MELCO RESORTS LEISURE (PHP) CORPORATION v. COMMISSIONER OF INTERNAL REVENUE

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY StJecial Second Division 1 MELCO RESORTS LEISURE CTA Case No. 10514 (PHP) CORPORATION, Petitioner, Members: -versus- RINGPIS-LIBAN, P.J. & Chairperson, COMMISSIONER OF MODESTO-SAN PEDRO, and INTERNAL FERRER-FLORES, JL REVENUE, Promulgated: Respondent. ~ t: iJ ·-7 R "" ~.. l .._1 'Li026 ... 1/~M x-------------------------------------------------------------------------------------------- RESOLUTION RINGPIS-LIBAN, ]._: l~'or resolution is the "l'vfotion for Partial Reconsideration (Re: Amended Decision promulgated 4 May 2026) "1 of Respondent Commissioner of Internal Revenue (CIR), timely filed on May 18, 2026, and received by Petitioner on June 3, 2026, seeking the reversal and setting aside of the Amended Decision dated l\1ay 4, 2026 2 (the ~Amended Decision), on the following ground: \'VHETHER THE HONORABLE COURT ERRED IN RULING THAT PETITIONER IS ENTITLED TO REFUND IN THE REDUCED AMOUNT OF P13,463,146.00 ALLEGEDLY REPRESENTING ERRONEOUS AND UNUTILIZED WITHHOLDING TAX ON ITS GAMING REVENUES FOR TAXABLE YEAR 2018. The dispositive portion of the ~Amended Decision reads: "WHEREFORE, premises considered, the Motion for Partial Reconsideration filed by the Commissioner of Internal Revenue is hereby DENIED for lack of merit. The Motion for Partial Reconsideration filed by Petitioner J\!Ielco Resorts Leisure 1 Docket- Vol. 3, unpaginated. 2 /d., pp. 1085-1092.

RESOLUTION CTA Case No. 10514 Page 2 (PHP) Corporation is hereby PARTIALLY GRANTED. The Decision dated January 6, 2026 is AFFIRMED with MODIFICATION in that Respondent Commissioner of Internal Revenue is ORDERED to REFUND or ISSUE A TAX CREDIT CERTIFICATE in favor of Petitioner Melco Resorts Leisure (PHP) Corporation the total amount of P13,463,146.00, representing (a) P12,620,976.15 in erroneous and unutilized withholding taxes on gaming revenues for taxable year 2018, and (b) P842,170.85 in excess creditable withholding taxes on non- gaming revenues for taxable year 2018. In all other respects, the Decision stands. SO ORDERED." 3 Procedural Antecedents Petitioner Melco Resorts Leisure (PHP) Corporation is a corporation duly organized under Philippine laws, engaged in developing and operating tourist facilities, including hotel casino entertainment complexes, and engaged in casino gaming activities. 4 It is a licensee of the Philippine Amusement and Gaming Corporation (P1\GCOR), having been issued an Amended Certificate of Affiliation & Provisional License on January 28, 2013, 5 and subsequently a Gaming License dated April 29, 2015, and Gaming License (Amended) dated August 8, 2018, valid until July 11, 2033, for casino operations in Entertainment City, Paraiiaque City, under the brand name City of Dreams Manila. 6 Petitioner filed its Annual Income Tax Return (ITR) for taxable year 2018 on April15, 2019. 7 On April12, 2021, it filed an administrative claim for refund with the Large Taxpayers Service of the BIR in the amount of P24,798,420.00, representing allegedly erroneously withheld and unutilized creditable withholding taxes (CWTs) for taxable year 2018. 8 Petitioner filed the Petition for Review via electronic mail on April 14, 2021. 9 After full trial on the merits, this Court promulgated the Decision dated January 6, 2026, 10 partially granting the Petition and ordering the refund of P12,620,97 6.15 representing erroneous C\'VTs on Petitioner's gaming revenues, while denying the refund of P12,171,230.60 representing unutilized CWTs on non-gaming revenues for failure to establish the third requisite. 3 /d., unpaginated. 4 Docket- Vol. 1, p. 412, Stipulation of Facts, Joint Stipulation of Facts and Issues (JSFI). 5 !d. 6 Docket- Vol. 2, p. 730, Exhibit "P-2". 7 !d., pp. 731 to 732, Exhibits "P-3" and "P-4". 8 /d., pp. 744 to 756, Exhibits "P-7", "P-7-1", and "P-7-2". 9 /d., pp. 786 to 798, Exhibits "P-11" and "P-11-1". 10 !d. at Note 1, pp. 1003-1027.

RESOLUTION CTA Case No. 10514 Page 3 Both parties timely filed their respective Motions for Partial Reconsideration of the January 6, 2026 Decision. Respondent received a copy of the Decision on January 16, 2026, and filed his first Motion for Partial Reconsideration on January 26, 2026. 11 Petitioner received a copy on January 16, 2026, and filed its ~lotion for Partial Reconsideration on February 2, 2026Y2 Respondent flied an Opposition on February 27, 2026. 13 This Court resolved the dual Motions for Partial Reconsideration in the _Amended Decision dated May 4, 2026, 14 which: (a) DENIED the CIR's first Motion for Partial Reconsideration in its entirety; (b) PARTIALLY GRANTED Petitioner's lVIotion for Partial Reconsideration; and (c) MODIFIED the refund award from P12,620,976.15 to P13,463,146.00 by adding P842,170.85 in excess C\Vfs on non-gaming revenues, upon finding that the applicable standard of proof for excess C\'vT refund claims under Section 76 of the National Internal Revenue Code (NIRC) is preponderance of evidence, not stridissimijuris. Respondent received a copy of the Amended Decision on May 12, 2026, and timely filed the present Motion for Partial Reconsideration on May 18, 2026. 15 Petitioner received a copy of the Motion on June 3, 2026. The Court issued a Resolution ordering Petitioner to file its Comment/Opposition, which was filed on June 23, 2026. 16 The lVIotion is now submitted for resolution. Summary of Grounds Respondent-Movant raises the single ground set out in the preamble above, which, upon analysis, breaks down into the following substantive arguments: (a) the income claimed for refund was not proven to pertain exclusively to casino gaming operations; (b) PAGCOR's payment of the 5% franchise tax was not duly proven; (c) the income on which the CWTs were withheld was not declared in Petitioner's Annual ITR; and (d) actual remittance of the withheld taxes to the BIR was not established. The Court's Ruling The Motion for Partial Reconsideration is DENIED. The Motion is pro forma and warrants outright denial. 11 /d., pp. 1029-1039. 12 /d., pp. 1043-1057. 13 /d.,pp. 1676-1682. 14 !d. at Note 2. 15 !d. at Note 1. 16 /d., unpaginated.

RESOLUTION CTA Case No. 10514 Page 4 The present Motion is, in substance, a verbatim repet1t10n of the arguments raised by Respondent in his first .l\!Iotion for Partial Reconsideration of the January 6, 2026 Decision. Each of the four arguments now reasserted was expressly considered and rejected in the Amended Decision. Respondent identifies no specific finding or conclusion of the Amended Decision alleged to be contrary to law, cites no authority not previously before the Court, and presents no new evidence. A motion for reconsideration that merely reiterates previously rejected arguments without raising a substantial and compelling reason to modify the judgment is pro forma. As the Supreme Court held in S hangri-la International Hotel lv1anagement, Ltd. v. Developers Group of Companies, Inc., 17 the movant must convince the court that certain findings or conclusions are contrary to law, and must raise new or substantial legitimate grounds to justify the reconsideration sought. \'\!here, as here, the grounds raised have already been sufficiently addressed in the assailed decision and no new or substantial matter is presented, the Court is not obliged to re-examine them anew. T'he Court finds that the present .l\!Iotion presents no new factual matter, legal issue, or supervening circumstance that would justify a re-examination of the Amended Decision. All four arguments were thoroughly addressed. The Motion is pro forma and is accordingly DENIED outright. Even on the merits, the grounds are without basis. \'Vithout prejudice to the foregoing, the Court addresses the substance of the grounds raised, and finds each one unmeritorious. The gaming revenues' exemption from income and withholding tax is settled. Section 13(2)(b) of PD No. 1869, 18 as interpreted by the Supreme Court in Bloomberry Resorts and Hotels, Im~ v. Bureau of Internal Revenue, 19 is clear: the tax exemption enjoyed by PAGCOR under its franchise inures to the benefit of and extends to all corporations with whom PAGCOR or its operator has any contractual relationship in connection with the operations of casino(s) authorized under the Franchise, upon PAGCOR's payment of the 5% franchise tax in lieu of all other taxes. This Court correctly applied that ruling in both the January 6, 2026 Decision and the 1 \mended Decision. 17 G.R. No. 159938, January 22, 2007. 18 CONSOLIDATING AND AMENDING PRESIDENTIAL DECREE NOS. 1067-A, 1067-B, 1067-C, 1399 AND 1632, RELATIVE TO THE FRANCHISE AND POWERS OF THE PHILIPPINE AMUSEMENT AND GAMING CORPORATION {PAGCOR). 19 G.R. No. 212530, August 10, 2016.

RESOLUTION CTA Case No. 10514 Page 5 The income subject of the refund - credit card settlement receipts from BDO attributable exclusively to buy-in transactions at designated gaming cage terminals - is unambiguously income from the operation of casino gaming activities, not from "other related services." The Merchant Agreement with BDO, the Merchant Identification Number (MID)/Terminal Address identification system, and the BIR Forms 2307 all confirm this classification. The factual finding in the _Amended Decision on this point is correct and will not be disturbed. PAGCOR's payment of the 5% franchise tax was duly established. The Amended Decision found P AGCOR's payment of the 5% franchise tax for taxable year 2018 duly established by: (1) the Statement of Franchise Tax Remittances for Calendar Year 2018 issued by PAGCOR,20 and (2) the BIR Forms 2553 filed by PAGCOR for the 1st through 4th quarters of2018. 21 Under Philippine Amztsement and Gaming Corporation (PAGCOR) v. BIR, 22 PAGCOR's actual payment of the 5% franchise tax is the operative fact that activates the tax exemption for its contractees and licensees. That fact was established on the basis of admitted documentarv evidence. The CIR's characterization of this evidence - as mere allegation is directly contradicted by the record. Proof of actual remittance by the withholding agent is not required of Petitioner. Section 2.58.3(B) of Revenue Regulations No. 2-98, as amended, expressly provides: "Proof of remittance is the responsibility of the withholding agent." 23 Petitioner is the payee-recipient, not the withholding agent. The BIR Forms 2307 issued by BDO constitute the prescribed evidence of withholding. 24 The burden of proving non-remittance lies with the BIR, not with the refund claimant. 25 This argument was already barred in the Amended Decision as a new argument raised for the first time in the first l'vlotion for Partial Reconsideration. Raising it again in the present l'v1otion compounds the defect. The gaming revenues were correctly reported as exempt income in the Annual ITR. 20 !d. at Note 6, p. 801, Exhibit "P-14". 21 /d., pp. 804 to 823, Exhibits "P-16 and series", "P-17 and series", "P-18 and series", and "P-19 and series". 22 G.R. No. 215427, December 10, 2014. 23 Section 2.58.3(B), Revenue Regulations No. 2-98, as amended. 24 Exhibits "P-25-1" to "P-25-79", USB marked as "P-21-2". 25 Philippine Bank of Communications v. Commissioner of Internal Revenue, eta/., G.R. No. 112024, January 28, 1999.

RESOLUTION CTA Case No. 10514 Page 6 Petitioner's gaming revenues are exempt from corporate income tax under PD No. 1869. They are therefore reported in the exempt income column of the i\nnual ITR, not the taxable column. The ICPA verified, and this Court confirmed in both the January 6, 2026 Decision and the Amended Decision, that Petitioner's gaming revenues attributable to credit card transactions at cage terminals correspond to the income payments on which the CWTs of P12,627,189.40 were withheld, reduced to P12,620,976.15 after the Court's own disallowances. For the non-gaming C\X/T component of P842,170.85, the Amended Decision applied the preponderance-of-evidence standard confirmed in Commissioner of Internal Revenue v. Sonoma Semices, Inc. 26 and Tullett Prebon (Philippines), Inc. v. Commissioner of Internal Revenue, 27 and found the I CPA's specific tracing of P168,436,849.05 in income payments (Tables 29 and 30 of the Amended ICPA Report) sufficient to satisfy the third requisite. No error is shown. The CIR presents no new evidence or authority warranting a different result. The Court reiterates that a claimant's burden of proof is to establish the factual basis of its claim.~ 8 Respondent has consistently failed to discharge the burden of showing that the ~Amended Decision's findings are contrary to law or constitute a manifest misappreciation of evidence. 29 WHEREFORE, premises considered, the Motion for Partial Reconsideration flied by Respondent Commissioner of Internal Revenue dated l'vfay 18, 2026, is hereby DENIED for lack of merit. The Amended Decision dated l\lfay 4, 2026 is AFFIRMED in its entirety. SO ORDERED. "". ~ I ---- MA. BELEN M. RINGPIS-LIBAN Presiding Justice WE CONCUR: MARlAR 26 G.R. No. 263916, August 18, 2025. 27 G.R. No. 257219, July 15, 2024. 28 Citibank, N.A. v. Court of Appeals, eta!., G.R. No. 107434, October 10, 1997. 29 Commissioner of Internal Revenue v. S.C. Johnson and Son, Inc., eta/., G.R. No. 127105, June 25, 1999.

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