SITEL PHILIPPINES CORPORATION v. COMMISSIONER OF INTERNAL REVENUE

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS Quezon City ENBANC FOUNDEVER PHILIPPINES CTA EB NO. 2678 (CTA Case No. 10076) CORPORATION (formerly Present: SITEL PHILIPPINES DEL ROSARIO, PJ., CORPORATION), RINGPIS-LIBAN, Petitioner, MANAHAN, BACORRO-VILLENA, -versus- MODESTO-SAN PEDRO, REYES-FAJARDO , CUI-DAVID, FERRER-FLORES, and ANGELES, fl. COMMISSIONER OF INTERNAL REVENUE, Respondent. X- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - X RESOLUTION BACORRO-VILLENA, L: For the Court En Bane's resolution is the "Motion for Reconsideration (of the Decision dated December 13, 2023)"' (MR) filed by petitioner Foundever Philippines Corporation (formerly Sitel Philippines Corporation) (petitioner) on 02 January 2024, sans Comment or Opposition by respondent Commissioner of Internal Revenue (respondent).6 Rollo, pp. 48 1-498. See Records Verification dated 16 February 2024, id. , p. 50 I.

RESOLUTION CTA EB NO. 2678 (CTA Case No. 10076) Foundever Philippines Corporation (formerly Site! Philippines Corporation) v. Commissioner of Internal Revenue Page 2 ofS x----------------------------------- ----------------------------------------- x The MR seeks the reversal of the Court En Bane's Decision3 dated 13 December 2023 (assailed Decision) which denied petitioner's Petition for Review. 4 The dispositive portion of the assailed Decision reads: WHEREFORE, in view of the foregoing, the instant Petition for Review filed by petitioner Foundever Philippines Corporation (formerly Site/ Philippines Corporation) on 21 September 2022 is hereby DENIED for lack of merit. Accordingly, the assailed Decision and Resolution dated 21 February 2022 and 15 August 2022, respectively, of the First Division in CTA Case No. 10076, entitled Site/ Philippines Corporation v. Commissioner ofInternal Revenue, are AFFIRMED. SO ORDERED. In the MR, petitioner opposes the Court's pronouncements in the assailed Decision. It maintains that it had sufficiently established its registration as a Value-Added Tax (VAT) taxpayer. It argues that the registration by its main office satisfies the requirements for a claim for refund of input taxes. Moreover, petitioner is firm that it had adequately proven that it is engaged in zero-rated sales of services and that it actually performed its services in the Philippines. We resolve. At the onset, We readily observe that petitioner's arguments cover matters that both the First Division and the Court En Bane have already been passed upon. Nevertheless, for emphasis, We briefly revisit the issues raised to further enlighten petitioner as to why the Court could not validly uphold its refund claim'l!J� !d., pp. 449-475. Filed on 21 September 2022, id., pp. 38-64.

RESOLUTION CTA EB NO. 2678 (CTA Case No. 10076) , , Foundever Philippines Corporation (formerly Site! Philippines Corporation) v. Commissioner of Internal Revenue x----------------------------------------------------------------------------x The Consolidated VAT Regulations of 20055, in line with Section 236(G) 6 of the National Internal Revenue Code (NIRC) of 1997, as amended, lays down the particulars relevant to the registration of VAT taxpayers. The regulation mandates registration for every separate and distinct establishment of place of business, apart from a warehouse without sales transactions.7 It further specifies that a taxpayer required to register but fails to do so loses the benefit of input tax credits (while still being liable for output taxes).8 As previously determined, the instant refund claim concerns sales generated from petitioner's Palawan site, which was not VAT-registered during taxable year (TY) 2016. To recall further, the said site was registered a Facility in the following TY. Therefore, as far as the present claim is concerned, the VAT registration requirement has not been met. Meanwhile, in the determination ofwhether petitioner is engaged in zero-rated or effectively zero-rated sales, the lapse in VAT registration is likewise fatal. Particularly, in Commissioner of Internal Revenue v. Deutsche Knowledge Services Pte. Ltd. 9, the Supreme Court held that in order for the sales of other services to be considered VAT zero-rated under Section w8(B)(2) of the NIRC of 1997, as amended, the taxpayer-claimant must prove the following conditions: ... First, the seller is VAT-registered. Second, the services are 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." Third, the services are "paid for in acceptable foreign currency and accounted for i~ accordance with [BSP] rules and regulation~ Revenue Regulations (RR) No. !6-2005 dated 0 l September 2005. SEC. 236. RegistraNun Requirements.- (G) Persons Required to Register for Value-Added Tax.- See Section 9.236-l(a) ofRR No. 16-2005. See Section9.236-l(b) ofRR No. !6-2005. G.R. No. 234445, 15 July 2020; Citations omitted, emphasis supplied and italics in the original text.

RESOLUTION CTA EB NO. 2678 (CTA Case No. 10076) Foundever Philippines Corporation (formerly Site! f!hilippines Corporation) v. Commissioner of Internal Revenue x----------------------------------------------------------------------------x The burden is on the taxpayer to show that he has strictly complied with the conditions for the grant of the tax refund or credit.10 Since taxes are the lifeblood of the government, tax laws must be faithfully and strictly implemented as they are not intended to be liberally construed.11 Having previously established the crucial defect in registration, We shall no longer belabor to explore anew the matters considered in the assailed Decision of the Court En Bane as well as of the First Division. This Court finds no meritorious considerations in the MR that would warrant reversing the same. WHEREFORE, the foregoing premises considered, petitioner's "Motion for Reconsideration (of the Decision dated December 13, 2023)" filed on o2 January 2024 is hereby DENIED for lack of merit. SO ORDERED. .._ WE CONCUR: Presiding Justice ~- ~ /'-----_ MA. BELEN M. RINGPIS-LIBAN Associate Justice 10 Coca-Cola Bottlers Philippines, Inc. v. Commissioner of Internal Revenue, G.R. No. 222428, 19 February 20 18. II !d.

RESOLUTION CTA EB NO. 2678 (CTA Case No. 10076) Foundever Philippines Corporation (formerly' Site! Philippines Corporation) v. Commissioner of Internal Revenue x----------------------------------------------------------------------------x {?~ /. /{b.-.-c-L- - CATHERINE f. MANAHAN ----- Associate Justice ~ IVY&fJR~rYE.S-f~AJ-ARD~'O~ MARIAN Associate Justice ~'d!hif LANEE S. CUI-DAviD Associate Justice HENRY d~NGELES Associate Justice