MSCI HONG KONG LIMITED v. COMMISSIONER OF INTERNAL REVENUE

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY SPECIAL THIRD DIVISION MSCI HONG KONG LIMITED, CTA Case No. 9392 Petitioner, Members: -versus- FABON-VICTORINO, and RINGPIS LIBAN, J..L. COMMISSIONER OF Promulgated: INTERNAL REVENUE, Respondent. X- - - - - - - - - - - - - - - - - - - - - - - - ?--_ - - - - - ~ :-~ t' ~ "7 .- - - - - - X RESOLUTION Fabon- Victorino, J. : For action is respondent's Motion for Partial Reconsideration dated March 13, 2019, 1 impugning the Decision2 dated February 20, 2019, the fal/o of which reads as follows: WHEREFORE , the instant Petition for Review is hereby PARTIALLY GRANTED . Accordingly, respondent Commissioner of Internal Revenue is hereby DIRECTED to REFUND or ISSUE A TAX CREDIT CERTIFICATE in favour of petitioner MSCI Hong Kong Limited in the reduced amount of P5, 377, 036.52, representing its unutilized and excess input VAT attributable to its zero- rated sales for the four quarters of calendar year 2014. SO ORDERED. 1 Docket, pp. 1121-1126. 2 Ibid. at pp. 1094-1119.

RESOLUTION CTA Case No. 9392 Respondent maintains that petitioner failed to convincingly prove that its sales of services to its clients are subject to zero-rating. Besides, a fragment of the VAT official receipts (ORs) and/or invoices issued by petitioner's suppliers failed to indicate VAT as a separate item, some do not contain the quantity, unit cost, as well as description of goods, properties, or services in violation of Section 113 of the National Internal Revenue Code (NIRC), as amended. There are also no indications of authority to print (ATP). Some do not bear petitioner's tax identification number (TIN), as well as its registered address. For these reasons, respondent insists that petitioner's refund claim for the four (4) quarters of CY 2014 must be rejected. In refutation, 3 petitioner counters that respondent's contentions are mere speculations to the effect that its evidence failed to prove that its sales of services are subject to zero-rating under Section 108(B)(2) of the NIRC, as amended. For petitioner, it has more than sufficient evidence to support the fact that it rendered management services to non-resident foreign corporation, i.e. MSCI Inc., and that it was paid in US Dollars duly accounted pursuant to prevailing rules and regulations. For petitioner, the Court correctly ruled that its sales of services are subject to VAT at zero percent (0%). And even granting that the said sales were subject to 12% VAT, respondent may not possibly impose taxes without a valid assessment as in this case. Contrary to respondent's claim, the ORs issued relative to its zero-rated sales of service are compliant with the invoicing requirements under Section 113 of the NIRC, as amended. As found by the Court, the said ORs are: 1) original duplicate copies; 2) contains words "VAT REG" and "TIN;" 3) Amounts were shown under item "zero-rated sales;" 4) BIR's ATP was duly indicated in the documents; and 5) the name(s) of the customer(s) is also indicated. The motion must be denied. I 3 Petitioner's Comment dated April 23, 2019, docket, unpaged.

RESOLUTION CTA Case No. 9392 It cannot be denied that the matters put forward by respondent in his Motion or Partial Reconsideration have been squarely addressed and meticulously passed upon by the Court in the impugned Decision of dated February 20, 2019. At the risk of being repetitive, let it be stressed that petitioner was able to satisfactorily discharged its burden of demonstrating its right for refund, albeit partially, of excess and unutilized input taxes imputable to its zero-rated sales covering the four (4) quarters of CY 2014 in the sum of P5,377,036.52 (out of P7,338,142.90). There being no formidable argument warranting a reversal, much less a modification of the impugned Decision dated February 20, 2019, respondent's Motion for Partial Reconsideration dated March 13, 2019 is DENIED. SO ORDERED. I Concur: ... (b.#.,... /'- MA. BELEN M. RINGPIS-LIBAN Associate Justice