MELCO RESORTS LEISURE (PHP) CORPORATION [formerly MCE LEISURE (PHILIPPINES) CORPORATION doing business under the name and style of City of Dreams Manila and COD Manila] v. COMMISSIONER OF INTERNAL REVENUE

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY ENBANC MELCO RESORTS CTA EB NO. 2718 LEISURE (PHP) (CTA Case Nos. 9582, 9667, & 9724) CORPORATION [formerly MCELEISURE Members: (PHILIPPINES) DEL ROSARIO, P.J. CORPORATION doing RINGPIS-LIBAN, business under the name and MANAHAN, style of City of Dreams BACORRO-VILLENA, Manila and COD Manila], MODESTO-SAN PEDRO, REYES-FAJARDO, Petitioner, CUI-DAVID, FERRER-FLORES, and -versus- ANGELES, JJ COMMISSIONER OF Promulgated: INTERNAL REVENUE, MAR 20 2025 Respondent. x------------------------------------------ -- - --- ---------- x RESOLUTION FERRER-FLORES, J. : For this Court's resolution are the following: 1. Motion for Partial Reconsideration (of Decision dated June 28, 2024) filed by petitioner Melco Resorts Leisure (PHP) Corporation (Melco) on July 17, 2024, with Opposition (Re: Motion for Reconsideration of the Decision dated 28 June 2024) filed by respondent Commissioner of Internal Revenue (CIR) on August 30, 2024; and, 2. Motion for Partial Reconsideration (Re: Decision promulgated 28 June 2024) filed by respondent CIR on July 18, 2024, with Opposition [To Respondent's Motion for Partial l

RESOLUTION CTA EB NO. 2718 (CTA CASE NOS. 9582,9667, & 9724) MELCO RESORTS LEISURE (PHP) CORPORATION [formerly MCE LEISURE (PHILIPPINES) CORPORATION doing business under the name and style of City of Dreams Manila and COD Manila} vs. COMMISSIONER OF INTERNAL REVENUE Page 2 of6 Reconsideration dated July 5, 2024] filed by petitioner Melco on September 4, 2024. Both parties move for reconsideration of the Decision dated June 28, 2024 (assailed Decision),1 wherein the Court partially granted Melco's Petition for Review, the dispositive portion of which reads: WHEREFORE, in light of the foregoing considerations, the Petition for Review is PARTIALLY GRANTED. The refund of input taxes on purchases of (1) capital goods; and, (2) domestic purchases of goods (other than capital goods) and services, subject of CTA Case Nos. 9582, 9667, and 9724 are DENIED for lack of merit. Let the cases be REMANDED to the CTA Third Division for the proper determination of the refundable amount of value-added tax (VAT) paid on (1) importation of goods (other than capital goods); and, (2) purchases of services rendered by non-residents for the fourth quarter of 2014, first quarter of 2015, and second quarter of2015. SO ORDERED. Melco's Motion for Partial Reconsideration In Melco's Motion for Partial Reconsideration, it insists that it should be allowed to claim for refund or tax credit on input taxes erroneously passed on by its domestic suppliers in violation of Presidential Decree (P.D.) No. 1869, as amended, notwithstanding that it is not considered as the statutory taxpayer under the law. Melco maintains that the fact of payment of input value-added tax (VAT) passed on by suppliers to it as evidenced by a VAT- registered invoice or official receipt per se, is sufficient compliance with the requisite of erroneously or illegally collected tax under Section 229 of the National Internal Revenue Code (NIRC) of 1997, as amended. Under the principle of solutio indebiti, the Government has to restore to Melco the sums representing erroneous payments of taxes. On the other hand, the CIR counters that Melco failed to prove that it is entitled to the refund of the input taxes paid which was fatal to its claim for refund. The CIR 's Motion for Partial Reconsideration l In the CIR's Motion for Partial Reconsideration, he maintains that Melco, being a licensee and contractee of Philippine Amusement and Gaming 1 Rollo, pp. 141 to 168.

RESOLUTION CTA EB NO. 2718 (CTA CASE NOS. 9582,9667, & 9724) MELCO RESORTS LEISURE (PHP) CORPORATION [formerly MCE LEISURE (PHILIPPINES) CORPORATION doing business under the name and style ofCity of Dreams Manila and COD Manila} vs. COMMISSIONER OF INTERNAL REVENUE Page 3 of6 Corporation (PAGCOR), is subject to income tax and VAT. The CIR also points out that Melco's alleged sales transactions are not among those considered as zero-rated transactions under the NIRC of 1997, as amended. As such, input VAT passed on to Melco cannot be claimed for refund, instead, the same will form part of cost of goods and services. Furthermore, the CIR assigns error in the Court's partial grant of the refund of the VAT withheld on its payment for services rendered by non-residents, arguing that the related VAT should not be refunded. Finally, respondent posits that it is incumbent upon Melco to prove that it is entitled to the refund sought and that Melco failed to discharge its burden of establishing its entitlement to the same. Melco, on the other hand, alleges that the CIR' s Motion is a mere rehash of his previous arguments which have already been resolved in the assailed Decision. Melco emphasizes that the Court has already affirmed its exemption from taxes under Section 13(2) of P.D. No. 1869, as amended; hence, it is entitled to the refund. Melco likewise reiterates that it is entitled to the refund of input taxes related to its payments for services rendered by non-residents, echoing the Court's ruling in the assailed Decision. We resolve. After an evaluation of the respective arguments raised by the parties, this Court finds both parties' Motions for Partial Reconsideration bereft of merit. A cursory reading of the present Motions for Partial Reconsideration would reveal that the arguments of the parties are mere repetitions of the matters raised in their various pleadings which have already been considered and exhaustively discussed by the Court En Bane in the assailed Decision. At the risk of sounding repetitive, the Court emphasizes that the tax exemption privileges of PAGCOR inure to the benefit of Meleo, being a PAGCOR licensee, pursuant to Section l3(2)(b), in relation to Section l3(2)(a), of P.D. No. 1869, as amended.2 Such tax exemption covers both direct and indirect taxes, including VAT. Consequently, Melco's gaming i revenues are exempt from VAT and not subject to 0% VAT as argued by Melco. , Philippine Amusement and Gaming Corporation vs. Bureau of Internal Revenue, G.R. No. 172087, March 15,2011.

RESOLUTION CTA EB NO. 2718 (CTA CASE NOS. 9582,9667, & 9724) MELCO RESORTS LEISURE (PHP) CORPORATION fformerly MCE LEISURE (PHILIPPINES) CORPORATION doing business under the nome and style of City of Dreams Manila and COD Manila} vs. COMMISSIONER OF INTERNAL REVENUE Page 4 of6 With regard to Melco's entitlement to the refund of its input taxes, as thoroughly explained in the assailed Decision, only VAT-registered persons engaged in zero-rated and effectively-zero rated sales are entitled to the refund of creditable input tax attributable to such sales. As such, the input taxes paid by Melco, which is not engaged in zero-rated sales, to its local suppliers of goods (other than capital goods) and services and capital goods cannot be subject to refund under Section 112(A) of the NIRC of 1997, as amended. On the other hand, the input taxes paid by Melco, as the statutory taxpayer, on its importation and services rendered by non-residents are refundable inasmuch these were erroneously collected and may be subject of refund pursuant to Section 229 of the NIRC of 1997, as amended. In Department ofEnergy vs. Commissioner of Internal Revenue,3 the Supreme Court, citing Shangri-la International Hotel Management, Ltd., et al. vs. Developers Group of Companies, Inc.,4 held that, while a motion for reconsideration, by its nature, may tend to dwell on issues already resolved in the decision or resolution sought to be reconsidered, a circumstance which should not be an obstacle for a reconsideration, petitioners must still raise matters substantially plausible or compellingly persuasive to warrant a reversal of the Court's previous ruling. Clearly, both motions failed to raise matters which are compelling enough to warrant any modification of the assailed Decision. All told, there being no new matters which warrant the Court's attention, the Court En Bane finds no cogent reason to reverse or modify the assailed Decision. WHEREFORE, premises considered, petitioner's Motion for Partial Reconsideration (ofDecision dated June 28, 2024) and respondent's Motion for Partial Reconsideration (Re: Decision promulgated 28 June 2024) are both DENIED for lack of merit. SO ORDERED. ~~-~~ CO~ONG.FE Associate Ju ce 3 G.R. No. 260912 (Resolution), August 30,2023. 4 G.R. No. 159938 (Resolution), January 22,2007.

RESOLUTION CTA EB NO. 2718 (CTA CASE NOS. 9582, 9667, & 9724) MELCO RESORTS LEISURE (PHP) CORPORATION {formerly MCE LEISURE (PHILIPPINES) CORPORATION doing business under the name and style ofCity of Dreams Manila and COD Manila} vs. COMMISSIONER OF INTERNAL REVENUE Page 5 of6 WE CONCUR: Presiding Justice With due respect, I reiterate my Concurring and Dissenting Opinion. MA. BELEN M. RINGPIS-LIBAN Associate Justice /1/2~ ' 7- ~. . . . . _ -~.?....,_ _ With Jr;;;;~pid, I h1aintain my Concurring and Dissenting Opinion dated June 28, 2024. CATHERINE T. MANAHAN Associate Justice � Justice Ringpis-Liban 's C. D. 0. STO-SAN PEDRO Associate Justice W'hd~ ~I ~D~r~o zt ue respect, maz:n-tazn my zssentzng pz�nz�on. MARIAN IVY F. REYES-FAJARDO Associate Justice With due respect, I maintain and reiterate my Concurring and Dissenting Opinion. LANEE S. CUT-DAVTD Associate Justice

RESOLUTION CTA EB NO. 2718 (CTA CASE NOS. 9582,9667, & 9724) MELCO RESORTS LEISURE (PHP) CORPORATION !formerly MCE LEISURE (PHILIPPINES) CORPORATION doing business under the name and style ofCity of Dreams Manila and COD Manila] vs. COMMISSIONER OF INTERNAL REVENUE Page 6 of6 HENRY st~GELES Associate Justice