MARCOS II v.

CA

GR No. 120880, June 5, 1997

293 SCRA 77

FACTS: Bongbong Marcos sought for the reversal of the ruling of the Court
of Appeals to grant CIR's petition to levy the properties of the late Pres.
Marcos to cover the payment of his tax delinquencies during the period of
his exile in the US. The Marcos family was assessed by the BIR, and
notices were constructively served to the Marcoses, however the
assessment were not protested administratively by Mrs. Marcos and the
heirs of the late president so that they became final and unappealable
after the period for filing of opposition has prescribed. Marcos contends
that the properties could not be levied to cover the tax dues because they
are still pending probate with the court, and settlement of tax deficiencies
could not be had, unless there is an order by the probate court or until the
probate proceedings are terminated.

ISSUE: Is the contention of Bongbong Marcos correct?

HELD: No. The deficiency income tax assessments and estate tax
assessment are already final and unappealable -and-the subsequent levy
of real properties is a tax remedy resorted to by the government,
sanctioned by Section 213 and 218 of the National Internal Revenue Code.
This summary tax remedy is distinct and separate from the other tax
remedies (such as Judicial Civil actions and Criminal actions), and is not
affected or precluded by the pendency of any other tax remedies
instituted by the government.

The approval of the court, sitting in probate, or as a settlement tribunal

over the deceased is not a mandatory requirement in the collection of
estate taxes. It cannot therefore be argued that the Tax Bureau erred in
proceeding with the levying and sale of the properties allegedly owned by
the late President, on the ground that it was required to seek first the
probate court's sanction. There is nothing in the Tax Code, and in the
pertinent remedial laws that implies the necessity of the probate or estate
settlement court's approval of the state's claim for estate taxes, before
the same can be enforced and collected.

On the contrary, under Section 87 of the NIRC, it is the probate or

settlement court which is bidden not to authorize the executor or judicial
administrator of the decedent's estate to deliver any distributive share to
any party interested in the estate, unless it is shown a Certification by the
Commissioner of Internal Revenue that the estate taxes have been paid.
This provision disproves the petitioner's contention that it is the probate
court which approves the assessment and collection of the estate tax.

Silicon v. CIR

Facts: Petitioner, a VAT-registered Philippine corp., is engaged in the business of,

among others, manufacturingand exporting advance and large-scale integrated
circuit components. It filed with the CIR an application forcredit/refund of unutilized
input VAT for the 4th quarter of 1998. It then filed a Petition for Review with theCTA,
alleging that for that same period, it generated and recorded zero-rated export
sales; and that it also paidinput VAT which have not been applied to any output VAT.
The CTA partially granted the claim for refund ofunutilized input VAT on capital
goods because not all items fall within the definition of capital goods underthe
law. On its claim for credit/refund of input VAT attributable to zero-rated export
sales, the CTA denied thesame because petitioner failed to present an Authority to
Print (ATP) from the BIR; neither did it print on itsexport sales invoices the ATP and
the word "zero-rated.

Issue:

WON Silicon is entitled to the refund/credit of unutilized input VAT on all purchased
capital goods andon those attributable to exported sales.

Held:

Yes but only to the extent of the capital goods that fall within the definition of
capital goods under thelaw. Under Section 4.106-1 (b) of RR No. 7-95, capital
goods or properties refer to those with an estimateduseful life greater than one
year and which are treated as depreciable assets under the law, used directly
orindirectly with the production of taxable goods or services. Office supplies,
posters, books, and other similaritems purchased by petitioner clearly do not fall
within that category.The NIRC requires persons engaged in business to secure an
ATP from the BIR prior to printinginvoices or receipts for registration purposes. The
only way to verify whether the invoices or receipts are dulyregistered is by requiring
the claimant to present its ATP from the BIR. Without this proof, the invoices
orreceipts would have no probative value for the purpose of refund. Failure also to
print the word zero-rated isfatal to a claim for refund of input VAT.

Microsoft Philippines, Inc. vs. Commissioner of Internal Revenue [GR No.

180173, April 6, 2011]
FACTS: In December 2002, Microsoft filed an administrative claim for tax credit of
VAT input taxes with the BIR for the year 2001. Due to the BIR's inaction, Microsoft
filed a petition for review with the CTA claiming that it is entitled to a refund of
unutilized input VAT attributable to its zero-rated. The CTA denied the claim for tax
credit of VAT input taxes, ruling that Microsoft failed to comply with the invoicing
requirements of NIRC and the corresponding Revenue Regulation. It stated that
Microsoft's official receipts do not bear the imprinted word zero-rated on its face,
thus, the official receipts cannot be considered as valid evidence to provide zero-
rated sales for VAT purposes. Hence, this petition.

ISSUE: Whether or not Microsoft is entitled to a claim for a tax credit or refund of
VAT input taxes even if the zero-rated is not imprinted on Microsoft's official
receipts

RULING: No. At the outset, a tax credit or refund, like tax exemption, is strictly
construed against the taxpayer. The taxpayer claiming the tax credit or refund has
the burden of proving that he is entitled to the refund or credit, in this case VAT
input tax, by submitting evidence that he has complied with the requirements laid
down in the Tax Code and the BIR's Revenue Regulations under which such privilege
of credit or refund is accorded.

The invoicing requirements for a VAT-registered taxpayer as provided in the NIRC

and Revenue Regulations are clear. A VAT-registered taxpayer is required to comply
with all the VAT invoicing requirements to be able to file a claim for input taxes on
domestic purchases for goods or services attributable to zero-rated sales. A VAT
invoice is an invoice that meets the requirements of Section 4.108-1 of RR 7-95.
Contrary to Microsoft's claim, RR 7-95 expressly states that All purchases covered
by invoices other than a VAT invoice shall not give rise to any input tax. Microsoft's
invoice, lacking the word zero-rated is not a VAT invoice and thus cannot give
rise to any input tax.

CIR v Sekisui Jushi

Facts
1. Sekisui is a domestic corporation duly organized under the Philippine
laws. It has an office located in a Special Export Processing Zone in
Binan, Laguna.
2. It is engaged in the business of manufacturing, importing, exporting,
buying, selling or dealing in wholesale of goods such as strapping
bands and other packaging materials and goods of similar nature, and
any and all equipment, materials, supplies used or employed in or
related to the manufacture of the finished products.
3. It is also registered as a VAT taxpayer and paid input taxes for January
1 to June 30 1997.
 4. Respondent, however, filed 2 applications for tax credit/refund with
Center-DOF for the input taxes it has paid claiming that it should be
VAT zero-rated.
5. No action was made by the BIR. This prompted the respondent to file
an action with the CTA within the 2 year prescriptive period.
6. CIR prayed for the denial of the petition and claims that tax
credit/refund is subject to routinary investigation; that the collection
was made in accordance with the law and that respondent failed to
show that the same was erroneously collected.
7. CTA rendered that Sekisui is entitled for refund being registered with
PEZA ecozone and claims were duly substantiated by invoices and
official receipts.
8. CA affirmed the decision.

Issue
Whether or not Sekisui is entitled to the tax credit/refund.

Held
Yes. Respondent is entitled to refund. As decided in the case CIR v Toshiba,
an entity registered with the PEZA as an ecozone may be covered by the VAT
system, which may choose between 2 fiscal incentive schemes;
1. To pay 5% preferential tax rate on its gross income and thus be exempt
from all other taxes including VAT
2. To enjoy an income tax holiday which means income tax exempt but is
not exempt from applicable national revenue taxes including VAT

It is found by the lower courts that respondent had availed an income tax
holiday. By availing this, the respondent became subject to VAT. However,
because it is located in an ecozone, which is geographically within the
Philippines but deemed separate territory the sales made are deemed as
export sales. These sales are zero-rated.

Furthermore, it has been shown that respondent has no output tax, which
could offset the input tax since all its transactions are deemed export sales
and are zero-rated . Therefore the input tax remained unutilized allowing
respond to claim refund for the input tax previously charged by its suppliers.

Western Mindanao Power Corp vs CIR

Case Digest GR 181136 June 13 2012
Full Text
Facts:
WMPC, engaged in the production and sale of electricity, is registered as a VAT taxpayer. It sells
electricity solely to the National Power Corporation (NPC), which is in turn exempt from the payment
of all forms of taxes, duties, fees and imposts, pursuant to its charter. Also, pursuant to Section
108(B) (3) of the NIRC, WMPCs power generation services to NPC is zero-rated. Thus, WMPC tried
to file an application for tax credit certificates on input VAT paid to its zero-rated sales. However, its
application was denied because of WMPCs failure to comply with the invoicing requirements under
Section 113 of the NIRC in relation to Sec 4.108-1 of RR 7-95.

Issue: W/N denial of application for tax refund or tax credit on the ground that the taxpayers Official
Receipts do not contain the phrase zero-rated is proper
Yes. Failure to indicate the term zero-rated in the invoice or receipt for zero-rated transactions is
fatal.
In a claim for tax refund or tax credit, the taxpayer must prove not only entitled to the grant of claim
under substantive law, but must also show satisfaction of all the documentary and evidentiary
requirements for an administrative claim of a refund or tax credit. Hence, the mere fact that the
applicants zero-rating has been approved by the CIR does not, by itself, justify the grant of a refund
or tax credit. The taxpayer must further comply with the invoicing and accounting requirements
mandated by the NIRC, as well as the revenue regulations implementing them.

Under the NIRC, a creditable input tax should be evidenced by a VAT receipt or Official Receipt,
which may only be considered as such when it complies with the requirements of RR 7-95
particulary Section 4.108-1 thereof. This section requires, among others, that if the sale is subject to
zero-percent VAT, the term zero-rated sale shall be written or printed prominently on the invoice or
receipt.

HITACHI VS. CIR

The Facts

Hitachi is a domestic corporation engaged in the business of manufacturing and

exporting computer products. Hitachi is registered with the Bureau of Internal
Revenue (BIR) as a Value-added Tax (VAT) taxpayer, evidenced by Certificate of
Registration No. 94-570-000298 and Taxpayer Identification No. 003-877-830
(VAT) issued on 28 June 1994. Hitachi is also registered with the Export
Processing Zone Authority as an Ecozone Export Enterprise.

On 4 August 2000, Hitachi filed an administrative claim for refund or issuance of a

tax credit certificate before the BIR.[6] The claim involved P25,023,471.84
representing excess input VAT attributable to Hitachis zero-rated export sales for
the four taxable quarters of 1999.
The Issues
Hitachi raises the following issues:

I. Whether Hitachis failure to comply with the requirements

prescribed under Section 4.108-1 of RR 7-95 is sufficient to
invalidate Hitachis claim for VAT refund for taxable year 1999;

II. Whether Hitachi has sufficiently complied with the requirements

for its claim for VAT refund for taxable year 1999; and

III. Whether the CTA En Banc erred when it denied Hitachis claim for
VAT refund for taxable year 1999.

The Ruling of the Court

The petition has no merit.

Hitachi argues that Section 4.108-1 of RR 7-95 cannot expand the invoicing
requirements prescribed by Section 113(A) of the NIRC, in relation to Sections
237 and 106(A)(2)(a)(1),[12] by imposing the additional requirement of printing the
word zero-rated on the invoices of a VAT registered taxpayer. Hitachi also submits
that the non-observance of the requirements of (1) printing zero-rated; (2) BIR
authority to print; (3) BIR permit number; and (4) registration of such receipts with
the BIR cannot result in the outright invalidation of its claim for refund.
We already settled the issue of printing the word zero-rated on the sales
invoices in Panasonic v. Commissioner of Internal Revenue.[13] In that case, we
denied Panasonics claim for refund of the VAT it paid as a zero-rated taxpayer on
the ground that its sales invoices did not state on their face that its sales were zero-
rated. We said:
But when petitioner Panasonic made the export sales subject of this
case, i.e., from April 1998 to March 1999, the rule that applied was
Section 4.108-1 of RR 7-95, otherwise known as the Consolidated Value-
Added Tax Regulations, which the Secretary of Finance issued on
December 9, 1995 and took effect on January 1, 1996. It already
required the printing of the word zero-rated on invoices covering
zero-rated sales. When R.A. 9337 amended the 1997 NIRC on
November 1, 2005, it made this particular revenue regulation a part of
 the tax code. This conversion from regulation to law did not diminish the
binding force of such regulation with respect to acts committed prior to
the enactment of that law.

Section 4.108-1 of RR 7-95 proceeds from the rule-making authority

granted to the Secretary of Finance under Section 245 of the 1997 NIRC
(Presidential Decree 1158) for the efficient enforcement of the tax code
and of course its amendments. The requirement is reasonable and is in
accord with the efficient collection of VAT from the covered sales of
goods and services. As aptly explained by the CTAs First Division, the
appearance of the word zero-rated on the face of the invoices covering
zero-rated sales prevents buyers from falsely claiming input VAT from
their purchases when no VAT was actually paid. If absent such word, a
successful claim for input VAT is made, the government would be
refunding money it did not collect. (Emphasis supplied)
Likewise, in this case, when Hitachi filed its claim for refund or tax credit, RR 7-
95 was already in force. Section 4.108-1 of RR 7-95 specifically required the
following to be reflected in the invoice:

Sec.4.108-1. Invoicing Requirements. - All VAT-registered persons shall,

for every sale or lease of goods or properties or services, issue duly
registered receipts or sales or commercial invoices which must show:

1. the name, TIN and address of seller;

2. date of transaction;
3. quantity, unit cost and description of merchandise or nature of service;
4. the name, TIN, business style, if any, and address of the VAT-
registered purchaser, customer or client;
5. the word zero-rated imprinted on the invoice covering zero-rated
sales; and
6. the invoice value or consideration.
xxxx

Only VAT-registered persons are required to print their TIN

followed by the word VAT in their invoices or receipts and this shall
be considered as a VAT invoice. All purchases covered by invoices
other than a VAT invoice shall not give rise to any input tax.
(Emphasis supplied)
Both the CTA First Division and the CTA En Banc found that Hitachis export sales
invoices did not indicate Hitachis Tax Identification Number (TIN) followed by
the word VAT. The word zero-rated was also not imprinted on the
invoices. Moreover, both the CTA First Division and the CTA En Banc found that
the invoices were not duly registered with the BIR.

Being a specialized court, the CTA has necessarily developed an expertise in the
subject of taxation that this Court has recognized time and again. [14] For this
reason, the findings of fact of the CTA are generally conclusive on this Court
absent grave abuse of discretion or palpable error, which are not present in this
case.[15]

Besides, tax refunds, like tax exemptions, are construed strictly against the
taxpayer.[16] The claimants have the burden of proof to establish the factual basis of
their claim for refund or tax credit.[17] In this case, Hitachi failed to establish the
factual basis of its claim for refund or tax credit.

G.R. No. 153204 August 31, 2005COMMISSIONER OF INTERNAL REVENUE, v

MANILA MINING CORPORATION

FACTS:

1. Respondent, a mining corporation duly organized and existing under Philippines

laws, is registered with theBureau of Internal Revenue (BIR) as a VAT-registered
enterprise2. In 1991, respondents sales of gold to the Central Bank
(now Bangko Sentral ng Pilipinas) amounted toP200,832,364.70. On April 22,
1991, July 23, 1991, October 21, 1991 and January 20, 1992, it filed its VATReturns
for the 1st, 2nd, 3rd and 4th quarters of 1991, respectively, with the BIR.3. Under
Sec. 2 of E.O. 581 as amended, gold sold to the Central Bank is considered an
export sale which underSection 100(a)(1) of the NIRC, as amended by E.O. 273, is
subject to zero-rated if such sale is made by a VAT-registered person, filed with the
Commissioner of Internal Revenue (CIR), through the BIR-VAT Division anapplication
for tax refund/credit of the input VAT it paid from July 1- December 31, 1999 in the
amount ofP8,173,789.60.4. Petitioner subsequently filed another application
for tax refund/credit of input VAT it paid the amount ofP5,683,035.04
from January 1 June 30, 1991.5. As the CIR failed to act upon respondents
application within sixty (60) days from the dates of filing, it filed onMarch 22, 1993 a
Petition for Review against the CIR before the CTA6. CTA- DENIED RESPONDENTS
CLAIM FOR REFUND although said sales are not subject to 10% output VAT.a. Failure
to prove that it paid the amounts claimed as such for the year 1991, no sales
invoices, receiptsor other documents as required under Section 2(c)(1) of Revenue
Regulations No. 3-88 having beenpresented. The CTA explained that a mere listing
of VAT invoices and receipts, even if certified to havebeen previously examined by
an independent certified public accountant, would not suffice to establishthe
truthfulness and accuracy of the contents of such invoices and receipts unless
offered and actuallyverified by it (CTA) in accordance with CTA Circular No. 1-95, as
amended by CTA Circular No. 10-97,which requires that photocopies of invoices,
receipts and other documents covering said accounts ofpayments be pre-marked
by the party concerned and submitted to the court.7. CA- Reversed the decision
of CTA and granted the claim a. the appellate court held that there was no need
for respondent to present the photocopies of thepurchase invoices or receipts
evidencing the VAT paid in view of Rule 26, Section 2 of the RevisedRules of Court
and the Resolutions of the CTA holding that the matters requested in
respondentsRequest for Admissions in CTA No. 4968 were deemed admitted by the
CIR in light of its failure to filea verified reply thereto8. Petitioner argued that the
documents required to be submitted to the BIR under Revenue Regulation No. 3-
88should likewise be presented to the CTA to prove entitlement to input
tax credit. A certification by anindependent Certified Public Accountant
(CPA) as provided under CTA Circulars 1-95 and 10-97 does notrelieve respondent
of the onus of adducing in evidence the invoices, receipts and other documents
to show theinput VAT paid on its purchase of goods and services.ISSUE: whether
respondent adduced sufficient evidence to prove its claim for refund of its input VAT
for taxable year1991 in the amounts of P5,683,035.04 and P8,173,789.60.NO.
Respondent failed to do so. As export sales, the sale of gold to the Central Bank is
zero-rated, hence, no tax ischargeable to it as purchaser. Zero rating is primarily
intended to be enjoyed by the seller respondent herein, whichcharges no output
VAT but can claim a refund of or a tax credit certificate for the input VAT previously
charged to it bysuppliers. For a judicial claim for refund to prosper, however,
respondent must not only prove that it is a VAT registered entityand that it filed its
claims within the prescriptive period. It must substantiate the input VAT paid by
purchase invoices orofficial receipts The CTA is described as a court of record. As
cases filed before it are litigated de novo, party litigants should proveevery minute
aspect of their cases. No evidentiary value can be given the purchase invoices or
receipts submitted to theBIR as the rules on documentary evidence require that
these documents must be formally offered before the CTAAs the CTA stated: [S]ale
of gold to the Central Bank should not be subject to the 10% VAT-output tax but this
does notipso facto mean that [the seller] is entitled to the amount of refund sought
as it is required by law to presentevidence showing the input taxes it paid during
the year in question. What is being claimed in the instantpetition is the refund of
the input taxes paid by the herein petitioner on its purchase of goods and services.
Hence, it is necessary for the Petitioner to show proof that it had indeed paid the
said input taxes during theyear 1991. In the case at bar, Petitioner failed to
discharge this duty. It did not adduce in evidence the salesinvoice, receipts or
other documents showing the input value added tax on the purchase of
goods andservices. xxx
Section 8 of Republic Act 1125 (An Act Creating the Court of Tax Appeals) provides
categorically that the Court of TaxAppeals shall be a court of record and as such it is
required to conduct a formal trial (trial de novo) where theparties must present
their evidence accordingly if they desire the Court to take such evidence into
considerationThere is nothing in CTA Circular No. 1-95, as amended by CTA Circular
No. 10-97, which either expressly or impliedlysuggests that summaries and
schedules of input VAT payments, even if certified by an independent CPA, suffice
asevidence of input VAT payments.Mere listing of VAT invoices and receipts, even if
certified to have been previously examined by an independent certifiedpublic
accountant, would not suffice to establish the truthfulness and accuracy of the
contents thereof unless offered andactually verified by this Court. CTA Circular
No. 1-95, as amended by CTA Circular No. 10-97, requires that
thephotocopies of invoices, receipts and other documents covering said accounts or
payments must be pre-marked by theparty and submitted to this Court.While the
CTA is not governed strictly by technical rules of evidence, as rules of procedure are
not ends inthemselves but are primarily intended as tools in the administration of
justice, the presentation of the purchase receiptsand/or invoices is not mere
procedural technicality which may be disregarded considering that it is the only
means bywhich the CTA may ascertain and verify the truth of respondents claims.
The records further show that respondent miserably failed to substantiate its claim
for input VAT refund forthe first semester of 1991. Except for the summary and
schedules of input VAT payments prepared by respondent itself,no other evidence
was adduced in support of its claim. As for respondents claim for input VAT refund
for the second semester of 1991, even though they made employed theservices of
Joaquin Cunanan & Co. and executed a certification, due to the fact that the
certification merely stated that itused auditing procedures considered necessary
and not auditing procedures which are in accordance with generallyaccepted
auditing principles and standards, and that the examination was made on input tax
payments by the ManilaMining Corporation, without specifying that the said
input tax payments are attributable to the sales of gold to theCentral Bank, this
Court cannot rely thereon and regard it as sufficient proof of respondents input VAT
payments for thesecond semester.