Tuesday, July 17, 2018
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Coca-Cola’s petition for tax refund denied

Beverage company seeking P80.4M

MANILA, Philippines—The Court of Tax Appeals has denied the petition of Coca-Cola Bottlers Philippines Inc. for a refund of some P80.4 million in value-added tax that the company claims it overpaid in 2008.

In a petition filed at the CTA in July 2010, Coca-Cola said it had paid such amount due to inadvertent record-keeping.

However, the CTA special second division said in a 13-page decision dated May 15 that Coca-Cola’s claim lacked merit.


The CTA said that based on the testimony of independent certified public accountant Jerome Antonio B. Constantino, a witness whom Coca-Cola itself presented during trial, the amount in question “essentially represents undeclared input taxes for the second quarter of 2008 and not the erroneously paid VAT.”

Businesses that purchase goods and services from VAT-registered suppliers and providers are charged an input tax, which is then offset or closed to an output tax.

Citing Section 112 of the Tax Code, the CTA said that excess input taxes may be claimed for refund when they are attributable to zero-rated sales or upon cancellation of VAT registration when an entity stops doing business.

“(P)etitioner’s claim for refund or tax credit … does not fall under any of the foregoing instances provided by law,” the court said. “Consequently, (Coca-Cola) is not entitled to a refund or issuance of a tax credit certificate” in the amount of P80.4 million.

In a similar decision issued last March, the CTA en banc denied the petition of Avon Products Manufacturing for a refund of P37.9 million in excise tax on its cologne and body spray products.

Avon was contesting a decision of the CTA’s second division, which denied for lack of merit the company’s claim for a refund from the Bureau of Internal Revenue the amount that it “erroneously paid” in 2007.

The CTA en banc said Avon was complaining against a BIR regulation that is concerned with a different type of tax and is thus not applicable to its case.

Avon was questioning excise tax collected on toilet water products while the BIR rule— spelled out in Revenue Regulation No. 8-84— is about percentage tax on cosmetic products.


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TAGS: Coca-Cola Bottlers Philippines, Court of Tax Appeals, tax refund, taxes
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