DEUTSCHE KNOWLEDGE SERVICES PTE., LTD. v. COMMISSIONER OF INTERNAL REVENUE

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY FIRST DIVISION DEUTSCHE KNOWLEDGE CTA CASE NO. 9227 SERVICES PTE. , LTD. Members: Petitioner, - versus- DEL ROSARIO, P.J. , Chairperson , MANAHAN, and REYES-FAJARDO, JJ. COMMISSIONER OF tz:s- Promulgated: . INTERNAL REVENUE, NOV 0 1 a,: ~ <>(' ~ Respondent. X- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -X DECISION DEL ROSARIO, P.J.: This is a Petition for Review1 filed on January 4, 2016 by Deutsche Knowledge Services Pte ., Ltd . (petitioner) against the Commissioner of Internal Revenue (respondent) praying that the Court render judgment ordering respondent to refund or issue a tax credit certificate to petitioner in the amount of P31 ,681 ,201 .78 , representing its excess and unutilized input VAT on purchases of goods and services attributable to zero-rated sales for the fourth (4th) quarter of calendar year (CY) 2013. THE PARTIES Petitioner is the Philippine branch of a multinational company organ ized and existing under and by virtue of the laws of Singapore, with registered office address at One Raffles Quay, #17-10 South Tower, Singapore 048583.2 It is licensed to do business as a regional operating headquarters (ROHQ) in the Philippines by the Securities and Exchange Commission (SEC ) on April 25, 2005 with SEC Reg istration No. FS200506950, pu rsuant to the Omnibus Investment 1 CTA Docket Vol. I, pp .10-47 (inclusive of annexes). 2 Par. 2, Stipulated Facts, Joint Stipulation of Facts and Issues (JSFI), CTA Docket Vol. V, p. 2472.o'1

DECISION Deutsche Knowledge Services Pte., Ltd. vs. Commissioner of Internal Revenue CTA Case No. 9227 Code of 1987, as amended by Republic Act (RA) No. 8756, 3 and its implementing rules and regulations, 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 personal management; logistics services; research and development services and product development; technical support and maintenance; data processing and communication and business development4 It was registered with the Bureau of Internal Revenue (BIR) on June 16, 2005 as a VAT-registered taxpayer with Taxpayer Identification Number (TIN) 238-763-115-000.5 Respondent is the Commissioner of Internal Revenue (CIR) with office address at the BIR National Office Building, Diliman, Quezon City. He is empowered to perform the duties of his office, including among others, the duty to act upon and approve claims for refund or tax credit as provided by law. 6 FACTS On September 1, 2015, petitioner filed with the BIR Large Taxpayers Regular Audit Division 3 (LTRAD 3) an Application for Tax Credits/Refunds (BI R Form No. 1914) of its excess and unutilized input VAT for the fourth (41h) quarter of CY 2013 in the amount of P31 ,681 ,201.78.7 Claiming inaction on its administrative claim, and considering that the 120-day period within which respondent is required to act on the claim for refund had lapsed on December 30, 2015, 8 petitioner filed the present Petition for Review on January 4, 2016. 9 The case was raffled to the Third Division. On June 28, 2016, within the extended periods granted by the Court, 10 respondent filed his Answer, 11 interposing the following special 3 An Act providing for the Terms, Conditions and Licensing Requirement of Regional or Area Headquarters, Regional Operating Headquarters, and Regional Warehouses of Multinational Companies, Amending for the purpose certain provisions of Executive Order No. 226, otherwise known as the Omnibus Investments Code of 1987. 4 Par. 3, I. Stipulated Facts, JSFI, CTA Docket Vol. V, p. 2472-2473. 5 Par. 4, I. Stipulated Facts, JSFI, CTA Docket Vol. V, p. 2473. 6 Par. 1, I. Stipulated Facts, JSFI, CTA Docket Vol. V, p. 2472. 7 Exhibits "P-4" and "P-4-a", CTA Docket Vol. VI, pp. 2910-2915. 8 Par. 8, IV Administrative Claim for Refund, Petition for Review, CTA Docket Vol. I, p. 13. � Supra, Note 1. 10 Resolution dated May 30, 2016, CTA Docket Vol. I, p. 76; Resolution dated July 4, 2016, CTA C1'l Docket Vol. I, p. 96. 11 CTA Docket Vol. I, pp. 82-93.

DECISION Deutsche Knowledge Services Pte., Ltd. vs. Commissioner of Internal Revenue CTA Case No. 9227 Page 3 of44 and affirmative defenses: (i) the instant judicial claim should be denied for petitioner's failure to submit the complete supporting documents and substantiate the claim at the administrative level; (ii) a petition for review before the Court of an unsuccessful administrative claim is not an original action; and, (iii) claims for refund are construed strictly against the taxpayer and in favor of the government. Respondent filed his Pre-Trial Brief on October 13, 2016, 12 while petitioner's Pre-Trial Brief was filed on October 14, 2016. 13 During the October 18, 2016 pre-trial conference, the parties were ordered to file their Joint Stipulation of Facts and lssues. 14 On November 7, 2016, within the extended period granted by the Court, 15 the parties filed their Joint Stipulation of Facts and lssues. 16 On December 7, 2016, the Court issued the Pre-Trial Order thereby terminating the pre-trial conferenceY During trial, both parties presented their respective testimonial and pieces of documentary evidence. Petitioner presented the testimonies of Ms. Rachel Concepcion,18 Legal Entity Controller of petitioner, and Mr. Emmanuel Mendoza, 19 Court-commissioned Independent Certified Public Accountant (ICPA). With respect to its documentary evidence, petitioner filed its Formal Offer of Evidence20 on October 23, 2017, with respondent's opposition thereto filed on November 2, 2017. 21 In the Resolution dated September 7, 2018, 22 the Court admitted in evidence the exhibits of petitioner, except the following: Exhibits "P- 12 CTA Docket Vol. I, pp. 107-110. 13 CTA Docket Vol. I, pp. 123-132. 14 Minutes of the Hearing dated October 18, 2016, CTA Docket Vol. V, p. 2465; Order dated October 18, 2016, CTA Docket Vol. V, pp. 2467-2468. 15 Resolution dated November 22, 2016, CTA Docket Vol. V, p. 2486. 1s CTA Docket Vol. V, pp. 2472-2480. 17 CTA Docket Vol. V, pp. 2488-2494. 18 Minutes of the Hearing dated March 6, 2017, CTA Docket Vol. VI, p. 2613; Order dated March 6, 2017, CTA Docket Vol. VI, p. 2614. 19 Minutes of the Hearing dated July 10, 2017, CTA Docket Vol. VI, p. 2643; Order dated July 10, 2017, CTA Docket Vol. VI, p. 2645; Minutes of the Hearing dated September 18,2017, CTA Docket Vol. VI, p. 2790; Order dated September 18,2017, CTA Docket Vol. VI, p. 2791. 2o CTA Docket Vol. VI, pp. 2797-2840. 21 Opposition Re Petitioner's Formal Offer of Exhibits, CTA Docket Vol. XII, pp. 7298-7300. 22 CTA Docket Vol. XII, pp. 7309-7315.~

DECISION Deutsche Knowledge Services Pte., Ltd. vs. Commissioner of Internal Revenue CTA Case No. 9227 6.1", "P-6.38", "P-6.53", "P-6.56", "P-6.61 ",and "P-7.2" for failure of the descriptions in the formal offer to correspond to the descriptions of the documents actually marked; Exhibits "P-6.3", "P-6.5", and "P-6.25" for failure of petitioner to present the originals thereof for comparison; Exhibits "P-6.4", "P-6. 7", "P-6.39", "P-6.42", "P-6.52", "P-6.54", "P- 6.55", "P-6.58", "P-6.59, and "P-6.60" for failure of petitioner to present the originals thereof for comparison and for failure of the descriptions in the formal offer to correspond to the descriptions of the documents actually marked; and Exhibits "P-6.57", "P-12-39", "P-12-211" for not being found in the records of the case. In view of the reorganization of the three (3) Divisions of the Court, pursuant to CTA Administrative Circular No. 02-2018 dated September 18, 2018, the present case was transferred to this Division in the Order dated October 1, 2018. 23 Petitioner filed an Omnibus Motion (1) Motion for Partial Reconsideration (Re: Resolution dated September 7, 2018); (2) Motion to Set Commissioner's Hearing for the Comparison of Documents; and (3) Motion for Leave of Court to present witness on September 28, 2018.24 In the Resolution dated April 3, 2019, 25 the Court granted petitioner's Motion to Set Commissioner's Hearing for the Comparison of Documents and Motion for Leave of Court to Present Witness. On September 3, 2019, petitioner presented its Legal Entity Controller, Felix B. Angue, as its last witness. 26 Thereafter, petitioner filed a Supplemental Formal Offer of Evidence on September 24, 2019. In the Resolution dated November 22, 2019, 27 the Court admitted Exhibits "P-6.1 ", "P-6.3", "P-6.5'', "P-6.38", "P-6.4", "P-6.53", "P-6.56", "P-6.61", and "P-7.2". During the hearing on February 6, 2020, respondent manifested that he would no longer present any witness. 28 Respondent, however, offered in evidence Exhibit "R-1" or the Memorandum dated December 16, 2015, which was admitted in open Court on even date. The parties 23 CTA Docket Vol. XII, p. 7316 24 CTA Docket Vol. XII, pp. 7318-7328. 25 CTA Docket Vol. XII, pp. 7339-7341. 26 Order dated September 3, 2019, CTA Docket Vol. XII, pp. 7376-7377. 27 CTA Docket Vol. XII, pp. 7434-7435. 28 Minutes of Hearing dated February 6, 2020, CTA Docket Vol. XII, p. 7436-7437�, Order dated February 6, 2020, CTA Docket Vol. XII, pp. 7438-7441. ~

DECISION Deutsche Knowledge Services Pte., Ltd. vs. Commissioner of Internal Revenue CTA Case No. 9227 were given a period of thirty (30) days within which to file their respective memoranda. 29 Respondent filed his Memorandum on March 9, 2020, 30 while petitioner failed to file its memorandum. 31 Thus, in the Resolution dated July 15, 2020, the case was submitted for decision.32 On October 6, 2020, the Court directed the Court-commissioned ICPA to submit a soft copy of the annexes to the ICPA Report in Microsoft Word and/or Excel format pursuant to CTA En Bane Resolution No. 06-2013 dated May 28, 2013, within five (5) days from notice, and the Resolution dated July 15, 2020 was recalled and set aside. In the Resolution dated November 20, 2020, the Court noted the Transmittal Memo and one (1) flash drive containing a soft copy of ICPA Report in Microsoft Word format, and its annexes in Microsoft Excel format filed by Mendoza Querido & Co. on November 16, 2020. In the same Resolution, the Court submitted anew the case for decision. THE ISSUE The main issue for consideration of the Court, as stipulated by the parties, is: Whether or not petitioner is entitled to its claim for refund of or issuance of TCC for excess or unutilized input VAT in the amount of P31 ,681 ,201. 78 for the fourth (4th) quarter of CY 2013. 33 PETITIONER'S ARGUMENTS34 According to petitioner, since its excess input VAT for the fourth (4th) quarter of CY 2013 in the amount of P31 ,681,201.78 was derived from its purchases of goods and services attributable to zero-rated sales of services for the same period, which to date has remained unutilized and/or unapplied against its output VAT liability, petitioner is 29 /d. 30 CTA Docket Vol. XII, pp. 7442-7452. 31 Records Verification dated July 6, 2020, CTA Docket Vol. XII, p. 7454. 32 CTA Docket Vol. XII, p. 7456. 33 Stipulated Issue, JSFI, CTA Docket Vol. V, p. 2473. 34 Legal Bases, Petition for Review, CTA Docket Vol. I, pp. 13-15. ~

DECISION Deutsche Knowledge Services Pte., Ltd. vs. Commissioner of Internal Revenue CTA Case No. 9227 entitled to the refund of or issuance of TCC for said amount pursuant to Sections 108(8)(2) and 112(A), in relation to Section 11 O(B) of the National Internal Revenue Code (NIRC) of 1997, as amended. RESPONDENT'S ARGUMENTS35 Respondent counters that the instant judicial claim should be denied for petitioner's failure to substantiate its claim for refund at the administrative level. According to respondent, petitioner failed to submit complete supporting documents as mandated by Revenue Memorandum Circular (RMC) No. 54-2014. Hence, petitioner's allegation that it is entitled to refund or tax credit was not proved by sufficient evidence. Furthermore, respondent insists that the instant judicial claim for refund or tax credit is not an original action but an appeal from unsuccessful administrative remedy. Considering that petitioner did not submit the complete documents required by RMC 54-2014 at the administrative level, it cannot cure the defect by submitting complete documents before the Court. Finally, respondent avers that tax refunds partake the nature of tax exemptions, and are strictly construed against the claimant and in favor of the government. THE COURT'S RULING The CTA, as a court of record, may conduct a trial de novo and accept evidence not presented at the administrative level At the outset, the Court finds it imperative to resolve the issue raised by respondent that the present judicial claim should be denied for petitioner's failure to substantiate its claim for refund at the administrative level. The Court finds respondent's argument bereft of merit. 35 Discussion, Memorandum, CTA Docket Vol. XII, pp. 7443-7450(!1

DECISION Deutsche Knowledge Services Pte., Ltd. vs. Commissioner of Internal Revenue CTA Case No. 9227 Page 7 of44 The issue of whether or not the non-submission of documents at the administrative level bars a taxpayer from submitting documents before this Court has been time and again raised by respondent. The Court has repeatedly ruled that the non-submission of complete supporting documents at the administrative level is not necessarily fatal to the claimant's judicial claim. A taxpayer may present additional documents before the Court of Tax Appeals (CTA) to substantiate its claim for refund, albeit the same were not presented at the administrative level. Republic Act (RA) No. 1125, as amended, provides that the CTA is a court of record, viz.: "Section 8. Court of record; sea/; proceedings. - The Court of Tax Appeals shall be a court of record and shall have a seal which shall be judicially noticed. It shall prescribe the form of its writs and other processes. It shall have the power to promulgate rules and regulations for the conduct of the business of the Court, and as may be needful for the uniformity of decisions within its jurisdiction as conferred by law, but such proceedings shall not be governed strictly by technical rules of evidence." (Boldfacing supplied.) Undeniably, cases filed before this Court are litigated de novo, and party-litigants are required to prove every minute aspect of their cases. The explicit pronouncement in Philippine Airlines, Inc. vs. Commissioner of Internal Revenue36 that a taxpayer-claimant may present new and additional evidence before the CTA to support its case for tax refund is instructive: "The Commissioner contends that PAL failed to present several of its documentary evidence before the Bureau of Internal Revenue during the administrative level. Thus, she claims that the new evidence that petitioner presented in the Court of Tax Appeals should not have been considered because trial de novo in the Court of Tax Appeals must be limited to the evidence shown in the administrative claim. This Court rules that the Court of Tax Appeals is not limited by the evidence presented in the administrative claim in the Bureau of Internal Revenue. The claimant may present new and additional evidence to the Court of Tax Appeals to support its case for tax refund. Section 4 of the National Internal Revenue Code states that the Commissioner has the power to decide on tax refunds, but his or her decision is subject to the exclusive appellate jurisdiction of the Court of Tax Appeals: 36 G.R. Nos. 206079-80 and 206309, January 17, 2018. ~

DECISION Deutsche Knowledge Services Pte., Ltd. vs. Commissioner of Internal Revenue CTA Case No. 9227 XXX XXX XXX Republic Act No. 9282, Republic Act No. 1125, is the governing law on the jurisdiction of the Court of Tax Appeals. Section 7 provides that the Court of Tax Appeals has exclusive appellate jurisdiction over tax refund claims in case the Commissioner fails to act on them: XXX XXX XXX This means that while the Commissioner has the right to hear a refund claim first, if he or she fails to act on it, it will be treated as a denial of the refund, and the Court of Tax Appeals is the only entity that may review this ruling. The power of the Court of Tax Appeals to exercise its appellate jurisdiction does not preclude it from considering evidence that was not presented in the administrative claim in the Bureau of Internal Revenue. Republic Act No. 1125 states that the Court of Tax Appeals is a court of record: Section 8. Court of record; seal; proceedings. - The Court of Tax Appeals shall be a court of record and shall have a seal which shall be judicially noticed. It shall prescribe the form of its writs and other processes. It shall have the power to promulgate rules and regulations for the conduct of the business of the Court, and as may be needful for the uniformity of decisions within its jurisdiction as conferred by law, but such proceedings shall not be governed strictly by technical rules of evidence. As such, parties are expected to litigate and prove every aspect of their case anew and formally offer all their evidence. No value is given to documentary evidence submitted in the Bureau of Internal Revenue unless it is formally offered in the Court of Tax Appeals. Thus, the review of the Court of Tax Appeals is not limited to whether or not the Commissioner committed gross abuse of discretion, fraud, or error of law, as contended by the Commissioner. As evidence is considered and evaluated again, the scope of the Court of Tax Appeals' review covers factual findings." (Boldfacing supplied.) The Court is not barred from rece1vmg, evaluating and appreciating evidence submitted before it. Once the claim for refund has been elevated to the Court, the admissibility, materiality, relevance, probative value and weight of evidence presented to substantiate the claim become subject to the relevant provisions of the Rules of Court. C"1

DECISION Deutsche Knowledge Services Pte., Ltd. vs. Commissioner of Internal Revenue CTA Case No. 9227 In fine, in determining petitioner's entitlement to its claim for refund, this Court may consider all pieces of exhibits formally offered before it during trial, which were admitted in evidence. Discussion on the merits of the case Section 112 of the NIRC of 1997, as amended, specifies the legal basis in a claim for refund or issuance of a tax credit certificate of input VAT, including the taxpayer's remedy of appeal to this Court, in case of an adverse decision or inaction of the CIR, viz.: "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 8angko Sentral ng Pilipinas (8SP): 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 of 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 the basis of the volume of sales. Provided, finally, That for a person making sales that are zero-rated under Section 108(8) (6), the input taxes shall be allocated ratably between his zero-rated and non-zero-rated sales. XXX XXX XXX (C) Period within which Refund or Tax Credit of Input Taxes shall be Made.- In proper cases, the Commissioner shall grant a refund or issue the tax credit certificate for creditable input taxes within one hundred twenty (120) days from the date of submission of complete documents in support of the application filed in accordance with Subsection (A) hereof. In case of full or partial denial of the claim for tax refund or tax credit, or the failure on the part of the Commissioner to act on the application within the period prescribed above, the taxpayer affected may, within thirty (30) days from the receipt of the decision denying the claim or after the expiration of the one hundred twenty day- period, appeal the decision or the unacted claim with the Court of Tax Appeals.'OtJ

DECISION Deutsche Knowledge Services Pte., Ltd. vs. Commissioner of Internal Revenue CTA Case No. 9227 Based on the aforequoted provisions of law, a claimant must satisfy the following requisites in order to be entitled to a refund or tax credit of unutilized input VAT attributable to zero-rated sales: 1. The administrative and judicial claims were filed within the prescribed period; 2. The taxpayer-claimant must be VAT-registered; 3. There must be zero-rated or effectively zero-rated sales; 4. The input VAT were incurred or paid; 5. The input VAT are attributable to zero-rated or effectively zero-rated sales; and, 6. The input VAT were not applied against any output VAT liability. First Requisite: The administrative and judicial claims were filed on time Section 112(A) of the NIRC of 1997, as amended, specifically requires that a taxpayer's application for refund or issuance of TCC of unutilized and/or excess input VAT, which are attributable to its zero- rated sales, must be made within two (2) years after the close of the taxable quarter when the sales were made. Since the present claim covers the fourth (41h) quarter of CY 2013, petitioner had two (2) years after the close of the taxable quarter on December 31, 2013 or until December 31, 2015, within which to file its claim for refund. Petitioner's administrative claim for refund or issuance of TCC for the fourth (41h) quarter of CY 2013 was filed on September 1, 2015. Thus, the same was timely filed. Anent the timeliness of petitioner's judicial claim for refund or issuance of TCC, Section 11 of Republic Act (RA) No. 1125,37 as amended by RA No. 9282, 38 provides the period of limitation within which to appeal before this Court, viz.: 37 An Act Creating the Court of Tax Appeals. 38 An Act Expanding the Jurisdiction of the Court of Tax Appeals (CTA), Elevating Its Rank to the Level of a Collegiate Court with Special Jurisdiction and Enlarging its Membership Amending for the Purpose Certain Sections of Republic Act No. 1125, as amended, otherwise known as the Law Creating the Court of Tax Appeals, and for Other Purposes.C11

DECISION Deutsche Knowledge Services Pte., Ltd. vs. Commissioner of Internal Revenue CTA Case No. 9227 Page 11 of44 "SEC. 11. Who May Appeal; Mode ofAppeal; Effect ofAppeal. - Any party adversely affected by a decision, ruling or inaction of the Commissioner of Internal Revenue, the Commissioner of Customs, the Secretary of Finance, the Secretary of Trade and Industry or the Secretary of Agriculture or the Central Board of Assessment Appeals or the Regional Trial Courts may file an appeal with the CTA within thirty (30) days after the receipt of such decision or ruling or after the expiration of the period fixed by law for action as referred to in Section 7(a)(2) herein. Appeal should be made by filing a petition for review under a procedure analogous to that provided for under Rule 42 of the 1997 Rules of Civil Procedure with the CTA within thirty (30) days from the receipt of the decision or ruling or in the case of inaction as herein provided, from the expiration of the period fixed by law to act thereon. xxx" (Boldfacing supplied) In relation to the foregoing, Section 112(C) of the NIRC of 1997, as amended, provides that the taxpayer affected by denial or inaction of the CIR on its administrative claim may, within thirty (30) days from the receipt of the decision denying the claim or after the expiration of the one hundred twenty day (120)-period from the submission of complete documents, appeal the decision or the unacted claim with the Court of Tax Appeals. As aforementioned, on September 1, 2015, petitioner filed its administrative claim for refund or issuance of TCC representing its unutilized input VAT for the fourth (4th) quarter of CY 2013 in the amount of P31 ,681 ,201.78. Counting the 120-day period from September 1, 2015, respondent had until December 30, 2015 to act on the claim. Alleging inaction on the part of respondent, petitioner had thirty (30) days from expiration of the 120-day period on December 30, 2015 or until January 29, 2016 within which to file its judicial claim. Hence, the filing of the present Petition for Review on January 4, 2016 was timely made. Second Requisite: Petitioner is a VAT-registered entity Petitioner is registered with the BIR as a VAT-registered entity on June 16, 2005, with registered office address at Net Quad Center, 31st St. corner 4th Avenue, E-Square Zone Crescent Park West, Bonifacio Global City, Taguig City bearing Tax Identification Number 238-763-115-000 as stated on its Certificate of Registration39 with OCN No. 9RC0000270209 issued by the BIR. Hence, the second requisite was complied with. 39 Exhibit "P-2", CTA Docket, Vol. VI, p. 2859(1'1

DECISION Deutsche Knowledge Services Pte., Ltd. vs. Commissioner of Internal Revenue CTA Case No. 9227 Third Requisite: Petitioner had zero-rated sales during the subject period but only in the amount of P1, 130,802,485.20 Petitioner claims that during the fourth (41h) quarter of CY 2013, sales were made to persons engaged in business conducted outside the Philippines. The services are claimed to be transactions subject to zero percent (0%) VAT in accordance with Section 108(8)(2) of the NIRC of 1997, as amended, viz.: "SEC. 108. Value-added Tax on Sale of Services and Use or Lease of Properties. - 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 (0%) 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); (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);" (Emphases supplied) In order for a sale or supply of service to be subjected to zero percent (0%) VAT, certain requirements must be met under Section 108(8)(2) of the NIRC of 1997, as amended, to wit: 1) The services fall within any of the categories under Section 108(8)(2),40 or that the services rendered were other than "processing, manufacturing or repacking goods"; 41 �4 Commissioner of Internal Revenue vs. American Express International, Inc. (Philippine Branch), G.R. No. 152609, June 29, 2005. 41 Commissioner of Internal Revenue vs. Burmeister and Wain Scandinavian Contractor Mindanao, Inc, G.R. No. 153205, January 22, 2007. ~

DECISION Deutsche Knowledge Services Pte., Ltd. vs. Commissioner of Internal Revenue CTA Case No. 9227 2) The service was performed in the Philippines42 by a VAT-registered person; 3) The recipient of the services is a foreign corporation, and the said corporation is doing business outside the Philippines, or is a non-resident person not engaged in business who is outside the Philippines when the services were performed;43 and, 4) The payment for such services was made in acceptable foreign currency accounted for in accordance with BSP rules. 44 1I Petitioner rendered "services other than processing, manufacturing or repacking goods" Petitioner is licensed by the SEC to do business as a Regional Operating Headquarters (ROHQ) in the Philippines, pursuant to the Omnibus Investment Code of 1987, as amended by R.A. No. 8756 and its implementing rules and regulations. Under its Certificate of Registration and License duly issued by the SEC,45 petitioner is authorized to engage in the following services or functions: 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. Thus, it can be said that the foregoing services fall within the scope of "services other than processing, manufacturing or repacking of goods". 42 Commissioner of Internal Revenue vs. American Express International, Inc. (Philippine Branch}, G.R. No. 152609, June 29, 2005; Commissioner of Internal Revenue vs. Burmeister and Wain Scandinavian Contractor Mindanao, Inc, G.R. No. 153205, January 22, 2007. 43 Site/ Philippines Corporation (Formerly Clientlogic Phils. Inc.) vs. Commissioner of Internal Revenue, G.R. No. 201326, February 8, 2017; Commissioner of Internal Revenue vs. Burmeister and Wain Scandinavian Contractor Mindanao, Inc., G.R. No. 153205, January 22, 2007; Accenture, Inc. vs. Commissioneroflnternal Revenue, G.R. No. 190102, July 11,2012. 44 Commissioner of Internal Revenue vs. Burmeister and Wain Scandinavian Contractor Mindanao, Inc., G.R. No. 153205, January 22, 2007. 45 Exhibits "P-1", CTA Docket, Vol. I, p. 167. ~

DECISION Deutsche Knowledge Services Pte., Ltd. vs. Commissioner of Internal Revenue CTA Case No. 9227 2) Petitioner proved that its services were performed in the Philippines Petitioner presented Ms. Rachel Concepcion, its Legal Entity Controller, to prove, among others, that it rendered services in the Philippines to its non-resident foreign clients 46 Pertinent portion of Ms. Concepcion's testimony by way of her Sworn Statement47 is quoted hereunder: "024: How did Petitioner incur the input VAT credits which are the subject of the present claim of refund? A: Petitioner purchased goods and services in the course of rendering services in the Philippines as a shared services center to clients engaged in business conducted outside the Philippines. These clients are all part of the Deutsche Bank Aktiengesellschaft Group (DB Group). XXX XXX XXX 032: What is the relevance of Exhibits "P-6" to "P-6.60" to Petitioner's claim for refund? A: These documents show that Petitioner, with office address in the Philippines, rendered services within the Philippines to foreign clients operating outside the Philippines. In turn, Petitioner's foreign clients paid Petitioner for the services rendered in the Philippines. "48 (Boldfacing supplied) The records of the case does not show that Ms. Concepcion was disqualified to testify or her Sworn Statement or any of her answers therein were striken on the ground of inadmissibility in accordance with Section 649 of the Judicial Affidavit Rule (A.M. No. 12-8-8-SC dated September 4, 2012). Although respondent cross-examined Ms. Concepcion pursuant to Section 7 of the Judicial Affidavit Rule, 5� the 46 Submission dated October 14, 2016, CTA Docket Vol. I, pp. 133-135; Transcript of Stenographic Notes dated March 6, 2017, p 3. 47 Sworn Statement of Ms. Rachel Concepcion to Questions Propounded by Atty. Ma. Carmela A. Esquivias; Exhibit "P-38", CTA Docket Vol. I, pp. 136-165. 48 Exhibit "P-38" to "P-38-a", CTA Docket, Vol. I, pp. 136-165. 49 Section 6. Offer of and objections to testimony in judicial affidavit. - The party presenting the judicial affidavit of his witness in place of direct testimony shall state the purpose of such testimony at the start of the presentation of the witness. The adverse party may move to disqualify the witness or to strike out his affidavit or any of the answers found in it on ground of inadmissibility. The court shall promptly rule on the motion and, if granted, shall cause the marking of any excluded answer by placing it in brackets under the initials of an authorized court personnel, without prejudice to a tender of excluded evidence under Section 40 of Rule 132 of the Rules of Court. 50 Section 7. Examination of the witness on his judicial affidavit. -The adverse party shall have the right to cross-examine the witness on his judicial affidavit and on the exhibits attached to the same. The party who presents the witness may also examine him as on re-direct. In every case, the court(J/

DECISION Deutsche Knowledge Services Pte., Ltd. vs. Commissioner of Internal Revenue CTA Case No. 9227 Page 15 of44 cross-examination did not dwell on her testimony that petitioner rendered services in the Philippines. Respondent's failure to object to the evidence offered by petitioner renders the same admissible, and this Court cannot, on its own, disregard such evidence. 51 Truth to tell, the aforesaid Sworn Statement of Ms. Concepcion was likewise offered as documentary exhibit and the same was admitted in evidence in the Resolution dated September 7, 2018. 52 The foregoing unrebutted testimony of Ms. Concepcion that petitioner rendered services in the Philippines is given full weight and credence. Jurisprudence has it that an unrebutted testimony is enough evidence, 53 and sufficient to establish a basis for the court's award.54 Tax refund case is civil in nature, 55 and only a preponderance of evidence is needed to grant a claim for tax refund based on excess payment. 56 31 Petitioner failed to prove that all of its clients for CY 2013 are non-resident foreign corporations (NRFCs) doing business outside the Philippines To prove that its clients are non-resident foreign corporations doing business outside the Philippines, petitioner presented the following documents: 1. SEC Certificate of Non-Registration of Company; 57 2. IntraGroup Service Agreeements; 58 and, 3. Foreign Business Registration Documents. 59 shall take active part in examining the witness to determine his credibility as well as the truth of his testimony and to elicit the answers that it needs for resolving the issues. 51 Asian Construction and Development Corporation vs. COMFAC Corporation, G.R. No. 163915, October 12, 2006. 52 CTA Docket Vol. 12, pp. 7309-7315. 53 Bienvenido Yap vs. The Solicitor General, G.R. No. L-1602, September 8, 1942. 54 People of the Philippines vs. Elrose/1 Manzano y Brebonera @ Boy Ulo, G. R. No. 138303, November 26, 2001. 55 Philippine Phosphate Fertilizer Corporation vs. Commissioner of Internal Revenue, G.R. No. 141973, June 28, 2005. 56 Southern Philippines Power Corporation vs. Commissioner of Internal Revenue, G.R. No. 179632, October 19, 2011. 57 Exhibits "P-5" to "P-5.61", CTA Docket, Vol. VI, pp. 2916-2980 58 Exhibits "P-6" to "P-6.61", CTA Docket, Vols. VI-VIII, pp. 2981-5529. 59 Exhibits "P-7" to "P-7.11", CTA Docket, Vol. VIII, pp. 5530-5692; Exhibits "P-8" to "P-8.62", CTA Docket, Vol. VIII-XII, pp. 5693-7239r1

DECISION Deutsche Knowledge Services Pte., Ltd. vs. Commissioner of Internal Revenue CTA Case No. 9227 Each of the aforesaid documents, standing alone, is however inadequate to prove that petitioner's client is a non-resident foreign corporation doing business outside the Philippines. The SEC Certificates of Non-Registration only show that the named entities therein are not registered corporations/partnerships in the Philippines, but the same do not prove that such entities are doing business outside the Philippines. On the other hand, the Certificates/Articles of Foreign Incorporation/Registration, Tax Residence Certificates, and Screenshot of US SEC Website only prove that the entities named/stated therein were incorporated/organized/domiciled abroad but do not necessarily establish that such entities are not doing business in the Philippines. Meanwhile, the IntraGroup Service Agreements only show the names and addresses/places of incorporation/registration of petitioner's clients to whom it renders services but they do not, on their own, establish that such clients are non-resident foreign corporations doing business outside the Philippines. As declared in Site/ Philippines Corporation (formerly Clientlogic Phils., Inc.) vs. Commissioner of Internal Revenue, 60 service agreements do not prove that the foreign clients were doing business outside the Philippines or have a continuity of commercial dealings outside the Philippines. To be considered as an NRFC doing business outside the Philippines, each entity must be supported, at the very least, by BOTH: (1) SEC Certificate of Non-Registration of Corporation/Partnership; AND (2) proof of foreign incorporation/registration (i.e., Certificate/Articles of Foreign Incorporation/Association or printed screenshots of the US SEC Website showing the state/province/country where the entity was organized,61 or Tax Residence Certificate62). The following table shows the clients of petitioner which shall be accorded NRFC status as supported by their respective SEC Certification of Non-Registration of Company and proof of foreign incorporation/registration, i.e., certificate of registration/articles of incorporation: 60 G.R. No. 201326, February 8, 2017. 61 Commissioner of Internal Revenue vs. CITCO International Support Services Limited-Philippine ROHQ, CTA EB No. 2015, November 29, 2019. 62 Chevron Holdings, Inc. vs. Commissioner of Internal Revenue, CTA Case No. 8946, March 14, 2018.CJ1

DECISION Deutsche Knowledge Services Pte., Ltd. vs. Commissioner of Internal Revenue CTA Case No. 9227 Clients SEC Certification Business of Non- Registration Deutsche Asia Pacific Holdings Pte Ltd Document Deutsche Bank (Malaysia) Berhad Registration of Deutsche Bank Aktiengesellschaft, Filiale New York Company P-7 Deutsche Bank Aktiengesellschaft, Filiale Seoul P.7.1 Deutsche Bank Aktiengesellschaft, lnlandsbank P-5.6 P-7.4 Deutsche Bank Securities Inc. P-5.10 P.7.5 Deutsche Securities Inc. P-5.25 P-7.7 DB Consorzio S. Cons. a. r. I. P-5.28 P-7.8 DB Energy Trading LLC P-5.32 P-7.10 DB International (Asia) Limited P-5.36 P-8 DB Service Centre Limited P-5.44 P-8.1 DB Services New Jersey, Inc. P-8.2 Deutsche Asset Management (Hong Kong) Limited P-5 P-8.3 Deutsche Asset Management (Korea) Company P-5.1 P-8.4 Limited P-5.2 P.8.7 Deutsche Bank (Suisse) SA P-5.3 Deutsche Bank Aktiengesellschaft, Filiale Hong kong P-5.4 P-8.8 Deutsche Bank Aktiengesellschaft, Filiale P-5.7 P-8.11 Johannesburg P-8.19 Deutsche Bank Aktienqesellschaft, Filiale Labuan P-5.8 Deutsche Bank Aktienqesellschaft, Filiale London P-5.11 P-8.21 Deutsche Bank Aktienqesellschaft, Filiale Sinqapur P-5.19 P-8.22 Deutsche Bank Luxembourq S.A. P-8.23 Deutsche Bank Netherland N.V. P-5.21 P-8.29 Deutsche Bank Trust Company Americas P-5.22 P-8.33 Deutsche Bank Trust Corporation P-5.23 P-8.34 Deutsche Group Services Pty Limited P-5.29 P-8.38 Deutsche Investment Manaqement Americas Inc. P-5.33 P-8.39 Deutsche New Zealand Limited P-5.34 P-8.41 Deutsche Securities Korea Co. P-5.38 P-8.42 DWS Holdinq & Service GmbH P-5.39 P-8.43 RREEF Manaqement L.L.C. P-5.41 P-8.45 DB Alternative Tradinq Inc. P-5.42 P-8.47 DB Investment Partners, Inc. P-5.43 P-8.52 DeAWM Service Company P-5.45 P-8.54 Deutsche Bank National Trust Companv P-5.47 P-8.55 Deutsche Asset Management Group Limited P-5.52 P-8.56 Deutsche Bank Trust Companv Delaware P-5.54 P-8.58 P-5.55 P-8.59 P-5.56 P-8.62 P-5.58 P-5.59 P-5.62 On the other hand, the following clients of petitioner shall not be accorded NRFC status due to defects in the submitted foreign business registration documents, i.e., certificates of registration/articles of incorporation not in the English language for which the Court cannot ascertain their truthfulness and veracity, certificates of registration/articles of incorporation that pertain to a C1l

DECISION Deutsche Knowledge Services Pte., Ltd. vs. Commissioner of Internal Revenue CTA Case No. 9227 different entity, and those which are not supported by any foreign business registration document, to wit: Clients SEC Business Certification Registration DBOI Global Services Private Limited Deutsche Bank (China) Co., Ltd., Shanahai Branch of Non- Document DEUTSCHE BANK A.S. Registration Deutsche Bank Aktiengesellschaft, Asia Pacific Head of Company P-8.5 Office P-8.9 Deutsche Bank Aktiengesellschaft, Filiale Abu Dhabi P-5.5 P-8.12 Deutsche Bank Aktiengesellschaft, Filiale Amsterdam P-5.9 Deutsche Bank Aktiengesellschaft, Filiale Bangkok P-5.12 P-8.13 Deutsche Bank Aktiengesellschaft, Filiale Brossel P-8.14 Deutsche Bank Aktiengesellschaft, Filiale Dubai (DIFC) P-5.13 P-8.15 Deutsche Bank Aktiengesellschaft, Filiale Jakarta P-5.14 P-8.16 Deutsche Bank Aktiengesellschaft, Filiale Mumbai P-5.15 P-8.17 Deutsche Bank Aktiengesellschaft, Filiale Paris P-5.16 P-8.18 Deutsche Bank Aktiengesellschaft, Filiale Prag P-5.17 P-8.20 Deutsche Bank Aktiengesellschaft, Filiale Wien P-5.18 P-8.24 Deutsche Bank Aktiengesellschaft, Filiale ZOrich P-5.20 P-8.26 Deutsche Bank Polska Sp61ka Akcyjna P-5.24 P-8.27 Deutsche Bank Societa per Azioni P-5.26 P-8.30 Deutsche Bank, Sociedad An6nima Espanola P-5.27 P-8.31 Deutsche Trustees Malaysia Berhad P-5.30 P-8,35 DWS Investment S.A. P-5.31 P-8.37 000 Deutsche Bank P-5.35 P-8.40 PT. Deutsche Securities Indonesia P-5.37 P-8.46 RREEF Management GmbH P-5.40 P-8.48 Bankers International Corporation P-5.46 P-8.49 Deutsche Bank Aktiengesellschaft, Filiale Mainland P-5.48 P-8.50 Deutsche Bank AktienQesellschaft, Filiale Cayman Islands P-5.49 P-8.51 Deutsche Bank PGK AG P-5.50 P-8.53 Deutsche Bank Privat Und Geschaftskunden AktienQ P-5.51 P-8.57 DWS Investments Service Company P-5.53 None P-5.57 None P-5.60 P-8.61 P-5.61 None P-5.63 P-5.64 Thus, the alleged zero-rated sales made to the abovementioned clients in the total amount offt179,148,317.17 shall be disallowed by the Court, broken down as follows: CLIENT ORNO. OR DATE AMOUNT Deutsche Bank Aktienaesellschaft, Filiate Jakarta 4822 10/2113 P' 418,583.63 Deutsche Bank Aktienaesellschaft, Filiate Jakarta 4823 10/2/13 Deutsche Bank Aktienaesellschaft, Filiale Cavman Islands 4830 10/7113 418,583.63 Deutsche Bank Aktienaesellschaft, Filiale ZOrich 4831 10/7113 26,831.56 DWS Investment S.A. 4832 10/7113 Deutsche Bank Aktiengesellschaft, Asia Pacific Head Office 4837 10/7113 185,567.52 281,766.77 49,660,612.12 ~

DECISION Deutsche Knowledge Services Pte., Ltd. vs. Commissioner of Internal Revenue CTA Case No. 9227 000 Deutsche Bank 4839 10/8/13 119,917.63 DEUTSCHE BANK A.S. 4840 10/9/13 71,718.98 Deutsche Bank Aktiengesellschaft, Filiate Amsterdam 4841 10/9/13 3196.95 Deutsche Bank Aktiengesellschaft, Filiate Cayman Islands 4843 10/9/13 23,000.18 Deutsche Bank Aktiengesellschaft, Filiate Wien 4845 10/9/13 17,258.74 Deutsche Bank (China) Co., Ltd., Shanghai Branch 4846 10/9/13 Deutsche Bank (China) Co., Ltd., Shanghai Branch 4846 10/9/13 946,708.46 Deutsche Bank (China) Co., Ltd., Shanghai Branch 4846 10/9/13 (1 ,058,487.27) Deutsche Bank (China) Co., Ltd., Shanghai Branch 4846 10/9/13 Deutsche Bank (China) Co., Ltd., ShanQhai Branch 4846 10/9/13 901,038.38 Deutsche Bank AktienQesellschaft, Filiate Mumbai 4851 10/11/13 901 038.38 Deutsche Bank Aktienoesellschaft, Filiate Mumbai 4851 10/11/13 959,391.17 Deutsche Bank AktienQesellschaft, Filiate Abu Dhabi 4854 10/11/13 (4,507,985.18) Bankers International Corooration 4855 10/16/13 11 ,864, 772.87 Deutsche Bank Polska So61ka Akcvina 4857 10/17/13 Deutsche Bank Aktienaesellschaft, Filiate Praa 4858 10/18/13 563.79 Deutsche Bank Aktienaesellschaft, Filiate Banakok 4862 10/18/13 13,631,285.47 Deutsche Bank Aktienaesellschaft, Asia Pacific Head Office 4866 10/21/13 Deutsche Bank Aktiengesellschaft, Filiale Amsterdam 4868 10/23/13 8,678.71 Deutsche Bank Societa per Azioni 4871 10/23/13 17,426.89 Deutsche Bank PGK AG 4873 10/23/13 450,166.19 Deutsche Bank Aktiengesellschaft, Filiale Cayman Islands 4879 10/23/13 13 014,972.21 Deutsche Trustees Malaysia Berhad 4881 10/24/13 382,884.97 Deutsche Bank Aktiengesellschaft, Filiale Paris 4887 10/25/13 290,857.20 Deutsche Bank Aktiengesellschaft, Filiale Dubai (DIFC} 4891 10/29/13 114,643.67 PT. Deutsche Securities Indonesia 4892 10/31113 26,169.20 Deutsche Bank AktienQesellschaft, Filiale Dubai (DIFC) 4895 1114/13 42,358.64 000 Deutsche Bank 4896 11/4/13 247,341.94 DEUTSCHE BANK A.S. 4897 11/5/13 DEUTSCHE BANK A.S. 4897 11/5/13 280.76 DEUTSCHE BANK A.S. 4897 11/5/13 34,575.36 DEUTSCHE BANK A.S. 4897 11/5/13 172,876.56 DEUTSCHE BANK A.S. 4897 11/5/13 115,256.50 DEUTSCHE BANK A.S. 4897 11/5/13 (30,156.08) DEUTSCHE BANK A.S. 4897 11/5/13 70,771.02 DEUTSCHE BANK A.S. 4897 11/5/13 (84,539.29) DEUTSCHE BANK A.S. 4897 11/5/13 71,591.96 Deutsche Bank Aktiengesellschaft, Filiale Dubai (DIFC) 4901 11125/13 71,591.96 Deutsche Bank Aktienaesellschaft, Filiate BrOssel 4902 11/6/13 71,591.96 Deutsche Bank Aktienaesellschaft, Filiale BrOssel 4903 11/6/13 71,837.40 71,718.98 68 921.73 270.78 106,915.80 415,916.47 ~

DECISION Deutsche Knowledge Services Pte., Ltd. vs. Commissioner of Internal Revenue CTA Case No. 9227 Deutsche Bank Aktiengesellschaft, Filiale BrOssel 4904 11/6/13 775,800.98 Deutsche Bank Polska Sp61ka Akcyjna 4908 11/8/13 8,896.91 Deutsche Bank Polska Sp61ka Akcyjna 4908 11/8/13 8,912.55 Deutsche Bank Polska Sp61ka Akcyina 4908 11/8/13 8,912.55 Deutsche Bank Polska Sp61ka Akcyjna 4908 11/8/13 8,912.55 RREEF Management GmbH 4910 11/11/13 DWS Investment S.A. 4915 11/11/13 1,345,472.46 Deutsche Bank Aktiengesellschaft, Filiale Bangkok 4916 11/12/13 282,995.97 Deutsche Bank Aktiengesellschaft, Filiale Bangkok 4916 11/12/13 Deutsche Bank Aktiengesellschaft, Filiale Bangkok 4916 11/12/13 1,711,489.60 Deutsche Bank Aktiengesellschaft, Filiale Bangkok 4917 11/12/13 1,956,506.91 Deutsche Bank Aktiengesellschaft, Filiale Bangkok 4917 11/12/13 1,347,236.55 Deutsche Bank Aktiengesellschaft, Filiale Bangkok 4917 11/12/13 1,037,583.88 Deutsche Bank Aktiengesellschaft, Filiale Bangkok 4917 11/12/13 Deutsche Bank Aktiengesellschaft, Filiale Bangkok 4917 11/12/13 811,268.73 Deutsche Bank Aktienqesellschaft, Filiale Bangkok 4917 11/12/13 3,976.13 Deutsche Bank AktienQesellschaft, Asia Pacific Head Office 4919 11/12/13 Deutsche Bank AktienQesellschaft, Filiale Wien 4926 11/13/13 1,550,259.28 RREEF ManaQement GmbH 4934 11/15/13 2,754.28 Deutsche Bank Aktienaesellschaft, Filiale Amsterdam 4935 11/15/13 Deutsche Bank, Sociedad An6nima Esoafiola 4939 11/18/13 1,008,859.09 Deutsche Bank, Sociedad An6nima Esoafiola 4940 11/18/13 12,934,588.05 Deutsche Bank Aktienoesellschaft, Filiale Dubai (DIFCl 4941 11/18/13 Deutsche Bank Societa per Azioni 4946 11/19/13 17,362.78 Deutsche Bank Aktiengesellschaft, Filiale Mainland 4947 11119/13 1,355,444.12 Deutsche Bank Aktiengesellschaft, Filiale Mainland 4947 11/19/13 Deutsche Bank Polska Sp61ka Akcvina 4951 11/20/13 379,087.90 Deutsche Bank Polska Sp61ka Akcyjna 4951 11/20/13 695,874.67 Deutsche Bank Polska Sp61ka Akcyina 4951 11/20/13 695,874.67 Deutsche Bank Polska Sp61ka Akcyjna 4951 11/20/13 173,968.67 Deutsche Bank Polska Sp61ka Akcyjna 4951 11/20/13 289,211.81 Deutsche Bank Polska Sp61ka Akcyjna 4951 11/20/13 243,874.24 Deutsche Bank Polska So61ka Akcyjna 4951 11/20/13 Deutsche Bank Polska So61ka Akcvina 4951 11/20/13 41,953.93 Deutsche Bank Polska So61ka Akcvina 4951 11/20/13 3,564.33 Deutsche Bank Polska So61ka Akcvina 4951 11/20/13 477.61 Deutsche Bank Polska So61ka Akcvina 4951 11/20/13 (812.77) Deutsche Bank Polska Sp61ka Akcvina 4951 11/20/13 168.46 Deutsche Bank Polska Sp61ka Akcyina 4951 11/20/13 5,934.05 Deutsche Bank Polska Sp61ka Akcyjna 4951 11/20/13 9,270.22 9,880.82 8,566.22 11,378.67 11,597.37 8,033.63 4,560.92 6,810.06 7,690.21 (Yj

DECISION Deutsche Knowledge Services Pte., Ltd. vs. Commissioner of Internal Revenue CTA Case No. 9227 Deutsche Bank Polska Sp61ka Akcvina 4951 11120113 (8,577.45) Deutsche Bank Polska Sp61ka Akcyjna 4951 11120113 4,396.01 Deutsche Bank PGK AG 4952 11120113 Deutsche Bank Aktiengesellschaft, Filiate Bangkok 4955 11120113 93,070.27 Deutsche Bank Aktiengesellschaft, Filiate Jakarta 4958 11120113 451,553.40 Deutsche Bank Aktiengesellschaft, Filiate Paris 4959 11121113 416,592.22 RREEF Management GmbH 4961 11122113 243,797.68 Deutsche Bank Aktiengesellschaft, Filiate ZOrich 4966 11125113 1,391,467.34 Deutsche Bank Aktiengesellschaft, Asia Pacific Head Office 4968 11125113 180,881.26 Deutsche Bank Polska So61ka Akcvina 4971 11126113 54,956,097.52 Deutsche Bank Aktienaesellschaft, Filiate Prag 4973 11128113 Deutsche Bank Aktienaesellschaft, Filiate Praa 4973 11128113 8,761.35 Deutsche Bank Aktienaesellschaft, Filiate Praa 4973 11128113 3,587.74 Deutsche Bank Aktiengesellschaft, Filiate Praa 4973 11128113 (2,076.16) Deutsche Bank Aktiengesellschaft, Filiale Praa 4973 11128113 Deutsche Bank Aktiengesellschaft, Filiale Prag 4973 11128113 480.67 Deutsche Bank Aktiengesellschaft, Filiale Prag 4973 11128113 (817.96) Deutsche Bank Aktiengesellschaft, Filiale Prag 4973 11128113 Deutsche Bank Aktiengesellschaft, Filiale Prag 4973 11128113 169.54 Deutsche Bank Aktiengesellschaft, Filiale Prag 4973 11128113 4,635.93 Deutsche Bank Aktiengesellschaft, Filiale Prag 4973 11128113 3 211.78 Deutsche Bank Aktiengesellschaft, Filiale Prag 4973 11128113 1,847.11 PT. Deutsche Securities Indonesia 4974 11129113 2,727.54 DBOl Global Services Private Limited 4975 1213113 3,080.31 DBOl Global Services Private Limited 4975 1213113 (3,578.22) DBOl Global Services Private Limited 4975 1213/13 1,704.94 DBOl Global Services Private Limited 4975 1213113 35,185.57 DBOl Global Services Private Limited 4975 1213/13 9,606.13 DBOl Global Services Private Limited 4975 1213/13 3,282.46 DBOI Global Services Private Limited 4975 1213113 11,080.27 DBOI Global Services Private Limited 4975 1213113 614,152.80 DBOI Global Services Private Limited 4975 12/3/13 553,912.93 DBOI Global Services Private Limited 4975 1213113 (220,417.17) DBOI Global Services Private Limited 4975 1213/13 301,122.17 DBOI Global Services Private Limited 4975 1213113 301,122.17 Deutsche Bank Aktiengesellschaft, Filiale Cayman Islands 4976 143,828.77 DBOI Global Services Private Limited 4977 1213113 301,122.17 DBOI Global Services Private Limited 4977 1213113 301,594.31 DBOI Global Services Private Limited 4977 1213113 301,594.31 DBOI Global Services Private Limited 4977 1213113 6,585.32 1213113 160,616.55 697,116.97 274,269.09 293,284.88 &1

DECISION Deutsche Knowledge Services Pte., Ltd. vs. Commissioner of Internal Revenue CTA Case No. 9227 DBOI Global Services Private Limited 4977 12/3/13 380,183.89 12/3/13 405,783.59 DBOI Global Services Private Limited 4977 12/3/13 427,918.88 12/3/13 366,294.81 DBOI Global Services Private limited 4977 12/3/13 12/4/13 3,124.85 DBOI Global Services Private Limited 4977 12/4/13 883,186.81 12/5/13 908,370.94 Deutsche Bank Aktiengesellschaft, Filiate Amsterdam 4978 12/9/13 117,748.84 12/9/13 293,877.28 Deutsche Bank AktienQesetlschaft, Filiate Banakok 4982 12/9/13 212,920.53 12/9/13 391 336.23 Deutsche Bank AktienQesellschaft, Filiate Banakok 4982 12/9/13 386,729.05 12/9/13 659,622.83 000 Deutsche Bank 4984 12/9/13 1,307,079.48 12/9/13 324 362.02 DWS Investment S.A. 4986 12/9/13 193,493.75 12/9/13 Deutsche Bank Aktienaesellschaft, Filiate Abu Dhabi 4987 12/9/13 999.27 12/9/13 691.80 Deutsche Bank Aktienoesellschaft, Filiate Abu Dhabi 4987 12/9/13 382.52 12/9/13 659.12 Deutsche Bank Aktienoesellschaft, Filiate Abu Dhabi 4987 12/10/13 (805.59) 12/10/13 358.91 Deutsche Bank Aktienoesellschaft, Filiate Abu Dhabi 4987 12/11113 429,292.83 12/11/13 18,013.52 Deutsche Bank Aktienoesellschaft, Filiate Abu Dhabi 4987 12/11/13 (2,117.83) 12/11/13 8,841.46 Deutsche Bank Aktienoesellschaft, Filiate Abu Dhabi 4987 12/11/13 3,930.42 12/12/13 3,783.56 Deutsche Bank Aktienaesellschaft, Filiale Abu Dhabi 4987 12/12/13 997,577.25 12/12/13 552,611.92 Deutsche Bank Aktienaesellschaft, Filiale Abu Dhabi 4987 12/13/13 552,611.91 12/13/13 531,056.27 Deutsche Bank Aktiengesellschaft, Filiale Abu Dhabi 4987 12/16/13 8,984.51 12/16/13 4.70858 Deutsche Bank Aktiengesellschaft, Filiale Abu Dhabi 4987 12/16/13 17,946.13 12/17/13 13,394,229.20 Deutsche Bank Aktiengesellschaft, Filiale Abu Dhabi 4987 12/17/13 225.14 12/17/13 Deutsche Bank Aktiengesellschaft, Filiale Abu Dhabi 4987 - Deutsche Bank Aktiengesellschaft, Filiale Abu Dhabi 4987 (28,408,432.08) 2,608.52 Deutsche Bank Aktiengesellschaft, Filiale Jakarta 4988 Cf1 Deutsche Bank Aktiengesellschaft, Filiale Prag 4989 Deutsche Bank Polska Sp61ka Akcyjna 4990 Deutsche Bank Polska Sp61ka Akcvina 4990 Deutsche Bank Polska Sp61ka Akcvina 4990 Deutsche Bank Polska Sp61ka Akcvina 4990 Deutsche Bank (China) Co., Ltd., Shanahai Branch 4991 Deutsche Bank Aktienaesellschaft, Filiale Mumbai 4992 Deutsche Bank Aktienaesellschaft, Filiale Mumbai 4992 Deutsche Bank Aktiengesellschaft, Filiale Mumbai 4992 Deutsche Bank Polska So61ka Akcvina 4995 Deutsche Bank Aktiengesellschaft, Filiale Brossel 4996 Deutsche Bank Aktiengesellschaft, Filiale Wien 4997 Deutsche Bank Aktiengesellschaft, Asia Pacific Head Office 4999 Deutsche Bank AktienQesellschaft, Filiale Dubai (DIFC) 5000 Deutsche Bank PGK AG 5007 Bankers International Corooration 5018 Deutsche Bank Aktienaesellschaft, Filiale Amsterdam --- 5027

DECISION Deutsche Knowledge Services Pte .. Ltd. vs. Commissioner of Internal Revenue CTA Case No. 9227 Deutsche Bank Aktiengesellschaft, Filiale Paris 5030 12/18/13 253,235.86 Deutsche Bank Polska Sp61ka Akcyjna 5031 12/18/13 9,006.25 Deutsche Bank Aktiengesellschaft, Filiale Bangkok 5033 12/18/13 Deutsche Bank Polska Sp61ka Akcvina 5038 12/19/13 465,308.95 Deutsche Bank Polska Sp61ka Akcyjna 5040 12/19/13 8,984.04 Deutsche Bank Aktiengesellschaft, Filiale Dubai (DIFC) 5043 12/23/13 8,984.04 Deutsche Bank AktienQesellschaft, Filiale Prag 5044 12/23/13 Deutsche Bank Aktienqesellschaft, Filiale BrUssel 5045/5046 12/27/13 179,461.18 Total 17,946.00 550,044.06 P'178189 718.35 4) Petitioner proved that its alleged zero-rated sales. except for the amount of ~261.584.33. were paid for in US Dollars and were accounted for in accordance with the BSP Rules For the services rendered to its affiliates for the fourth (41h) quarter of CY 2013, petitioner was paid in US Dollars which were accounted for in accordance with 8SP rules and regulations, as evidenced by the electronic print-outs of the inward remittances.63 Considering that these documents attest to the fact of payment in acceptable foreign currency and accounted for in accordance with the rules and regulations of the 8SP, petitioner is considered to have complied with the fourth requisite, except for the following which shall be disallowed considering that the proof of inward remittances does not show the equivalent amount in Philippine peso: CLIENT OR OR EXHIBIT- AMOUNT DB Consorzio S. Cons. a. r. I. NO. DATE REMITTANCE p 261,584.33 4945 11/19/13 P-10-1138 5) Compliance with Invoicing Requirements In addition to the four (4) requisites to be considered as valid zero-rated sales under Section 108(8)(2) of the NIRC of 1997, as amended, there is a need to determine petitioner's compliance with the invoicing requirements under the law and regulations. Sections 113(A)(2), (8)(1 ), (2)(c) and (3) of the NIRC of 1997, as amended, provide that a VAT taxpayer shall, for every lease of goods 63 Exhibits "P-10-1b" to "P-10-206b" -~

DECISION Deutsche Knowledge Services Pte., Ltd. vs. Commissioner of Internal Revenue CTA Case No. 9227 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;" (Emphasis supplied) Sections 4.113-1 (A)(2), (8)(1) and (2)(c) of Revenue Regulations (RR) No. 16-2005 likewise provide for the same invoicing requirements as found in the NIRC of 1997, as amended, to wit: "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 (!1

DECISION Deutsche Knowledge Services Pte., Ltd. vs. Commissioner of Internal Revenue CTA Case No. 9227 receipt. All purchases covered by invoices/receipts other than VAT lnvoiceNAT Official Receipt shall not give rise to any input tax. VAT invoice/official receipt shall be prepared at least in duplicate, the original given to the buyer and the duplicated to be retained by the seller as part of his accounting records. (B) Information contained in VAT invoice or VAT official receipt.- The following information shall be indicated in VAT invoice or VAT official receipt: (1) A statement that the seller is a VAT-registered person, followed by his TIN; (2) The total amount which the purchaser pays or is obligated to pay to the seller with the indication that such amount includes the VAT; Provided, That: XXX XXX XXX (C) If the sale is subject to zero percent (0%) VAT, the term 'zero-rated sale' shall be written or printed prominently on the invoice or receipt;" (Emphasis supplied) Pursuant to the foregoing provisions, the zero-rated sales made by petitioner 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 non-resident foreign clients/affiliates and was paid in foreign currency duly accounted for in accordance with the rules and regulations of the BSP for the fourth (4th) quarter of CY 2013, petitioner presented its Schedule of Sales Transactions, 54 and the related official receipts, 65 sales invoices,66 and bank inward remittances. 67 Upon scrutiny of the abovementioned documents, the Court finds that out of the zero-rated sales in the amount of P1 ,462,453,544.50 declared per VAT return for the fourth (4th) quarter of CY 2013, sales amounting to P150,849,774.47 must be disallowed as they were not duly supported by VAT official receipts, viz.: CLIENT EXHIBIT ORNO. OR DATE AMOUNT Deutsche Bank Aktienaesellschaft, Filiale New York P-1 0-8 4830 10/7113 Deutsche Investment Manaaement Americas Inc. P-1 0-8 4830 10/7113 ~ 6,379,601.87 287,778.71 64 Exhibit "P-31 ". 65 Exhibits "P-10-1" to "P-10-206". 66 Exhibits "P-10-1a" to "P-10-206a". C1J 67 Exhibits "P-10-1b" to "P-10-206b".

DECISION Deutsche Knowledge Services Pte., Ltd. vs. Commissioner of Internal Revenue CTA Case No. 9227 DeAWM Service Company P-10-8 4830 1017113 95,953.95 RREEF Management L.L.C. P-10-8 4830 10/7113 3,028.51 DB Alternative Trading Inc. P-10-31 4855 10116113 4,214.25 DB Energy Trading LLC P-10-31 4855 10116113 Deutsche Bank Securities Inc. P-10-35 4859 10118113 168,742.52 Deutsche Bank Securities Inc. P-10-35 4859 10118113 7,091,385.83 Deutsche Bank Securities Inc. P-10-35 4859 10118113 Deutsche Bank Trust Company Americas P-1 0-35 4859 10118113 278,594.48 DB Services New Jersey, Inc. P-1 0-35 4859 10118113 283,613.99 Deutsche Bank Trust Company Delaware P-1 0-35 4859 10118113 381,890.61 Deutsche Bank National Trust Company P-1 0-35 4859 10118113 685,566.76 DB Investment Partners, Inc. P-10-35 4859 10118113 15,464,960.48 Deutsche Bank Trust Company Americas P-10-54 4879 10123113 DeAWM Service Company P-1 0-54 4879 10123113 4,299.41 RREEF Management L.L.C. P-1 0-54 4879 10123113 378.32 Deutsche Bank Aktiengesellschaft, Filiale New York P-10-54 4879 10123113 Deutsche Bank Aktiengesellschaft, Filiale New York P-1 0-59 4884 10124113 1,156,561.36 Deutsche Investment Management Americas Inc. P-1 0-59 4884 10124113 3,622.90 RREEF Management L.LC. P-1 0-59 4884 10124113 DB Energy Trading LLC P-10-59 4884 10124113 12,605.72 Deutsche Investment Management Americas Inc. P-1 0-59 4884 10124113 27,151,298.88 DB Services New Jersey, Inc. P-1 0-59 4884 10124113 DB Energy Trading LLC P-10-59 4884 10124113 3,370,347.13 DB Energy Trading LLC P-10-59 4884 10124113 1,380,530.07 Deutsche Asset Management (Korea) Company Limited P-10-64 4889 10129113 70,487.70 Deutsche Bank Aktiengesellschaft, Filiale New York P-10-82 4909 11111113 78,257.65 Deutsche Bank Aktiengesellschaft, Filiale New York P-10-96 4927 11113113 299,406.62 Deutsche Bank Trust Company Americas P-10-96 4927 11113113 3,050, 187.77 RREEF ManaQement L.L.C. P-10-117 4950 11120113 103,720.33 Deutsche Investment Management Americas Inc. P-10-129 4962 11122113 29,423.95 Deutsche Bank Trust Company Americas P-10-129 4962 11122113 DB Investment Partners, Inc. P-10-129 4962 11122113 286,279.89 DB Alternative Tradinq Inc. P-10-132 4965 11125113 4,718,989.35 DB Enerov Tradino LLC P-10-132 4965 11125113 27,056,437.19 DB Services New Jersey, Inc. P-10-168 5001 12112113 1,659,957.52 Deutsche Bank Aktienqesellschaft, Filiale New York P-10-185 5018 12117113 Deutsche Bank Trust Companv Americas P-10-185 5018 12117113 662,126.72 Deutsche Bank Trust Companv Delaware P-10-185 5018 12117113 295,813.32 Deutsche Investment Manaaement Americas Inc. P-10-185 5018 12117113 311,483.64 Deutsche Bank Trust Company Americas P-1 0-185 5018 12117113 Deutsche Bank Aktiengesellschaft, Filiale New York P-10-185 5018 12117113 49.72 Deutsche Asset Management (Korea) Company 646.89 Limited P-10-189 5029 12120113 Deutsche Asset Management (Korea) Company . Limited P-10-189 5029 12120113 Total 117,975.89 729,587.90 10,180,084.04 193,248.77 1,775,526.93 5,101,224.15 1,722,019.31 28,087,086.14 (177,235.88) 292,013.21 P' 150,849,774.47 Further, the Court finds that the following amounts of zero-rated sales claimed by petitioner were higher than the amounts reflected in the bank inward remittances, thus, the difference of P2,349,982.15 should likewise be disallowed: ~

DECISION Deutsche Knowledge Services Pte., Ltd. vs. Commissioner of Internal Revenue CTA Case No. 9227 CLIENT EXHIBIT AMOUNT AMOUNT OF EXCESS REPORTED AS REMITTANCE CLAIM SALES Deutsche Bank Aktiengesellschaft, P-10-3B ~ 2,161,990.97 ~ 2,157,356.90 ~ 4,634.07 lnlandsbank P-10-4B Deutsche Bank Aktiengesellschaft, P-10-5B 3,589,786.04 3,582,091.60 7,694.44 lnlandsbank Deutsche Bank Aktiengesellschaft, 4,006,395.58 3,997,808.16 8,587.42 lnlandsbank Deutsche Bank Luxembourg S.A. P-10-7B 198,424.01 198,227.41 196.60 Deutsche Bank Aktiengesellschaft, Filiale Singapur P-10-118 41,057,438.68 41,014,005.62 43,433.06 Deutsche Bank Aktiengesellschaft, Filiale Hongkong P-10-12B 33,526,553.93 33,491,087.50 35,466.43 P-10-198 138,893.39 134,253.91 4,639.48 Deutsche Bank Trust Corporation P-10-558 45,372.51 P-10-558 90,682.76 134,564.04 1 ,491.23 Deutsche New Zealand Limited P-10-618 352,004.92 351,950.25 54.67 i P-10-638 193,533.54 Deutsche New Zealand Limited 280.76 193,252.78 P-10-65B 1,755,805.69 Deutsche Securities Korea Co. P-10-688 1,254,304.34 1,751,596.24 4 209.45 P-10-738 1,250,549.91 3,754.43 Deutsche Bank Luxembourg S.A. P-10-74B 433,685.03 5,840.83 Deutsche Bank Aktiengesellschaft, P-10-79B 433,685.03 427,844.20 Filiale Seoul P-10-80B 248,389.82 427,668.33 . P-10-80B 245,872.85 DB Services New Jersey, Inc. P-10-80B 2,936.92 6,016.70 P-10-80B (5,853.98) 2,516.97 Deutsche Bank (Suisse) SA P-10-80B P-10-80B 2,554.91 310,230.20 3,013.72 Deutsche Bank (Suisse) SA P-10-80B 2,259.35 4,310,409.68 5,842.73 P-10-808 (4,516.36) Deutsche Bank Netherland N.V. P-10-808 2,441.59 P-10-808 44,534.51 Deutsche Bank Luxembouro S.A. P-1 0-808 16,118.59 P-10-808 15,217.31 Deutsche Bank Luxemboura S.A. P-10-80B 20,681.68 P-10-808 18,494.18 Deutsche Bank Luxemboura S.A. P-10-80B 16,845.81 8,078.86 Deutsche Bank Luxemboura S.A. P-10-97B 49,104.03 124,346.52 Deutsche Bank Luxemboura S.A. P-10-99B 4,316,252.41 Deutsche Bank Luxemboura S.A. P-10-998 103,151,623.14 Deutsche Bank Luxemboura S.A. P-10-998 293,458.14 Deutsche Bank Luxemboura S.A. P-10-1068 6,260,440.58 109,264,073.53 441,448.33 Deutsche Bank Luxemboura S.A. P-1 0-1078 20,766,628.04 1,743.36 20,768,371.40 25,862,436.95 Deutsche Bank Luxemboura S.A. P-10-1118 1,718,658.70 41,605.29 25,904,042.24 80.16 848.52 Deutsche Bank Luxemboura S.A. P-10-1128 0.04 1,719,507.22 Deutsche Bank Luxemboura S.A. P-10-116B 80.20 Deutsche Bank Luxembourg S.A. P-10-116B 23,051,711.05 Deutsche Bank Luxembourg S.A. P-1 0-117B 6,024,056.56 28,992,042.75 83,724.86 Deutsche Bank Luxembourg S.A. P-1 0-1208 5,183,018.43 30,914.50 Deutsche Group Services Pty 5,213,932.93 439,201.20 Limited P-10-1218 12,350,685.72 73,445.39 Deutsche Bank Aktiengesellschaft, 12,789,886.92 13,886,654.94 Filiale London ~ Deutsche Bank Aktiengesellschaft, 13,960,100.33 Filiale London Deutsche Bank Aktiengesellschaft, Filiale London Deutsche Group Services Pty Limited Deutsche Bank Aktiengesellschaft, Filiale Hongkong Deutsche Bank Trust Company Delaware Deutsche Asset Management Group Limited Deutsche Bank Aktiengesellschaft, Filiale Sinaaour Deutsche Bank Aktiengesellschaft, Filiale Sinaaour Deutsche Investment Management Americas Inc. Deutsche Bank Aktiengesellschaft, lnlandsbank Deutsche Bank Aktiengesellschaft, lnlandsbank

DECISION Deutsche Knowledge Services Pte., Ltd. vs. Commissioner of Internal Revenue CTA Case No. 9227 Deutsche Bank Securities Inc. P-10-1238 6,784,226.26 6,748,533.81 35,692.45 Deutsche Bank Netherland N.V. P-10-1248 251,230.93 249,909.16 1,321.77 Deutsche Bank Aktiengesellschaft, P-10-1348 1,752,858.29 1,751,166.84 1 ,691.45 Filiate Seoul DB Consorzio S. Cons. a. r. I. P-10-1368 263,419.27 263,165.08 254.19 Deutsche Bank Aktiengesellschaft, P-10-1398 175,420.65 175,397.87 22.78 Filiate Johannesbura Deutsche Bank Netherland N.V. P-10-1468 704,579.12 703,646.50 932.62 Deutsche Bank Aktiengesellschaft, P-10-1478 2,015,577.51 2,012,909.58 2,667.93 lnlandsbank Deutsche Bank Netherland N.V. P-10-1488 6,623.93 6,142.10 481.83 Deutsche Bank Aktiengesellschaft, P-10-1508 (55,301.30) lnlandsbank P-10-1508 460,670.17 403,754.69 1 614.18 Deutsche Bank Aktiengesellschaft, lnlandsbank DWS Holding & Service GmbH P-10-1528 1,469,386.39 1,460,023.45 9,362.94 Deutsche Bank Aktiengesellschaft, P-10-161 8 118,998,405.60 118,914,236.33 84,169.27 Filiale London P-10-1688 Deutsche Bank Aktiengesellschaft, P-10-1698 6,009,770.90 5,999,776.82 9,994.08 Filiale New York P-1 0-1708 28,662,821.99 28,620,316.67 42,505.32 Deutsche Bank Aktiengesellschaft, 35,708,284.97 35,655,331.63 52,953.34 Filiate Singapur Deutsche Bank Aktiengesellschaft, Filiale Hongkong Deutsche Securities Inc. P-10-1718 15,084,667.09 Deutsche Securities Inc. P-10-1718 29,181,489.28 44,200,512.20 65,644.17 Deutsche Securities Inc. P-10-1728 6,979,442.48 6,969,092.36 10,350.12 Deutsche Bank Luxembourg S.A. P-10-174 50,623.82 50,548.74 75.08 Deutsche Bank Aktiengesellschaft, P-1 0-1758 1,109,976.36 1,106,381.35 3,595.01 lnlandsbank P-10-1768 2,050,145.96 2,043,505.91 6,640.05 Deutsche Bank Aktiengesellschaft, P-10-1788 6,014,624.71 5,995,144.47 19,480.24 lnlandsbank P-10-1808 2,475,688.56 2,467,670.26 8,018.30 Deutsche Bank Aktiengesellschaft, P-10-1818 2,050,145.96 2,043,505.91 6,640.05 Filiale Hongkong P-10-1828 15,826,825.24 15,775,565.13 51,260.11 P-10-1838 2,475,688.56 2,467,670.26 8,018.30 Deutsche Bank Aktiengesellschaft, P-10-1848 3,636,224.25 lnlandsbank P-10-1848 87,281,254.74 97,086,476.46 295,401.59 Deutsche Bank Aktiengesellschaft, P-10-1848 6,464,399.06 179,108.43 838.96 lnlandsbank P-10-1868 Deutsche Bank Aktiengesellschaft, P-10-1888 179,947.39 4,454,310.14 22,084.79 lnlandsbank 4,476,394.93 Deutsche Bank Aktiengesellschaft, lnlandsbank Deutsche Bank Aktiengesellschaft, Filiale London Deutsche Bank Aktiengesellschaft, Filiale London Deutsche Bank Aktiengesellschaft, Filiale London Deutsche Bank Aktiengesellschaft, Filiale Johannesburg Deutsche Group Services Pty Limited Deutsche Securities Korea Co. P-10-1928 360,392.85 Deutsche Securities Korea Co. P-10-1928 360,392.85 718,207.17 2,578.53 DB Service Centre Limited P-10-1948 16,782.09 DB Service Centre Limited P-10-1948 1,525.81 DB Service Centre Limited P-10-1948 106,525.35 DB Service Centre Limited P-10-1948 106,525.35 DB Service Centre Limited P-10-1948 106,525.35 DB Service Centre Limited P-10-1948 517,740.19 DB Service Centre Limited P-10-1948 517,740.19 DB Service Centre Limited P-10-1948 (34,938.95) 1,333,030.38 5,395.00 RREEF Manaoement L.L.C. P-1 0-1958 682,296.90 532,418.66 149,878.24 Deutsche Bank Aktiengesellschaft, P-10-1968 86,913.96 86,503.03 410.93 Filiale Labuan P-10-1978 Deutsche Bank Aktiengesellschaft, 1,797,967.30 1,791,535.27 6,432.03 Filiale Seoul Total " 706,425,555.59 " 704,075,573.44 1'2,349,982.15 ~

DECISION Deutsche Knowledge Services Pte., Ltd. vs. Commissioner of Internal Revenue CTA Case No. 9227 Accordingly, only the amount of P1, 129,567,393.85, detailed below, qualifies for VAT zero-rating under Section 108(8)(2) of the NIRC of 1997, as amended: CLIENT EXHIBIT� ORNO. OR DATE EXHIBIT- AMOUNT OR REMITTANCE Deutsche Bank Aktiengesellschaft, 10/2/13 ,. JI lnlandsbank P-10-3 4824 10/2/13 P-10-3B 2,157,356.90 Deutsche Bank Aktiengesellschaft, 10/2113 P-10-4B 3,582,091.60 i lnlandsbank P-1 0-4 4825 10/2/13 P-10-5B 3,997,808.16 I Deutsche Bank Aktiengesellschaft, 10/2/13 P-10-6B 84,781.01 lnlandsbank P-10-5 4826 10/2/13 P-10-6B 35,512.59 10/2/13 P-10-6B 28,030.88 DB Consorzio S. Cons. a. r. I. P-10-6 4827 10/2/13 P-10-6B 25,091.17 10/2/13 P-10-6B 36,820.04 DB Consorzio S. Cons. a. r. I. P-10-6 4827 10/2113 P-10-6B 33,766.39 10/2/13 P-10-6B 25,039.48 DB Consorzio S. Cons. a. r. I. P-1 0-6 4827 10/2/13 P-10-6B 30,617.00 10/2/13 P-10-6B 34,905.27 DB Consorzio S. Cons. a. r. I. P-1 0-6 4827 10/4/13 P-10-6B 39,717.46 10/7113 P-10-7B 198,227.41 DB Consorzio S. Cons. a. r. I. P-1 0-6 4827 10/7113 P-10-11B 41 ,014,005.62 10/8/13 P-10-12B 33,491,087.50 DB Consorzio S. Cons. a. r. I. P-1 0-6 4827 10/9/13 P-10-14B 25,589.46 10/9/13 P-10-18B 8,296.43 DB Consorzio S. Cons. a. r. I. P-1 0-6 4827 10/9/13 P-10-19B 134,253.91 10/9/13 P-10-20B 72.95 DB Consorzio S. Cons. a. r. I. P-10-6 4827 10/10/13 P-1 0-23B 1,633,467.18 10/10/13 P-10-24B 652,811.80 DB Consorzio S. Cons. a. r. I. P-10-6 4827 10/10/13 P-10-25B 85.09 10/10/13 P-10-25B 135,429.65 DB Consorzio S. Cons. a. r. I. P-1 0-6 4827 10/10/13 P-10-25B 51 ,515.77 10/11113 P-10-26B 5,916,598.18 Deutsche Bank Luxembouro S.A. P-10-7 4829 10/11/13 P-10-28B 62,051,606.03 Deutsche Bank Aktiengesellschaft, P-10-11 4835 10/11/13 P-10-28B 6,209,036.44 Filiale Sinaaour P-10-12 4836 10/11/13 P-10-29B 396.53 Deutsche Bank Aktiengesellschaft, P-10-14 4838 10/17/13 P-10-29B 396.53 Filiale Honokono 10/18/13 P-10-32B 1,660,414.26 Deutsche Bank Aktiengesellschaft, 10/21/13 P-10-36B 109,849,630.28 Filiale London 10/21/13 P-10-38B 4,678,843.54 10/21113 P-10-39B 3,227,882.36 Deutsche Bank Netherland N.V. P-10-18 4842 P-10-39B 293,443.85 ~ Deutsche Bank Trust Corporation P-1 0-19 4843 Deutsche Asset Management Group P-1 0-20 4844 Limited P-1 0-23 4847 Deutsche Group Services Pty Limited RREEF Managemenl LLC. P-10-24 4848 Deutsche Asset Management Group P-1 0-25 4849 Limited P-10-25 4849 Deutsche Bank Aktiengesellschaft, P-1 0-25 4849 Filiale London P-10-26 4850 Deutsche Bank Aktiengesellschaft, P-10-28 4852 Filiale London P-10-28 4852 Deutsche Bank Aktiengesellschaft, P-10-29 4853 Filiale SinQapur P-1 0-29 4853 Deutsche Bank Aktiengesellschaft, P-10-32 4856 Filiale London P-1 0-36 4860 Deutsche Bank Aktiengesellschaft, P-1 0-38 4863 Filiale London P-10-39 4864 Deutsche Asset Management (Hong P-10-39 4864 Ko!!.Q) Limited Deutsche Asset Management (Hong Kona) Limited Deutsche Bank Trust Company Americas Deutsche Bank Aktiengesellschaft, Filiale London Deutsche Investment Management Americas Inc. Deutsche Bank Aktiengesellschaft, Filiale London Deutsche Bank Aktiengesellschaft, Finale London

DECISION Deutsche Knowledge Services Pte., Ltd. vs. Commissioner of Internal Revenue CTA Case No. 9227 Deutsche Bank Aktiengesellschaft, P-10-40 4865 10121113 P-10-40B 5,824,573.60 Filiale HonQkona P-1 0-42 4867 10122113 P-10-42B 4,340,502.46 Deutsche Group Services Pty P-10-44 4869 10/23113 P-10-44B 1 '113,907.95 Limited P-10-45 4870 10123113 P-10-458 1,439,744.59 Deutsche Bank Aktiengesellschaft, P-10-47 4872 10123113 P-10-47B Filiale Singapur P-10-49 4874 10123113 P-10-498 49,139.52 P-1 0-50 4875 10123113 P-10-50B 457,453.58 DWS Holding & Service GmbH P-10-51 4876 10123113 P-10-51B 2,006,845.83 Deutsche Bank Aktiengesellschaft, P-10-52 4877 10123113 P-10-52B 14,912,822.53 lnlandsbank P-1 0-53 4878 10123113 P-10-53B 12,416,007.55 Deutsche Bank Aktiengesellschaft, P-1 0-55 4880 10/23113 P-10-558 701,526.84 lnlandsbank P-1 0-55 4880 10123113 P-10-55B 134,564.04 Deutsche Bank Aktiengesellschaft, P-10-57 4882 10124113 P-10-57B 1,445,636.94 lnlandsbank P-10-58 4883 10124113 P-1 0-58B Deutsche Bank Aktiengesellschaft, P-10-60 4885 10124113 P-10-60B 84,717.87 lnlandsbank P-10-60 4885 10124113 P-10-60B 182,707.67 Deutsche Bank Aktiengesellschaft, P-10-61 4886 10125113 P-10-61B 175,580.70 lnlandsbank P-10-63 4888 10125113 P-10-63B 351,950.25 P-10-65 4890 10129113 P-10-65B Deutsche Bank Netherland N.V. P-10-68 4893 1114113 P-10-68B 280.76 P-10-72 4898 1115/13 P-10-728 1,751,596.24 Deutsche New Zealand Limited P-10-73 4899 1116113 P-10-73B 1,250,549.91 P-10-74 4900 1116113 P-10-748 7,141,895.45 Deutsche New Zealand Limited P-10-79 4905 1116113 P-10-79B P-10-80 4907 1117113 P-10-80B 427,844.20 Deutsche Bank (Malaysia) 8erhad P-10-80 4907 1117113 P-10-80B 427,668.33 Deutsche Bank Aktiengesellschaft, P-10-80 4907 1117113 P-10-808 245,872.85 Filiale Labuan P-1 0-80 4907 1117113 P-1 0-80B Deutsche Bank Aktiengesellschaft, P-1 0-80 4907 1117113 P-10-80B 310,230.20 Filiale Johannesburg P-1 0-80 4907 1117113 P-10-80B 1,100,712.00 Deutsche Bank Aktiengesellschaft, P-1 0-80 4907 1117113 P-10-80B 4,436,184.33 Filiale Johannesbura P-1 0-80 4907 1117113 P-10-80B 1,976,802.22 P-1 0-80 4907 1117113 P-10-80B Deutsche Securities Korea Co. P-10-80 4907 1117113 P-10-80B ~ P-10-80 4907 1117113 P-10-80B Deutsche Bank Luxemboura S.A. P-10-80 4907 1117113 P-10-80B Deutsche Bank Aktiengesellschaft, P-10-80 4907 1117113 P-10-808 Filiale Seoul P-10-80 4907 11/7113 P-10-808 P-10-80 4907 1117113 P-10-80B DB Services New Jersey, Inc. P-10-87 4918 11112113 P-10-87B P-1 0-89 4920 11113113 P-1 0-89B Deutsche Securities Inc. P-1 0-90 4921 11113113 P-10-90B Deutsche Bank{Suisse) SA Deutsche Bank (Suisse) SA Deutsche Bank Netherland N.V. Deutsche Bank Luxembourg S.A. Deutsche Bank Luxembourg S.A. Deutsche Bank Luxembourg S.A. Deutsche Bank Luxembourg S.A. Deutsche Bank Luxembourg S.A. Deutsche Bank Luxemboura S.A. Deutsche Bank Luxembourg S.A. Deutsche Bank Luxembourg S.A. Deutsche Bank Luxemboura S.A. Deutsche Bank Luxembourg S.A. Deutsche Bank Luxemboura S.A. Deutsche Bank Luxembourg S.A. Deutsche Bank Luxemboura S.A. Deutsche Bank Luxembourg S.A. Deutsche Bank Luxemboura S.A. Deutsche Bank Aktiengesellschaft, Filiale Sinaaour Deutsche Bank Aktiengesellschaft, lnlandsbank Deutsche Bank Aktiengesellschaft, lnlandsbank

DECISION Deutsche Knowledge Services Pte., Ltd. vs. Commissioner of Internal Revenue CTA Case No. 9227 Deutsche Bank Aktiengesellschaft, P-10-91 4922 11/13/13 P-10-91B 24,957.12 lnlandsbank P-1 0-91 4922 11/13/13 P-10-91B Deutsche Bank Aktiengesellschaft, P-10-92 4923 11/13/13 P-10-92B (14,315.0~ lnlandsbank P-10-93 4924 11/13/13 P-10-93B Deutsche Bank Aktiengesellschafl, P-10-94 4925 11/13/13 P-10-94B 2,140,534.16 lnlandsbank P-1 0-97 4928 11/13/13 P-1 0-97B 2,387,121.08 Deutsche Bank Aktiengesellschaft, P-10-98 4929 11/14/13 P-10-98B 3,089,142.06 lnlandsbank P-1 0-99 4930 11/14/13 P-10-996 4,310,409.68 Deutsche Bank Aktiengesellschaft, P-10-99 4930 11/14/13 P-10-996 lnlandsbank P-10-99 4930 11114/13 P-10-996 319,794.49 Deutsche Group Services Pty P-10-100 4931 11/14/13 P-10-1006 Limited P-10-100 4931 11/14/13 P-10-1006 109,264,073.53 Deutsche Investment Management P-1 0-100 4931 11/14/13 P-10-1006 192,562.50 Americas Inc. P-1 0-100 4931 11/14/13 P-10-1006 Deutsche Bank Aktiengesellschaft, P-1 0-100 4931 11/14/13 P-10-1006 (192,562.50) Filiale London P-10-100 4931 11/14/13 P-10-100B 68,156.31 Deutsche Bank Aktiengesellschaft, P-10-100 4931 11/14/13 P-10-1006 56,404.19 Filiale London P-10-101 4932 11/15/13 P-10-101B 50,976.12 Deutsche Bank Aktiengesellschaft, P-10-102 4933 11/15/13 P-10-1026 49,170.67 Filiale London P-1 0-105 4936 11/15/13 P-10-1056 P-10-105 4936 11/15/13 P-10-1056 190,874.40 Deutsche Bank Luxembourg S.A P-10-106 4937 11/15/13 P-10-1066 5,799,902.62 P-10-107 4938 11118/13 P-10-1076 Deutsche Bank Luxembourg S.A. P-10-111 4942 11/19/13 P-10-1116 8,037.07 P-10-112 4943 11/19/13 P-10-1126 3,214,210.14 Deutsche Bank Luxembourg S.A. P-10-116 4949 11/19/13 P-1 0-116B 65,909,845.42 P-10-116 4949 11/19/13 P-10-1166 20,766,628.04 Deutsche Bank Luxembourg S.A. P-10-117 4950 11/20/13 P-10-1176 25,862,436.95 P-1 0-120 4953 11/20/13 P-1 0-120B 1,718,658.70 Deutsche Bank Luxembourg S.A. P-10-121 4954 11/20/13 P-10-1216 P-10-123 4956 11/20/13 P-1 0-123B 80.16 Deutsche Bank Luxembourg S.A P-1 0-124 4957 11/20/13 P-10-1246 P-10-127 4960 11/21/13 P-10-1276 28,992,042.75 Deutsche Bank Luxembourg S.A P-1 0-130 4963 11/22/13 P-10-1306 5,183,018.43 Deutsche Bank Aktiengesellschaft, P-10-131 4964 11/22/13 P-10-1316 Filiate Hongkong P-10-134 4967 11/25/13 P-10-1346 12,350,685.72 P-10-136 4969 11/25/13 P-10-1366 13,886,654.94 Deutsche Bank Netherland N.V. P-10-137 4970 11/26/13 P-10-1378 6,748,533.81 Deutsche Bank Aktiengesellschaft, P-10-139 4972 11/27/13 P-10-1396 Filiale London P-10-143 4976 P-10-1436 249,909.16 Deutsche Bank Aktiengesellschaft, 12/3/13 790,717.80 Filiale London Deutsche Group Services Pty 84,451.21 Limited 1,441 086.60 Deutsche Bank Aktiengesellschaft, 1,751,166.84 Filiale HonQkonQ Deutsche Bank Trust Company 263,165.08 Delaware 285,182.94 Deutsche Asset Management Group 175,397.87 Limited Deutsche Bank Aktiengesellschaft, 33,435.83 Filiale Sinoaour Deutsche Bank Aktiengesellschaft, c1l Filiale Sinoaour Deutsche Investment Management Americas Inc. Deutsche Bank Aktiengesellschaft, lnlandsbank Deutsche Bank Aktiengesellschaft, lnlandsbank Deutsche Bank Securities Inc. Deutsche Bank Netherland N.V. DB International (Asia) Limited Deutsche Bank Aktiengesellschaft, Filiale Labuan Deutsche Bank (Malaysia) Berhad Deutsche Bank Aktiengesellschaft, Filiale Seoul DB Consorzio S. Cons. a. r. I. Deutsche Asset Management _(_Korea) Comoanv Limited Deutsche Bank Aktiengesellschaft, Filiale Johannesburg Deutsche Bank Trust Corporation

DECISION Deutsche Knowledge Services Pte., Ltd. vs. Commissioner of Internal Revenue CTA Case No. 9227 DeAWM Service Company P-10-143 4976 12/3/13 P-10-1438 - P-10-143 4976 12/3/13 P-10-1438 - RREEF Management L.L.C. P-10-146 4979 12/4/13 P-10-1468 P-10-147 4980 12/4/13 P-10-1478 703,646.50 Deutsche Bank Netherland NV. P-10-148 4981 12/4/13 P-10-1488 2 012,909.58 Deutsche Bank Aktiengesellschaft, P-10-150 4983 12/5/13 P-10-1508 lnlandsbank P-10-150 4983 12/5/13 P-10-1508 6,142.10 P-1 0-152 4985 12/9/13 P-10-1528 Deutsche Bank Netherland N.V. P-10-160 4993 12/13/13 P-10-1608 403,754.69 Deutsche Bank Aktiengesellschaft, P-10-160 4993 12/13/13 P-10-1608 1 460,023.45 lnlandsbank P-10-160 4993 12/13/13 P-10-1608 Deutsche Bank Aktiengesellschaft, P-10-160 4993 12/13/13 P-10-1608 412,237.01 lnlandsbank P-10-161 4994 12/13/13 P-10-1618 P-1 0-165 4998 12/16/13 P-10-1658 - DWS Holding & Service GmbH P-10-165 4998 12/16/13 P-1 0-1658 Deutsche Investment Management P-10-168 5001 12/12/13 P-10-1688 - Americas Inc. P-1 0-169 5002 12/12/13 P-10-1698 P-1 0-170 5003 12/12/13 P-10-1708 118,914,236.33 DB Services New Jersey, Inc. P-10-171 5004 12/12/13 P-1 0-171 B 6,301 ,840.29 P-10-171 5004 12/12/13 P-10-1718 1,590,672 .55 DB Investment Partners, Inc. P-1 0-172 5005 12/12/13 P-10-1728 5,999,776.82 P-1 0-173 5006 12/12/13 P-10-174 DB Enerov Tradino LLC P-10-175 5008 12/17/13 P-10-1758 28,620,316.67 Deutsche Bank Aktiengesellschaft, P-1 0-176 5009 12/17/13 P-10-1768 35,655,331.63 Filiale London P-10-177 5010 12/17/13 P-10-1778 Deutsche Bank Aktiengesellschaft, P-10-178 5011 12/17/13 P-10-1788 44,200,512.20 Filiale SinQapur P-10-179 5012 12/17/13 P-10-1798 6,969,092.36 Deutsche Bank Aktiengesellschaft, P-10-180 5013 12/17113 P-10-1808 50,548.74 Filiale Sinaaour P-10-181 5014 12/17/13 P-10-1818 1,106,381.35 Deutsche Bank Aktiengesellschaft, P-10-182 5015 12/17/13 P-10-1828 2,043,505.91 Filiale New York P-10-183 5016 12/17/13 P-1 0-1838 Deutsche Bank Aktiengesellschaft, P-1 0-184 5017 12/17/13 P-10-1848 5,995,144.47 Filiale Sinaaour P-10-184 5017 12/17/13 P-10-1848 12,456,822.24 Deutsche Bank Aktiengesellschaft, P-10-184 5017 12/17/13 P-10-1848 Filiale Honakona P-1 0-186 5024 12/26/13 P-10-1868 2,467,670.26 P-10-188 5028 12/20/13 P-10-1888 2,043,505.91 Deutsche Securities Inc. P-10-192 5032 12/18/13 P-10-1928 15,775,565.13 P-10-192 5032 12/18/13 P-10-1928 2,467,670.26 Deutsche Securities Inc. P-1 0-194 5034 12/18/13 P-10-1948 P-1 0-194 5034 12/18/13 P-10-1948 97,086,476.46 Deutsche Securities Inc. P-10-194 5034 12/18/13 P-10-1948 179,108.43 Deutsche Bank Luxembourg S.A. 4,454,310.14 Deutsche Bank Aktiengesellschaft, lnlandsbank 718,207.17 Deutsche Bank Aktiengesellschaft, lnlandsbank 1,333,030.38 Deutsche Bank Aktiengesellschaft, Filiale Singapur ~ Deutsche Bank Aktiengesellschaft, Filiale Hongkono Deutsche Bank Aktiengesellschaft, lnlandsbank Deutsche Bank Aktiengesellschaft, lnlandsbank Deutsche Bank Aktiengesellschaft, lnlandsbank Deutsche Bank Aktiengesellschaft, lnlandsbank Deutsche Bank Aktiengesellschaft, lnlandsbank Deutsche Bank Aktiengesellschaft, Filiale London Deutsche Bank Aktiengesellschaft, Filiale London Deutsche Bank Aktiengesellschaft, Filiale London Deutsche Bank Aktiengesellschaft, Filiate Johannesburg Deutsche Group Services Pty Limited Deutsche Securities Korea Co. Deutsche Securities Korea Co. DB Service Centre Limited DB Service Centre Limited DB Service Centre Limited

DECISION Deutsche Knowledge Services Pte., ltd. vs. Commissioner of Internal Revenue CTA Case No. 9227 DB Service Centre Limited P-10-194 5034 12118/13 P-10-1948 3,539,198.20 DB Service Centre Limited P-10-194 5034 12118113 P-10-1948 2,772,950.04 DB Service Centre Limited P-10-194 5034 12118113 P-10-1948 6,837,274.45 DB Service Centre Limited P-10-194 5034 12118113 P-10-1948 DB Service Centre Limited P-10-194 5034 12118113 P-10-1948 285,371.69 P-10-195 5035 12118113 P-10-1958 6,113,389.00 Deutsche Bank Securities Inc. P-10-195 5035 12118113 P-10-1958 (1 ,380, 158.91) P-10-195 5035 12118113 P-10-1958 Deutsche Bank Securities Inc. P-10-195 5035 12118113 P-10-1958 285,371.69 P-10-195 5035 12118113 P-10-1958 7,435,219.30 Deutsche Bank Securities Inc. P-10-195 5035 12118113 P-10-1958 11,322,081.24 P-10-195 5035 12118/13 P-10-1958 Deutsche Bank Securities Inc. P-10-195 5035 12118113 P-1 0-1958 532,418.66 P-10-195 5035 12118113 P-10-1958 285,371.69 Deutsche Bank Securities Inc. P-10-195 5035 12118113 P-10-1958 3,717,609.65 P-10-195 5035 12118113 P-10-1958 Deutsche Bank Securities Inc. P-10-197 5035 12118113 P-10-1958 86,503.03 P-10-196 5036 12118113 P-10-1968 1,791,535.27 Deutsche Bank Securities Inc. P-10-197 5037 12118113 P-10-1978 1,479,454.25 P-10-199 5039 12119113 P-10-1998 Deutsche Bank Securities Inc. P-10-201 5041 12119113 P-10-2018 571,688.72 P-10-202 5042 12119113 P-10-2028 20,194,274.25 Deutsche Bank Securities Inc. t>1 '130,802,485.21 RREEF Management LLC. Deutsche Bank Securities Inc. Deutsche Bank Securities Inc. Deutsche Bank Aktiengesellschaft, Filiale Labuan Deutsche Bank Aktiengesellschaft, Filiale Seoul Deutsche Bank (Malaysia) Berhad Deutsche Asia Pacific Holdings Pte Ltd Deutsche Group Services Pty Limited Total In sum, the total disallowed zero-rated sales amounts to P331 ,651 ,059.30. Deducting this amount from zero-rated sales reported by petitioner for the fourth (4th) quarter of CY 2013 amounting to P1 ,462,453,544.51, the valid zero-rated sales stands only at P1, 130,802,485.20, computed below: Total Reported Zero-rated Sales 1"1 ,462,453,544.50 Less: Disallowed zero-rated sales on the following grounds: 178,189,718.35 331,651,059.30 Failure to comply with twin requirement to establish 1"1, 130,802,485.20 NFRC status of its clients 150,849,774.47 261,584.33 Not supported by VAT official receipts Not supported by bank inward remittance 2,349,982.15 Excess claim Valid Zero-rated Sales C11

DECISION Deutsche Knowledge Services Pte., Ltd. vs. Commissioner of Internal Revenue CTA Case No. 9227 Fourth and Fifth Requisites: Petitioner incurred/paid input taxes attributable to zero- rated sales in the total amount of P25,818,283.17 Having found that petitioner had valid VAT zero-rated sales in the amount of P1, 130,802,485.20 for the subject period of claim, the Court shall proceed to determine whether petitioner complied with the remaining requisites pertaining to the input VAT. In its Quarterly VAT Return for the fourth (4th) quarter of CY 2013,68 petitioner reflected a total amount of P32,942,361.27 allowable input VAT arising from domestic purchases of goods other than capital goods, domestic purchase of services, domestic purchases of capital goods not exceeding P1 million, and services rendered by non-resident citizens, detailed as follows: PARTICULARS AMOUNT Input Tax Deferred on Capital Goods exceeding 1'"1 Million 1,306,641.28 (Line 208) p 203,758.70 1,510,399.98 Add: Input Tax on Capital Goods exceeding P1 Million 1,199,023.12 Purchases this Quarter (Line 21 0) 311,376.86 18,865.10 Total Unamortized Input Tax on Capital Goods exceeding P1 130,765.14 Million deferred fro the succeeding period 30,863,833.05 Less: Input Tax on Purchases of Capital Goods exceeding P1 1,617,521.12 32,942,361.27 Million deferred for the succeeding period (Line 23A) Amortization of Input Tax on Capital Goods exceeding P1 Million Input Tax on Domestic Purchases of Capital Goods Not Exceedinq P1 Million (Line 218) Input Tax on Domestic Purchases of Goods Other than Capital Goods (Line 21 F) Input Tax on Domestic Purchase of Services (Line 21J) Services Rendered by Non-Residents (Line 21L) Total Allowable Input Tax p Out of the P32,942,361.27 total input VAT for the fourth (41h) quarter of CY 2013, petitioner is claiming refund of the amount of P31,681,201.78, detailed below, allegedly representing input VAT attributable to its VAT zero-rated sales for CY 2013: PARTICULARS AMOUNT Total Allowable Input Tax Less: Output VAT p 32,942,361.27 Excess Input VAT for 4th Quarter of CY 2013 1,068,303.56 31,874,057.71 sa Exhibit "P-3"~

DECISION Deutsche Knowledge Services Pte., Ltd. vs. Commissioner of Internal Revenue CTA Case No. 9227 % of Zero-rated Sales to Total Sales ,. 99.39%69 l11_1)ut VAT attributable to Zero-rated Sales 31,681,201.78 In support of its refund claim of excess and unutilized input VAT, petitioner offered in evidence various summary lists and schedules, 70 and the corresponding invoices/1 official receipts72 and other documents, 73 which were all examined by the Court-commissioned ICPA. A review of the ICPA Report shows that input taxes pertaining to domestic purchases of capital goods not exceeding P1 Million, domestic purchases of goods other than capital goods, domestic purchases of services, and services rendered by non-residents amounting to P4, 167,279.76 should be disallowed for not being properly substantiated as prescribed under Sections 11 O(A), 113(A) and (B), 237 and 238 of the NIRC of 1997, as amended, in relation to Sections 4.11 0-1, 4.11 0-8 and 4.113-1 of RR No. 16-2005, as amended, to wit: 74 PARTICULARS EXHIBIT AMOUNT Input VAT on domestic purchases of services supported 206,026.51 by documents such as invoices, collection receipts, ,. Annex 3-G billing statements, and statement of accounts 2,284,532.70 Annex 3-H 9,572.19 Input VAT on domestic purchases of services supported by ORs dated outside the period of claim Annex 3-1 9,562.97 Input VAT on domestic purchases of goods supported 1,536,442.02 by VAT registered invoices dated outside the period of Annex 3-J claim Annex 3-K 803.57 Annex 3-L 120,339.80 Input VAT on domestic purchases of capital goods not Annex 3-B 4,167 ,279. 76 exceeding 1'"1 million supported by VAT registered invoices dated outside the period of claim ~ Input VAT on domestic purchases of services with no supporting documents Input VAT on domestic purchases of goods with no supporting documents Excess of Input VAT per schedule over the amount of Input VAT in the supporting VAT ORs Total Input VAT Disallowed by ICPA 69 8,902,529.65 0.61% 1,462,453,544.50 99.39% VATable Sale 1,471 ,356,074.15 Zero-rated Sales Total Sales 70 Exhibits "P-24-1" to "P-24-9"; "P-32". 71 Exhibits "P-16-1" to "P-16-13"; "P-17-1" to "P-17-26"; "P-20-1" to "P-20-5"; "P-21-1" to "P-21-10"; "P-22-1"; "P-23-1" to "P-23-17". 72 Exhibits "P-12-1" to "P-12-255"; "P-13-1" to "P-13-36"; "P-14-1" to "P-14-13"; "P-19-1" to "P-19- 54". 73 Exhibits "P-15-1" tp "P-15-3"; "P-15-1a" to "P-15-3a"; "P-18-1" to "P-18-49". 74 ICPA Report, p. 12. CJ1

DECISION Deutsche Knowledge Services Pte., Ltd. vs. Commissioner of Internal Revenue CTA Case No. 9227 Finding the observations of the ICPA reasonable and proper, the Court shall adopt the same, except for the last item entitled "Excess of Input VAT per schedule over the amount of Input VAT in the supporting VAT ORs" summarized in Annex 3-B of the ICPA Report in the amount of P120,339.80. This amount shall be included with the amount of P468,035.87 as indicated in Annex 3-B of the ICPA Report for further verification. Hence, the total input VAT found by the ICPA to be not properly substantiated, and hereafter disallowed by the Court, shall be in the total amount of P4,046,939.96. 75 Upon further verification of the submitted evidence, particularly the VAT invoices and official receipts, the Court shall disallow input VAT in the total amount of P2, 156,737.45 for petitioner's failure to comply with the invoicing requirements as provided for under the NIRC of 1997, as amended, and RR No. 16-2005, detailed as follows: SUPPLIER OR/INVOICE/SO NO. DATE INPUT VAT EXHIBIT I I 1) Input VAT on domestic purchases of goods and services supported by VAT lnvoiceNAT OR where date indicated is missing or not complete ADVENTURE INTERNATIONAL TOURS, 200-00023651 11/13/13 ~ 17,072.40 P-12-8 Design Muscle Inc. 0521 10/23/13 30,840.00 P-12-48 QUARTZ BUSINESS PRODUCTS CORP 507606 11/7113 15,002.68 P-17-24 QUARTZ BUSINESS PRODUCTS CORP 507878 11/13/13 12.013.71 P-17-25 QUARTZ BUSINESS PRODUCTS CORP 507584 11/7113 2,462.14 P-17-26 77,390.93 Subtotal - Input VAT on domestic purchases of goods and services supported by VAT lnvoiceNAT OR where date indicated is missina or not como/eta 2) Input VAT on domestic purchases of aoods supported bv VAT Invoice where VAT amount is unreadable MERCURY DRUG CORPORATION 283-96525 10/24/13 1,323.75 P-17-7 MERCURY DRUG CORPORATION 283-96526 10/24/13 931.61 P-17-8 MERCURY DRUG CORPORATION 283-96527 10/24/13 285.98 P-17-9 Subtotal-Input VAT on domestic purchase of goods supported by VAT Invoice where VAT amount is unreadable 2,541.34 3) Input VAT on domestic purchases of services supported by VAT OR where amount of VATable sales is not indicated ASCOTTMAKATIINC. 60273 12/11/13 25,551.00 P-12-16 ASIAPEOPLEWORKSI INC. 3282 10/2/13 17,960.05 P-12-17 ASIAPEOPLEWORKS' INC. 3283 10/2/13 18,527.26 P-12-18 ASIAPEOPLEWORKS! INC. 3295 10/9/13 12,799.87 P-12-19 ASIAPEOPLEWORKS' INC. 3297 10/9/13 9,111.07 P-12-20 ASIAPEOPLEWORKS' INC. 3342 10/16/13 763.24 P-12-21 ASIAPEOPLEWORKS� INC. 3345 10/16/13 11,118.31 P-12-22 ASIAPEOPLEWORKS! INC. 3454 10/30/13 3,564.86 P-12-23 ASIAPEOPLEWORKS! INC. 3455 10/30/13 2,686.10 P-12-24 ASIAPEOPLEWORKSI INC. 3456 10/30/13 6,335.22 P-12-25 ASIAPEOPLEWORKSI INC. 3457 10/30/13 5,693.28 P-12-26 ASIAPEOPLEWORKSI INC. 3466 11/6113 6.207.96 P-12-27 ASIAPEOPLEWORKSI INC. 3468 11/6/13 14,142.68 P-12-28 ASIAPEOPLEWORKS' INC. 3482 11/13/13 8,685.26 P-12-29 ASIAPEOPLEWORKS� INC. 3529 11/27/13 8,601.06 P-12-30 ASIAPEOPLEWORKS' INC. 3531 11/27/13 6,154.57 P-12-31 = 75 1'"4.167,279.76- !'"120,339.80 !'"4,046,939.96~

DECISION Deutsche Knowledge Services Pte., Ltd. vs. Commissioner of Internal Revenue CTA Case No. 9227 ASIAPEOPLEWORKSI INC. 3610 1214113 62,027.51 P-12-32 ASIAPEOPLEWORKSI INC. 3611 1214113 2,947.76 P-12-33 ASIAPEOPLEWORKSI INC. 3612 1214113 4,522.62 P-12-34 ASIAPEOPLEWORKSI INC. 3671 12111113 5,948.28 P-12-35 ASIAPEOPLEWORKSI INC. 3786 11120113 3,387.09 P-12-36 ASIAPEOPLEWORKS! INC. 3787 11120/13 1,735.63 P-12-37 CIBIINFORMATION, INC. 45097 10/25/13 720.00 P-12-44 DHL EXPRESS (PHILIPPINES) CORP 2366039 10/5/13 900.20 P-12-83 DHL EXPRESS (PHILIPPINES) CORP 2375004 10/9/13 3.60 P-12-84 DHL EXPRESS (PHILIPPINES) CORP 2375005 10/9/13 58.78 P-12-85 DHL EXPRESS (PHILIPPINES) CORP 2375006 10/9/13 58.78 P-12-86 DHL EXPRESS (PHILIPPINES) CORP 2386431 10/23/13 4,862.00 P-12-87 DHL EXPRESS (PHILIPPINES) CORP 2386432 10123113 2,004.00 P-12-88 DHL EXPRESS (PHILIPPINES) CORP 2386433 10123113 378.00 P-12-89 DHL EXPRESS (PHILIPPINES) CORP 2386434 10/23113 67.20 P-12-90 DHL EXPRESS (PHILIPPINES) CORP 2386435 10123113 104.78 P-12-91 DHL EXPRESS (PHILIPPINES) CORP 2386436 10/23/13 33.60 P-12-92 DHL EXPRESS (PHILIPPINES) CORP 2390365 11/6/13 33.60 P-12-93 DHL EXPRESS (PHILIPPINES) CORP 2390366 1116/13 58.78 P-12-94 DHL EXPRESS (PHILIPPINES) CORP 2390367 1116/13 58.78 P-12-95 FTL HOTELS, INC 49042 10/2/13 383.14 P-12-112 FTL HOTELS, INC 50008 11/13/13 31,212.00 P-12-113 FTL HOTELS, INC 50034 12/11/13 30,294.00 P-12-114 FTL HOTELS, INC 50035 12/11/13 383.14 P-12-115 INDRA Philippines Inc 2582 12/11/13 17,142.86 P-12-146 INDRA Philippines Inc 2583 12111/13 34,285.72 P-12-147 INDRA Philippines Inc 2620 10/24/13 32,753.70 P-12-148 INDRA Philippines Inc 2646 11/25/13 P-12-149 INDRA Philippines Inc 2718 12/18/13 74,872.80 P-12-150 SALT & LIGHT VENTURES, INC. 13897 10/23/13 209,419.84 P-12-201 SALT & LIGHT VENTURES, INC. 13936 11/27/13 P-12-202 SALT & LIGHT VENTURES, INC. 13937 11/27/13 15,840.00 P-12-203 SALT & LIGHT VENTURES, INC. 13943 12/11/13 9,600.00 P-12-204 SALT & LIGHT VENTURES, INC. 13944 12111113 4,440.00 P-12-205 SALT & LIGHT VENTURES, INC. 13948 12/18/13 8,160.00 P-12-206 ASIAPEOPLEWORKSI INC. 3343 10/16/13 P-13-1 ASIAPEOPLEWORKSI INC. 3344 10/16/13 25,200.00 P-13-2 ASIAPEOPLEWORKS' INC. 3346 10/16/13 22,440.00 P-13-3 ASIAPEOPLEWORKS! INC. 3453 10/30/13 P-13-4 ASIAPEOPLEWORKSI INC. 3467 1116/13 1,447.34 P-13-5 ASIAPEOPLEWORKS! INC. 3483 11113/13 1,647.00 P-13-6 ASIAPEOPLEWORKS! INC. 3532 11127/13 1,524.14 P-13-7 ASIAPEOPLEWORKSI INC. 3530 11/27/13 1,572.27 P-13-8 ASIAPEOPLEWORKS' INC. 3528 11/27/13 1,977.36 P-13-9 ASIAPEOPLEWORKSI INC. 3672 12111113 1,453.91 P-13-10 ASIAPEOPLEWORKSI INC. 3693 12118113 1,847.88 P-13-11 ASIAPEOPLEWORKS! INC. 3854 1214113 1,598.18 P-13-12 FIRST PACIFIC LEADERSHIP ACADE 6413 12111113 1 453.52 P-13-20 INNOVE NC 834002986 0400589 10129113 3,672.00 P-13-31 ASIAPEOPLEWORKSI INC. 3296 1019113 1,397.52 FIRST PACIFIC LEADERSHIP ACADE 6421 12111113 1,574.86 P-14-1 FTL HOTELS, INC 49043 10/2113 13,713.44 P-14-3 62,070.22 P-14-4 15,716.84 1,236.00 2,640.82 ('fj

DECISION Deutsche Knowledge Services Pte., Ltd. vs. Commissioner of Internal Revenue CTA Case No. 9227 FTL HOTELS, INC 50009 11/13/13 191.58 P-14-5 26,760.36 P-14-10 HEWLETI-PACKARD PHILIPPINES 134445 12/4/13 P-14-13 9,360.00 PAUL CALVIN DELl 1662 1/15/14 I 917,095.22 Subtotal-Input VAT on domestic purchases of services supported by VAT OR where amount of VA Table sales is not indicated 4) lnout VAT on domestic ourchase of service supported by VAT OR where VAT amount is not indicated PREMIUM SECURITY & INVESTIGATI 72127 11/20/13 8,585.43 P-12-182 Subtotal-Input VAT on domestic purchase of service supported by VAT OR where VAT amount is not indicated 8,585.43 5) Input VAT on domestic purchase of service supported by VAT OR where Authority to Print (ATP) details are not indicated i SANTA FE MOVING AND RELOCATION 10148 11120/13 1,121.40 P-12-209 SANTA FE MOVING AND RELOCATION 10481 10/23/13 641.40 P-12-210 Subtotal-Input VAT on domestic purchase of service supported by VAT OR where A TP details are not indicated 1,762.80 6) Input VAT on domestic purchase of service supported by VAT OR where alterations were made without authorized countersignature BUSINESSWORKS, INC. 4001 11/13/13 39 780.00 P-12-40 DESTURA LAW OFFICE 4272 10/21/13 1,098.00 P-12-67 MR. SUN KIDDIE PARTYCOM, 11038 11/22/13 23,035.71 P-12-169 ePLDT INC. 20230 11/20/13 73,401.22 P-13-18 137,314.93 Subtotal-Input VAT on domestic purchase of service supported by VAT OR where alterations were made without authorized countersignature 7) Input VAT on domestic purchases of services supported by documents other than VAT OR 0&W Ad's Corporation 0016 12/26/13 5,376.00 P-12-47 PLOT 002255 10/30/13 150,414.39 P-12-177 PLOT 002259 11/27/13 195,096.61 P-12-178 PREMIUM SECURITY & INVESTIGATI 26130 11/13/13 420.00 P-12-179 351,307.00 Subtotal - Input VAT on domestic purchases of services supported by documents other than VAT OR 8) Input VAT on domestic purchase of services without VAT OR BUSINESSWORKS, INC. 3637 10/9/13 28,350.00 P-12-39 Subtotal-Input VAT on domestic purchase of services without VAT OR 28,350.00 154.92 9) Input VAT on domestic purchase of services supported bv an unmarked exhibit 154.92 WIDE WIDE WORLD EXPRESS CORPOR 1134488 12/26/13 3,024.72 N/A Subtotal- Input VAT on domestic purchase of services supported by an P-12-139 P-15-1 to unmarked exhibit P-15-1a P-15-1 to 10) Input VAT on domestic purchases of services outside the period of claim P-15-1a P-15-1 to HEWLETI-PACKARD PHILIPPINES 135093 1/8/14 P-15-1a P-15-1 to FIRST ADVANTAGE AUSTRALIA 33010-2 5/1112 83,116.56 P-15-1a P-15-1 to FIRST ADVANTAGE AUSTRALIA 38124 9/2/13 67,602.49 P-15-1 a P-15-2 to INTUITION PUBLISHING PTE LTD 401053.1 8/23/13 37,368.00 P-15-2a P-15-2 to INTUITION PUBLISHING PTE LTD 401039.1 8/23/13 37,368.00 P-15-2a P-15-2 to INTUITION PUBLISHING PTE LTD 401039.2 9/16/13 18,640.80 P-15-2a P-15-2 to ANAND KASTURI CONSULTING 1202 8/17113 52,320.00 P-15-2a P-15-3 to FIRST ADVANTAGE AUSTRALIA 37887 8/1/13 91,565.63 P-15-3a P-15-3 to Global Training Partners Pte. Ltd. 096 9/27113 98,216.05 P-15-3a HEMSLEY FRASER INV010864 9/20/13 50,892.90 FIRST ADVANTAGE AUSTRALIA 37065 5/1/13 30,621.84 HEMSLEY FRASER INV010702 8/30/13 61,497.89 632,234.88 Subtotal -Input VAT on domestic purchase of service supported by VAT OR where ,. 2,156,737.45 A TP details are not indicated Total Input VAT Disallowances per Court's further verification rJ/

DECISION Deutsche Knowledge Services Pte., Ltd. vs. Commissioner of Internal Revenue CTA Case No. 9227 In addition, the Court finds that the following amounts of input VAT claimed by petitioner were higher than the amounts reflected in the VAT official receipts, thus, the difference of P459,552.26 should likewise be disallowed: SUPPLIER OR/INVOICE/ DATE INPUT VAT INPUT VAT EXCESS EXHIBIT SDNO. PER PER CLAIM CIBI INFORMATION, SCHEDULE SUPPORTING INC. OF REFUND DOCUMENT CITYWAY PRINTING CLAIM SERVICES DHL EXPRESS 45874 12/18/13 P' 2,814.24 P' 2,814.00 P' 0.24 P-12-45 (PHILIPPINES) CORP 522 10/30/13 5,089.29 4,998.41 90.88 P-12-46 ePLDT INC. 2429317 12/11/13 3,518.00 3,418.00 100.00 P-12-104 20209 10/2/13 1.250,894. 74 1,238,557.33 12,337.41 P-12-1 08 ePLDT INC. 20231 11/20/13 1,183,977.12 1 '162,834.67 21 '142.45 P-12-1 09 20240 12/4/13 P-12-110 ePLDT INC. 188816 10/16/13 142,622.39 140,075.58 2.546.81 FUJI XEROX 188817 10/16/13 13.012.63 12,583.49 PHILIPPINES INC 192768 11/27/13 32,155.92 3,158.70 429.14 P-12-116 FUJI XEROX 193592 12/26/13 29,767.05 29,038.72 PHILIPPINES INC 48,382.56 47,518.59 28,997.22 P-12-117 FUJI XEROX PHILIPPINES INC 728.33 P-12-118 FUJI XEROX PHILIPPINES INC 863.97 P-12-121 , JOHN CLEMENTS I CONSULTANTS, 121196 11/27/13 450,000.87 450,000.86 0.01 P-12-153 INC JOHN CLEMENTS 121430 12/26/13 697,021.28 697,021.17 0.11 P-12-154 CONSULTANTS, 3788 11/13/13 88.632.85 88,632.84 0.01 P-12-159 INC 3816 12/18/13 0.01 P-12-161 I Johnson Controls 0531 12/11/13 306,278.44 306,278.43 24.00 P-12-176 IFM Phils. Co 2,760.00 2,736.00 Johnson Controls IFM Phils. Co 72004 10/30/13 7,905.77 7.244.95 660.82 P-12-181 NEXT STEP TRAINING AND 72240 11/27/13 1.317.18 970.23 346.95 P-12-183 PREMIUM SECURITY & 72241 11/27/13 29.66 21.07 8.59 P-12-184 INVESTIGATI PREMIUM 72242 11/27/13 1,928.11 1,163.76 764.35 P-12-185 SECURITY & INVESTIGATI 72390 12/4/13 1,489.50 1,069.50 420.00 P-12-188 PREMIUM SECURITY & 17510 10/23/13 11,460.00 1,910.00 9,550.00 P-12-192 INVESTIGATI PREMIUM 17513 11/27/13 11,460.00 1,910.00 9,550.00 P-12-193 SECURITY & 038185 11/27/13 241,291.13 239.993.72 1.297.41 P-12-198 INVESTIGATI 12/11/13 299.652.00 271 512.00 P-12-222 PREMIUM 2168 28,140.00 SECURITY & INVESTIGATI 18041 10/9/13 342,774.19 331,200.00 11,574.19 P-12-247 PROFESSIONAL SKILLS 1130032 11/13/13 1,480.67 1,454.02 26.65 P-12-251 ENRICHMENT PROFESSIONAL 113051_3_ L1_1/g?_jj]__ 446.75 438.77 7.98 P-12-252 SKILLS ENRICHMENT Cil REUTERS LIMITED Seven Seven Global Services In TIERRA INTERNATIONAL CONSTRUCT WIDE WIDE WORLD EXPRESS CORPOR WIDE WIDE WORLD EXPRESS CORPOR

DECISION Deutsche Knowledge Services Pte., Ltd. vs. Commissioner of Internal Revenue CTA Case No. 9227 BAYANTEL A/C 984062 11/6/13 182.04 124.69 57.35 P-13-13 337550509 993652 12/4/13 182.04 178.78 3.26 P-13-14 BAYANTEL AIC 993651 12/4/13 364.07 357.57 6.50 P-13-15 337550509 BAYANTEL AIC 526 12/18/13 1,429.71 1,404.18 25.53 P-13-16 337550509 4262 10/16/13 540.00 450.00 90.00 P-13-17 CITYWAY 12/4/13 1,310.74 P-13-19 PRINTING 10/25/13 73,401.22 72,090.48 11,200.84 P-13-21 SERVICES 11/27/13 11,313.98 113.14 P-13-22 DESTURA LAW 11/27/13 60.04 1.09 P-13-23 OFFICE 11/27/13 61.13 75.40 P-13-24 12/4/13 4,222.63 4,147.23 156.25 P-13-25 ePLDT INC. 20241 12/4/13 3,500.03 3,343.78 171.70 P-13-26 FUJI XEROX 188829 3,846.19 3,674.49 171.70 PHILIPPINES INC 192769 11112/13 3,846.19 3,674.49 FUJI XEROX 192767 PHILIPPINES INC 192770 12/11/13 44,968.60 44,276.73 691.87 P-13-27 FUJI XEROX 192779 PHILIPPINES INC 192778 12/11/13 38,477.94 38,063.39 414.55 P-13-28 FUJI XEROX PHILIPPINES INC 0654 12/4/13 42,884.86 42,292.66 592.20 P-13-29 FUJI XEROX 12/4/13 PHILIPPINES INC 0656 8,145.17 7,999.72 145.45 P-13-30 FUJI XEROX 12/11/13 88,620.00 88,020.00 600.00 P-13-32 PHILIPPINES INC 0602 12/11/13 HCL 80,220.00 13,370.00 66,850.00 P-13-33 TECHNOLOGIES 134444 11/27/13 6,720.00 2,800.00 3 920.00 P-13-34 PHILIPPINES I 0526 12/18/13 HCL 11115/13 307.77 302.27 5.50 P-13-35 TECHNOLOGIES 17516 4,636.32 P-13-36 PHILIPPINES I 997957 4,553.53 82.79 P-17-17 HCL 613.88 TECHNOLOGIES 1130514 613.87 0.01 PHILIPPINES I 0515A ,. 459,552.26 HEWLETT- 301092001684 PACKARD PHILIPPINES NEXT STEP TRAINING AND PROFESSIONAL SKILLS ENRICHMENT SUNVISION CABLE, INC. WIDE WIDE WORLD EXPRESS CORPOR Taurus Electrical Services MERCURY DRUG CORPORATION Total Excess Claims The Court will now proceed to determine the substantiation of the P311 ,376.86 amortization of input VAT on purchases of capital goods exceeding P1 million which originated from input tax deferred on capital goods exceeding P1 million from previous quarters and input tax from purchases during the fourth (41h) quarter of CY 2013, as shown below: PARTICULARS AMOUNT Input Tax Deferred on Capital Goods exceeding ~1 Million (Line f' 1,306,641.28 208) Add: Input Tax on Capital Goods exceeding 1'"1 Million Purchases 203,758.70 this Quarter (Line 210) Total Unamortized Input Tax on Capital Goods exceeding f'1 Million 1,510,399.98 deferred fro the succeedinQ period Less: Input Tax on Purchases of Capital Goods exceeding f'1 1,199,023.12 Million deferred for the succeedinQ period (Line 23A) Amortization of Input Tax on Capital Goods exceeding ~1 "" 311,376.86 Million Cf/

DECISION Deutsche Knowledge Services Pte., Ltd. vs. Commissioner of Internal Revenue CTA Case No. 9227 Page41 of44 The ICPA determined that out of total amortized input VAT for the fourth (41h) quarter of CY 2013 in the total amount of P311 ,376.86, P303,682.39 shall be disallowed for failure of petitioner to present the relevant VAT invoices supporting the prior period purchases, and for petitioner's outright expense treatment of the purchases. 76 Finding the observations of the ICPA proper, the Court shall consider only the amount of P7,694.47 as valid total amortized input VAT, as shown below: PARTICULARS EXHIBIT TOTAL AMOUNT Total Amortized Input VAT for the 4th quarter of Annex 4-B CY 2013 Annex 4-C I" 311,376.86 Annex 4-A Less: 302,886.92 Amortization of Input VAT on domestic purchase of capital goods (from 3rd quarter of CY 2009 to 3rd 795.47 quarter of CY 2013) with no available supporting VAT 303,682.39 invoice I" 7,694.47_ Amortization of Input VAT on domestic purchase of capital goods where amount of purchases were expensed out and not recorded as capital asset Total- Not Properly Substantiated Input VAT Valid Amortization of Input VAT on domestic purchase of capital goods (from 4th quarter of CY 2013) supported by VAT invoice The foregoing disallowances in the total amount of P6,966,912.06 are summarized as follows: PARTICULARS AMOUNT 1) Input VAT on domestic purchases of goods and services not '" 4,046,939.96 properly substantiated and claimed outside the period of claim 303,682.39 2) Amortized Input VAT for the 4th quarter of CY 2013 not 4,350,622.35 supported by VAT invoice and and purchases expensed outright Subtotal- ICPA Exceptions Disallowed by the Court 2,156,737.45 Court's Disallowances 459,552.26 1) Input VAT on domestic purchases of goods and services not properly substantiated and dated outside the period of claim 2,616,289.71 2) Excess claims of Input VAT Subtotal - Court's Disallowances I" 6,966,912.06 Total Input VAT Disallowances Taking into consideration the above-computed total input VAT disallowances, the total valid input taxes of petitioner subject for allocation is P25,975,449.21, as shown below: 7BICPA Report, p. 14. ~

DECISION Deutsche Knowledge Services Pte., Ltd. vs. Commissioner of Internal Revenue CTA Case No. 9227 Total Input VAT declared per quarterly VAT return ~ 32,942,361.27 Less: Input VAT Disallowances 6,966,912.06 Total Valid Common Input VAT for Allocation ~ 25,975,449.21 Considering that petitioner is engaged in taxable sales subject to 0% and 12% VAT, and its input VAT cannot be directly or entirely attributed to any of the transactions, the valid common input VAT of P25,975,449.21 shall be proportionately allocated on the basis of the volume of petitioner's sales in accordance with Section 112(A) of the NIRC of 1997, as amended, thus: Total VATable Sales per Quarterly VAT Return '" 8,902,529.65 Divided by the Total Declared Sales per Quarterly VAT Return 1,471,356,074.15 Multiplied by the Total Allowable Input VAT Input VAT Allocated to VATable Sales 25,975,449.21 ~ 157,166.04 Total Zero-rated Sales per Quarterly VAT Return '" 1,462,453,544.50 1,471,356,074.15 Divided by the Total Declared Sales per Quarterly VAT Return 25,975,449.21 Multiplied by the Total Allowable Input VAT ~ 25,818,283.17 Input VAT Allocated to Zero-rated Sales - --- -�-��- --�-- ----------�- Sixth Requisite: Petitioner has excess input VAT available for refund Having determined that petitioner had valid input VAT attributable to its zero-rated sales, the Court shall determine whether the same was not applied against its output VAT liability. After deducting the input tax attributable to VATable sales in the amount of P157, 166.04 from its output VAT liability of P1 ,068,303.56 from the said sales, petitioner still has a net output VAT payable of P911, 137.04, as computed below: Output VAT per Quarterly VAT Return ~ 1,068,303.56 Less: Input VAT Allocated to VATable Sales Output VAT Still Due 157,166.04 ~ 911,137.52 The valid input VAT attributable to zero-rated sales in the amount of P25,818,283.17 shall then be utilized to offset the balance of the output tax due in the amount of P911, 137.52. Thus, there is excess valid input VAT attributable to total reported zero-rated sales of P24,907, 145.65. This amount shall be further allocated based on the valid zero-rated sales of P1, 130,802,485.20 out of the total declared zero-rated sales of P1 ,462,453,544.50, computed below: C!1

DECISION Deutsche Knowledge Services Pte., Ltd. vs. Commissioner of Internal Revenue CTA Case No. 9227 Input VAT Allocated to Zero-rated Sales p 25,818,283.17 Less: Output VAT Still Due Excess Valid Input VAT Allocated to Zero-rated Sales 911,137.52 Divided by Total Declared Zero-rated Sales Multiplied by Total Valid Zero-rated Sales '" 24,907,145.65 Input VAT Attributable to Valid Zero-rated Sales 1,462,453,544.50 . 1'130,802,485.20 19,258,773.94 Thus, there exists an amount of P19,258, 773.94 representing the valid input VAT attributable to the valid zero-rated sales for the fourth (4th) quarter of CY 2013. Needless to state, the said amount is within the total amount subject of this claim for tax refund, which is P31,681,201. 78. Although petitioner carried over in its succeeding Quarterly VAT Returns the claimed input VAT, the same remained unutilized until it was finally deducted as "VAT Refund/TCC Claimed" in its Amended Quarterly VAT Return for the third (3rd) quarter of CY 2015. 77 As such, the subject claim no longer formed part of the excess input VAT that was carried over as of the end of the third (3rd) quarter of CY 2015. Therefore, the possibility that the present claim would be applied to future output VAT liability has been eliminated. It is a rule that in cases of tax refunds, the burden of proof lies with the taxpayer to show that it has strictly complied with the conditions for the grant of such refund. 78 In fine, petitioner discharged such burden and has sufficiently proven its entitlement to a refund or issuance of TCC in the reduced amount of P19,258,773.94, representing its excess and unutilized input VAT attributable to its zero- rated sales for the fourth (4th) quarter of CY 2013. WHEREFORE, premises considered, the present Petition for Review is PARTIALLY GRANTED. Accordingly, respondent Commissioner of Internal Revenue is ORDERED TO REFUND or ISSUE A TAX CREDIT CERTIFICATE in favor of petitioner Deutsche Knowledge Services Pte., Ltd. the amount of NINETEEN MILLION TWO HUNDRED FIFTY EIGHT THOUSAND SEVEN HUNDRED SEVENTY THREE PESOS AND NINETY FOUR CENTAVOS (P19,258, 773.94 ), representing petitioner Deutsche Knowledge Services Pte., Ltd.'s excess and unutilized input VAT attributable to zero-rated sales for the fourth (4th) quarter of calendar year 2013. 77 Exhibit "P-3.19", CTA Docket, Vol. VI, pp. 2900-2901. 76 Coca-Co/a Bottlers Philippines, Inc. vs. Commissioner of Internal Revenue, G.R. No. 222428, February 19, 2018. ~

DECISION Deutsche Knowledge Services Pte., Ltd. vs. Commissioner of Internal Revenue CTA Case No. 9227 SO ORDERED. Presiding Justice WE CONCUR: ~T~~~v~~f~ C~THERINE T. MANAHAN MARIAN IVYlt:. REYE~-FAJKRDO Associate Justice Associate Justice CERTIFICATION Pursuant to Article VIII, Section 13 of the Constitution, it is hereby certified that the conclusions in the above decision were reached in consultation before the case was assigned to the writer of the opinion of the Court. Presiding Justice