Tuesday, February 23, 2016

Accenture, Inc. vs Commissioner of Internal Revenue (CIR)

FACTS: Accenture filed a Value-Added Tax (VAT) claim for refund on unutilized input VAT premised on its claim that its sales were zero-rated for being in connection with services rendered to non-resident recipients. The Commissioner of Internal Revenue (CIR) denied the claim stating that Accenture failed to prove that its foreign clients did business outside the Philippines.

ISSUE: Whether or not Accenture is entitled to the VAT refund

RULING: No. Accenture failed to prove that services were rendered for non-residents. The Amex case did not rule that the services to recipients need not be doing business outside the Philippines but only that the consumption need not be abroad. However, Accenture failed to prove that the clients/service recipients are doing business outside the Philippines as they only submitted the Securities and Exchange Commission (SEC) certifications showing that their clients have not established any branch offices in the Philippines and billing statements issued to the said clients. The Court ruled that while it did prove that its clients are foreign, there was no proof that they were doing business outside the Philippines.

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