SECOND DIVISION

[G.R. No. 234445. July 15, 2020.]

COMMISSIONER OF INTERNAL REVENUE, petitioner, vs. DEUTSCHE

KNOWLEDGE SERVICES PTE. LTD., respondent.

DECISION

INTING, J : p

Before the Court is a Petition for Review on Certiorari 1 under Rule 45 of the
Rules of Court filed by the Commissioner of Internal Revenue (CIR) the Decision 2
dated March 30, 2017 and the Resolution 3 dated September 18, 2017 of the Court of
Tax Appeals (CTA) En Banc in CTA EB Nos. 1244 and 1345. In the assailed issuances,
the CTA En Banc affirmed the Decision 4 dated July 7, 2014 of the CTA Second
Division (CTA Division) in CTA Case No. 8443 which partially granted Deutsche
Knowledge Services Pte. Ltd. (DKS)'s application for refund or issuance of tax credit
certificate (TCC).
The Antecedents
DKS is the Philippine branch of a multinational company organized and existing
under and by virtue of the laws of Singapore. 5 The branch is licensed to operate as a
regional operating headquarters (ROHQ) 6 in the Philippines that provides the following
services to DKS's foreign affiliates/related parties, its clients (foreign affiliates-clients):
"general administration and planning; business planning and coordination;
sourcing/procurement of raw materials and components; training and personnel
management; logistic services; product development; technical support and
maintenance; data processing and communication; and business development"
(qualifying services). 7 CAIHTE

By virtue of several Intra-Group Services Agreements (service agreements), DKS

rendered qualifying services to its foreign affiliates-clients, 8 from which it generated
service revenues.
DKS is a value-added tax (VAT)-registered enterprise. 9 On October 21, 2011,
DKS filed with the Bureau of Internal Revenue (BIR) Large Taxpayers Regular Audit
Division an Application for Tax Refund/Credit (BIR Form No. 1914) and a letter claim for
refund, supported by the relevant documents (hereinafter collectively referred to as
"administrative claim"). DKS declared that its sales of services to 34 10 foreign affiliates-
clients are zero-rated sales for VAT purposes. Thus, it sought to refund an amount of
P33,868,101.19, representing unutilized input VAT attributable to zero-rated sales
incurred during the first quarter of 2010. 11
Alleging that the CIR had not acted upon their administrative claim, DKS filed a
petition for review before the CTA on March 19, 2012 (judicial claim).
In its Answer, the CIR, represented by the Office of the Solicitor General, refuted
DKS's entitlement to a tax refund or credit as follows: First, DKS failed to submit the
documents necessary to support its claim. Second, its claim is subject to administrative
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 routine investigation and examination by the BIR. Third, it also failed to prove that it
rendered services to persons engaged in business conducted outside the Philippines,
the payments of which were made in Euro and other acceptable foreign currency in
accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP).
Finally, the filing of its judicial claim was premature. 12
During the proceedings, DKS presented the following evidence to prove that its
foreign affiliates-clients are non-resident foreign corporations doing business outside
the Philippines (NRFCs): (1) SEC Certifications of Non-Registration of Company; (2)
Authenticated Articles of Association and/or Certificates of Registration/Good
Standing/Incorporation; (3) Service Agreements; 13 and foreign business registration
printouts retrieved from the AMInet database.
The CTA Division Ruling
In the Decision 14 dated July 7, 2014, the CTA Division partially granted DKS's
claim. At the onset, the CTA Division resolved that both DKS's administrative and
judicial claims were timely filed. 15 On the substantive aspect, it reduced DKS's claim to
P14,882,227.02 computed as follows:

Input VAT claimed for refund P33,868,101.19

Less: Disallowances

Unamortized Input VAT on

Capital Goods exceeding
P1 million P719,723.72

Input VAT on Capital

Goods exceeding P1
million without supporting
documents 514,698.21

Input VAT on purchases

of services and goods
other than capital goods 11,556,290.62 12,790,712.55

–––––––––––– –––––––––––––

Valid Input VAT P21,077,388.64

Less: Output VAT 713,041.78

–––––––––––––

Valid Excess Input VAT P20,364,346.86

Multiply by: Portion pertaining

to duly-established zero-
rated sales 16 73.0798%

–––––––––––––––

Excess Input VAT attributable

to the Valid Zero-Rated
Sales/Receipts P14,882,227.02 17
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 =============

The CTA Division found as follows:

First, DKS initially claimed for refund total input VAT from current transactions
amounting to P33,868,101.19, 18 purportedly from the purchases of capital goods,
domestic purchases of services and goods other than capital goods, and services
rendered by non-residents. However, it did not properly support its input VAT claims in
accordance with prevailing VAT invoicing and substantiation requirements. This
resulted in the disallowance of input VAT amounting to P12,790,712.55, 19 reducing the
amount of valid excess input VAT subject to refund to P20,364,346.86. 20
Second, DKS reported zero-rated sales amounting to P858,315,870.09 in its VAT
return. 21 However, "[t]o be considered as [an NRFC], each entity must be supported, at
the very least, by both SEC certificate of non-registration of corporation/partnership and
certificate/articles of foreign incorporation/association." 22 Based on the evidence
presented, out of 34 entities it claimed to be foreign, DKS established the NRFC status
of only 15 foreign affiliates-clients. Thus, only sales to these 15 entities
(P627,255,650.48), which comprised 73.0798% 23 of the total zero-rated sales declared
(P858,315,870.09), was proven to be derived from foreign affiliates-clients.
Concomitantly, only input VAT to the extent of P14,882,227.02 24 may be granted as a
refund or credit or 73.0798% of the above-mentioned validated excess input VAT
amounting to P20,364,346.86. DETACa

From this Decision, the CIR filed a Motion for Reconsideration (MR). On the other
hand, DKS filed an Omnibus Motion for Partial Reconsideration and to Re-open Trial to
Present Supplemental Evidence (omnibus motion). The CTA Division denied 25 the
CIR's MR, but allowed DKS to present additional evidence, despite the CIR's
opposition. 26 Ultimately, the CTA Division still denied DKS's motion for partial
reconsideration.
Aggrieved, the CIR and DKS filed petitions for review on certiorari before the
CTA En Banc docketed as CTA EB Nos. 1244 and 1345, respectively.
The CTA En Banc Ruling
In its assailed Decision, the court a quo partially granted the CIR's petition but
denied for lack of merit that of DKS. It mainly echoed the CTA Division's rulings on
evidentiary matters, viz.:
We agree with the Court in Division that to be considered as a non-
resident foreign corporation doing business outside the Philippines, each entity
must be supported, at the very least, by both a certificate of non-registration of
corporation/partnership issued by the [SEC] and certificate/articles of foreign
incorporation/association. Parenthetically, it must be emphasized that
notwithstanding the presentation of the said documents, there must not be any
indication that the recipient of the services is doing business in the Philippines,
consistent with the above-quoted ruling in the case of Commissioner of Internal
Revenue vs. Burmeister and Wain Scandinavian Contractor Mindanao, Inc.
The said basic documents are necessary because the Philippine SEC's
negative certification establishes that the recipient of the service has no
registered business in the Philippines, while the said certificate/articles of
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 incorporation/association will prove that the recipient is indeed foreign. 27
However, after further evaluation, the CTA En Banc found that DKS established
the NRFC status of only 11 foreign affiliates-clients, as opposed to the CTA Division's
findings of 15 entities. The court a quo excluded four 28 entities because these entities'
NRFC status could not have been established by mere printouts from DKS's own
database, viz.:
x x x [The] foreign business registration print-outs retrieved from the
AMInet database (Exhibits "P-1" to "P-33"), which is a database set up by
Deutsche Bank Global (the head office of Deutsche Knowledge in Germany) x
x x are self-serving and can be easily manipulated to favor Deutsche
Knowledge in view of its affinity with the entity that maintains or keeps the said
database. 29
Resultantly, this reduced DKS's claim to P14,527,282.57 because only 71.3368%
30 (not 73.0798% as found by the CTA Division) of its reported sales were valid zero-

rated sales, viz.:

Valid Excess Input VAT, as found by the CTA

Division P20,364,346.86

Multiply by: Portion pertaining to duly-

established zero-rated sales 31 71.3368%

–––––––––––––––

Excess Input VAT attributable to the Valid

Zero-Rated Sales/Receipts P14,527,282.57 32

=============

Both parties moved for reconsideration, but the CTA EB denied them. Hence, the
CIR filed the present petition.
Issue
The sole issue for the Court's resolution is whether DKS is entitled to a tax
refund/credit amounting to P14,527,282.57.
The Court's Ruling
The petition is unmeritorious.
The CIR insists that DKS is not entitled to a tax refund/credit because: First, its
judicial claim was filed prematurely. 33 And second, it failed to prove that its clients are
foreign corporations doing business outside the Philippines. Being a procedural matter,
the Court shall first resolve the former then proceed to the substantive matters.
Timeliness of DKS's Judicial
Claim
Section 112 (C) of the National Internal Revenue Code of 1997 (Tax Code) gives
the CIR 120 days from the date of submission of complete documents (date of
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 completion) supporting the application for credit or refund excess input VAT attributable
to zero-rated sales to resolve the administrative claim. If it remains unresolved after this
period, the law allows the taxpayer to appeal the unacted claim to the CTA within 30
days from the expiration of the 120-day period (120 and 30-day periods). 34
Stated differently, the date of completion commences the CIR's 120-day period to
resolve the claim. In turn, the expiration of the 120-day period triggers the running of the
30-day period to appeal an unacted claim. aDSIHc

The CIR argues that Revenue Memorandum Order No. (RMO) 53-98 provides a
list of documents that the taxpayer must submit to substantiate his claim for tax refund
or credit. It points out that, when DKS filed its administrative claim, it failed to submit the
complete documents. Thus, the 120 and 30-day periods did not begin to run.
This content on directly contravenes law, applicable tax regulations, and
jurisprudence.
First, the Court pronounced in Commissioner of Internal Revenue v. Team Sual
Corp., 35 that inasmuch as RMO 53-98 enumerates the documentary requirements
during an audit investigation, its provisions do not apply to applications for tax refund or
credit. 36
Second, in Pilipinas Total Gas, Inc. v. Commissioner of Internal Revenue , 37 the
Court emphasized that the law accords the claimant sufficient latitude to determine the
completeness of his submission for the purpose of ascertaining the date of completion
from which the 120-day period shall be reckoned. 38 He "enjoys relative freedom to
submit such evidence to prove his claim" because, in the first place, he bears the
burden of proving his entitlement to a tax refund or credit. 39
This benefit, a component of the claimant's fundamental right to due process, 40
allows him: (a) to declare that he had already submitted complete supporting
documents upon filing his claim and that he no longer intends to make additional
submissions thereafter; or (b) to further substantiate his application within 30 days after
filing, as allowed by Revenue Memorandum Circular No. (RMC) 49-03. 41
To counterbalance the claimant's liberty to do so, he may be required by the tax
authorities in the course of their evaluation, to submit additional documents for the
proper evaluation thereof. In which case, the CIR shall duly notify the claimant of his
request from which the claimant has 30 days to comply.
Notably, both parties are given the occasion to determine the completeness of
documents supporting a claim for tax refund or credit. However, the Court must
differentiate between these two functions.
On the one hand, the claimant has the prerogative to determine whether he had
completed his submissions upon filing or within 30 days thereafter. This procedural
determination of completeness is aimed at ascertaining the date of completion from
which the 120-day period shall commence.
In contrast, whether the claimant's submissions "are actually complete as
required by law — is for the CIR and the courts to determine." 42 The CIR and courts'
subsequent evaluation of the documents is a substantive determination of
completeness, for the purpose of ascertaining the claimant's entitlement to the tax
refund or credit sought.
Clearly, the CIR has no authority to unilaterally determine the completeness of
these documents and dictate the running of the 120-day period to resolve the claim, as
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 he attempts to do so in the present case. To sanction this would be giving the tax
authorities "unbridled power to indefinitely delay the administrative claim" and in turn
"prevent the filing of a judicial claim with the CTA." 43
Third, as discussed above, RMC 49-03 explicitly empowers the tax authorities to
request for additional documents that will aid them in verifying the claim. If its supporting
documents were incomplete, the BIR was duty-bound to notify DNKS of its deficiencies
and require them to make further submissions, as necessary. 44
The tax authorities had the full opportunity to opine on the issue of documentary
completeness while DKS's claim was pending before them. However, there was no
action on the claim on the administrative level. The first instance the BIR served a
formal response to the claimant, alleging documentary deficiencies, was already in the
CIR's Answer filed before the CTA on May 11, 2012. In other words, it took the BIR 203
days 45 to show concern on the matter, only to ask the court to deny the claim based on
a mere procedural issue that they themselves could have addressed on the
administrative level.
Its belated response to the present claim only brings to light that the BIR had
been remiss in their duties to duly notify the claimant to submit additional documentary
requirements and to timely resolve their claim. The CIR cannot now fault DKS for
proceeding to court for the appropriate remedial action on the claim they ignored.
Parenthetically, the Court reiterates that the above analysis involving the
determination of the completeness of documents supporting a claim for tax refund or
credit applies only to claims filed prior to June 11, 2014. 46 At present, RMC 54-14 47
requires the taxpayer to attach the following to his claim upon filing thereof: (a) complete
supporting documents, as enumerated in the issuance, and (b) a statement under oath
attesting that the documents submitted are in fact complete. The guidelines now ensure
that the date of completion coincides with the date of filing of the claim.
This new issuance cannot be made to apply to the present case, which involves a
claim filed in 2011, due to the rule on non-retroactivity of rulings. 48
Requisites for the Entitlement to
Tax Refund or Credit of Excess
input VAT Attribute to Zero-
rated Sales
Under Section 4.112-1 (a) of Revenue Regulations No. (RR) 16-05, otherwise
known as the Consolidated VAT Regulations of 2005, in relation to Section 112 49 of the
Tax Code, a claimant's entitlement to a tax refund or credit of excess input VAT
attributable to zero-rated sales hinges upon the following requisites: "(1) the taxpayer
must be VAT-registered; (2) the taxpayer must be engaged in sales which are zero-
rated or effectively zero-rated; (3) the claim must be filed within two years after the close
of the taxable quarter when such sales were made; and (4) the creditable input tax due
or paid must be attributable to such sales, except the transitional input tax, to the extent
that such input tax has not been applied against the output tax." 50
The second requisite for the claimant's entitlement to a tax refund or credit of
excess input VAT is at issue in the present case. ETHIDa

Conditions for Zero-rating of

Sales of Services
Zero-rated sales are, for all intents and purposes, subject to VAT, only that the
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 rate imposed upon them is 0%. Thus, while these sales will not mathematically yield
output VAT, the input VAT arising therefrom 51 is nonetheless creditable or refundable,
as the case may be. 52
Sales of "other services," 53 such as those qualifying services 54 rendered by
DKS to its foreign affiliates-clients, shall be zero-rated pursuant to Section 108 (B) (2) 55
of the Tax Code if the following conditions are met: First, the seller is VAT-registered.
Second, the services are rendered "to a person engaged in business conducted outside
the Philippines or to a nonresident person not engaged in business who is outside the
Philippines when the services are performed." Third, the services are "paid for in
acceptable foreign currency and accounted for in accordance with [BSP] rules and
regulations." 56
With regard to these conditions, it is no longer disputed that DKS is VAT-
registered and that it received payments for its qualifying services in acceptable foreign
currency and accounted for as required by applicable BSP rules. What remains in
contention is whether or not DKS's foreign affiliates-clients are NRFCs doing business
outside the Philippines.
Proof of NRFC Status
For purposes of zero-rating under Section 108 (B) (2) of the Tax Code, the
claimant must establish the two components of a client's NRFC status, viz.: (1) that their
client was established under the laws of a country not the Philippines or, simply, is not a
domestic corporation; and (2) that it is not engaged in trade or business in the
Philippines. To be sure, there must be sufficient proof of both of these components:
showing not only that the clients are foreign corporations, but also are not doing
business in the Philippines. 57
Such proof must be especially required from ROHQs such as DKS. That the law
58 expressly authorizes ROHQs to render services to local and foreign affiliates alike
only stresses the ROHQ's burden to distinguish among their clients' nationalities and
actual places of business operations and establish that they are seeking refund or credit
of input VAT only to the extent of their sales of services to foreign clients doing
business outside the Philippines.
To recall, the CTA found that the SEC Certification of Non-Registration of
Company and Authenticated Articles of Association and/or Certificates of
Registration/Good Standing/Incorporation sufficiently established the NRFC status of
11 of DKS's affiliates clients. 59
The Court upholds these findings.
The Court accords the CTA's factual findings with utmost respect, if not finality,
because the Court recognizes that it has necessarily developed an expertise on tax
matters. 60 Significantly, both the CTA Division and CTA En Banc gave credence to the
aforementioned documents as sufficient proof of NRFC status. The Court shall not
disturb its findings without any showing of grave abuse of discretion considering that the
members of the tax court are in the best position to analyze the documents presented
by the parties. 61
In any case, after a judicious review of the records, the Court still do not find any
reason to deviate from the court a quo's findings. To the Court's mind, the SEC
Certifications of Non-Registration show that their affiliates are foreign corporations. 62
On the other hand, the articles of association/certificates of incorporation stating that
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 these affiliates are registered to operate in their respective home countries, outside the
Philippines are prima facie evidence that their clients are not engaged in trade or
business in the Philippines.
Proof of the above-mentioned second component sets the present case apart
from Accenture, Inc. v. Commissioner of Internal Revenue 63 and Sitel Philippines Corp.
v. Commissioner of Internal Revenue. 64 In these cases, the claimants similarly
presented SEC Certifications and client service agreements. However, the Court
consistently ruled that documents of this nature only establish the first component (i.e.,
that the affiliate is foreign). The absence of any other competent evidence (e.g., articles
of association/certificates of incorporation) proving the second component (i.e., that the
affiliate is not doing business here in the Philippines) shall be fatal to a claim for credit
or refund of excess input VAT attributable to zero-rated sales.
WHEREFORE, the petition is DENIED. The Decision dated March 30, 2017 and
the Resolution dated September 18, 2017 of the Court of Tax Appeals En Banc in CTA
EB Nos. 1244 and 1345 are AFFIRMED. cSEDTC

SO ORDERED.
Perlas-Bernabe, Hernando, Delos Santos and Gaerlan, * JJ., concur.

Footnotes
* Designated as additional member per Special Order No. 2780 dated May 11, 2020.

1. Rollo, pp. 10-25.

2. Id. at 34-71; penned by Associate Justice Erlinda P. Uy with Presiding Justice Roman G. Del
Rosario, concurring and dissenting; and Associate Justices Juanito C. Castañeda, Jr.,
Lovell R. Bautista, Caesar A. Casanova, Esperanza R. Fabon-Victorino, Cielito N.
Mindaro-Grulla, Ma. Belen M. Ringpis-Liban, and Catherine F. Manahan, concurring.

3. Id. at 76-79.

4. Id. at 127-149; penned by Associate Justice Juanito C. Castañeda, Jr. with Associate
Justices Caesar A. Casanova, concurring; and Amelia R. Cotangco-Manalastas, on
leave.

5. Id. at 127.
6. Book III, Section 2 (3) of Executive Order No. (EO) 226, otherwise known as the Omnibus
Investments Code of 1987, as amended by Republic Act No. (RA) 8756, defines a
Regional Operating Headquarters (ROHQ) as "a foreign business entity which is
allowed to derive income in the Philippines by performing qualifying services to its
affiliates, subsidiaries or branches in the Philippines, in the Asia-Pacific Region and in
other foreign markets." Book III, Chapter II, Article 58 requires all ROHQs to secure a
license from the "Securities and Exchange Commission (SEC), upon the favorable
recommendation of the Board of Investments [BOI]."

7. Id. at 127-128. Book III, Chapter II, Article 59 (b) (1) enumerates the "qualifying services"
ROHQs are allowed to render. The law explicitly provides that "ROHQs are prohibited
from offering qualifying services to entities other than their affiliates, branches or
subsidiaries, as declared in their registration with the Securities and Exchange
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 Commission nor shall they be allowed to directly and indirectly solicit or market goods
and services whether on behalf of their mother company, branches, affiliates,
subsidiaries or any other company."

8. Id. at 128.

9. Id. at 127.

10. Id. at 141-142. According to the Court of Tax Appeals Second Division (CTA Division),
DKS alleged to have rendered services to the following foreign affiliates-clients: (1)
Deutsche Bank Aktiengesellschaft, Inlandsbank, (2) Deutsche Bank Aktiengesellschaft,
Filiale Amsterdam, (3) Deutsche Bank, Sociedad Española, (4) Deutsche Bank
Aktiengesellschaft, Filiale Zurich, (5) Deutsche Bank Aktiengesellschaft, Asia Pacific
Head Office, (6) Deutsche Bank Aktiengesellschaft, Filiale Singapur, (7) Deutsche Bank
Aktiengesellschaft, Filiale Karachi, (8) Deutsche Bank Aktiengesellschaft, Filiale Ho-Chi-
Minh-Stadt, (9) Deutsche Bank Aktiengesellschaft, Filiale Seoul, (10) Deutsche Bank
Aktiengesellschaft, Filiale New York, (11) Deutsche Bank Aktiengesellschaft, Filiale
London, (12) Deutsche Bank Aktiengesellschaft, Filiale Tokyo, (13) Deutsche Bank
Aktiengesellschaft, Filiale Paris, (14) Deutsche Bank Aktiengesellschaft, Filiale Prag,
(15) Deutsche Bank Luxembourg S.A., (16) Deutsche Securities, Inc., (17) Deutsche
Bank (China) Co. Ltd., Beijing Branch, (18) Deutsche Bank (China) Co. Ltd.,
Guangzhou Branch, (19) Deutsche Bank (China) Co. Ltd., Shanghai Branch, (20) DWS
Holding & Service GmbH, (21) RREEF Management GmbH, (22) DB Hedgeworks, LLC,
(23) Deutsche Bank Real Estate (Japan) Y.K., (24) Deutsche Bank Securities, Inc., (25)
Deutsche Asia Pacific Holdings Pte. Ltd., (26) PT. Deutsche Securities Indonesia, (27)
Deutsche Group Services Pty. Limited, (28) Deutsche Bank PBC Spolka Akcyjna, (29)
Deutsche Bank Trust Company Americas, (30) DB Services New Jersey, Inc. (31)
Deutsche Bank National Trust Company, (32) DB Finance, Inc.,(33) DB International
(Asia) Limited, and (34) DBOI Global Services Private Limited.

11. Id. at 128.

12. Id. at 128-132.

13. Id. at 142.

14. Id. at 127-149.

15. Id. at 135-137.

16. P627,255,650.48 is 73.0798% of total reported zero-rated sales amounting to

P858,315,870.09. The percentage has been rounded off to four decimal places.

17. Rollo, pp. 147-148.

18. Id. at 145.

19. Id. at 147.

20. "Valid excess input VAT" is the difference between Valid input VAT amounting to
P21,077,388.64 and Output VAT amounting to P713,041.78. Id. at 147-148.

21. Id. at 145.

22. Id. at 143.

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 23. See supra note 16.

24. Rollo, p. 148.

25. See the Resolution dated October 13, 2014 of the CTA Division,id. at 92-101.

26. The CTA Division denied the Commissioner of Internal Revenue (CIR)'s Motion for Partial
Reconsideration in its Resolution dated October 13, 2014, id. at 38.

27. Id. at 54-55. Emphasis omitted; italics in the original.

28. Id. at 60. Deutsche Bank (China) Co. Ltd., Beijing Branch; Deutsche Bank (China) Co. Ltd.,
Shanghai Branch; Deutsche Bank Aktiengesellschaft, Filiale Ho-Chi-Minh-Stadt; and DB
International (Asia) Limited.

29. Id. at 56-57.

30. P612,295,462.42 is 71.3668% of total reported zero-rated sales amounting to
P858,315,870.09. The percentage has been rounded off to four decimal places.

31. Id.

32. From the CTA Division's computation, the CTA En Banc only modified the "Portion
pertaining to duly-established zero-rated sales" from 73.0798% to 71.3368%. This
resulted in the decrease of "Excess Input VAT attributable to the Valid Zero-Rated
Sales/Receipts" from P14,882,227.02 to P14,527,282.57.

33. Rollo, p. 18.

34. Section 112 (C) of the National Internal Revenue Code of 1997 (Tax Code) provides, "x x x
[i]n 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.'' Also see Procter and
Gamble Asia Pte. Ltd. v. Commissioner of Internal Revenue, 785 Phil. 817 (2016).
35. 739 Phil. 215 (2014).

36. Id. at 227.

37. 774 Phil. 473 (2015).

38. Id. at 493.

39. Id. at 493-494.

40. Id. at 494.

41. Pursuant to Revenue Memorandum Circular No. (RMC) 49-03 [Subject:Amending Answer
to Question Number 17 of RMC No. 42-03, August 15, 2003], ''[f]or pending claims
which have not been acted upon by the investigating/processing office due to
incomplete documentation, the taxpayer-claimants are given thirty (30) days within
which to submit the documentary requirements unless given further extension by the
head of the processing unit, but such extension should not exceed thirty (30) days."

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 42. Pilipinas Total Gas, Inc. v. Commissioner of Internal Revenue, supra note 37 at 494.

43. Id. at 488.

44. See Commissioner of Internal Revenue v. Team Sual Corp., supra note 35 at 229.

45. DKS filed their administrative claim on October 21, 2011,rollo, p. 36.

46. Pilipinas Total Gas, Inc. v. Commissioner of Internal Revenue, supra note 37 at 496.
47. Clarifying Issues Relative to the Application for Value-Added Tax (VAT) Refund/Credit,
Revenue Memorandum Circular No. 054-14, [June 11, 2014].

48. Pilipinas Total Gas, Inc. v. Commissioner of Internal Revenue, supra note 37 at 496-497,
citing Section 246 of the Tax Code.

49. SECTION 112. Refunds or Tax Credits of Input 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: Provided, however, That in the case of zero-rated sales under Section 106
(A) (2) (a) (1), (2) and (b) and Section 108 (B) (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 (BSP): 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 of 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
(B) (6), the input taxes shall be allocated ratably between his zero-rated and non-zero-
rated sales.

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) hereof. [73]
xxx xxx xxx

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.

xxx xxx xxx

50. Silicon Phils., Inc. v. Commissioner of Internal Revenue, 654 Phil. 492, 504 (2011).

51. Section 110 (A) (3), Tax Code.

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 52. Section 110 (B), Tax Code of, Sections 4.108-5 (a), 4.110-6, 4.110-7 (b), RR 16-05.

53. Services other than those mentioned in Section 108 (B) (1) of the Tax Code,viz.:
"Processing, manufacturing or repacking goods for other persons doing business
outside the Philippines which goods are subsequently exported x x x" (Italics supplied.)

54. See supra note 7.

55. SECTION 108. Value-Added Tax on Sale of Services and Use or Lease of Properties. — x
xx
(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%) rate x x x (2) Services other than those mentioned in the preceding paragraph,
rendered to a person engaged in business conducted outside the Philippines or to a
nonresident person not engaged in business who is outside the Philippines when the
services are performed, 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).

xxx xxx xxx

56. Also see Commissioner of Internal Revenue v. American Express International, Inc., 500
Phil. 586, 606 (2005); Commissioner of Internal Revenue v. Burmeister and Wain
Scandinavian Contractor Mindanao, Inc., 541 Phil. 119, 131 (2007).

57. See Accenture, Inc. v. Commissioner of Internal Revenue, 690 Phil. 679, 690-691 (2012);
Sitel Philippines Corp. v. Commissioner of Internal Revenue, 805 Phil. 464, 482-483
(2017).

58. See supra note 6.

59. Rollo, p. 58.

60. Winebrenner & Iñigo Insurance Brokers, Inc. v. Commissioner of Internal Revenue, 752
Phil. 375, 397 (2015). Citations omitted.

61. Rep. of the Phils. v. Team (Phils.) Energy Corp., 750 Phil. 700, 717 (2015), citing Sea-
Land Service, Inc. v. Court of Appeals, 409 Phil. 508, 514 (2001). Also see Coca-Cola
Bottlers Philippines, Inc. v. Commissioner of Internal Revenue, 826 Phil. 329, 346-347
(2018).

62. See Accenture, Inc. v. Commissioner of Internal Revenue, supra note 57 at 697.
63. 690 Phil. 679 (2012).

64. 805 Phil. 464 (2017).

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