CHEVRON HOLDINGS, INC. v. COMMISSIONER OF INTERNAL REVENUE

Republic of the Philippines COURT OF TAX APPEALS Quezon City SECOND DIVISION CHEVRON HOLDINGS, INC., CTA Case No. 8621 Petitioner, Members: -versus- CASTANEDA, JR., Chairperson CASANOVA, and COTANGCO-MANALASTAS, J.J. COMMISSIONER OF INTERNAL Promulgated: REVENUE, APR 0 5 2016 Respondent. / t7 'I: ~ b ~-~ . x----------------------------------------------------------------------------------x DECISION CASANOVA, J.: This is a Petition for Review1 filed by petitioner Chevron Holdings, Inc., praying for the refund or issuance of a tax credit certificate (TCC) in the amount of Seventy Million Six Hundred Thirty One Thousand One Hundred Ninety Two and 67/100 (P70,631,192.67), representing its alleged excess and unutilized input value-added taxes (input VAT) on purchases of goods and services attributable to zero-rated sales for calendar year (CY) 2011. Petitioner is a Philippine branch of a multinational company duly organized and existing under and by virtue of the laws of the State of Delaware, United States of America. 2 It is licensed by the Securities and Exchange Commission (SEC) to transact business in the Philippines as a regional operating headquarters (ROHQ) under SEC Registration No. A1998024863 dated June 3, 1998, with officee- 1 Docket (Vol. I), pp. 6-18 . 2 Par. 1, The Parties, Petition for Review, Docket (Vol. I), p. 6. 3 Exhibit "P-1".

Decision CTA Case No. 8621 address at 35th Floor, Yuchengco Tower, RCBC Plaza, 6819 Ayala Avenue, 1200 Makati City.4 Respondent, on the other hand, is the duly appointed Commissioner of Internal Revenue, vested under the appropriate laws with the authority to carry out the functions, duties and responsibilities of said office, including among others, the duty to act upon and approve claims for refund or tax credit pursuant to the provisions of the National Internal Revenue Code of 1997 (Tax Code) and other tax laws, rules and regulations. She may be served with summons, pleadings and other legal processes at her office at the 5th Floor, BIR National Office Building, BIR Road, Diliman, Quezon City.5 As a regional operating headquarters, petitioner is engaged in general administration and planning; business planning and coordination; sourcing/procurement of raw materials and components; corporate finance advisory services; marketing control and sales promotion; training and personnel management; logistic services; research and development services and product development; technical support and maintenance; data processing and communication; and business development.6 Petitioner is registered with the BIR as a VAT taxpayer and was issued a Certificate of Registration with Tax identification Number (TIN) 201-056-391-000.7 On the following dates, petitioner filed with the BIR its Original Quarterly VAT Returns8 for the four quarters of 2011, respectively: Taxable Quarter Date of Filing of Original Return 1st 2nd April 20, 2011 3rd July 18, 2011 4th October 20, 2011 May 22, 2012 l/2 :p 4 Par. 1, Admitted Facts, Joint Stipulation of Facts and Issues (JSFI), Docket (Vol. I), p. 119. 5 Par. 2, Admitted Facts, JSFI, Docket (Vol. I), p. 119. 6 Par. 3, Admitted Facts, JSFI, Docket (Vol. I), p. 220. 7 Exhibit "P-3". 8 Exhibits "P-4.1", "P-4.2", "P-4.3" and "P-4.4".

Decision CfA Case No. 8621 On October 23, 2012, petitioner filed its administrative claim for refund and/or the issuance of TCC9 of unutilized input VAT for the four quarters of CY 2011. In view of respondent's inaction, petitioner filed the present Petition for Review10 on March 22, 2013. Respondent filed her Answer11 on June 13, 2013, interposing the following Special and Affirmative Defenses: "4. She reiterates and re-pleads the preceding paragraphs of this Answer as part of her Special and Affirmative Defenses. 5. To support its claim, it is imperative for petitioner to prove the following, viz. a. The registration requirements of a value- added taxpayer in compliance with section 6 (a) and (b) of Revenue Regulations No. 6-97 in relation to Section 4.107-1 (a) of Revenue Regulations No. 7-9~ and Section 236 of the Tax Code, as amended; b. The invoicing and accounting requirements for VAT-registered persons, as well as the filing and payment of VAT in compliance with the provisions of Section 113 and 114 of the Tax Code, as amended; c. Proof of compliance with the prescribed checklist of requirements to be submitted involving claims for VAT refund pursuant to Revenue Memorandum Order No. 53-98, otherwise there would be no sufficient compliance with the filing of an administrative claim for refund which is a condition sine qua non prior to the filing of a judicial claim in accordance with Section 112 of the Tax Code, as amended. This requires th~ 9 Exhibit "P-6". 10 Supra note 1. 11 Docket (Vol. I), pp. 50-64.

Decision CTA Case No. 8621 submission of complete documents in support of the application filed with the Bureau of Internal Revenue before the 120-day audit period shall appl~ and before the taxpayer could avail of the judicial remedies as provided for in the law. Hence, petitioner's failure to submit proofof compliance with the above- stated requirements warrants immediate dismissal ofpetitioner's petition for review; d. That the input taxes of Php 70,631,192.67 allegedly paid by petitioner from its purchases of goods and services for 2011 was attributable to its zero-rated sales and such have not been applied against any output tax and were not carried over to the succeeding taxable quarter or quarters; e. That petitioner's administrative and judicial claims for tax credit or refund of the unutilized input tax (VAT) were filed within the periods provided in Sections 112 (A} and (D) of the Tax Code, as amended; f. That petitioner's purchases of goods and services was made in the course of its trade or business, properly supported by VAT invoices and/or official receipts and other documents, such as subsidiary purchase Journal showing that it actually paid VAT in accordance with Sections 110 {A) (2) and 113 of the Tax code, as amended, and pursuant to Section 4.104-5 (a) and (b) of Revenue Regulations No. 7- 95 (Re: Substantiation of Claims for Input Tax Credits); g. The requirements as enumerated under Section 4.104-5 Revenue Regulations No. 7-95. (Re: Substantiation of Claims for Input Tax Credits). 6. Petitioner must prove that the aggregate amount of P70,631,192.67 allegedly representing excess andt!-

Decision CfA Case No. 8621 unutilized input VAT for calendar year 2011, is properly documented. 7. As petitioner states in its petition before this Honorable Court, the subject of its claim for refund is the unutilized input VAT on its purchases of goods and services attributable to zero-rated sales of services covering the period 2011. 8. It is noteworthy to state that the instant petition involves a claim for refund in the amount Seventy Million Six Hundred Thirty One Thousand One Hundred Ninety Two and 67/100 Pesos (P70,631,192.67) allegedly paid and incurred for calendar year 2011, however such claim for refund should not be given due course for lack of jurisdiction since petitioner failed to exhaust all administrative remedies before elevating this case to the Honorable Court. 9. Unmistakably, Section 1 (j) of Rule 16 of the 1999 Rules of Civil Procedure provides that: 'MOTION TO DISMISS' Section 1. Grounds. - Within the time for but before filing the answer to the complaint or pleading asserting a claim, a motion to dismiss may be made on any of the following grounds: XXX (j) That a condition precedent for filing the claim has not been complied with. ' 10. Corollary thereto, Section 112 (D) [now Section 112 (c) of the Tax Code of 1997] provides as follows, to wit: 'SEC. 112. Refunds or Tax Credits of Input Tax.- XXX (D) Period Within Which Refund or Tax Credit ofInput Taxes Shall be Made. - In proper cases, the Commissioner shall grant ~

Decision CTA Case No. 8621 refund or issue the tax credit certificate for creditable input taxes within one hundred twenty (120) days from the date of submission of compete documents in support of the application filed in accordance with Subsections {A} and (B) 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. '(Emphasis supplied) 11. Pursuant to the aforequoted provision of law, the Commissioner of Internal Revenue ('CIR', for brevit:'IJ has 120 days from the submission of the complete or supporting documents to decide the claim for refund. It logically follows that a taxpayer must first submit the complete supporting documents before the 120-day period should commence. The CIR cannot decide the claim for refund without the complete supporting documents. 12. The implementing rule for these complete documents required by law is RMO No. 53-98. Annex B-1 of said RMO lists all the required documents as follows: VALUE-ADDED TAX (For audit involving Claim for Refund/ TCC) A} Requirements from Taxpayer I. Requirements mention in Annex 8 II. Additional General Requirements~

Decision CTA Case No. 8621 1) 3 copies of 'Application for VAT Credit I Refund' 2) Summary List of Local Purchases specifying the following: XXX 3) Photocopies of VAT purchase invoices for purchase ofgoods and official receipts for purchase of services. (The invoices/ 'official receipts must be arranged according to the summary list) 4) Summary of importations made during the period with the following details: XXX XXX XXX 5) Photocopies of invoices, import entry documents, official receipts or confirmation receipts evidencing payment of VAT. (Segregate documents paid by cash from those paid by tax debit memo) 6) VAT Returns filed for the quarter showing that the amount applied for refund/TCC has been reflected as a deduction from the total available input tax, as well as VAT Return for the succeeding quarter. 7) Certification of taxpayer showing the amount ofZero-rated Sales, Taxable Sales and Exempt Sales 8) A statement showing the amount and description of the sale ofgoods and services, name ofpersons or entities (except in case of exports) to whom the goods or services were sold and date of the transaction, where the applicant's zero-rated transactions are regulated by certain government agency. 9) Articles of Incorporation - for first time filers 10) Sales ContractjAgreemen~

Decision CTA Case No. 8621 11) 801 Certificate ofRegistration 12) BIR Certificate ofRegistration 13) Certification from 801, DOF, BOC, EPZA, etc., that subject taxpayer has not filed similar claim for refund covering the same period 14) Sworn statement that ending inventory as of the close of the period covered by the Claim has been used directly or indirectly in the products subsequently exported as supported by export documents, if the applicant is 100% exporter. 15) Documents of liquidation evidencing the actual utilization of the raw materials in the manufacture of goods at least 70% of which has been actually exported, if the applicant is an indirect exporter. 16) Copy of the ITR and Certified Financial Statements, ifapplicable. 17) Beginning and ending inventory of raw materials, work-in-process, finished goods, supplies and materials. Additional Specific Requirements 1) For Zero-Rated Sales of Services (contractors, mining, etc) a. Authenticated copyjies of the contractjs showing the personjs for whom the services were rendered, amount of consideration, description of the services and documents evidencing actual payments. b. Photocopies of official receipts and billings together with a summary of the date of billing, name of principal, official receipt number, date of receipt, amount in foreign currency and the corresponding value thereof, date of remittance, name of banke-

Decision CTA Case No. 8621 bank credit memo number and amount remitted in pesos. c. Bank credit memoranda and certificate from the BSP with information similar to 1-c (export sales) 13. As stated above, the first documentary requirement is that provided in Annex B of the same RMO. Annex B provides for more requirements as follows: VALUE-ADDED TAX A) Requirements from Taxpayers 1) Proof ofclaimed tax credits 2) Proof of Tax Compliance Certificates applied 3) Xerox copy of used Tax Credit Certificate {TCC) with annotation of issued TDM at the back, ifapplicable 4) Proofofpayment ofdeficiency tax, if any a) current year /period b) previous year /period 5) Certification of the appropriate government agency as to taxpayer's entitlement to tax incentives. ifapplicable. 6) Xerox copies of the Official Receipts evidencing VAT payment on imported purchases, ifapplicable 7) Proof of exemption under special law, if applicable 8) Certification of the appropriate regulatory agency as to the exempt or zero-rated sales of the taxpayer under its regulatory supervision, if applicablea-

Decision CTA Case No. 8621 9) Certificate of Registration issued by the appropriate regulatory agency, together with the conditions attached to such registration, if applicable 10) Proof of 'Approval for Effective Zero Rating ofSale~ 'ifapplicable 11) Sample invoicejs for 'Export/Exempt Sales; if applicable 12) Proof that the acceptable foreign currency exchange proceeds on export sales/ foreign currency denominated sales had been duly accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP), ifapplicable. 14. Indubitably, the law requires the submission of complete documents in support of the application filed with the Bureau of Internal Revenue before the 120-day audit period shall apply, and before the taxpayer could avail of judicial remedies as provided for in the law. 15. Upon examination of the BIR records, it is evident that petitioner failed to prove that it has submitted the complete documents to substantiate its administrative claim for refund and to reckon the commencement of the 120-day period for the CIR. This is a requirement established by law and jurisprudence. Ergo, respondent humbly submits that failure on the part of petitioner to submit the required complete supporting documents would render the instant petition with this Honorable Court to have been prematurely filed. 16. This is not a claim for refund of erroneously or illegally collected taxes where petitioner may choose the evidence it wishes to submit to prove its case. This is merely a claim for excess input taxes where the prescribed documentation is needed by the BIR 17. Petitioner's alleged claim for refund is subject to administrative routinary investigation/examination by the Bureau of Internal Revenue. A claim for refund is not ipso facto granted because respondent CIR still has to~

Decision CfA Case No. 8621 investigate and ascertain the validity of the claim. 18. Respondent respectfully avers that before judicial inquiry into the issue of whether taxpayers, in general, are entitled to a refund/tax credit under substantive law may be considered, they have an initial burden to discharge. They must prove that they complied with all the administrative requirements continuing up to judicial review. In other words, before trial de novo proceeds and disposes of the issue of refund entitlement under substantive law, it must first be proved that there was procedural compliance in pursuing the administrative claim leading to the appellate proceedings. As stated by the Honorable Supreme Court: 'Petitioner's contention that non-compliance with Revenue Regulations 3-88 could not have adversely affected its case in the CTA indicates a failure on its part to appreciate the nature of the proceedings in that court First, a judicial claim for refund or tax credit in the CTA is by no means an original action but rather an appeal by way of petition for review of a previous, unsuccessful administrative claim. Therefore, as in every apoeal or petition for review, a petitioner has to convince the apoellate court that the quasi- judicial agency a guo did not have any reason to deny its claims. In this case, it was necessary for petitioner to show the CTA not only it was entitled under substantive law to the grant ofits claims but also that it satisfied all the documentary and evidentiary requirements for an administrative claim for refund or tax credit. Second, cases filed in the CTA are litigated de novo. Thus, a respondent should prove every minute aspect of its case by presenting, formally offering and submitting its evidence to the CTA. Since it is crucial for a petitioner in a judicial claim for refund or tax credit to show that its administrative claim should have been ~

Decision CTA Case No. 8621 granted in the first place, part of the evidence to be submitted to the CTA must necessarily include whatever is required for the successful prosecution of an administrative claim. fEmphasis and underscoring supplied) 19. The doctrine of exhaustion of administrative remedies ensures an orderly procedure which favors a preliminary sifting process, particularly with respect to matters peculiarly within the competence of the administrative agency. After this sifting process comes the availability of judicial review of administrative decisions. Judicial review of administrative decisions entails the Court to examine the method in which the decision was arrived at, and finding no error, lets the administrative decision stand. This is precisely because, as previously stated, these are matters peculiarly within the competence of the administrative agency. 20. Well-settled is the rule that exhaustion of available administrative remedies is a condition sine qua non before taking a judicial action. The Honorable Supreme Court, in a long line of cases, has consistently held that if a remedy within the administrative machinery can still be resorted to by giving the administrative officer every opportunity to decide on a matter that comes within his jurisdiction, then such remedy must be exhausted first before the court's power of judicial review can be sought. 21. Moreso, the Honorable Supreme Court had the occasion to rule that where a remedy is available within the administrative machinery, this should be resorted to before resort can be made to courts, not only to give the administrative agency the opportunity to decide the matter by itself correctly, but also to prevent unnecessary and premature resort to courts. Thus, the party with an administrative remedy must not merely initiate the prescribed administrative procedure to obtain relief but also pursue it to its appropriate conclusion before seeking judicial intervention in order to give the administrative agency an opportunity to decide the matter itself correctly and prevent unnecessary and premature resort to the court~

Decision CTA Case No. 8621 22. The doctrine of exhaustion of administrative remedies has practical and legal reasons. Resort to administrative remedies entails lesser expenses and provides for speedier disposition of controversies. Thus, for reasons of comity and convenience, courts will shy away from a dispute until the system of administrative redress has been completed and complied with so as to give the administrative agency every opportunity to correct its error and to dispose of the case. The underlying principle of the rule rests on the presumption that the administrative agency, if afforded a complete chance to pass upon the matter, will decide the same correctly. 23. Respondent respectfully submits that the 120- day period provided for by law within which the CIR has to act on petitioner's claim for refund has not yet commenced considering petitioner's failure to comply with the duly mandated legal requirements in such claims for refund/tax credit (i.e submission of complete supporting documents). While it is true that petitioner filed an administrative claim for refund, the same is considered merely pro forma as it failed to submit a complete documentary evidence to prove its entitlement thereto. Petitioner here failed to substantiate its administrative claim for refund. 24. Had petitioner submitted all relevant documents to substantiate its claim for refund or tax credit, respondent would have the opportunity to determine the veracity of its claim and might refund or issue a tax credit certificate for the claimed amount. Such failure of petitioner to submit relevant documents deprived respondent of the opportunity and time to study petitioner's claim for refund and to fully exercise its function. It must be remembered, that in the case of Jariol vs. Commission on Elections, the Supreme Court reasoned that a party must not merely initiate the prescribed administrative procedure to obtain relief, the party concerned must pursue this relief until the appropriate conclusion takes place before seeking judicial intervention in order to give the administrative agency an opportunity to decide the matter by itself correctly and prevent unnecessary and premature resort to the court.6l

Decision CTA Case No. 8621 25. It is well settled rule in tax laws, that the taxpayer who feels aggrieved by the actions taken by tax authorities may not seek redress in the courts of justice without first exhausting available administrative remedies, except for certain well- recognized exceptions. It is the policy of the law and good practice to discourage court litigations and encourage resort to administrative action whenever the latter is feasible, adequate and speedy. Besides, the respect and consideration due to each branch of the government demand that the judicial department abstain, whenever possible from interfering in the acts of the other departments except when the latter transcend their respective shares of action and suitable remedies cannot be obtained by them. 26. Equally noteworthy is the fact that the Highest Tribunal in the case of Atlas Consolidated Mining and Development Corporation vs. Commissioner of Internal Revenue, held that: 'Petitioner's contention that non-compliance with Revenue Regulations 3-88 could not have adversely affected its case in the CTA indicates a failure on its part to appreciate the nature of the proceeding in that court. First a judicial claim for refund or tax credit in the CTA is by no means an original action but rather an appeal by way of petition for review of a previous, unsuccessful administrative claim. Therefore, as in every appeal or petition for review, a petitioner has to convince the appellate court that quasi- judicial agencv a quo did not have reason to denv its claim. In this case, it is necessary for petitioner to show the CTA not only that it was entitled under substantive law to grant of its claim but also that it satisfied all the documentary evidence and evidentiary requirements for administrative claim for refund or tax credits. xxx' (Emphasis and Underscoring Supplied) 27. Thus, as clearly stated by the above jurisprudence, the necessity for petitioner to submit al~

Decision CfA Case No. 8621 relevant documents to substantiate its administrative claim for refund is imperative. The filing of the petition for review to this Honorable Court must be due to the denial of its claim or inaction which is tantamount to a denial of the said action. Absent these circumstances, the judicial claim merely becomes an attempt by the taxpayer to circumvent the role and duties of the Commissioner in evaluating taxpayer's claim for refund. 28. Failure of petitioner to exhaust all administrative remedies is fatal to its claim considering that such non- exhaustion is not merely for purposes of formality but is jurisdictional in nature. 29. Prescinding from and anent the foregoing considerations, petitioner's failure to exhaust all available administrative remedies which led to the premature filing of the instant petition divests the Honorable Court jurisdiction over the instant petition. 30. Exemptions from taxation are highly disfavored in law and he who claims exemption must be able to justify his claim by the clearest grant of organic or statutory law. An exemption from the common burden cannot be permitted to exist upon vague implications. 31. In an action for refund, the burden of proof is on the taxpayer to establish its right to refund, and failure to sustain the burden is fatal to the claim for refund. Hence, a taxpayer is charged with the heavy burden of proving that he has complied with and satisfied all the statutory and administrative requirements to be entitled to the tax refund. Failure to comply therewith warrants a dismissal of the taxpayer's claim for refund. Respondent humbly submits that petitioner failed to establish its right to refund. 32. It can never be emphasized enough that in this jurisdiction tax refunds/ credits are in the nature of tax exemptions, hence, laws relating to them call for a strict application against the claimant. As held by the Honorable Supreme Court: 'Tax refunds are in the nature of tax exemption~ and are to be construed strictissimi juris against the entity claiming th~

Decision CfA Case No. 8621 same. Thu~ the burden of proof rests upon the taxpayer to establish by sufficient and competent evidence, its entitlement to a claim for refund ' 33. Taxes collected are presumed to be in accordance with laws and regulations. 34. Claims for refund are construed strictly against the claimant for the same partake of the nature of exemption from taxation and as such, they are looked upon with disfavor. Basic is the rule that tax refunds are regarded as tax exemptions that are in derogation of the sovereign authority and are to be construed in strictissimi juris against the person or entity claiming the exemption. The law does not look with favor on tax exemptions and that he who would seek to be thus privileged must justify it by words too plain to be mistaken and too categorical to be misinterpreted. 35. Based on the foregoing, petitioner's claim for refund has no basis in fact and in law. Thus, the instant petition should be dismissed for lack of jurisdiction and/or for lack of merit." Petitioner's Pre-Trial Brief12 was filed on July 17, 2013, while respondent's Pre-Trial Brief13 was filed on September 6, 2013. Thereafter, the parties submitted their Joint Stipulation of Facts and Issues14 on August 30, 2013. Petitioner, however, filed its Amended Pre-Trial Brief15 on September 20, 2013. Thus, a Pre-Trial Order16 was issued on October 2, 2013, thereby terminating the Pre-Trial. During the trial, petitioner presented its witnesses, Mr. Robert D. Secular, Jr. 17, petitioner's Finance Coordinator; Mr. Chito R. Padie18, Optimization Manager of petitioner; Mr. Ruben R. Rubio19, Court-commissioned Independent Certified Public Accountant; and Ms. Jennifer A. Valdez20, Fixed Assets Team Leader of petitioner.s:- 12 Docket (Vol. I), pp. 71-80. 13 Docket (Vol. I), pp. 124-128. 14 Docket (Vol. I) pp. 119-122. 15 Docket (Vol. IV) pp. 1871-1881. 16 Docket (Vol. IV), pp. 1885-1888. 17 Docket (Vol. I) pp. 132-141. 18 Docket (Vol. IV), pp. 1894-1900. 19 Docket (Vol. I), pp. 171-226. 20 Docket (Vol. I), pp. 247-251.

Decision CTA Case No. 8621 On February 4, 2014, petitioner filed its Formal Offer of Evidence2\ while counsel for respondent manifested in the hearing held on March 24, 201422, that respondent has no witness in this case. Thus, the parties were ordered to file their respective memorandum within thirty (30) days from notice; afterwhich the case shall be deemed submitted for decision. Petitioner filed its Memorandum23 on April 23, 2014 while respondent filed a Manifestation24 dated May 23, 2014, stating that she is adopting the arguments raised in her Answer. Hence, this Court, in a Resolution25 dated May 27, 2014, submitted the instant petition for decision. On November 6, 2014, petitioner filed an Urgent Omnibus Motion (1) For Leave of Court to Present Additional Evidence and (2) Defer Resolution of the Case26, which was granted by the Court in a Resolution27 dated February 24, 2015. However, petitioner filed a Manifestation and Motion28 on April 1, 2015, stating that it will not present any additional evidence. Thus, the case was submitted for decision on April 6, 201529 � As stipulated by the parties, the sole issue to be resolved in this case is whether or not petitioner is entitled to the claim for refund or issuance of TCC for excess or unutilized input VAT for the four (4) quarters of Calendar Year (CY) 2011 in the amount of P70,631,192.67. 30 For the four quarters of taxable year 2011, petitioner duly filed with the Bureau of Internal Revenue (BIR) its Quarterly VAT Returns31 declaring the following: 1st Quarter 2nd Quarter (Exhibit P-4.1) (Exhibit P-4.2) Vatable Sales/Receipts p 33 221 546.96 p 32 362 352.24 Zero-Rated Sales/Receipts 645 984 584.15 662 353 661.91 21 Docket (Vol. IV), pp. 1966-2019. 22 Minutes of the Hearing, Docket (Vol. V), p. 2058. 23 Docket (Vol. V), pp. 2059-2102. 24 Docket (Vol. V), pp. 2108-2110. 25 Docket (Vol. V), p. 2111. 26 Docket (Vol. V), pp. 2113-2119. 27 Docket (Vol. V), pp. 2147-2149. 28 Docket (Vol. V), pp. 2150-2152. 29 Minutes of the Hearing, Docket (Vol. V), p. 2154. 30 Stipulated Issues, JSFI, Docket (Vol. I), p. 120. 31 Exhibits "P-4.1" to "P-4.4".

Decision p 679,206,131.11 p 694,716,014.15 CfA Case No. 8621 Page 18 of 44 p 3 986 585.64 p 3 883,482.27 Total Sales/Receipts OutQ_ut Tax Due Less: Allowable Input Tax p 157 160,605.18 p 168 295 169.15 Input Tax Carried Over from Previous Period Input Tax Deferred on Capital Goods Exceeding 36 621,041.07 34 040 548.13 P1Million from Previous Quarter Current Transactions 104 348.45 - Purchase of Capjtal Goods not exceeding P1Million 1 873_[710.34 Purchase of Capital Goods exceeding P1Million 2 036,605.79 Domestic Purchases of Goods other than Capital Goods 356 278.83 524 082.55 Importation of Goods Other than Capital Goods 54,715.00 100,781.00 Domestic Purchase of Services 9 702 448.35 Services Rendered b'l_ Non-residents 8 930,139.03 4 733,187.72 1 221_[465.02 Total Available Input Tax Less: Deductions from Input Tax p 206 322,302.92 p 219 432,822.69 Input Tax on Purchases of Capital Goods exceeding p 34 040,548.13 p 31 825 211.39 P1Million deferred for the succeeding period VAT Refund/TCC claimed - - Total p 34 040_1548.13 p 31 825 211.39 Total Allowable Input Tax Net VAT Overpayment p 172 281,754.79 p 187 607 611.30 p 168,295,169.15 p 183,7241129.03 3rd Quarter 4th Quarter Total (Exhibit P-4.3) ffxhtbit P-4. 4)_ Vatable Sales/ReceiQts p 22 002 922.66 p 36,305 194.38 p 123 892 016.24 Zero-Rated Sales/Receipts Total Sales/Receipts 612 162 244.83 552,084 574.11 2 472 585 065.00 Output Tax Due p 634,165 167.49 p 588,389 768.49 p 2 596 477 081.24 p 2,640 350.72 p 4 356 623.33 p 14L867 041.96 Less: Allowable Input Tax Input Tax Carried Over from Previous Period p 183,724 129.04 p 196 739_L_960.22 p 157,160 605.18 Input Tax Deferred on Capital 31 825,_211.39 34 129,991.80 36,621 041.07 Goods Exceeding P1Million from - - 104 348.45 23 225,862.12 Previous Quarter 6 542 955.10 12 772 590.89 2 323 971.21 Current Transactions 709 870.37 733 739.46 260,080.00 69 015.00 35 569.00 Purchase of Capital Goods 42 356 205.00 not exceeding P1Million 7 596 073.11 16 127 544.51 12 097,956.05 Purchase of Capital Goods 3 043 048.74 3 100 254.57 exceeding P1Million ........ Domestic Purchases of Goods (Other than Capital Goods) Importation of Goods Other than Capital Goods Domestic Purchase of Services Services Rendered by Non-

Decision CTA Case No. 8621 residents Total Available Input Tax p 233 510 302.75 p 263,639 650.45 p 274 150 069.08 Less: Deductions from Input Tax 34 129 991.81 p 42 681 486.32 p 42 681 486.32 62 066,592.88 Input Tax on Purchases of - 62 066 592.88 104 748 079.20 Capital Goods exceeding 34 129 991.81 p 104 748 079.20 p P1Million deferred for the succeeding period p VAT Refund/TCC claimed Total p Total Allowable Input Tax p 199 380 310.94 p 158 891 571.25 p 169 401 989.88 154,534,947.92 p Net VAT Overpayment p 196,739,960.22 p 154,534,947.92 As indicated in the returns, petitioner's total allowable input VAT arising from its amortization of input VAT on purchases of capital goods exceeding P1 million, domestic purchases of capital goods not exceeding P1 million, domestic purchases of goods other than capital goods, importation of goods other than capital goods, domestic purchases of services and services rendered by non-residents for the four quarters of taxable year 2011 amounted to P74,307,977.58, broken down as follows: Input Tax Deferred on Capital Goods exceeding P1Million 1st Quarter 2nd Quarter 36,621 041.07 p from Previous Quarter p 34 040,548.13 1 873 710.34 Add: Input Tax on Capital Goods exceeding P1Million 2 036 605.79 38 494 751.41 p Purchased this Quarter 36,077 153.92 34 040 548.13 Total Unamortized Input Tax on Capital Goods exceeding 31,825 211.39 4 454 203.28 p P1Million p 4 251 942.53 104 348.45 Less: Input Tax on Purchases of Capital Goods exceeding 356 278.83 - P1Million deferred for the succeeding period 54 715.00 524 082.55 8 930 139.03 100 781.00 Amortization of Input Tax on Capital Goods exceeding 1 221 465.02 9,702,448.35 4,733 187.72 P1Million p 15 121,149.61 p 19,312 442.15 Add: Input Tax on - Purchase of Capital Goods not exceeding P1Million Domestic Purchases of Goods Other than Capital Goods Importation of Goods other than Capital Goods Domestic Purchase of Services Services Rendered by Non-Residents Total Allowable Input Tax p 3rd Quarter 4th Quarter Total 31 825,211.39 p Input Tax Deferred on Capital Goods 6 542,955.10 exceeding P1Million from Previous 38 368 166.49 p Quarter p 34 129 991.80 p 36 621,041.07 34 129,991.81 Add: Input Tax on Capital Goods exceeding P1Million Purchased this Quarter 12 772 590.89 23 225,862.12 Total Unamortized Input Tax on Capital 46 902 582.69 p 59 846,903.19 Goods exceeding P1Million p 42 681 486.32 42 681,486.32 Less: Input Tax on Purchases of Capital (~ Goods exceeding P1Million

Decision CTA Case No. 8621 deferred for the succeeding period Amortization of Input Tax on Capital Goods exceedinq P1Million p 4 238 174.68 p 4,221 096.37 p 17 165 416.87 Add: Input Tax on- - - 104 348.45 Purchase of Capital Goods not 2 323 971.21 exceeding P1Million 709 870.37 733 739.46 Domestic Purchases of Goods Other 69 015.00 35 569.00 260 080.00 than Capital Goods 42 356 205.00 Importation of Goods other than 7 596 073.11 16,127 544.51 12 097 956.05 Capital Goods 3 043 048.74 3,100 254.57 p 74J307/iJ77.58 Domestic Purchase of Services 15,656L181,90 p 24,218,203.91 Services Rendered by Non- Residents Total Allowable Input Tax p Out of the P74,307,977.58 input VAT, petitioner is claiming refund of the amount of P70,631,192.67 allegedly representing input VAT attributable to its zero-rated sales for CY 2011, computed as follows32 : Vatable Sales 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Total p 33 221 546.96 p 32 362 352.24 p 22 002 922.66 p 36 305 194.38 p 123 892 016.24 Zero-Rated Sales 2 472 585 065.00 645 984 584.15 662 353 661.91 612 162 244.83 552 084 574.11 P2 596 477,081.24 Total Sales p 679 206 131.11 p 694 716 014.15 p 634 165 167.49 p 588 389 768.49 %of Zero-Rated Sales /Total Sales 95% 95% 97% 94% ln_Q_ut Tax p 15,121 149.60 p 19 312,442.16 p 15 656 181.90 p 24 218 203.92 p 74 307 977.58 Input Tax Attributable to P14,381,539.11 P18 412,799.65 P15 112 976.79 P22,723,877.12 P7~631,192.67 Zero-Rated Sales Section 112(A) of the NIRC of 1997, as amended, provides the basis for the refund/tax credit of excess input VAT attributable to zero-rated or effectively zero-rated sales, to wit: "SEC. 112. Refunds or Tax Credits ofInput 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: Provide~ howeve~ That in the case of zero-rated~ 32 Exhibit "P-6".

Decision CTA Case No. 8621 sales under Section 106(A)(2)(a)(1), (2) and (b) and Section 108(8)(1) and (2), the acceptable foreign currency exchange proceeds thereof had been duly accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (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 or properties or services, and the amount of creditable input tax due or paid cannot be directly and entirely attributed to any one of the transactions, it shall be allocated proportionately on 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." Pursuant to the above-mentioned provision and as enumerated by the Supreme Court in the case of San Roque Power Corporation vs. Commissioner of Internal Revenue'3/ in order to be entitled to a refund or issuance of a tax credit certificate of input VAT paid, petitioner must prove the following: 1. That there must be zero-rated or effectively zero-rated sales; 2. That input taxes were incurred or paid; 3. That such input taxes were attributable to zero-rated or effectively zero-rated sales; 4. That the input taxes were not applied against any output VAT liability; and 5. That the claim for refund was filed within the two-year prescriptive period. The Court shall first determine the fifth requisite which is the timeliness of the filing of the administrative claim for refund. Following the above-mentioned provision, the administrative claim for refund/tax credit certificate must be filed within two (2) years after the close of the taxable quarter when the zero-rated or effectively zero-rated sales were made;#' 33 G.R. No. 180345, November 25, 2009.

Decision CfA Case No. 8621 Based on the records of the case, petitioner filed its administrative claim for refund together with the supporting documents34 on October 23, 2012. Applying the foregoing rules, it is clear that petitioner's administrative claim for refund was filed within the 2-year period prescribed by law, as detailed below: CY 2011 Close of the Last Day to File Date of Filing of 1st Quarter Taxable Quarter Administrative Administrative 2nd Quarter 3rd Quarter March 31, 2011 Claim Claim and 4th Quarter June 30 2011 Submission of September 30 2011 March 31, 2013 December 31, 2011 June 30, 2013 Documents September 30 2013 December 31, 2013 October 23, 201235 As to the timeliness of petitioner's judicial appeal, Section 112(C) of the NIRC of 1997, as amended, provides as follows: "SEC. 112. Refunds or Tax Credits ofInput Tax.- XXX XXX XXX (C) Period within which Refund or Tax Credit of Input Taxes shall be Made. - In proper cases, the Commissioner shall grant a refund or issue the tax credit certificate for creditable input taxes within one hundred twenty (120) days from the date of submission of complete documents in support of the application filed in accordance with Subsection (A). 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.'~ 34 Exhibit "P-6". 35 Exhibit "P-6".

Decision CTA Case No. 8621 The afore-quoted provision provides that respondent has one hundred twenty (120) days from the date of submission of the complete documents within which to grant or deny petitioner's claim for refund. In case of respondent's inaction of the claim, petitioner is given a period of thirty (30) days from the expiration of the one hundred (120) days to appeal the claim before this Court. Thus, from the expiration of the 120 day period, petitioner may file its judicial claim before this Court. Respondent contends that pursuant to Section 112 (C) of the NIRC of 1997, as amended, she has 120 days from the submission of the complete supporting documents to decide the claim for refund. Accordingly, it logically follows that a taxpayer must first submit the complete supporting documents, as required under RMO No. 53-98, before the 120-day period should commence to run. For respondent, the instant Petition for Review was prematurely filed on account of petitioner's failure to prove that it has submitted the complete documents to substantiate its administrative claim for refund. 36 The Court disagrees with the respondent. Petitioner, upon the filing of its administrative claim on October 23, 2012, simultaneously submitted the documents in support thereof as evidenced by petitioner's letter-claim37 for refund or issuance of tax credit certificate filed with the BIRon the said date. Since the records do not show that a written notice was sent by the BIR informing petitioner that the documents it submitted were incomplete nor requiring petitioner to submit additional documents, the 120-day period commenced and continued to run from October 23, 2012, the date when petitioner completely submitted the required documents. This is in accordance with Revenue Memorandum Circular (RMC) No. 29-09 which states that: "III. Period within which Refund or Tax Credit or Input Taxes shall be Made..a- 36 Pars. 11 and 15, Answer, Docket (Vol. I), pp. 53 and 57. 37 Exhibit "P-6".

Decision CTA Case No. 8621 Section 112(C) of the Tax Code of 1997, as amended by Republic Act No. 9337, provides among others, that in proper cases, the Commissioner shall grant a refund or issue the tax credit certificate (TCC) for creditable input taxes within one hundred twenty (120) days from the date of submission of complete documents. For the purpose of defining "proper cases" in the said provision, the taxpayer/claimant must have complied with the following conditions/requirements upon audit/verification of his/its claim: a. Submission of complete documents necessary to determine and/or ascertain the correctness of the return and the amount to be refunded/credited; XXX XXX XXX In cases where taxpayer failed to comply with the above conditions/ requirements, i.e., failure to present the accounting books and records for audit/verification, additional documents to explain discrepancies/findings are not submitted, taxpayer refuses or incurs delay in the submission of the Agreement Form, the running of the 120-day period shall stop from the date of notification to the taxpayer. Likewise, the running of the 120-day period shall be suspended in case a question of law arises during the conduct of audit/verification and/or review of the claim for tax refund/credit, and the issue is referred to the Legal Division or the Legal Service, as the case may be, for resolution and issuance of legal opinion, which should be rendered within thirty (30) working days from receipt of the request. (Emphasis supplied) Moreover, it is a well-settled rule that in claims for VAT refund, the non-submission of complete supporting documents in the administrative level is NOT fatal to petitioner's judicial claim. This Court is not barred from receiving, evaluating and appreciating evidence submitted before it. Once the claim for refund has been elevated to the Court, the admissibility, materiality, relevancy, probative value and weight of evidence presented therein become subject to the Rules of Court. The question of whether or not the evidence submitted by a party is sufficient to warrant the granting o~

Decision CTA Case No. 8621 a claim for refund lies within the sound discretion and judgment of the Court.38 In the present case, the respondent failed to act on petitioner's administrative claim within the period required by law which lapsed on February 20, 2013. Pursuant to Section 112 (C) of the NIRC, as amended, petitioner has thirty (30) days or until March 22, 2013 to file its judicial claim for refund. Thus, applying the said Section, petitioner's judicial claim for the four quarters of CY 2011 was timely filed within the "120-30" day period, as shown below: CY 2011 Date of Filing of End of 120 days End of 30 days Date of Filing of 1st Quarter Administrative for the BIR from the Petition for 2nd Quarter Review 3rd Quarter Claim and Commissioner to expiration of the 4th Quarter Submission of decide on the 120 days claim Documents October 23, 2012 February 20, 2013 March 22, 2013 March 22, 2013 The Court shall now determine whether petitioner has satisfied the remaining requirements to be entitled to a refund. Petitioner claims that the services it renders to its affiliates located and doing business outside the Philippines are subject to zero percent (0�/o) VAT pursuant to Section 108(8)(2) of the NIRC of 1997, as amended, to wit: "SEC. 108.- Value-added Tax on Sale of Services and Use or Lease ofProperties.- XXX XXX XXX (B) Transactions Subject to Zero Percent (0%) Rate.-- The following services performed in the Philippines by VAT-registered persons shall be subject to zero percent (0�/o) rate:~ 38 Commissioner of Internal Revenue vs. CE Luzon Geothermal Power Company, Inc., CTA EB Case No. 474, September 1, 2009; Commissioner of Internal Revenue vs. Toledo Power Company, CTA EB Case No. 589 (CTA Case No. 7471), September 15, 2010; Commissioner of Internal Revenue vs. San Roque Power Corporation CTA EB No. 657 (CTA Case Nos. 7424 and 7492), April 4, 2012.

Decision CTA Case No. 8621 (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 non- resident 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);" Based therefrom, the following requirements must be met/complied with and, as laid down by the Supreme Court in the case of Commissioner of Internal Revenue vs. Burmeister and Wain Scandinavian Contractor Mindanao, Inc.}9 in order for the supply of services to be considered as VAT zero-rated: 1. the services must be other than processing, manufacturing or repacking of goods; 2. the recipient of such services is doing business outside the Philippines; and 3. payment for such services must be in acceptable foreign currency accounted for in accordance with the BSP rules and regulations. It is undisputed that petitioner is duly registered with the BIR as a VAT taxpayer and was issued a Certificate of Registration with Tax Identification Number (TIN) 201-056-391-00040� Petitioner is licensed by the Securities and Exchange Commission (SEC) to transact business in the Philippines as a Regional Operating Headquarters (ROHQt1 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~ 39 G.R. No.153205, January 22, 2007. 40 Par. 3, Admitted Facts, JSFI, Docket (Vol. I), p. 120. 41 Par. 1, Admitted Facts, JSFI, Docket (Vol. I), p. 119.

Decision CTA Case No. 8621 personnel management; logistics services; research and development services and product development; technical support and maintenance; data processing and communication; and business development.42 Such services are not of the same category as "processing, manufacturing or repacking of goods", thereby complying with the first requirement. In relation to the second requirement, Sections 113(A)(2), (8)(1), (2)(c) and (3) of the NIRC of 1997, as amended, as implemented by Sections 4.113-1(A)(2), 8(1) and (2)(c) of Revenue Regulations (RR) No. 16-05, provides that a VAT taxpayer shall, for every lease of goods or properties and for every sale, barter or exchange of services, issue a VAT official receipt which must contain the following information: "SEC. 113. Invoicing and Accounting Requirements for VAT-Registered Persons. - (A) Invoicing Requirements. - A VAT-registered person shall issue: XXX XXX XXX (2) A VAT official receipt for every lease of goods or properties, and for every sale, barter or exchange of services (B) Information Contained in the VAT Invoice or VAT Official Receipt - The following information shall be indicated in the VAT invoice or VAT official receipt: (1) A statement that the seller is a VAT- registered person, followed by his Taxpayer's Identification Number (TIN); (2) The total amount which the purchaser pays or is obligated to pay to the seller with the indication that such amount includes the value- added tax: Provided, that: XXX XXX XXX (c) If the sale is subject to zero percent (0�/o) value-added tax, the term 'zero-rated sale' shall be...e- 42 Par. 4, Admitted Facts, JSFI, Docket (Vol. I), p. 120.

Decision CfA Case No. 8621 written or printed prominently on the invoice or receipt; XXX XXX XXX (3) The date of transaction, quantity, unit cost and description of the goods or properties or nature of the service; and xxx (underlining supplied) SEC. 4.113-1. Invoicing Requirements.- (A) A VAT-registered person shall issue:- XXX XXX XXX (2) A VAT official receipt for every lease of goods or properties, and for every sale, barter or exchange of services. Only VAT-registered persons are required to print their TIN followed by the word 'VAT' in their invoice or official receipts. Said documents shall be considered as a 'VAT Invoice' or VAT official receipt. All purchases covered by invoices/receipts other than VAT Invoice/VAT Official Receipt shall not give rise to any input tax. VAT invoice/official receipt shall be prepared at least in duplicate, the original to be given to the buyer and the duplicate to be retained by the seller as part of his accounting records. (B)Information contained in VAT invoice or VAT official receipt. - The following information shall be indicated in VAT invoice or VAT official receipt: (1) A statement that the seller is a VAT-registered person, followed by his TIN; (2) The total amount which the purchaser pays or is obligated to pay to the seller with the indication that such amount includes the VAT; Provided, That: XXX XXX XXX (c) If the sale is subject to zero percent (0�/o) VAT, the term "zero-rated sale" shall be written or printede;..

Decision CTA Case No. 8621 prominently on the invoice or receipt; (underlining supplied) For services rendered for the four taxable quarters of CY 2011, petitioner received US dollar payments which were accounted for in accordance with the BSP rules and regulations as evidenced by the bank certification of inward remittances43 issued by JP Morgan Chase Bank N.A - Manila Branch and duly supported by VAT zero-rated official receipts44 issued by petitioner to its client-affiliates. This Court, however, noted that out of petitioner's declared zero-rated receipts for CY 2011 in the amount of P2,472,585,065.00, the amount of P21,354,210.92 (US$480,896.83t5 pertaining to Chevron International Pte. Ltd. does not have a corresponding VAT zero-rated OR in the records. In addition, petitioner's reported zero- rated receipts from Chevron Corporation in the amount of P8,677,924.55 (US$203,584.11), although supported by VAT zero- rated OR No. 330846, does not have corresponding foreign currency inward remittances. This Court in the case of Deutsche Knowledge Services, Pte Ltd. vs. Commissioner of Internal Revenue47, explained the documentary requirements needed to establish that the recipients of services are indeed doing business outside the Philippines, to wit: "To be considered as non-resident foreign corporation doing business outside the Philippines, each entity must be supported, at the very least, by both SEC certificate of non-registration of corporation/partnership and certificate/articles of foreign incorporationIassociation1registration. xxx" (Emphasis supplied) To prove that all of its client-affiliates are non-resident foreign corporations doing business outside the Philippines, petitioner presented Certifications of Non-Registration of Corporation/ Partnership issued by the Republic of the Philippines Securities and Exchange Commission (SEC) 48 Certificate/Memorandum/Articles of_p... , 43 Exhibit P-15. 44 Exhibit P-14, inclusive of sub-markings. 45 Exhibit P-22.1. 46 Exhibit P-14.7.13. 47 CTA Case No. 7808, December 16, 2014. 48 Exhibits P-7.1 to P-7.32 and P-7.33 to P-7.69.

Decision CTA Case No. 8621 Association/Incorporation49, Tax Residence Certificate50, Inline Report of the Corporate Profile5\ printed screenshots of Company Profile52, Service Agreements53 and printed screenshots of Chevron Corporation's records with the U.S. SEC website54� Each of the said documents, standing alone, is not sufficient to show that petitioner's client is a non-resident foreign corporation doing business outside the Philippines. While the SEC Certificates of Non-Registration show that the named entities therein are not registered companies in the Philippines, the same do not prove that such entities are non-resident foreign corporations doing business outside the Philippines. Likewise, the service agreements only show the names and addresses of petitioner's customers to whom it renders services but the same do not establish that such customers are non-resident foreign corporations doing business outside the Philippines. Moreover, the Certificate/Memorandum/Articles of Association/Incorporation, Tax Residence Certificate, Inline Report of the Corporate Profile, printed screenshots of Company Profile and printed screenshots of the United States SEC website for company filings of Chevron Corporation only prove that the named entities therein were incorporated/organized abroad but do not establish that such entities are not doing business in the Philippines. Thus, only the following clients of petitioner, with transactions with the latter during 2011, shall be considered as non-resident foreign corporations doing business outside the Philippines: 1 Cabinda Gulf Oil Company Limited 2 Chevron Africa-Pakistan Services (Pty) Ltd. Chevron AI Khalij, A Branch of Chevron Asia Pacific 3 Holdings Limited 4 Chevron Bangladesh Blocks Thirteen & Fourteen, Ltd. 5 Chevron Brasil Lubrificantes Ltda. Chevron Business and Real Estate Services (A Chevron 6 USA Inc. Division) 7 Chevron Business Support Center, S.A. 8 Chevron (Cambodia) Limited 9 Chevron (China) Investment Co. Ltd. 10 Chevron Corporation 13-. 49 Exhibits P-8.1 to P-8.23, P-33.1 to P-33.5 and P-47.1 to P-47.5. 50 Exhibits P-9.1 to P-9. 21. 51 Exhibits P-10.1 to P-10.7. 52 Exhibits P-11.1 to P-11.51. 53 Exhibits P-12.1 to P-12.40. 54 Exhibits P-13.

Decision CfA Case No. 8621 11 Chevron Egypt S.A.E. Chevron Energy Technology Co. (A Chevron USA Inc. 12 Division) 13 Chevron Environmental Management Company 14 Chevron Global Energy, Inc. 15 Chevron Hong Kong Limited 16 Chevron India Holdings, Pte Ltd. Chevron International Exploration and Production Technology Services, A Division of Chevron Global 17 Technology Services Company 18 Chevron International Limited 19 Chevron International Pte. Ltd. 20 Chevron Japan Ltd. 21 Chevron Kuo Pte. Ltd. 22 Chevron Limited 23 Chevron Lubricants India Private Limited 24 Chevron Lubricants Lanka PLC 25 Chevron Malaysia Limited 26 Chevron New Zealand 27 Chevron Nigeria Limited Chevron North America Exploration and Production Co. 28 (A Chevron USA Inc. Division) 29 Chevron North Sea Limited 30 Chevron Oronite Company LLC 31 Chevron Oronite Pte. Ltd. 32 Chevron Petroleum India Private Limited 33 Chevron Shipping Company LLC 34 Chevron Singapore Pte. Ltd. 35 Chevron South Africa (Pty) Limited 36 Chevron (Thailand) Limited 37 Chevron (Tianjin) Lubricants Co., Ltd. 38 Chevron Trading Pte. Ltd. Project Resources Company (A Chevron USA Inc. 39 Division) 40 PT Chevron Oil Products Indonesia 41 PT Chevron Pacific Indonesia 42 Star Holdings Company Limited 43 Talcor Pty. Ltd. Accordingly, petitioner's foreign currency receipts derived from services rendered to the aforementioned entities for the CY 2011 in the amount of P578,576,738.40, duly covered by VAT zero-rated official receipts, qualify for VAT zero-rating under Section 108(8)(2) of the NIRC of 1997, as amended. Below is the breakdown of the amount of P578,576,738.40:.?-'

Decision CTA Case No. 8621 Amount Per Collection Summary55 OR No. Date Client In US$ In PhP Exhibit First Quarter of 2011 JANUARY 3176 17-Jan-11 Chevron Nigeria Limited 2,383.25 104 005.03 P-14.1.5 1,199.42 53 260.21 P-14.1.15 3187 25-Jan-11 Chevron (Cambodia} Limited 136 681.89 P-14.1.14 327,732.86 6 069 355.68 P-14.1.9 3186 25-Jan-11 Chevron Hong Kong Limited 307 832.04 14r_552 968.92 P-14.1.11 168,275.85 13,669 273.53 P-14.1.13 3181 25-Jan-11 Chevron Malaysia Limited 224,992.25 P-14.1.12 7 472 284.64 3183 25-Jan-11 Chevron New Zealand 120,737.06 9 990 774.87 15,364.11 3185 25-Jan-11 Chevron North Sea Limited 3,562.98 5_L903.60 3184 25-Jan-11 Chevron Singapore Pte. Ltd. 2,850.66 5 366 091.56 P-14.1.17 3189 26-Jan-11 Chevron Africa-Pakistan Services (Pty) 4,911.81 682 849.33 P-14.1.18 Ltd. 158 354.67 P-14.1.19 1199.42 262 615.66 P-14.1.21 3190 26-Jan-11 Chevron Business Support Center S.A. 4,029.93 126 135.40 P-14.1.20 197 544.90 217 048.61 P-14.1.22 3191 26-Jan-11 Chevron Oronite Pte. Ltd. 221_L124.24 105,063.45 3193 27-Jan-11 Chevron International Limited 164,188.23 6 351.36 3192 28-Jan-11 Chevron Lubricants Lanka PLC 107,806.84 3194 31-Jan-11 Chevron Business Support Center S.A. 2 587.11 1,424.08 FEBRUARY 120 737.16 3195 15-Feb-11 Chevron Japan Ltd. 87 680.82 52 514.01 P-14.2.1 213,535.11 175 749.24 P-14.2.3 3197 17-Feb-11 Chevron Nigeria Limited 8 603 871.95 P-14.2.4 1 522.19 9_L614 097.39 P-14.2.6 3198 24-Feb-11 Chevron (Thailand) Limited 173 936.71 4 567 976.09 P-14.2.10 7 138 618.70 P-14.2.7 3200 25-Feb-11 Chevron Corporation 278 202.37 P-14.2.13 4 722 156.81 P-14.2.12 3204 25-Feb-11 Chevron International Pte. Ltd. 3201 25-Feb-11 Chevron New Zealand 3207 28-Feb-11 Chevron Lubricants Lanka PLC 3206 28-Feb-11 Chevron North Sea Limited MARCH 3208 14-Mar-11 Chevron Nigeria Limited 112 483.04 P-14.3.3 61 997.39 P-14.3.4 3209 15-Mar-11 Chevron Japan Ltd. 3211 18-Mar-11 Chevron Africa-Pakistan Services (Pty) 5 276 973.78 P-14.3.6 Ltd. 3,832 203.67 P-14.3.7 9 280 100.39 P-14.3.11 3212 18-Mar-11 Chevron South Africa (P!Y) Limited P-14.3.17 66 153.41 P-14.3.12 3216 25-Mar-11 Chevron Corporation 7L559,179.05 3222 25-Mar-11 Chevron Egypt S.A.E. 3217 25-Mar-11 Chevron Hong_ Kong Limited 101,801.15 4 424 213.39 P-14.3.16 3221 25-Mar-11 Chevron International Exploration and 163 019.52 7_L084,724.90 P-14.3.13 Production Technology Services, A 232 661.72 10 111,330.73 P-14.3.10 Division of Chevron Global Technology P-14.3.19 Services Company 23 001.06 998 309.90 P-14.3.20 9 424.24 409,038.19 P-14.3.21 3218 25-Mar-11 Chevron International Pte. Ltd. 3 245.49 140 863.28 P-14.3.18 5 333 026.48 P-14.3.22 3215 25-Mar-11 Chevron New Zealand 122 872.93 645 271.19 P-14.3.23 14 847.69 131 054.76 3224 28-Mar-11 Chevron (Tianjin) Lubricants Co. Ltd. 3 015.57 149,345,128.22 3225 28-Mar-11 Chevron Limited 3,405,048. 70 3226 28-Mar-11 Chevron Limited 3223 28-Mar-11 Chevron Malaysia Limited 3227 30-Mar-11 Chevron (Tianjin) Lubricants Co., Ltd. 3228 30-Mar-11 Chevron Lubricants Lanka PLC sub-total Second Quarter of 2011 -i:k- 55 Exhibit P-22.1 to P-22.12.

Decision CTA Case No. 8621 APRIL Chevron Lubricants India Private Limited 2,259.65 97 947.55 P-14.4.6 Chevron (China) Investment Co. Ltd. 3 386.65 146J65.30 P-14.4.4 3234 07-Apr-11 Chevron Japan Ltd. P-14.4.3 3232 14-Apr-11 Chevron Limited 957.49 41 622.09 P-14.4.7 3231 15-Apr-11 Cabinda Gulf Oil Company Limited 32.32 1 397.92 P-14.4.8 3235 20-Apr-11 Chevron (Cambodia) Limited P-14.4.10 3236 25-Apr-11 Chevron (Thailand) Limited 61 069.66 2 635 721.19 P-14.4.18 3238 25-Apr-11 Chevron AI Khalij, A Branch of Chevron 13 294.00 573 759.17 3246 26-Apr-11 Asia Pacific Holdings Limited 226 541.75 Chevron Business and Real Estate 9 777 373.76 Services (A Chevron USA Inc. Division) 35 196.65 3253 26-Apr-11 Chevron Corporation 1 519 061.29 P-14.4.25 Chevron Energy Technology Co. (A 46 151.41 3251 26-Apr-11 Chevron USA Inc. Division) 232 551.10 1991 860.60 P-14.4.23 3245 26-Apr-11 Chevron Global Energy, Inc. 101036 732.84 P-14.4.17 Chevron Hong Kong Limited 6,499.72 3257 26-Apr-11 Chevron International Exploration and 5,502.80 280 523.09 P-14.4.29 3260 26-Apr-11 Production Technology Services, A 149 352.96 237 496.76 P-14.4.32 3247 26-Apr-11 Division of Chevron Global Technology 6,445 962.88 P-14.4.19 Services Company 3252 26-Apr-11 Chevron International Exploration and 42 289.97 1,825,203.71 P-14.4.24 Production Technology Services, A 3258 26-Apr-11 Division of Chevron Global Technology 6 443.86 278 112.21 P-14.4.30 3256 26-Apr-11 Services Company 7 072.72 305 253.34 P-14.4.28 3243 26-Apr-11 Chevron Kuo Pte. Ltd. 308 821.12 13 328,490.29 P-14.4.15 Chevron New Zealand 3255 26-Apr-11 Chevron North America Exploration and 27 386.88 1181 997.41 P-14.4.27 3263 26-Apr-11 Production Co. (A Chevron USA Inc. 1 834.40 79,171.34 P-14.4.36 3250 26-Apr-11 Division) P-14.4.22 Chevron Shipping Company LLC 83 671.41 3,611,195.94 Chevron Trading Pte. Ltd. 3262 26-Apr-11 Project Resources Company (A Chevron 2 645.78 114,189.90 P-14.4.34 3265 26-Apr-11 USA Inc. Division) 410.64 17,722.92 P-14.4.37 3261 26-Apr-11 PT Chevron Oil Products Indonesia P-14.4.33 3270 27-Apr-11 Chevron India Holdings Pte. Ltd. 4 615.21 199,189.04 P-14.4.42 3268 27-Apr-11 Chevron Limited 35 196.65 1 520,373.65 P-14.4.40 3266 27-Apr-11 Chevron Malaysia Limited 84 695.77 3,658,564.58 P-14.4.38 3269 27-Apr-11 Chevron North Sea Limited 194 840.39 8 416,431.53 P-14.4.41 Chevron Oronite Company LLC 72 591.43 3 135 698.92 Chevron Thailand Exploration and 3275 27-Apr-11 Production 8 120.86 350 793.09 P-14.4.47 3271 27-Apr-11 Star Holdings Company Limited 31 615.99 1 365 701.51 P-14.4.43 3276 28-Apr-11 Chevron International Limited 19,580.47 P-14.4.48 847 272.61 MAY 05-May-11 PT Chevron Pacific Indonesia 1 622.74 17-May-11 Chevron Lubricants Lanka PLC 8 886.93 69 585.76 P-14.5.7 3277 25-May-11 Chevron Corporation 283,625.11 382 892.29 P-14.5.9 3279 25-May-11 Chevron Limited 11J32.22 12,315 462.87 P-14.5.12 3282 25-May-11 Chevron New Zealand 235 509.27 509 432.05 P-14.5.15 3285 10,226 194.96 P-14.5.13 3283 23-Jun-11 Chevron (Thailand) Limited 182,660.59 24-Jun-11 Chevron Corporation 238,138.98 7 934 864.90 P-14.6.5 JUNE 24-Jun-11 Chevron Hong Kong Limited 179,297.34 10,331 409.11 P-14.6.8 24-Jun-11 Chevron International Limited P-14.6.9 3287 24-Jun-11 Chevron Limited 12,544.40 7 778 626.46 P-14.6.14 3290 11,732.22 544 225.60 3291 508 990.02 - P-14.6.15 3296 3297

Decision CTA Case No. 8621 3298 24-Jun-11 Chevron Limited 6,744.01 292 581.78 P-14.6.16 112,925.39 4 899 149.24 P-14.6.13 3295 24-Jun-11 Chevron Malaysia Limited 247 081.27 10,719 360.95 P-14.6.7 168,865.00 7 326 030.37 P-14.6.10 3289 24-Jun-11 Chevron New Zealand 138,280.19 5 999 140.56 P-14.6.11 3,554,274.79 153 858 933.35 3292 24-Jun-11 Chevron North Sea Limited 3293 24-Jun-11 Chevron Singapore Pte. Ltd. sub-total Third Quarter of 2011 JULY 3301 01-Jul-11 Chevron Lubricants Lanka PLC 13 293.17 577 211.03 P-14.7.6 2,016.00 86 412.34 P-14.7.7 3302 11-Jul-11 Chevron Business Support Center S.A. 1,403.18 60 093.36 P-14.7.10 P-14.7.14 3305 21-Jul-11 Chevron Limited 177 946.36 7 585 096.33 P-14.7.17 6,291.41 264 789.98 3309 25-Jul-11 Chevron New Zealand 0.40 3313 29-Jul-11 Chevron Lubricants Lanka PLC 11 364.18 AUGUST 225.22 237,633.69 3315 03-Aug-11 Chevron Business Support Center S.A. 225,639.17 16.77 P-14.8.3 219 848.87 482 349.75 P-14.8.5 3317 22-Aug-11 Chevron International Limited 160 868.49 P-14.8.16 265 982.45 9 510.98 P-14.8.8 3328 25-Aug-11 Chevron (Cambodia) Limited 163 651.61 10,035 206.50 P-14.8.9 221 865.50 P-14.8.11 3320 25-Aug-11 Chevron (Thailand) Limited 115 584.72 9 528 681.17 P-14.8.14 9 284,158.36 P-14.8.7 3321 25-Aug-11 Chevron Corporation 6 291.41 6,793,432.85 P-14.8.13 231 580.30 11 232 366.98 P-14.8.10 3323 25-Aug-11 Chevron Hong Kong Limited 810 085.51 6,910 963.26 P-14.8.17 108 981.31 9,369,320.10 3326 25-Aug-11 Chevron Malaysia Limited 4,914,316.33 3319 25-Aug-11 Chevron New Zealand 3325 25-Aug-11 Chevron North Sea Limited 3322 25-Aug-11 Chevron Singapore Pte. Ltd. 3329 31-Aug-11 Chevron South Africa (Pty) Limited SEPTEMBER 3330 01-Sep-11 Chevron Lubricants Lanka PLC 269,324.06 P-14.9.1 10 134 805.25 P-14.9.7 3336 26-Sep-11 Chevron Corporation 35 452,319.91 P-14.9.6 P-14.9.9 3335 26-Sep-11 Chevron International Pte. Ltd. 4 769 422.76 3338 26-Sep-11 Chevron Oronite Company LLC 16 825.31 732 171.89 P-14.9.11 Chevron International Exploration and 3340 27-Sep-11 Production Technology Services, A Division of Chevron Global Technology sub-total Services Company 2,997,378.26 128,491,969.96 Fourth Quarter of 2011 OCTOBER 3342 19-0ct-11 Chevron Petroleum India Private Limited 916.41 39 500.43 P-14.10.4 8 204.44 353 792.15 P-14.10.5 3343 21-0ct-11 Chevron International Limited 3364 25-0ct-11 Chevron Bangladesh Blocks Thirteen & 2,413.89 104 815.02 P-14.10.26 Fourteen, Ltd. 226,678.93 9 842 767.26 P-14.10.11 3349 25-0ct-11 Chevron Corporation 99.78 4 332.61 P-14.10.29 3367 25-0ct-11 Chevron Environmental Management 143 676.34 6 238 660.01 P-14.10.14 Company 3352 25-0ct-11 Chevron Hong Kong Limited 5,475.02 237 734.26 P-14.10.24 3362 25-0ct-11 Chevron International Exploration and 45 229.84 1 963 953.10 P-14.10.19 Production Technology Services, A 72 098.19 3 130 620.50 P-14.10.18 Division of Chevron Global Technology 426 098.51 18 501 889.27 P-14.10.10 Services Company 33 535.77 3357 25-0ct-11 Chevron International Pte. Ltd. 3356 25-0ct-11 Chevron Malaysia Limited 3348 25-0ct-11 Chevron New Zealand 1456 177.59 P-14.10.22 ,._. 3360 25-0ct-11 Chevron North America Exploration and Production Co. (A Chevron USA Inc.

Decision CTA Case No. 8621 3351 25-0ct-11 Division) 168 865.00 7,332 392.53 P-14.10.13 3363 25-0ct-11 Chevron North Sea Limited 4 166.61 180 920.97 P-14.10.25 3353 25-0ct-11 Chevron Oronite Company LLC P-14.10.15 Chevron Singapore Pte. Ltd. 108 465.31 4,709,739.90 Chevron Thailand Exploration and 3368 25-0ct-11 Production 61.14 2,654.80 P-14.10.30 3355 25-0ct-11 Chevron Trading Pte. Ltd. 91 356.38 3,966,842.38 P-14.10.17 3365 25-0ct-11 PT Chevron Oil Products Indonesia P-14.10.27 3370 26-0ct-11 Chevron (Thailand) Limited 230.29 9 999.57 P-14.10.32 Chevron AI Khalij, A Branch of Chevron 227 499.33 9 839,936.42 Asia Pacific Holdings Limited 3372 26-0ct-11 Chevron Africa-Pakistan Services (Pty) 70 393.31 3,044,693.34 P-14.10.34 Ltd. 3375 27-0ct-11 Chevron South Africa (Pty) Limited 191 952.32 8 277,374.73 P-14.10.37 3376 27-0ct-11 Talcor Pty. Ltd. 29 152.52 1,257,116.00 P-14.10.38 3377 27-0ct-11 4 847.57 P-14.10.39 NOVEMBER Chevron Brasil Lubricantes Ltda. 209 037.08 3379 02-Nov-11 Chevron Lubricants Lanka PLC 3380 02-Nov-11 Chevron Hong Kong Limited 1 276.13 54,372.82 P-14.11.3 3385 22-Nov-11 Chevron International Pte. Ltd. 12 250.02 521,943.76 P-14.11.4 3388 22-Nov-11 Chevron Malaysia Limited 156 503.95 6 789 759.22 P-14.11.7 3387 22-Nov-11 Chevron New Zealand 109 788.89 4/763,075.49 P-14.11.10 3384 22-Nov-11 Chevron Singapore Pte. Ltd. 125 067.02 5 425 901.08 P-14.11.9 3386 22-Nov-11 Chevron (Thailand) Limited 294 928.20 12 795 149.67 P-14.11.6 3390 23-Nov-11 Chevron Oronite Pte. Ltd. 149 360.83 6 479 862.47 P-14.11.8 3392 28-Nov-11 Chevron Lubricants Lanka PLC 159 023.82 6 881169.19 P-14.11.12 3393 29-Nov-11 P-14.11.14 DECEMBER Chevron Corporation 2 102.89 91 749.13 P-14.11.15 3396 02-Dec-11 Chevron (Thailand) Limited 9 153.95 402 194.64 3400 21-Dec-11 Chevron Corporation 3398 21-Dec-11 Chevron Lubricants Lanka PLC 175 842.76 7 668 676.84 P-14.12.5 3403 27-Dec-11 Chevron Oronite Pte. Ltd. 1091_710.32 4 826 674.88 P-14.12.13 3404 27-Dec-11 206,069.44 9 065 967.44 P-14.12.11 P-14.12.16 sub-total 6 291.41 273 420.69 P-14.12.17 3,125.67 135 839.63 TOTAL 3,381,912.20 146,880 706.87 13,338,613.95 578,576,738.40 In sum, out of petitioner's declared zero-rated receipts for CY 2011 in the amount of P2,472,585,065.00, only the amount of P578,576,738.40 represents its valid zero-rated receipts. The Court shall now determine the amount of input VAT attributable to the zero-rated receipts of P578,576,738.40. As stated earlier, petitioner reflected a total amount of P74,307,977.58 allowable input VAT in its Quarterly VAT Returns for CY 2011, to wit: Particulars Input VAT Amortization of Input Tax on Capital Goods exceeding P1 Million p 17,165,416.87 Purchase of Capital Goods not exceeding P1M 104,348.45

Decision 2,323,971.21 CfA Case No. 8621 260,080.00 Page 36 of 44 42,356,205.00 12,097,956.05 Domestic Purchase of Goods (other than Capital Goods) Importation of Goods other than Capital Goods p 74,307,977.58 Domestic Purchase of Services Service Rendered by Non-Residents Total Available Input Tax In support of the above input VAT, petitioner presented invoices, official receipts, Import Entry and Internal Revenue Declaration (IEIRD), BIR Form No. 1600 and other documents which were all examined by the Court-commissioned Independent Certified Public Accountant (ICPA) firm, SGV & Co., through its partner, Mr. Ruben R. Rubio. However, upon careful examination of the ICPA Reports dated September 2, 201356 and September 17, 201357 together with petitioner's supporting documents, the Court finds that the input VAT in the amount of P14,073,181.47, detailed below, should be disallowed for not being properly substantiated by VAT invoices or receipts as prescribed under Sections 110(A) and 113(A) and (B) of the NIRC of 1997, as amended, in relation to Sections 4.110-1, 4.110-8 and 4.113-1 of RR No. 16-05, as amended: FINDINGS 1st 2nd 3rd 4th Total Quarter Quarter Quarter Quarter A. INPUT TAXES ON LOCAL PURCHASES OF SERVICES - - Supported by VAT ORs issued in the - name other than Chevron Holdings, - Inc. 39 341.95 (Exhibit P-18 Annex D-3) 24 440.93 - 92 995.90 - 24/440.93 651 856.23 Supported by VAT ORs dated outside 72.00 235 550.63 83 212.10 1 930.32 467.72 CY 2011 (Exhibit P-18 Annex D-5) 568 572.13 - - - 4 320.00 Supported by ORs with incorrect TIN of - - 57 015.77 - - petitioner (Exhibit P-18 Annex D-9) 467.72 - 17 673.82 92 995.90 - Supported by ORs with different - - business style from that of petitioner 963.96 (Exhibit P-18 Annex D-12) 4 320.00 2 095.20 Supported by ORs with pre-printed 8 597.14 "TIN" only (Exhibit P-18 Annex D-13) - - Supported by ORs where the amount in figures does not tally with the amount in words (Exhibit P-18 Annex D-14) - Supported by ORs where VAT is not shown separately (Exhibit P-18, Annex D-16) - 272,715.41 508 266.04 997 115.31 1 000 480.51 Supported by Non-VAT ORs - 8 702.44 (Exhibit P-18 Annex D-2) 470.92 Supported by OR without BIR Permit No. (Exhibit P-18 Annex D-4) 6 607.24 Supported by OR without TIN of petitioner (Exhibit P-18 Annex D-10) 16 108.71 2,466.25 27 172.10 194 082.62 194 082.62 (Exhibit P-51 Annex D-4) - 56 Exhibit P-18. 57 Exhibit P-51.

Decision CTA Case No. 8621 Supported by OR without business 95 312.81 100 084.18 3731_913.60 623 115.94 1192 426.53 style of petitioner 419 218.62 7 772.27 46,826.10 473 816.99 - (Exhibit P-18 Annex D-11) - - 465.54 465.54 - (Exhibit P-51 Annex D-5) 19 004.12 - - 19 004.12 Not supported by VAT ORs - (Exhibit P-18 Annex D-17) 20 475.90 - 4 988.82 25 464.72 Supported by Provisional Receipts 1,174,999.10 - (Exhibit P-18 Annex D-18) 751504.67 2,242L661,91 4 280 978.16 Without supporting documents 111812.48 (Exhibit P-51 Annex D-61 Subtotal B. INPUT TAXES ON PURCHASES OF GOODS OTHER THAN CAPITAL GOODS Supported by VAT invoices issued in the name other than Chevron Holdings, - - Inc. (Exhibit P-18 Annex E-2) - 1,144.90 - 1144.90 - Supported by VAT invoices dated 45 805.68 - 2 752.58 outside CY 2011 (Exhibit P-1/3_ Annex 45 805.68 - - E-6) - 4 110.00 - Supported by photocopied VAT invoices - - 26 051.77 128 230.58 8 284.07 (Exhibit P-18 Annex E-8) 21752.58 5 994.18 352 150.85 Supported by invoices where VAT is not 651.86 9 172.04 shown separately (Exhibit P-113_ Annex - - - 3 192.96 403.29 E-12) 4 110.00 134,876.62 453 068.14 Supported by invoices with different business style from that of petitioner - - (Exhibit P-18 Annex E-14) 26 051.77 Supported by VAT invoices without BIR - Permit (Exhibit P-18 Annex E-3) 1 398.21 6 885.86 Supported by invoices without business style of petitioner (Exhibit P-18 Annex E-9) 87 639.64 21,068.28 115 212.35 (Exhibit P-51,Annex 8-4) 1 221.43 - 1 956.43 Supported by VAT invoices without the TIN of petitioner (Exhibit P-1s_Annex E- - - 2 541.10 13) Not supported by VAT invoices - 403.29 - (Exhibit P-18 Annex E-151 Subtotal 162,116.73 32 254.91 123 819.88 C. INPUT TAXES ON LOCAL PURCHASES OF CAPITAL GOODS EXCEEDING 1 MILLION Purchases of services supported by photocopied VAT ORs (Exhibit P-113_ - AnnexC-5) 70 858.93 - - 70 858.93 Purchases of services supported by 3 579,167.21 4 956 544.77 ORs where VAT is not shown 1 832_1_436.62 1 832 436.62 1 616 331.54 separately 197 459.25 - 1179 918.31 - (Exhibit P-18 Annex C-8) - 14 307.86 (Exhibit P-51 Annex C-5) - - - - 78 301.08 356 775.07 Purchases of goods supported by VAT 356 775.07 117 158.54 13 392.86 181167.31 invoices dated outside CY 2011 (Exhibit 181167.31 (!,...... P-18 Annex C-13) 1 616,331.54 - - Purchases of services supported by VAT ORs without the TIN of petitioner - (Exhibit P-18 Annex C-9) 14 307.86 - Purchases of services supported by VAT ORs without the business style of petitioner - - 78 301.08 (Exhibit P-18 Annex C-10) (Exhibit P-51 Annex C-6) - - - Purchases of goods supported by VAT invoices without the business style of - - petitioner (Exhibit P-18 Annex C-14) 103 765.68 Purchases of services without supporting VAT ORs (Exhibit P-51, - AnnexC-7) - -

Decision CTA Case No. 8621 Subtotal 1828 098.65 70,858.93 1_L361_L985.07 5 962 939.07 9 223,881.72 D. INPUT TAXES ON LOCAL PURCHASES OF CAPITAL GOODS NOT EXCEEDING 1 MILLION Input VAT which was claimed twice - - - (Exhibit P-18 Annex C-16) 104,348.45 104,348.45 104 348.45 Subtotal 104 348.45 - - - E. INPUT TAXES ON IMPORTATIONS OF GOODS OTHER THAN CAPITAL GOODS Excess of the input VAT claim per Summary List of Importations over the input VAT per IEIRD (see breakdown under Note 1 below) 1 568.00 898.00 6 644.00 1J95.00 10 905.00 1795.00 10,905.00 Subtotal 1568.00 898.00 6,644.00 Total 3 271130.93 215,824.32 2,243,953.62 8 342 272.60 14 073,181.47 Note 1: Breakdown ofinput VAT disallowance on importations ofgoods other than capital goods under letter E above Name of Supplier (per Summary Input VAT Input VAT (PHP) (per (PHP) (per List of Importations) Exhibit No. Summary List Difference IEIRD) of Im_portations} 1st Quarter Subtotal P-26.1 6 567.00 7,832.00 (1,265.00) OCTANNER Subtotal P-26.3 6 764.00 7,067.00 (303.00) OCTANNER 13,331.00 14 899.00 P-26.4 _(_1,568.00) 2nd _Quarter P-26.6 21 691.00 22,310.00 OCTANNER 24 365.00 24,644.00 (619.00) OCTANNER P-26.7 46,056.00 46,954.00 (279.00) P-26.9 {898.00) 3rd_Quarter 18 972.00 24,467.00 OCTANNER P-26.11 (5 495.00) 23 679.00 24 828.00 LANGHAM LOGISTICS INC Subtotal 42,651.00 49,295.00 (1,149.00) (6,644.00) 4th Quarter Subtotal 12 936.00 14,731.00 OCTANNER 12_L936.00 14,731.00 (1 795.001 Total 114,974.00 125,879.00 (1,795.00) (10,905.00) Further, petitioner did not submit VAT invoices/receipts in support of the input taxes on purchases of capital goods exceeding P1 million deferred from previous quarters in the amount of P36,621,041.07, hence, the amortized amount being claimed for the CY 2011 shall be disallowed. Considering the earlier disallowance of P9,223,881.72, petitioner's input VAT on capital goods exceeding P1 million from current transactions in the amount of P23,225,862.12 shall be reduced to P14,001,980.40, computed as follows:g_

Decision CfA Case No. 8621 1st 2nd 3rd 4th Total Quarter Quarter Quarter Quarter p 23 225 862.12 Input VAT on Purchases of p 12 772 590.89 9 223 881.72 5 962 939.07 Capital Goods exceeding P14,001L980.40 P6,809,651.82 P1Million from Current Transactions p 1,873,710.34 p 2 036 605.79 p 6 542 955.10 Less: Disallowances 1 828,098.65 70 858.93 1 361 985.07 Valid Input VAT ~ 45L611.69 Pl 965,746.86 ~5,180,970.03 While the above input taxes were found to be duly substantiated, the same are not entirely creditable for the subject period of claim. Pursuant to Section 110(A)(2) of the NIRC of 1997, as amended, input VAT claim on capital goods purchases attributable to zero-rated sales may be claimed either in full during the month of acquisition, or spread over a period of time, depending on the aggregate acquisition cost of the capital goods in the calendar month. If the aggregate acquisition cost exceeds P1Million, the claim for input tax should be spread over 60 months or the estimated useful life of the capital goods, whichever is shorter. On the other hand, if aggregate acquisition cost does not exceed P1 million, the total input taxes shall be allowed as credit/refund in the month of acquisition. Applying the prov1s1ons of Section 110(A)(2) to the present case, out of the P14,001,980.40 valid input VAT on capital goods purchases exceeding P1Million, only the amount of P995,518.30 is creditable for the four quarters of CY 2011, computed as follows: Payee Exhibit Input Tax Monthly Allowable (In PhP) Amortization 58 Input VAT for the Four (In PhP) Quarters of Taxable Year 2011 (In PhP) First Quarter P-16.1.216 1 552.34 25.87 310.47 Facilities Managers, Inc. P-16.1.217 22 119.43 368.66 4 423.89 P-16.3.350 Mge Ups Systems Philippines, Inc. 21 939.92 365.67 3 656.65 Adtech Construction And Industrial Services 45 611.69 8 391.01 Corp. Subtotal 58 Based on a useful life of 60 months

Decision CfA Case No. 8621 Second Quarter P-16.4.279 30,992.15 516.54 4,648.82 CB Richard Ellis Philippines, Inc. P-16.4.280 4 800.00 80.00 720.00 CB Richard Ellis Philippines, Inc. P-16.4.281 2 547.38 42.46 382.11 Facilities Managers, Inc. P-16.4.282 2 332.39 38.87 349.86 Facilities Managers, Inc. P-16.4.283 2 622.00 43.70 393.30 Facilities Managers, Inc. P-16.4.284 1 681.28 28.02 252.19 Facilities Managers, Inc. P-16.4.285 1 552.34 25.87 232.85 Facilities Managers, Inc. P-16.4.286 1 681.28 28.02 252.19 Facilities Managers, Inc. P-16.4.287 1 681.28 28.02 252.19 Facilities Managers, Inc. P-16.4.288 1 552.35 25.87 232.85 Facilities Managers, Inc. P-16.4.289 2 124.48 35.41 318.67 Facilities Managers, Inc. P-16.4.290 MFT International Corporation P-16.4.291 56_296.73 946.61 8,519.51 Network Solutions and Interfaces Corp. P-16.4.292 61128.84 1,018.81 9 169.33 RCW Construction and Dev't Corporation P-16.4.293 106 296.29 1,771.60 15,944.44 RCW Construction and Dev't Corporation P-16.4.294 91 361.48 1 522.69 13 704.22 RCW Construction and Dev't Corporation P-16.4.295 355 747.07 5,929.12 53 362.06 RCW Construction and Dev't Corporation P-16.4.296 95 821.64 1 597.03 14 373.25 Santa Fe Moving and Reloc. Svcs. Phils., Inc. P-16.4.297 Santa Fe Moving and Reloc. Svcs. Phils., Inc. P-16.5.247 1 263.60 21.06 189.54 G4S Security Systems, Inc. P-16.5.248 4 224.96 70.42 633.74 RCW Construction and Dev't Corporation P-16.5.249 57 841.45 964.02 7 712.19 Santa Fe Moving and Reloc. Svcs. Phils., Inc. P-16.5.250 118 405.89 1 973.43 15 787.45 Santa Fe Moving and Reloc. Svcs. Phils., Inc. P-16.5.251 4 082.40 68.04 544.32 Santa Fe Moving and Reloc. Svcs. Phils., Inc. P-16.5.252 3 510.00 58.50 468.00 Santa Fe Moving and Reloc. Svcs. Phils., Inc. P-16.5.253 1458.00 24.30 194.40 Santa Fe Moving and Reloc. Svcs. Phils., Inc. P-16.5.254 2 948.40 49.14 393.12 Santa Fe Moving and Reloc. Svcs. Phils., Inc. P-16.5.255 16.20 129.60 Santa Fe Moving and Reloc. Svcs. Phils., Inc. P-16.5.256 972.00 24.30 194.40 Santa Fe Moving and Reloc. Svcs. Phils., Inc. P-16.5.257 1 458.00 71.28 570.24 Santa Fe Moving and Reloc. Svcs. Phils., Inc. P-16.5.258 4 276.80 25.92 207.36 Santa Fe Moving and Reloc. Svcs. Phils., Inc. P-16.5.259 1 555.20 68.04 544.32 Santa Fe Moving and Reloc. Svcs. Phils., Inc. P-16.5.260 4 082.40 16.20 129.60 Santa Fe Moving and Reloc. Svcs. Phils., Inc. P-16.5.261 66.42 531.36 Santa Fe Moving and Reloc. Svcs. Phils., Inc. P-16.5.262 972.00 50.22 401.76 Santa Fe Moving and Reloc. Svcs. Phils., Inc. P-16.5.263 3 985.20 69.66 557.28 Scitech Outdoor Advertising Inc. P-16.5.265 3 013.20 29.16 233.28 Yogie Marino Dela Fuente P-16.5.264 4 179.60 187.71 1 501.66 Vanguard Interiors (Philippines) 652.00 5 216.00 Adtech Construction and Industrial Svcs. P-16.6.281 ~749.60 12 198.52 97 588.16 Corp. Integrated Computer Systems,Inc. P-16.6.282 11 262.44 405.27 2 836.91 Santa Fe Moving and Reloc. Svcs. Phils., Inc. P-16.6.283 39 120.00 7,783.01 Santa Fe Moving and Reloc. Svcs. Phils., Inc. P-16.6.284 731 911.20 ~111.86 Scitech Outdoor Advertising Inc. P-16.6.285 851.76 24 316.37 121.68 1,061.13 Subtotal 151.59 4,122.00 6~711.54 588.86 273,490.43 71300.80 9,095.40 35 331.43 1,965,746.86

Decision CTA Case No. 8621 Third Quarter P-16.7.228 1 470_LOOO.OO 24 500.00 147,000.00 Dominic Construction, Inc. P-16.7.229 8,744.52 145.74 874.45 G4S Security Systems, Inc. P-16.7.230 354.66 G4S Security Systems, Inc. P-16.7.231 2~279.47 2 127.95 Integrated Computer Systems,Inc. P-16.7.232 8 480.36 50,882.14 Integrated Computer Systems,Inc. P-16.7.233 508,821.43 8 480.36 50 882.14 Personal Computer Specialists, Inc. P-16.8.201 508 821.43 2 343.20 14,059.20 Buendia Hardware and Construction Supply P-16.8.206 140_L592.00 Equicom Inc. P-16.8.207 22.77 113.84 Equicom Inc. P-16.8.208 1,366.07 10 054.68 50 273.42 Integrated Computer Systems,Inc. P-16.9.249 603_L281.00 49,703.98 Equicom Inc. P-16.9.250 596_L447.80 9 940.80 42 401.75 Facilities Managers, Inc. P-16.9.251 508 821.00 8 480.35 53,295.34 Facilities Managers, Inc. P-16.9.252 799_L430.17 13 323.84 Facilities Managers, Inc. P-16.9.253 122.83 Facilities Managers, Inc. P-16.9.254 1 842.44 30.71 186.82 Facilities Managers, Inc. P-16.9.255 46.71 187.73 Facilities Managers, Inc. ~802.35 46.93 112.09 P-16.10.157 28.02 161.51 Subtotal P-16.10.158 2 815.89 40.38 120.04 Fourth Quarter P-16.10.159 1,681.28 30.01 Alecto General Technology Corporation P-16.10.161 462,505.23 Alecto General Technology Corporation P-16.10.162 ~422.64 Alecto General Technology Corporation P-16.10.163 1 396.19 4,188.57 Equicom Inc. P-16.11.230 1,800.54 615.45 1,846.34 Trends and Technologies, Inc. P-16.11.231 146.21 Phil-Data Business Systems, Inc. P-16.11.233 51 1801 970.03 438.62 Datacraft Philippines, Inc. P-16.11.234 12 665.37 37,996.10 Datacraft Philippines, Inc. P-16.11.235 83 771.32 31124.81 93,374.44 E. E. Black, Ltd. P-16.11.236 Equicom Inc. P-16.11.237 3~926.78 1 222.26 3 666.77 Hewlett-Packard Philippines Corp P-16.11.238 16L200.00 32,400.00 Integrated Computer Systems,Inc. P-16.11.239 8,772.49 17 080.00 JLGT Marketing P-16.12.321 759 921.96 8 540.00 19,441.84 Master Automated Systems, Inc. P-16.12.322 1 867,488.84 9220.92 Network Solutions and Interfaces Corp. P-16.12.323 4/256.13 8,512.25 Cornersteel Systems Corp. P-16.12.324 73 335.42 37.78 JLGT Marketing P-16.12.331 972_LOOO.OO 18.89 MGE Ups Systems Philippines, Inc. P-16.12.332 512,400.00 1 323.43 Network Solutions and Interfaces Corp. P-16.12.336 583 255.16 661.71 4,869.18 Ronald Magbitang P-16.12.337 255,367.52 2,434.59 2 721.46 Ronald Magbitang 1_L360.73 Master Automated Systems, Inc. 1133.45 207.79 Alecto General Technology 103.89 10,099.68 39,702.86 10,099.68 146,075.40 486.92 486.92 350.86 81_L643.82 350.86 307.89 6 233.61 307.89 5 436.05 5 436.05 1473.20 605 980.77 1 473.20 3 175.04 29/215.08 3 175.04 1 697.42 21 051.44 1 697.42 18L473.69 Subtotal 251,131.63 326 163.26 88 391.79 ~~ 190 502.25 101 844.91 6,809,651.82

Decision CTA Case No. 8621 I TOTAL I lt4,oot,98o.4o I 995,518.30 In sum, petitioner's total substantiated input taxes for the CY 2011 amounted to P53,288,789.26, as computed below: (In Philippine Pesos) 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Total Input VAT Claim 15 121 149.61 19 312 442.15 15,656,181.90 24,218,203.91 74 307 977.57 Less: Disallowances Input VAT on local 1174,999.10 111 812.48 751 504.67 2,242 661.91 4 280 978.16 purchases of services 162 116.73 32 254.91 123 819.88 104,348.45 134 876.62 453 068.14 Input VAT on - - purchases of goods 1 568.00 - 104 348.45 other than capital 898.00 6 644.00 goods 4 454 203.28 1,795.00 10,905.00 Input VAT on local (8 391.01) 4 251 942.53 4 238 174.68 purchases of capital (273,490.43) (462 505.23) 4 221 096.37 17 165 416.86 goods not exceeding P1Million (251 131.63) (995 518.30) Input VAT on importations of goods other than capital goods Input VAT on local purchases of capital goods exceeding P1Million Less: Allowable Input VAT for the period of claim Total Disallowances 5 888 844.55 4 123,417.49 4 657 638.00 6 349 298.27 21 019 198.31 Substantiated Input VAT 9,232 305.06 15,189,024.66 10,998,543.90 17,868,905.64 53,288,779.26 Since petitioner did not submit VAT invoices/receipts proving the existence of its reported input VAT carry-over from previous year in the amount of P157,160,605.1859, its output VAT liability for taxable year 2011 in the total amount of P14,867,041.96 shall be offset against the substantiated input VAT of P53,288,779.26. Hence, only the remaining input VAT of P38,421,737.30 can be attributed to the entire zero-rated receipts declared by petitioner in the amount of P2,472,585,065.00 and only the input VAT of P9,188,216.85 is attributable to the valid zero-rated receipts of P578,576,738.40, as computed below: In Philippine Pesos 1st 2nd 3rd 4th Total Quarter Quarter Quarter Quarter 9 232_L_305.06 53,288 779.26 Substantiated Input VAT 3 986,585.64 15 189,024.66 10,998 543.90 17 868,905.64 14 867 041.96 Less: Output Tax 5,245,719.42 38,421,737.30 Excess Input VAT 3 883 482.27 2 640 350.72 4 356 623.33 11,305,542.39 8,358 193.18 13_L512/282.31 59 Exhibit P-4.1, Line 20A.

Decision CTA Case No. 8621 Valid Zero-Rated 149 345 128.22 153 858 933.35 128 491,969.96 146 880 706.87 578 576 738.40 Receipts 645 984 584.15 662 353 661.91 612 162,244.83 552 084 574.11 2 472 585,065.00 Divided by Total Declared Zero-Rated 5 245 719.42 11 305 542.39 8 358,193.18 13 512 282.31 38 421,737.30 Receipts 1,212,757.48 2,626,178.12 1,754,372.66 3,594,908.59 9,188,216.85 Multiplied by Excess Input VAT Excess Input VAT Attributable to Valid Zero-Rated Receipts Although the claimed input VAT was carried-over by petitioner in its succeeding Quarterly VAT Returns60, the same remained unutilized until it was deducted as "VAT Refund/TCC Claimed'161 in its Quarterly VAT Return for the fourth quarter of taxable year 2012. Thus, the excess input VAT of P141,688,758.5562 as of the end of the fourth quarter of taxable year 2012 which was to be carried-over to the succeeding first quarter of taxable 201363 no longer included the subject claim. WHEREFORE, premises considered, the instant Petition for Review is PARTIALLY GRANTED and respondent is ordered to REFUND OR ISSUE A TAX CREDIT CERTIFICATE in favor of petitioner in the reduced amount of P9,188,216.85, representing its unutilized excess input VAT for the four quarters of taxable year 2011 which is attributable to its valid zero-rated receipts for the same period. SO ORDERED. CAESAR~ANOVA Associate Justice 60 Exhibits P-5.1 to P-5.4. 61 Exhibit P-5.4, Line 23D. 62 Exhibit P-5.4, Line 29, Total Amount Payable (Overpayment). 63 Exhibit P-5.5.

Decision CTA Case No. 8621 WE CONCUR: ~~" c C. AaS.T.:A>NrE~D~A:~'Ri.... JUANITO C. Associate Justice (On Leave) AMELIA R. COTANGCO-MANALASTAS Associate Justice ATTESTATION I attest that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court's Division. ~~~% C!_. Q.Y--GW..J-~ -Q . ~UANITO c. CASTANEoN{'jR. Associate Justice Chairperson, Second Division CERTIFICATION Pursuant to Article VIII, Section 13 of the Constitution, and the Division Chairperson's Attestation, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court. Presiding Justice