Philippine Court Clarifies Input VAT Refunds for Zero-Rated Sales in Outsourcing Services Case

The Philippine Court of Tax Appeals issued a decision on input VAT refunds for zero-rated sales.
The taxpayer, a VAT-registered business outsourcing service provider, requested a refund for unutilized input VAT for Q3 2020.
The refund was related to zero-rated sales to nonresident affiliates and PEZA registered entities.
The Commissioner of Internal Revenue partially denied the refund due to insufficient documentation.
On appeal, the Court partially ruled in favor of the taxpayer.
The Court ordered the Commissioner to pay an additional input VAT refund.
The Court found that the taxpayer proved certain input taxes were due or paid.
The input VAT was not transitional input VAT for newly VAT-registered persons.
The taxpayer did not use the input VAT against any output VAT liability.

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.