WELLS FARGO PHILIPPINES SOLUTIONS INC. v. COMMISSIONER OF INTERNAL REVENUE

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY THIRD DIVISION WELLS FARGO PHILIPPINES CTA Case No. 9578 SOLUTIONS, INC., Members: Petitioner, UY, Chairperson, -versus- FASON-VICTORINO, and RINGPIS LIBAN, J.L COM M I S S I O N ER OF Promulgated: INTERNAL REVENUE, Respondent. JUN 2 3 2020 X - - - - - - - - - - - - - - - - - - - - - - - - - ~ - - - - - :( : p ~ f'--: ._ - - - -X RESOLUTION Fabon- Victorino, J .: Cha llenged in respondent's Motion for Reconsideration 1 dated December 13, 2019 is the Decision2 dated November 12, 2019 promulgated by t he Court, decreeing its ruling as follows: WHEREFORE, the instant Petition for Review filed by petitioner Well s Fargo Philippines Solutions, Inc. on April 17, 2017, is hereby PARTIALLY GRANTED. Acco rdingly, respondent is hereby DIRECTED TO REFUND in favor of petitioner the amount of P24,116,899.61, representing petitioner's excess payment of creditable withholding taxes for the ta xa ble year 2014. SO ORDERED. / Docket, pp. 1893-1895. 2 Ibid. at pp. 1866-1884.

RESOLUTION CTA Case No. 9578 Respondent maintains that proof of actual remittance to the Bureau of Internal Revenue (BIR) of the taxes withheld is a precondition for the grant of claim for refund of creditable withholding tax (CWT). Allegedly under the law, petitioner is required to present a Certification from the BIR Revenue Accounting Division (RAD) indicating that the taxes withheld by its withholding agent were indeed remitted to the BIR. For failure of petitioner to satisfy this requirement, its CWT refund claim must be denied in its entirety. In refuting the above argument3, petitioner counters that the onus of establishing remittance of CWTs lies with the income payor-withholding agent and not with the income payee-taxpayer such as itself, citing jurisprudence4 as well as the Decision5 of this Court as authorities. Besides, it presented to the Court the pertinent Certificate of Income Tax Withheld6 indicating that the corresponding income taxes were indeed withheld by its withholding agent. Even, assuming that the law requires proof of actual remittance, the same was complied with when it presented documents7 showing actual remittance of the CWTs to the BIR. Respondent's arguments are obviously flawed and must be rejected. In Commissioner of Internal Revenue vs. Univation Motor Philippines, Inc. (formerly Nissan Motors Philippines, Inc.),8 the Supreme Court enumerated the three essential conditions for the grant of a claim for refund of creditable withholding income tax, to wit: (1) the claim is filed with the CIR within the two-year period from the date of payment of the tax; (2) it is shown on the return of the recipient that the income payment received was declared as part of the gross income; and (3) the fact of withholding is established by a copy of a statement duly issued by the payor to the payee 3 Petitioner's Comment/Opposition (To Respondent's Motion for Reconsideration dated December 13, 2019). 4 Republic of the Philippines vs. Team (Philippines) Energy Corporation, G.R. No. 188016, January 14, 2015. 5 Commissioner of Internal Revenue vs. Univation Motor Philippines, Inc. (formerly Nissan Motor Philippines, Inc.), CTA EB No. 1789, July 5, 2019. / 6 Exhibit P-16. 7 Exhibit P-15. 8 G.R. No. 231581, July 12, 2019.

RESOLUTION CTA Case No. 9578 showing the amount paid and the amount of the tax withheld therefrom. Contrary to respondent's protestation, the Tax Code, as amended, as well as the numerous jurisprudence on the matter do not require the taxpayer-claimant to adduce proof of actual remittance of the tax withheld for a claim for refund to prosper. The reason is simple. The burden is on the income payor-withholding agent and not on the income payee-taxpayer, such as petitioner, who must establish the fact of withholding, which it did by presenting the pertinent Certificate of Taxes Withheld at Source (BIR Form No. 2307) 9 issued by its withholding agent. Given that the two other requisites 10 for the grant of CWT refund were likewise satisfactorily complied with by petitioner, the grant of CWT refund forTY 2014 to the extent ofP24,116,899.61 in its favor was in order. WHEREFORE, respondent's Motion for Reconsideration dated December 13, 2019 is DENIED. The challenged Decision dated November 12, 2019 is AFFIRMED. SO ORDERED. We Concur: ERL~P. UY Associate Justice (Inhibited) MA. BELEN M. RINGPIS-LIBAN Associate Justice 9 See Note 6. 10 See pages 9-17, challenged Decision.