rated or effectively zero-rated sales and taxable or exempt sales, and the input taxes cannot be directly and entirely attributable to any of these sales, the input taxes shall be proportionately allocated on the basis of sales volume; and 9. the claim is filed within two years after the close of the taxable quarter when such sales were made.13 The first and ninth requisites were already passed upon in the Decision dated November 6, 2015. 14 We now proceed with the re- evaluation of the remaining requisites. Second and Seventh Requisites: Petitioner had zero- rated sales which were paid for in acceptable foreign currency duly accounted for in accordance with 8SP rules and regulations.~ 13 San Roque Power Corporation vs. Commissioner of Internal Revenue, G.R. No. 180345, November 25, 2009. 14 Decision dated November 6, 2015, CTA Case No. 8432, Docket (Vol. V), pp. 2342-2344.

AMENDED DECISION CTA CASE NOS. 8432, 8498, 8534 & 8581 For the fiscal year 2010, petitioner allegedly rendered services to the following non-resident foreign corporations which are either covered with individual Master Service Agreements or included in an Intercompany Service Agreement as listed by Ms. Maria Juvy M. Vargas and Ms. Mary Cris Barayuga, petitioner's Chief Financial Officer and Senior Manager for Finance and Accounting, respectively, in their Sworn Statements dated September 11, 201315 and June 15, 201616, respectively: 1 AIG Global Reinsurance Division 2 AIG Kazakhstan 3 AIG Travel Assist_ Inc. 4 AIU Insurance Company - Japan 5 American Home Assurance Australia 6 American Home Assurance Company Australia 7 American Home Assurance Company UAE 8 American Home Assurance Korea 9 American Home Assurance Singapore 10 Chartis Azerbaijan Insurance Co. 11 Chartis Chile Campania Seguros Generales S.A. 12 Chartis China 13 Chartis Claims 14 Chartis Europe S.A. 15 Chartis Europe S.A. Branch Office of Hungary 16 Chartis Europe S.A. Bulgaria Branch 17 Chartis Europe S.A. Czech Republic Branch 18 Chartis Europe S.A. Finland Branch 19 Chartis Europe S.A. Georgia Branch 20 Chartis Europe S.A. Poland Branch Office 21 Chartis Europe S.A. Slovak Republic Branch 22 Chartis Insurance Claims 23 Chartis Insurance Hong Kong 24 Chartis Insurance Indonesia 25 Chartis Insurance Ireland Limited 26 Chartis Insurance UK Ltd. 27 Chartis International 0 and S HO 28 Chartis Inti F&A 29 Chartis Malaysia Insurance Berhad 30 Chartis Romania Insurance Company SA 31 Chartis Southeast Asia Limited 32 Chartis Taiwan Insurance Co. Ltd. Chartis Technology and Operations Management (M) SDN 33 BHD 34 Chartis Technology_ and Operations Management - Ireland 35 Chartis UK Services, Ltd. ...,___ 15 CTA Case No. 8432, Docket (Vol. III), pp. 1282-1283. 16 Exhibit "M-61"

AMENDED DECISION CTA CASE NOS. 8432, 8498, 8534 & 8581 36 Chartis Ukraine Insurance Company OSC 37 Chartis Uzbekistan 38 Chartis Vietnam Insurance Company Limited 39 OSC Chartis 40 Direct DME Inc. 41 Guam Insurance Adjusters, Inc. 42 Intercompany Clearing House NY - Chartis Inti F&A 43 Lexinqton 44 New Hampshire Insurance Thailand 45 UBB Chartis Insurance Company_ Bulgaria 46 Alico AIG GID 47 Chartis MEMSA Insurance Co. - Oman Branch 48 Chartis MEMSA Insurance Company Limited 49 Chartis South Africa Ltd. 50 Health Direct Inc. 51 Tata AIG Gen Insurance Co. Ltd. - India Petitioner presented SEC Certifications of Non-Registration of Company17, Master Agreements for Professional Services18, Intercompany Services Agreement19 and consularized foreign incorporation/registration documents and/or screenshots from various foreign government websites20 to prove that its clients are non-resident foreign corporations doing business outside the Philippines. In Deutsche Knowledge Services, Pte Ltd. vs. Commissioner of Internal Revenut#-1, this Court discussed the documentary requirements to prove that the recipients of services are non-resident foreign corporations doing business outside of the Philippines, to wit: "To prove that its clients are non-resident foreign corporations doing business outside the Philippines, petitioner presented the following documents: 1. SEC Certifications of Non-Registration of Company; 2. Certifications from different government agencies in the country of origin of petitioner's clients, all~ 17 Exhibits "L-1" to "L-51" 18 Exhibits "M-2" to "M-58". 19 Exhibit "M-59". 20 Exhibits "M-1-a" to "M-61-a" 21 CTA Case No. 7808, December 16, 2014.

AMENDED DECISION CTA CASE NOS. 8432, 8498, 8534 & 8581 duly authenticated by the nearest consulate of the Philippines; 3. Intragroup Service Agreements; and, 4. Duetsche Bank List of Shareholdings 2008 However, the Court finds that the aforesaid documents per se do not constitute sufficient proof that petitioner's clients are non-resident foreign corporations 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 Intra-Group Service Agreements only show the names of petitioner's customers to whom it rendered services but the same do not establish that such customers are non-resident foreign corporations doing business outside the Philippines. Moreover, the Articles of Association and Certificates of Registration/Incorporation of Foreign Company only prove that the named entities therein were incorporated/organized abroad. However, they also do not establish that such entities are not doing business in the Philippines. To be considered as non-resident foreign corporation doing business outside the Philippines, each entity must be supported, at the very least, by both SEC certificate of non-registration of corporation/partnership and certificate/articles of foreign incorporation I association I registration. xxx" (Emphasis and underscoring supplied) As to the validity of screenshots of foreign government websites, this Court ruled in Chevron Holdings, Inc. [formerly Caltex (Asia) Limited] vs. Commissioner of Internal Revenue22 that "[B]eing official government registry of corporations, the Court is inclined to accept the printed screenshots of the official websites of othe~ 22 CTA Case No. 8241, August 11, 2015.

AMENDED DECISION CTA CASE NOS. 8432, 8498, 8534 & 8581 foreign government's registry of companies as sufficient proof in lieu of the Certificates/Articles of Foreign Incorporation/Association." After a thorough examination of these documents presented, the Court finds that out of petitioner's 51 foreign clients, only the following entities can be considered non-resident foreign corporations doing business outside the Philippines: 1 AIG Kazakhstan 2 AIG Travel Assist Inc. 3 American Home Assurance Com_Qan_y UAE 4 Chartis Chile Campania Seguros Generales S.A. 5 Chartis Claims 6 Chartis Europe S.A. 7 Chartis Europe S.A. Branch Office of Hun_ga_!Y 8 Chartis Europe S.A. Bulgaria Branch 9 Chartis Europe S.A. Czech Republic Branch 10 Chartis Europe S.A. Finland Branch 11 Chartis Europe S.A. Poland Branch Office 12 Chartis Europe S.A. Slovak Republic Branch 13 Chartis Insurance Ireland Limited 14 Chartis Malaysia Insurance Berhad 15 Chartis Southeast Asia Limited 16 Chartis Technology and Operations _(_MJ SON BHD 17 Chartis UK Services Ltd. 18 Chartis Ukraine Insurance Company OSC 19 Chartis Uzbekistan 20 Direct DME Inc. 21 Guam Insurance Adjusters Inc. 22 New Hampshire Insurance Thailand 23 Chartis South Africa Ltd. 24 Health Direct, Inc. 25 Tata AIG Gen Insurance Co. Ltd. - India The names of the above-enumerated entities matched with those shown in both the Philippine SEC Certificates of Non- Registration of Company and consularized foreign incorporation/registration documents and/or screenshots from various foreign government websites. In its amended Quarterly VAT Returns23 for the FY 2010, petitioner reported an amount of P1,356,544,794.50 total sales, where P1,326,963,237.76 pertains to zero-rated sales, to wit~ 23 Exhibits "F-1", "F-3", "F-7" and "F-8".

AMENDED DECISION CTA CASE NOS. 8432, 8498, 8534 & 8581 Quarter VATable Zero-Rated TOTAL pt p 7 276,101.73 p 402,399,346.27 p 409,675 448.00 2nd 7,153,406.38 214,520,912.15 221,674J318.53 3rd 7,548 669.02 389,793 750.70 397 342,419.72 4th 7 603,379.61 320,249,228.64 327,852,608.25 TOTAL P29,581,556.74 P1,326,963,237.76 P1,356,544,794.50 Petitioner submitted its VAT official receipts and sales invoices24 to support its zero-rated sales which were scrutinized by the Court- commissioned Independent Certified Public Accountant (!CPA), Ms. Mary Ann Capuchino. The Court finds it proper to disallow zero-rated sales amounting to P640,937,776.58 due to the following findings by the !CPA, as summarized in her report25 : ICPA Report Findin_gs Amount Annex Export sales pertaining to ICH IT transactions supported by VAT OR p 589 846,852.10 issued in the name of Chartis Int'l F&A stamped with zero-rated Reference sales and with Certificate of Inward Remittance (8 4401887.79) D Adjustments made to export sales with Chartis Int'l F&A 21 652J333.73 D Export sales pertaining to ICH IT transactions supported by VAT E ORs issued in the name of Chartis Int'l F&A stamped with zero- (518,892.61) rated sales and with Certificate of Inward Remittance with noted 21 809 283.34 E difference in the amount per invoice and per schedule of collection report 8 323 122.78 F Adjustments made to export sales with Chartis Int'l F&A with noted difference in the amount per invoice and per schedule of collection 6 552 908.05 G report Export sales not properly supported by VAT OR stamped with zero- 7 291152.22 H rated sale but supported with Certificate of Inward Remittance (5 578 095.24) Export sales supported by VAT OR with no CAS permit number P640,937_L776.58 I indicated but supported with Certificate of Inward Remittance Export sales properly supported bby VAT OR stamped with zero- rated sale but not supported with original Certificate of Inward Remittance Export sales pertaining to ICH IT transactions supported by VAT OR issued in the name of Chartis Int'l F&A and with Certificate of Inward Remittances but not supported by VAT invoices Other adjustments TOTAL 24 Exhibit "P-3", with submarkings. 25 Exhibit "P-1", Part 1 of 2, pp. 11-12.

AMENDED DECISION CTA CASE NOS. 8432, 8498, 8534 & 8581 In addition to the ICPA's findings, the Court finds that P454,989,141.77 of petitioner's zero-rated sales must likewise be disallowed due to the following: !CPA Report Exh. No. Client OR No. Date Amount in Amount in PHP Annex USD Reference Sales supported by VAT zero-rated OR without date and without Certificate ofInward Remittance Chartis Europe SA, Branch Office of c P-3-0142 Hungary 259 $19231.96 P907. 844.63 Sales supported by VAT zero-rated OR but without Certificate ofInward Remittance B P-3-0010 Guam Insurance Adjusters Inc. 257 12/1/2009 3 114.55 147 000.53 B P-3-0012 New Hampshire Insurance Thailand 271 12/1/2009 89 948.96 4 246 040.66 B P-3-0017 Chartis Europe SA Bulgaria Branch 283 2/25/2010 15 471.26 719 568.31 Chartis Europe SA, Czech Republic B P-3-0020 Branch 286 2/25/2010 46 001.06 2 137 648.90 B P-3-0021 Chartis Europe SA Finland Branch 288 2/25/2010 88 224.97 4,097 762.14 B P-3-0023 Chartis Insurance Hongkonq 290 2/25/2010 164 686.86 7 612 120.54 Chartis Europe SA, Branch Office of B P-3-0024 Hungary 291 2/25/2010 34 411.12 1 594 880.00 B P-3-0028 Chartis Malaysia Insurance Berhad 296 2/25/2010 173 711.47 8 051 607.01 B P-3-0029 Chartis Europe SA Poland Branch 298 2/25/2010 47 663.88 2 211 265.86 Chartis Europe SA, Slovak Republic B P-3-0031 Branch 301 2/25/2010 38 022.04 1 768 405.09 B P-3-0032 New Hampshire Insurance Thailand 303 2/25/2010 32 082.10 1 480 685.15 B P-3-0033 AIG Travel Assist Inc. 304 2/25/2010 111 609.09 5 190 938.78 B P-3-0051 Direct DME Inc. 0000051 6/15/2010 10 552.00 487 502.40 B P-3-0056 Chartis Claims 0000062 7/5/2010 476 821.50 22 029 153.30 B P-3-0061 Direct DME Inc. 0000068 7/12/2010 10 552.00 489 190.72 B P-3-0066 Chatis Claims 0000079 7/30/2010 5 276.00 244 595.36 B P-3-0069 Chartis Claims 0000082 8/6/2010 494 193.46 22 500 628.23 B P-3-0072 Chartis Claims 0000085 8/19/2010 5 276.00 240 216.28 B P-3-0073 Chartis Claims 0000088 8/20/2010 502 870.43 22 895 690.68 B P-3-0075 Direct DME Inc. 0000093 8/25/2010 18 089.29 828 724.64 American Home Assurance B P-3-0086 Company, UAE 0000586 8/27/2010 254 865.88 11 604 043.54 B P-3-0091 Chartis Europe SA 0000102 9/2/2010 6 934.08 314 668.55 Chartis Technology and Operations B P-3-0123 (M) SON BHD 0000167 11/24/2010 3 500.00 154 255.50 1 971.91 93 084.01 c P-3-0139 Chartis Europe SA Bulgaria Branch 254 12/1/2009 135 613.70 6 401 644.72 c P-3-0146 Chartis Malaysia Insurance Berhad 264 12/1/2009 Chartis Europe SA, Slovak Republic c P-3-0150 Branch 269 12/1/2009 11 412.50 538 727.06 SUBTOTAL 2782876.11 128. 080 047.96 Sales supported by VAT zero-rated OR but petitioner failed to prove that client is a non-resident foreign corporation not doing business in the Philippines B P-3-0003 Chartis Insurance UK Ltd 312 2/4/2010 3 886.44 180 758.32 B P-3-0005 Chartis Insurance UK Ltd 314 2/18/2010 45 600.00 2 120 856.00 B P-3-0008 Chartis Insurance UK Ltd 317 2/25/2010 45 600.00 2 120 856.00 B P-3-0009 Chartis Azerbaijan Insurance Co. 253 12/1/2009 9 387.37 443 131.26 B P-3-0011 American Home Assurance Korea 263 12/1/2009 124 024.10 5 854 557.64 B P-3-0013 Chartis International O&S HO 272 12/1/2009 410 760.63 19 389 955.55 B P-3-0014 AIG Global Reinsurance Division 274 12/1/2009 1 672.85 78 946.96 Chartis Vietnam Insurance B P-3-0015 Company Limited 280 1/22/2010 7 440.91 342 467.88 B P-3-0018 Chartis International O&S HO 284 2/25/2010 573 180.15 26 658 608.80 B P-3-0019 Chartis China 285 2/25/2010 102 985.99 4 789 878.39 B P-3-0022 Chartis Europe SA Gerogia Branch 289 2/25/2010 12 325.82 573 273.90 B P-3-0025 Chartis Insurance Indonesia 292 2/25/2010 66 575.92 3 096 446.04 B P-3-0026 AIU Insurance Company - Japan 293 2/25/2010 25 616.50 1 191 423.41 B P-3-0027 American Home Assurance Korea 295 2/25/2010 227 147.14 10 564 613.49

AMENDED DECISION CTA CASE NOS. 8432, 8498, 8534 & 8581 Chartis Romania Insurance B P-3-0030 Comp_any SA 299 2/25/2010 39 944.52 1 857 819.63 B P-3-0031 Chartis Taiwan Insurance Co. Ltd. 302 2/25/2010 247 861.54 11 321 494.28 B P-3-0034 AIG Global Reinsurance Division 305 2)25/2010 8 430.63 392 108.60 Chartis Vietnam Insurance B P-3-0035 Company Limited 309 2/25/2010 3 480.76 161 013.00 B P-3-0036 Lexington 0000034 4/28/2010 39 819.74 1 799 454.05 B P-3-0039 Chartis Insurance UK Ltd 0000037 5/7/2010 45 600.00 2 027 376.00 B P-3-0040 Chartis Insurance UK Ltd 0000040 5/14/2010 2 041.08 90 746.42 B P-3-0042 Lexinqton 0000043 5/18/2010 39 438.68 1 753 443.71 B P-3-0046 OSC Chartis 0000419 3/31/2010 20 538.67 928 758.66 Chartis Vietnam Insurance B P-3-0047 Company Limited 0000420 3)31/2010 9 490.00 429 137.80 Chartis Vietnam Insurance B P-3-0049 Company Limited 0000476 5/31/2010 5 544.36 246 502.24 Chartis Vietnam Insurance B P-3-0050 Company Limited 0000478 5/31/2010 13 898.71 617 936.64 B P-3-0052 Chartis Insurance UK Ltd 0000052 6/15/2010 45 600.00 2 106 720.00 B P-3-0053 Lexington 0000054 6/18/2010 35 771.70 1 652 652.54 B P-3-0054 Chartis Insurance UK Ltd 0000056 6/24/2010 42 120.00 1,945 944.00 B P-3-0055 AIG Global Services Malaysia 0000057 6/9/2010 25 269.59 1 062 325.11 B P-3-0058 Chartis Insurance UK Ltd 0000065 7/8]2010 2 013.12 93 328.24 B P-3-0060 Chartis Insurance UK Ltd 0000067 7)13/2010 2 097.00 97 216.92 B P-3-0062 AIG Global Services Malaysia 0000069 7/14/2010 3 500.00 162 260.00 B P-3-0063 AIG Global Services Malaysia 0000070 7/14/2010 2 663.00 123 456.68 B P-3-0064 Chartis Insurance UK Ltd 0000073 7/20/2010 45 600.00 2 114 016.00 B P-3-0065 Lexinqton 0000074 7/22/2010 40 592.00 1 881 845.12 B P-3-0068 Chartis Insurance UK Ltd 0000081 7/27/2010 1 230.24 57 033.93 B P-3-0070 AIG Global Services Malaysia 0000083 8/16/2010 2 663.00 121 246.39 B P-3-0071 AIG Global Services Malaysia 0000084 8/16/2010 3 500.00 159 355.00 B P-3-0076 Chartis Insurance UK Ltd 0000094 8/25/2010 45 600.00 2 076 168.00 B P-3-0077 Lexington 0000095 8/26/2010 40 592.00 1 848 153.76 Chartis Vietnam Insurance B P-3-0079 Company Limited 0000495 6}17/2010 17 648.14 815 344.07 Chartis Vietnam Insurance B P-3-0082 Company Limited 0000516 6/29/2010 18 843.22 870 556.76 Chartis Vietnam Insurance B P-3-0083 Company Limited 0000549 7/30/2010 5 142.53 238 407.69 B P-3-0084 OSC Chartis 0000550 7/30/2010 71900.66 3 333 314.59 B P-3-0088 OSC Chartis 0000591 8/31/2010 29 377.40 1 337 553.03 UBB Chartis Insurance Company, B P-3-0089 Bulgaria 0000592 8/31/2010 198.90 8 986.10 B P-3-0090 Chartis Insurance UK Ltd 0000101 9/2/2010 1 453.92 65 978.89 B P-3-0095 Lexington 0000109 9/17/2010 40 592.00 1 842 064.96 B P-3-0097 Chartis Insurance UK Ltd 0000111 9/21/2010 1118.40 50 752.99 B P-3-0100 Lexinqton 0000122 10/13/2010 40 229.56 1 765 273.09 B P-3-0107 Chartis Insurance UK Ltd 0000131 10/19/2010 1 202.28 52 756.05 B P-3-0122 Chartis Insurance UK Ltd 0000166 11/23/2010 1 537.80 66 156.16 B P-3-0124 Alico AIG Cid 0000616 9/22/2010 14 462.50 656 308.25 Chartis Vietnam Insurance B P-3-0130 Company Limited 0000666 10/29/2010 17 078.88 749 421.25 B P-3-0131 OSC Chartis 0000706 11/30/2010 25 753.00 1107 894.06 B P-3-0132 OSC Chartis 0000711 11/30/2010 42 762.20 1 839 629.85 B P-3-0133 OSC Chartis 0000714 11/30/2010 24 807.64 1 067 224.67 UBB Chartis Insurance Company, B P-3-0135 Bulgaria 0000673 10/31/2010 312.00 13 690.56 B P-3-0136 OSC Chartis 0000716 11/30/2010 3 747.90 161 234.66 c P-3-0138 Chartis Insurance Australia 248 12/1/2009 1 307 721.08 61 730 973.60 c P-3-0140 Chartis China 255 12/1/2009 20 497.50 967 584.49 c P-3-0141 Chartis Insurance Honqkong 258 12/1/2009 176 701.96 8 341 216.02 c P-3-0143 Chartis Insurance Indonesia 260 12/1/2009 35 933.45 1 696 238.51 c P-3-0144 AIU Insurance Company - Japan 261 12/1/2009 11 674.00 551 071.17 Chartis Kazakhstan Insurance Co. c P-3-0145 JSC 262 12/1/2009 142.67 6 734.74

AMENDED DECISION CTA CASE NOS. 8432, 8498, 8534 & 8581 c P-3-0147 Chartis New Zealand (R0030) 265 12/1/2009 2 372.50 111 993.86 Chartis Romania Insurance 4 171 985.90 c P-3-0148 Company SA 266 12/1/2009 88 380.17 11 690 117.65 4 768 677.43 Chartis Singapore Insurance PTE 5 331 338.84 c P-3-0149 LTD 268 12/1/2009 247 645.75 12 689 489.03 101 020.60 c P-3-0151 Chartis Taiwan Insurance Co. Ltd. 270 12/1/2009 112 940.13 435 269.76 c P-3-0152 Chartis International O&S HO 2 273 12/1/2009 135 437.76 13 535 919.07 Chartis Technology & Operations 17971735.15 c P-3-0153 Management - Ireland 256 12/1/2009 268 816.63 32 744 315.29 Chartis Vietnam Insurance 101 094.15 4 837.04 c P-3-0155 Company Limited 250 12/14/2009 9 220.84 5 836 503.16 Chartis Vietnam Insurance 31.3398.366.66 c P-3-0157 Company Limited 278 12/31/2009 2 869.14 184 207.60 286 747.57 161 301.34 c P-3-0158 OSC Chartis 277 12/31/2009 386 405.83 345.508.94 c P-3-0159 Chartis Insurance Australia 282 2/25/2010 12 257.373.58 P454,989,141.77 Chartis Technology & Operations c P-3-0160 Management - Ireland 287 2/25/2010 704 027.42 Chartis Kazakhstan Insurance Co. c P-3-0161 JSC 294 2/25/2010 2 173.60 104.00 c P-3-0162 Chartis New Zealand_{R0030) 297 2/25/2010 Chartis Singapore Insurance PTE c P-3-0163 LTD 300 2/25/2010 125 489.21 SUBTOTAL (i 720 157.14 Sales supported by VATzero-rated OR but issued to International Banking & Finance Center c P-3-0154 Chartis Uzbekistan 275 12/1/2009 3 902.29 c P-3-0164 Chartis Uzbekistan 306 2/25/2010 3 468.10 SUBTOTAL 7.370.39 Sales supported by VATzero-rated OR but issued to AIU Searo c P-3-0156 Chartis Southeast Asia Limited 251 12/29/2009 262788.26 GRAND TOTAL $9,792,423.86 To summarize, out of the total P1,326,963,237.76 zero-rated sales declared by petitioner in its amended Quarterly VAT Returns, only P231,036,319.41, as computed below, can be considered as valid zero-rated sales: Total declared zero-rated sales p 1 326,963,237.76 Less: Disallowances 1,095,926,918.35 P231,036,319.41 Per ICPA report P6401937,776.58 Per the Court's further verification 454,989)41.77 Valid zero-rated sales for refund/issuance of TCC purposes Third and Fourth Requisites: Input taxes were incurred or paid and were not transitional input taxes. For FY 2010, petitioner incurred a total of P61,686,917.40 input taxes, broken down in each quarter26 as follows~ 26 Exhibits "F-1", "F-3", "F-7" and "F-8".

AMENDED DECISION CTA CASE NOS. 8432, 8498, 8534 & 8581 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr Total Purchase of capital p 282 015.99 p 417,350.00 p 626 004.36 p 364 275.98 p 1,689 646.33 goods not exceeding 1M Purchase of capital - - 121 050.52 226 234.88 347 285.40 goods exceeding 1M Domestic purchases of 891 712.42 1 749 426.26 2,957 929.30 2 656 960.13 8 256 028.11 goods other than capital goods - - - - - Importation of goods other than capital goods 12,550 606.39 10 556,192.89 12 574,935.56 15 712,222.72 51 393 957.56 Domestic purchase of services - - - - - Services rendered by non-residents P13,724,334.80 P12,722,969.15 P16,279,919.74 P18,959,693.71 P61,686,917.40 Total available current input tax However, petitioner only prayed for a refund/issuance of TCC on unutilized input VAT attributable to zero-rated sales amounting to P56,815,398.78. This amount is lower than the total declared current input VAT by P4,871,518.62 (P61,686,917.40- 56,815,398.78). The difference can be accounted for as follows27 : Period Covered 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Total Input VAT credited to Output VAT for the Period p 873,132.21 p 858.408.77 p 905.840.28 p 912405.55 P3 549 786.81 7 276 101.73 7,153 406.38 7 548 669.02 7 603 379.61 I Total local sales .;-) Total declared sales 409 675 448.00 221 674 318.53 397 342 419.72 327 852 608.25 x) Excess input VAT 12 851 202.59 11 864 560.38 15 374 079.46 18 047 288.16 1'1,321,731.81 (P13 724 334.80 - 873 132.21) p 228. 245.70 p 382868.09 p 292,075.13 p 418. 542.90 (P12 722 969.15- 858 408.77) (P16 279 919.74- 905 840.28) P1,101,377.90 P1,241,276.85 P1,197,915.41 P1,330 948.46 P4 871 518.62 (P18 959 693.71 - 912 405.55) Input VAT allocated to Local Sales Input VAT not available for refund/issuance of TCC Petitioner submitted various suppliers' official receipts and invoices to substantiate the amount of P61,686,917.40 input VAT declared in its Quarterly VAT Returns. Upon scrutiny of the ICPA Report28 and the related supporting documents, the Court finds that the input taxes in the amount of41' 27 Exhibit "P-1", Part 1 of 2, p. 8.

AMENDED DECISION CfA CASE NOS. 8432, 8498, 8534 & 8581 P22,127,813.82 should be disallowed for non-compliance with the substantiation requirements under Sections 110(A) and 113(A) and (B) of the NIRC of 1997, as amended, in relation to Sections 4.110-2, 4.110-3, 4.110-8 and 4.113-1 of Revenue Regulations (RR) No. 16- 05. Below is the detailed breakdown of the disallowed input VAT of P22,127,813.82: ICPA Findings Amount Report Domestic purchases of services properly supported with original VAT ORs Annex but do not bear company's TIN p 51,493.34 Reference Domestic purchases of goods properly supported with original VAT invoice but the amount of input VAT claimed was not separately indicated 75,522.83 u Domestic purchases of services properly supported with original VAT ORs but the amount of input VAT claimed was not separately indicated 14 059,593.90 v Overclaimed input VAT from domestic purchases of goods supported with original VAT invoices 145 071.43 w Overclaimed input VAT from domestic purchases of services supported with original VAT ORs 128,388.84 X Domestic purchases of goods supported only with photocopies of VAT y invoices 339 721.78 Domestic purchases of goods supported by original VAT invoices but have z no Authority to Print 1,137.60 Domestic purchases of goods not supported with VAT invoices but AA supported with VAT ORs 91,318.39 Domestic purchases of services not supported with VAT ORs but BB supported only with original VAT invoices 183,429.86 Domestic purchases of services supported with original VAT invoices/ORs cc but not in the name of company 10,189.77 Domestic purchases of services supported with original VAT ORs but no DD dates were indicated 789,540.51 EE Domestic purchases of goods supported with VAT ORs not dated within the quarter 35 133.51 FF Domestic purchases of goods and services supported with VAT invoices HH and VAT ORs not dated within the quarter and not within the taxable year 3 367,287.75 3 214.29 II Domestic purchases of services supported with acknowledgment receipt Domestic purchases of services supported only with "zero-rated" official 11 459.91 JJ Receipts Domestic purchases of goods supported with original VAT invoices with 394,922.40 KK imprinted "not a valid source of input tax" Domestic purchases of services supported with receipts with imprinted 84 346.52 LL "not a valid source of input tax" Domestic purchases of goods and services supported only with Non-VAT 61 329.37 MM sales invoices and ORs Domestic purchases of capital goods exceeding P1 million supported with 53 789.65 PP VAT invoices not dated within the quarter Domestic purchases of capital goods exceeding P1 million supported only 126 300.52 QQ with photocopies of original VAT official invoice Domestic purchases of capital goods exceeding P1 million properly 17 541.97 RR supported with original VAT invoice but the amount of input VAT claimed 103 835.96 was not shown separately ss Domestic purchases of capital goods exceeding P1 million SUQQOrted with 28 Exhibit "P-1", Part 1 of 2, pp. 24-26.

AMENDED DECISION CTA CASE NOS. 8432, 8498, 8534 & 8581 invoices imprinted "Not a Valid Source of Input Tax" TT Unsupported domestic purchases of goods and services 1 993 243.72 TOTAL P22,127,813.82 In addition, petitioner's claimed input VAT incurred on domestic purchases of goods and services totaling P5,791,198.01, as detailed below, should also be disallowed for non-compliance with the substantiation requirements under the VAT law and regulations: ICPA Report Annex Amount in Ref. Exh. No. Client Invoice/OR No. Date , PHP 17397 1/9/2010 Exhibit denied admission by the Court Q P-6-0175 MEDEXPRESS 345.01 Purchase ofcapital goods exceeding P1M supported with VAT invoice but amount ofinput VAT was not separately indicated NN P-6-3224 INTEGRATED COMPUTER SYSTEMS INC 210039536 3/31/2010 65,939.42 NN P-6-3225 INTEGRATED COMPUTER SYSTEMS INC 210039537 3/31/2010 121,501.56 SUBTOTAL 187,440.98 Purchase ofgoods supported with VAT invoice but amount ofinput VAT was not seParately indicated GG P-6-2789 FILES SYSTEMS MANUFACTURING & 55213 5/21/2010 2,208.75 SUPPLY CORP GG P-6-2805 ROBINSON HANDYMAN INC 8414 5/26/2010 748.66 Q P-6-0199 ACE HARDWARE PHILS INC 2903 4/6/2010 4,959.43 659 4/17/2010 3 264.00 Q P-6-0230 HALCYON INCORPORATED 8452 6/8/2010 SUBTOTAL 320.09 Q P-6-0345 ROBINSON HANDYMAN INC 11,500.93 Purchase ofgoods supported with VAT invoice with alteration on petitioner's name but the countersignor's authority cannot be ascertained Q P-6-0262 to 0263 PURPLE TAG INC 2168/2167 4/22/2010 16,232.15 Purchase ofgoods supported with VAT invoice with alteration on the input VAT amount but the countersignor was different from the preparer Q P-6-0252 JJED PHILIPPINES INC 87201 4/13/2010 307.50 Purchase ofgoods supported with VAT invoice with alteration on the input VAT amount but the countersignor's authority cannot be ascertained Q P-6-0206 AMERICAN TECHNOLOGIES INC 82806 3/16/2010 771.43 Purchase ofgoods supported with VAT invoice with alteration on the input VAT amount without authorized countersigl1ature Q P-6-0302 GEM STATIONERY INC 218528 6/23/2010 2,667.86 Purchase ofservices supported with CAS-generated VAT OR but no imprinted CAS or POS Permit No. or supporting SIR CAS Permit ofsupplier y P-6-2421 PLDT PKPOR000424315 3/26/2010 11,137.25 PKPOR000441158 5/7/2010 11,164.46 y P-6-2422 PLDT PKPOR000468292 7/14/2010 11,137.25 PKPOR0004 75211 7/30/2010 11,137.25 y P-6-2433 PLDT PWKOR001051169 10/5/2010 11,137.20 PKPOR000516899 11/9/2010 11,137.20 y P-6-2434 PLDT PKPOR000516884 11/9/2010 PWKOR001049120 9/30/2010 156.54 y P-6-2447 PLDT 11 137.20 y P-6-2448 PLDT y P-6-2449 PLDT y P-6-2450 PLDT GG P-6-2631 PLDT PWKOR00133540 9/8/2010 26 878.53 GG P-6-2675 to 2707 PLDT various receipts 3/31/2010 50,676.07 GG P-6-2774 PLDT PQGOR008864819 6/2/2010 10,497.94 GG P-6-2838 to 2886 PLDT various receipts 9/6/2010 43,736.97 R P-6-0679 to 0769 PLDT various receipts 31,524.18 R P-6-0838 to 0915 PLDT various receipts 26,457.91 R P-6-0911 to 0924, PLDT various receipts 52,625.74 1021 to 1033, 1044 to 1180 1:: a..

AMENDED DECISION CTA CASE NOS. 8432, 8498, 8534 & 8581 j l I I SUBTOTAL I 320,541.69 Purchase ofservices supported with VAT OR but amount ofinput VAT was not separately indicated 1,777.92 y P-6-2423 SKYHAWK SECURITY FORCE AND 13980 5/28/2010 294.64 8,629.94 ALLIED SERVICE 334.02 y P-6-2428 TOWER CLUB 93284 5/24/2010 293,868.28 y P-6-2451 SYSTEMS GENERATORS PHILIPPINES, 1171 9/17/2010 5,885.41 INC. 55,129.83 1 801 390.31 GG P-6-2559 ANSCOR CASTO TRAVEL 40188 3/4/2010 97.34 CORPORATION 4 071.56 GG P-6-2576 DATACRAFT PHILIPPINES INC 1695 3/10/2010 75.00 750.00 GG P-6-2579 FIRE SOLUTIONS INC 1256 4/21/2010 24,925.51 2,323.16 GG P-6-2594 SQME PROFESSIONALS INC 934 6/11/2010 12,455.48 16,710.37 GG P-6-2603 KFORCE GLOBAL SOLUTIONS INC 1571 9/3/2010 180.00 24,201.26 GG P-6-2615 KING OF TRAVEL INC 109457 9/3/2010 24,980.04 GG P-6-2632 FIRE SOLUTIONS INC 128 1/5/2010 4,488.45 GG P-6-2637 CASA MEDICA INC 267565 3/19/2010 6,908.40 838,229.28 GG P-6-2639 CASA MEDICA INC 267566 3/19/2010 12,228.67 GG P-6-2641 CORPORATE EXECUTIVE SEARCH INC 34158 3/19/2010 12,554.81 GG P-6-2645 CORPORATE EXECUTIVE SEARCH INC 34157 3/19/2010 11,996.82 GG P-6-2647 FUJI XEROX PHILIPPINES INC 107293 4/23/2010 9,780.68 GG P-6-2666 INFORMATION PROFESSIONALS INC 17093 3/4/2010 9,782.67 GG P-6-2667 INTEGRATED COMPUTER SYSTEMS INC 423027 3/12/2010 214.29 13,675.76 GG P-6-2669 JAGUAR SECURITY AND 40205 4/18/2010 7,167.60 INVESTIGATION AGENCY 2,221.80 GG P-6-2671 JAGUAR SECURITY AND 40305 4/28/2010 964.29 INVESTIGATION AGENCY 11,990.04 GG P-6-2708 PRIME TECHNOLOGY SPECIALISTS INC 3500 3/5/2010 15,360.00 GG P-6-2713 PUNONGBAYAN & ARAULLO 114020 3/24/2010 6,034.29 GG P-6-2715 RCG INFORMATION TECHNOLOGY INC 3090 3/5/2010 3,750.00 5,550.00 GG P-6-2722 SPECIALIZED CLEANING SERVICES 2547 3/19/2010 3,999.20 2,268.30 2000 INC 1 795.29 15 462.18 GG P-6-2727 SUPERIOR MAINTENANCE SERVICES 187429 3/26/2010 10 368.00 9,654.75 INC 3,420.00 GG P-6-2729 SUPERIOR MAINTENANCE SERVICES 187430 3/26/2010 235.18 INC 51150.00 2,729.06 GG P-6-2731 SYSTEMS GENERATORS PHILIPPINES, 3484 3/2/2010 <! .... INC. GG P-6-2738 SYSTEMS GENERATORS PHILIPPINES, 3498 3/12/2010 INC. GG P-6-2745 to 2746 TOWER CLUB 90496/60568 3/9/2010 GG P-6-2751 INFORMATION PROFESSIONALS INC 17399 6/1/2010 GG P-6-2778 PUNONGBAYAN & ARAULLO 116104 6/21/2010 GG P-6-2782 SPECIALIZED CLEANING SERVICES 2975 7/30/2010 2000 INC GG P-6-2783 SPECIALIZED CLEANING SERVICES 3052 7/30/2010 2000 INC GG P-6-2785 SUPERIOR MAINTENANCE SERVICES 188907 6/10/2010 INC GG P-6-2808 ANCILLA ENTERPRISE DEVELOPMENT 7160 9/3/2010 CONSULTING INC GG P-6-2811 ANCILLA ENTERPRISE DEVELOPMENT 7161 9/3/2010 CONSULTING INC GG P-6-2815 ARKIGRAFIX CORPORATION 3332 10/7/2010 GG P-6-2817 CASA MEDICA INC 279973 9/9/2010 GG P-6-2819 CORPORATE EXECUTIVE SEARCH INC 34654 9/17/2010 GG P-6-2822 CORPORATE EXECUTIVE SEARCH INC 34653 9/17/2010 GG P-6-2826 HYU BUILDERS 232 11/4/2010 GG P-6-2828 INFORMATION PROFESSIONALS INC 17764 9/3/2010 GG P-6-2832 KREATIVO KONCEPTO INC 370 9/24/2010 GG P-6-2834 MANDARIN ORIENTAL MANILA 29477 9/3/2010 GG P-6-2836 MANILA PENINSULA HOTEL INC 32992 10/14/2010 GG P-6-2887 REYNALDO MASTER KEY & LOCK 10696 9/3/2010 SERVICE GG P-6-2889 RICHVILLE HOTEL MANAGEMENT INC 106784 10/8/2010 GG P-6-2892 SPECIALIZED CLEANING SERVICES 3132 10/1/2010

AMENDED DECISION CTA CASE NOS. 8432, 8498, 8534 & 8581 2000 INC GG P-6-2895 SPECIALIZED CLEANING SERVICES 3180 10/22/2010 1,446.43 2000 INC GG P-6-2898 SYSTEMS GENERATORS PHILIPPINES, 1150 9/3/2010 11,250.57 97026 9/14/2010 294.64 INC. GG P-6-2906 TOWER CLUB GG P-6-2913 VALLEY SPORTS CORPORATION 44584 9/4/2010 281.25 GG P-6-2928 MGE UPS SYSTEM 20831 10/29/2010 548.46 Q P-6-0197 to 0198 WINNER ADVERTISING 3154 12/18/2009 5,850.00 15693 4/23/2010 2,266.93 Q P-6-0273 SEAGULL GLASS WORKS INC 9/21/2010 3 766.44 189 Q P-6-0380 COLORLUX PHILIPPINES INC Q P-6-0383 COLORLUX PHILIPPINES INC 196 11/9/2010 3,766.44 Q P-6-0440 SYSTEMS CONNECTIVITY SOLUTION 492 11/9/2010 3,589.29 INC R P-6-0602 METRO PARKING MANAGEMENT 0007 2/10/2010 7,885.71 (PHILIPPINES) INC R P-6-0613 SOFTWARE LABORATORIES INC 11702 1/22/2010 25,707.43 R P-6-0835 MARK'S FITNESS PLACE INC 47719 7/25/2010 997.50 R P-6-0974 FUNCTIONAL INC 146936 10/1/2010 2 830.71 R P-6-0983 HYU BUILDERS 234 11/12/2010 1 556 810.59 R P-6-1005 MR. SUN KIDDIEPARTYCOM INC 2092 10/22/2010 3,732.00 SUBTOTAL 4,983,084.27 Purchase ofServices supported with VAT OR but dated outside the period ofclaim Q P-6-0381 COLORLUX PHILIPPINES INC 198 12/1/2010 3,766.44 Purchase ofServices supported with VAT OR but not in the name ofpetitioner R P-6-0598 MAYNILAD 902334351 3/8/2010 285.64 R P-6-0600 MAYNILAD 900935526 1/5/2010 237.78 R P-6-0641 MAYNILAD 903730910 5/14/2010 195.38 R P-6-0673 MAYNILAD 904223845 6/3/2010 89.08 903042471 4/13/2010 201.90 R P-6-0675 MAYNILAD SUBTOTAL 1,009.78 Purchase ofServices supported with VAT OR but total amountpaid onlypertains toE-VAT but the true nature of payment cannot be ascertained due to lack ofsupporting documents R P-6-0595 JE BURTON PROPERTIES INC 0018 12/11/2009 197,052.63 Purchase ofservices supported with VAT OR with alteration on the input VAT amount without authorized countersignature R P-6-0951 SYSTEM GENERATORS PHILIPPINES 1123 8/6/2010 10,028.91 INC Purchase ofservices without supporting VAT OR Q P-6-0188 to 0189 NEW RIALTO PHOTO & OPTICAL 139488 1/11/2010 1,590.75 SUPPLY R P-6-0967 CHARTIS PHILIPPINES INSURANCE INC A100000246 10/11/2010 2,404.00 SUBTOTAL 3,994.75 Supporting documents not found in the records 00 INTEGRATED COMPUTER SYSTEMS INC 210040657 5/13/2010 6,374.57 210040658 5/13/2010 6,375.04 00 INTEGRATED COMPUTER SYSTEMS INC 210040659 5/13/2010 6,374.57 210040660 5/13/2010 6,374.57 00 INTEGRATED COMPUTER SYSTEMS INC 8/27/2010 11,648.91 117709 00 INTEGRATED COMPUTER SYSTEMS INC R FUJI XEROX PHILIPPINES INC R FUJI XEROX PHILIPPINES INC 112650 6/22/2010 15 306.02 SUBTOTAL 52,453.68 TOTAL PS,791,198.01 Further, as noted by the !CPA, petitioner did not amortize its incurred input VAT from its domestic purchases of capital goods exceeding Pl million in accordance with Section 11029 of the NIRC ofe.. 29 SEC. 110. Tax Credits. - (A) Creditable Input Tax. - XXX

AMENDED DECISION CTA CASE NOS. 8432, 8498, 8534 & 8581 1997, as amended, and as implemented by Section 4.110-330 of RR No. 16-05, as amended. As such, the Court deems it proper to disallow the unamortized portion of the valid input VAT from these type of purchases amounting to P3,508,915.12, as detailed and computed below: Provided, That the input tax on goods purchased or imported in a calendar month for use in trade or business for which deduction for depreciation is allowed under this Code, shall be spread evenly over the month of acquisition and the fifty-nine (59) succeeding months if the aggregate acquisition cost for such goods, excluding the VAT component thereof, exceeds One million pesos (P1,000,000): Provided, however, That if the estimated useful life of the capital good is less than five (5) years, as used for depreciation purposes, then the input VAT shall be spread over such a shorter period: Provided, finally, that in the case of purchase of services, lease or use of properties, the input tax shall be creditable to the purchaser, lessee or licensee upon payment of the compensation, rental, royalty or fee. 30 SECTION 4.110-3. Claim for Input Tax on Depreciable Goods. - Where a VAT-registered person purchases or imports capital goods, which are depreciable assets for income tax purposes, the aggregate acquisition cost of which (exclusive of VAT) in a calendar month exceeds One Million pesos (P1,000,000.00), regardless of the acquisition cost of each capital good, shall be claimed as credit against output tax in the following manner: (a) If the estimated useful life of a capital good is five (5) years or more- The input tax shall be spread evenly over a period of sixty (60) months and the claim for input tax credit will commence in the calendar month when the capital good is acquired. The total input taxes on purchases or importations of this type of capital goods shall be divided by 60 and the quotient will be the amount to be claimed monthly. (b) If the estimated useful life of a capital good is less than five (5) years - The input tax shall be spread evenly on a monthly basis by dividing the input tax by the actual number of months comprising the estimated useful life of the capital good. The claim for input tax credit shall commence in the calendar month that the capital goods were acquired. Where the aggregate acquisition cost (exclusive of VAT) of the existing or finished depreciable capital goods purchased or imported during any calendar month does not exceed One million pesos (P 1,000,000.00), the total input taxes will be allowable as credit against output tax in the month of acquisition. xxx xxx xxx XXX XXX XXX Capital goods or properties refers to goods or properties with estimated useful life greater than one (1) year and which are treated as depreciable assets under Sec. 34(F) of the Tax Code, used directly or indirectly in the production or sale of taxable goods or services. The aggregate acquisition cost of depreciable assets in any calendar month refers to the total price, excluding the VAT, agreed upon for one or more assets acquired and not on the payments actually made during the calendar month. Thus, an asset acquired on installment for an acquisition cost of more than P1,000,000.00, excluding the VAT, will be subject to the amortization of input tax despite the fact that the monthly payments/installments may not exceed P1,000,000.00..- XXX XXX XXX

AMENDED DECISION CTA CASE NOS. 8432, 8498, 8534 & 8581 ICPA Exh. No. Client Invoice Date Total Input Input VAT No. of Input VAT Unamortized Report VAT Amortization Months Amortization Input VAT Annex Lapsed per Month during for the Ref. (60mos) Period Period of of Claim Claim INTEGRATED 310085879/ 12/29/2009 210037038/ 12/11/2009 P-6-3213 COMPUTER 210037288/ 12/22/2009 210037289/ 12/22/2009 NN to 3217 SYSTEMS INC 210037287 12/22/2009 P117 072.09 P1 951.20 12 P23 414.42 P93 657.67 70 798.24 10 619.74 60 178.50 INTEGRATED 15 331.20 2 299.68 13 031.52 12 243.17 2 040.53 10 202.64 COMPUTER 42 637.98 5 685.06 36 952.92 82 355.20 10 980.69 71 374.51 NN P-6-3219 SYSTEMS INC 210039237 3/22/2010 1 306.79 1179.97 9 196.02 1110.77 5 393.88 809.08 4 584.80 INTEGRATED 46 017.70 6 135.69 39 882.01 24 148.22 2 414.82 21 733.40 COMPUTER 13 016.62 1 084.72 11 931.90 8 434.90 843.49 7 591.41 NN P-6-3220 SYSTEMS INC 210039528 3/31/2010 4 006.75 255.52 9 400.68 3 606.08 8 816.14 734.68 8 081.46 INTEGRATED 25 384.67 2 538.47 22 846.20 25 384.67 2 538.47 22 846.20 COMPUTER 9 197.09 613.14 8 583.95 28 123.92 2 343.66 25 780.26 NN P-6-3221 SYSTEMS INC 210038228 2/9/2010 204.05 10 8 877.75 97 655.23 106 532.98 7 955.46 87 510.02 INTEGRATED 95 465.48 2 531.41 35 439.73 37 971.14 3 125.37 28 128.29 COMPUTER 31 253.66 NN P-6-3223 SYSTEMS INC 210039941 4/16/2010 710.63 8 INTEGRATED COMPUTER NN P-6-3226 SYSTEMS INC 210040241 4!27/2010 1 372.59 8 INTEGRATED COMPUTER NN P-6-3228 SYSTEMS INC 310089766 3/4/2010 21.78 9 INTEGRATED COMPUTER NN P-6-3229 SYSTEMS INC 210038781 3/3/2010 89.90 9 NEXUS TECHNOLOGIES NN P-6-3231 INC 52671 4/12/2010 766.96 8 COMPUTER NElWORK NN P-6-3232 SYSTEMS CORP 4021 6/1/2010 402.47 6 COMPUTER NElWORK NN P-6-3234 SYSTEMS CORP 4068 7/15/2010 216.94 5 INFORMATION WORKTOOLS NN P-6-3236 CORP 4487 6/15/2010 140.58 6 INFORMATION WORKTOOLS NN P-6-3237 CORP 4499 6!17/2010 66.78 6 INTEGRATED COMPUTER NN P-6-3239 SYSTEMS INC 210041954 7/5/2010 146.94 5 INTEGRATED COMPUTER NN P-6-3240 SYSTEMS INC 210041370 6/11/2010 423.08 6 INTEGRATED COMPUTER NN P-6-3241 SYSTEMS INC 210041369 6/11/2010 423.08 6 INTEGRATED COMPUTER NN P-6-3243 SYSTEMS INC 310100170 8/23/2010 153.28 4 INTEGRATED COMPUTER NN P-6-3244 SYSTEMS INC 210041955 7/5/2010 468.73 5 INTEGRATED COMPUTER NN P-6-3245 SYSTEMS INC 210041956 7/20/2010 1 775.55 5 INTEGRATED P-6-3247 COMPUTER NN to 3248 SYSTEMS INC 210041966 7}6/2010 1 591.09 5 INTEGRATED COMPUTER NN P-6-3249 SYSTEMS INC 210042953 8/19/2010 632.85 4 NEXUS TECHNOLOGIES NN P-6-3250 INC 53319 6/1/2010 520.89 6

AMENDED DECISION CTA CASE NOS. 8432, 8498, 8534 & 8581 NEXUS TECHNOLOGIES NN P-6-3252 INC 53452 6/17/2010 17702.00 295.03 6 1 770.20 15 931.80 39 019.30 3 251.61 35 767.69 NEXUS 1 582.91 131.91 1 451.00 TECHNOLOGIES 120 603.54 10 050.30 110 553.25 120 647.36 10 053.95 110 593.41 NN P-6-3253 INC 53784 7/16/2010 650.32 5 3 518.00 49 251.98 52 769.98 5 343.05 48 087.45 NEXUS 53 430.50 2 731.49 38 240.89 40 972.38 6 818.78 95 462.86 TECHNOLOGIES 102 281.64 6 818.78 95 462.86 102 281.64 2 448.55 NN P-6-3254 INC 53794 7/16/2010 29 382.61 26.38 5 11 948.00 26 934.06 358 439.95 346 491.95 NEXUS 36 541.42 609.02 22 531.47 375.52 35 932.40 TECHNOLOGIES 132.79 22 155.95 2 655.87 2 116.29 NN P-6-3255 INC 53679 7/5/2010 63 488.82 2 010.06 5 261.86 I 2 082.18 2 523.08 NEXUS 7 855.70 2 082.18 61 372.53 62 465.49 384.15 7 593.84 TECHNOLOGIES 62 465.49 746.10 60 383.31 11 311.74 60 383.31 NN P-6-3256 INC 53678 7/5/2010 7 682.94 2 010.79 5 1 937.21 7 298.79 I 14 922.09 118.07 14 175.99 NEXUS 226 234.86 118.07 214 923.12 116 232.74 114 295.53 TECHNOLOGIES 2 361.49 2 243.42 2 361.49 2 243.42 NN P-6-3257 INC 54166 8/19/2010 879.50 4 NEXUS TECHNOLOGIES NN P-6-3258 INC 53490 6/21/2010 890.51 6 NEXUS TECHNOLOGIES NN P-6-3259 INC 54189 8/20/2010 682.87 4 NEXUS TECHNOLOGIES NN P-6-3260 INC 54188 8/20/2010 1 704.69 4 NEXUS TECHNOLOGIES NN P-6-3261 INC 54187 8/20/2010 1 704.69 4 NEXUS TECHNOLOGIES NN P-6-3262 INC 53680 7/5/2010 489.71 5 COMPUTER NElWORK NN P-6-3264 SYSTEMS CORP 4202 10/4/2010 5 974.00 2 CREATIVE TECHNOLOGIES NN P-6-3266 INC 59881 11f312010 609.02 1 CREATIVE TECHNOLOGIES NN P-6-3267 INC 59869 11/2/2010 375.52 1 INFORMATION WORKTOOLS NN P-6-3269 CORP 4587 9/17/2010 44.26 3 INTEGRATED COMPUTER NN P-6-3270 SYSTEMS INC 210044138 10/4/2010 1 058.15 2 INTEGRATED COMPUTER NN P-6-3272 SYSTEMS INC 210044497 10/26/2010 130.93 2 INTEGRATED COMPUTER NN P-6-3273 SYSTEMS INC 210044511 10/26/2010 1 041.09 2 INTEGRATED COMPUTER NN P-6-3274 SYSTEMS INC 210044512 10/26/2010 1 041.09 2 INTEGRATED COMPUTER NN P-6-3276 SYSTEMS INC 210043266 9/2/2010 128.05 3 INTEGRATED COMPUTER NN P-6-3278 SYSTEMS INC 210043447 9/8/2010 248.70 3 INTEGRATED COMPUTER NN P-6-3279 SYSTEMS INC 210043701 9/21/2010 3 770.58 3 NEXUS TECHNOLOGIES NN P-6-3281 INC 55130 11/15/2010 1 937.21 1 NEXUS TECHNOLOGIES NN P-6-3282 INC 54508 9/23/2010 39.36 3 NEXUS TECHNOLOGIES NN P-6-3283 INC 54507 9/23/2010 39.36 3

AMENDED DECISION CTA CASE NOS. 8432, 8498, 8534 & 8581 ABENSON 6780181 4/14/2010 4,583.57 76.39 8 611.14 3,972.43 NN P-6-3285 VENTURES INC 187.50 28.13 159.38 CARLGIN 10341 3/12/2010 6 090.00 3.13 9 812.00 5 278.00 NN P-6-3287 ENTERPRISES 10 454.40 1 568.16 8 886.24 EXPERT 982.14 147.32 834.82 7 020.00 819.00 6 201.00 INTERIOR 44.64 535.69 1 812.50 491.05 NN P-6-3288 PRODUCTS INC 1939 4/5/2010 21750.00 101.50 8 19 937.50 350.00 ICON 5 250.00 36.32 4 900.00 726.43 23.74 690.11 NN P-6-3290 INTERIORS INC 2998 3/4/2010 174.24 9 1 551.79 1 424.62 1 835.71 1 400.88 ICON 2997 3/4/2010 46 553.57 16.37 9 45 001.78 NN P-6-3291 INTERIORS INC 55 071.43 8 832.08 53 235.72 ICON 52 992.48 3 131.07 44 160.40 NN P-6-3292 INTERIORS INC 3122 5/19}2010 18 786.40 117.00 7 7 525.71 I 15 655.33 ACE HARDWARE 45 154.25 2 731.14 37 628.54 NN P-6-3294 PHILS. INC 2945 7/27/2010 16 386.81 8.93 5 23 161.83 13 655.68 NN P-6-3296 CITIMEX INC 30513 7/21/2010 138 970.98 362.50 5 12 337.11 115 809.15 COSMOTECH 74 022.67 4 228.08 61 685.56 PHILIPPINES 25 368.46 3 020.10 21140.38 NN P-6-3298 INC 12604 8/6/2010 18 120.59 87.50 4 3 817.22 15 100.49 4 213.15 ABENSON 22 903.32 19 086.10 36 112.69 4 213.15 NN P-6-3300 VENTURES INC 1727200 9/20/2010 12.11 3 31899.54 36 112.69 4 213.15 ACE HARDWARE 31 899.54 36 112.69 2 423.26 NN P-6-3302 PHILS. INC 3831 11/16/2010 23.74 1 31 899.54 20 770.81 831.62 NN P-6-3304 CITIMEX INC 30877 10/19/2010 775.89 2 18 347.55 7 128.17 6 477.65 NN P-6-3305 CITIMEX INC 30878 10/19/2010 917.86 2 6 296.55 43 184.34 17 109.81 INTEGRATED 2 410.33 36 706.69 102 658.84 COMPUTER 310088720 2/17/2010 16 068.85 883.21 10 85 549.03 00 P-6-3307 SYSTEMS INC 13 658.52 INTEGRATED COMPUTER 00 P-6-3308 SYSTEMS INC 210038039 2/1/2010 313.11 10 NEXUS TECHNOLOGIES 52214 2/25/2010 752.57 10 00 P-6-3309 INC NEXUS TECHNOLOGIES 52220 2/25/2010 273.11 10 00 P-6-3310 INC NEXUS TECHNOLOGIES 52215 2/25/2010 2 316.18 10 00 P-6-3311 INC NEXUS TECHNOLOGIES 52219 2/25/2010 1 233.71 10 00 P-6-3312 INC NEXUS TECHNOLOGIES 52218 2/25/2010 422.81 10 00 P-6-3313 INC NEXUS TECHNOLOGIES 52217 2/25/2010 302.01 10 00 P-6-3314 INC NEXUS TECHNOLOGIES 52196 2/24/2010 381.72 10 00 P-6-3315 INC COMPUTER NETWORK 00 P-6-3317 SYSTEMS CORP 4005 5/14/2010 601.88 7 COMPUTER NETWORK 4007 5/14/2010 601.88 7 00 P-6-3318 SYSTEMS CORP COMPUTER NETWORK 4006 5/14/2010 601.88 7 00 P-6-3319 SYSTEMS CORP COMPUTER NETWORK 00 P-6-3320 SYSTEMS CORP 4015 5/26/2010 346.18 7 INFORMATION WORKTOOLS 4457 5/26/2010 118.80 7 00 P-6-3322 CORP INTEGRATED COMPUTER 210039535 3/31/2010 719.74 9 00 P-6-3324 SYSTEMS INC INTEGRATED COMPUTER 210038613 2/25/2010 1 710.98 10 00 P-6-3325 SYSTEMS INC 210039529 3/31/2010 267.81 9 INTEGRATED 00 P-6-3326 COMPUTER

AMENDED DECISION CTA CASE NOS. 8432, 8498, 8534 & 8581 00 P-6-3328 SYSTEMS INC 210040653 5/13/2010 31 873.32 531.22 7 3 718.55 28 154.77 00 210040654 5/13/2010 31 873.32 00 P-6-3329 INTEGRATED 210040656 5/13/2010 6 374.57 531.22 7 3 718.55 28 154.77 00 COMPUTER 2100406S2 5/13/2010 31 873.32 00 P-6-3330 SYSTEMS INC 210040655 5/13/2010 31 873.32 106.24 7 743.70 5 630.87 00 INTEGRATED 210040591 5/12/2010 17 851.71 00 P-6-3331 COMPUTER 210040804 5/20/2010 12 803.45 531.22 7 3 718.55 28 154.77 00 SYSTEMS INC 210040349 4/29/2010 20 827.07 00 P-6-3332 210040421 5/20/2010 16 019.85 531.22 7 3 718.55 28 154.77 00 INTEGRATED 210040240 5/20/2010 33 035.63 00 P-6-3334 COMPUTER 210040977 5/27/2010 8 848.47 297.53 7 2 082.70 15 769.01 00 SYSTEMS INC 5/14/2010 18 609.08 P-6-3335 INTEGRATED S3062 5/27/2010 7 934.80 213.39 7 1493.74 11 309.71 I P-6-3336 COMPUTER S3228 5}27/2010 1 628.44 P-6-3338 SYSTEMS INC 53234 6/21/2010 21 606.39 347.12 8 2 776.94 18 050.13 00 to 3339 INTEGRATED 4046 7/20/2010 2 808.84 00 P-6-3340 COMPUTER 499413 7/20/2010 7 583.81 267.00 7 1 868.98 14 150.87 00 to 3341 SYSTEMS INC 2100421S2 6/24/2010 114 S13.25 00 P-6-3343 INTEGRATED 210041670 8/27/2010 25 865.33 550.59 7 3 854.16 29 181.47 00 COMPUTER 210040800 2}12/2010 1 964.29 00 P-6-3344 SYSTEMS INC 2953 2/8/2010 17 424.00 147.47 7 1 032.32 7 816.15 00 INTEGRATED 2938 1/19/2010 11 785.72 00 P-6-3346 COMPUTER 2880 5/25/2010 49 714.29 310.15 7 2 171.06 16 438.02 00 SYSTEMS INC 30245 P3 873 982.83 00 P-6-3347 INTEGRATED TOTAL 132.25 7 925.73 7 009.07 00 COMPUTER P-6-3348 SYSTEMS INC 27.14 7 189.98 1 438.46 INTEGRATED P-6-3350 COMPUTER 360.11 6 2 160.64 19 445.75 SYSTEMS INC 234.07 P-6-3352 INTEGRATED 46.81 5 I COMPUTER P-6-3353 SYSTEMS INC 2 574.77 INTEGRATED P-6-3355 COMPUTER 126.40 5 631.98 6 951.83 P-6-3356 SYSTEMS INC P-6-3358 NEXUS 1 908.55 6 11 451.33 103 061.93 P-6-3360 TECHNOLOGIES P-6-3361 INC 431.09 4 1 724.36 24 140.97 NEXUS TECHNOLOGIES 32.74 10 327.38 1 636.91 INC NEXUS 290.40 10 2 904.00 14 520.00 TECHNOLOGIES INC 196.43 11 2 160.72 9 625.00 COMPUTER 828.57 7 5 800.00 43 914.29 NElWORK SYSTEMS CORP INTEGRATED COMPUTER SYSTEMS INC INTEGRATED COMPUTER SYSTEMS INC INTEGRATED COMPUTER SYSTEMS INC INTEGRATED COMPUTER SYSTEMS INC ICON INTERIORS INC ICON INTERIORS INC ICON INTERIORS INC CITIMEX INC P365,067.71 P3 508,915.12 In sum, out of the P61,686,917.40 reported input VAT for FY 2010, only the amount of P30,258,990.45 represents petitioner's valid input VAT, computed as follows:~

AMENDED DECISION CTA CASE NOS. 8432, 8498, 8534 & 8581 Total declared input VAT p 61,686,917.40 Less: Disallowances P22 127,813.82 Per ICPA report Per the Court's further verification: 5 791,198.01 Domestic purchases of goods and services 3 508,915.12 31,427,926.95 Unamortized input VAT from purchases of P30,258,990.45 capital goods exceeding P1M Valid input VAT Fifth, Sixth and Eighth Requisites: Petitioner's claimed input taxes remained unutilized but were not properly allocated to its zero-rated sales. The input VAT claimed herein for refund/issuance of TCC amounting to P56,815,398.78 was the subject of separate administrative claims as follows: Period Exhibit No. Amount of Claim 1st Quarter E-1 p 12,622,956.90 2nd Quarter E-2 11,481,692.29 3rd Quarter E-3 15,082,004.33 4th Quarter E-4 17,628 745.26 Total PS6,815,398.78 These amounts were accordingly carried over to petitioner's subsequent VAT returns until they were separately deducted as VAT Refund/TCC Claimed as follows: Period Exhibit No. VAT Refund/TCC FY 2011 3rd Quarter VAT Return F-15 p 12,622 956.90 FY 2012 1st Quarter VAT Return F-18 261563 696.63 FY 2012 2nd Quarter VAT Return F-20 17,628 745.26 PS6,815,398.79 Hence, it can be ascertained that the claimed amount of P56,815,398.78 will no longer be utilized as credit for any future VAT liability.~

AMENDED DECISION CTA CASE NOS. 8432, 8498, 8534 & 8581 However, since petitioner also reported VATable sales in FY 2010, a proportionate allocation based on the volume of zero-rated and VATable sales must be made for the allowable unutilized input taxes. As such, only P4,650,314.29 unutilized excess input VAT can be allowed for refund/issuance of TCC, to wit: Total valid zero-rated sales P30 258,990.45 P231 1 036_L319.41 7 Total declared zero-rated sales 3,549,786.81 1,326 963 237.76 x Excess unutilized input VAT: 26,709,203.64 Total valid input VAT P4,650,314.29 Less: Output VAT liability for the period Unutilized excess input VAT for refund/issuance of TCC Based on the foregoing, petitioner's Motion for Reconsideration shall be partially granted in the reduced amount of P4,650,314.29, representing petitioner's unutilized excess input taxes attributable to zero-rated sales for the FY 2010. WHEREFORE, premises considered, petitioner's Motion for Reconsideration is PARTIALLY GRANTED. Accordingly, the dispositive portion of the Decision dated November 6, 2015 is modified to read as follows: WHEREFORE, the instant Petition for Review is PARTIALLY GRANTED. Accordingly, respondent is ORDERED to REFUND or to ISSUE A TAX CREDIT CERTIFICATE to petitioner in the reduced amount of P4,650,314.29 representing petitioner's unutilized excess input taxes attributable to its zero-rated sales for the FY 2010. SO ORDERED. SO ORDERED. CAESAR A. CASANOVA Associate Justice

AMENDED DECISION CTA CASE NOS. 8432, 8498, 8534 & 8581 I CONCUR: ~~ c. Qy--~a6. . ~ JU~NITO C. CASTANEDA/JR.� Associate Justice ATTESTATION I attest that the conclusions in the above Amended Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court's Division. a~~':h> c.Q.gt-~ Q JffANITO C. CASTANEDA()R. Associate Justice Chairperson CERTIFICATION Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson's Attestation, it is hereby certified that the conclusions in the above Amended Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court. ROMAN G. DEL: OSARIO Presiding Justice