MACQUARIE OFFSHORE SERVICES PTY LTD.-PHILIPPINE BRANCH v. COMMISSIONER OF INTERNAL REVENUE

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY SPECIAL FIRST DIVISION MACQUARIE OFFSHORE CTA Case No. 9180 SERVICES PTY. LTD.- For: Refund PHILIPPINE BRANCH Members: Petitioner, -versus- DEL ROSARIO, P.J.,Chairperson, UY, and MINDARO-GRULLA, JJ. COMMISSIONER OF INTERNAL Promulgated: ' 9; ,.::> t>-__.._ REVENUE, Respondent. x--- --- ---- ------------------------------------ DECISION MINDARO-GRULLA, J.: This is a Petition for Review 1 filed by Macquarie Offshore Services Pty Ltd. - Philippine Branch, pray ing for the refund of or the issuance of a tax cre dit certificate (TCC) in the total amount of P68,311,847.13, allegedly representing excess and unutilized input value-added tax (VAT) directly attributable to its zero-rated sales for the four quarters of fiscal year (FY) ended March 31, 2014 . Petitioner Macquarie Offshore Services Pty Ltd. - Philippine Branch is a foreign corporation organized and existing under and by virtue of the laws of Australia. It is duly licensed to do business in the Philippines thru its Regional Operating Headquarters (ROHQ) in the Philippines by virtue of a License to Do Business issued by the Securities and Exchange Commission (SEC) on April 10, 2008. 1 CTA Docket, pp . 10- 19. t

Macquarie Offshore Services Pty. Ltd.- Philippine Branch vs. CIR, Page 2 of 56 CTA Case No. 9180 DECISION The office of petitioner is located at the 29th Floor, Tower 1, The Enterprise Center, Ayala Avenue, Makati City. Petitioner is also a VAT-registered entity as evidenced by its Bureau of Internal Revenue (BIR) Certificate of Registration No. OCN 9RC0000330527. 2 Respondent, on the other hand, is the Commissioner of the Bureau of Internal Revenue duly appointed and empowered to perform the duties of his office, including, among others, the duty to act on and approve claims for refund or tax credit as provided by law. He holds office at the 5th Floor, BIR National Office Building, Agham Road, Diliman, Quezon City. As an ROHQ, it is authorized to engage in general administration and planning; business planning and coordination; sourcing/procurement of raw materials and components; corporate finance advisory services; marketing control and sales promotion; training and personnel management; logistic services, research and development services and product development; technical support and maintenance; data processing and communication; and business development. 3 Petitioner provides qualifying services to its affiliates and related parties in the Asia-Pacific Region and other foreign markets. These qualifying services include application testing and monitoring, technology infrastructure, application development and support, and financial administration. In the instant petition, petitioner allegedly generated VAT zero-rated sales in the total amount P4,386,917,075.48 from its sole foreign non-resident client, Macquarie Financial Holdings Limited (MFHL), an entity incorporated, registered, and operating under the laws of Australia, broken down as follows: FY 2014 VAT ZERO-RATED SALES 1st Quarter p 885,752 256.26 2nd Quarter 1,448 664,049.63 3rd Quarter 752,109,656.90 2 Exhibit "P-1-d", CTA Docket, vol. I, p. 389. 3 Exhibit "P-1-c", CTA Docket, vol. I, p. 370. t..

Macquarie Offshore Services Pty. Ltd.- Philippine Branch vs. CIR, Page 3 of 56 CTA Case No. 9180 DECISION 4th Quarter 1,300 445,112.69 p 4,386,917,075.48 TOTAL Petitioner claims that its sales of services were rendered exclusively to MFHL during FY 2014 pursuant to a Service Agreement4 executed on April 1, 2009. Further, the services were rendered by petitioner in the Philippines, paid for in Australian Dollars (AUD), inwardly remitted to the Philippines and duly accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP). During these quarters, petitioner incurred and paid input VAT arising from its domestic purchases of goods and services. The amounts of its domestic purchases and the corresponding amounts of input VAT were recorded in its quarterly5 and monthly6 summaries. Considering that MFHL's sale for FY 2014 are mostly VAT zero-rated, it constantly carried over input VAT to the succeeding quarters. Consequently, it had accumulated a significant amount of excess input VAT from its domestic purchases, but with minimal output VAT to charge it against with, thus, it remained unutilized. Petitioner's Quarterly VAT returns were filed as follows: Quarter Period Covered Date Filed pt April 1 to June 30, 2013 July 25, 2013 2nd July to September 30 2013 October 24 2013 3rd October 1 to December 31, 2013 January 27, 2014 4th January 1 to March 31, 2014 April 25, 2014 On June 26, 2015, petitioner filed an administrative application for issuance of a Tax Credit Certificate (TCC)/ Refund 7 of input VAT with BIR Revenue District Office (ROO) No. 47. On October 5, 2015, petitioner received a letter from the BIR dated September 29, 2015 formally denying its administrative claim for refund. 4 Exhibit "P-41", CTA Docket, vol. II, p. 854-870. 5 Exhibit "P-9" to "P-16", CTA Docket, vol. II, pp. 6 Exhibit "P-5" to "P-8", CTA Docket, vol. II, pp. 7 Exhibit "P-18", CTA Docket, vol. II, p. t

Macquarie Offshore Services Pty. Ltd.- Philippine Branch vs. CIR, Page 4 of 56 CTA Case No. 9180 DECISION On November 3, 2015, petitioner filed the instant Petition for Review docketed as CTA Case No. 9180. In his AnswerS, respondent argues that petitioner's sales of goods and services to its alleged client do not qualify as effectively zero-rated VAT transactions. Moreover, respondent avers that petitioner failed to comply with the substantiation requirements provided under Revenue Regulations (RR) No. 16-2005 in relation to Sections 113 and 237 of the NIRC, as well as the conditions prescribed under Section 112 (A)(C) and (D) of the NIRC of 1997, as amended. Lastly, the claims for refund/TCC are strictly construed against petitioner as it partakes the nature of an exemption. Thereafter, in a Resolution dated January 28, 2016, the case was set for pre-trial on April 28, 2016. The parties filed their Joint Stipulation of Facts and Issues9 on July 15, 2016, and the Court issued a Pre-Trial Order10 on September 21, 2016. To substantiate petitioner's allegations, it presented as witnesses, Ms. Ailyn B. Perocho, petitioner's Head of Finance, and Ms. Katherine 0. Constantino, the Independent Certified Public Accountant (ICPA) commissioned by the Court. In Ms. Ailyn B. Perocho's Sworn Witness Statement11, she testified that petititioner is an ROHQ, registered with the SEC and the BIR and licensed to provide services to affiliates and related parties in the Asia-Pacific Region and other foreign markets. She also declared that petitioner generated zero-rated sales for the services it rendered for MFHL, which is a non- resident entity registered and doing business in Australia. For such services, petitioner was paid in AUD inwardly remitted in accordance with the rules and regulations of the BSP. All of petitioner's sales of services were made 8 CTA Division Docket, vol. I, pp. 293-296. �9 CTA Division Docket, voi.II, pp. 1006-1018. 1 CTA Division Docket, voi.II, pp. 1115-1142. 11 CTA Division Docket, voi.I, 333-368. L

Macquarie Offshore Services Pty. Ltd.- Philippine Branch vs. CIR, Page 5 of 56 CTA Case No. 9180 DECISION exclusively to MFHL, rendering the said sales of services subject to VAT zero-rating. She also confirmed that for FY 2014, petitioner incurred and paid input VAT on its domestic purchases of goods, services, and capital goods in connection with its delivery of services to MFHL. These input VAT for the four quarters of FY 2011 were carried-over to the succeeding quarters but such remained unutilized. After petitioner filed a claim for refund/TCC, the said amount was removed from the category of "VAT carried over". Petitioner thereafter filed a claim for refund of unutilized input VAT for FY 2014 with respondent, who denied the claim, prompting petitioner to elevate the matter to this Court. The Court commissioned ICPA, Ms. Katherine 0. Constantino testified that that she audited and evaluated petitioner's documents and records in support of its claim for VAT refund/ TCC for FY 2014, the result of which is contained in the ICPA Report12 which was submitted to the Court on August 1, 2016. Subsequently, on September 30, 2016, petitioner filed its Formal Offer of Evidence13, consisting of Exhibits "P-1" to "P-6020", inclusive of sub-markings. With the admission of all the formally offered exhibits of petitioner, except for Exhibits "P-33-a" and "P-2416" in a Resolution 14 dated January 9, 2017, petitioner has been deemed to have rested its case. In view of the denial of the admission in evidence of Exhibit "P-33-a", petitioner filed a Motion for Reconsideration (Re: Resolution dated 09 January 2017) January 25, 2017. Petitioner moved that it be allowed to recall witness, Ms. Ailyn B. Perocho, for purposes of presenting the exhibit's duplicate original, and clarifying the discrepancy of the date between the identified and marked exhibit and the document actually offered. 12 Exhibit "P-64", CTA Docket. 13 CTA Docket, vol. II, pp. 1148-1168. 14 CTA Docket, vol. III, pp. 1724-1726. L

Macquarie Offshore Services Pty. Ltd.- Philippine Branch vs. CIR, Page 6 of 56 CTA Case No. 9180 DECISION Acting on the motion, and without any objection on respondent's part despite notice, the Court admitted Exhibit "P-33-a" in an Order dated April 3, 2017. Petitioner's admitted documentary exhibits are as follows: Exhibit Description "P-1" to Certified true copy of petitioner's Certificate of "P-1-c" Registration and License with Company Registration "P-1-d" No. FS200805155 issued by the SEC on 10 April 2008 "P-2" Certified true copy Petitioner's BIR Registration "P-3" Certificate numbered OCN9RC0000330527 issued by "P-4" Revenue District No. 047 on 02 June 2008 "P-5" "P-6" Petitioner's BIR Registration Payment Form for fiscal "P-7" "P-8" year 2014 (BIR Form 0605 - Annual VAT "P-9" "P-10" Registration) filed via eFPS on 04 January 2013 "P-11" Petitioner's BIR Registration Payment Form for fiscal "P-12" "P-13" year 2015 (BIR Form 0605 - Annual VAT "P-14" Registration) filed via eFPS on 08 January 2014 Petitioner's BIR Registration Payment Form for fiscal year 2016 (BIR Form 0605 - Annual VAT Registration) filed via eFPS on 07 January 2015 Certified true copy of petitioner's Quarterly VAT Return for the 1st Quarter FY 2014 (1 April to 30 June 2013) filed via eFPS on 25 July 2013 Certified true copy of petitioner's Quarterly VAT Return for the 2nd Quarter FY 2014 (1 July to 30 September 2013) filed via eFPS on 24 October 2013 Certified true copy of petitioner's Quarterly VAT Return for the 3rd Quarter FY 2014 (1 October to 31 December 2013) filed via eFPS on 27 January 2014 Certified true copy of petitioner's Quarterly VAT Return for the 4th Quarter FY 2014 (1 January to 31 March 2014) filed via eFPS on 25 April 2014 Certified true copy of petitioner's Monthly VAT Declaration for the month of April 2013, as filed via . eFPS on 21 May 2013 Certified true copy of petitioner's Monthly VAT Declaration for the month of May 2013, as filed via eFPS on 21 June 2013 Certified true copy of petitioner's Monthly VAT Declaration for the month of July 2013, as filed via eFPS on 22 August 2013 Certified true copy of petitioner's Monthly VAT Declaration for the month of August 2013, as filed via eFPS on 23 September 2013 Certified true copy of petitioner's Monthly VAT Declaration for the month of October 2013, as filed via eFPS on 21 November 2013 Certified true copy of petitioner's Monthly VAT Declaration for the month of November 2013, as t-

Macquarie Offshore Services Pty. Ltd.- Philippine Branch vs. CIR, Page 7 of 56 CTA Case No. 9180 DECISION filed via eFPS on 20 December 2013 . "P-15" Certified true copy of petitioner's Monthly VAT "P-16" "P-17" Declaration for the month of January 2014, as filed "P-18" "P-18-a" via eFPS on 21 February 2014 "P-18-b" Certified true copy of petitioner's Monthly VAT "P-19" "P-19-a" Declaration for the month of February 2014, as filed "P-19-b" "P-19-c" via eFPS on 21 March 2014 "P-20" Certified true copy of petitioner's Monthly VAT "P-20-a" "P-20-b" Declaration for May 2015, filed via eFPS on 19 June "P-20-c" 2015 "P-21" "P-21-a" Administrative Application for Issuance of Tax Credit "P-21-b" "P-21-c" Certificate/Refund of input VAT dated 26 June 2015 "P-22" and filed with BIR-RDO 47 on 26 June 2015 "P-22-a" "P-22-b" Stamp of the BIR RDO 47 as signed by Aida E. Paredo, indicating receipt of the Application referred to in Exhibit "P-18"on 26 June 2015 Names and signatures of Atty. Jose Leonilo V. Didulo 1 and ' Atty. Leslie M. Pacheco of Nisce Mamuric Guinto Rivera and Alcantara Law Offices Original copy of petitioner's Summary of Purchases with input VAT for the pt Quarter FY 2014 Original copy of petitioner's Summary of Domestic Purchases - pt Quarter of FY 2014 - Month of April Original copy of petitioner's Summary of Domestic Purchases - 1st Quarter of FY 2014 - Month of May 1 Original copy of petitioner's Summary of Domestic 1 Purchases - 1st Quarter of FY 2014 - Month of June Original copy of petitioner's Summary of Purchases ! with input VAT for the 2nd Quarter FY 2014 Original copy of petitioner's Summary of Domestic Purchases - 2nd Quarter of FY 2014 - Month of July Original copy of petitioner's Summary of Domestic Purchases - 2nd Quarter of FY 2014 - Month of August Original copy of petitioner's Summary of Domestic Purchases - 2nd Quarter of FY 2014 - Month of September Original copy of petitioner's Summary of Purchases with input VAT for the 3rd Quarter FY 2014 Original copy of petitioner's Summary of Domestic Purchases - 3rd Quarter of FY 2014 - Month of October Original copy of petitioner's Summary of Domestic Purchases - 3rd Quarter of FY 2014 - Month of November Original copy of petitioner's Summary of Domestic Purchases - 3rd Quarter of FY 2014 - Month of December Original copy of petitioner's Summary of Purchases with input VAT for the 4th Quarter FY 2014 Original copy of petitioner's Summary of Domestic Purchases - 4th Quarter of FY 2014 - Month of January Original copy of (:>etitioner's Summarl' of Domestic t

Macquarie Offshore Services Pty. Ltd.- Philippine Branch vs. CIR, Page 8 of 56 CTA Case No. 9180 DECISION Purchases - 4th Quarter of FY 2014 - Month of February "P-22-c" Original copy of petitioner's Summary of Domestic Purchases - 4th Quarter of FY 2014 - Month of March "P-23" and Original copy of petitioner's Schedule of zero-rated "P-23-a" sales- 1st Quarter of Fiscal Year March 2014 "P-24" Certified true copy of Official Receipt No. 000033 dated 28 April 2013 covering the payments made for VAT zero-rated sales made during the 1st Quarter FY 2014 "P-24-a" Certified true copy of Official Receipt No. 000034 dated 21 June 2013 covering the payments made for VAT zero-rated sales made during the 1st Quarter FY 2014 "P-25" Certified true copy of Service Invoice No. 000196 dated 31 January 2013 "P-25-a" Certified true copy of Service Invoice No. 000197 dated 01 February 2013 "P-25-b" Certified true copy of Service Invoice No. 000206 dated 28 February 2013 "P-25-c" Certified true copy of Service Invoice No. 000207 dated 28 February 2013 "P-25-d" Certified true copy of Service Invoice No. 000208 dated 28 February 2013 "P-25-e" Certified true copy of Service Invoice No. 000209 dated 28 February 2013 "P-25-f" Certified true copy of Service Invoice No. 000210 dated 28 February 2013 "P-25-g" Certified true copy of Service Invoice No. 000211 dated 28 February 2013 "P-25-h" Certified true copy of Service Invoice No. 000212 dated 28 February 2013 "P-25-i" Certified true copy of Service Invoice No. 000213 dated 01 March 2013 "P-25-j" Certified true copy of Service Invoice No. 000214 dated 28 March 2013 "P-25-k" Certified true copy of Service Invoice No. 000215 dated 28 March 2013 "P-25-1" Certified true copy of Service Invoice No. 000216 dated 28 March 2013 "P-25-m" Certified true copy of Service Invoice No. 000217 dated 28 March 2013 "P-25-n" Certified true copy of Service Invoice No. 000218 dated 28 March 2013 "P-25-o" Certified true copy of Service Invoice No. 000219 dated 28 March 2013 "P-25-p" Certified true copy of Service Invoice No. 000220 dated 28 March 2013 "P-25-q" Certified true copy of Service Invoice No. 000221 dated 28 March 2013 "P-25-r" Certified true copy of Service Invoice No. 000222 dated 28 March 2013 "P-25-s" Certified true copy of Service Invoice No. 000223 dated 28 March 2013 ---- t.

Macquarie Offshore Services Pty. Ltd.- Philippine Branch vs. CIR, Page 9 of 56 CTA Case No. 9180 DECISION "P-25-t" Certified true copy of Service Invoice No. 000224 "P-25-u" dated 28 March 2013 "P-25-v" Certified true copy of Service Invoice No. 000225 "P-25-w" dated 28 March 2013 "P-25-x" Certified true copy of Service Invoice No. 000226 "P-25-y" dated 28 March 2013 "P-25-z" Certified true copy of Service Invoice No. 000228 "P-25-aa" dated 28 March 2013 "P-25-bb" Certified true copy of Service Invoice No. 000229 "P-25-cc" dated 01 April 2013 "P-25-dd" Certified true copy of Service Invoice No. 000230 "P-26" and dated 01 April 2013 "P-26-a" Certified true copy of Service Invoice No. 000231 dated 01 April 2013 "P-27" Certified true copy of Service Invoice No. 000232 dated 01 April 2013 "P-27-a" Certified true copy of Service Invoice No. 000233 dated 01 April 2013 "P-27-b" Certified true copy of Service Invoice No. 000234 dated 01 April 2013 "P-28" Certified true copy of Service Invoice No. 000235 "P-28-a" dated 01 April 2013 "P-28-b" Original copy of petitioner's Schedule of zero-rated "P-28-c" sales - 2nd Quarter of Fiscal Year March 2014 "P-28-d" "P-28-e" Certified true copy of Official Receipt No. 001001 dated 30 July 2013 covering the payments made for VAT zero-rated sales made during the 2nd Quarter FY 2014 Certified true copy of Official Receipt No. 001002 dated 15 August 2013 covering the payments made for VAT zero-rated sales made during the 2nd Quarter FY 2014 Certified true copy of Official Receipt No. 001003 dated 25 September 2013 covering the payments made for VAT zero-rated sales made during the 2nd Quarter FY 2014 Certified true copy of Service Invoice No. 000236 dated 30 April 2013 Certified true copy of Service Invoice No. 000237 dated 30 April 2013 Certified true copy of Service Invoice No. 000238 dated 31 May 2013 Certified true copy of Service Invoice No. 000239 dated 31 May 2013 Certified true copy of Service Invoice No. 000240 dated 31 May 2013 Certified true copy of Service Invoice No. 000241 dated 31 May 2013 t

Macquarie Offshore Services Pty. Ltd.- Philippine Branch vs. CIR, Page 10 of 56 CTA Case No. 9180 DECISION "P-28-f" Certified true copy of Service Invoice No. 000242 "P-28-g" dated 31 May 2013 "P-28-h" "P-28-i" Certified true copy of Service Invoice No. 000243 "P-28-j" dated 31 May 2013 "P-28-k" "P-28-1" Certified true copy of Service Invoice No. 000244 "P-28-m" dated 31 May 2013 "P-28-n" "P-28-o" Certified true copy of Service Invoice No. 000245 "P-28-p" dated 31 May 2013 "P-28-q" "P-28-r" Certified true copy of Service Invoice No. 000247 "P-28-s" dated 31 May 2013 "P-28-t" "P-28-u" Certified true copy of Service Invoice No. 000248 "P-28-v" dated 03 June 2013 "P-28-w" "P-28-x" Certified true copy of Service Invoice No. 000249 "P-28-y" dated 31 May 2013 "P-28-z" "P-28-aa" Certified true copy of Service Invoice No. 000250 "P-28-bb" dated 31 May 2013 Certified true copy of Service Invoice No. 000251 dated 31 May 2013 Certified true copy of Service Invoice No. 000252 dated 31 May 2013 Certified true copy of Service Invoice No. 000253 dated 31 May 2013 Certified true copy of Service Invoice No. 000254 dated 28 June 2013 Certified true copy of Service Invoice No. 000255 dated 28 June 2013 Certified true copy of Service Invoice No. 000257 dated 28 June 2013 Certified true copy of Service Invoice No. 000258 dated 28 June 2013 Certified true copy of Service Invoice No. 000259 dated 28 June 2013 Certified true copy of Service Invoice No. 000260 dated 28 June 2013 Certified true copy of Service Invoice No. 000261 dated 28 June 2013 Certified true copy of Service Invoice No. 000262 dated 28 June 2013 Certified true copy of Service Invoice No. 001001 dated 31 July 2013 Certified true copy of Service Invoice No. 001002 dated 31 July 2013 Certified true copy of Service Invoice No. 001003 dated 31 July 2013 Certified true copy of Service Invoice No. 001004 dated 31 July 2013 t

Macquarie Offshore Services Pty. Ltd.- Philippine Branch vs. CIR, Page 11 of 56 CTA Case No. 9180 DECISION "P-28-cc" Certified true copy of Service Invoice No. 001005 "P-28-dd" dated 31 July 2013 "P-28-ee" "P-28-ff" Certified true copy of Service Invoice No. 001006 "P-28-gg" dated 31 July 2013 "P-28-hh" "P-28-ii" Certified true copy of Service Invoice No. 001007 "P-28-jj" dated 31 July 2013 "P-29" and "P-29-a" Certified true copy of Service Invoice No. 001008 dated 31 July 2013 "P-30" Certified true copy of Service Invoice No. 001009 "P-30-a" dated 31 July 2013 "P-31" Certified true copy of Service Invoice No. 001010 "P-31-a" dated 31 July 2013 "P-31-b" "P-31-c" Certified true copy of Service Invoice No. 001011 "P-31-d" dated 31 July 2013 "P-31-e" "P-31-f" Certified true copy of Service Invoice No. 001012 "P-31-g" dated 31 July 2013 "P-31-h" "P-31-i" Original copy of petitioner's Schedule of zero-rated "P-31-j" sales - 3rd Quarter of Fiscal Year March 2014 "P-31-k" Certified true copy of Official Receipt No. 001004 dated 24 October 2013 covering the payments made for VAT Zero-rated sales made during the 3rd Quarter FY 2014 Certified true copy of Official Receipt No. 001005 dated 18 November 2013 covering the payments made for VAT Zero-rated sales made during the 3rd Quarter FY 2014 Certified true copy of Service Invoice No. 001013 dated 30 August 2013 Certified true copy of Service Invoice No. 001014 dated 30 August 2013 Certified true copy of Service Invoice No. 001015 dated 30 August 2013 Certified true copy of Service Invoice No. 001016 dated 30 August 2013 Certified true copy of Service Invoice No. 001017 dated 30 Auqust 2013 Certified true copy of Service Invoice No. 001018 dated 30 August 2013 Certified true copy of Service Invoice No. 001019 dated 30 August 2013 Certified true copy of Service Invoice No. 001020 dated 30 August 2013 Certified true copy of Service Invoice No. 001021 dated 30 Auqust 2013 Certified true copy of Service Invoice No. 001022 dated 30 September 2013 Certified true copy of Service Invoice No. 001023 dated 30 September 2013 Certified true copy of Service Invoice No. 001024 dated 30 September 2013 t

Macquarie Offshore Services Pty. Ltd.- Philippine Branch vs. CIR, Page 12 of 56 CTA Case No. 9180 DECISION "P-31-1" Certified true copy of Service Invoice No. 001025 "P-31-m" dated 30 September 2013 "P-31-n" Certified true copy of Service Invoice No. 001026 "P-31-o" dated 30 September 2013 "P-31-p" Certified true copy of Service Invoice No. 001027 "P-31-q" dated 30 September 2013 "P-32" and Certified true copy of Service Invoice No. 001028 "P-32-a" dated 01 October 2013 Certified true copy of Service Invoice No. 001029 "P-33" dated 30 September 2013 Certified true copy of Service Invoice No. 001030 "P-33-a" dated 30 September 2013 Original copy of petitioner's Schedule of zero-rated "P-33-b" sales - 4th Quarter of Fiscal Year March 2014 Certified true copy of Official Receipt No. 001006 "P-33-c" dated 10 January 2014 covering the payments made for VAT Zero-rated sales made during the 4th "P-34" Quarter FY 2014 through Certified true copy of Official Receipt No. 001007 "P-34-gg" dated 26 February 2014 covering the payments "P-34-a" made for VAT Zero-rated sales made during the 4th "P-34-b" Quarter FY 2014 "P-34-c" Certified true copy of Official Receipt No. 001008 "P-34-d" dated 25 March 2014 covering the payments made "P-34-e" for VAT Zero-rated sales made during the 4th "P-34-f" Quarter FY 2014 "P-34-g" Certified true copy of Official Receipt No. 001009 "P-34-h" dated 27 March 2014 covering the payments made "P-34-i" for VAT Zero-rated sales made during the 4th "P-34-j" Quarter FY 2014 "P-34-k" Certified true copy of Service Invoice No. 001031 dated 31 October 2013 Certified true copy of Service Invoice No. 001032 dated 31 October 2013 Certified true copy of Service Invoice No. 001034 dated 31 October 2013 Certified true copy of Service Invoice No. 001035 dated 31 October 2013 Certified true copy of Service Invoice No. 001036 dated 31 October 2013 Certified true copy of Service Invoice No. 001037 dated 31 October 2013 Certified true copy of Service Invoice No. 001038 dated 31 October 2013 Certified true copy of Service Invoice No. 001039 dated 31 October 2013 Certified true copy of Service Invoice No. 001040 dated 29 November 2013 Certified true copy of Service Invoice No. 001041 dated 29 November 2013 Certified true copy of Service Invoice No. 001042 dated 29 November 2013 Certified true copy of Service Invoice No. 001043 dated 29 November 2013 t..

Macquarie Offshore Services Pty. Ltd.- Philippine Branch vs. CIR, Page 13 of 56 CTA Case No. 9180 DECISION "P-34-1" Certified true copy of Service Invoice No. 001044 "P-34-m" dated 29 November 2013 "P-34-n" Certified true copy of Service Invoice No. 001045 "P-34-o" dated 29 November 2013 "P-34-p" Certified true copy of Service Invoice No. 001046 "P-34-q" dated 29 November 2013 "P-34-r" Certified true copy of Service Invoice No. 001047 "P-34-s" dated 29 November 2013 "P-34-t" Certified true copy of Service Invoice No. 001048 "P-34-u" dated 31 December 2013 "P-34-v" Certified true copy of Service Invoice No. 001049 "P-34-w" dated 31 December 2013 "P-34-x" Certified true copy of Service Invoice No. 001050 "P-34-y" dated 31 December 2013 "P-34-z" Certified true copy of Service Invoice No. 001051 "P-34-aa" dated 31 December 2013 "P-34-bb" Certified true copy of Service Invoice No. 001052 "P-34-cc" dated 31 December 2013 "P-34-dd" Certified true copy of Service Invoice No. 001053 "P-34-ee" dated 31 December 2013 "P-34-ff" Certified true copy of Service Invoice No. 001054 "P-34-gg" dated 31 December 2013 "P-35" and Certified true copy of Service Invoice No. 001055 "P-35-a" dated 31 December 2013 "P-35-b" Certified true copy of Service Invoice No. 001056 dated 31 December 2013 "P-36" Certified true copy of Service Invoice No. 001057 dated 2 January 2014 "P-36-a" Certified true copy of Service Invoice No. 001058 "P-37" dated 31 January 2014 Certified true copy of Service Invoice No. 001059 dated 31 January 2014 Certified true copy of Service Invoice No. 001060 dated 31 January 2014 Certified true copy of Service Invoice No. 001061 dated 31 January 2014 Certified true copy of Service Invoice No. 001062 dated 31 January 2014 Certified true copy of Service Invoice No. 001063 dated 31 January 2014 Certified true copy of Service Invoice No. 001064 dated 31 January 2014 Certified true copy of Service Invoice No. 001065 dated 31 January 2014 Original Copy of petitioner's Schedule of Taxable Sales for Fiscal year March 2014 Certified true copy of Original Receipt No. 1010 dated 25 March 2014 Certified true copy of petitioner's Audited Financial Statement for FY 2014, as duly received by the BIR RDO No. 047 on 14 July 2014 Stamp of BIR RDO 47 showing receipt of petitioner's AFS on 14 July 2014 Petitioner's Annual Income Tax Return for FY 2014 t

Macquarie Offshore Services Pty. Ltd.- Philippine Branch vs. CIR, Page 14 of 56 CTA Case No. 9180 DECISION "P-38" and filed via eFPS on 11 July 2014 "P-38-a" Original copy of the Sworn Certification by MOSL's representative, Ailyn Perocho, certifying: (i) the "P-39" to amount of zero-rated sales, taxable sales, and "P-39-a" exempt sales for FY 2014; and (ii) that MOSL did "P-39-b" to not file any and/or will not file any similar claim with "P-39-c" the Bureau of Internal Revenue, Bureau of Customs, and/or the Board of Investments for the period 1 "P-40" April 2013 to 31 March 2014 "P-41" Original copy of the certified list of petitioner's Foreign Client for fiscal year 2014 "P-42" Original copy of the certified list of petitioner's Philippine Clients for Fiscal Year 2014 "P-43" Original copy of the Certification of Non-Registration of Company issued by the SEC on 24 June 2015 in "P-44" favor of Macquarie Financial Holdings Limited "P-45" Authenticated copy of the Services Agreement "P-46" executed by and between petitioner and Macquarie Financial Holdings Limited (MFHL) dated 1 April "P-47" 2009 Consularized Certificate of Registration on Change of "P-48" Name" issued on 31 October 2007 in the name of Macquarie Financial Holdings Limited under "P-49" to Australian Company Number 124 071 398 issued by "P-49-a" the ASIC. Consularized Certificate of Registration issued on 21 February 2007 in the name of Macquarie Financial Group Holdings No. 2 Ltd ACN 124 071 398 issued by the ASIC. Consularized Constitution of Macquarie Financial Holdings Limited ACN 124 071 398 Consularized copy of the ASIC Company Extract in the name of Macquarie Financial Holdings Limited Screenshot of Extract from ASIC's online database for Macquarie Financial Holdings Limited, ACN 124 071 398, accessed on 16 March 2015 at AEST 14:08:17 Screenshot of Extract from ASIC's online database for Macquarie Financial Holdings Limited, ACN 118817440, accessed on 16 March 2015 at AEST 13:57:18 Original copy of the Certification issued by the Department of Finance that, as of 11 June 2015, petitioner has no similar and/or outstanding application for tax credit and duty drawback under the NIRC, the Omnibus Investments Code and the Tariff and Customs Code of the Philippines for the period 1 April 2013 to 31 March 2014 Original copy of the Schedule of Inward Remittances For the pt Quarter of Fiscal year 2014 "P-50" to Original copy of the Schedule of Inward Remittances "P-50-a" For the 2nd Quarter of Fiscal year 2014 "P-51" to Original copy of the Schedule of Inward Remittances "P-51-a" For the 3rd Quarter of Fiscal year 2014 c_

Macquarie Offshore Services Pty. Ltd.- Philippine Branch vs. CIR, Page 15 of 56 CTA Case No. 9180 DECISION "P-52" to Original copy of the Schedule of Inward Remittances "P-52-a" For the 4th Quarter of Fiscal year 2014 "P-53" Certification of Inward Remittance dated 2 June "P-54" 2015, covering the period of 1 April to 30 June "P-55" 2013, issued by The Hong Kong and Shanghai "P-56" Banking Corporation Limited (HSBC), to prove "P-57" inward receipt of foreign currency of export sales I "P-58" Certification of Inward Remittance dated 7 August "P-59" to "P-59-a" 2013, covering the period of 1 July to 30 September "P-60" to "P-60-b" 2013, issued by The Hong Kong and Shanghai "P-61" Banking Corporation Limited (HSBC), to prove "P-62" "P-63" and inward receipt of foreign currency of export sales "P-63-a" "P-64" and Certification of Inward Remittance dated 6 "P-64-a" November 2013, covering the period of 1 October to "P-65" and "P-65-a" 31 December 2013, issued by The Hong Kong and Shanghai Banking Corporation Limited, to prove inward receipt of foreign currency of export sales Certification of Inward Remittance dated 25 November 2013, covering the period of 1 October to 31 December 2013, issued by The Hong Kong and Shanghai Banking Corporation Limited (HSBC), to prove inward receipt of foreign currency of export sales Certification of Inward Remittance dated 7 March 2014, covering the period of 1 January to 31 March 2014, issued by The Hong Kong and Shanghai Banking Corporation Limited (HSBC), to prove inward receipt of foreign currency_ of ex_Qort sales Certification of Inward Remittance dated 29 April 2014, covering the period of 1 January to 31 March 2014, issued by The Hong Kong and Shanghai Banking Corporation Limited, to prove inward receipt of foreign currency_ of ex_Qort sales Original copy of petitioner's Schedule of Bank Credit I Memos - Fiscal Year march 2014 I Original copy of the Organizational Chart of Macquarie Group Limited Letter from BIR RDO 47 dated 29 September 2015 Letter from petitioner's counsel to BIR RDO 47 dated 14 October 2015 Sworn Witness Statement of Ailyn Perocho in lieu of Direct Testimony dated 19 April 2016 The two-part report of the court commissioned Independent CPA entitled "MACQUARIE OFFSHORE SERVICES PTY LTD.-PHILIPPINE BRANCH Independent CPA Report on Results of the Procedures Performed Relative to the Claim for Refund of Tax Credits Representing Excess and Unutilized Input Value Added Tax (VAT) Directly Attributable to Zero-Rated Sales for the Fiscal Year ended March 31, 2014; CTA Case No. 9180; First Division" dated 29 July 2016 Sworn Witness Statement of Ms. Katherine 0. Constantino, the court-commissioned !CPA, dated 15 August 2016 t

Macquarie Offshore Services Pty. Ltd.- Philippine Branch vs. CIR, Page 16 of 56 CTA Case No. 9180 DECISION "P-66" Certificate of Accreditation No. 0213 issued to Constantino Gaudalquiver & Co. by the Board of "P-66-a" Accountancy of the Professional Regulation Commission on 27 September 2013 "P-66-b" Certificate of Accreditation No. 0016-AR-3 issued to Katherine 0. Constantino by the Securities and "P-66-c" Exchange Commission on 17 December 2014 Certificate of Accreditation as Tax Practitioner No. "P-66-d" 08-001507-5-2014 issued to Katherine 0. Constantino by the Bureau of Internal Revenue on 5 "P-67" January 2015 "P-68" Certificate of Accreditation No. 0003-FR-3 issued to "P-69" Constantino Guadalquiver & Co. by the Securities "P-70" and Exchange Commission on 11 November 2014 "P-71" Certificate of Accreditation as Tax Practitioner No. 08-001507-0-2014 issued to Constantino "P-72" Guadalquiver & Co. by the Bureau of Internal "P-73" Revenue on 5 January 2015 "P-74" BIR Authority to Print issued on 09 June 2013 Journal Entries of Bank Charges "P-75" Petitioner's General Ledger of the Tax Transfer "P-76" Pricing Allocation "P-77" Petitioner's Trial Balance for FY 2014 "P-78" to Reconciliation of the difference between Service Fee "P-78-c" Income reported in petitioner's audited financial "P-79" to statement for FY 2014 and its quarterly VAT Returns "P-79-c" for 2014 "P-80" Schedule of New Capital goods purchases in FY 2014 "P-81" to PPE Lapsing Schedule for FY 2014 "P-834" General Ledger of the property and equipment accounts such as Computer Equipment, Leasehold "P-835" to Improvement Cost and Furniture and Fittings Cost "P-837" Petitioner's Journal Entries "P-838" to General Ledger GL-VAT Recoverable other account "P-1101" (1033456302) General Ledger GL - GST VAT Stax Indir Tax Recov "P-1102" to (1033456210) Quarterly VAT Returns filed for FY 2015 I i Quarterly VAT Returns filed for FY 2016 Quarter VAT Return filed for the pt quarter of FY 2017 Sales invoices and/or original receipts supporting petitioner's input VAT on its purchases of services and goods other than capital goods for the pt quarter of 2014 BIR Forms No. 1600 and payment confirmation forms supporting petitioner's input VAT for services rendered by non-residents for pt quarter of FY 2014 Sales invoices and/or original receipts supporting petitioner's input VAT on its purchases of services and goods other than capital goods for the pt quarter of 2014 I Sales invoices and/or original_ receipts supporting t.

Macquarie Offshore Services Pty. Ltd.- Philippine Branch vs. CIR, Page 17 of 56 CTA Case No. 9180 DECISION "P-2295" petitioner's input VAT on its purchases of services and goods other than capital goods for the 2nd "P-2296" to quarter of 2014 "P-2298" BIR Forms No. 1600 and payment confirmation forms supporting petitioner's input VAT for services "P-2299" rendered by non-residents for 2nd quarter of FY 2014 to "P-2569" Sales invoices and/or original receipts supporting petitioner's input VAT on its purchases of services (except for and goods other than capital goods for the 2nd "P-2416") quarter of 2014 "P-2570" to Sales invoices and/or original receipts supporting "P-3717" petitioner's input VAT on its purchases of services and goods other than capital goods for the 3rd "P-3718" to quarter of 2014 "P-3720" BIR Forms No. 1600 and payment confirmation forms supporting petitioner's input VAT for services "P-3721" to rendered by non-residents for 3rd quarter of FY 2014 "P-3996" Sales invoices and/or original receipts supporting petitioner's input VAT on its purchases of services "P-3997" to and goods other than capital goods for the 3rd "P-5254" quarter of 2014 Sales invoices and/or original receipts supporting "P-5255" to petitioner's input VAT on its purchases of services "P-5257" and goods other than capital goods for the 4th quarter of 2014 "P-5258" to BIR Forms No. 1600 and payment confirmation "P-5467" forms supporting petitioner's input VAT for services rendered by non-residents for 4th quarter of FY 2014 "P-5468" to Sales invoices and/or original receipts supporting "P-5473" petitioner's input VAT on its purchases of services and goods other than capital goods for the 4th "P-5474" to quarter of 2014 "P-5474-e" Supporting official receipts and invoices for the "P-5475" to purchases of capital goods exceeding Php1 Million in "P-5475-f" FY 2014 "P-5476" to Debit Notes for the 1st Quarter of FY 2014 "P-5476- Debit Notes for the 2nd Quarter of FY 2014 m" Debit Notes for the 3rd Quarter of FY 2014 "P-5477" to Debit Notes for the 4th Quarter of FY 2014 "P-5477-y" "P-5478" to Supporting official receipts and invoices for the purchases of capital goods exceeding Php1 Million in "P-5628" FY 2014 Supporting official receipts and invoices for the "P-5629" to purchases of capital goods exceeding Php1 Million "P-6020" for previous quarters in 2009 until 2013. For his part, respondent called his lone witness, Revenue Officer Madonna Angelli L. Marco, and who by way t

Macquarie Offshore Services Pty. Ltd.- Philippine Branch vs. CIR, Page 18 of 56 CTA Case No. 9180 DECISION of her Judicial Affidavit15, testified that she was part of a group which conducted the examination and evaluation of petitioner's documents in support of its claim for refund/TCC of input VAT for the 4 quarters of FY 2014. She also declared that after evaluation, the group finally concluded that petitioner is not entitled to claim for failure to comply with the documentary requirements provided under Revenue Memorandum Circular (RMC) 54-2014. After being granted an extension of time by this Court in a Resolution dated April 10, 2017, respondent's Formal Offer of Evidence was submitted on April 24, 2017. In a Resolution dated October 3, 2017, the Court admitted Exhibits "R-1", "R-2", "R-3", "R-3-a", "R-3-b", "R-4", "R-4-a", "R-4-b", "R-5", "R-5-a" and "R-6-a". Respondent's admitted documentary exhibits are as follows: Exhibit Description R-1 BIR Records bearing the report of investigation on R-2 the claim for tax refund/credit of petitioner involving R-3 its alleged unutilized input VAT attributable to its R-3-a zero-rated sales, for Fiscal Year ended March 31, R-3-b 2014 R-4 BIR Electronic Letter of Authority No. R-4-a eLA201100082881 dated July 7, 2015 R-4-b Memorandum Report of Revenue Officer Madonna R-5 Angellli L. Marco R-5-a Name and specimen signature of Revenue Officer Madonna Angelli L. Marco R-6 Name and specimen signature of Jonas DP. Amora, Regional Director of BIR RR8 - Makati City BIR Letter dated September 29, 2015 addressed to petitioner Name and specimen signature of Revenue District Officer Isabel A. Paulino, RDO 47-East Makati Date of Receipt of petitioner of the said BIR Letter dated September 29, 2015 BIR Revenue Memorandum Circular (RMC) No. 54- 2014 Checklist of mandatory requirements/documents to be submitted by petitioner in support of its claimed input VAT refund/credit, for Fiscal Year ended March 31, 2014 Sworn Judicial Affidavit dated June 14, 2016 of Revenue Officer Madonna Angelli L. Marco 15 Exhibit "R-6", CTA Docket, vol. II, pp. 959-963. c

Macquarie Offshore Services Pty. Ltd.- Philippine Branch vs. CIR, Page 19 of 56 CTA Case No. 9180 DECISION R-6-a Name and specimen signature of Revenue Officer Madonna Anoelli L. Marco In the same Resolution, this Court required both parties to file their respective Memoranda. Petitioner filed its Memorandum on October 30, 2017, while respondent filed his Memorandum on November 3, 2017. Thereafter, the Court declared the case submitted for decision in a Resolution dated November 21, 2017. The Court shall determine the propriety of petitioner's entitlement to its claim for refund in the amount of P68,311,847.13, allegedly representing excess and unutilized input value-added tax (VAT) directly attributable to its zero-rated sales for the four quarters of fiscal year (FY) ended March 31, 2014. In claims for refund, Sections 112(A) and (C) of the NIRC of 1997, as amended, relevantly provides: "SEC. 112. Refunds or Tax Credits of Input Tax.- (A) Zero-rated or Effectively Zero-rated Sales. - Any VAT-registered person, whose sales are zero-rated or effectively zero-rated may, within two (2) years after the close of the taxable quarter when the sales were made, apply for the issuance of a tax credit certificate or refund of creditable input tax due or paid attributable to such sales, except transitional input tax, to the extent that such input tax has not been applied against output tax: Provided, however, That in the case of zero-rated sales under Section 106(A)(2)(a)(1), (2) and (b) and Section 108(B)(1) and (2), the acceptable foreign currency exchange proceeds thereof had been duly accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP): Provided, further, That where the taxpayer is engaged in zero-rated or effectively zero-rated sales and also in taxable or exempt sale of goods or properties or L

Macquarie Offshore Services Pty. Ltd.- Philippine Branch vs. CIR, Page 20 of 56 CTA Case No. 9180 DECISION services, and the amount of creditable input tax due or paid cannot be directly and entirely attributed to any one of the transactions, it shall be allocated proportionately on the basis of the volume of sales: Provided, finally, That for a person making sales that are zero-rated under Section 108(8)(6), the input taxes shall be allocated ratably between his zero-rated and non zero-rated sales." XXX XXX XXX (C) Period within which Refund or Tax Credit of Input Taxes shall be Made. - In proper cases, the Commissioner shall grant a refund or issue the tax credit certificate for creditable input taxes within one hundred twenty (120) days from the date of submission of complete documents in support of the application filed in accordance with Subsection (A) hereof. In case of full or partial denial of the claim for tax refund or tax credit, or the failure on the part of the Commissioner to act on the application within the period prescribed above, the taxpayer affected may, within thirty (30) days from the receipt of the decision denying the claim or after the expiration of the one hundred twenty day-period, appeal the decision or the unacted claim with the Court of Tax Appeals." In sum, to be entitled to refund of unutilized input VAT attributable to zero-rated sales, the following requisites must concur: 1. That the taxpayer is VAT-registered; 2. That there must be zero-rated or effectively zero- rated sales; 3. That input taxes were incurred or paid; t

Macquarie Offshore Services Pty. Ltd.- Philippine Branch vs. CIR, Page 21 of 56 CTA Case No. 9180 DECISION 4. That input taxes claimed are attributable to zero- rated or effectively zero-rated sales; 5. That input taxes have not been applied against any output VAT liability; and 6. That the claim was filed within the prescribed periods both in the administrative and judicial levels. In view of the foregoing, the timeliness of the filing of the Petition for Review is a primordial consideration on whether the Court has jurisdiction over the matter. This is necessary in order to determine the competence of this Court to rule on the issue at hand. Pursuant to the afore-quoted Section 112(A) of NIRC of 1997, as amended, the administrative claim for the issuance of a TCC or refund of input VAT must be filed with the BIR within two (2) years after the close of the taxable quarter when the zero-rated or effectively zero-rated sales were made. Since the present claim covers the four quarters of FY ended March 31, 2014, the two-year prescriptive period started to run on June 30, 2013, on September 30, 2013, on December 31, 2013, and on March 31, 2014, and ended on June 30, 2015, on September 30, 2015, on December 31, 2016, and on March 31, 2016, respectively. Thus, petitioner's administrative claims for the said quarters were seasonably filed on June 26, 2015. Anent the timeliness of petitioner's judicial appeal, Section 112(C) of the NIRC of 1997, as amended, states the prescriptive period for filing a judicial claim for the refund or tax credit of input VAT. The legal provision speaks of two periods namely: (1) the period of 120 days, which serves as a waiting period to give time for the BIR Commissioner to act on the administrative claim for a refund or credit; and (2) the period of 30 days, which refers to the period for filing a judicial claim with the Court of Tax Appeals (CTA) 16� Notably, the 120-day period begins to run from the date of submission of complete documents supporting the 16 Rohm Apollo Semiconductor Philippines vs. Commissioner oflnternal Revenue, G.R. No. 168950, January 14, 2015. t.

Macquarie Offshore Services Pty. Ltd.- Philippine Branch vs. CIR, Page 22 of 56 CTA Case No. 9180 DECISION administrative claim17� As to when should the submission of supporting documents be deemed "completed" for purposes of determining the running of the 120-day period, the pronouncement of the Supreme Court in the case of Pilipinas Total Gas, Inc. vs. Commissioner of Internal Revenue18 is instructive, to wit: "To summarize, for the just disposition of the subject controversy, the rule is that from the date an administrative claim for excess unutilized VAT is filed, a taxpayer has thirty (30) days within which to submit the documentary requirements sufficient to support his claim, unless given further extension by the CIR. Then, upon filing by the taxpayer of his complete documents to support his application, or expiration of the period given, the CIR has 120 days within which to decide the claim for tax credit or refund. Should the taxpayer, on the date of his filing, manifest that he no longer wishes to submit any other addition documents to complete his administrative claim, the 120-day period allowed to the CIR begins to run from the date of filing. In all cases, whatever documents a taxpayer intends to file to support his claim must be completed within the two-year period under Section 112(A) of the NIRC. The 30- day period from denial of the claim or from the expiration of the 120-day period within which to appeal the denial or inaction of the CIR to the CTA must also be respected. (Emphasis supplied) It bears mentioning at this point that the foregoing summation of the rules should onlv be made applicable to those claims for tax credit or refund filed prior to June 11, 2014, such as the claim at bench. As it now stands, RMC 54-2014 dated June 11, 2014 mandates that: 17 Silicon Philippines, Inc. (Formerly Intel Philippines Manufacturing, Inc.) vs. Commissioner of Internal Revenue, G.R. No. 182737, March 2, 2016. 18 Pilipinas Total Gas, Inc. vs. Commissioner of Internal Revenue, G.R. No. 207112, December 8, 2015. t.

Macquarie Offshore Services Pty. Ltd.- Philippine Branch vs. CIR, Page 23 of 56 CTA Case No. 9180 DECISION The application for VAT refund/tax credit must be accompanied by complete supporting documents as enumerated in Annex "A" hereof. In addition, the taxpayer shall attach a statement under oath Attesting to the completeness of the submitted documents (Annex B). The affidavit shall further state that the said documents are the only documents which the taxpayer will present to support the claim. If the taxpayer is a juridical person, there should be a sworn statement that the officer signing the affidavit (i.e., at the very least, the Chief Financial Officer) has been authorized by the Board of Directors of the company. Upon submission of the administrative claim and its supporting documents, the claim shall be processed and no other documents shall be accepted/required from the taxpayer in the course of its evaluation. A decision shall be rendered by the Commissioner based only on the documents submitted by the taxpayer. The application for tax refund/tax credit shall be denied where the taxpayer/claimant failed to submit the complete supporting documents. For this purpose, the concerned processing/investigating office shall prepare and issue the corresponding Denial Letter to the taxpayer/claimant. Thus, under the current rule, the reckoning of the 120-day period has been withdrawn from the taxpayer by RMC 54-2014, since it requires him at the time he files his claim to complete his supporting documents and attest that he will no longer submit any other document to prove his claim. Further, the taxpayer is barred from submitting additional documents after he has filed his administrative claim." t:

Macquarie Offshore Services Pty. Ltd.- Philippine Branch vs. CIR, Page 24 of 56 CTA Case No. 9180 DECISION In the case at bar, upon the filing of its administrative claim for the four quarters of FY 2014 on June 26, 2015, petitioner simultaneously submitted the documents in support thereof. Since no written notice was sent by respondent requiring petitioner to submit additional documents, the 120-day period commenced from the filing of the administrative claim on June 26, 2015, giving respondent 120 days or until October 24, 2015 to act on the said claim. For its part, petitioner had thirty (30) days from receipt of the BIR letter dated October 5, 2015 denying its claim for refund or until November 4, 2015 to appeal the decision of respondent to this Court. As such, the Petition for Review covering petitioner's claim for the four quarters of FY 2014 was seasonably filed. Thus, giving this Court jurisdiction over the matter. The Court shall now proceed to determine petitioner's compliance with the remaining requisites for refund. Based on records, petitioner complied with the first requisite considering that it is registered with the BIR as a VAT entity under BIR Certificate of Registration No. OCN 9RC0000330527 dated June 2, 2008 with Tax Identification No. 261-474-856-000 and registered office address of 29F Tower I, The Enterprise Center, Ayala Avenue, Makati City19� On the second requisite, petitioner avers that during FY 2014, its sales of services were rendered exclusively to MFHL and posits that such sales of services which were paid for in Australian Dollars (AUD) inwardly remitted and accounted for in accordance with the rules and regulations of the BSP are entitled to the benefit of VAT zero-rating under Section 108(8)(2) of the NIRC of 1997, as amended, which states: "SEC. 108. Value-added Tax on Sale of Services and Use or Lease of Properties. - XXX XXX XXX 19 Exhibit "P-1-d", CTA Docket, voi.I, p.389. t.

Macquarie Offshore Services Pty. Ltd.- Philippine Branch vs. CIR, Page 25 of 56 CTA Case No. 9180 DECISION (B) Transactions Subject to Zero Percent (0�/o) Rate. - The following services performed in the Philippines by VAT-registered persons shall be subject to zero percent {0�/o) rate: XXX XXX XXX (2) Services other than those mentioned in the preceding paragraph rendered to a person engaged in business conducted outside the Philippines or to a nonresident person not engaged in business who is outside the Philippines when the services are performed, the consideration for which is paid for in acceptable foreign currency and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP) 11 Accordingly, in the case of Commissioner of Internal Revenue vs. Burmeister and Wain Scandinavian Contractor Mindanao, Inc. 20, the Supreme Court laid down the requisites in order for the supply of services to be VAT zero- rated under Section 108(B)(2) of the NIRC of 1997, as amended, 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. The payment for such services must be in acceptable foreign currency accounted for in accordance with the BSP rules and regulations. There is no doubt that petitioner has met the first requisite. Petitioner is licensed by the Securities and Exchange Commission per Company Reg. No. FS200805155 dated April 10, 2008, to transact business in the Philippines as a regional operating headquarters (ROHQ) authorized to engage in general administration and planning; business �2 Commissioner of Internal Revenue vs. Burmeister and Wain Scandinavian Contractor Mindanao, Inc., G.R. No. 153205, January 22, 2007. L

Macquarie Offshore Services Pty. Ltd.- Philippine Branch vs. CIR, Page 26 of 56 CTA Case No. 9180 DECISION planning and coordination; sourcing/procurement of raw materials and components; corporate finance advisory services; marketing control and sales promotion training and personnel management; logistic services; research and development services and product development; technical support and maintenance; data processing and communication; and business development21 � Further, pursuant to the Services Agreement22 between petitioner and MFHL dated April 1, 2009, petitioner shall provide the services set out in Schedule 1 of the agreement such as: (a) Application testing; (b) Application monitoring; (c) Technology infrastructure support; (d) Application development; (e) Application support; (f) Financial administration; and (g) Such other services as MFHL may require from time to time and that the petitioner is willing and able to provide. These services clearly fall within the scope of "services other than processing, manufacturing or repacking of goods" contemplated by the aforementioned provision. In order to show compliance with the second requisite and to prove that MFHL is a non-resident foreign corporation doing business outside the Philippines, petitioner presented the following documents: 1. Certification of Non-Registration of Company issued by the SEC. 23 2. Services Agreement24 ; 21 Exhibit "P-1" to "P-1-c", CTA Docket, p. 370. 22 Exhibit "P-41", CTA Docket, p. 1667. 23 Exhibit "P-40", CTA Docket, p. 1654. 24 Supra note 21, pp. 1657-1669.

Macquarie Offshore Services Pty. Ltd.- Philippine Branch vs. CIR, Page 27 of 56 CTA Case No. 9180 DECISION 3. Certificate of Registration on Change of Name in the name of MFHL25 1� 4. Certificate of Registration in the name of MFHL26 ; 5. Constitution of MFHL27 ; 6. Australian Securities and Investments Commission (ASIC) Company Extract in the name of MFHL28 ; and 7. ASIC's online database for MFHL29 � Significantly, Sections 113(A)(1), (8)(1), (2)(c) and (3) of the NIRC of 1997, as amended, as implemented by Sections 4.113-1(A)(1), (8)(1) and (2)(c) of RR No. 16- 2005, as amended, mandate that a VAT taxpayer, like petitioner, shall for every sale, barter, or exchange of goods or properties, issue a VAT invoice, which must contain the following information; "Section 113. Invoicing and Accounting Requirements for VAT-Registered Persons. - (A) Invoicing Requirements. A VAT- registered person shall issue: XXX XXX XXX (2) A VAT official receipt for every lease of goods or properties, and for every sale, barter or exchange of services. XXX XXX XXX (B) Information Contained in the VAT Invoice or VAT Official Receipt. -The following information shall be indicated in the VAT invoice or VAT official receipt: 25 Exhibit "P-42", CTA Docket, p.1670. 26 Exhibit "P-43", CTA Docket, p. 1671. 27 Exhibit "P-44", CTA Docket, pp. 1672-1688. 28 Exhibit "P-45", CTA Docket, pp.1691-1694. 29 Exhibit "P-46", CTA Docket, p. 1697. t-

Macquarie Offshore Services Pty. Ltd.- Philippine Branch vs. CIR, Page 28 of 56 CTA Case No. 9180 DECISION (1) A statement that the seller is a VAT- registered person, followed by his Taxpayer's Identification Number (TIN); and (2) The total amount which the purchaser pays or is obligated to pay to the seller with the indication that such amount includes the value- added tax. Provided, That: XXX XXX XXX (c) If the sale is subject to zero percent (0�/o) value-added tax, the term "zero-rated sale" shall be written or printed prominently on the invoice or receipt. XXX XXX XXX (3) The date of transaction, quantity, unit cost and description of the goods or properties or nature of the service; and XXX XXX XXX "Section. 4.113-1. Invoicing Requirements. - (A) A VAT-registered person shall issue:- XXX XXX XXX (2) A VAT official receipt for every lease of goods or properties, and for every sale, barter or exchange of services. Only VAT-registered persons are required to print their TIN followed by the word 'VAT' in their invoice or official receipts. Said documents shall be considered as a 'VAT invoice' or 'VAT Official Receipt.' All purchases covered by invoices/receipts other than VAT Invoice/VAT Official Receipt shall not give rise to any input tax. VAT invoice/official receipt shall be prepared at least in duplicate, the original to be given to the '-

Macquarie Offshore Services Pty. Ltd.- Philippine Branch vs. CIR, Page 29 of 56 CTA Case No. 9180 DECISION buyer and the duplicate to be retained by the seller as part of his accounting records. (B) Information contained in VAT invoice or VAT official receipt. - The following information shall be indicated in VAT invoice or VAT official receipt: (1) A statement that the seller is a VAT- registered person, followed by his TIN; (2) The total amount which the purchaser pays or is obligated to pay to the seller with the indication that such amount includes the VAT; Provided, That: XXX XXX XXX (c) If the sale is subject to zero percent (0�/o) VAT, the term "zero-rated sale" shall be written or printed prominently on the invoice or receipt;" (Emphasis supplied) Under the premises, the foreign currency payments referred to under Section 108(8)(2) of the NIRC of 1997, as amended, must likewise be supported by VAT zero-rated official receipts. In its Quarterly VAT Returns for the four quarters of FY 2014, petitioner declared a total amount of P4,386,971,075.48 zero-rated sales, broken down as follows: FY 2014 VAT ZERO-RATED SALES 1st Quarter p 885,752,256.26 2nd Quarter 1,448 664,049.63 3rd Quarter 752,109 656.90 4th Quarter 1,300,445,112.69 TOTAL - - p 4~86,~71,075.48 ----- --- In support thereof, petitioner submitted various documents such as summaries of zero-rated sales30, service invoices31 , official receipts32, schedule of remittances33, certifications of inward remittances from Hongkong and 30 Exhibits "P-19" to "P-22". 31 Exhibits "P-25" to "P-25-dd", "P-28" to "P-28-jj", "P-31" to "P-31-q", and "P-34" to "P-34-gg". L.

Macquarie Offshore Services Pty. Ltd.- Philippine Branch vs. CIR, Page 30 of 56 CTA Case No. 9180 DECISION Shanghai Banking Corporation (HSBC) 34 and the report35 of the Court-commissioned !CPA. A comparison between the zero-rated sales reflected in petitioner's Quarterly VAT Returns and that shown in its VAT zero-rated OR's would reveal that there is a discrepancy amounting to P1,364,375, 768.60. 1st Quarter 2"d Quarter 3�d Quarter 4th Quarter Total Amounts in Pho Zero Rated P885,752,256.36 P1,448,664,049.68 P752,109,656. 90 P1,300,445,112.70 P4,386,971,075.64 Sales per Quarterly VAT Returns Zero Rated 624,591,889.22 863,783,190.69 563,722,318.68 970,497,908.45 P3,022,595,307.04 Sales per Official Receipts Discrepancy P261,160,367.14 P584,880,858.99 P188,387,338.22 P329,947,204.25 P1,364,375,768.60 Nonetheless, the !CPA was able to account such discrepancy to the following: a.) Debit Notes, which represent billings by MFHL for recoveries of ISD, human resources, business services, insurance, financial operations and other recoveries to petitioner, including cross border interest relative to advances made by petitioner to MFHL and reimbursement expenses paid by MFHL on behalf of petitioner; b.) Revaluation of intercompany balances, which pertains to foreign currency differential from invoice date and estimated settlement date based on the internal rate being used by the group and petitioner; and c.) Reconciling and rounding-off Difference. 32 Exhibits "P-24" to "P-24-a", "P-26" to "P-26-a", "P-27" to "P-27-b", "P-30" to "P-30-a", "P-33" to "P-33- c", and "P-35-b". 33 Exhibits "P-49" to "P-52-a". 34 Exhibits "P-53" to "P-58". 35 Exhibits "P-64" to "P-64-a". t.

Macquarie Offshore Services Pty. Ltd.- Philippine Branch vs. CIR, Page 31 of 56 CTA Case No. 9180 DECISION To illustrate: Pad;icular:; 1:;t Q!.Hld:er36 2nd Qyacter37 Jrd Quarter38 4th Qyacter39 _IQtll] Debit Notes Pho256 540 567.74 Php552 719 450.21 Php193 896 688.63 PhQ_342 406 504.37 Php1 345 563 210.95 Revaluation 4,616,591.78 32,161,408.99 (5,509,350.40) (12,459,300.04) 18,809,350.33 Intercompany 3 207.62 - - - 3 207.6240 Balances Reconciling - (0.21) (0.01) _(O.Ofll_ (0.30) Difference Rounding-off Php261,160 367.14 Php584 880 858.99 Php188 387 338.22 Php329 947 204.25 Phol 364 3751 768.60 Difference TOTAL Under the premises, petitioner was able to prove that it had zero-rated sales for the four quarters of FY ended March 31, 2014 in the total amount of P4,386,971,075.48. Thus, petitioner's sales to MFHL qualify for VAT zero-rating. Consequently, this Court shall determine whether petitioner incurred input taxes in connection thereto and if such input taxes have been applied against any output VAT liability of the petitioner. The total amount of input VAT claim that is reflected in petitioner's Quarterly VAT returns is P68,811,347.34 which arose from the amortization of input VAT on domestic purchases of goods other than capital goods, domestic purchases of services, importation of goods other than capital goods and services rendered by non-residents, detailed as follows: l!i:t Ouart"r 2nd Ouarter 3rd Ouarter 4th Ouarter TOTAL Input VAT: Php891 032.64 Php906 306.67 Php893 284.05 Php1 917 183.15 Php4 607 806.51 Goods Other 43 021.80 6 756.00 49 777.80 Capital Goods - - Importation 9 244 294.68 12 731 567.67 52 854 641.35 Services 15 558 232.65 15 320 546.35 Services Rendered by Non-Residents 469 691.72 447 263.85 425 397.51 682 712.09 2 025 065.17 TOTAL (a) Php10 648 040.84 Php14 091 894.19 Php16 876 914.21 Pho17 920 441.59 Pho59 537 290.83 Inout VAT: Pho2 034 403.77 Pho3 332 730.88 Php2 580 898.41 Pho3 366 479.82 Phpll 314 512.88 Capital Goods 16 219 315.08 15 911 389.33 16 800 379.00 Exceedino 1Million 16 767 559.57 65 698 642.98 Add: Input tax deferred from previous ouarter 36 Exhibits "P-5474" to "P-5474-e"; Folder 31, Box 1. 37 Exhibits "P-5475" to "P-5475-f"; Folder 31, Box 1. 38 Exhibits "P-5476" to "P-5476-m"; Folder 31, Box 1. 39 Exhibits "P-5477" to "P-5477-y"; Folder 31, Box 1. 40 As represented by Mr. John Madamba, the difference is due to erroneous peso amount filled up in the invoice no. 197 amounting Php833,622.82. t.

Macquarie Offshore Services Pty. Ltd.- Philippine Branch vs. CIR, Page 32 of 56 CTA Case No. 9180 DECISION Less: Input tax deferred 15 911 389.33 16 800 379.00 16 767 559.57 17 396 702.51 66 876 030.41 for the succeedino oeriod 2 342 329.52 2 443 741.21 2 613 717.84 2 737 336.88 10 137 125.45 Amortization of input tax on cao. Goods exceedino 1M (b) TOTAL INPUT TAX CREDIT (a+b) Php12 990 370.36 Php16 535 635.40 Php19 490 632.05 Php20 657 778.47 Php69 674 416.28 I The difference in the total allowable input tax of P68,811,347.34 pertains to the related output VAT for the 4th quarter of FY 2014 amounting to P863,068.94, to wit: 1st quarter P12,990,370.36 2nd quarter 16,535,635.40 3rd quarter 19,490,632.05 4th guarter 20,657,778.47 Total tax credits p 69,674,416.28 Less: 863�068.94 ll 68,811,347.34 Out.e.ut VAT To substantiate its claim, petitioner proffered as evidence the summary list of its Domestic Purchases with Input VAT, the corresponding suppliers' VAT invoices, VAT official receipts, and other documents, which were all examined by the ICPA. A scrutiny of the ICPA Report together with the documents supporting the P59,537,290.8341 input VAT claim on domestic purchases of goods other than capital goods, importation of goods other than capital goods, domestic purchases of services and purchases of services rendered by non-residents show that the input tax amounting to P8,391,851.02 should be disallowed for not being properly substantiated by VAT invoices and official receipts as prescribed under Sections 110(A) and 113(A) and (B), 237, and 238 of the NIRC of 1997, as amended, in relation to Sections 4.110-1,4.110-8, and 4.113-1 of RR No. 16-2005, as amended. The amount of P8,391,851.02 is detailed as follows: 41 P4 607 806.51 49 777.80 Domestic Purchases of Goods Other than Capital Goods Importation of Goods other than Capital Goods 52 854 641.35 Domestic Purchase of Services 2 025 065.17 Services Rendered bv Non-Residents Total input Tax except amortization of capital goods P59,537,290.83 exceeding Pl million t.

Macquarie Offshore Services Pty. Ltd.- Philippine Branch vs. CIR, Page 33 of 56 CTA Case No. 9180 DECISION OTHER FINDINGS Annex Reference 1ST 2ND 3RD 4TH TOTAL Annex 6-3Q-aa QUARTER QUARTER QUARTER QUARTER 107.04 Domestic purchase of goods Annex 6-2Q-aa - - 107.04 - 4,607.14 other than capital goods supported Annex 6-4Q-p - 4,607.14 - - 34,298.36 1 TIN No. Invoices Annex 6-1Q-m 725.36 Annex 6-2Q-ab - - - 34,298.36 Domestic 1,377.43 purchase of goods Annex 6-20-ac 725.36 - - - other than capital Annex 6-20-ad 6,991.07 goods supported Annex 6-10-n - 1,377.43 - - 394.29 by TIN No. VAT Annex 6-10-o Invoices not dated Annex 6-10-p - 6,991.07 - - 25,455.53 within the quarter 255,200.20 but within the - 394.29 - - period of claim 1,758.73 with incomplete 25,455.53 - - - 2 Petitioner's name 255,200.20 - - - Domestic purchase of goods 1,758.73 - - - other than capital goods supported by VAT REG. TIN NO. Invoices not dated within the quarter but within the period of claim with the Petitioner's name 3 unclear Domestic purchase of goods other than capital goods supported by photocopied TIN NO. VAT 4 Invoices Domestic purchase of goods other than capital goods supported by photocopied VAT REG. TIN 5 Invoices Domestic purchase of goods other than capital goods supported by photocopied VAT REG. TIN NO. Invoices not dated within the quarter but within 6 the period of claim Domestic purchase of goods other than capital goods supported by VAT REG. TIN NO. Invoices with 7 altered date Domestic purchase of goods other than capital goods supported by TIN NO. VAT Invoices not within the year (or period 8 of claim) Domestic purchase of goods other than capital goods supported by VAT REG. TIN NO. Invoices not within the year (or 9 period of claim) Domestic 10 purchase of goods L

Macquarie Offshore Services Pty. Ltd.- Philippine Branch vs. CIR, Page 34 of 56 CTA Case No. 9180 DECISION other than capital Annex 6-10-q 135.96 - 1,859.52 - 1,995.48 goods supported Annex 6-30-ai by VAT REG. TIN - 26.79 - - 26.79 NO. Invoices but Annex 6-20-ae with wrong TIN - 790.72 - - 790.72 No. of Petitioner Annex 6-20-af with overclaimed Annex 6-20-ag - 790.73 - - 790.73 input VAT amount as independently Annex 6-20-ah - 1,660.18 - - 1,660.18 computed Annex 6-20-ai Domestic purchase of goods other than capital goods supported by VAT REG. TIN NO. Invoices with alteration on the 11 VAT amount Domestic purchase of goods other than capital goods supported by VAT REG. TIN NO. Invoices not dated within the quarter but within the period of claim with alteration on the Petitioner's name and address and with underclaimed input VAT amount as independently 12 computed Domestic purchase of goods other than capital goods supported by VAT REG. TIN NO. Invoices not dated within the quarter but within the period of claim with incomplete Petitioner's name, inserted Petitioner's address and without BIR 13 authority to print Domestic purchase of goods other than capital goods supported by VAT REG. TIN NO. Invoices not dated within the quarter but within the period of claim with incomplete Petitioner's name and without BIR 14 authority to print Domestic purchase of goods other than capital goods supported by VAT REG. TIN NO. Invoices not dated within the quarter but within the period of claim with incomplete Petitioner's name with inserted Petitioner's address and without BIR 15 authority to print 16 Domestic t

Macquarie Offshore Services Pty. Ltd.- Philippine Branch vs. CIR, Page 35 of 56 CTA Case No. 9180 DECISION purchase of goods - 1,189.29 - - 1,189.29 other than capital goods supported Annex 6-20-aa - 790.73 - - 790.73 by VAT REG. TIN NO. Invoices not Annex 6-20-aa - 790.73 - - 790.73 in the name of the Annex 6-20-al petitioner - 1,672.52 - - 1,672.52 Annex 6-20-am Domestic Annex 6-20-an - 1,581.46 - - 1 ,581.46 purchase of goods Annex 6-20-ao other than capital - 2,328.21 - - 2,328.21 goods supported Annex 6-40-q by VAT REG. TIN -- - 746.79 - - 746.79 NO. Invoices with 47,621.54 altered Petitioner's - - - 47,621.54 name and address with countersign but without BIR 17 authority to print Domestic purchase of goods other than capital goods supported by VAT REG. TIN NO. Invoices with incomplete Petitioner's name and altered address with countersign and without BIR 18 authority to print Domestic purchase of goods other than capital goods supported by VAT REG. TIN NO. Invoices with inserted Petitioner's name and address with countersigns and without BIR 19 authority to print Domestic purchase of goods other than capital goods supported by VAT REG. TIN NO. Invoices with inserted Petitioner's name with countersign and inserted Petitioner's address without countersign and without BIR 20 authority to print Domestic purchase of goods other than capital goods supported by VAT REG. TIN NO. Invoices with inserted address with countersign and without BIR 21 authority to print Domestic purchase of goods other than capital goods supported by VAT REG. TIN NO. Invoices with inserted address without countersign and without BIR 22 authority to print Domestic 23 purchase of goods t

Macquarie Offshore Services Pty. Ltd.- Philippine Branch vs. CIR, Page 36 of 56 CTA Case No. 9180 DECISION other than capital Annex 6-40-r - - - 428.57 428.57 goods supported 1,036.07 by VAT REG. TIN Annex 6-30-aj - - 56.79 979.29 NO. Invoices with Annex 6-40-t 222,742.90 the Petitioner's 26,839.56 83,691.21 96,645.40 15,566.73 address in Annex 6-10-r 77,666.22 different writing Annex 6-20-ap 1,914.60 68,351.67 5,407.47 1,992.49 694,774.07 and its BIR Penni! Annex 6-30-ak 312,029.94 177,780.96 104,076.21 100,886.97 and printing date Annex 6-40-u 289.39 are both not - - - 289.39 1,416.34 indicated Annex 6-10-s 2,449.78 Domestic Annex 6-30-al - - - 1,416.34 10,612.76 purchase of goods Annex 6-40-v 2,581,958.99 other than capital - - - 2,449.78 36,320.41 goods supported Annex 6-40-x 1,318.70 by VAT REG. TIN 2,608.93 7,039.28 - 964.55 24,985.13 NO. Invoices and Annex 6-40-y its BIR Penni! and 1,293,245.1 1,286,459.3 - printing date are Annex 6-40-z 24 both not indicated Annex 6-10-t 8 3 2,254.48 Domestic Annex 6-20-ar purchase of goods Annex 6-40-aa 6,960.00 27,105.93 - 2,254.48 other than capital goods supported Annex 6-10-u - - - 1,318.70 25 by VAT OR only. Annex 6-20-as Domestic Annex 6-40-ac 1,681.28 11,316.01 11,987.84 - purchase of goods other than capital Annex 6-10-v goods with Annex 6-20-at supports other Annex 6-40-ac 26 than VAT invoice. Domestic Annex 6-40-ae purchase of goods other than capital Annex 6-10-w goods without Annex 6-20-au supporting Annex 6-30-am documents at the Annex 6-1 0-x 27 time of verification TOTAL Purchase of Services Domestic purchase of services supported by VAT stamped 1 OR only Domestic purchase of services supported by TIN NO. NV 2 OR Domestic purchase of services supported 3 by VAT NO. OR Domestic purchase of services supported 4 by TIN No. OR Domestic purchase of services properly supported by TIN 5 No. Non-VAT OR Domestic purchase of services supported by Non-VAT 6 Register TIN OR Domestic purchase of services supported 7 by No.VATOR Domestic purchase of services supported by VAT Reg. No. 8 OR 9 Domestic t

Macquarie Offshore Services Pty. Ltd.- Philippine Branch vs. CIR, Page 37 of 56 CTA Case No. 9180 DECISION purchase of Annex 6-40-af 1,795.16 - - 2,655.67 4,450.83 services supported by VAT REG. TIN Annex 6-10-y 211.61 - - - 211.61 NO. OR without Annex 6-30-an Petitioner's Annex 6-10-z - - 34,281.61 - 34,281.61 address Annex 6-10-ab Annex 6-10-ac 28,492.80 - - - 28,492.80 Domestic Annex 6-10-ad 26,187.75 purchase of - - - 26,187.75 services supported Annex 6-1 0-ae 7,500.00 by VAT REG. TIN Annex 6-10-af 575.89 - - - 7,500.00 NO. OR with Annex 6-10-ag unclear address of Annex 6-10-ah 3,415.18 - - - 575.89 10 the petitioner 1,608.48 - - - 3,415.18 Domestic 512.68 purchase of 343.15 - - - 1,608.48 services supported by VAT REG TIN - - - 512.68 NO. OR with inserted - - - 343.15 Petitioners address without 11 countersign Domestic purchase of services supported by VAT REG. TIN NO. OR with incomplete name and unclear address of the 12 petitioner. Domestic purchase of services supported by TIN NO. VAT OR with incomplete name 13 of the Petitioner. Domestic purchase of services supported by Non-VAT Reg. TIN OR with wrong petitioner's 14 TIN Domestic purchase of services supported by TIN NO. VAT OR not dated within the period 15 of claim Domestic purchase of services supported by TIN NO. VAT OR with incomplete name of the petitioner and with alteration on the VAT 16 amount Domestic purchase of services without supplier's TIN , not dated within the period of claim and without BIR 17 Authority to print Domestic purchase of services without supplier's TIN with alteration on 18 the VAT amount Domestic purchase of services supported by VAT REG. TIN 19 NO. OR where L

Macquarie Offshore Services Pty. Ltd.- Philippine Branch vs. CIR, Page 38 of 56 CTA Case No. 9180 DECISION date in the OR is Annex 6-10-ai 1,429.82 - - - 1,429.82 different from the 3,359.17 3,359.17 schedule, with Annex 6-1 0-aj - - - unclear Name, TIN 1,149.00 1,149.00 and Address of Annex 6-10-ak 3,274.07 - - - 165,235.80 the petitioner and Annex 6-10-al with alteration on Annex 6-20-aw 200.46 1,157.17 7,800.00 153,004.56 200.46 the VAT amount Annex 6-30-ap 10,183.88 10,183.88 Annex 6-40-ag 18,921.59 - - - 19,261.77 Domestic 105,385.59 175,487.48 purchase of Annex 6-10-am - - - services supported 5,219.98 5,219.98 by VAT REG. TIN Annex 6-10-an 122.02 - 218.16 No. OR not within the quarter but Annex 6-10-ao - 31,808.98 38,292.91 within the period Annex 6-20-ax of claim with Annex 6-40-ah - - - unclear name, TIN and address of the Annex 6-10-ap 20 petitioner. Annex 6-30-aq Annex 6-40-ai Domestic purchase of Annex 6-10-aq services supported by VAT REG. TIN NO. OR but not within the period 21 of claim. Domestic purchase of services supported by VAT REG. TIN NO. OR but not within the period of claim and with underclaimed input VAT as amount independently 22 computed Domestic purchase of services supported by VAT REG. TIN NO. OR without 23 date Domestic purchase of services supported by VAT REG. TIN NO. OR without date, with unclear Name and TIN of 24 the Petitioner Domestic purchase of services supported by VAT REG TIN NO. OR without date and with incomplete name 25 of the Petitioner. Domestic purchase of services supported by VAT REG. TIN NO. OR with unclear Name and TIN of the 26 Petitioner. Domestic purchase of services supported by VAT REG. TIN NO. OR with unclear Name, TIN and Address of 27 the petitioner. Domestic purchase of services supported by VAT REG. TIN 28 NO. OR with t

Macquarie Offshore Services Pty. Ltd.- Philippine Branch vs. CIR, Page 39 of 56 CTA Case No. 9180 DECISION unclear Name, TIN Annex 6-10-ar 921.23 - - - 921.23 and Address of the petitioner and Annex 6-10-as 385.72 - - 339.43 725.15 without showing Annex 6-40-aj 174,148.73 the VAT 815.63 - - 173,333.10 151 '195.98 Breakdown Annex 6-1 Q-at Annex 6-40-ak 73,806.78 1,379.88 72,261.36 3,747.96 1,076.67 Domestic Annex 6-10-au 5,899.40 purchase of Annex 6-20-ay 1,076.67 - - - services supported Annex 6-30-ar 12,211.20 by VAT REG TIN Annex 6-40-al 4,745.47 - - 1,153.93 56,090.10 NO. OR with unclear Name, TIN Annex 6-10-av 12,211.20 - - - and Address of the petitioner and Annex 6-1 Q-aw 10,018.80 43,756.80 - 2,314.50 with alteration on Annex 6-40-am the VAT amount 29 with countersign Annex 6-10-ax Annex 6-10-ay Domestic Annex 6-20-az purchase of Annex 6-40-an services supported by VAT REG TIN NO. OR with unclear Name, TIN and Address of the petitioner and with overclaimed input VAT as amount independently 30 computed Domestic purchase of services supported by VAT REG TIN NO. OR with unclear name and address of the 31 petitioner. Domestic purchase of services supported by VAT REG TIN NO. OR with incomplete name 32 of the petitioner. Domestic purchase of services supported by VAT REG TIN NO. OR with incomplete name of the petitioner and without 33 Petitioner's TIN. Domestic purchase of services supported by VAT REG TIN NO. OR with incomplete name of the Petitioner and with wrong 34 petitioner's TIN. Domestic purchase of services supported by VAT REG TIN NO. OR with incomplete name and unclear address of the Petitioner with alteration on the VAT amount with 35 countersign Domestic purchase of services supported by VAT REG TIN NO. OR with 36 wrong Petitioner's t

Macquarie Offshore Services Pty. Ltd.- Philippine Branch vs. CIR, Page 40 of 56 CTA Case No. 9180 DECISION TIN Annex 6-10-az 16,323.40 2,485.64 - 1,921.18 20,730.22 Annex 6-20-ba 96.00 Domestic Annex 6-40-ao 96.00 - - - purchase of 4,353.19 services supported Annex 6-10-ba 4,353.19 - - - 138,031.70 by VAT REG TIN NO. OR with Annex 6-10-bb 63,438.24 26,914.39 32,033.48 15,645.58 219.32 unclear TIN of the Annex 6-10-bc 1,659.00 37 Petitioner Annex 6-20-bb 219.32 - - - Annex 6-30-as 260.79 Domestic Annex 6-40-ap - - 1,659.00 - purchase of 187.50 services supported Annex 6-10-bd - - 260.79 - 170.36 by VAT REG TIN NO. OR with Annex 6-30-au - - 187.50 - wrong Petitioner's Annex 6-30-av TIN and with - - 170.36 - alteration on the Annex 6-30-aw VAT amount with Annex 6-30-ax 38 countersign Domestic purchase of services supported by VAT REG TIN NO. OR with unclear address of the Petitioner with underclaimed input VAT as amount independently 39 computed Domestic purchase of services supported by VAT REG TIN NO. OR with alteration on the VAT amount without 40 countersign Domestic purchase of services supported by VAT REG TIN NO. OR with alteration on the VAT amount without countersign with overclaimed input VAT as amount independently 41 computed Domestic purchase of services supported by VAT Reg No. OR with incomplete 42 Petitioner's name Domestic purchase of services supported by VAT Reg No. OR with wrong 43 Petitioner's TIN Domestic purchase of services supported by VAT REG. TIN NO. OR not dated within the quarter but within the period of claim with altered Petitioner's name without 44 countersign Domestic purchase of services supported 45 by VAT REG. TIN t

Macquarie Offshore Services Pty. Ltd.- Philippine Branch vs. CIR, Page 41 of 56 CTA Case No. 9180 DECISION NO. OR not dated Annex 6-30-av - - 35.89 - 35.89 within the quarter Annex 6-20-bd but within the Annex 6-30-az - 167.14 83.58 - 250.72 period of claim Annex 6-20-be with incomplete Annex 6-30-ba - 14,687.51 346,787.19 42,846.84 404,321.54 Petitioner's name Annex 6-40-ar - - 1,692.65 - 1,692.65 Domestic Annex 6-30-bb purchase of - - 4,200.00 - 4,200.00 services supported Annex 6-30-bc by VAT REG. TIN - - 294.34 129.97 424.31 NO. OR not dated Annex 6-30-bd within the quarter Annex 6-40-as - - 5,214.43 - 5,214.43 but within the period of Annex 6-30-be - - 12,535.71 - 12,535.71 claim,without Annex 6-30-bf Petitioner's TIN 46 and address Domestic purchase of services supported by VAT REG TIN NO. OR without date, Petitioner's name,TIN and 47 address Domestic purchase of services supported by VAT REG. TIN NO. OR but with alteration on the date without 48 countersion Domestic purchase of services supported by VAT REG. TIN NO. OR but with alteration on the date without countersign with overclaimed input VAT as amount independently 49 computed Domestic purchase of services supported by VAT REG. TIN NO. OR with unclear date and incorrrect 50 Petitioner's TIN Domestic purchase of services supported by VAT REG. TIN NO. OR with unclear Petitioner's Name and TIN with underclaimed inputVATas amount independently 51 computed Domestic purchase of services supported by VAT REG TIN NO. OR but without Petitioner's name, TIN and 52 address Domestic purchase of services supported by VAT REG. TIN NO. OR without Petitioner's TIN 53 with altered t

Macquarie Offshore Services Pty. Ltd.- Philippine Branch vs. CIR, Page 42 of 56 CTA Case No. 9180 DECISION Petitioner's Annex 6-20-bf - 10,875.49 325.17 967.18 I address with Annex 6-30-bg countersiQn Annex 6-40-at I Domestic Annex 6-30-bh 12,167.84 purchase of services supported Annex 6-30-bi I by VAT REG. TIN Annex 6-20-bg NO. OR but with Annex 6-30-bj - - 2,322.00 - 2,322.00 alteration on the Annex 6-40-au Petitioner's TIN - - 690.00 - 690.00 without Annex 6-30-bk 54 countersign - 57,160.97 20,235.23 267.75 77,663.95 Annex 6-30-bm Domestic Annex 6-30-bn - - 10,670.40 - 10,670.40 purchase of services supported Annex 6-30-bo - - 1,200.00 - 1,200.00 by VAT REG. TIN NO. OR with Annex 6-20-bi - - 82,901.05 - 82,901.05 inserted Annex 6-40-aw Petitioner's TIN - - 242.14 - 242.14 without Annex 6-40-ax 55 countersign Annex 6-20-bj - 64,022.40 - 13,070.75 77,093.15 Annex 6-40-ay __ Domestic - - - 83.58 83.58 purchase of 257.14 services supported - 42.86 - 214.29 by VAT REG TIN NO. OR with abbreviated 56 address Domestic purchase of services supported by VAT REG TIN NO. OR but VAT amount was not 57 shown separately Domestic purchase of services properly supported by TIN No. OR with 58 incomplete name Domestic purchase of services supported by certified true copy VAT REG TIN NO. OR where VAT amount was not 59 shown separately Domestic purchase of services supported by photocopied 60 VAT Invoice only Domestic purchase of services supported by photocopied VAT Reg. TIN NO. 61 OR Domestic purchase of services supported by TIN NO. VAT OR and with overclaimed input VAT as amount independently 62 computed Domestic purchase of services supported by VAT REG. TIN NO. OR without date, Petitioner's Name,address and TIN No. is not 63 indicated Domestic 64 purchase of t

Macquarie Offshore Services Pty. Ltd.- Philippine Branch vs. CIR, Page 43 of 56 CTA Case No. 9180 DECISION services supported I' by VAT REG. TIN NO. OR not dated Annex 6-20-bk - - 38,936.66 i within the quarter but within the Annex 6-40-az 267.86 38,668.80 period of claim and altered VAT Annex 6-40-ba - - - 818,481.38 818,481.38 amount without - countersign Annex 6-40-bb - - - 11,184.00 11,184.00 Domestic Annex 6-40-bc - - - 30,000.00 30,000.00 purchase of services supported Annex 6-40-bd - 33.60 - 99.64 99.64 by VAT REG TIN 81.66 NO. OR with Annex 6-20-bl - - - 33.60 Petitioner's Name 102.75 65 is unclear Annex 6-20-bn - - - 81.66 Domestic I purchase of services supported Annex 6-20-bo_ L___________��� _- - - 102.751 by VAT REG. TIN NO. OR but wrong Petitioner's TIN 66 NO. Domestic purchase of services supported by VAT REG. TIN NO. OR with inserted Petitioner's TIN and address without 67 countersign Domestic purchase of services supported by VAT REG TIN NO. OR but without BIR 68 authority to print Domestic purchase of services supported by VAT REG TIN NO. OR with alteration on VAT amount without countersign and with underclaimed inputVATas amount independently 69 computed Domestic purchase of services supported by VAT Reg No. OR date not 70 indicated Domestic purchase of services supported by VAT Reg No. OR but VAT amount not shown 71 separately Domestic purchase of services supported by TIN NO. VAT OR not within the quarter but within the period of claim with Petitioner's name written in a printed OR and its address written on a computer printed OR without countersign and 72 without BIR c.

Macquarie Offshore Services Pty. Ltd.- Philippine Branch vs. CIR, Page 44 of 56 CTA Case No. 9180 DECISION authority to print Annex 6-20-bp - 5,057.14 - - 5,057.14 Annex 6-20-bq Domestic Annex 6-20-br - 160.71 - - 160.71 purchase of services supported Annex 6-20-bs - 255.35 - - 255.35 by TIN NO. VAT Annex 6-20-bt OR but VAT Annex 6-20-bu - 9,032.51 - - 9,032.51 amount was not Annex 6-20-bv 73 shown separately - 8,541.96 - - 8,541.96 Annex 6-20-bw Domestic - 5,783.64 - - 5,783.64 purchase of services supported - 352.22 - - 352.22 by TIN No. VAT 74 Registered OR - 746.32_ - - 746.32 Domestic purchase of services supported by VAT REG. TIN NO. OR with altered OR date, with unclear Petitioner's name 75 and TIN Domestic purchase of services supported by VAT REG. TIN NO. OR with alteration on the date but with countersign and with with overclaimed input VAT as amount independently 76 computed Domestic purchase of services supported by VAT REG. TIN NO. OR with alteration on the name of the Petitioner without 77 countersign Domestic purchase of services supported by VAT REG. TIN NO. OR with alteration on the name, TIN No. OR and address of the Petitioner all without 78 countersiqn Domestic purchase of services supported by VAT REG. TIN NO. OR with alteration on the name, TIN No. OR, address and VAT amount of the Petitioner all without 79 countersign Domestic purchase of services supported by VAT REG. TIN NO. OR with alteration on the name, TIN No. OR and address of the Petitioner all without countersign and with overclaimed input VAT as 80 amount ~

Macquarie Offshore Services Pty. Ltd.- Philippine Branch vs. CIR, Page 45 of 56 CTA Case No. 9180 DECISION independently Annex 6-20-bx - 24,816.00 - - 24,816.00 computed Annex 6-20-bv - 17,368.85 - - 17,368.85 Domestic purchase of Annex 6-20-bz - 362.59 - - 362.59 services supported by VAT REG. TIN Annex 6-20-ca - 43,199.99 - - 43,199.99 NO. OR with alteration on the Annex 6-20-cb - 6.54 - - 6.54 name and VAT amount of the Annex 6-20-cc I Petitioner both Annex 6-10-bf without Annex 6-20-cd - 93,433.61 - - 93,433.61 81 countersiqn Annex 6-30-bp Annex 6-40-be 56,504.86 81,029.94 224,816.72 16,424.43 378,775.95 Domestic Annex 6-10-bg purchase of Annex 6-20-ce I services supported Annex 6-30-bq by VAT REG. TIN Annex 6-40-bf 73,357.19 754,579.17 417,414.47 402,895.22 1 ,648,246.06 NO. OR with incomplete name of the Petitioner and with alteration on the TIN No. and address of the Petitioner both without 82 countersion Domestic purchase of services supported by VAT REG. TIN NO. OR with unclear Petitioner's TIN and with underclaimed input VAT as amount independently 83 computed Domestic purchase of services supported by VAT REG. TIN NO. OR but with TIN No., address and VAT amount of Petitioner all not indicated and without BIR 84 authority to print Domestic purchase of services supported by TIN NO. OR but with the name, TIN No., address and VAT amount of the Petitioner all 85 not indicated Domestic purchase of services supported by TIN NO. Non- VAT OR with underclaimed input VAT as amount independently 86 computed Domestic purchase of services supported by OR with notation as not a valid source of 87 input VAT Domestic purchase of services without supporting 88 documents at the t.

Macquarie Offshore Services Pty. Ltd.- Philippine Branch vs. CIR, Page 46 of 56 CTA Case No. 9180 DECISION time of verification Annex 6-30-g - - 1,912.86 - 1,912.86 Annex 6-30-r Domestic - - 85.71 - 85.71 purchase of 7,547,459.59 services supported by VAT REG TIN ' NO. OR not dated within the quarter 149,618.98 but within the 149,618.98 period of claim with overclaimed 56,311.00 inputVATas 56,311.00 amount (56,310.89) independently 89 computed (1.74) 8,391,851.02 Domestic purchase of services supported by VAT REG TIN NO. OR without date and with altered Petitioner's address with 90 countersign Subtotal 1,842,535.35 2,599,905.23 1,326,11 0.48 1,778,908.53 Services Rendered to Annex 6-10-bh 142,862.98 6,756.00 - - Non-Resident Citizens Annex 6-20-cf 142,862.98 6,756.00 Services rendered - - to non-residents without supporting documents at the 1 time of verification Subtotal Importation of Goods Annex 6-20-cg - 56,311.00 - - other than Capital Goods - - - Importation of goods without supporting documents at the 1 time of verification Subtotal 56,311.00 Difference in schedule - (56,31 0.89) - vs. VAT return - Rounding-off difference (0.91) 0.11 0.03 (0.28) TOTAL- OTHER 2,297,427.36 2,784,442.41 1,430,186.72 1,879,795.23 FINDINGS- Relative thereto, for further verification by this Court is the input VAT amount of P6,116,121.79. A scrutiny of the documents presented in support thereof would reveal the existence of alterations. While such alterations were countersigned, the Court cannot verify the authenticity of the signatures and authority of the signatories found therein. Thus, for failure to meet the substantiation requirements under the afore-mentioned VAT law and regulations, the amount of P6,116,121.79 is likewise disallowed. Annex 1ST 2ND 3RD 4TH QUARTER TOTAL Reference QUARTER QUARTER QUARTER Purchase of Goods other than Capital Goods Domestic purchase of goods other than capital goods supported Annex 6-2Q-k - 1 by VAT REG. TIN Annex 6-3Q-i - 52,258.18 91,1Q'].18 143 365.36 t_

Macquarie Offshore Services Pty. Ltd.- Philippine Branch vs. CIR, Page 47 of 56 CTA Case No. 9180 DECISION NO. Invoice with inserted Petitioner's name with counterslon Domestic purchase of goods other than capital goods supported by VAT REG. TIN NO. Invoices with inserted Petitioner's address with Annex 6-3Q-j - - 2 countersign Annex 6-4Q-j 4 744.24 2 284.28 7 028.52 Domestic purchase of goods other than capital goods supported by VAT REG. TIN NO. Invoices not dated within the quarter but within the period of claim with inserted Petitioner's address with - 3 countersion Annex 6-30-k - - 790.71 790.71 Domestic purchase of goods other than capital goods supported by VAT REG. TIN NO. Invoices not dated within the quarter but within the period of claim with alteration on the Petitioner's name with - - - 4 countersion Annex 6-20-1 2 442.86 2 442.86 Domestic purchase of goods other than capital goods supported by VAT REG. TIN NO. Invoices not dated within the quarter but within the period of claim with inserted petitioner's name with Annex 6-2Q-m - 5 countersion Annex 6-30-1 - 118 769.64 91 537.57 210 307.21 Domestic purchase of goods other than capital goods supported by VAT REG. TIN NO. Invoices not dated within the quarter but within the period of claim with altered petitioner's TIN - 6 with countersion Annex 6-20-n - 15 006.15 - 15 006.15 Domestic purchase of goods other than capital goods supported by VAT REG. TIN NO. Invoices with alteration Annex 6-1Q-k on the VAT Annex 6-2Q-o amount with Annex 6-3Q-m 7 countersion Annex 6-40-k 6 096.70 12 360.90 7 544.44 107.09 26 109.13 Domestic purchase of t

Macquarie Offshore Services Pty. Ltd.- Philippine Branch vs. CIR, Page 48 of 56 CTA Case No. 9180 DECISION goods other than capital goods supported by VAT REG. TIN NO. Invoices not dated within the quarter but within the period of claim with altered VAT amount with Annex 6-2Q-p - Annex 6-4Q-I 8 counters ian - 1 841.78 2 110.07 3 951.85 Annex 6-3Q-ah Domestic Annex 6-40-o purchase of Annex 6-2Q-q goods other Annex 6-3Q-n than capital Annex 6-30-o Annex 6-1Q-I goods supported Annex 6-2Q-r Annex 6-3Q-p by certified true Annex 6-4Q-m copy VAT REG. TIN Invoices not dated within the quarter but within the period of claim with inserted Petitioner's name with - 9 countersign - 1 620.00 - 1 620.00 Domestic purchase of goods other than capital 10 goods supported by - TIN NO. invoices - - 197 344.14 806 185.46 806 185.46 6 096.70 202,679.51 SUBTOTAL 810 686.90 1 216 807.25 Purchase of Services Domestic purchase of services supported by VAT REG TIN NO. OR with inserted Petitioner's address with countersign - - 1 249.11 - 249.11 Domestic purchase of services supported by VAT REG. TIN OR not dated within the - - quarter but - 614.76 614.76 within the period of claim with inserted adress 2 with countersign Domestic purchase of services supported by VAT REG. TIN NO. OR not dated within the quarter but within the period of claim with altered VAT amount with - - 3 countersian - 418.92 418.92 Domestic purchase of services supported by VAT REG. TIN NO. OR with alteration on the VAT amount 4 with countersign 126 264.66 237 177.56 46 049.70 98 794.11 508 286.03 Domestic purchase of services supported by VAT REG TIN. t-

Macquarie Offshore Services Pty. Ltd.- Philippine Branch vs. CIR, Page 49 of 56 CTA Case No. 9180 DECISION NO. OR with alteration on the Petitioner's name and address with - 5 countersign Annex 6-3Q-q - - 1 756.73 1 756.73 Domestic purchase of services supported by VAT REG TIN NO. OR with altered invoice date with Annex 6-2Q-s 6 countersign Annex 6-30-s - 6 650.02 153 617.07 - 160 267.09 Domestic purchase of services supported by VAT REG. TIN NO. OR with altered invoice date with countersign, with inserted Petitioner's name with countersign and with altered Petitioner's TIN 7 with countersign Annex 6-30-t - - 19 004.64 - 19 004.64 Domestic purchase of services supported by VAT REG. TIN NO. OR with altered date and Petitioner's address with 8 countersign Annex 6-3Q-u - - 7 350.00 - 7 350.00 Domestic purchase of services supported by VAT REG TIN NO. OR with altered date and VAT amount - 9 with countersign Annex 6-3Q-v - 550.80 - 550.80 Domestic purchase of services supported by VAT REG. TIN NO. OR with altered Petitioner's name with Annex 6-2Q-t 10 countersign Annex 6-3Q-w - 9 012.33 22 454.73 - 31 467.05 Domestic purchase of services supported by VAT REG. TIN NO. OR with altered Petitioner's name, TIN and address with 11 countersigns Annex 6-30-x - - 5 760.00 - 5 760.00 Domestic purchase of services supported by VAT REG. TIN NO. OR with altered Petitioner's name and VAT - 12 with countersign Annex 6-3Q-y - 13 088.97 - 13 088.97 Domestic purchase of services supported by VAT REG TIN NO. OR with Annex 6-2Q-u 13 inserted Annex 6-30-z - 219.776.30 447.21 - 220,223.51 t

Macquarie Offshore Services Pty. Ltd.- Philippine Branch vs. CIR, Page 50 of 56 CTA Case No. 9180 DECISION Petitioner's name with countersion Domestic purchase of services supported by VAT REG TIN NO. OR with inserted Petitioner's name with countersign and with altered TIN Annex 6-2Q-v - 14 with countersign Annex 6-3Q-aa 50 267.64 41 232.86 - 91 500.50 Domestic purchase of services supported by VAT REG TIN NO. OR with altered petitioner's TIN Annex 6-3Q- - 15 with countersion ab - 12 600.00 - 12 600.00 Domestic purchase of services i supported by VAT REG TIN NO. OR with altered petitioner's TIN and address Annex 6-3Q- - - - 16 with countersion ac 27 711.00 27 711.00 Domestic purchase of services supported by VAT REG. TIN NO. OR but with alteration on the Petitioner's Annex 6-2Q-w i address with Annex 6-3Q-ad 801 264.02 17 countersiqn Annex 6-40-n - 78 150.96 366 117.83 356 995.23 Domestic purchase of services supported by VAT REG. TIN NO. OR with altered Petitioner's TIN Annex 6-3Q- 18 with counterslqn ae - - 194 914.80 - 194 914.80 Domestic purchase of services supported by VAT REG TIN NO. OR with altered Petitioner's TIN and VAT with 19 countersigns Annex 6-3Q-af - - 17 234.40 - 17 234.40 Domestic purchase of services supported by VAT REG. TIN NO. OR not within the quarter but within the period of claim and with alteration on name and address of Petitioner but both are with - - 20 countersign Annex 6-2Q-x 106.07 - 106.07 Domestic purchase of services supported by VAT REG. TIN NO. OR with alteration on the name, TIN No. - - 21 and address of Annex 6-20-v 46.77 - 46.77 t

Macquarie Offshore Services Pty. Ltd.- Philippine Branch vs. CIR, Page 51 of 56 CTA Case No. 9180 DECISION the Petitioner with counterslon Domestic purchase of services supported by VAT REG. TIN NO. OR with alteration on the name, address and VAT amount of the Petitioner - - 22 with countersign Annex 6-2Q-z 310 642.95 - 310 642.95 Domestic Annex 6-1Q-be Annex 6-2Q-bc purchase of Annex 6-3Q-at Annex 6-40-ao services Annex 6-3Q-bl supported by Annex 6-2Q-bh VAT REG. TIN Annex 6-40-av NO. OR with Annex 6-2Q- bm overclaimed Annex 6-1Q-aa input VAT as Annex 6-2Q-av Annex 6-3Q-ao amount Annex 6-4Q- independently w 23 computed Annex 6-4Q- 2 707.71 95 162.20 357 489.19 7 073.76 462 432.86 ab Domestic purchase of services properly supported by TIN NO. OR with altered VAT amount with - - 1 194 880.91 24 countersign - 1 194 880.91 Domestic purchase of services supported by TIN NO. VAT OR with alteration on VAT amount 25 with countersion - 803.58 - 806 976.17 807 779.75 Domestic purchase of services supported by VAT Reg No. OR with alteration on the TIN No. of Petitioner - 26 with countersion - 1 607.36 - 1 607.36 Domestic purchase of services supported by VAT Reg. No. OR with underclaimed input VAT as amount independently 27 computed 3 153.00 956.84 2 239.93 - 6 349.77 530.54 Domestic I purchase of 530.54 services supported by - 28 TIN NO. V OR - - Domestic purchase of services properly 29 supported by - - - 675.23 I VAT TIN NO. OR 675.23 I SUBTOTAL TOTAL- FOR CONSIDERATION OF THE 132,125.37 1,010 609.68 2 485 534.45 1 271 045.04 4 899 314.54 HONORABLE COURT 138 222.07 1 213 289.19 2,682 878.59 2 081 731.94 6 116 121.79 Based on the foregoing, out of the P59,537,290.83 reported input VAT on domestic purchases of goods not exceeding 1M, domestic purchases of goods other than capital goods, domestic purchases of services and purchases of services rendered by non-residents, only the amount of ~

Macquarie Offshore Services Pty. Ltd.- Philippine Branch vs. CIR, Page 52 of 56 CTA Case No. 9180 DECISION P45,029,318.02 represents petitioner's valid input VAT, to illustrate: Properly substantiated input VAT on Domestic Purchases of goods not P59,537,290.83 exceeding 1M, Domestic Purchases of Goods other than Capital Goods, Domestic Purchases of Services and Services rendered by non- P8 391 851.02 residents P6 116,121.79 Less: Disallowances P45 029 318.02 Per ICPA Report Per Court's further verification TOTAL We proceed with the substantiation made by petitioner of the P10,137,125.45 amortization of input VAT on purchases of capital goods exceeding P1Million which originated from the P16,219,315.08 input tax deferred on capital goods exceeding PlM from previous quarter and P11,314,512.88 input VAT on purchases of capital goods exceeding 1M for the four quarters of FY 2014, as shown below: Input Tax Deferred on Capital Goods exceeding Total 1M from Previous Quarter P16,219 315.08 Add: Input tax on Capital Goods exceeding 1M P11 314 512.88 ourchased this Quarter P27 533 827.96 Total: Unamortized Input Tax on Capital Goods exceeding 1M P17,396,702.51 Less: Input Tax on Purchases of Capital Goods P10,137,125.45 exceeding 1M deferred for the succeeding period. I Total: Amortization of Input Tax on Capital Goods exceeding 1M Upon perusal of the supporting documents and the !CPA Report, the Court finds that the total amount of P2,496,408.88 [P1,861,962.44 input VAT for the previous years' amortization plus P634,446.44 input VAT for the current year's amortization] should be disallowed for not being substantiated by VAT invoices, to wit: INPUT TAX DEFERRED ON CAPITAL GOODS EXCEEDING 1M FROM PREVIOUS QUARTER Reference Input VAT Allowable Input VAT Other Findings Annex 8-o 1269,514.29 Annex 8-p - 469,028.58 1213,902.86 1 Domestic purchase of capital goods exceeding 165,539.50 12 1 million supported by computer printed TIN VAT invoice with inserted Petitioner's TIN with countersign 2 Domestic purchase of capital goods (services) exceeding 12 1 million supported by TIN VAT OR not dated within the quarter but within the year of claim ~

Macquarie Offshore Services Pty. Ltd.- Philippine Branch vs. CIR, Page 53 of 56 CTA Case No. 9180 DECISION 3 Domestic purchase of capital goods exceeding Annex 8-q 35,250.00 7,050.00 P. 1 million supported by computer printed VAT REG TIN invoice not dated within the quarter but Annex 8-r 18,882.08 3,776.42 within the year of claim with inserted Petitioner's Annex 8-s 14,207.14 3,664.82 with countersign, inserted insertions/alterations are Annex 8-t 186,520.00 83,965.19 substantiated by an OR Annex 8-u 2,698.97 7,872.00 4 Domestic purchase of capital goods exceeding Annex 8-v P.1 million supported by computer printed VAT Annex 8-w P87,535.71 P18,757.65 REG TIN invoice with inserted Petitioner's TIN with Annex 8-x 4,937.14 987.43 countersign and with alteration on the Petitioner's Annex 8-y address with countersign Annex 8-z 465,261.57 206,059.85 5 Domestic purchase of capital goods exceeding Annex 8-aa 19,785.93 10,145.46 P. 1 million supported by VAT REG TIN Invoice with Annex 8-ab 633,068.87 220,533.66 alteration on the VAT amount without countersiqn Annex 8-ac Annex 8-ad 20,666.07 7,085.51 6 Domestic purchase of capital goods exceeding 9,961.33 11,625.45 P. 1 million supported by VAT REG TIN Invoices Annex 8-ae 43,025.09 but not dated within the period of claim Annex 8-af 387,225.79 Annex 8-ag 7,201.06 1,440.21 7 Domestic purchase of capital goods exceeding Annex 8-ah P.1 million supported by VAT REG TIN Invoices Annex 8-ai P-5,400.00 P.1 ,080.00 with alteration on the date without countersign Annex 8-aj 2,556.53 511.31 Annex 8-ak 4,731.63 946.33 8 Domestic purchase of capital goods exceeding Annex 8-al P 1 million supported by computer printed VAT 455,659.61 197,600.92 REG TIN invoice with altered date without - 115,082.14 7,672.14 countersign, incomplete Petitioner's name, inserted TIN without countersign and with altered address of 707,142.86 249,579.83 the Petitioner with countersign 4,500.00 1,588.24 9 Domestic purchase of capital goods exceeding 289,640.68 99,305.38 P 1 million supported by VAT REG TIN Invoice with inserted Petitioner's name without countersign 10 Domestic purchase of capital goods exceeding P 1 million supported by photocopied VAT REG TIN Invoices 11 Domestic purchase of capital goods exceeding P 1 million supported by TIN VAT photocopied invoice not dated within the quarter but within the year of claim 12 Domestic purchase of capital goods exceeding P 1 million supported by TIN VAT invoice not dated within the period of claim 13 Domestic purchase of capital goods exceeding P 1 million supported by VAT REG TIN Invoices but not dated within the period of claim with alteration on the Petitioner's name and with inserted Petitioner's TIN without countersign 14 Domestic purchase of capital goods exceeding P 1 million supported by VAT REG TIN Invoices but not dated within the period of claim with inserted Petitioner's name without countersign 15 Domestic purchase of capital goods exceeding P 1 million supported by TIN VAT invoice with incomplete Petitioner's name (Macquarie Offshore Services Pty Ltd) 16 Domestic purchase of capital goods exceeding P 1 million supported by TIN VAT invoice with inserted Petitioner's name without countersign 17 Domestic purchase of capital goods exceeding P. 1 million supported by computer printed TIN VAT invoice with inserted name and TIN of the Petitioner without countersign and alteration on the Petitioner's address without countersign 18 Domestic purchase of capital goods exceeding P. 1 million supported by photocopied TIN VAT invoice without Petitioner's TIN 19 Domestic purchase of capital goods exceeding P. 1 million supported by photocopied TIN VAT invoice with inserted Petitioner's TIN with countersign 20 Domestic purchase of capital goods exceeding P. 1 million supported by photocopied TIN VAT invoice 21 Domestic purchase of capital goods exceeding P. 1 million supported by Invoices not registered with the BIR 22 Domestic purchase of capital goods (services) exceeding P. 1 million supported by photocopied VAT REG TIN Invoice not dated within the quarter but within the period of claim 23 Domestic purchase of capital goods exceeding P. 1 million supported by VAT REG TIN Invoice not dated within the period of claim with alteration on the VAT amount with countersign 24 Domestic purchase of capital goods exceeding t

Macquarie Offshore Services Pty. Ltd.- Philippine Branch vs. CIR, Page 54 of 56 CTA Case No. 9180 DECISION P 1 million supported by TIN VAT Invoice with Annex 8-am 1,956, 104.07 584,782.05 alteration on the Petitioner's name and TIN without countersign P5,977, 735.08 (81 ,361.82) P1 ,861,962.44 25 The supporting documents not available at the time of verifications 26 Difference between independent computation and per schedule Sub-Total INPUT TAX ON PURCHASES OF CAPITAL GOODS EXCEEDING 1M DURING THE FOUR QUARTERS OF FY 2014 1 Domestic purchase of capital goods exceeding P1 Annex 7-2Q-f P35,088.22 P11 ,838.93 million supported by TIN VAT invoices but not dated within the period of claim Annex 7-1Q-c 601,122.53 232,692.59 Annex 7-30-e 508,879.74 98,492.85 2 Domestic purchase of capital goods exceeding P1 million supported by TIN VAT invoices but not Annex 7-3Q-f 7,593.75 3,796.88 dated within the period of claim with inserted Annex 7-20-g 304,268.57 60,524.94 Petitioner's TIN with countersign Annex 7-30-g Annex 7-10-d 3,438,5 765,333.05 3 Domestic purchase of capital goods exceeding P1 Annex 7-20-h million supported by invoices not valid for input tax Annex 7-3Q-h P4,895,467 .17 (538,232.80) Annex 7-4Q-e P1 0 873,202.25 P634,446.44 4 Domestic purchase of capital goods exceeding P1 P2,496,408.88 million supported by TIN VAT invoices but not dated within the period of claim with alteration on the Petitioner's name and inserted TIN with countersign 5 Domestic purchase of capital goods exceeding P1 million with supports other than VAT Invoices 6 Domestic purchase of capital goods exceeding P1 million without supporting documents available at the time of verifications 7 Difference between independent computation and per schedule Sub-Total TOTAL In addition thereto, upon further consideration and verification of the documents supporting the amortization of the input VAT in the amount of P188,100.55 [P84,292.87 input VAT for the previous years' amortization plus P103,807.68 input VAT for current year's amortization], the Court finds that petitioner failed to fully substantiate its claim as provided under the law, hence, should also be disallowed. In this regard, out of the PlO, 137,125.45 reported amortization of input VAT on purchase of capital goods exceeding 1M, only the amount of P7,452,615.93 represents petitioner's valid claim. For reference: Properly substantiated amortization of input P10 137,125.45 VAT on purchases of capital goods exceeding PlMillion P2,496,408.88 Less: Disallowances P188 100.55 Per ICPA Report P7,452,616.0~ Per Court's further verification TOTAL In sum, petitioner's total allowable input VAT amounted only to P52,481,934.04, computed as follows: t.

Macquarie Offshore Services Pty. Ltd.- Philippine Branch vs. CIR, Page 55 of 56 CTA Case No. 9180 DECISION Total Input VAT for the FY 2014 P69,674 416.28 Less: Disallowances !.CAPITAL GOODS AND SERVICES a. PeriCPA P8,391,851.02 P6,116,121. 79 b. Per further Court P14,507,972.81 verification Subtotal: II. AMORTIZATION ON CAPITAL GOODS EXCEEDING 1M a. PeriCPA p 2,496,408.88 p 188,100.55 b. Per further Court Verification Subtotal: P2,684,509.43 Total Disallowances: P17 192 482.24 P52,481,934.04 I Properly substantiated Input VAT Claim Lastly, considering that petitioner's reported sales for FY 2014 are 99.84�/o zero-rated, the substantiated input VAT in the amount of P52,481,934.04 attributable to its zero- rated sales was not applied against any output tax. Even though the claimed input VAT was carried over by petitioner in its succeeding Quarterly VAT Returns, the same is not sufficient to cover the total output VAT during the year amounting to P863,068.94. Hence, preventing the carry over or application of the input VAT for the next taxable period. In view of the foregoing, petitioner has sufficiently proven its entitlement to a refund or issuance of a tax credit certificate in the reduced amount of P51,536,274.92, representing unutilized input VAT attributable to its zero- rated sales to MFHL for the four quarters of FY ended March 31, 2014, computed as follows: Substantiated P52,481,934.04 Input VAT Claim P863,068.94 (99.84%) Less: Output VAT PHP 51,536,274.92 Less: Percentage attributable to zero rated sales TOTAL WHEREFORE, premises considered, the instant Petition for Review is hereby PARTIALLY GRANTED. Accordingly, respondent CIR is ORDERED TO REFUND or ISSUE A TAX CREDIT CERTIFICATE in the amount of FIFTY-ONE MILLION FIVE HUNDRED THIRTY-SIX THOUSAND TWO HUNDRED SEVENTY-FOUR AND t

Macquarie Offshore Services Pty. Ltd.- Philippine Branch vs. CIR, Page 56 of 56 CTA Case No. 9180 DECISION 92/100 PESOS (P51,536,274.92), representing petitioner's unutilized input VAT attributable to its zero-rated sales for FY ended March 31, 2014. SO ORDERED. ~ N.M~~~C~ CIELITO N. MINDARO-GRULLA Associate Justice WE CONCUR: Presiding Justice ........... AEs~R~~~ustPi.cUeY 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. ROMAN G. DEL"ROSARIO Presiding Justice Chairperson, Special First Division