THE COURT of Tax Appeals (CTA) has partially granted a refund to OceanaGold Philippines, Inc., amounting to over P109 million, covering the four taxable quarters of 2019 and representing the portion of the company’s valid input value-added tax (VAT) linked to its substantiated zero-rated sales.
The tax court’s first division, through a ruling published on Nov. 29, ordered the Bureau of Internal Revenue (BIR) to refund P109,643,347.55 to the mining company, which originally sought P133,671,461.36.
OceanaGold argued that the P133 million was the total amount of excess and unutilized input VAT it had accumulated from its purchases of goods and services attributable to zero-rated sales for the first to fourth quarters of 2019.
The BIR initially refused to accept OceanaGold’s claim, arguing that the company had outstanding tax liabilities.
The Court ruled that this was not a valid reason to deny the claim because the outstanding tax liability was still being disputed in court and had not yet become a delinquent account.
“When the claim for refund has a clear legal basis and is sufficiently supported by evidence, as in the present case, then the Court shall not hesitate to grant the refund,” Associate Justice Jean Marie E. Bacorro-Villena penned in a 43-page ruling.
It also found that OceanaGold had properly substantiated its claim for input VAT with the required documentation.
However, the court only recognized P6,608,397,449.29 of OceanaGold’s declared zero-rated sales due to issues with supporting documentation for some of its sales.
The remaining sales lacked sufficient documentation to prove that the goods were shipped to foreign countries and paid for in acceptable foreign currency.
The company is a VAT-registered entity engaged in the sale of minerals, which are zero-rated under Philippine tax law.
In partially granting the refund, the tax court said OceanaGold had timely filed both its administrative and judicial claims.
The company filed its administrative claim with the BIR on May 11, 2021, and its judicial claim with the CTA on May 31, 2021. This was within the two-year statutory deadline for filing such claims.
Presiding Justice Roman G. Del Rosario issued a dissenting opinion, arguing that OceanaGold’s claim should have been denied entirely because the company failed to comply with the invoicing requirements for zero-rated sales.
Mr. Del Rosario said that all of OceanaGold’s invoices lacked the required phrase “zero-rated sale,” making them ineligible for a refund. — Chloe Mari A. Hufana