PMI Philippines Wins US$560,000 Tax Refund

Philip Morris International (PMI) has received a VAT refund of 32.04 million pesos. It is reported that the Philippine Tax Court (CTA) approved this request and stated that PMI is entitled to this amount.

According to reports from the Philippine media "BusinessWorld Online," PMI Philippines has received partial approval for its tax refund application from the Philippine Tax Appeals Court (CTA), amounting to 32.04 million Philippine pesos (approximately 560,000 US dollars), corresponding to its zero-rated sales of unused VAT input tax in 2015.

The court ruling indicated that PMI was able to prove its entitlement to this amount, as its sales invoices showed that the actual goods were exported from the Philippines to foreign countries.

Zero-rated sales refer to transactions conducted by VAT-registered taxpayers that do not generate any output tax. Taxpayers must present official receipts for specific fiscal periods, indicating "zero rate" on the receipts to qualify for tax exemption.

Previously, PMI requested a refund for excess VAT input tax of 90 million pesos (approximately 1.58 million US dollars) for 2015, which had received partial approval from the CTA's Third Division at that time. According to the directive, the Commissioner of Internal Revenue (CIR) should refund 31.18 million pesos to PMI.

In this case, the Philippine Tax Court (CTA) and the Commissioner of Internal Revenue (CIR) held opposing views. The CIR believed that the CTA should dismiss PMI's appeal and argued that PMI's export sales could not prove that the company's goods were paid for in officially designated foreign currency. The CTA stated that the CIR's arguments could not support the dismissal of this case.