CTA affirms denial of infrastructure consulting firm’s tax refund claim

THE Court of Tax Appeals (CTA) affirmed its ruling rejecting AECOM Philippines, Inc.’s claim for a refund worth P13.98 million allegedly representing excess credit-withholding tax (CWT) for 2013.

In a 12-page decision dated Dec. 9 and made public on Dec. 19, the CTA full court said the firm failed to prove that its excess CWT was reflected in its 2013 income tax return.

“It bears stressing that a claimant for tax refund has the burden of proof to establish the factual basis of his or her claim for tax credit or refund,” Associate Justice Roman G. Del Rosario said in the ruling.

Under the law, a firm’s official receipts must show that the income on which the withholding tax was made was declared as part of the gross income.

AECOM is a domestic corporation that provides engineering consultancy for infrastructure projects. Its main office is in Taguig City.

In 2016, the firm applied for a tax refund with Revenue District No. 44 in Taguig and appealed the decision to the CTA shortly after.

AECOM argued that its excess CWT was presented in its progress service reports for the fiscal years 2013 and 2012, which the court disagreed with.

“Upon re-evaluation of the progress service reports, the court en banc finds that petitioner failed to prove that the revenues declared per annual income tax return tally with the revenue declared,” the tax tribunal said.

The CTA said the firm failed to match the revenues presented in its progress service report for 2013  and the revenues declared in its annual income tax return and audited financial statements for that year.

It noted a discrepancy between the total amount of P326,368,368.31 reported in the firm’s year-to-date gross revenue found in the progress service report and the P324,574,237 presented in its 2013 financial statements and annual income tax return.

The tribunal said the discrepancy cast doubt on the credibility of the amounts reported in the progress service reports. 

“Tax refunds or credits just like tax exemptions, are strictly construed against taxpayers, the latter having the burden to prove strict compliance with the conditions for the grant of the tax refund or credit,” it said. — John Victor D. Ordoñez