- The Court of Tax Appeals (CTA) has set out the requirements for a valid claim for refund or credit of input value added tax (VAT) for zero-rated sales and services in the Philippines.
- The claim for refund must be filed with the Bureau of Internal Revenue (BIR) within two years after the close of the tax quarter when the sales were made.
- A judicial claim with the CTA must be filed within 30 days from receipt of the BIR’s decision denying the claim, or after the expiration of the 120-day period within which the BIR must act on the application.
- The claimant must be a VAT-registered taxpayer.
- The taxpayer must be engaged in zero-rated or effectively zero-rated sales and must account for acceptable foreign currency exchange proceeds in accordance with Bangko Sentral ng Pilipinas (BSP) rules and regulations.
- To establish that sales of services are zero-rated, the taxpayer must show that the recipient of the services is a foreign corporation doing business outside the Philippines or a nonresident person not engaged in business who is outside the Philippines when the services were performed.
- The services rendered must not involve processing, manufacturing, or repacking goods.
- The services must be performed in the Philippines by a VAT-registered person.
- The input taxes being refunded must not be transitional, must be due or paid, must be attributable to zero-rated or effectively zero-rated sales, and must not have been applied against output taxes.
- The taxpayer must comply with the applicable substantiation and invoicing requirements.
Source: kpmg.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
