Showing posts with label CIR v. Vestas Services Philippines. Show all posts
Showing posts with label CIR v. Vestas Services Philippines. Show all posts

CIR v. Vestas Services Philippines, Inc.

 

CIR v. Vestas Services Philippines, Inc.

G.R. No. 255085

March 29, 2023

FACTS:

                VSPI is a domestic corporation and registered as a VAT-Taxpayer. VSPI amended its primary purpose to be able to engage in installation and construction services. It entered into an Onshore Engineering, Procurement and Construction Contract with EDC Burgos Wind Power Corporation. It filed a letter-request for the refund and/or issuance of a tax credit certificate with the BIR. It filed a Petition for Review with the CTA Division, claiming for the refund or issuance of a tax credit certificate in the amount of P41,6M, representing its alleged accumulated and unutilized input VAT. It also alleged that since it has no sales transaction other than those made to EDC Burgos, it accumulated an aggregate unput VAT of P41.6M and that such input VAT credits have not been utilized or charged by it against any of its output VAT liability. The CIR invoked the burden on the part of VSPI to prove its entitlement to the claim for refund or tax credit since taxes paid and collected are presumed to have been made in accordance with the law and is thus, not refundable. In a Decision dated May 26, 2017, 16 the CTA Division initially dismissed VSPI's claim for refund for lack of jurisdiction. It held that the BIR had 120 days from March 20, 2014, the date when VSPI filed an administrative claim and presumably submitted its complete documents, to decide on the claim for refund, or until July 18, 2014. Since the BIR did not act on VSPI's claim, the latter had until August 18, 2014, the last day of the 30-day period, within which to file its judicial claim. However, VSPI only filed its judicial claim on September 5, 2014, or 18 days after the lapse of the 30-day period. Since VSPI belatedly brought its judicial claim for refund or issuance of a tax credit certificate, the CTA has lost jurisdiction.

ISSUE:

                Whether or not VSPI’s judicial claim for refund was timely filed with the CTA, pursuant to Sec. 112 (C) of the Tax Code.

HELD:

                Yes. The CIR failed to object or comment on VSPI’s Supplemental Formal Offer of Evidence and file a Memorandum where he could have opposed the admission of the supplemental evidence. The failure to object to the offered evidence renders it admissible, and the court cannot, on its own, disregard such evidence. If a party desires the court to reject the evidence offered, it must so state in the form of a timely objection and it cannot raise the objection to the evidence for the first time on appeal. Because of a party’s failure to timely object, the evidence offered becomes part of the evidence in the case. As a consequence, all the parties are considered bound by any outcome arising from the offer of evidence properly presented.

                The CTA is not governed strictly by the technical rules of evidence. Its admission of the formal offer of supplemental evidence, without prompt objection from the Commissioner, was thus justified. The CTA Division correctly admitted VSPI’s supplemental evidence proving that it timely filed its judicial claim.

CIR v. Vestas Services Philippines, Inc.

 

CIR v. Vestas Services Philippines, Inc.

CTA EB NO. 2255

January 25, 2022

Doctrine:

Findings of fact by the Court of Tax Appeals in Division are generally accorded great weight and are not to be disturbed without any showing of grave abuse of discretion, considering that the members of the Division are in the best position to analyze the documents presented by the parties.

Facts:

Before the Court is a Petition for Review seeking the nullification of the Decision' ("Assailed Decision") dated September 20, 2019 and Resolution2 ("Assailed Resolution") dated February 13, 2020 of the Court of Tax Appeals Second Division ("Second Division"), partially granting Petitioner's claim for refund or issuance of a Tax Credit Certificate ("TCC") amounting to Php134,298,376.32, representing unutilized excess input value-added tax ("VAT") attributable to its zero-rated sales/ receipts for the second quarter of calendar year 2014.

Issue:

Whether or not the services rendered by Respondent to its customer VWS qualified for VAT zero rating.

Held: 

Yes. Section 108(B)(2)20 of the National Internal Revenue Code ("NIRC") of 1997, as amended, provides that the recipient of services is doing business outside the Philippines. Petitioner claims however that Respondent is actually an instrumentality by which VWS engages business in the Philippines. Petitioner is mistaken for two reasons. First, the Second Division, through its thorough examination of the evidence presented, ruled that VWS is a non-resident foreign corporation doing business outside the Philippines. This pronouncement was supported by documentary evidence, as follows: (1) Certificate of Non-Registration of Company issued by the Securities and Exchange Commission (SEC), (2). Consularized Articles of Association, (3) Certificate of Tax Residency issued by the Central Customs and Tax Administration of Denmark, and ( 4) Company Extract from the Danish Business Authority. It is settled that findings of fact by the Court of Tax Appeals in Division are generally accorded great weight and are not to be disturbed without any showing of grave abuse of discretion, considering that the members of the Division are in the best position to analyze the documents presented by the parties. 


Second, VWS and Respondent are two distinct corporate entities separately registered in two (2) different countries, Denmark and Philippines. Although VWS is one of the shareholders of Respondent, it is a fundamental principle of corporation law that "a corporation is an entity separate and distinct from its stockholders and from other corporations to which it may be connected."