CTA affirms denial of Halliburton Worldwide’s refund

THE Court of Tax Appeals has affirmed its ruling that granted part of Halliburton Worldwide Ltd.’s refund claim worth P55,610.23 representing its excess value-added tax for the calendar year 2015.

In a 15-page decision on April 4 and made public on April 13, the tribunal said the firm failed to establish that the initial P11.26 million claim qualified for 0% value-added tax (VAT).

Halliburton Worldwide did not submit Board of Investments (BoI) certificates of registration of its clients to show that it was entitled to tax incentives.

“In fine, while petitioner may not be faulted in its non-presentation of the pertinent Department of Energy (DoE) certificate of endorsement of EDC and MGI, its claim of VAT zero-rating on its sales to Energy Development Corp. (EDC) and Maibarara Geothermal, Inc., (MGI) must be denied for failure to present their Board of Investments certificates of registration (BoI-COR) during the periods covered by its refund claim,” Associate Justice Marian Ivy F. Reyes-Fajardo said.

It argued that its VAT sales in the total amount of P11.26 million to registered renewable energy developers and export sales to nonresident clients qualified for zero-rated sales for 2015.

The court only agreed with the firm’s argument that a Department of Energy certificate of endorsement is only crucial when an entity seeks duty-free importation of renewable energy machinery and other equipment.

The petitioner is engaged in oil field services and the development of equipment and technology related to the oil and gas industries. It is the Philippine branch office of the Cayman Islands-based firm.

Under the country’s law on renewable energy developers, a VAT-registered entity’s sales to renewable energy developers are subject to 0% VAT, which does not translate to output tax.

“Otherwise stated, there is no showing that EDC and MGI were both registered with the Bureau of Investments and were issued DoE certificates of endorsement,” Associate Justice Jean Marie A. Bacorro-Villena said in a separate concurring opinion.

“Clearly from the foregoing, the subject sales of services to EDC and MGI failed to qualify for VAT zero-rating because petitioner failed to present in evidence EDC’s and MGI’s BoI-COR.” — John Victor D. Ordoñez