ACCENTURE V. CIR, G.R. NO.

190102, JULY 11, 2012 DOCTRINE: For VAT zero-rating of services rendered
to non-resident foreign corporation under Section 108(B)((2) of the NIRC, it is not enough that the
recipient of services be proven to be a foreign corporation, it must be proven to be a non-resident
foreign corporation.

FACTS: Taxpayer filed an application for refund of unutilized input taxes allocated to its zero-rated sale
of services to foreign clients. In order to prove that its sales are VAT zero-rated, taxpayer presented as
evidence the Official Receipts, Billing Statements, Memo Invoices- Receivable, Memo Invoices-Payable
and Bank Statements. Taxpayer argued that these documents show that the zero-rated sales were paid
in foreign currency and duly accounted for in accordance with the rules and regulations of the Bangko
Sentral ng Pilipinas (BSP).

HELD: The Court ruled that for sale of services to be VAT zero-rated under Section 108(B) of the NIRC,
the recipient of service must be doing business outside the Philippines. According to the Court, the
documents presented by taxpayer merely substantiated the existence of sales, receipt of foreign
currency payments and inward remittance of the proceeds of such sales. There is no evidence that the
clients were doing business outside the Philippines. Accordingly, the Court denied the claim on the
ground that no evidence was presented to prove the fact that the foreign clients to whom the taxpayer
rendered services are clients doing business outside the Philippines.