CTA junks Wells Fargo’s P29-M tax refund claim

MANILA – The Court of Tax Appeals (CTA) has turned down a PHP29 million claim for tax refund filed by a financial services company.

In a 20-page decision dated February 8, the tax court’s second division through Associate Justice Jean Marie A. Bacorro-Villena denied for lack of merit the petition for review filed by Wells Fargo Enterprise Services, Inc. LLC-Philippines.

The firm, the local branch office of US-based Wells Fargo, in the course of its business, claimed that it had an unutilized input value-added tax (VAT) in the aggregate amount of PHP29.52 million from the purchase of goods and services that were subjected to VAT.

In 2018, the company filed an administrative claim for refund with the Bureau of Internal Revenue representing its unutilized input value-added tax (VAT) arising from zero-rated sales for the four quarters of 2016.

Ruling against the firm, the court said “the claim for refund is bereft of legal mooring”.

Among other things, the court said “it should be noted that the seller/supplier is statutorily liable for the payment of VAT although the burden of tax is allowed to be shifted or passed on the buyer”.

“The proper party to seek the tax refund or credit should be the petitioner’s suppliers, assuming the VAT was properly remitted to the government. To be clear, this does not preclude petitioner from recovering the amount it paid for input VAT from its suppliers or goods and services who passed on the same,” the court further said.