MANULIFE DATA SERVICES, INC., v. COMMISSIONER OF INTERNAL REVENUE

Republic of the Philippines COURT OF TAX APPEALS Quezon City SECOND DIVISION MANULIFE DATA SERVICES, CTA Case No. 8 7 01 INC., Me m b ers: Petitioner, CASTANEDA, JR., Chairp erson CASANOVA, and -versus- COTAN GCO-MANALASTAS, J1. COMMISSIONER OF INTERNAL Promulgate d: REVENUE, / X OCT Z82015 Respondent. J o / '"' _ x----------- -- ---- -- -- -- -- -- ------- - ---- ----------------------------------------- --x DECISION CASANOVA, ] . : This Petition for Review, filed by petit ione r Ma nulife Data Se rvices, Inc., s eeks the refund or issuance of tax credit cer t ificate of the amoun t of P29,406,541.2 3, repres enting petitioner's alleged excess and unutilized excess VAT payments attributable to its VAT a nd zero-ra ted sales for the 1st to the 4 th qua rters of Calend ar Year (CY) 2 011. Petitioner is a foreign corpora tion duly registered with and a uthori zed by the Securit ies a nd Excha nge Commission ("SEC") to ope rate as a Regional Operating Headquarte rs ("ROHQ") with principal office address at Manulife Building, UP North Scie nce and Technology Park, Commonwealth Avenue, Dilima n, Quezon City.l Responde nt is the Commissioner of Inte rna l Revenue, presently in the pers on of the Honorable Kim Ja cinto-He nares, who holds office at the 5th Floor BIR Na tional Office Building, Agha m Road, Dilima n, Quezon City, vested w ith the powe r to d ecide tax cases, including clai ms fo r refund a nd/or tax cre dits pursua nt to Section 4 of the 1997 National Intern al Rev enue Code, as a me nded.2..--- 1 Par. 1, Petition for Revi ew, Docket (Vol. 1), p . 14 2 Par. 1.5 and 1.6, St ipu lation of Fact s, Joint Stipu lati on of Fact s and Issues (JSFI), Docket (Vol. II), p. 714

Decision CTA Case No. 8701 Page 2 of45 Petitioner, as ROHQ, is engaged in performing qualifying services to its affiliates and related parties in the Asia-Pacific Region and other foreign markets. It is a VAT-registered entity as evidenced by its Certificates of Registration (BIR Form 2303) OCN 3RC00003308243 and OCN 3RC00004216264 both dated March 9, 2006, issued by the Bureau of Internal Revenue, Revenue Region No. 007, Revenue District No. 039 and Revenue Region No. 007, Revenue District No. 038, respectively. For the 1st to the 4th quarter of CY 2011, petitioner generated the following VAT-able sales and zero-rated sales which were directly attributable to services rendered to its affiliates doing business outside the Philippines, viz: CY 2011 VAT-able Sales Zero-rated Sales 1st Quarter 2nd Quarter r 123,879.72 r 325,131,825.82 3rct Quarter 4th Quarter 1,972,899.62 322,609,555.60 255,132.50 331,372,504.80 1,070,390.25 456,579,564.39 Petitioner accumulated input VAT for CY 2011 from its domestic purchases of supplies and services as well as from purchase of capital goods which remained unutilized and is now the subject of the instant claim. Petitioner's input VATS for 2011 is herein below summarized, to wit: Consolidated for CY 2011 Purchases Input VAT Purchase of capital goods not 17,916,693.81 2,150,003.26 exceeding P1M 7,117,654.20 7,610,074.36 Domestic purchase of goods 158,783,956.18 1,003,315.98 other than capital goods 26,845,196.13 19,054,074.75 Domestic purchase of services Current portion of Input Tax 210,663,500.32 (410,927.13) on purchases of capital goods 29,406,541.23 exceeding Php1 Million Less: Output VAT Total Current Purchases 'Annex "B" to Petition for Review, Docket (Vol. 1), p. 39 4 Annex "B-1" to Petition for Review, Ibid, p. 40 5 No. 13, Facts, Petition for Review, Docket (Vol. 1), p. 18

Decision CTA Case No. 8701 Petitioner filed its VAT and Income Tax Returns6, which was duly received by respondent on the following dates: Quarterly VAT Return, Date Filed 1st Quarter of 2011 25 April 2011 Quarterly VAT Return, 25 July 2011 2nd Quarter of 2011 22 August 2011 Amended Quarterly VAT Return, 25 October 2011 2nd Quarter of 2011 25 January 2012 Quarterly VAT Return, 13 April2012 3rct Quarter of 2011 25 April2012 Quarterly VAT Return, 10 September 2012 4th Quarter of 2011 25 October 2012 Amended Quarterly VAT Return, 25 January 2013 4th Quarter of 2011 26 March 2013 Quarterly VAT Return, 15 April 2013 1st Quarter of 2012 Amended Quarterly VAT Return, 2nd Quarter of 2012 Quarterly VAT Return, 3rct Quarter of 2012 Quarterly VAT Return, 4th Quarter of 2012 Amended Monthly VAT Declaration for the month of February 2013 Income Tax Return for 2011 with attached Audited Financial Statement On March 27, 2013, petitioner filed with respondent, through the Revenue District Office No. 38 ("ROO 38"), its administrative application for refund or issuance of tax credit certificate for its excessjunutilized input for the 1st to 4th quarters of 201 F. Since no action has been taken by respondent on petitioner's administrative claim for refund/issuance of tax credit certificate, petitioner filed the instant Petition for Review. On September 17, 2013, respondent filed her Answer and interposed the following Special and Affirmative Defenses, to wit:,. 6 No. 1.8, JSFI, Stipulation of Facts, Docket (Vol. II), p. 714 7 Par. 14, Ill. Facts, Petition for Review, Docket (Vol. 1), p. 18

Decision CTA Case No. 8701 "6. Petitioner contends that it is entitled for a tax refund or tax credit certificate in the amount of PESOS: TWENTY-NINE MILLION FOUR HUNDRED SIX THOUSAND FIVE HUNDRED FORTY-ONE AND 23/100 (Php29,406,541.23) of its excess and unutilized input VAT taxes for the 1st to 4th quarters of calendar year 2011. 7. Section 112 Paragraphs (A) and (C) of the National Internal Revenue Code has this to say on Refund or Tax Credits of Input Tax and the Period within which to file Refund of Input Taxes, to wit: 'Section 112. Refund 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 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: xxxxxx' 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 (1201 days from the date of submission ofcomplete documents in support of the application filed in accordance with Subsection (Al hereot '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.r

Decision CTA Case No. 8701 Page 5 of45 � expiration of the one hundred twenty day- period, appeal the decision or the unacted claim with the Court of Tax Appeals. 8. Claims for refund are strictly construed against the taxpayer as the same partake of an exemption; 9. Petitioner has the burden to show proof that the taxes were erroneously or illegally paid, hence, failure on the part of the Petitioner to prove the same is fatal to its cause of action; 10. Petitioner should prove the legal basis in claiming the amount to be refunded; 11. In COMMISSIONER OF INTERNAL REVENUE VS. SAN ROQUE POWER CORPORATION, G. R. No. 187485, the Honorable Supreme Court has this to say on undisputed excess input VAT, to wit: 'xxx Well-established is the rule that tax refunds or credits, just like tax exemptions, are strictly construed against the taxpayer. The burden is on the taxpayer to show that he has strictly complied with the conditions for the grant ofthe tax refund or credit.' 12. In COMPAIGNIE FINCANCIERE SUCRES ET DENREES vs. COMMISSIONER OF INTERNAL REVENUE, GR No. 133834 August 28, 2006 the Honorable Supreme Court ruled, to wit: 'xxx Tax refunds are a derogation of the State's taxing power. Hence, like tax exemptions, they are construed strictly against the taxpayer and liberally in favor of the State. Consequently, he who claims a refund or exemption from taxes has the burden of justifying the exemption by words too plain to be mistaken and too categorical to be misinterpreted.' On December 27, 2013, petitioner filed a Motion To Commission an Independent Certified Public Accountant which motion was granted by the Court in the hearing on January 29, 2014.~

Decision CTA Case No. 8701 Page 6 of45 The parties filed their Joint Stipulation of Facts and Issue8 on January 10, 2014 and the same was subsequently approved and adopted by the Court in its Pre-Trial Order9 dated January 23, 2014. After presentation of its evidence, petitioner filed its Formal Offer of Exhibitslo thru registered mail on May 23, 2014, without respondent's comment thereon. In a Resolution11 promulgated on July 24, 2014, this Court resolved to admit petitioner's exhibits, except for the following which were denied admission, viz: (a) Exhibits "P-2, P-57, P-58, P-59, P-60 and P-2206 to P-2217" for failure of petitioner to submit the originals for comparison; (b) Exhibits "P-32, P-33, P-34, P-2327, P-1200b, P- 1211b, P-1219b, P-1482b, P-1504b, P-1512b, P-1783b, P- 1797b, P-1803b, P-2093b, P-2096b and P-2115b to P- 2122b" for not being found in the records of the case; and (c) Exhibits "P-2249 to P-2276" for not being identified during trial and for failure of petitioner to submit the originals for comparison. In the hearing on September 10, 2014, respondent's counsel manifested that she has no witness to present in this case, and, upon motion, the parties were granted thirty (30) days from September 10, 2014 or until October 10, 2014 to file their memoranda, after which the case shall be considered submitted for decision. On September 26, 2014, respondent filed her Respondent's Memorandum while petitioner, after an extension of fifteen (15) days granted by the Court, filed its Memorandum For Petitioner on October 23, 2014. The case was considered submitted for decision per Resolution promulgated on October 28, 2014;z. 8 Docket (Vol. II), pp. 713-717 9 Ibid, pp. 727-732 10 ld., pp. 803-830 11 ld., pp. 886-887

Decision CTA Case No. 8701 Page 7 of45 As jointly stipulated by the parties, the sole issue to be resolved is "whether or not petitioner is entitled to the issuance of a tax credit certificate for its unutilizedfexcess input VAT payments for the 1st to 4th quarters of 2011 amounting to a total of Php29,406,541.23". Petitioner anchors its claim on Section 110(8) and 112(A) of the National Internal Revenue Code (NIRC) of 1997, as amended, which, respectively, reads as follows: "SEC. 110. Tax Credits. - XXX. (B) Excess Output or Input Tax. - If at the end of any taxable quarter the output tax exceeds the input tax, the excess shall be paid by the VAT-registered person. If the input tax exceeds the output tax, the excess shall be carried over to the succeeding quarter or quarters. Provided, however, that any input tax attributable to the purchase of capital goods or to zero-rated sales by a VAT-registered person may at his option be refunded or credited against other internal revenue taxes, subject to the provisions of Section 112. 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(8)(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 sale and also in taxable or exempt sale of goods or properties or 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 th~

Decision CTA Case No. 8701 Page 8 of45 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." Under the afore-quoted provisions, in order to be entitled to a refund or tax credit of input VAT due or paid attributable to zero-rated or effectively zero-rated sales, the following requisites must be met/complied with, to wit: (1) there must be zero-rated or effectively zero-rated sales; (2) that input taxes were incurred or paid; (3) that such input taxes are attributable to zero-rated or effectively zero-rated sales; (4) that the input taxes were not applied against any output VAT liability; and (5) that the claim for refund was filed within the two-year prescriptive period. For the four quarters of taxable year 2011, petitioner had duly filed its Quarterly VAT Returns with the BIR declaring the following: 1st Quarter 2nd Quarter Exhibit "P-36" Exhibit "P-35" p 1 972 899.62 322 609 555.60 Vatable Sales/Receipts p 123 879.72 P324,582,455.22 Zero-Rated Sales/Receipts Total Sales/Receipts 325 131 825.82 P325,255,705.54 Output Tax Due p 14 865.57 p 236 747.95 Less: Allowable Input Tax 43 285 603.64 52 327 649.41 12 Input Tax Carried Over from Previous Quarter Input Tax Deferred on Capital Goods Exceeding P1Million 18 266 771.54 16 717 259.31 from Previous Quarter Current Transactions 307 150.42 760,417.33 Purchase of Capital Goods not exceedinq P1Million 445 825.63 1 214,205.61 Purchase of Capital Goods exceeding P1Million 335 591.07 Domestic Purchases of Goods Other than Capital Goods 12 155 684.18 188,512.90 Domestic Purchase of Services 2 268 135.69 12 Should be P52,327,649.40.

Decision CTA Case No. 8701 Page 9 of45 Total Allowable Input Tax 74 796 626.48 73 476,180.25 13 Less: Deductions from input tax 16 717 259.31 16 040 015.07 Input tax deferred for the succeeding period 5,736 852.20 VAT Refund[TCC claimed 12 380 003.61 Total Allowable Input Tax 52 342 514.97 45 056,161.57 14 Net VAT Payable/(Overpayment) P52,327,649.4115 p 44,819,413.61 3rd Quarter 4th Quarter Total Exhibit ''P-39" Exhibit "P-38" p 1 072 480.88 Vatable Sales/Receipts p 255 132.50 366 429 620.13 p 3 424,392.72 Zero-Rated Sales/Receipts Total Sales/Receipts 331 372 504.80 P367 502,101.01 1 345 543 506.35 P331 627,637.3116 P1,348,967,899.07 Output tax due p 30,615.90 p 128,697.71 p 410,927.13 Less: Allowable Input Tax 44 819 413.61 49 049 300.28 43 285 603.64 Input Tax Carried Over from Previous Quarter 16 040 015.07 15 594 680.41 18 266,771.54 Input Tax Deferred on Capital Goods Exceeding P1Million from Previous 720 852.71 361 582.78 2 150 003.24 Quarter 1 423 402.19 137 990.12 3 221 423.55 156 006.75 Current Transactions 174,007.79 3 133 349.65 854,118.51 Purchase of Capital Goods not 1 496,905.22 19,054,074.74 exceedinq P1Million Purchase of Capital Goods exceedinq P1Million Domestic Purchase of Goods Other than Capital Goods Domestic Purchase of Services Total Allowable Input Tax 64 674 596.59 68 432 909.99 86 831 995.22 Less: Deductions from input tax 15 594 680.41 13 878 120.81 13 878 120.81 Input Tax on Purchases of Capital 11 997,999.50 30 114 855.31 Goods exceeding P1Million deferred - 42 556,789.68 42 839,019.11 for the succeeding period 49,079 916.18 VAT Refund[TCC claimed Total Allowable Input Tax Net VAT Pavable/(Overpayment) p 49,049,300.28 p 42,428,091.98 p 42,428,091.98 As indicated in the returns, petitioner's excess input VAT arising from its domestic purchases of goods not exceeding PlMillion, domestic purchases of goods other than capital goods, domestic purchases of services and amortization of input VAT on purchases of capital goods& 13 Should be P73,476,180.24. 14 Should be P45,056,161.56. 15 Should be P52,327,649.40. 16 Should be P331,627,637.30.

Decision CTA Case No. 8701 Page 10 of45 exceeding P1Million for the four quarters of 2011 amounted to P29,668,270.78, broken down as follows: 1st Quarter 2nd Quarter Input Tax Deferred on Capital Goods exceeding P1Million from p 18,266,771.54 p 16 717,259.31 Previous Quarter Add: Input Tax on Capital Goods exceeding P1Million Purchased this 445,825.63 1,214 205.61 18 712 597.17 17 931 464.92 Quarter Total Unamortized Input Tax on Capital Goods exceeding P1Million 16 717 259.31 16 040 015,07 Less: Input Tax on Purchases of Capital Goods exceeding P1Million 1 995,337.86 1,891 449.85 deferred for the succeeding period 307 150.42 760 417.33 Amortization of Input Tax on Capital Goods exceeding P1Million 335 591.07 188 512.90 Add: Input Tax on - 12 155,684.18 2 268 135.69 Domestic Purchases of Capital Goods not Exceeding P1Million P14,793 763.53 p 5 108 515.77 Domestic Purchases of Goods Other than Capital Goods Domestic Purchase of Services Total Allowable Input Tax 3rd Quarter 4th Quarter Total Input Tax Deferred on Capital Goods exceeding p 16,040 015.07 p 15 594 680.41 p 18 266,771.54 P1Million from Previous Quarter 1,423 402.19 Add: Input Tax on Capital Goods exceeding 137 990.12 3 221 423.55 17 463 417.26 P1Million Purchased this Quarter 15 732 670.53 21 488 195.09 Total Unamortized Input Tax on Capital Goods 15 594 680.41 1,868,736.85 13 878,120.81 13,878 120.81 exceeding P1Million 1 854,549.73 7 610 074.29 Less: Input Tax on Purchases of Capital Goods 720 852.71 174 007.79 361 582.78 2 150 003.24 exceeding P1Million deferred for the 1 496 905.22 succeedinq period 156 006.75 854 118.51 Amortization of Input Tax on Capital Goods P4,260,502.57 exceedinq P1 Million 3 133 349.65 19,054 074.74 Add: Input Tax on - P5,505,488.91 P29,668,270.78 Domestic Purchases of Capital Goods not Exceeding P1 Million Domestic Purchases of Goods Other than Capital Goods Domestic Purchases of Services Total Allowable Input Tax Out of the reported excess input VAT for the four quarters of 2011 in the amount of P29,668,270.78, petitioner is claiming refund in the amount of P29,406,541.23 alleging that the same is attributable to its zero-rated sales of services for the same period. We shall first determine petitioner's compliance with the fifth requisite, timeliness of the filing of the claim. Under Section 112(A), the application for tax credit certificate/refund of unutilized excess input VAT must be filed within two years after the close of the taxable quarter when the zero rated or effectively zero-rated sales were made.,-

Decision CTA Case No. 8701 The present claim covers the four taxable quarters of 2011 which closed on March 31, 2011; June 30, 2011; September 30, 2011 and December 31, 2011. Counting two years from the said dates, petitioner had until March 31, 2013; June 30, 2013; September 30, 2013 and December 31, 2013, respectively, within which to file its administrative claim for tax credit certificate/refund. Thus, petitioner's administrative claim for refund was seasonably filed on March 27, 2013, as shown below: CY 2011 Close of the Last Day to File Date of Filing of Taxable Quarter Administrative Administrative 1st Quarter 2nd Quarter March 31, 2011 Claim Claim 3rd Quarter June 30, 2011 4th Quarter September 30, 2011 March 31, 2013 March 27, 201317 December 31, 2011 June 30, 2013 September 30, 2013 December 31,2013 As to the timeliness of petitioner's judicial appeal, Section 112(C) of the NIRC of 1997, as amended, provides that: "SEC. 112. Refunds or Tax Credits ofInput Tax.- 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.'~ 17 Petition for Review, Annex "H", Docket (Vol. 1), p. 75; Respondent's Pre-Trial Brief, Part II, Summary of Admitted Facts, par. 3, Docket (Vol. 1), p. 91.

Decision CTA Case No. 8701 Page 12 of45 Applying Section 112(C) of the NIRC of 1997, as amended, petitioner's judicial claims for the first, second, third and fourth quarters of 2011 were timely filed within the "120-30" day period, as shown below: CY 2011 Date of Filing of End of 120 days End of 30 days Date of Filing of 1st Quarter Administrative for the BIR from the Judicial Claim 2nd Quarter 3rd Quarter Claim Commissioner to expiration of the 4th Quarter 120 days decide on the claim March 27, 2013 July 25, 2013 August 24, 2013 August 23, 201318 Clearly from the above, petitioner's judicial claims for the four quarters of taxable year 2011 were timely filed within the "120-30" day period required under Section 112(C) of the NIRC of 1997, as amended. Anent the first requisite, petitioner alleges that its sales of services to its foreign affiliates who are all engaged in business conducted outside the Philippines, and which services were paid for in United States Dollars inwardly remitted to the Philippines and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP) qualify for VAT zero rating under Section 108(8)(2) of the NIRC of 1997, as amended, which states that: "SEC. 108.-Value-added Tax on Sale of Services and Use or Lease ofProperties.- XXX XXX XXX (B) Transactions Subject to Zero Percent (0%) Rate.-- The following services performed in the Philippines by VAT-registered persons shall be subject to zero percent (Oo/o) rate: (1) Processing, manufacturing or repacking goods for other persons doing business outside the Philippines which goods are subsequently exported, where the services are paid for in acceptable foreign currency and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP);@.' 18 Docket (Vol. 1), p. 14.

Decision CTA Case No. 8701 Page 13 of45 (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);" In the case of Commissioner of Internal Revenue vs. Burmeister and Wain Scandinavian Contractor Mindanao, Inc. 19, the Supreme Court held that in order for the supply of services to be VAT zero-rated under Section 108(8)(2) of the NIRC of 1997, as amended, the following requisites must be met: 1. the services must be other than processing, manufacturing or repacking of goods; 2. the recipient of such services is doing business outside the Philippines; and 3. payment for such services must be in acceptable foreign currency accounted for in accordance with the BSP rules and regulations. On the first requisite, it is undisputed that petitioner is a registered VAT taxpayer2o with license issued by the Securities and Exchange Commission (SEC) to operate as a Regional Operating Headquarters (ROHQ) in the Philippines and 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.21 Such services are not the same category as "processing, manufacturing or repacking of goods". As to the second requisite of proving that its clients for the subject period of claim are non-resident foreign corporations doing business outside the Philippines, petitioner presented Certifications of Non- Registration of Corporation/Partnership issued by the Republic of the..,.. 19 G.R. No.153205, January 22, 2007. 20 JSFI, Stipulation of Facts, par. 1.4, Docket (Vol. II), p. 713. 21 Exhibit "P-12".

Decision CTA Case No. 8701 Philippines Securities and Exchange Commission (SEC), Service Agreements, Certificate/Articles of Incorporation and other documents, summarized as follows: Exhibit Documents John Hancock Life Insurance "P-3" Services Agreement "P-4" Addendum to the Service Agreement "P-19" Certification of Non-Registration of Company Amended Articles of Redomestication (indicating the change of name of The "P-18" Manufacturer's Life Insurance CompaOYl_USA) to John Hancock Articles of Redomestication of the Manufacturer's Life Insurance Company (USA) Manulife International) Ltd. "P-1" Business Processil}g Services Agreement "P-15" Certification of Non-Registration of Company Certificate of Incorporation "P-14" Memorandum of Association First Schedule to the Companies Certificate of Deposit of Memorandum of Association and by Laws Certificate of Registration of Change of Name of Overseas Company showing the change of name from Manulife (Bermuda) Limited to Manulife (International) "P-14-a" Limited Manulife Asset Management (Hong Kong) Limited "P-8" Services Agreement "P-24" Certification of Non-Registration of Company "P-23-a" Business Registration Certificate "P-23-b" Assessment Demanding Final Tax I Notice for Payment of Provisional Tax "P-23-c" Notice of Refund of Tax "P-23-d" Articles of Association "P-23-e" Memorandum of Articles and Association (Hua Tse Enterprises Limited) Manulife Asset Management (Malaysia) Sdn. Bhd. "P-9" Master Administrative Services Agreement "P-25" Certification of Non-Registration of Company Manulife Asset Management (Singapore) pte, Ltd. "P-10" Services Agreement "P-27" Certification of Non-Registration of Company Manulife Insurance Berhad "P-6" Service Agreement "P-20" Certification of Non-Registration of Company Manulife Singapore Pte. Ltd. IIP-T' Master Services Agreement "P-22" Certification of Non-Registration of Company Memorandum of Association "P-21-a" Articles of Association "P-21-b" Certificate of Incorporation of Private Company "P-21-c" Certificate of Residence for the purpose of claiming VAT refund PT Asuransi Jiwa Manulife Indonesia "P-29" Certification of Non-Registration of Company

Decision CTA Case No. 8701 Page 15 of45 The Manufacturer's Life Insurance Company "P-5" Master Administrative Services Aqreement "P-31" Letters Patent "P-31-a" Patent of Amalqation "P-31-b" Certificate of Confirmation "P-31-c" Certificate of Good Standinq In relation to the third requisite, Sections 113(A)(2), (8)(1), (2)(c) and (3) of the NIRC of 1997, as amended, as implemented by Sections 4.113-1(A)(2), 8(1) and (2)(c) of Revenue Regulations (RR) No. 16-05, as amended, provide that a VAT taxpayer, like herein petitioner, shall for every for every lease of goods or properties, and for every sale, barter or exchange of services, issue a VAT official receipt which must contain the following information: "SEC. 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 (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: (1) A statement that the seller is a VAT-registered person, followed by his Taxpayer's Identification Number (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 value-added tax: Provided, That: XXX XXX XXX (c) If the sale is subject to zero percent (0%) 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 (underlining supplied)#-

Decision CTA Case No. 8701 Page 16 of45 SEC. 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 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) lfthe sale is subject to zero percent (0%) VAT, the term 'zero-rated sale' shall be written or printed prominently on the invoice or receipt;" (underlining supplied) Pursuant to the foregoing provJswns, the foreign currency remittances referred to under Section 108(8)(2) of the NIRC of 1997, as amended, must likewise be supported by VAT zero-rated official receipts. To prove that it rendered services to its foreign affiliates and was paid in US dollars duly accounted for in accordance with the rules and regulations of the BSP for the four quarters of CY 2011, petitioner,..._

Decision CTA Case No. 8701 presented VAT zero-rated official receipts22, VAT zero-rated sales invoices23, Schedule of Zero-Rated Sales24, Summary of Bank Certifications of Inward Remittances for Payments Received from Foreign ClientsZ5 as well as bank statements26 and bank credit advices27 from Citibank, which were examined by the Court-commissioned Independent CPA firm, Constantino Guadalquiver & Co., through its Partner, Ms. Katherine 0. Constantino. In her report dated February 28, 2014, Ms. Constantino noted the following findings:zs Findings 1st Quarter 2nd Quarter 3rd Quarter 4th Ouarter Total Properly Supported by 165 383 915.60 In Philippine Pesos 699 824 978.66 Zero-Rated OR29 23 274 875.95 94 675 575.24 The Manufacturer's Life 167 358 227.93 178 687 560.06 188 395 275.07 Insurance Company 8,903.04 24 714 955.33 25 100 064.72 21 585 679.24 98 428.00 Manulife {International) 1 616 213.20 6 394 267.77 Ltd. 86 152 892.64 7 446.83 - 82 078.13 362 775 114.41 Manulife Singapore Pte. 1 590 963.03 1 611 825.56 Ltd. - 85 035 045.12 1 575 265.98 101 577 691.13 452 509.02 Manulife Insurance - 90 009 485.52 1 727 956.37 Berhad 452 509.02 - John Hancock Life - - 508 792.57 Insurance - 4 205 252.01 PT Asuransi Jiwa 432 597.12 640 250.00 655 109.25 1170,662 874.05 Manulife Indonesia 276 436,800.43 Manulife Asset 169 408.45 167 745.50 171 638.62 Management (Singapore) Pte. Ltd. 1 571 231.02 1 042 105.51 1 591 915.48 Manulife Asset Management (Malaysia) 281 332,383.85 297,222 477.29 315.671.212.48 Sdn. Bhd. Manulife Asset Management (Hong Kong) Limited Subtotal Supported by Zero- 21 930 273.75 23 097 686.47 21 891 758.32 25 002 388.97 91 922 107.51 Rated OR issued in 18,369 772.71 the name of the 5 114 880.90 6 463 475.83 2 878 530.24 3,912 885.74 110,291 880.22 Customer�s 27,045,154.65 29,561,162.30 24,770.288.56 28.915,274.71 Department'" ~ The Manufacturer's Life Insurance Company John Hancock Life Insurance Subtotal 22 Exhibits P-966 to P-2133. 23 Exhibits P-966a to P-2133a. 24 Exhibits "P-45", "P-47", "P-49" and "P-51". 25 Exhibits "P-46" "P-48", "P-5011 and "P-52". 1 26 Exhibits P-2134 to P-2143; P-2279 to P-2283, P-2328 to P-2329. 27 Exhibits P-2144 to P-2182. 28 Exhibit P-65. 29 Exhibit P-65, Annexes 5, 6, 7 and 8. 30 Exhibit P-65, Annexes 9, 10, 11 and 12.

Decision CTA Case No. 8701 Page 18 of45 Zero-Rated Sales 14 631 601.43 7 204 088.49 8 556 910.15 13 058 473.22 43 451 073.29 amounts not tie-up 7 018 269.31 5 553 762.67 243,411.38 4 364 968.62 17 180 411.98 per Official Receipt31 - - 579 418.23 - 579 418.23 The Manufacturer's Life 4 489 769.67 Insurance Companv - - - 4 489 769.67 65 700 673.17 John Hancock Life 21 913 211.51 Insurance 21,649,870.74 12 757 851.16 9 379 739.76 (50 565.6Zl_ Manulife Asset (19 513.19) Management (Hong (701078.86) Konq) Limited Manulife (International) Ltd. Subtotal Zero-Rated Sales without supforting documents' Manulife Asset Management (Singapore) Pte. Ltd. - - - (50 565.67) Manulife Asset Management (Malaysia) Sdn. Bhd. - - - (19 513.19) Subtotal (70,078.86) Total 32S 131 825.82 323 651 397.31 331 372 505.61 366 429 619.84 1 346 585 348.58 Per Quarterly VAT Returns 325,131,82S.82 322,609,555.60 331,372,504.80 366,429,620.13 1,345 543 506.35 Difference - 1041841.71 0.8133 (0.29)34 1 041,842.23 As found by the !CPA, the difference in the amount of P1,041,842.23 between petitioner's zero-rated sales/receipts as reported in its Quarterly VAT Return for the second quarter of 2011 vis- a-vis the zero-rated sales reflected in its Schedule of Zero-Rated Sales for the same quarter pertains to two (2) VATable transactions which were erroneously included also in the Schedule of Zero-Rated Sales. The details are as follows: Exhibit Customer O.R. Transaction Local Output Tax P-2318 The Manufacturer's Life No. Currency Currency P-2319 Insurance Company (Phils.) Inc. 2547 $ 6,803.57 p 295 079.90 p 35,409.59 The Manufacturer's Life Insurance Company (Phils.) 2543 17,217.86 746,761.55 89 611.39 Inc. $24,021.43 P1,041,841.45 - p 125,020.98 Total 31 Exhibit P-65, Annexes 13, 14, 15 and 16. 32 Exhibit P-65, Annex 17. 33 Difference is due to rounding-off. 34 Difference is due to rounding-off.

Decision CTA Case No. 8701 Page 19 of45 The !CPA was able to verify that the above VATable sales were included in the Schedule3s of VATable Sales and were reported as VATable sales in the 2011 VAT returns36. In other words, in determining petitioner's valid zero-rated receipts for CY 2011, the amount of f1,041,841.71 shall be excluded and the amount of f1,345,543,506.35 declared by petitioner in its 2011 Quarterly VAT Returns shall be used as reference point. This Court has consistently held that in order to be considered as non-resident foreign corporation doing business outside the Philippines, each entity must be supported, at the very least, by both SEC certificate of non-registration of company and proof of incorporation or registration in a foreign country. Thus, only the following client-affiliates of petitioner shall be considered as non- resident foreign corporations doing business outside the Philippines, namely: 1. John Hancock Life Insurance 2. Manulife (International) Ltd. 3. Manulife Asset Management (Hong Kong) Limited 4. Manulife Singapore Pte. Ltd. Consequently, only the following gross receipts in the total amount of f502,373,742.26 derived by petitioner from services rendered to the aforementioned entities shall be considered for VAT zero-rating pursuant to Section 108(8)(2) of the NIRC of 1997, as amended: Exhibit Customer OR No. OR Date Amount in Amount in US$ PhP First Quarter of CY 2011 P-1211 Manulife (International) Ltd. 2075 2/28/2011 48,277.34 2 133,665.32 2076 2/28/2011 88,717.54 3,920,960.56 P-1212 Manulife (International) Ltd. 2077 2/28/2011 35,335.77 1,561,699.87 2164 3/31/2011 45,124.60 1, 970,670.14 P-1213 Manulife (International) Ltd. 2165 3/31/2011 92,755.83 4,050,809.61 2166 3/31/2011 35,756.58 1,561,552.40 P-1214 Manulife (International) Ltd. 2255 4/29/2011 46,655.57 2,029,703.92 2256 4/29/2011 99 306.40 4,320,225.67 P-1215 Manulife (International) Ltd. 2257 4/29/2011 39,665.05 1,725,588.47 531,594.68 23,274,875.96 P-1216 Manulife (International) Ltd. subtotal P-1217 Manulife (International) Ltd. P-1218 Manulife (International) Ltd. P-1219 Manulife (International) Ltd. P-1106 Manulife Sinqapore Pte. Ltd. 2081 2/28/2011 22.39 989.35 35 Exhibit P-2183. 36 Exhibit P-65, Findings and Observations No. 4, p. 7.

Decision CTA Case No. 8701 Page 20 of45 P-1107 Manulife Singapore Pte. Ltd. 2170 3/31[2011 76.98 3 362.04 P-1108 Manulife Singapore Pte. Ltd. 104.63 4,551.65 2261 4/29/2011 204.00 8,903.04 subtotal 14 169.06 626 215.78 14 338.75 633,715.40 P-1112 John Hancock Life Insurance 2106 2/28/2011 5,054.71 223,397.96 P-1113 John Hancock Life Insurance 2107 2/28/2011 2,641.70 116,752.57 P-1114 John Hancock Life Insurance 2108 2/28/2011 15,536.24 686,639.66 P-1115 John Hancock Life Insurance 2109 2/28/2011 49,412.23 2, 183,822.92 P-1116 John Hancock Life Insurance 2117 2/28/2011 46,016.64 2,033,751.42 P-1117 John Hancock Life Insurance 2118 2/28/2011 233,656.74 P-1118 John Hancock Life Insurance 2119 2/28/2011 5,286.83 233,505.15 P-1119 John Hancock Life Insurance 2122 2/28/2011 5,283.40 1,147,209.27 P-1120 John Hancock Life Insurance 2123 2/28/2011 25,957.31 6,434,667.56 P-1121 John Hancock Life Insurance 2124 2/28/2011 145,593.89 3,081,096. 74 John Hancock Life Insurance 2125 2/28/2011 69,714.38 P-1122 John Hancock Life Insurance 2125 2/28/2011 15,619.98 69~340.64 John Hancock Life Insurance 2125 2/28/2011 14 458.39 P-1123 John Hancock Life Insurance 2125 2/28/2011 5 666.66 639 003.00 P-1124 John Hancock Life Insurance 2125 2/28/2011 3 909.81 250,443.71 P-1125 John Hancock Life Insurance 2125 2/28/2011 (2 183.33) 172,797.96 P-1126 John Hancock Life Insurance 2125 2/28/2011 16 812.43 (96 494.4~ P-1127 John Hancock Life Insurance 2126 2/28/2011 2 401.54 743 042.16 P-1128 John Hancock Life Insurance 2127 2/28/2011 19,285.33 106,138.46 P-1129 John Hancock Life Insurance 2128 2/28/2011 32 807.41 852 334.44 P-1130 John Hancock Life Insurance 2130 2/28/2011 13 217.51 1449 956.29 P-1131 John Hancock Life Insurance 2129 2/28/2011 12,089.21 584 161.07 P-1132 John Hancock Life Insurance 2131 2/28/2011 8,885.70 534,294.73 P-1133 John Hancock Life Insurance 2132 2/28/2011 19,594.28 392 712.40 John Hancock Life Insurance 2133 2/28/2011 12,968.28 865 988.80 P-1134 John Hancock Life Insurance 2152 2/28/2011 5,891.58 573,146.10 John Hancock Life Insurance 2139 2/28/2011 5,923.80 260,384.27 P-1135 John Hancock Life Insurance 2140 2/28/2011 16 999.98 261,808.26 P-1136 John Hancock Life Insurance 2144 2/28�2011 751,331.12 P-1137 John Hancock Life Insurance 2144 2/_28f2011 30.75 P-1138 John Hancock Life Insurance 2157 2/28/2011 15,579.92 1,359.03 P-1139 John Hancock Life Insurance 2196 3/31/2011 15,237.11 688,570.14 P-1140 John Hancock Life Insurance 2197 3/31/2011 13 802.56 665,431.26 P-1141 John Hancock Life Insurance 2198 3/31/2011 5 054.53 602J81.95 P-1142 John Hancock Life Insurance 2199 3/31/2011 2 641.70 220,740.17 P-1143 John Hancock Life Insurance 2207 3/31/2011 14,853.28 115 367.66 P-1144 John Hancock Life Insurance 747 3/31/2011 45 986.76 648,668.73 P-1145 John Hancock Life Insurance 2208 3/31/2011 57 606.21 2 008 322.29 John Hancock Life Insurance 2211 3/31/2011 5,215.58 2,515 764.00 P-1146 John Hancock Life Insurance 2212 3/31/2011 5,283.40 227 773.51 John Hancock Life Insurance 2213 3/31/2011 25 699.67 230,735.32 John Hancock Life Insurance 2214 3[_31/2011 146 447.82 1,122 349.56 John Hancock Life Insurance 2214 3/31/2011 71,597.77 6,395 632.58 3,126,799.91

Decision CTA Case No. 8701 Page 21 of45 P-1147 John Hancock Life Insurance 2214 3/31/2011 16 040.25 700,505.79 P-1148 John Hancock Life Insurance 2214 3/31/2011 14 392.31 628,537.36 P-1149 John Hancock Life Insurance 2214 3/31/2011 247,472.96 P-1150 John Hancock Life Insurance 2214 3/31/2011 5 666.66 167,472.86 P-1151 John Hancock Life Insurance 2214 3/31/2011 3 834.81 (95,349.84) P-1152 John Hancock Life Insurance 2215 3/31/2011 (2,183.33) 734,156.18 P-1153 John Hancock Life Insurance 2216 3/31/2011 16,810.78 104,891.25 P-1154 John Hancock Life Insurance 2217 3/31/2011 2,401.81 745,898.20 P-1155 John Hancock Life Insurance 2218 3/31/2011 17,079.65 549,497.61 P-1156 John Hancock Life Insurance 2219 3/31/2011 12,582.45 1,441,990.53 P-1157 John Hancock Life Insurance 2220 3/31/2011 33,018.84 715,759.46 John Hancock Life Insurance 2221 3/31/2011 16,389.53 388,054.07 P-1158 John Hancock Life Insurance 2222 3/31/2011 8,885.70 811,435.96 John Hancock Life Insurance 2241 3/31/2011 18,580.34 566,347.48 P-1159 John Hancock Life Insurance 2228 3/31/2011 12,968.28 227,238.96 P-1160 John Hancock Life Insurance 2229 3/3112011 5,203.34 258J02.71 P-1161 John Hancock Life Insurance 2233 3/31/2011 5,923.80 742,418.88 P-1162 John Hancock Life Insurance 2233 3/31/2011 16,999.98 P-1163 John Hancock Life Insurance 2246 3/31/2011 1 617.67 70,646.48 P-1164 John Hancock Life Insurance 2287 4/29/2011 21 007.74 917 444.77 P-1165 John Hancock Life Insurance 2288 4/29/2011 15 609.98 679 096.57 P-1166 John Hancock Life Insurance 2289 4/29/2011 13 370.34 581,663.27 P-1167 John Hancock Life Insurance 2290 4/29/2011 5 054.72 219,900.54 P-1168 John Hancock Life Insurance 2298 4/29/2011 2 641.70 114 924.52 P-1169 John Hancock Life Insurance 2299 4/29/2011 14 858.59 646 408.10 John Hancock Life Insurance 2300 4/29/2011 47 858.25 2,082,025.31 P-1170 John Hancock Life Insurance 2303 4/29/2011 58,314.74 2,536,924.45 John Hancock Life Insurance 2304 4/29/2011 5,433.08 236,360.71 P-1171 John Hancock Life Insurance 2305 4/29/2011 5 291.66 230,208.38 P-1172 John Hancock Life Insurance 2306 4/29/2011 27,514.85 1,197,006.03 P-1173 John Hancock Life Insurance 2306 4/29/2011 143,719.76 6,252,384.44 P-1174 John Hancock Life Insurance 2306 4/2912011 69,577.80 3,026,912.61 P-1175 John Hancock Life Insurance 2306 4/29/2011 16 666.74 725,069.86 P-1176 John Hancock Life Insurance 2306 4/29/2011 14 537.11 632,422.43 P-1177 John Hancock Life Insurance 2306 4/29/2011 5,666.66 246,522.38 P-1178 John Hancock Life Insurance 2306 4/29/2011 3 962.31 172,376.33 P-1179 John Hancock Life Insurance 2307 4/29/2011 (2 183.331_ (94 983.59) P-1180 John Hancock Life Insurance 2308 4/29/2011 16,706.37 726,793.92 P-1181 John Hancock Life Insurance 2309 4/29/2011 2 401.54 104,476.60 John Hancock Life Insurance 2311 4/29/2011 24 083.20 1,047 715.53 John Hancock Life Insurance 2310 4/29/2011 33 965.86 1 477 650.77 John Hancock Life Insurance 2312 4/29/2011 13 208.47 574,621.28 John Hancock Life Insurance 2313 4/29/2011 14,118.63 614,216.88 John Hancock Life Insurance 2314 4/29/2011 8 885.70 386 563.49 John Hancock Life Insurance 2333 4/29/2011 16 810.78 731 336.17 John Hancock Life Insurance 2320 4/29/2011 12,968.28 564,172.05 John Hancock Life Insurance 2321 4/29/2011 5,873.33 255 513.35 5 923.80 257 709.00

Decision CTA Case No. 8701 Page 22 of45 P-1182 John Hancock Life Insurance 2325 4/29/2011 14,166.65 616,305.94 John Hancock Life Insurance 2325 4/29/2011 27.69 1,204.63 P-1183 John Hancock Life Insurance 2338 4/29/2011 P-1220 John Hancock Life Insurance 2120 2/28/2011 15,028.55 653,802.04 P-1221 John Hancock Life Insurance 2121 2/28/2011 19,562.57 864,587.34 P-1222 John Hancock Life Insurance 2145 2/28/2011 17,211.65 760,686.08 P-1223 John Hancock Life Insurance 2209 3/31f2011 2,500.00 110,490.00 P-1224 John Hancock Life Insurance 2210 3,131/2011 19,348.76 844 994.21 P-1225 John Hancock Life Insurance 2234 3/31/2011 15 856.19 692 467.57 P-1226 John Hancock Life Insurance 2301 4/29/2011 2,500.00 109,179.38 P-1227 John Hancock Life Insurance 2302 4/29/2011 18,281.55 795,320.55 P-1228 John Hancock Life Insurance 2326 4/29/2011 19 041.83 828 395.77 P-1229 John Hancock Life Insurance 2163 2/28/2011 2 500.00 108 760.00 P-1230 John Hancock Life Insurance 2254 3/31/2011 79,890.07 3,530,821.53 P-1231 John Hancock Life Insurance 2347 4/29/2011 79 855.92 3,487,447.77 80 368.71 3 496 350.73 subtotal 2,244,592.43 98,286,042.83 Total - First Quarter of CY 2011 2,776,391.11 121,569,821.83 Second Quarter of CY 2011 2348 5/30/2011 45 479.04 1 946 502.87 P-1504 Manulife (International) Ltd. 2349 5/30/2011 106,126.36 4,542 208.41 P-1505 Manulife (International) Ltd. 2350 5/30/2011 41,140.63 1,760 818.86 P-1506 Manulife (International) Ltd. 2445 6/30/2011 49 576.81 2 139 144.81 P-1507 Manulife (International) Ltd. 2446 6/30/2011 98 118.26 4 233 615.41 P-1508 Manulife (International) Ltd. 2447 6/30/2011 40,514.73 1,748,133.37 P-1509 Manulife (International) Ltd. 2549 7/29/2011 49,453.12 2,144,847.66 P-1510 Manulife (International) Ltd. 2550 7/29/2011 101 993.63 4,423,599.66 P-1511 Manulife (International) Ltd. 2551 7/29/2011 40 950.65 1,776,084.27 P-1512 Manulife (International) Ltd. 573,353.23 24,714,955.32 subtotal P-1385 Manulife Sinqapore Pte Ltd 2354 5/30/2011 173.99 7,446.83 173.99 7,446.83 subtotal P-1394 Manulife Asset Management 2417 5/30/2011 12 150.00 520L020.00 P-1395 (Hong Kong) Limited 2512 P-1396 Manulife Asset Management 2617 6/30/2011 12 150.00 524 249.31 (Hong Kong) Limited Manulife Asset Management 7/29/2011 12 150.00 526 961.70 (Hong Kong) Limited 36,450.00 1,571,231.01 subtotal 15,609.98 668 107.14 P-1397 John Hancock Life Insurance 2381 5/30/2011 12,968.34 555,044.95 P-1398 John Hancock Life Insurance 2382 5/30/2011 5,054.67 216 339.88 P-1399 John Hancock Life Insurance 2383 5/30/2011 2,641.70 113 064.76 P-1400 John Hancock Life Insurance 2384 5/30/2011 16,092.78 688 770.98 P-1401 John Hancock Life Insurance 2392 5/30/2011 56,102.54 2 401,188.71 P-1402 John Hancock Life Insurance 2394 5/30/2011 ~

Decision CTA Case No. 8701 Page 23 of45 P-1403 John Hancock Life Insurance 2397 5130/2011 4 968.08 212 633.82 P-1404 John Hancock Life Insurance 2398 5/30/2011 5,283.40 226,129.52 P-1405 John Hancock Life Insurance 2399 5/30/2011 25,699.03 1 099 918.48 John Hancock Life Insurance 2400 5/3012011 140 831.88 6 027 604.46 P-1406 John Hancock Life Insurance 2400 5/30/2011 68 896.05 2,948 750.94 John Hancock Life Insurance 2400 5/30/2011 17 241.02 737,915.66 P-1407 John Hancock Life Insurance 2400 5/30/2011 14 533.11 622,017.11 P-1408 John Hancock Life Insurance 2400 5/30/2011 5 666.66 242 533.05 P-1409 John Hancock Life Insurance 2400 5/30/2011 3,617.31 154,820.87 P-1410 John Hancock Life Insurance 2400 5/30/2011 (2 183.33) (93,446.52) P-1411 John Hancock Life Insurance 2401 5/30/2011 16,812.29 719,566.01 P-1412 John Hancock Life Insurance 2402 5/30/2011 2,401.54 102,785.91 P-1413 John Hancock Life Insurance 2403 5/30/2011 23,844.87 1,020,560.44 P-1414 John Hancock Life Insurance 2404 5/30/2011 13,214.50 565,580.60 P-1415 John Hancock Life Insurance 2405 5/30/2011 31,895.39 1 365,122.69 P-1416 John Hancock Life Insurance 2406 5/30/2011 15,003.65 642,156.22 P-1417 John Hancock Life Insurance 2407 5/30/2011 8,885.70 380,307.96 P-1418 John Hancock Life Insurance 2408 5/30/2011 16,810.78 719,501.38 P-1419 John Hancock Life Insurance 2431 5/30/2011 12,968.28 555,042.38 P-1420 John Hancock Life Insurance 2414 5/30/2011 8,420.83 360,411.52 P-1421 John Hancock Life Insurance 2415 5/30/2011 5,923.80 253,538.64 P-1422 John Hancock Life Insurance 2422 5/30/2011 16,666.65 713,332.62 P-1423 John Hancock Life Insurance 2422 5/30/2011 P-1424 John Hancock Life Insurance 2436 5/30/2011 27.62 1_,182.14 P-1425 John Hancock Life Insurance 2476 6/30/2011 15 696.74 671820.47 P-1426 John Hancock Life Insurance 2477 6/30/2011 16,501.98 712L028.93 P-1427 John Hancock Life Insurance 2478 6/30/2011 13 663.74 589,564.30 P-1428 John Hancock Life Insurance 2479 6/30/2011 3 722.39 160 614.02 P-1429 John Hancock Life Insurance 2487 6/30/2011 3 081.98 132 981.55 John Hancock Life Insurance 2488 6/30/2011 16,105.90 694,938.84 P-1430 John Hancock Life Insurance 2489 6/30/2011 54 614.18 2 356,497.60 John Hancock Life Insurance 2492 6/30/2011 55 943.15 2 413,840.12 P-1431 John Hancock Life Insurance 2493 6/30/2011 4,803.08 207,243.73 P-1432 John Hancock Life Insurance 2494 6/30/2011 5,283.40 227,968.62 P-1433 John Hancock Life Insurance 2495 6/30/2011 24,839.86 1,071,792.54 P-1434 John Hancock Life Insurance 2495 6/3012011 141,672.40 6,112,893.59 P-1435 John Hancock Life Insurance 2495 6/30/2011 72 053.17 3,108,956.73 P-1436 John Hancock Life Insurance 2495 6/30/2011 17,755.64 766,121.97 John Hancock Life Insurance 2495 6/_30f2011 14,289.19 616,551.27 John Hancock Life Insurance 2495 6/30/2011 5,666.66 244,505.56 John Hancock Life Insurance 2495 6/30/2011 3 602.31 155 432.80 John Hancock Life Insurance 2496 6/30/2011 (2,183.331 (94,206.52) John Hancock Life Insurance 2497 6/30/2011 16 467.70 710/549.82 John Hancock Life Insurance 2498 6/30/2011 2 401.54 103 621.87 John Hancock Life Insurance 2500 6/30/2011 17 411.19 751 259.61 John Hancock Life Insurance 2499 6/30/2011 32,603.11 1,406,761.95 John Hancock Life Insurance 2501 6/30/2011 15 031.48 648,579.67 14 218.59 613,505.01 ~ il-

Decision CTA Case No. 8701 Page 24 of45 P-1437 John Hancock Life Insurance 2502 6/30/2011 8,885.70 383,400.99 P-1438 John Hancock Life Insurance 2503 6/30/2011 13,482.89 581,760.96 P-1439 John Hancock Life Insurance 2529 6/30/2011 12 831.05 553,635.31 P-1440 John Hancock Life Insurance 2509 6/30/2011 10,806.93 466 298.40 P-1441 John Hancock Life Insurance 2510 6/30/2011 5,923.80 255,600.66 John Hancock Life Insurance 2517 6/30/2011 15,333.33 661,603.92 P-1442 John Hancock Life Insurance 2517 6/30/2011 72,396.89 John Hancock Life Insurance 2532 6/30/2011 1,677.87 842,575.64 P-1443 John Hancock Life Insurance 2580 7/29/2011 19,527.53 560,558.44 P-1444 John Hancock Life Insurance 2581 7/29/2011 12,924.63 630,156.85 P-1445 John Hancock Life Insurance 2582 7/29/2011 14,529.34 161,445.02 P-1446 John Hancock Life Insurance 2583 7/29/2011 3,722.39 174J27.05 P-1447 John Hancock Life Insurance 2592 7/29/2011 4,028.63 696,277.75 P-1448 John Hancock Life Insurance 2593 7/29/2011 16,053.87 2,365,361.92 P-1449 John Hancock Life Insurance 2594 7/29/2011 54,537.45 2 490 639.15 P-1450 John Hancock Life Insurance 2595 7/29/2011 57,425.93 799 238.26 P-1451 John Hancock Life Insurance 2596 7/29/2011 18 427.80 717 897.92 P-1452 John Hancock Life Insurance 2597 7/29/2011 16 552.36 208,315.98 P-1453 John Hancock Life Insurance 2598 7/29/2011 4 803.08 229 864.60 P-1454 John Hancock Life Insurance 2599 7/29/2011 1 066 498.05 P-1455 John Hancock Life Insurance 2600 7/29/2011 5 299.92 6,144,588.98 John Hancock Life Insurance 2600 7/29/2011 24 589.93 3,160,378.85 P-1456 John Hancock Life Insurance 2600 7/29/2011 141,673.97 747,766.03 John Hancock Life Insurance 2600 7/29/2011 72,867.92 638 678.88 P-1457 John Hancock Life Insurance 2600 7/29/2011 17,241.02 245 770.60 P-1458 John Hancock Life Insurance 2600 7/29/2011 14,725.83 156 236.99 P-1459 John Hancock Life Insurance 2600 7/29/2011 (94 693.93) P-1460 John Hancock Life Insurance 2601 7/29/2011 5,666.66 677,026.95 P-1461 John Hancock Life Insurance 2602 7/29/2011 3,602.31 104,157.99 P-1462 John Hancock Life Insurance 2603 7/29/2011 (2 183.33) 739,476.03 P-1463 John Hancock Life Insurance 2604 7/29/2011 15,610.01 546,829.67 P-1464 John Hancock Life Insurance 2605 7/29/2011 2,401.54 1 469,172.26 P-1465 John Hancock Life Insurance 2606 7/29/2011 17,049.88 597 066.69 P-1466 John Hancock Life Insurance 2607 7/29/2011 12,608.09 385,384.66 P-1467 John Hancock Life Insurance 2608 7/29/2011 33_L_874.27 605 061.76 John Hancock Life Insurance 2635 7/29/2011 13 766.39 630 627.43 P-1468 John Hancock Life Insurance 2614 7/29/2011 8,885.70 468 710.96 John Hancock Life Insurance 2615 7/29/2011 13 950.73 256 923.10 P-1469 John Hancock Life Insurance 2622 7/29/2011 14 540.19 665 026.97 P-1470 John Hancock Life Insurance 2622 7/29/2011 10,806.93 P-1471 John Hancock Life Insurance 2638 7/29/2011 5,923.80 1,205.72 P-1513 John Hancock Life Insurance 2540 6/30/2011 15,333.33 771,607.25 P-1514 John Hancock Life Insurance 2588 7/29/2011 3,408,227.14 P-1515 John Hancock Life Insurance 2395 5/30/2011 27.80 187 254.00 P-1516 John Hancock Life Insurance 2396 5/30/2011 17,790.72 794 487.84 John Hancock Life Insurance 2490 6/30/2011 78 989.06 699 861.32 John Hancock Life Insurance 2491 6/30/2011 4 317.46 789,008.15 18 562.80 714,833.56 16,351.90 18,286.05 16,566.98

Decision CTA Case No. 8701 Page 25 of45 P-1517 John Hancock Life Insurance 2644 7/29/2011 79,898.05 3 465,284.96 P-1520 John Hancock Life Insurance P-1521 John Hancock Life Insurance 2393 5/30/2011 46,689.27 1 998,300.76 2444 5/30/2011 83 071.54 3,555 461.91 subtotal 2,251,406.47 97,052,283.61 Total -Second Quarter of CY 2011 2,861,383.69 123,345,916.77 Third Quarter of CY 2011 2650 8/31/2011 12 150.00 512,001.00 Manulife Asset Management 2852 10/30/2011 12 150.00 530 104.50 P-1689 (Honq Konq) Limited 2749 9/30/2011 13 704.31 579 418.23 38,004.31 1,621,523.73 Manulife Asset Management subtotal P-1690 (Honq Konq) Limited Manulife Asset Management P-1815 (Honq Konq) Limited P-1691 Manulife (International) Ltd. 2645 8/31/2011 48,383.73 2,038,890.56 P-1692 Manulife (International) Ltd. 2645 8/31/2011 41,006.95 1,728 033.81 P-1693 Manulife (International) Ltd. 2647 8/31/2011 102,671.46 4,326 575.27 P-1798 Manulife (International) Ltd. 2744 9/30/2001 46 645.85 1,972 186.58 P-1799 Manulife (International) Ltd. 2745 9/30/2001 41,109.71 1, 738,118.67 P-1800 Manulife (International) Ltd. 2746 9/30/2001 107 306.02 4,536,898.63 P-1801 Manulife (International) Ltd. 2847 10/30/2011 47 212.98 2 059,902.48 P-1802 Manulife (International) Ltd. 2848 10/30/2011 45 007.46 1 963 675.66 P-1803 Manulife (International) Ltd. 2849 10/30/2011 108 544.19 4 735 783.06 587,888.35 25,100,064.72 subtotal P-1694 John Hancock Life Insurance 2715 8/31/2011 15,970.21 672,984.65 P-1695 John Hancock Life Insurance 2716 8/31/2011 14 949.62 629 976.99 P-1696 John Hancock Life Insurance 2717 8/31/2011 4 736.16 199 581.78 P-1697 John Hancock Life Insurance 2718 8/31/2011 3 962.55 166 981.86 P-1698 John Hancock Life Insurance 2719 8/31/2011 2,833.33 119 396.53 P-1699 John Hancock Life Insurance 2720 8/31/2011 17,060.95 718 948.43 P-1700 John Hancock Life Insurance 2721 8/31/2011 53,320.82 2 246 939.35 P-1701 John Hancock Life Insurance 2722 8/31/2011 54,184.62 2,283,339.89 P-1702 John Hancock Life Insurance 2725 8/31/2011 4,968.08 209,354.89 P-1703 John Hancock Life Insurance 2726 8/31/2011 5,945.21 250,531.15 P-1704 John Hancock Life Insurance 2727 8/31/2011 25,514.34 1 075,174.29 John Hancock Life Insurance 2728 8/31/2011 140,321.14 5 913,132.84 P-1705 John Hancock Life Insurance 2728 8/31/2011 65 932.68 2 778,403.14 John Hancock Life Insurance 2728 8/31/2011 13,158.40 554,494.98 P-1706 John Hancock Life Insurance 2728 8/31/2011 14 469.13 609 729.14 P-1707 John Hancock Life Insurance 2728 8/31/2011 5 666.66 238,793.05 P-1708 John Hancock Life Insurance 2728 8/31/2011 3,602.31 151,801.34 John Hancock Life Insurance 2728 8/31/2011 (2,183.33) (92 005.53) John Hancock Life Insurance 2730 8/31/2011 2,401.54 101,200.90 John Hancock Life Insurance 2731 8/31/2011 24,528.11 1,033,614.56 John Hancock Life Insurance 2732 8/31/2011 14,780.11 622,833.84

Decision CTA Case No. 8701 P-1709 John Hancock Life Insurance 2733 8/31/2011 31 039.90 1,308,021.39 P-1710 John Hancock Life Insurance 2734 8/31/2011 13,918.12 586,509.58 P-1711 John Hancock Life Insurance 2735 8/31j2011 8,885.70 374,443.40 P-1712 John Hancock Life Insurance 2736 81_31/2011 13 940.90 587 469.53 P-1713 John Hancock Life Insurance 2738 8/31/2011 5 923.80 249,628.93 John Hancock Life Insurance 2739 8/31/2011 15 999.99 674 239.58 P-1714 John Hancock Life Insurance 2739 8/31/2011 1171.07 John Hancock Life Insurance 2740 8/31/2011 27.79 576 843.50 P-1715 John Hancock Life Insurance 2741 9/30/2011 13 688.74 758 021.91 P-1716 John Hancock Life Insurance 2817 9/30/2011 17 988.18 659,989.95 P-1717 John Hancock Life Insurance 2818 9/30/2011 15,609.98 604 146.95 P-1718 John Hancock Life Insurance 2819 9/30/2011 14,289.19 264 498.31 P-1719 John Hancock Life Insurance 2820 9/30/2011 6,255.87 167 536.61 P-1720 John Hancock Life Insurance 2822 9/30/2011 3,962.55 720,913.74 P-1721 John Hancock Life Insurance 2823 9/30/2011 17,050.94 P-1722 John Hancock Life Insurance 2824 9/30/2011 54,765.05 2,315,466.50 P-1723 John Hancock Life Insurance 2827 9/30/2011 54,861.07 2,319,526.10 P-1724 John Hancock Life Insurance 2828 9/30/2011 4,863.08 P-1725 John Hancock Life Insurance 2829 9/30/2011 6,317.11 205,611.02 P-1726 John Hancock Life Insurance 2830 9/30/2011 25,897.60 267,087.36 John Hancock Life Insurance 2830 9/30/2011 139,094.40 1,094,950.66 P-1727 John Hancock Life Insurance 2830 9/30/2011 68 075.97 5,880,911.20 John Hancock Life Insurance 2830 9/30/2011 14 839.48 2,878,252.05 P-1728 John Hancock Life Insurance 2830 9/30/2011 14 289.19 P-1729 John Hancock Life Insurance 2830 9/30/2011 5 666.66 627_~413.21 P-1730 John Hancock Life Insurance 2830 9/30/2011 2,401.54 P-1731 John Hancock Life Insurance 2831 9/30/2011 (2 183.33) 604 146.95 P-1732 John Hancock Life Insurance 2832 9/30/2011 16 810.78 239 586.38 P-1733 John Hancock Life Insurance 2833 9/30/2011 2 401.54 101,537.11 P-1734 John Hancock Life Insurance 2834 9/30/2011 30 621.28 (92,311.33) P-1735 John Hancock Life Insurance 2835 9/30/2011 15 617.98 710 759.78 P-1736 John Hancock Life Insurance 2836 9/30/2011 20 413.09 101 537.11 P-1737 John Hancock Life Insurance 2837 9/30/2011 27,898.84 1 294 667.56 P-1738 John Hancock Life Insurance 2838 9/30/2011 8,885.70 660 328.28 John Hancock Life Insurance 2839 9/3012011 26,364.73 863 065.45 P-1739 John Hancock Life Insurance 2840 9/30/2011 13,250.20 1179,562.95 John Hancock Life Insurance 2841 9/30/2011 9,606.16 375 687.40 P-1740 John Hancock Life Insurance 2842 9/30/2011 5,923.80 1114,700.89 P-1741 John Hancock Life Insurance 2842 9/30/2011 15,333.33 560 218.42 P-1742 John Hancock Life Insurance 2843 9/30/2011 406,148.44 P-1743 John Hancock Life Insurance 2844 9/30/2011 28.14 250,458.26 P-1744 John Hancock Life Insurance 2918 10/30/2011 12 968.28 648,293.19 P-1745 John Hancock Life Insurance 2919 10/30/2011 20 074.72 P-1746 John Hancock Life Insurance 2920 10/30/2011 15,609.98 1,189.76 P-1747 John Hancock Life Insurance 2921 10/30/2011 14 289.19 548,298.88 John Hancock Life Insurance 2923 10/30/2011 8,876.36 848 759.21 John Hancock Life Insurance 2924 10/30/2011 7,148.20 681,063.43 16,784.10 623 437.36 51,517.23 387,275.68 311,875.98 732,290.37 2,247,696.64

Decision CTA Case No. 8701 P-1748 John Hancock Life Insurance 2925 10/30/2011 55 394.17 2 416 847.48 P-1749 John Hancock Life Insurance 2926 10/30/2011 18,018.98 786,167.91 P-1750 John Hancock Life Insurance 2927 10/30/2011 16 368.84 714 172.33 P-1751 John Hancock Life Insurance 2928 10/30/2011 222 647.38 P-1752 John Hancock Life Insurance 2929 10/30/2011 5 103.08 236,003.19 John Hancock Life Insurance 2931 10/30/2011 5,409.20 P-1753 John Hancock Life Insurance 2931 10/30/2011 136,125.87 5 939,171.69 John Hancock Life Insurance 2931 10/30/2011 71,245.59 3 108,445.10 P-1754 John Hancock Life Insurance 2931 10/30/2011 14,689.42 P-1755 John Hancock Life Insurance 2931 10/30/2011 14,289.19 640,899.39 P-1756 John Hancock Life Insurance 2931 10/30/2011 5,666.66 623 437.36 P-1757 John Hancock Life Insurance 2931 10/30/2011 3,111.09 247,236.38 P-1758 John Hancock Life Insurance 2932 10/30/2011 (2,183.33) 135,736.68 P-1759 John Hancock Life Insurance 2933 10/30/2011 16,467.70 (95,258.83) P-1760 John Hancock Life Insurance 2934 10/30/2011 2,401.54 718,485.88 P-1761 John Hancock Life Insurance 2935 10/30/2011 28,846.97 104,779.19 P-1762 John Hancock Life Insurance 2936 10/30/2011 15 769.43 1 258,593.08 P-1763 John Hancock Life Insurance 2937 10/30/2011 20,416.62 688 020.36 P-1764 John Hancock Life Insurance 2938 10/30/2011 26 225.09 890J77.30 John Hancock Life Insurance 2939 10/30/2011 10 296.13 1144 200.61 P-1765 John Hancock Life Insurance 2940 10/30/2011 37 566.95 449 220.09 John Hancock Life Insurance 2941 10/30/2011 11494.61 1 639 045.90 P-1766 John Hancock Life Insurance 2942 10/30/2011 8,405.39 501 509.91 P-1767 John Hancock Life Insurance 2943 10/30/2011 5,923.80 366 727.17 P-1793 John Hancock Life Insurance 2943 10/30/2011 15,095.23 258,455.39 P-1794 John Hancock Life Insurance 2944 10/30/2011 658,605.09 P-1795 John Hancock Life Insurance 2945 10/30/2011 28.04 P-1796 John Hancock Life Insurance 2723 8/31/2011 13,311.36 1,223.36 P-1804 John Hancock Life Insurance 2724 8/31/2011 23,547.17 580,774.47 P-1805 John Hancock Life Insurance 2825 9/30/2011 18,290.34 1,027,362.85 P-1806 John Hancock Life Insurance 2826 9/30/2011 15,725.17 770,754.93 P-1807 John Hancock Life Insurance 2729 8/31/2011 18,286.49 662,658.66 P-1808 John Hancock Life Insurance 2737 8/31/2011 15_L_893.19 773,152.59 P-2322 John Hancock Life Insurance 2821 9/30/2011 15 610.01 671,964.06 P-2323 John Hancock Life Insurance 2922 10/30/2011 10,686.85 657,805.82 John Hancock Life Insurance 2950 10/30/2011 2,833.33 450)43.86 John Hancock Life Insurance 2930 10/30/2011 2 833.33 119J93.19 John Hancock Life Insurance 2946 10/30/2011 76 780.19 123 618.19 26,174.61 3 349 919.69 subtotal 3,162.88 1141 998.19 2,179,326.92 137,996.50 93,131,427.16 Total -Third Quarter of CY 2011 2,805,219.58 119,853,015.61 Fourth Quarter of CY 2011 3227 1/31/2012 1872.22 82 078.13 P-1984 Manulife Singapore Pte. Ltd. 1,872.22 82,078.13 subtotal

Decision CTA Case No. 8701 Page 28 of45 P-1988 Manulife Asset Management 2959 11/30/2011 12,150.00 529,033.48 P-1989 (Honq Konq) Limited 12,150.00 530,226.00 P-1990 Manulife Asset Management 3116 12/30/2011 (Hong Kong) Limited 12,150.00 532,656.00 Manulife Asset Management 3229 1/31/2012 36,450.00 1.591,915.48 (Hong Kol'lg) Limited subtotal P-1991 Manulife (International) Ltd. 3222 12/30/2011 46,349.35 2,031,955.44 P-1992 Manulife (International) Ltd. 3216 12/31/2011 552.00 24,199.68 P-1993 Manulife (International) Ltd. 3217 127,048.32 P-1994 Manulife (International) Ltd. 3218 1/1/2012 2,898.00 P-1995 Manulife (International) Ltd. 3219 1/2/2012 2,898.00 127,048.32 P-1996 Manulife (International) Ltd. 3220 1/3/2012 2,898.00 127,048.32 P-1997 Manulife (International) Ltd. 3221 1/4/2012 3,622.50 158,810.40 P-2117 Manulife (International) Ltd. 3109 1/5/2012 3,622.50 158,810.40 P-2118 Manulife (International) Ltd. 2954 12/30/2011 48,108.08 2,099,436.75 P-2119 Manulife (International) Ltd. 2955 11/30/2011 47,079.64 2,049,934.62 P-2120 Manulife (International) Ltd. 2956 11/30/2011 42,710.81 1,859,707.87 P-2121 Manulife (International) Ltd. 3223 11/30/2011 106,711.46 4,646,414.53 P-2122 Manulife (International) Ltd. 3224 1/31/2012 44,579.30 1,954,356.51 P-2130 Manulife (International) Ltd. 3110 1/31/2012 98,284.37 4,308, 786.56 P-2131 Manulife (International) Ltd. 3111 12/30/2011 102,881.98 4,489,769.67 12/30/2011 43,815.80 1,912,121.51 597,011.79 26,075,448.90 subtotal P-1998 John Hancock Life Insurance 3075 11/30/2011 15,459.88 673,151.80 P-1999 John Hancock Life Insurance 3076 11/30/2011 15,387.88 670,016.96 P-2000 John Hancock Life Insurance 3077 11/30/2011 7,684.94 334,616.50 P-2001 John Hancock Life Insurance 3078 11/30/2011 3,962.55 172,536.76 P-2002 John Hancock Life Insurance 3079 11/30/2011 2,833.33 123,368.43 P-2003 John Hancock Life Insurance 3080 11/30/2011 15,641.45 681,057.50 P-2004 John Hancock Life Insurance 3081 11/30/2011 52,024.89 2,265,259.85 P-2005 John Hancock Life Insurance 3082 11/30/2011 53,254.13 2,318,783.15 P-2006 John Hancock Life Insurance 3083 11/30/2011 19,225.21 837,101.05 P-2007 John Hancock Life Insurance 3084 11/30/2011 14,784.60 643,748.72 P-2008 John Hancock Life Insurance 3085 11/30/2011 5,080.58 221,217.85 P-2009 John Hancock Life Insurance 3086 11/30/2011 5,409.20 235,526.37 P-2010 John Hancock Life Insurance 3087 11/30/2011 26,194.45 1,140,554.70 John Hancock Life Insurance 3088 11/30/2011 147,090.75 6,404,603.33 P-2011 John Hancock Life Insurance 3088 11/30/2011 74,649.65 3,250,384.05 John Hancock Life Insurance 3088 11/30/2011 14,689.42 639,604.52 P-2012 John Hancock Life Insurance 3088 11/30/2011 14,289.19 622,177.77 P-2013 John Hancock Life Insurance 3088 11/30/2011 5,666.66 246,736.86 P-2014 John Hancock Life Insurance 3088 11/30/2011 3,602.31 156,851.24 P-2015 John Hancock Life Insurance 3088 11/30/2011 (2 183.33) (95,066.37) John Hancock Life Insurance 3089 11/30/2011 16,524.88 719,523.95 John Hancock Life Insurance 3090 11/30/2011 2,401.54 104,567.49 John Hancock Life Insurance 3091 11/30/2011 28,910.56 1,258,819.47 John Hancock Life Insurance 3093 11/30/2011 20,413.09 888,823.70 lA.

Decision CTA Case No. 8701 Page 29 of45 P-2016 John Hancock Life Insurance 3094 11/30/2011 23,302.03 1,014,613.70 P-2017 John Hancock Life Insurance 3095 11/30/2011 10,366.65 451,383.12 P-2018 John Hancock Life Insurance 3096 11/30/2011 45,914.20 P-2019 John Hancock Life Insurance 3097 11/30/2011 12,808.21 1,999,189.30 P-2020 John Hancock Life Insurance 3098 11/30/2011 9,983.52 557,693.30 P-2021 John Hancock Life Insurance 3099 11/30/2011 8,119.49 434,700.81 P-2022 John Hancock Life Insurance 3100 11/30/2011 4,442.85 353,537.72 John Hancock Life Insurance 3101 11/30/2011 15,968.24 193,449.91 P-2023 John Hancock Life Insurance 3101 11/30/2011 695 286.90 John Hancock Life Insurance 3102 11/30/2011 27.94 1,216.58 P-2024 John Hancock Life Insurance 3103 11/30/2011 15,850.12 690,143.55 P-2025 John Hancock Life Insurance 3104 11/30/2011 24,961.90 P-2026 John Hancock Life Insurance 3184 12/30/2011 2,659.70 1,086,887.30 P-2027 John Hancock Life Insurance 3185 12/30/2011 16,322.94 115,808.26 P-2028 John Hancock Life Insurance 3186 12/30/2011 13,927.35 712,333.01 P-2029 John Hancock Life Insurance 3187 12/30/2011 7,577.52 607,789.73 P-2030 John Hancock Life Insurance 3188 12/30/2011 14,956.16 330,683.15 P-2031 John Hancock Life Insurance 3189 12/30/2011 4,587.30 652,686.78 P-2032 John Hancock Life Insurance 3190 12/30/2011 14,451.10 200,189.61 P-2033 John Hancock Life Insurance 3191 12/30/2011 51,914.84 630,645.97 P-2034 John Hancock Life Insurance 3192 12/30/2011 53,019.88 P-2035 John Hancock Life Insurance 3193 12/30/2011 21,871.36 2,265,563.66 P-2036 John Hancock Life Insurance 3194 12/30/2011 14,130.05 2,313,787.76 P-2037 John Hancock Life Insurance 3195 12/30/2011 5,163.08 P-2038 John Hancock Life Insurance 3196 12/30/2011 4,717.32 954,466.10 P-2039 John Hancock Life Insurance 3197 12/30/2011 25,862.10 616,635.26 John Hancock Life Insurance 3197 12/30/2011 150,779.70 225,316.81 P-2040 John Hancock Life Insurance 3197 12/30/2011 70,057.68 205,863.91 John Hancock Life Insurance 3197 12/30/2011 14,689.42 1,128,622.26 P-2041 John Hancock Life Insurance 3197 12/30/2011 14,289.19 6,580,026.27 P-2042 John Hancock Life Insurance 3197 12/30/2011 5,666.66 3,057,316.96 P-2043 John Hancock Life Insurance 3197 12/30/2011 3,602.31 641,046.29 P-2044 John Hancock Life Insurance 3198 12/30/2011 (2,183.33) 623,580.25 P-2045 John Hancock Life Insurance 3199 12/30/2011 16,810.78 247,293.04 P-2046 John Hancock Life Insurance 3200 12/30/2011 2,401.54 157,204.81 P-2047 John Hancock Life Insurance 3201 12/30/2011 29,053.20 (95,280.67) P-2048 John Hancock Life Insurance 3202 12/30/2011 2,401.54 733,622.44 P-2049 John Hancock Life Insurance 3203 12/30/2011 20,788.59 104,803.21 P-2050 John Hancock Life Insurance 3204 12/30/2011 22,395.83 1,267,881.75 P-2051 John Hancock Life Insurance 3205 12/30/2011 10,366.65 104,803.21 P-2052 John Hancock Life Insurance 3206 12/30/2011 39,464.66 907,214.21 John Hancock Life Insurance 3207 12/30/2011 18,345.29 977,354.21 P-2053 John Hancock Life Insurance 3208 12/30/2011 9,510.07 452,400.61 John Hancock Life Insurance 3209 12/30/2011 8,405.39 1, 722,237.83 P-2054 John Hancock Life Insurance 3210 12/30/2011 4,442.85 800,588.24 P-2055 John Hancock Life Insurance 3210 12/30/2011 15,333.33 415,019.54 P-2056 John Hancock Life Insurance 3211 12/30/2011 366,811.22 John Hancock Life Insurance 3212 12/30/2011 124.04 193,885.97 John Hancock Life Insurance 3213 12/30/2011 14,697.38 669,146.52 24,057.41 2,659.70 5,412.95 641,393.84 1,049,865.20 116,069.31

Decision CTA Case No. 8701 Page 30 of45 P-2057 John Hancock Life Insurance 3298 1/31/2012 14,905.89 653,474.36 P-2058 John Hancock Life Insurance 3299 1/31/2012 12,968.34 568,532.15 P-2059 John Hancock Life Insurance 3300 1/31/2012 327,262.49 P-2060 John Hancock Life Insurance 3301 1/31/2012 7,464.93 173,718.19 P-2061 John Hancock Life Insurance 3302 1/31/2012 3,962.55 248,426.37 P-2062 John Hancock Life Insurance 3303 1/31/2012 5,666.66 635,428.80 P-2063 John Hancock Life Insurance 3304 1/31/2012 14,494.27 2,333, 786.89 P-2064 John Hancock Life Insurance 3305 1/31/2012 53,234.19 2,456,760.97 P-2065 John Hancock Life Insurance 3306 1/31/2012 56,039.26 909,639.14 P-2066 John Hancock Life Insurance 3307 1/31/2012 20,749.07 687,342.28 P-2067 John Hancock Life Insurance 3309 1/31/2012 15,678.43 231,624.26 P-2068 John Hancock Life Insurance 3310 1/31/2012 5,283.40 1,122,009.37 John Hancock Life Insurance 3311 1/31/2012 25,593.28 6,899,134.59 P-2069 John Hancock Life Insurance 3311 1/31/2012 157,370.77 3,179,901.41 John Hancock Life Insurance 3311 1/31/2012 72,534.25 696,625.93 P-2070 John Hancock Life Insurance 3311 1/31/2012 15,890.19 678,829.29 P-2071 John Hancock Life Insurance 3311 1/31/2012 15,484.24 248,426.37 P-2072 John Hancock Life Insurance 3311 1/31/2012 5,666.66 157,925.27 P-2073 John Hancock Life Insurance 3311 1/31/2012 3,602.31 (95,717.33) P-2074 John Hancock Life Insurance 3312 1/31/2012 (2,183.33) 736,984.60 P-2075 John Hancock Life Insurance 3313 1/31/2012 16,810.78 105,283.51 P-2076 John Hancock Life Insurance 3314 1/31/2012 2,401.54 1,218,800.12 P-2077 John Hancock Life Insurance 3315 1/31/2012 27,801.10 105,283.51 P-2078 John Hancock Life Insurance 3316 1/31/2012 2,401.54 839,857.82 P-2079 John Hancock Life Insurance 3317 1/31/2012 19,157.34 1,370,223.46 P-2080 John Hancock Life Insurance 3318 1/31/2012 31,255.10 454,473.94 P-2081 John Hancock Life Insurance 3319 1/31/2012 10,366.65 1,914,048.55 John Hancock Life Insurance 3320 1/31/2012 43,659.87 736,984.60 P-2082 John Hancock Life Insurance 3321 1/31/2012 16,810.78 379,019.60 John Hancock Life Insurance 3322 1/31/2012 8,645.52 315,850.54 P-2083 John Hancock Life Insurance 3323 1/31/2012 7,204.62 194,774.54 P-2084 John Hancock Life Insurance 3324 1/31/2012 4,442.85 672,213.19 P-2085 John Hancock Life Insurance 3324 1/31/2012 15,333.33 P-2086 John Hancock Life Insurance 3325 1/31/2012 5,437.76 P-2123 John Hancock Life Insurance 3326 1/31/2012 124.04 620,213.89 P-2124 John Hancock Life Insurance 3327 1/31/2012 14,147.21 1,257,352.80 P-2133 John Hancock Life Insurance 3215 12/30/2011 28,680.49 197,669.74 P-2326 John Hancock Life Insurance 3092 11/30/2011 4,508.89 3,647,930.88 John Hancock Life Insurance 3108 11/30/2011 83,591.45 104,567.49 John Hancock Life Insurance 3308 1/31/2012 2,401.54 3,808,318.24 John Hancock Life Insurance 3011 1/31/2012 87,463.40 273,072.78 6,228.85 4,091,895.83 subtotal 93,337.04 109,855,545.54 2,515,242.83 Total - Fourth Quarter of CY 2011 3,150,576.84 137,604,988.05 Grand Total - CY 2011 11,593,571.21 502.373.742.26

Decision CTA Case No. 8701 However, the following gross receipts totaling P22,826,883.17, which were not properly supported by VAT zero-rated ORs as found by the !CPA, shall be deducted from the above gross receipts of P502,373,742.26: ICPA's Findings 1'' Quarter 2"� Quarter 3"' Quarter 4'" Quarter Total Supported by zero-rated OR issued in the name of the p 5,114 880.90 !' 6 463 475.83 p 2 878 530.24 p 3 912 885.74 p 18 369 772.71 customer's department37 !'5,114,880.90 !'6,463,475.83 P2,878,530.24 P3 912 885.74 P18 369 772.71 John Hancock Life Insurance !' 66 652.02 !' 1 478 050.49 !' 210 224.75 !' 58 818.81 !' 1 813 746.07 65 716.23 65 716.23 Subtotal - - - Excess amount of the zero- - - - 2 577 648.16 rated receipts per petitoner's 2 577 648.16 p 4,457 110.46 claim over the zero-rated p 66 652.02 P1 478 050.49 p 275 940.98 P2 636 466.97 P22 826,883.17 receipts per OR38 !'5,181,532.92 P7,941,526.32 P3,154,471.22 P6,549,352.71 John Hancock Life Insurance Manulife Asset Management (Hong Kong) Limited Manu life (International) Ltd. Subtotal Total Disallowances per ICPA's Findings In addition, the Court noted that OR Nos. 2540 and 3215, per schedule, in the amounts of US$78,989.06 and US$83,591.45, respectively, were not the ORs actually submitted by petitioner per marked exhibits. Further, OR No. 3111 in the amount of US$43,815.80 was issued not in the name of petitioner's client. Hence, the corresponding gross receipts shall also be denied VAT zero-rating, detailed as follows: Amount in Amount in OR No. US$ PhP Findings OR per schedule was not the OR actually submitted by petitioner Payment received from Manulife Canadian per marked exhibit Division in the amount of US$38,950.47 per OR No. For the 2nd Quarter of CY 2011 2356 John Hancock Life Insurance 2540 78 989.06 3,408,227.14 Payment received from (Exhibit No. P-1470) Manulife Canadian Division in the amount of For the 4th Quarter of CY 2011 US$17,421.46 per OR No. 2953 83,591.45 3,647,930.88 John Hancock Life Insurance 3215 (Exhibit No. P-2086) OR issued was not in the name of petitioner's client For the 4th Quarter of CY 2011 37 Exhibit P-65, Annexes 9 to 12. 38 Exhibit P-65, Annexes 13 to 16.

Decision CTA Case No. 8701 Manulife (International) Ltd. 3111 43,815.80 1,912,121.51 Payment Received from (Exhibit No. P-2131) Hong Kong Operations in 206,396.31 8,968,279.53 the amount of Total US$102 881.98 Likewise, as per verification of the bank statements and credit advice, it was also noted that the following sales of petitioner to its non- resident foreign affiliates have no corresponding inward remittances, to wit: Zero-Rated Zero-Rated Inward Bank Amount in Remittance Statement Sales Sales Difference PhP of Zero- (in PhP) (in US$) /Credit (d) Rated Sales OR (in US$) (C) Advice (b) (Exh. No.) (a-cJ Without Customer No. (a I Corresponding First Quarter of CY 2011 Manulife (International) Ltd. Inward Manulife (International) Ltd. Remittance [b x (d+a)J 2075 48 277.34 2 133 665.32 2076 88 717.54 3 920 960.56 136 994.88 6 054 625.88 123 754.36 P-2135 13 240.52 585 178.20 Manulife (International) Ltd. 2077 35 335.77 1,561 699.87 31 900.93 P-2136 3 434.84 151 806.37 Manulife (International) Ltd. 2164 45 124.60 1 970 670.14 Manulife (International) Ltd. 2165 92 755.83 4 050 809.61 137 88Q.43 6 021479.75 123 935.00 P-2137 13 945.43 609 021.34 Manulife (International) Ltd. 2166 35 756.58 1 561 552.40 32 345.46 P-2138 3,411.12 148 969.58 Manulife (International) Ltd. 2255 46 655.57 2 029 703.92 Manulife (International) Ltd. 2256 99 306.40 4 320 225.67 145 961.97 6 349 929.59 Manulife (International) Ltd. 2257 39 665.05 1 725 588.47 130 972.15 P-2139 14989.82 652 117.13 531 594.69 23 274 875.95 - 39 665.05 1 725 588.47 - 88 686.79 3 872 681.09 442 907.90 Subtotal Manulife Sinqapore pte, Ltd. 2081 22.39 989.35 Manulife Sinoaoore pte, Ltd. 2170 76.98 3 362.04 99.37 4 351.39 Manulife Singapore pte, Ltd. 2261 104.63 4 551.65 94.37 P-2279 5.00 218.95 204.00 8 903.04 78.63 P-2139 26.00 1131.06 531798.69 23 283 778.99 173.00 31.00 1 350.Ql Subtotal 443 080.90 88,717.79 3 874,031.10 Total - First Otr of CY 2011 Second Quarter of CY 2011 2348 45 479.04 1 946 502.87 Manulife (International) Ltd. 2349 106 126.36 4 542 208.41 Manulife (International) Ltd. 151 605.40 6 488 711.28 49 576.81 2 139 144.81 98 118.26 4 233 615.41 135 703.58 P-2142 15 901.82 680 597.91 Manulife (International) Ltd. 2445 Manulife (International) Ltd. 2446

Decision CTA Case No. 8701 Manulife (International) Ltd. 2447 40 514.73 1 748 133.37 188 209.80 8 120 893.59 49 453.12 2 144 847.66 132 313.32 P-2282 55 896.48 2 411826.41 101 993.63 4 423 599.66 Manulife {International) Ltd. 2549 151 446.75 6 568 447.33 151 436.75 P-2283 Manulife {International) Ltd. 2550 40 950.65 1 776 084.27 37 027.46 P-2152 532 212.60 22 954 136.47 Manulife {International) Ltd. 2551 456 481.11 10.00 433.71 3 923.19 170 153.98 Subtotal 75 731.49 3 263,012.01 Manulife 5inoaoore Pte Ltd 2354 173.99 7 446.83 147.99 P-2142 26.00 1112.81 Subtotal 173.99 7 446.83 147.99 26.00 1112.81 532 386.59 22,961 583.30 456 629.10 75,757.49 3 264,124.82 Total-Second Qtr of CY 2011 Third Ouarter of CY 2011 2645 48 383.73 2 038 890.56 Manulife {International) Ltd. 2647 Manulife {International) Ltd. 102 671.46 4 326 575.27 151 055.20 6 365 465.83 15 662.24 P-2153 135 392.96 5 705 459.06 37 108.47 P-2165 71435.72 3 1!6 740.50 Manulife (!nternationa I) Ltd. 2849 108,544.19 4 735 783.06 52 770.71 206 828.68 8 822199.56 Total -Third Otr of CY 2011 259 599.39 11101 248.89 Fourth Quarter of CY 2011 Manulife 5inoaoore Pte. Ltd. 3227 1 872.22 82 078.13 - - 1 872.22 82 078.13 1 872.22 82 078.13 Subtotal 1 872.22 82 078.13 Manulife Asset Management (Hong Kong)_ Limited 2959 12 150.00 529 033.48 - - 12 150.00 529 033.48 12 150.00 530 226.00 Manu life Asset Management 31!6 12,150.00 530,226.00 - - 12 150.00 532,656.00 {Hono Konq) Limited 36 450.00 1 591 915.48 Manulife Asset Management 3229 12,150.00 532,656.00 - - {Hong Kong) Limited Subtotal 36 450.00 1 591 915.48 Manulife (International) Ltd. 3222 46,349.35 2,031,955.44 - - 46 349.35 2 031 955.44 46 349.35 2 031 955.44 Subtotal 46 349.35 2,031 955.44 John Hancock Life Insurance 3298 14,905.89 653,474.36 - - 14 905.89 653 474.36 12 968.34 568 532.15 John Hancock Life Insurance 3299 12,968.34 568,532.15 - - 7 464.93 327 262.49 3 962.55 173 718.19 John Hancock Life Insurance 3300 7,464.93 327,262.49 - - 248 426.37 5 666.66 635 428.80 John Hancock Life Insurance 3301 3,962.55 173,718.19 - - 14 494.27 2 333 786.89 53 234.19 2 456 760.97 John Hancock Life Insurance 3302 5,666.66 248,426.37 - - 56 039.26 909 639.14 20 749.07 687 342.28 John Hancock Life Insurance 3303 14,494.27 635,428.80 15 678.43 273 072.78 6 228.85 231 624.26 John Hancock Life Insurance 3304 53,234.19 2,333,786.89 - - 5 283.40 1122 009.37 25 593.28 6 899 134.59 John Hancock Life Insurance 3305 56,039.26 2,456,760.97 - - 157 370.77 3 179 901.41 72 534.25 696 625.93 John Hancock Life Insurance 3306 20,749.07 909,639.14 - - 15 890.19 678 829.29 15 484.24 John Hancock Life Insurance 3307 15,678.43 687,342.28 - - John Hancock Life Insurance 3308 6,228.85 273,072.78 - - John Hancock Life Insurance 3309 5,283.40 231,624.26 - - John Hancock Life Insurance 3310 25,593.28 1,122,009.37 - - John Hancock Life Insurance 331! 157,370.77 6,899,134.59 - - John Hancock Life Insurance 3311 72,534.25 3,179,901.41 - - John Hancock Life Insurance 3311 15,890.19 696,625.93 - - John Hancock Life Insurance 3311 15,484.24 678,829.29 - -

Decision CTA Case No. 8701 Page 34 of45 John Hancock Life Insurance 3311 5,666.66 248,426.37 - - 5 666.66 248 426.37 John Hancock Life Insurance 3311 3,602.31 157,925.27 - - 3 602.31 157 925.27 John Hancock Life Insurance 3311 (2,183.33) (95,717.33) - - (2 183.33) (95 717.33) John Hancock Life Insurance 3312 16,810.78 736,984.60 - - 16 810.78 736 984.60 John Hancock Life Insurance 3313 2,401.54 105,283.51 - - 2 401.54 105 283.51 John Hancock Life Insurance 3314 27,801.10 1,218,800.12 - - 27 801.10 1 218 800.12 John Hancock Life Insurance 3315 2,401.54 105,283.51 - - 2 401.54 105 283.51 John Hancock Life Insurance 3316 19,157.34 839,857.82 - - 19 157.34 839 857.82 John Hancock Life Insurance 3317 31,255.10 1,370,223.46 - - 31 255.10 1 370 223.46 John Hancock Life Insurance 3318 10,366.65 454,473.94 - - 10 366.65 454 473.94 John Hancock Life Insurance 3319 43,659.87 1,914,048.55 - - 43 659.87 1 914 048.55 John Hancock Life Insurance 3320 16,810.78 736,984.60 - - 16 810.78 736 984.60 John Hancock Life Insurance 3321 8,645.52 379,019.60 - - 8 645.52 379 019.60 John Hancock Life Insurance 3322 7,204.62 315,850.54 - - 7 204.62 315 850.54 John Hancock Life Insurance 3323 4,442.85 194,774.54 - - 4 442.85 194 774.54 John Hancock Life Insurance 3324 15,333.33 672,213.19 - - 15 333.33 672 213.19 John Hancock Life Insurance 3324 124.04 5,437.76 - - 124.04 5 437.76 John Hancock Life Insurance 3325 14,147.21 620,213.89 - - 14 147.21 620 213.89 John Hancock Life Insurance 3326 28,680.49 1,257,352.80 - - 28 680.49 1 257 352.80 John Hancock Life Insurance 3327 4,508.89 197,669.74 - - 4 508.89 197,669.74 Subtotal 764 385.86 33 510 675.71 - - 764 385.86 33 510 675.75 Total - Fourth Qtr of CY 2011 849 057.43 37 216 624.76 849,057.43 37 216 624.80 Grand Total - CY 2011 2,172 842.09 94 563 235.94 952 480.71 1 220,361.38 53 176,980.28 In sum, petitioner's valid zero-rated receipts for the taxable year 2011 amounted only to P417,401,599.28, computed thus: 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Total Zero-Rated Receipts in 98 286 042.83 97 052 283.61 93 131 427.16 105 490,576.90 393 960 330.50 PhP 23 274 875.96 24 714 955.32 25 100 064.72 26 075 448.90 99 165 344.90 John Hancock Life Insurance - 1 571 231.01 1 621 523.73 1 591 915.48 4 784 670.22 7,446.83 82 078.13 98 428.00 Manulife (International) Ltd. 8 903.04 - Manulife Asset Management 121,569,821.83 123,345,916.77 137,604,988.05 502,373 742.26 (Hong Kong) Limited 119,853,015.61 Manulife Sinqapore pte Ltd Total Less: Disallowances 5 114 880.90 6 463 475.83 2 878,530.24 3 912 885.74 18 369 772.71 Per ICPA's Findings 66 652.02 1478 050.49 210 224.75 58 818.81 1 813 746.07 Supported by Zero-Rated O.R. issued in the name of the Customer's Department John Hancock Life Insurance Excess amount ofthe zero- rated receipts per petitoner's claim over the zero-rated receipts per OR'9 John Hancock Life Insurance 39 Exhibit P-65, Annexes 13 to 16.

Decision CTA Case No. 8701 Manulife (International) Ltd. - - 65 716.23 - 65 716.23 ~anulife ~~~et Management Hona Kon Limited - - - 2 577 648.16 2 577 648.16 6 549 352.71 22 826 883.17 subtotal 5 181.532.92 7 941 526.32 3 154 471.22 3 647 930.88 7 056 158.02 Per this Court's Findinas - 3 408 227.14 - OR per schedule was not the 1 912 121.51 1,912 121.51 OR actual OR per marked - - - 5 560 052.39 8 968 279.53 Exhibits - 3 408 227.14 - 33 510 675.75 33 510 675.75 John Hancock Life Insurance - 2 031 955.44 17 989,848.10 0. R. issued was not in the - - name ofthe netitioner. 3 872 681.09 1 591 915.48 1,591 915.48 3 263 012.01 8 822 199.56 82 078.13 84 540.95 Manulife (International) Ltd. - - - 37 216 624.80 53 176 980.28 subtotal 1 350.01 - 49 326,029.90 84,972,142.98 Sales without 3 874 031.10 1112.81 corresponding Inward 9 055 564.02 3 264 124.82 8 822 199.56 88 278 958.15 417 401 599.28 Remittance 112 514.257.81 14 613 878.28 11 976 670.78 108.732.038.49 107 876,344.83 John Hancock Life Insurance Manulife l!nternationan Ltd. ~anulife ~~et Management Hona Kon Limited Manulife Sinaaoore Pte Ltd subtotal Total Disallowances Valid and Substantiated Zero-Rated Sales Considering that not all of petitioner's declared zero-rated receipts are properly substantiated, only a portion of the claimed input taxes attributable to the substantiated zero-rated receipts can be refunded using the following rate: 2011 Valid Zero-Rated Zero-Rated Rate of Valid Zero- Receipts Receipts Per VAT Rated Receipts Returns 1st 112 514,257.81 325,131,825.82 34.6057349% 2nd 108,732,038.49 322,609 555.60 33.7039113% 3rd 107 876.344.83 331.372 504.80 32.5544043% 4th 88 278 958.15 366,429,620.13 24.0916545% Total p 417.401.599.28 P1.345.543,506.35 After having resolved that petitioner had VAT zero-rated receipts for the four taxable quarters of 2011 in the amount of P417,401,599.28, we shall ascertain the amount of input VAT incurred by petitioner in connection thereto. As stated earlier, petitioner reflected a total amount of P29,668,270.78 allowable input VAT in its Quarterly VAT Returns for taxable year 2011, to wit&

Decision CTA Case No. 8701 Particulars Input VAT Amortization of Input Tax on Capital Goods exceeding P1Million p 7,610,074.29 Purchase of Capital Goods not exceeding P1Million Domestic Purchase of Goods (other than Capital Goods) 2,150,003.24 Domestic Purchase of Services 854,118.51 Total Available Input Tax 19,054,074.74 P29,668,270.78 In support of the aforesaid input VAT, petitioner submitted various suppliers' invoices and official receipts40 which were examined by the !CPA. A review of the !CPA report together with the documents supporting the P22,058,196.4941 input VAT claim on domestic purchases of goods other than capital goods, domestic purchases of services and capital goods not exceeding P1Million shows that input taxes amounting to P2,964,214.90 should be disallowed for not being properly substantiated by VAT invoices or receipts as prescribed under Sections 110(A), 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 Revenue Regulations (RR) No. 16-05, as amended. Below is the breakdown of the input taxes ofP2,964,214.90: FINDINGS 1'' 2"" 3"' 4th Total Quarter Quarter 27 471.61 Quarter Quarter 20 851.01 Domestic purchases of goods other than capital goods 1. Input tax claimed on domestic purchases of goods other than capital goods supported by VAT registered invoices without date indicated42 - 379.90 27 091.71 - 2. Input tax claimed on domestic purchases of goods other than capital goods supported by VAT registered invoices but the amount of VAT is not shown separately in the invoice43 - 20 468.99 223.23 158.79 40 Exhibits P-66 to P-322, P-66A to P-322A, P2241, P-2241A, P-323 to P-894, P-323A to P-894A, P-954 to P- 965, P-2249 to P-2276. 41 Purchase of capital Goods not exceeding PlM p 2,150,003.24 Domestic Purchase of Goods (other than Capital Goods) 854,118.51 Domestic Purchase of Services 19,054,074.74 Total p 22,058,196.49 42 Exhibit P-65, Annexes 51 and 52. 43 Exhibit P-65, Annexes 53, 54 and 55.

Decision CTA Case No. 8701 Page 37 of45 3. Input tax claimed on domestic purchases of goods other than capital goods supported by VAT registered invoices dated outside the period of claim44 116 619.97 116 619.97 4. Input tax claimed on domestic purchases 675.00 135.00 12 820.39 13 630.39 of services erroneously classified as purchase of goods supported by VAT registered invoice or collection receipts with comment of "not valid as source of input tax1145 5.1nput tax claimed on domestic purchases 675.00 4,820.40 3 506.29 8 882.06 17 883.75 of goods other than capital goods supported by other documents such as statement of account, delivery receipt, miscellaneous account charge46 6. Input tax claimed on domestic purchases 663.21 40.50 2 239.29 2 943.00 of goods other than capital goods with 139 482.07 199 399.73 no supportinq documents" 32 135.34 3 840.58 23 941.74 subtotal Domestic Purchases of Services 7. Input tax claimed on purchases of services supported by collection receipts and official receipts. Collection Receipt bore the BIR authority to print and the input VAT is separately shown in the official receipt48 50 654.06 67 369.71 43 958.61 33 188.80 195 171.18 8. Input tax claimed on domestic purchases of services supported by VAT registered official receipts without date indicated" 193 310.Q1 193 310.01 9. Input tax claimed on domestic purchases of services supported by VAT registered official receipts but amount of VAT is not shown separately in the official receipt50 442.37 615.49 5 745.54 316 812.29 323 615.69 10. Input tax claimed on domestic purchases of services supported by VAT registered official receipts dated outside the period of claim 51 � 20 367.24 20 367.24 11. Input tax claimed on domestic purchases of services supported by VAT registered official receipt or collection receipts with comment "not a valid L_~ sou~ rc~ e o~ f i~ npu~ t t~ ax- " 52---------~2- 12 - 79~ 3.8~ 5 ~~2L 9 7_ 45~ .3~ 7 ~~3~ 0 8~ 21~ .25~~~ 51~9~ 59.~ 06--~ 32~ 5 ~ 31~ 9.5< 3 Z 44 Exhibit P-65, Annex 58. 45 Exhibit P-65, Annexes 59, 60 and 61. 46 Exhibit P-65, Annexes 62, 63, 64 and 65. 47 Exhibit P-65, Annexes 66, 67 and 68. 48 Exhibit P-65, Annexes 88, 89, 90 and 91. 49 Exhibit P-65, Annex 105. 50 Exhibit P-65, Annexes 106, 107, 108 and 109. 51 Exhibit P-65, Annex 112. 52 Exhibit P-65, Annexes 113, 114, 115 and 116.

Decision CTA Case No. 8701 Page 38 of45 12. Input tax claimed on domestic 1199.99 - 18 332.62 12 493.27 32 025.88 purchases of services supported by other documents such as statement of - 884.00 1 518.02 304 408.12 306 810.14 account, delivery receipt, miscellaneous 216 951.39 72 756.54 43 333.58 1 072 302.63 account charge, tape receipt53 739 261.12 315 565.96 366 442.59 782 562.36 2 468922.30 13. Input tax claimed on domestic - 3 600.00 - 3 600.00 purchases of services supported by VAT - registered official receipts with "VAT - - 116 541.60 Exempt Sale" indicated in the official - receipt54 135 308.96 39 858.38 175 167.34 583.93 583.93 14. Input tax claimed on domestic - - 583.93 purchases of services with no 807 088.03 295 892.87 supporting documents55 135 308.96 43 458.38 2,964,214.90 483,010.26 413,741.55 subtotal 1004 351.39 Purchases of Capital Goods not exceeding_P1Million 15. Input tax claimed on purchases of capital goods not exceeding P1 million supported by TIN VAT invoice but amount of VAT is not shown separately in the invoice56 - 16. Input tax claimed on purchases of capital goods not exceeding P1 million supported by VAT registered invoices dated outside the period of claim57 116 541.60 17. Input tax claimed on purchases of capital goods not exceeding P1 million supported by VAT registered invoice/receipt or collection receipts with comment "not a valid source of input tax" 58 - 18. Input tax claimed on purchases of capital goods not exceeding P1 million without supporting documents59 - subtotal 116 541.60 TOTAL 1,260,375.06 In addition to the foregoing exceptions found by the !CPA, this Court, likewise, found that petitioner's input VAT claim on purchase of goods other than capital goods in the amount of P805.71 must be disallowed because the corresponding invoice with serial no. 25023560 dated November 30, 2010, is outside the period of claim.~ 53 Exhibit P-65, Annexes 117, 118 and 119. 54 Exhibit P-65, Annexes 120, 121 and 122. 55 Exhibit P-65, Annexes 123, 124, 125 and 126. 56 Exhibit P-65, Annex 146. 57 Exhibit P-65, Annex 147. 58 Exhibit P-65, Annexes 148 and 149. 59 Exhibit P-65, Annex 150. 60 Exhibit P-72.

Decision CTA Case No. 8701 Page 39 of45 Hence, out of the P22,058,196.49 input VAT claim on domestic purchases of goods other than capital goods, domestic purchases of services and capital goods not exceeding P1Million, only the amount of P19,093,175.88, as computed below, is duly supported by valid VAT invoices or official receipts in accordance with the existing VAT law and regulations: Domestic Domestic Purchases of Total Purchases of Purchases of Capital Goods Goods (other not exceeding than Capital Services 1 million Goods) Input VAT per Quarterly VAT p 854 118.51 p 19 054 074.74 p 2 150,003.24 p 22,058 196.49 Returns Less: Disallowances 199 399.73 2 468 922.30 295 892.87 2 964 214.90 805.71 805.71 Per !CPA's findinqs - - Per this Court's findinqs Input VAT Properly Substantiated p 653,913.07 P16,585,152.44 p 1,854 110.37 P19 093,175.88 We now proceed to the substantiation of the P7,610,074.29 amortization of input VAT on capital goods purchases exceeding P1Million which originated from the P18,266,771.54 input tax deferred on capital goods exceeding P1Million from previous quarter and from the P3,221,423.55 input tax on capital goods exceeding P1Million purchased during the four quarters of CY 2011, as shown below: Input Tax Deferred on Capital Goods exceeding P1Million from Previous Quarter p 18 266,771.54 Add: Input Tax on Capital Goods exceeding P1Million Purchased during the four quarters of CY 2011 3,221,423.55 Total Unamortized Input Tax on Capital Goods exceedinq P1Million p 21,488,195.09 Less: Input Tax on Purchases of Capital Goods exceeding P1Million deferred for the succeeding period 13,878,120.81 Amortization of Input Tax on Capital Goods exceedinq P1Million p 7,610,074.29 Based on the ICPA's report, the P18,266,771.54 input tax deferred on capital goods exceeding P1Million from previous quarter pertains to petitioner's purchases in the years 2006, 2007, 2008, 2009 and 201061. Petitioner failed to present supporting invoices andjor official receipts for the input taxes covering the years 2006 to 2008.62 While there were invoices and official receipts submitted for the years 2009 and 2010, the same were denied admission by the Court for not being found in the records of the case and for petitioner's failure to submit the originals thereof for comparison 63. Consequently, the claimed amortization ofe. 61 Exhibit P-65, Findings and Observations No. 6, p. 28. 62 Exhibit P-65, Findings and Observations No. 6, p. 27. 63 Resolution dated July 24, 2014, Docket, Vol. II, pp. 886-887.

Decision CTA Case No. 8701 Page 40 of45 input VAT from the previous quarters of taxable years 2006 to 2010 shall be denied. As regards the substantiation of the P3,221,423.55 input taxes on purchases of capital goods exceeding PlMillion for the taxable year 2011, the !CPA noted the following: Findings 1st 2nd 3rd 4th Total Quarter Quarter Quarter Quarter Input Tax from Purchases of Capital Goods exceeding Pl million For the year 201164 1. Input tax claimed on purchases of capital goods exceeding 1"1 million which are substantiated for VAT purposes: a. Properly supported by VAT - REG TIN invoices/receipts65 p 136 014.80 - p 907,830.76 1"1,043 845.56 b. Properly supported by TIN 153,091.45 p 508,355.27 515 571.43 1"137,990.12 1 315 008.27 VAT invoices/receipts66 2. Input tax claimed on purchases of capital goods exceeding 1"1 million supported by VAT registered invoices and official receipts not dated within the quarter but within the period of - 573 772.96 - - 573 772.96 claim 67 3. Input tax claimed on purchases of capital goods exceeding P1 million supported by VAT registered invoices and official receipts dated outside the period of claim 68 156 719.38 - - - 156 719.38 4. Input tax claimed on purchases of capital goods exceeding 1"1 million supported by VAT REG TIN invoice with comment of "not a valid source of input tax"69 - 132 077.38 - - 132 077.38 Total P44~825.63 P1,214,205.61 P1,423,402.19 P137,990.12 P3,221,423.55 From the above findings of the !CPA, the following input taxes in the amount of'P288,796.76 shall be disallowed:.,.,.. 64 Exhibit P-65, Annex 151. 65 Exhibit P-65, Annexes 152 and 153. 66 Exhibit P-65, Annexes 154, 155, 156 and 157. 67 Exhibit P-65, Annex 158. 68 Exhibit P-65, Annex 159. 69 Exhibit P-65, Annex 160.

Decision CTA Case No. 8701 Taxable Year 2011 1st 2nd 3rd 4th Quarter Findinas Quarter Quarter Quarter Total 1. Input tax claimed on purchases of p 156,719.38 p 156.719.38 - - - capital goods exceeding 1 million 132 077.38 supported by VAT registered - p 132 077.38 - - invoices and official receipts dated outside the oeriod of claim 70 2. Input tax claimed on purchases of capital goods exceeding 1 million supported by VAT REG TIN invoice with comment of "not a valid source of in out tax"71 Total P156.719.38 P132.077.38 - - P288,796.76 Thus, out of the f3,221,423.55 input taxes on purchases of capital goods exceeding f1Million for the taxable year 2011, only the amount of f2,932,626.79 was properly substantiated by VAT invoices and official receipts, computed as follows: 1st 2nd Taxable Year 2011 4th Total Quarter Quarter 3rd Quarter p 3 221 423.55 p 445.825.63 Quarter Input VAT on capital p 1 214.205.61 p 1.423 402.19 p 137.990.12 goods purchases exceeding P1M for the � vear 2011 Less: Disallowances 156 719.38 132 077.38 288 796.76 Properly Substantiated P289.106.25 P1.082 128.23 P1 423 402.19 P137 990.12 P2,932,626.79 Input VAT on capital goods purchases exceeding P1M for the vear 2011 Pursuant to Section 110(A)(2) of the NIRC of 1997, as amended, input VAT claim on capital goods purchases attributable to zero-rated sales may be claimed either in full during the month of acquisition, or spread over a period of time, depending on the aggregate acquisition cost of the capital goods in the calendar month. If the aggregate acquisition cost exceeds f1Million, the claim for input tax should be spread over 60 months or the estimated useful life of the capital goods, whichever is shorter. On the other hand, if aggregate acquisition cost does not exceed fl million, the total input taxes shall be allowed as credit/refund in the month of acquisition._.... 70 Exhibit P-65, Annex 159. 71 Exhibit P-65, Annex 160.

Decision CTA Case No. 8701 Page 42 of45 Applying the above provisions in the present case, out of the P2,932,626.79 input VAT incurred by petitioner on capital goods exceeding P1Million for the year 2011, only the amount ofP378,848.60 is creditable for the year 2011, computed as follows: Date Supplier Exhibit Amount of Input Tax Est. Monthly Allowable Purchased of Purchase net of Amortization Input Tax for Useful the taxable per Invoice VAT Life73 period 2011 /O.R. Schedules 1133 456.67 Attached P-954 1 275 762.05 P-955 2,409,218.72 to the Quarterly P-958 4 781 441.31 P-957 4 236 293.95 VAT 9,017,735.26 Returns72 P-960 P-965-A 5 298 342.97 1st Quarter of2011 P-961-A 2 266 913.33 136 014.80 60 2 266.91 27 202.96 1 050 000.00 RDT Jr. Associates P-962 153 091.45 48 3 189.41 31 894.05 1/25/2011 Inc. P-963-A 1146,428.58 289,106.25 5,456.32 59,097.01 2 100 000.00 Accent Micro P-964 11 861 684.88 3/21/2011 Technologies Inc. 1149 917.64 Subtotal 1149 917.64 24 438 556.50 2nd Quarter of2011 573 772.96 48 11 953.60 95 628.83 Accent Micro 508 355.27 60 8 472.59 67 780.70 5/13/2011 Technologies Inc. 1,082,128.23 20,426.19 163 409.53 Teledatacom Phils. 5/3/2011 Inc. Subtotal 3rt/ Quarter of2011 635 801.16 48 13 245.86 79 475.14 272 029.60 60 Accent Micro 126,000.00 60 4 533.83 27 202.96 7/22/2011 Technologies Inc. 2 100.00 12 600.00 137,571.43 60 ROT Jr. Associates 252 000.00 60 7/8/2011 Inc. 1,423 402.19 7/26/2011 Total Ventures Inc. 2 292.86 11 464.29 8/16/2011 Hoffsman 4 200.00 21 000.00 Systematic 26 372.54 151 742.39 Designs Inc. 8/2/2011 Total Ventures Inc. Subtotal 4th Quarter of2011 137 990.12 60 2 299.84 4 599.67 Teledatacom Phils. 137,990.12 2 299.84 4,599.67 2 932 626.78 54 554.89 378 848.60 11/11/2011 Inc. Subtotal Total Therefore, petitioner's properly substantiated input VAT for the four quarters of taxable year 2011 amounted only to P19,472,024.50, computed as follows: Particulars 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Total In Philippine Pesos 1 854,110.39 Domestic Purchases of Capital Goods not 190 608.83 625 108.37 677 394.35 360 998.84 exceedinq P1Million 72 Exhibits "P-35", "P-36", "P-38" and "P-39". 73 Per Attached Schedule in the Quarterly VAT Returns.

Decision CTA Case No. 8701 Page 43 of45 Domestic Purchases of 195,303.29 156,377.56 170,167.21 132,065.01 653,913.07 Goods (other than Capital Goods)- 11 151,332.79 1 952,569.73 1,130,462.63 2,350,787.29 16 585,152.44 Domestic Purchases of 11,537,244.91 2,734,055.66 1,978,024.19 2,843,851.14 19,093,175.90 Services Subtotal Amortization of Input Tax 59 097.01 163 409.53 151 742.39 4 599.67 378 848.60 on Capital Goods exceeding P1Million 59 097.01 163 409.53 151 742.39 4 599.67 378 848.60 Subtotal 11,596,341.92 2,897,465.19 2,129,766.58 2,848,450.81 19,472,024.50 Total Input Tax Properly Substantiated A portion, however, of the aforementioned substantiated input VAT shall be applied against petitioner's reported output VAT liability for the four taxable quarters of2011 in the total amount ofP410,927.13. Hence, only the remammg input VAT of P19,061,097.37 (P19,472,024.50 less P410,927.13) can be attributed to the entire zero- rated receipts declared by petitioner in the amount of P1,345,543,506.35 and only the input VAT of P6,243,220.30 is attributable to the valid zero-rated receipts of P417,401,599.28, as computed below: 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Total Valid Input VAT P11 596,341.92 p 2 897,465.19 p 2,129 766.58 p 2 848,450.81 p 19,472 024.50 14,865.57 236,747.95 410 927.13 Less: Output VAT 30 615.90 128 697.71 P11 581 476.35 p 2 660 717.24 p 19 061 097.37 Excess Input VAT p 2 099 150.68 p 2 719 753.10 Multiply by Rate of Substantiated Zero-Rated 34.6057349% 33.7039113% 32.5544043% 24.0916545% Receipts P4,007,855.00 p 896,765.78 p 683,366.00 p 655,233.52 P6,243,220.30 Excess Input VAT Attributable to Valid Zero-Rated Receipts Although the claimed input VAT was carried-over by petitioner in its succeeding Quarterly VAT Returns74, the same remained unutilized until it was deducted as "VAT Refund/TCC Claimed"7S in its Quarterly VAT Return for the first quarter of 2013. Thus, the excess input VAT of P54,288,135.9F6 as of the end of the first quarter of 2013 which was to be carried-over to the succeeding second quarter of 201377 no longer included the subject claim. et 74 Exhibits P-2218 to P-2222. 75 Exhibit P-2222, line 23D. 76 Exhibit P-2222, line 29, Total Amount Payable (Overpayment). 77 Exhibit P-2223, line 20A.

Decision CTA Case No. 8701 In fine, petitioner has sufficiently proven its entitlement to the refund or issuance of tax credit certificate representing unutilized excess input VAT attributable to its zero-rated receipts for the four taxable quarters ofCY 2011 in the amount ofP6,243,220.30. WHEREFORE, premises considered, the instant Petition for Review is hereby PARTIALLY GRANTED. Accordingly, respondent is hereby ORDERED TO REFUND or TO ISSUE A TAX CREDIT CERTIFICATE in favour of petitioner in the reduced amount of SIX MILLION TWO HUNDRED FORTY THREE THOUSAND TWO HUNDRED TWENTY and 30/100 PESOS (P6,243,220.30), representing petitioner's unutilized excess input VAT attributable to its zero-rated sales/receipts for the four (4) taxable quarters of CY 2011. SO ORDERED. _a CAESAR A. CASANOVA Associate Justice WE CONCUR: J~UA-N"ITOCC.. CA~STA,NEQ DA,.fit . Associate Justice (On Leave) AMELIA R. COTANGCO-MANALASTAS Associate Justice ATTESTATION I attest 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. S'-�:.6 C.a�-~~ Q JUANITO c. CASTANEDA, JIC ' Associate Justice Chairperson, Second Division

Decision CTA Case No. 8701 Page 45 of45 CERTIFICATION Pursuant to Article VIII, Section 13 of the Constitution and the Division Chairperson's Attestation, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court's Division. Presiding Justice