SUMMARY OF SIGNIFICANT SC DECISIONS (January 2011)

1. Once the carry-over option is chosen for excess income tax payment, it becomes
irrevocable and no refund is available.

Taxpayers income tax return for the year 1997 showed excess income tax payments. Instead of
claiming the amount as a tax refund, taxpayer decided to apply it as tax credit to the succeeding
taxable year by marking the applicable box in the tax return. Taxpayer in fact carried-over the
excess income tax payment in the 1998 and 1999 income tax returns. In denying taxpayers
claim for refund, the Supreme Court ruled that once the option to carry-over excess income tax
payments to the succeeding years has been made, it becomes irrevocable. Thus, applications
for refund of the unutilized excess income tax payments may no longer be allowed. (Belle
Corporation vs. Commissioner of Internal Revenue, G.R. No. 181298, January 14, 2011)

2. Printing of the Authority to Print (ATP) in the invoices or receipts is not required,
but in a claim for refund, the ATP must be presented.

The ATP need not be reflected in the invoices or receipts because there is no law or regulation
requiring it. Failure to print the ATP on the invoices or receipts should not result in the outright
denial of a claim or the invalidation of the invoices ore receipts for purposes of claiming a
refund. But while there is no such law, the Tax Code requires persons engaged in business to
secure ATP from the BIR prior to printing invoices or receipts. Since the ATP is not indicated in
the invoices or receipts, the only way to verify whether the invoices or receipts are duly
registered is by requiring the claimant to present its ATP from the BIR. Without which, the
invoices or receipts would not have probative value for the purpose of refund. (Silicon
Philippines, Inc. vs. Commissioner of Internal Revenue, G.R. No. 172378, January 21,
2011)

3. Failure to print the word zero-rated on the sales invoices is fatal to a claim for
refund of input VAT.

Compliance with Section 4.108-1 of RR 7-95, requiring the printing of the word zero-rated on
the invoice covering zero-rated sales is essential as this regulation proceeds from the rule-
making authority of the Secretary of Finance. (Silicon Philippines, Inc. vs. Commissioner of
Customs, G.R. No. 172378, January 21, 2011)
4. Taxpayer need not prove its losses in a claim for refund of excess income tax
payments.

Taxpayer filed its annual income tax return for 2001 showing net loss. Hence, the taxes withheld
on its income was not utilized against income tax. Accordingly, it filed a claim for refund. The
BIR argued that the taxpayer must also prove its reported losses to be entitled to refund. The
Supreme Court agreed that the taxpayer bears the burden to establish the losses, but then the
taxpayer has fulfilled this duty when it presented its income tax return showing the incurred
losses. It must be noted that the CTA earlier ruled that the burden of proof as to whether the
taxpayer incurred net losses from its operations rests on the BIR. This is the reason why the
BIR is authorized by law to examine the books and accounting records to ascertain the
truthfulness of the taxpayers declaration in its income tax return. (Commissioner of Internal
Revenue vs. Asian Transmission Corporation, G.R. No. 179617, January 26, 2011)

5. The proper party to seek refund of an indirect tax is the statutory taxpayer, not the
person on whom it is shifted to.

Exxon purchased from Caltex Philippines, Inc. and Petron Corporation Jet A-1 fuel and other
petroleum products, the excise taxes on which were paid for and remitted by both Caltex and
Petron. Said taxes, however, were passed on to Exxon which ultimately shouldered the excise
taxes on the fuel and petroleum products. Exxon sold some of these products to international
carriers, which by virtue of international agreements, are free of excise taxes. Exxon then filed
various claims for refund of the excise taxes paid. The Supreme Court upheld the decisions of
the lower courts denying the claim for refund by holding that the proper party to question, or to
seek a refund of, an indirect tax, is the statutory taxpayer, or the person on whom the tax is
imposed by law and who paid the same, even if he shifts the burden thereof to another. (Exxon
Mobil Petroleum & Chemical Holdings, Inc. Philippine Branch vs. Commissioner of
Internal Revenue, G.R. No. 180909, January 26, 2011)