AVALOQ PHILIPPINES OPERATING HEADQUARTERS v. COMMISSIONER OF INTERNAL REVENUE

1111111111111111111111 11111 11111 1111111111111111111111111 11111 111111111111111111 CTA Form No. 8 21-000363-0065 REPUBLIC OF THE PIDLIPPINES COURT OF TAX APPEALS QUEZON CITY SPECIAL FIRST DIVISION CTA CASE N0.10617 AVALOQ PHILIPPINES OPERATING HEADQUARTERS, Petitioner, -versus- NOTICE OF DECISION COMMISSIONER OF INTERNAL REVENUE, Respondent. To: OFFICE OF THE SOLICITOR GENERAL 134 Amorsolo Street, Legazpi Village Makati City ATTY. AYESHA BANIA B. GUILING-MATANOG ATTY. CLARISSA J . VIRTUDES-BABARAN Bureau of Internal Revenue Room 703, Litigation Division, BIR National Office Building Sen. Miriam P. Defensor-Santiago Avenue Diliman, Quezon City CABRERA & COMPANY 29th Floor, Philam life Tower 8767 Paseo de Roxas, 1226 Makati City GREETINGS: You are hereby notified by these presents that on September 18, 2026, a Decision was rendered in the above-entitled case, copy of which is attached hereto. Quezon City, Philippines, September 22, 2026. Atty. Maria ~ F. Chan-Te Executive Crerf of Court III

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY SPECIAL FIRST DIVISION A VALOQ PHILIPPINES CTA CASE N0 . 1o617 OPERATING HEADQUARTERS, Petitioner, Members: BACORRO-VILLENA, Chairperson, and CUI-DAVID, Jl. -versus- COMMISSIONER OF INTERNAL REVERNuE, d espon en . t PSEPuigst2~2s . 3~ voeM iidJj X - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - _P'!_T- - - - - - - - - - - - - - X DECISION BACORRO-VILLENA, J.: Before the Court is a Petition for Review1 (or judicial claim) filed by petitioner Avaloq Philippines Operating Headquarters (petitioner) _ pursuant to Section 3(a),' Rule 8 in relation to Section 3(a)(1),' Rule 4 o f t 1 Filed on 21 October 2021, Di vision Docket, Vo lume I, pp. I 0-467, with annexes. 2 SEC. 3 . Who may appeal; period to file petition.- (a) A party adversely affected by a decision, ru ling or the inaction of the Comm issioner of Internal Revenue on disputed assessments or claims for refund of internal revenue taxes, or by a decision or ruling of the Commissioner of Customs, the Secretary of Finance, the Secretary of Trade and Industry, the Secreta ry of Agriculture, or a Regional Trial Court in th e exercise of its orig inal jurisdiction may appeal to the Court by petition for review filed within thirty days after receipt of a copy of such decision or ruling, or expiration of the period fi xed by law for the Commissioner of Internal Revenue to act on the disputed assessments. In case of inaction of the Comm issioner of Internal Revenue on claims fo r refund of intern al revenue taxes erroneously or illegally co llected, the taxpayer must file a petition for review within the two-year period prescribed by law from payment or collect ion of the taxes. SEC. 3 . Cases within the jurisdiction ofthe Court in Division. - The Court in Division shall exercise: (a) Exc lusive orig inal over or appellate j urisdiction to review by appeal the fo llowing: ( I ) Decisions of the Comm issioner of Inte rnal Revenue in cases invo lving disputed assessments, refunds of internal revenue taxes, fees or other charges, penalties in re lation thereto, or oth er matters arising under the National Intern al Revenue Code or other laws adm inistered by the Bureau of Internal Revenue[.]

CTA Case No. 10617 Avaloq Philippines Operating Headquarters v. Commissioner of Internal Revenue DECISION x --- - ---------------------------------------- - ----------------------- x the Revised Rules of the Court of Tax Appeals (RRCTA), seeking to appeal respondent Commissioner of Internal Revenue's (respondent's! CIR's) total denial of its administrative claim for refund in the amount of P 4 1 4031906.o9. The amount claimed represents unutilized input Value-Added Tax (VAT) on purchases of services attributable to zero- rated sales for the period from 01 January 2019 to 30 June 2019. PARTIES TO THE CASE Petitioner is a regional operating headquarters of Avaloq Group AG, a company organized and existing under the laws of Switzerland.4 It is registered with the Securities and Exchange Commission (SEC)Sand holds office at the gth and 9th Floors, Robinsons Summit Center, Ayala Avenue, Makati City. 6 Respondent, on the other hand, is the duly appointed CIR, with principal office at the Bureau of Internal Revenue (BIR) Litigation Division, Room 704, BIR Building, Diliman, Quezon City.7 FACTS OF THE CASE For the first and second quarters (Q1 and Q2) of calendar year (CY) 2019, petitioner filed its Amended Quarterly VAT Returns8 and declared a total sales amount, all of which were zero-rated, of P184,742,9S6·99· On n May 2021, petitiOner filed an Application for Tax Credits/Refunds (BIR Form No. 1914)9 (administrative claim), with the BIR's VAT Credit Audit Division (VCAD), seeking a refund ofunutilized input VAT attributable to zero-rate9 sales for Q1 and Q2 of CY 2019 in the total amount of P 4,40J,906.o9·t Exhibit " P-1 ", Divis ion Docket, Volume II, pp. 89 1-905. Exhibit " P-2", id., p. 906. 6 Par. I, THE PARTIES, Petition for Review, supra at note I, p. I 0. Par. I(a), STIPULATION OF FACTS, Joint Stipulation of Facts and Issues (JSFI), Division Docket, Volume II, pp. 547-554. Exhi bits " P-4" and " P-5", id., pp. 908-9 1 I. 9 Exhi bit " P-34", id., p. 1263.

CTA Case No. 10617 Avaloq Philippines Operating Headquarters v. Commissioner of Internal Revenue DECISION x------------------------------------ - ------------------------------- x Respondent, on the other hand, issued a Tax Verification Notice (TVN) with TVN No. 20180014314410 on even date authorizing Revenue Officers (ROs) Marvin K. Villarama and Rochelle May P. Leonor, all from BIR's VCAD, to verify the documents submitted in support of petitioner's claim for VAT refund. Subsequently, on 30 July 2021, respondent issued a VAT Refund Notice,n signed by Assistant Commissioner Maria Luisa I. Belen, denying petitioner's claim for refund on the ground of non-compliance with invoicing requirements, failure to substantiate, and lack of connection between remittances and zero-rated sales. PROCEEDINGS BEFORE THE COURT Dissatisfied with the BIR's decision, on 21 October 2021, petitioner filed the instant Petition for Review12 before the Second Division to appeal respondent's denial of the administrative claim. The same was raffled to the Second Division and docketed as CTA Case No. 10617. On 25 October 2021, the Second Division issued Summons13 ordering respondent to file an Answer within thirty (30) days from service of the same. The CIR received the said Summons on 17 November 2o21.14 After the Second Division granted extension of time/s the CIR filed an Answer16 on 31 January 2022. The CIR then transmitted the BIR Records on 15 March 2022. 17 On the same day, in compliance with the Second Division's directive, 18 respondent filed his or her Pre-Trial Brief/9 while petitioner failed to file the same. 20 As such, during the scheduled Pre-Trial Conference on 27 April 2022," the Second Division dismissed the caset 10 Exhibit " R- 1", BIR Records, p. 128. II Exhibit " R-4", id., pp. 298-299. 12 Supra at note I. 13 Division Docket, Volume I, p. 468 . 14 Id. 15 See Order dated 03 January 2022, id., p. 474. 16 Id., pp. 475-482. 17 See Compliance dated 15 March 2022, id., pp. 492-494. 18 See Notice of Pre-Trial Conference dated 03 March 2022, id., pp. 485-486. 19 ld., pp. 487-490. 20 See Order dated 27 April 2022, id., p. 507. 21 See Minutes of Hearing dated 2 7 April 2022, id., p. 506.

CTA Case No. 10617 Avaloq Philippines Operating Headquarters v. Commissioner of Internal Revenue DECISION X-- - --- --------------- - ------- ---- - --- ----- ------------- -------------X for petitioner's failure to file its pre-trial brief, as well as for failure of petitioner's counsel to appear at the pre-trial. 22 On 10 May 2022, petitioner filed a "Motion for Reconsideration with Motion for Leave of Court to Admit Attached Pre-Trial Brief'2 3 (MR), averring that it received the Notice of Pre-Trial Conference on 10 March 2022 and endorsed the same to Mr. Pacifico Toledo, Jr. (Toledo), one of the liaison officers of the law firm Cabrera & Company, on 14 March 2022. The same, however, was allegedly not properly endorsed to the lawyers in charge and may have been lost, and that upon MR's submission, the copy of the Notice of Pre-Trial Conference has not yet been found. Respondent failed to file a comment on the MR.24 Thereafter, the Second Division, per Resolution dated os August 2022, 2 s in the interest of substantial justice and to afford the parties the opportunity to fully ventilate their cases, granted petitioner's MR. During the new setting for the Pre-Trial Conference on o6 October 2022, the Second Division noted the parties' submission of their respective pre-trial briefs and granted them a 30-day period to submit their Joint Stipulation of Facts and Issues (JSFI) and "Motion to Commission an Independent Certified Public Accountant (ICPA)". 26 On 26 October 2022, the parties submitted their JSFI,2 7 which the Second Division approved on 22 November 2o22. 28 The Second Division then issued the Pre-Trial Order dated 04 January 2023, 2 9 setting trial dates for the presentation of the parties' witnesses. Previously, on 04 November 2022, petitioner submitted its "Compliance (RE: Submission of the Petitioner's Motion for Commissioning of [ICPA] and the Judicial Affidavit of ICPA Mr. Christian Gene A. Rasos [Rasos])"Jo (Motion to Commission ICPA Division.'' t Rasos). Then, on 29 May 2023, the case was transferred to the First 22 See Order dated 27 April 2022, supra at note 20. 23 Division Docket, Volume I, pp. 508-532 . 24 See Records Verification dated 16 June 2022, id., p. 535. 25 ld., Vo lume II , pp. 537-541. 26 See Order dated 06 October 2022, id., pp. 545-546. 27 Id., pp. 547-554 . 28 See Resolution dated 22 November 2022, id., p. 572 . 29 Jd., pp. 574-579 . 30 ld., pp. 555-570, with annexes. 31 Resolution dated 29 May 2023, id., p . 732.

CTA Case No. 10617 Avaloq Philippines Operating Headquarters v. Commissioner of Internal Revenue DECISION x ---- - ------------- - - - - - ----- - ---- - - - ----- - - ----- - - ------ - ----------- x During the hearing conducted on 14 November 2023, the First Division found that Mr. Rasos' Certificate of Accreditation as Tax Practitioner expired and gave him five (5) days before 01 February 2024 to submit the same. This, notwithstanding, and there being no objection from the adverse party with regard to the appointment of Mr. Rasos, the First Division granted the Motion to Commission ICPA Rasos and gave him forty-five (45) days to submit his ICPA ReportY· On the same hearing date, petitioner presented its accountant as the first witness. In her Judicial Affidavit dated 15 October 202133 and Supplemental Judicial Affidavit dated 10 March 2023,34 Mary Lalaine V. Munar (Munar) testified: (1) on petitioner's filing ofVAT returns for CY 2019; (2) of petitioner's services that were rendered to its nonresident foreign affiliates and thus, subject to zero-rated VAT; (3) of the said services being rendered in the Philippines, as evidenced by extracted logs in petitioner's ProTime monitoring software; and (4) that petitioner incurred unutilized input VAT amounting to P4.403,906.o9 (which became the subject of its administrative claim that respondent later on denied).35 On cross-examination, Munar confirmed that it is not her, but petitioner's SAP Team who extracts and generates the logs of the services rendered from ProTime. 36 Upon re-direct examination, Munar clarified that in her Supplemental Judicial Affidavit, she submitted petitioner's Annual Income Tax Return (AITR).37 No re-cross examination followed .38 On 15 December 2023, Mr. Rasos filed a "Request for Replacement as Court-Commissioned [ICPA] for CTA Case No. 10617'',39 stating that due to scheduling restrictions, he cannot obtain an updated Certificate of Accreditation as Tax Practitioner. In light of this, on 22 December 2023, petitioner filed a "Manifestation with an Urgent Motion tot 32 See Order dated 14 November 2023, id., pp. 743-745 . 33 Exhibit " P-40", id., Vo lume I, pp. 119-1 34, sans annexes. 34 Exhibit " P-41 ", id., Vo lume II, pp. 603-609, sans annexes. 35 Id. 36 TSN dated 14 November 2023, pp. 23-24 . 37 !d., p. 2 5. 38 Id. 39 Di vision Docket, Volume II, pp. 747-748 .

CTA Case No. 10617 Avaloq Philippines Operating Headquarters v. Commissioner of Internal Revenue DECISION X--------------------------------------------------------------------X Commission a New [ICPA]", 40 requesting one (1) month to look for a new ICPA, which the First Division granted on 10 January 2024.41 On 15 February 2024, petitioner filed a uCompliance with Motion to Extend the Deadline for the Submission of the Judicial Affidavit of Mr. Enrico T. Pizarro [Pizarro] (RE: Submission of the Petitioner's Motion for Commissioning of [ICPA] and the Judicial Affidavit of [ICPA Pizarro]"42 (Motion to Commission ICPA Pizarro), manifesting that petitioner found a new ICPA, Mr. Pizarro. Then, on 20 February 2024, petitioner filed a uMotion with Leave of Court to Admit the Attached Judicial Affidavit of Mr. [Pizarro]"43 (Motion to Admit Judicial Affidavit of I CPA Pizarro). Thereafter, the First Division, on 05 March 2024, granted both Motions. 44 During the hearing conducted on 14 March 2024, the First Division commissioned Mr. Pizarro as the new ICPA and granted him until15 April 2024 to submit his ICPA Report, 45 which the latter complied with.46 During the hearing conducted on 02 July 2024, pet1t10ner presented ICPA Pizarro, 47 who testified by way of his Judicial Affidavit dated 23 May 202448 regarding the following: (1) the documents he examined in preparation of the ICPA Report; (2) factual circumstances on the filing of the administrative and judicial claims for refund; (3) that petitioner's sales were subject to zero-rated VAT, as the same were rendered to nonresident foreign affiliates, evidenced by the latter's corporate documents and agreements entered into with them; and (4) that petitioner was able to substantiate, through documentary evidence that complied with invoicing requirements, only P2,743,887.96 out of the amount of refund claim ofP4,403,906.og, which ICPA Pizarro recommends for partial refund. After completing the presentation of evidence, petitioner, on 15 July 2024, filed its uCompliance with Submission (Re: Directive made open court last 2 july 2024)", with attached "Formal Offer ofEvidence"49t 40 Id., pp. 749-753 . 41 See Notice of Resolution dated 10 January 2024, id., pp . 754-755. 42 Id., pp. 757-764. 43 ld., pp. 765-790. 44 See Notice of Resolution dated 05 March 2024, id ., p. 786. 45 See Order dated 14 March 2024, id ., pp. 788-790. 46 See !CPA Report, id., pp. 798-830. 47 See Order dated 02 July 2024, id., Volume III, pp. 1392-1393. 48 Exhibit "P-77", id ., Volume II, pp. 840-863. 49 Id., pp. 867-1390, with annexes.

CTA Case No. 10617 Avaloq Philippines Operating Headquarters v. Comm issioner of Internal Revenue DECISION X------- ---------------------------- ------------------------ ---------X (FOE), consisting of Exhibits "P-I" to "P-77", inclusive of sub-markings. Respondent failed to file his or her comment thereto. so Thereafter, in its Resolution dated 09 October 2024,s the First Division admitted all of 1 petitioner's exhibits, except the following: Exhibit Reference Reason for Denial "P-14-I""P, -IS-I""P, -I6-I", Failure to locate marked documents ''P-I7-I ", "P-I8-I", "P-Ig-I, , "P-20-I"' "P-2I-I "' "P-31" up-52", "P -53 ", "P-54, , "P-ss , , Failure of the submitted documents (which do "P-s 6" , "P-57", "P-s 8", "P-sg" not include apostille pages) to correspond with the formal offer (as apostilled documents) "P -72-I , to "P-72-44 ", Failure of the ICPA to specifically identify these "P -73-1" to "P-73-22 ", exhibits in the ICPA Report "P-74-1" to "P-74- 6" , up-75-Iu to up -75-134u, "P-76 -1 " to "P-7 6-s " On 10 October 2024, respondent presented its witness, RO Lovely G. Mallari (Mallari),s2 who testified by way of her Judicial Affidavit dated 15 March 202253 to prove the following: (1) issuance of TVN ;54 (2) petitioner's documents submitted in support of the judicial claim as shown in the Revised Checklist of Mandatory Requirements on Claims for VAT Credit/Refund;ss and (3) issuance of the Memorandum recommending the denial of petitioner's administrative claim56 and the VAT Refund Notice.s7 On cross-examination, RO Mallari confirmed that: (I) the entire docket of the case was transmitted to and reviewed by BIR Legal;S8 (2) she checked all the soft copies of petitioner's documents in support . of the refund, including offsetting arrangements;59 and (3) she foundt 50 See Records Verification dated 02 August 2024, id., Volume III, p. 1396. 51 ld., pp. 1403- 1404 . 52 See Order dated I 0 October 2024 , id., pp. 1405- 1406. 53 Exhibit " R-6", id., Volume I, pp. 501 -505. 54 Supra at note I 0 . 55 Exhibit "R-2", BIR Records, p. 127. 56 Exhibit "R-3", id., pp. 283-285 . 57 Supra at note II . 58 TSN dated I 0 October 2024, pp. 9- 10. 59 !d., pp. 10-11.

CTA Case No. 10617 Avaloq Philippines Operating Headquarters v. Commissioner of Internal Revenue DECISION x ----- - ---------------------------------------- - -------------------- -x that there were no soft copies of the billing statements as part of the mandatory requirements.60 No re-direct examination was conducted. 61 Meanwhile, in response to the First Division's questions, RO Mallari stated that she only checks the soft copies of the supporting documents because the original documents remain with the VCAD.62 On 15 October 2024, respondent filed its "[FOE]" 63 consisting of Exhibits "R-1" to "R-s". Thereafter, petitioner filed a "Comment (On the Respondent's [FOE])". 64 In its Resolution dated 28 January 2025,6s the First Division admitted all of respondent's exhibits and gave the parties 30 days from notice to file their respective memoranda. Having failed to do so, 66 the First Division submitted the case for decision. 67 This notwithstanding, on 09 May 2025, petitioner filed a "Motion with Leave of Court to Admit Attached Memorandum (Re: Notice dated 8 April2025"68 (Motion to Admit Memorandum), alleging that similar to the incident regarding petitioner's Pre-Trial Brief, Mr. Toledo did not endorse a copy of the Resolution dated 28 January 2025,6 9 resulting in petitioner's failure to file the same. After respondent failed to file a comment thereto,7° the First Division granted petitioner's Motion to Admit Memorandum and submitted the case anew for decision. 71 ISSUE As the parties so stipulated, the sole Issue for this Court's resolution is - WHETHER PETITIONER AVALOQ PHILIPPINES OPERATING HEADQUARTERS IS ENTITLED TO THE REFUND OF P4,403,go6.og REPRESENTING UNUTILIZED INPUT VALUE-ADDED TAX (VAT) ATTRIBUTABLE TO ITS ZERO-RATED SALES FOR THE FIRST AND SECOND QUARTERS OF CALENDAR YEAR 2019. t 60 !d., p. 13. 61 !d. 62 !d., p. 15. 63 Divis ion Docket, Vo lume III, pp. 1408-1 4 11. 64 !d., pp. 141 5-1 4 18. 65 !d., pp. 1423-1 424. 66 See Records Verification dated 13 March 2025, id., p. 1425 . 67 See Notice of Resolut ion dated 08 April 2025 , id., p. 1426. 68 !d., pp. 1430-1436 . 69 Supra at note 65. 70 See Records Verification dated 21 July 2025, Division Docket, Vo lume III, p. 149 1. 71 See Reso lution dated 2 1 November 2025, id., pp. 1496-1499.

CTA Case No. 10617 Avaloq Philippines Operating Headquarters v. Commissioner of Internal Revenue DECISION x------------- ------- ------ ------- -------- ------------ --------- ------x ARGUMENTS In the instant Petition for Review and Memorandum, petitioner argues that it is entitled to VAT refund because: (1) the administrative and judicial claims were filed within the reglementary periods; (2) petitioner is a VAT-registered entity engaged in zero-rated sales transactions; (3) said sales have been paid for in acceptable foreign currency via intercompany offsetting arrangements and the proceeds have been accounted for in accordance with Bangko Sentral ng Pilipinas (BSP) rules; and (4) input taxes duly paid for are not transitional and have not been offset against output VAT. Conversely, in his or her Answer, respondent counters that the verification of the documents submitted at the administrative level reveals petitioner's failure to substantiate its claim for VAT refund. RULING OF THE COURT Before going into the merits of the case, We shall first determine whether this Court has jurisdiction over the case. PETITIONER TIMELY FILED THE REFUND CLAIMS, AND THUS, THIS COURT ACQUIRED JURISDICTION OVER THE INSTANT CASE Petitioner anchors its claim on Sections no(B)7 and n2(A) and (C) 2 of the National Internal Revenue Code (NIRC) of 1997, as amended by Republic Act (RA) No. 10963 or Tax Reform for Acceleration and Inclusion (TRAIN) , which are quoted hereunder: SEC. no. Tax Credits . - (B) Excess Output or Input Tax. - If at the end of any taxable quarter the output tax exceeds the input tax, the excess shall be paid by the VAT-registered person. If the input tax exceeds the output tax, the ~ excess shall be carried over to the succeeding quarter or quarters: U 72 As am ended by Republic Act No. 936 1, "AN ACT AMENDfNG SECTION II O(B) OF THE NATIONAL fNTERNAL REVENUE CODE OF 1997, AS AMENDED, AND FOR OTHER PURPOSES".

CTA Case No. 10617 Avaloq Philippines Operating Headquarters v. Commissioner of Internal Revenue DECISION x-------- - ---------- - - ----- - - --------------- -- -------------- - - - -- -- --x Provided, however, That any input tax attributable to zero-rated sales by a VAT-registered person may at his option be refunded or credited against other internal revenue taxes, subject to the provisions of Section 112. SEC. n2. Refunds or Tax Credits of Input Tax. - (A) Zero-Rated or Effectively Zero-Rated Sales. - Any VAT-registered person, whose sales are zero-rated or effectively zero-rated may, within two (2) years after the close of the taxable quarter when the sales were made, apply for the issuance of a tax credit certificate or refund of creditable input tax due or paid attributable to such sales, except transitional input tax, to the extent that such input tax has not been applied against output tax: Provided, however, That in the case of zero-rated sales under Section w6(A)(2)(a)(1), (2) and (b) and Section w8(B)(1) and (2), the acceptable foreign currency exchange proceeds thereof had been duly accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP) : Provided, furthe r, That where the taxpayer is engaged in zero-rated or effectively zero- rated sale and also in taxable or exempt sale of goods or properties or services, and the amount of creditable input tax due or paid cannot be directly and entirely attributed to any one of the transactions, it shall be allocated proportionately on the basis of the volume of sales: Provided, finally, That for a person making sales that are zero-rated under Section w8(B)(6), the input taxes shall be allocated ratably between his zero-rated and non-zero-rated sales. (C) Period within which Refund of Input Taxes shall be Made. - In proper cases, the Commissioner shall grant a refund for creditable input taxes within ninety (90) days from the date of submission of the official receipts o r invoices and othe r d ocuments in support of the application filed in accordance with Subsections (A) and (B) hereof: Provided, That should the Commissioner find that the grant of refund is not proper, the Commissioner must state in writing the legal and factual basis for the denial. In case of full or partial denial of the claim for tax refund, the taxpayer affected may, within thirty (3o) days from the receipt of the decision denying the claim, appeal the decision with the Court of Tax Appeals: Provided, however, That failure on the part of any official, agent, or employee of the BIR to act on the application within the ~ode.'' tf ninety (9_0) -day period shall be punishable under Section 269 of this 73 Italics in the original text.

CTA Case No. 10617 Avaloq Philippines Operating Headquarters v. Commissioner of Internal Revenue DECISION x --- - - - - - --- - ----------- - - - ----------------- - -------- - -- - - - - - - - - - - - - -x Pursuant thereto, the administrative claim for refund of unutilized input VAT must be filed with the BIR within two (2) years after the close of the taxable quarter when the zero-rated or effectively zero-rated sales are made. Petitioner's present claim covers Q 1 and Q2 of CY 2019 . Counting two (2) years from the respective close of the said quarters, the last day for the filing of the administrative claim for the said two (2) quarters, vis-a-vis the petitioner's actual date of filing of the administrative claim, pursuant to Section n2(A) of the NIRC of 1997, as amended, are shown below: Last day for filing Quarter Close of taxable Date of filing of an administrative (CY 2019) quarter claim for refund claim 1st Quarter 31 March 2019 31 March 2021 n May 202174 2nd Quarter 30 June 2019 30 June 2021 As can be gleaned from the foregoing table, petitioner had until 31 March 2021 and 30 June 2021 within which to file the administrative claims for refund for Q1 and Q2 of CY 2019, respectively. Considering that petitioner filed its administrative claim on n May 2021, it would appear that only the administrative claim for Q2 is seasonably filed, whereas the administrative claim for Q1 is time-barred. Notably, however, on 18 March 2021, the BIR issued Revenue Memorandum Circular (RMC) No. 39-2021,75 which extended the period to file administrative claims falling due on 31 March 2021 to 12 Apri12o21: For the information and guidance of all internal revenue officers, employees and others concerned and following the temporary closure ofVCAD until March 28, 2021, in compliance with the existing health protocols for the mitigation of the COVID-19 pandemic, the filing ofVAT Refund, where the two (2)-year period within which Apriltz, zozt.t to file the claim falls on March 31, 2021, shall be extended until 74 Su pra at note 9. 75 EXTENSION OF THE DEADLINE FOR THE FILING OF APPLICATIONS AND SUSPENSION OF THE NINETY (90)-DA Y PROCESSING OF VALUE-ADDED TAX (VAT) REFUND CLAIMS PURSUANT TO SECTION 11 2 OF THE TAX CODE OF 1997, AS AMENDED BY THE R.A. NO. 10963 (TRAIN LAW) WITH THE VAT CREDIT AUDIT DIVISION (VCAD).

CTA Case No. 10617 Avaloq Philippines Operating Headquarters v. Commissioner of Internal Revenue DECISION x - - ------------ - - - ------ - - - ---- - - - -- - - - ---------- - - --- --- --- - -- - - - - -- x Moreover, the 9o-day period of processing of all VAT refund claims pending with VCAD during the temporary closure is also suspended pursuant to Section 5(3) of Revenue Regulations No. 2 7-2020.76 Thereafter, on os April 2021, the BIR issued RMC No. 45-2021, 77 which further extended the period to file administrative claims falling due on 12 April2021 (per RMC No. 39-2021) to 30 days from the lifting of the Enhanced Community Quarantine, which ran untiln April 2021.78 Accordingly, petitioner had 30 days therefrom, or untiln May 2021, to file its administrative claim for refund. Considering that petitioner filed its administrative claim on the same date, it shall be considered as timely filed, even for Q1 2019. As to the timeliness of the judicial claim, petitioner received the VAT Refund Notice totally denying its administrative claim on 14 September 2021.79 Thus, petitioner had 30 days therefrom or until 14 October 2021, within which to file a judicial claim before this Court. However, during this time, the Supreme Court suspended the time for filing and service of pleadings and motions, So and lifted the same only on 20 October 2021. 8• Pursuant to Supreme Court Administrative Circular No. 72-2021, 82 the period for filing and service shall resume seven (7) calendar days from the lifting of the suspension, or by 27 October 2021. Accordingly, the instant Petition for Review was timely filed on 21 October 2021 and thus, this Court properly acquired jurisdiction over the case. Notably, in Commissioner of Internal Revenue v. Deutsche Knowledge Services Pte. Ltd. 8' (Deutsche) , the Supreme Court laid down t 76 Emphasis supplied. 77 Extension of the Deadline for the Filing of Position Papers, Replies, Protests, Documents and Other Similar Letters and Correspondences in Relation to Ongoing BIR Audit In vestigations, an d Filing of VAT Refund with VAT Credit Audit Division (VCAD). 78 Per lA TF-EID Reso lution No. I 08-A, 04 April 202 1. By 12 April 202 1, the National Cap ital Region, among others, was already placed under Modified Enhanced Community Quarantine. (See IA TF- EID Reso lution No. I 09-A, I 0 April 202 1, and IATF-EID Reso lution No. 11 3-A, 29 April 202 1.) 79 See Petition for Review, supra at note I ; Petitioner's Memorandum, supra at note 68; and Judicial Affidavit of Mary Lalaine V. Munar, supra at note 33. 80 See Supreme Court Administrative Circular No. 75-202 I. 81 See Supreme Court Administrative Circular No. 83-202 1. 82 RE: COURT OPERATIONS BEGINNING 16 SEPTEMBER 202 1. 83 G. R. No. 234445, 15 July 2020; Citations omitted and emphasis supplied.

CTA Case No. 10617 Avaloq Philippines Operating Headquarters v. Commissioner of Internal Revenue DECISION X--------- ------------- ----- ----------- ---- ------- --- ----- -----------X the requisites for the entitlement to tax refund or credit of excess input VAT attributable to zero-rated sales, to wit: Under Section 4.112-1(a) of Revenue Regulations No. (RR) 16-os, otherwise known as the Consolidated VAT Regulations of 2005, in relation to Section 112 of the Tax Code, a claimant's entitlement to a tax refund or credit of excess input VAT attributable to zero-rated sales hinges upon the following requisites: "(t) the taxpayer must be VAT- registered; (2) the taxpayer must be engaged in sales which are zero-rated or effectively zero-rated; (3) the claim must be filed within two years after the close of the taxable quarter when such sales were made; and (4) the creditable input tax due or paid must be attributable to such sales, except the transitional input tax, to the extent that such input tax has not been applied against the output tax." Thus, the above disquisition regarding the timeliness of filing of the administrative and judicial claims sufficiently shows that petitioner satisfied the third (3rd) requisite for entitlement to VAT refund, i.e., that the claim must be filed within two (2) years after the close of the taxable quarter when such sales were made. As to the first (t8 t) requisite, i.e., that the taxpayer must be VAT -registered, it is undeniable that petitioner is, as supported by its BIR Certificate of Registration No. OCN 9RCoooo461791,84 which bears its Taxpayer's Identification Number (TIN) ooB-637-771-ooo. Thus, petitioner met the 1st requisite. As to the second (2nd) and fourth (4th) requisites, a careful and thorough evaluation of the parties' respective evidence and the applicable laws, rules, and regulations reveal that petitioner failed to comply with both requisites. SECOND (2N°) REQUISITE: PETITIONER MUST BE ENGAGED IN SALES WHICH ARE ZERO-~D OR EFFECTIVELY ZERO-RATED D 84 Exhibit "P-3", Division Docket, Volume II, p. 907.

CTA Case No. 10617 Avaloq Philippines Operating Headquarters v. Commissioner of Internal Revenue DECISION x - --- -------- - ---- - --- - ------- - - - -- - --- - -------------- - -- - --- - -- - ---- x Petitioner's claim for VAT refund relates to zero-rated sales of services to its nonresident foreign affiliates. In relation thereto, Section 1o8(B)(2) of the NIRC of 1997, as amended, provides that: SEC. 108. Valu e-added Tax on Sale ofServices and Use or Lease of Properties. - (B) Transactions Subject to Zero Percent (o%) Rate. - The following services performed in the Philippines by VAT-registered persons shall be subject to zero percent (o%) rate: (2) Services other than those mentioned in the preceding paragraph rendered to a person engaged in business conducted outside the Philippines or to a nonresident person not engaged in business who is outside the Philippines when the services are performed, the consideration for which is paid for in acceptable foreign currency and accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP)[.]8 5 Based on the foregoing, for a sale or supply of services to qualify as zero-rated, the following essential elements must be present: 1. The recipient of the services is a foreign corporation, and the said corporation is doing business outside the Philippines, or is a nonresident person not engaged in business who is outside the Philippines when the services are performed;86 2. The services fall under any of the categories under Section 1o8(B)(2),87 or simply, the services rendered should be other than "processing, manufacturing or repacking goods";88 t 85 Emphasis suppl ied and italics in the orig inal text. 86 Site! Philippines Corporation (Formerly Clientlogic ?hils., Inc.) v. Commissioner of Internal Revenue, G.R. No. 201 326, 08 February 20 17; Accenture, Inc. v. Commissioner ofInternal Revenue, G .R. No. 190102, II July 201 2; Commissioner of Internal Revenue v. Burmeister and Wain Scandinavian Contractor Mindanao, Inc. , G.R. No. 153205 , 22 January 2007. 87 See Commissioner ofInternal Revenue v. American Express International, Inc. (Philippine Branch), G.R. No. 152609, 29 June 2005. 88 Commissioner of Internal Revenue v. Burmeister and Wain Scandinavian Contractor Mindanao, Inc. , supra at note 86.

CTA Case No. 10617 Avaloq Philippines Operating Headquarters v. Commissioner of Internal Revenue DECISION x-- -- ----------------------------------------------------------------x 3· The service must be performed in the Philippines by a VAT- registered person;89 and 4· The consideration for the services was paid for in acceptable foreign currency and accounted for in accordance with the rules and regulations of the BSP. 9o RECIPIENTS OF SERVICES MUST BE NONRESIDENT FOREIGN CORPORATIONS (NRFCs) In Deutsche, 9 the Supreme Court ruled that to be considered as 1 an NRFC doing business outside the Philippines, both the SEC-issued "Certification of Non-Registration of Company" and the proof of incorporation or registration in a foreign country (i.e. , "Authenticated Articles of Association and/or Certificates of Registration/Good Standing/Incorporation"), must be presented, to wit: For purposes of zero-rating under Section 108(B)(2) of the Tax Code, the claimant must establish the two components of a client's NRFC status, viz.: (1) that their client was established under the laws of a country not the Philippines or, simply, is not a domestic corporation; and (2) that it is not engaged in trade or business in the Philippines. To be sure, there must be sufficient proof of both of these components: showing not only that the clients are foreign corporations, but also are not doing business in the Philippines. Such proof must be especially required from ROHQs such as OKS. That the law expressly authorizes ROHQs to render services to local and foreign affiliates alike only stresses the ROHQ's burden to distinguish among their clients' nationalities and actual places of business operations and establish that they are seeking refund or credit of input VAT only to the extent of their sales of services to foreign clients doing business outside the Philippines. To recall, the CTA found that the SEC Certification of Non- Registration of Company and Authenticated Articles of Association and/or Certificates of Registration/Good Standing/Incorporation sufficiently established the NRFC status of n of DKS's affiliates clients. The Court upholds these findings. t 89 !d.; Commissioner of Internal Revenue v. American Express International, Inc. (Philippine Branch) , supra at note 87. 90 Id. 91 Supra at note 83; Citations omitted, e mphasis supplied and italics in the original text.

CTA Case No. 10617 Avaloq Philippines Operating Headquarters v. Commissioner of Internal Revenue DECISION x--------------------------------------------------------------------x The Court accords the CTA's factual findings with utmost respect, if not finality, because the Court recognizes that it has necessarily developed an expertise on tax matters. Significantly, both the CTA Division and CTA En Bane gave credence to the aforementioned documents as sufficient proof of NRFC status. The Court shall not disturb its findings without any showing of grave abuse of discretion considering that the members of the tax court are in the best position to analyze the documents presented by the parties. In any case, after a judicious review of the records, the Court still do not find any reason to deviate from the court a quo's findings. To the Court's mind, the SEC Certifications of Non-Registration show that their affiliates are foreign corporations. On the other hand, the articles of association/ certificates of incorporation stating that these affiliates are registered to operate in their respective home countries, outside the Philippines are prima facie evidence that their clients are not engaged in trade or business in the Philippines. Proof of the above-mentioned second component sets the present case apart from Accenture, Inc. v. Commissioner of Internal Revenue and Site! Philippines Corp. v. Commissioner of Internal Revenue. 'In these cases, the claimants similarly presented SEC Certifications and client service agreements. However, the Court consistently ruled that documents of this nature only establish the first component (i.e., that the affiliate is foreign). The absence of any other competent evidence (e.g., articles of association/certificates of incorporation) proving the second component (i.e., that the affiliate is not doing business here in the Philippines) shall be fatal to a claim for credit or refund of excess input VAT attributable to zero-rated sales. In the case at bar, petitioner adequately proved the NRFC status of the following clients for whom services were rendered for Q1 and Q2 ofCY 2019: Proof of Foreign SEC Certification of Non- Company Name Incorporation/ Registration of Company Registration Avaloq Australia Pty Ltd "P -14-1"92 I "P - 52-1"93 "P-14"94 92 Exhibit "R-5", BIR Records, p. 189. Although Exhibits " P-14-1", "P-15- 1", " P-16-1", "P-17-1", "P-18-1 ", "P-19-1 ", "P-20- 1", " P-2 1- 1" were denied admission for fai lure to locate the marked documents per Resolution dated 09 October 2024 (Division Docket, Volume III, pp. 1403-1404), the same are actually found in the BIR Records. 93 Exhibit " P-44- 1",USB. 94 Division Docket, Volume II, pp. 938-985.

CTA Case No. 10617 Avaloq Philippines Operating Headquarters v. Commissioner of Internal Revenue DECISION x------- ----- ---------------------------------- --------- -------------x Proof of Foreign SEC Certification of Non- Company Name Incorporation/ Registration of Company Registration Avaloq Asia Pacific Pte. Ltd. "P-15-1 "95 I "P-53-1"96 "P-15"97 Avaloq Licence AG "P-1 6-1 "98 I "P-54-1 "99 "P-16"too Avaloq Sourcing Asia Pacific (Singapore) Pte. Ltd. "P-17-1 "JOt I "P-55-1 "102 "P-q "to3 Avaloq Sourcing (Switzerland & "P-18 -1 "104 I "P-56 -1"105 "P-18"106 Liechtenstein) SA Avaloq Sourcing (Europe) "P-1 9-1"107 / "P-57-1"w8 "P-19 "to9 AG Avaloq UK Limited "P-20-1 "no / "P-5 8 -1 "Ill "P-2o"112 Avaloq Evolution AG "P-21-1 "113 I "P-59-1"114 "P-21"n5 SERVICES RENDERED SHOULD BE OTHER THAN PROCESSING, MANUFACTURING, OR REPACKING GOODS In the instant case, petitioner presented the "General Framework Services Agreement",116 which governs the provision of services between "services" therein are the following: t affiliates under the Avaloq Group. Included under the definition of 95 Exhibit " R-5", BIR Records, p. 187. 96 Exhibit "P-44-1 ", USB. 97 Division Docket, Volume II, pp. 986-1022. 98 Exhibit "R-5", BIR Records, p. 191. 99 Exhibit "P-44-1 " , USB. 100 Division Docket, Volume II, pp. I 023-1052. 101 Exhibit " R-5 ", BIR Records, p. 190. 102 Exhibit " P-44-1 ", USB. 103 Division Docket, Volume II, pp. I 053-1090 . 104 Exhibit "R-5", BIR Records, p. 193 . 105 Exhib it " P-44-1 ", USB. 106 Division Docket, Volume II, pp. 1091-1109 . 107 Exh ibit " R-5 ", BIR Records, p. 192. 108 Exhibit "P-44-1 ",USB. 109 Division Docket, Volume II, pp. II 10-1119. 110 Exhibit "R-5", BIR Records, p. 194. Ill Exhibit " P-44-1 " ,USB. 112 Division Docket, Volume II, pp. 1120-1151. 113 Exhibit " R-5" , BIR Records, p. 188. 114 Exhibit " P-44-1 ", USB. 115 Division Docket, Volume II, pp. 1152-1181. 116 Exhibit " P-22", id., pp. 1182- 1203.

CTA Case No. 10617 Avaloq Philippines Operating Headquarters v. Comm issioner of Internal Revenue DECISION x-- - - ---------- - ---------- - ---- - ---------- - - --- -- - - - - - ---- - - -- -- - ---- x • Preparation of analyses; • Making of status quo analyses; • Consulting; • Preparation of concepts; • Documentation; • Promotion of products and services; • Sub-project management; • Training and support in training services; • Support in implementation services; • Support in parametrization services; • Support in maintenance services; • Support with and coordination of Global Processing Network projects; • Coordination; • Audits; and • Support in acceptance. Meanwhile, Exhibit 1 attached to the "Contract Software Research & Development [R&D] Agreement"u7 executed between petitioner and Avaloq Licence AG provides that petitioner shall render R&D services consisting of the following: • Software Development; • Software Architecture and Concepts; • Testing; • Business Analysis; • Functionality Deployment; • Product customization and parametrization; • Integration of third party software; and • Cooperation with third parties in specific research projects. Clearly, the foregoing services rendered by petitioner to its nonresident foreign affiliates are other than processing, manufacturing, or repacking goods. SERVI CES WERE PERFORMED BY A VALUE-ADDED TAX (VAT)-REGISTERED PERSON IN THE PH ILIPP INES t 117 Exhibit "P-23", id., pp. 1205-1239.

CTA Case No. 10617 Avaloq Philippines Operating Headquarters v. Comm issioner of Internal Revenue DECISION x-- -------- - -- --- ------ --- --- - - - -- - ---------------- - - - - - ------ -- ----- x As already discussed under the 1st requisite for VAT zero-rating under Section 1o8(B)(2) of the NIRC of1997, as amended, petitioner is a VAT-registered person. With regard to performance of services in the Philippines, It Is worth noting that both the General Framework Services Agreement118 and the Contract Software [R&D] Agreemene 9 lack any indication that 1 the services are to be performed within the Philippines. The ICPA also made a similar finding in his Judicial Affidavit.120 This notwithstanding, petitioner's witness Munar stated in her Supplemental Judicial Affidavit12 1 that petitioner, as a software company, provides services such as software maintenance, support, and bug-fixing through phone calls, emails, online meetings, and other electronic means. This is evidenced by ProTime logs for the period of January to June 2019.122 Said extracted logs include the location of the service, the nonresident affiliate to whom the service was rendered, the month when the service was rendered, and the corresponding time charges. As the records bear, the Pro-Time logs clearly indicate that petitioner rendered the services within the Philippines. PETITIONER FAILED TO PROVE THAT THE CONSIDERATION WAS PAID FOR IN ACCEPTABLE FOREIGN CURRENCY VIA OFFSETTING ARRANGEMENTS According to p e titio ner, its revenues for Q1 and Q2 2019 were all derived from services rendered to its nonresident foreign affiliates, which were paid via an intercompany offsetting agreement. The BIR has recognized offsetting arrangements as an alternative to actual inward remittance of foreign currency proceeds in export sales. In RMC No. 42-2003,12 3 the submission of proof of inward remittances of foreign currency payments for export sales is relaxed when there are t 118 Supra at note I 16. 11 9 Supra at note 117. 120 Supra at note 48 . 121 Supra at note 34. 122 Exhibits "P-36" and " P-37", Division Docket, Volume II, pp. 1270-1332. 123 Clarifying Certain Issues Raised Relative to the Processing of Claims for Value-Added Tax (VAT) Credit/Refund, Including Those Filed w ith the Tax and Revenue Group, One-Stop Shop Inter- Agency Tax Credit and Duty Drawback Center, Department of Finance (OSS) by Direct Exporters.

CTA Case No. 10617 Avaloq Philippines Operating Headquarters v. Commissioner of Internal Revenue DECISION x ----- - ------ -- --- - ---------------------- - ----- - --- -- -- - ------------- x offsetting arrangements, as these do not entail inward remittances. In its place, the RMC enumerates acceptable pieces of documentary evidence to fulfill the legal and jurisprudential requirement of "payment in acceptable foreign currency in accordance with BSP rules." Specifically, the taxpayer-claimant must present the following: a. Import documents which created liability accounts in favor of the foreign parent or affiliated company; b. Other contracts with the foreign or affiliated company that brought about the liabilities which were offset against receivables from export sales; c. Evidence of proceeds ofloans, in case the claimant has received loans or advances from the foreign company; d. Documents or correspondence regarding offsetting arrangements;12 4 e. Confirmation of the offsetting arrangements by the heads of the business organizations involved; f. Documents to prove actual export of goods; g. Documents to prove that the sales are zero-rated sales. In the case at bar, based on the testimony of witness Munar,12s the offsetting arrangement occurs as follows : 31. Q: Ms. Munar, do you know how Petitioner bills its foreign affiliates for the services rendered? A: Yes. The 'General Framework Services Agreement' that shows the guidelines for the provision of services between the affiliates of Avaloq Group AG, and the 'Short Term Credit Facility Agreement' would explain how Avaloq PH bills its foreign affiliates. The invoices billed by Petitioner are collected/offset against the loan payable to Avaloq Group AG. Based _ on the General Framework Services Agreement, the t 124 Italics supplied. 125 Supra at note 33.

CTA Case No. 10617 Avaloq Philippines Operating Headquarters v. Commissioner of Internal Revenue DECISION x------------------------------------------------------ - -- ---- ------- x offsetting process of the receivables and payables of the Petitioner are as follows : a. Avaloq PH maintains a 'centralized' current account, in which the funding of Avaloq Group AG is being remitted pursuant to a Short-Term Credit Facility Agreement; b. For the collection of intercompany invoices billed by Avaloq PH to its affiliates, these are collected/offset through this account. To illustrate, whenever we obtain a 'loan' from our head office - Avaloq Group AG, which is basically the funding we receive monthly, the funding/cash remitted is credited to Avaloq Group AG current account. The amount receivable from the invoices billed for the services rendered to the affiliates of Avaloq PH will be debited or offset against this same account. 34· Q: Ms. Munar, how did Petitioner collect/ offset the intercompany services billed agai~st the loan payable to Avaloq Group AG pursuant to the Short-Term Credit Facility? A: Under the Short-Term Credit Facility, Petitioner is entitled to request for [a] loan in the form of advance and/or overdraft from Avaloq Group AG. The loan amount, which varies depending on the financial necessity of the Petitioner to support its operations, are remitted by Avaloq Group AG in foreign currency denominated. The remitted amount forms part of the loan payable of Petitioner which are then offset against the intercompany invoices billed to the foreign affiliates of Avaloq PH. 126 Essentially, as petitiOner alleged, it receives foreign currency funding from its parent company, Avaloq Group AG, which is recorded and treated in petitioner's books as a loan payable to Avaloq Group AG. Thereafter, petitioner's receivables from nonresident foreign affiliates are then supposedly offset against the should-be loan payments to Avaloq arrangement. t Group AG, th~reby sufficing the requirement for a valid offsetting 126 Emphasis supplied.

CTA Case No. 10617 Avaloq Philippines Operating Headquarters v. Comm issioner of Internal Revenue DECISION X- -- ------------- - - - ---- - ------ - ----------------- - - - -------- -- ------- X We are unconvinced. Indeed, the General Framework Services Agreement12 7 did provide that the contracting parties, which include Avaloq Group AG and Avaloq affiliates, may agree on alternative methods for payment of service fees, "including by way of centralized clearing/netting system or group current accounts." To prove this offsetting agreement, petitioner presented its "Short-Term Credit Facility Agreement",128 Section 12 of which provides for offsetting as follows : 12. Set-Off Balances Both parties authorize each other to set-off any credit balance in any currency to which it is entitled on any account in satisfaction of any sum due and payable under this Agreement but unpaid. For this purpose, both parties are authorized to purchase with the monies standing to the credit of any such account such other currencies as may be necessary to effect such application. While the Short-Term Credit Facility Agreement did validate petitio ner's claim of having foreign currency loans with Avaloq Group AG as creditor, and expressly allowed the offsetting between them, nothing in the documents indicates that petitioner's loans payable to Avaloq Group AG may be offset against petitioner's receivables from sales of services rendered to nonresident foreign affiliates. This is the critical flaw in petitioner's purported offsetting agreement. First, the Short-Term Credit Facility Agreement is an undertaking between Avaloq Group AG, as the creditor, and each affiliate, as borrower. Under the principle of relativity of contracts, "[c]ontracts take effect only between the parties, their assigns and heirs, except in case where the rights and obligations arising from the contract are not . transmissible by their nature, or by stipulation or by provision oft 127 Supra at note I 16. 128 Exhibit " P-24", Division Docket, Vo lume II, pp. 1240-1256.

CTA Case No. 10617 Avaloq Philippines Operating Headquarters v. Commissioner of Internal Revenue DECISION X--------------------------------- - ---------------------------------- X law.... [I]t is a general principle oflaw that a contract can only bind the parties who had entered into it or their successors or heirs who have assumed their personality or juridical possession[.]"129 Consequently, the Short-Term Credit Facility Agreement, particularly its provision regarding offsetting, only contemplates set-offs in loan transactions between the lender-parent company, Avaloq Group AG, and its borrower-affiliates, in this case, petitioner; but not in transactions between one Avaloq affiliate and another. Second, Avaloq Group AG is a distinct legal entity from its affiliates. Accordingly, while the right to offset has been proven to exist between petitioner and Avaloq Group AG, on the basis of the Short- Term Credit Facility Agreement, the same right has not been similarly established between petitioner and its nonresident foreign affiliates. An offsetting arrangement between petitioner and Avaloq Group AG cannot be presumed to subsume transactions between one affiliate and another without any indication in the Short-Term Credit Facility Agreement to that effect. Considering that the subject of the instant claim for refund is petitioner's zero-rated sales of services to its nonresident foreign affiliates, that is, other foreign affiliates under the Avaloq Group, and not Avaloq Group AG itself, the offsetting arrangements that petitioner must prove before this Court should pertain to said nonresident foreign affiliates, and not to Avaloq Group AG. As the records bear, however, petitioner failed to submit, much less prove, that separate offsetting arrangements exist between it and other affiliates under the Avaloq Group. To reiterate, RMC No. 42-2003 provides that, in the case of offsetting arrangements, documents or correspondence regarding the same must be presented in lieu of proof of actual inward remittance of foreign currency proceeds in export sales in order to fulfill the requirement that payments be made in acceptable foreign currency and accounted for in accordance with BSP rules. It goes without saying that such offsetting arrangements must pertain to the taxpayer-claimant, i.e. , petitioner in this case, and the recipients of the services rendered, i.e., t 129 Heirs of Corazon Villeza, et a!. v. Elizabeth S. Aliangan, eta!., G. R. Nos. 244667-69 (Form erly UDK 16373-75), 02 December 2020.

CTA Case No. 10617 Avaloq Philippines Operating Headquarters v. Comm issioner of Internal Revenue DECISION X---------------------------------------- - --------------- - -- - --------X other foreign affiliates under the Avaloq Group. Without such proof, petitioner cannot be said to have met the requirements for VAT zero- rating of its sales of services to said nonresident foreign affiliates. Even assuming that the Short-Term Credit Facility Agreement adduced by petitioner is sufficient to prove that a valid offsetting arrangement existed between petitioner and its nonresident foreign affiliates, petitioner must still establish the actual details of the offsetting transaction that occurred. In line with this, petitioner submitted an Avaloq Group AG 11 Current Account (Short-term Credit Facility) Offsetting Schedule 2019" 3° (Offsetting Schedule ), the pertinent details of which are 1 excerpted below: OR Balance Credit Exhib it Date Particulars Debit (US$) (USs) Deb it+/Credit- No . 31.12.2018 Sal do-Vortrag 1,381,605-42 1,381,605-42 , "P-6o-7 01.01.2019 PAYM 243oooo126 ASEU 80,901.35 1,462,506.77 , "P-6o-2 01.01.2019 PAYM 2430000121 66,079·30 1,528,586.o 7 , "P-60-1 01.01.2019 PAYM 243oooon9 ASAP 75.427·17 1,604,013.24 "P-6o-3" 01.01.201() PAYM 243oooo122 ASSL 98,942.06 1,702,C)C)C).30 , "P-6o-4 01.01.2019 PAYM 2430000123 EVO 84·94 1,703,040.24 , "P-6o-5 01.01.2019 PAYM 2430000124 AU 20,269·71 1,723,309·95 "P-6o-6" 01.01.2019 PAYM 2430000125 ASAP 19.304·38 1,742,614·33 "P-6o-8" 01.01.2019 PAYM 243oooo128 EVO 159·77 1,742,774 ·10 PAYM 2430000129 01.01.2019 LICENCE 978,348.00 2,721,122.10 GROUP ACCOUNT 09.01.2019 FUND TRANSFER 400,000.00 2,321,122.10 GROUP ACCOUNT 24.01.2019 FUND TRANSFER 400,000.00 1,921,122.10 01.02.2019 PAYM 2430000131 7.456.26 1,9 28,578. 36 01.02.2019 PAYM 243oooo13o 32_0,801.05 1,537.777·31 GROUP ACCOUNT 22.02.2019 FUND TRANSFER soo,ooo.oo 1,037.777·31 GROUP ACCOUNT 08.03.2019 FUND TRANSFER 300,000.00 737.777·31 GROUP ACCOUNT 15.03.2019 FUND TRANSFER _5_00,000.00 237.777·31 130 Exhibit " P-32", Division Docket, Vo lume II, p. 1262.

CTA Case No. 10617 Avaloq Philippines Operating Headquarters v. Commissioner of Internal Revenue DECISION x--------------------------------------------------------------------x OR Balance Credit Exhibit Date Particulars Debit (USs) (USs) Debit+/Credit- No. 31.03.2019 PAYM 2430000132 EXPAT 7,412.64 245,189·95 31.03.2019 Interest Q1 14,732·77 259.922.72 31.03.2019 WHT on Interest Q1 259.922.72 Transfer Group/ 15.04.2019 Philippines 500,000.00 - 240,077·28 PAYM IC Invoices "P-6o-n" 26.04.2019 2430000133 1,954,144·49 1,714,067.21 PAYM IC Invoices "P-6o-18" 28.04.2019 2430000137 2,926.92 1,716,994·13 PAYM IC Invoices "P-60-12" 28.04 .2019 2430000135 521.68 1,717,515.81 PAYM IC Invoices "P-60-16" 28.04.2019 2430000138 10,807.69 1,728,)23·50 PAYM IC Invoices "P - 6 0-17" 28.04.2019 2430000143 86,742.40 1,815,o65.9o PAYM IC Invoices "P - 6 0-113" 28.04.2019 2430000136 16,107.88 1,831,173·78 PAYM IC Invoices "P - 6 0-1t5" 30.04.2019 2430000141 102,344·72 1,933,518.50 PAYM IC Invoices "P-6o-1o" 26.04.2019 2430000134 1,623.06 1,935,141.56 PAYM IC Invoices "P-6o-14" 28.04.2019 2430000140 774·36 1,935.915.92 Transfer Group/ 10.05.2019 Philippines 6oo,ooo.oo 1,)35.915·92 Transfer Group/ 12.05.2019 Philippines 500,000.00 835.915·92 PAYM IC Invoices 27.06.2019 2430000144 5.679·08 841,595·00 PAYM IC Invoices 27.06.2019 2430000145 16,918.66 8 58,513.66 30.06.2019 Interest Q2 9,569.26 868,082.92 30.06.2019 WHT on Interest Q2 868,082.92 A closer examination of the foregoing reveals that it only shows additions and deductions to the "Avaloq Group AG Current Account", proving that there were transfers of funds between Avaloq Group AG and its affiliates. However, it cannot be ascertained whether such loan transactions were treated as payments specifically for petitioner's services rendered to nonresident foreign affiliates within the covered period of the present refund claim. Without such explicit indication, it cannot be pinpointed nor presumed which loan proceeds were directlyt

CTA Case No. 10617 Avaloq Philippines Operating Headquarters v. Commissioner of Internal Revenue DECISION x--------------------------------------------------------------------x offset to which receivables. Clearly, therefore, the Offsetting Schedule failed to prove the actual details of the offsetting arrangement between petitioner's receivables from its nonresident foreign affiliates and the loan proceeds received from Avaloq Group AG. Therefore, insofar as the 2nd requisite is concerned, while petitioner was able to prove that: (1) the recipients of its services are NRFCs; (2) the services rendered were not processing, manufacturing, or repacking of goods; and (3) the services were performed by petitioner in the Philippines, it nevertheless failed to establish that the consideration for the services was paid for in acceptable foreign currency via offsetting arrangements between petitioner and the other affiliates under the Avaloq Group. As such, petitioner failed to meet the 2nd requisite for entitlement to VAT zero-rating. Even assuming that petitioner was able to adequately prove its offsetting agreement with nonresident foreign affiliates, the instant judicial claim must still be dismissed for failure to comply with invoicing and substantiation requirements under the 4th requisite. 4th REQUISITE: INPUT VALUE-ADDED TAX (VAT) CLAIMED WAS DUE OR PAID, EXCEPT TRANSITIONAL INPUT TAX, TO THE EXTENT THAT IT HAS NOT BEEN APPLIED TO OUTPUT TAX In order to prove the 4th requisite, it must be established that the input VAT claimed: 1. does not constitute transitional input tax; 2. has not been applied to output tax; and 3· was actually due and has been paid. INPUT VALUE-ADDED TAX (VAT) CLAIMED DOES NOT TRANSITIONAL INPUT TAX t CONSTITUTE

CTA Case No. 10617 Avaloq Philippines Operating Headquarters v. Commissioner of Internal Revenue DECISION x------------- - ------------- - ---------------------------------------- x Section 111(A) of the NIRC of 1997, as amended, describes transitional input tax as follows: SEC. 111. Transitiona l/Presumptive Input Tax Credits. - (A) Transitional Input Tax Credits. - A person who becomes liable to value-added tax or any person who elects to be a VAT-registered person shall, subject to the filing of an inventory according to rules and regulations prescribed by the Secretary of Finance, upon recommendation of the Commissioner, be allowed input tax on his beginning inventory of goods, materials and supplies equivalent to two percent (2%) of the value of such inventory or the actual value-added tax paid on such goods, materials and supplies, whichever is higher, which shall be creditable against the output tax. Transitional input tax credit operates to benefit newly VAT- registered persons, whether or not they previously paid taxes in the acquisition of their beginning inventory of goods, materials and supplies. During the period of transition from non-VAT to VAT status, the transitional input tax credit serves to alleviate the impact of the VAT on the taxpayer .131 In the case at bar, considering that petitioner is not a newly VAT- registered person, as it was registered way back in 2013, the claimed input taxes do not appear to be transitional input taxes as understood under Section 1n(A) of the NIRC of 1997, as amended. INPUT VALUE-ADDED TAX (VAT) CLAIMED HAS NOT BEEN APPLIED TO OUTPUT VALUE-ADDED TAX (VAT) In Chevron Holdings, Inc. (Formerly Caltex Asia Limited) v. Commissioner of Internal Revenue132 (Chevron), the Supreme Court made a definitive declaration that a VAT-registered taxpayer has two (2) options with respect to its input VAT attributable to zero-rated sales, it may: (1) charge the same against output VAT from VATable sales, and claim for refund or issuance of a tax credit certificate (TCC) any t 13 1 Fort Bonifacio Development Corporation v. Commissioner of Internal Revenue, eta/., G. R. Nos. 158885 & 170680, 02 April 2009. 132 G.R. No. 2 15159, 05 July 2022 ; Citation omitted, emphasis in the original text and supplied.

CTA Case No. 10617 Avaloq Philippines Operating Headquarters v. Commissioner of Internal Revenue DECISION x----------------------- -- - ------------------------------------------x unutilized or "excess" input VAT; or (2) claim the same for refund or issuance of a TCC in its entirety, viz: [T]he input tax attributable to zero-rated sales may, at the option of the VAT-registered taxpayer, be: (1) charged against output tax from regular 12% VAT-able sales, and any unutilized or "excess" input tax may be claimed for refund or the issuance of tax credit certificate; or (2) claimed for refund or tax credit in its entirety. It must be stressed that the remedies of charging the input tax against the output tax and applying for a refund or tax credit are alternative and cumulative. Furthermore, the option is vested with the taxpayer-claimant. It goes without saying that the CTA, and even the Court, may not, on its own, deduct the input tax attributable to zero-rated sales from the output tax derived from the regular twelve percent (12%) VAT-able sales first and use the resultant amount as the basis in computing the allowable amount for refund. The courts cannot condition the refund of input taxes allocable to zero-rated sales on the existence of "excess" creditable input taxes, which includes the input taxes carried over from the previous periods, from the output taxes. These procedures find no basis in law and jurisprudence. Importantly, the Supreme Court's ruling in Chevron clarifies that if the taxpayer-claimant is requesting a refund of unutilized or unused input VAT from zero-rated sales (as opposed to the "excess" creditable input VAT from the output VAT), this amount is inherently immediately refundable, given that there is no related output VAT to offset it against, viz: [T]o call the refundable input tax in Section no(B), in relation to Section n2(A), "excess" input tax is a misnomer since what is being applied for a refund or tax credit is the unutilized or unused input VAT from zero-rated sales. As a matter of fact, there is no "excess" input tax attributable to zero-rated sales as there is no related output tax from which the input tax may be charged against. For context, in zero-rated transactions, the tax rate is set at zero percent. Consequently, the seller charges zero output tax. However, the seller may have incurred input taxes from its purchases of goods and/or services related to its sales. The input taxes previously charged by suppliers remain unutilized or unused until charged against the output tax from the non-zero-rated sale transactions in the same quarter that the input taxes were incurred or applied for at

CTA Case No. 10617 Avaloq Philippines Operating Headquarters v. Commissioner of Internal Revenue DECISION X-------------------- - ---------------------------------- - ------------X refund or the issuance of tax credit certificate within two (2) years from the close of the taxable quarter when the related sales were made!33 This precisely applies to the case at bar. As shown in the Amended Quarterly VAT Returns 134 for Q1 and Q2 2019, petitioner did not declare any other type of sale except zero-rated sale of services to nonresident foreign affiliates. As there is no output VAT to begin with, any input VAT paid by petitioner is inherently immediately refundable. PETITIONER FAILED TO ADEQUATELY SUBSTANTIATE ITS PURPORTED INPUT VALUE-ADDED TAX (VAT) PAYMENTS In its Amended Quarterly VAT Returns135 for Q1 and Q2 2019, petitioner reported a total input VAT of P4,403,906.o9, derived from amortized input VAT on purchases of capital goods exceeding P1 million, purchase of capital goods not exceeding P1 million, domestic purchase of goods other than capital goods, and domestic purchase of services. The entire amount is the subject of the present claim for refund, as detailed below: Item CY2o19 1st Quarter 2nd Quarter Total Amortization of Capital Goods Exceeding PI million: 2oB Input tax deferred on 3,u 9 ,8I 9 .15 2,796,899·32 5,916,718.47 capital goods exceeding PI million from previous period 21D Input tax on purchase of 373.772.70 - 373.772.70 capital goods exceeding PI million Total 3.493.591.85 2,796,899·32 6,290,491.17 2)A Less: Input tax on 2, 796,899· 32 2,108,093·80 4·904,993·12 purchases of capital goods exceeding P1 million deferred for the succeeding period Amortized Input Tax on Capital 696,692·53 688,805.52 I.385.498.os Goods Exceeding P1 million - 133 . . . . Supra at note 13 1, C1tat10ns omitted, e mphas1s m the ong mal text and supplied. 134 Supra at note 8. 135 Id.

CTA Case No. 10617 Avaloq Philippines Operating Headquarters v. Commissioner of Internal Revenue DECISION X- - - --- - - - - - - - -- - ---- - --- - - - -------------------- - - - --- - -- - - -- -------- X Item CY 2019 1st Quarter 2nd Quarter Total Current Input Taxes: 21B Purchase of capital goods 4,500.00 59,033·42 63,533·42 not exceeding :P1 million 21F Domestic purchase of 36,956.2 9 14,974·27 51,930·56 goods other than capital goods 21} Domestic purchase of 1,520,613·96 1,)82,)30.10 2,902,944·06 services Total Current Input Tax 1,562,070.25 1.456.337·79 3,018,4o8.o4 Total Allowable Input VAT 2,258,762.78 2,145,143·31 4,40J,906.09 15B Less: Output VAT - - - Amount of refund claim 2,258,762.78 2,145,143·31 4,40J,906.09 To establish entitlement to refund for input taxes due or paid, petitioner must not only present the supporting documents prescribed under Section 4.110-8 of Revenue Regulations (RR) No. 16-2005, but also satisfy the substantiation and invoicing requirements under the NIRC of 1997, as amended, and other implementing rules and regulations/36 particularly Sections 113(A) and (B), 237, and 238 of the NIRC of 1997, as amended, as implemented by Section 4.113-1(A) and (B) of RR No. 16-2005, as amended. Verily, in ].R.A. Philippines, Inc. v. Commissioner of Internal Revenue, 137 the Supreme Court elucidated that: Case law dictates that in a claim for tax refund or tax credit, the applicant must prove not only entitlement to the claim but also compliance with all the documentary and evidentiary requirements therefor. Section uo{A)(I) of the NIRC provides that creditable input taxes must be evidenced by a VAT invoice or official receipt, which must, in turn, comply with Sections 237 and 238 of the same law, as well as Section 4.108.1 of RR 7-95. The foregoing provisions require, inter alia, that an invoice must reflect, as required by law: (a) the BIR Permit to Print; (b) the TIN-V of the purchaser; and (c) the word "zero- rated" imprinted thereon. In this relation, failure to comply with the said invoicing requirements provides sufficient ground to deny a claim for tax refund or tax credit.t 136 Team Energy Corporation (Formerly: Mirant Pagbilao Corporation and Southern Energy Quezon, Inc.) v. Commissioner of Internal Revenue, G.R. Nos. 197663 & 197770, 14 March 20 18. 137 G .R. No. 171307, 28 August 20 13; Citations omitted, emphasis and italics in the orig inal text.

CTA Case No. 10617 Avaloq Philippines Operating Headquarters v. Commissioner of Internal Revenue DECISION x--------------------------------------------------------------------x In this case, records show that all of the export sales invoices presented by petitioner not only lack the word "zero-rated" but also failed to reflect its BIR Permit to Print as well as its TIN-V. Thus, it cannot be gainsaid that it failed to comply with the above-stated invoicing requirements, thereby rendering improper its claim for tax refund. Clearly, compliance with all the VAT invoicing requirements is required to be able to file a claim for input taxes attributable to zero- rated sales. As held in Microsoft Philippines, Inc. v. CIR : The invoicing requirements for a VAT-registered taxpayer as provided in the NIRC and revenue regulations are clear. A VAT-registered taxpayer is required to comply with all the VAT invoicing requirements to be able to file for a claim for input taxes on domestic purchase for goods or services attributable to zero-rated sales. A "VAT invoice" is an invoice that meets the requirements of Section 4 .108-1 of RR 7-95. Contrary to Microsoft's claim. RR-7-95 expressly states that "[A]ll purchases covered by invoice other than a VAT invoice shall not give rise to any input tax. Microsoft's invoice, lacking the word "zero-rated," is not a "VAT invoice," and thus cannot give rise to any input tax. Compliance with invoicing requirements is mandatory due to the word "shall" and not "may". Hence, non-compliance with any thereof would disallow any claim for tax credit or VAT refund.138 Strict compliance with substantiation and invoicing requirements is necessary considering VAT's nature and VAT system's tax credit method, where tax payments are based on output and input taxes and where the seller's output tax becomes the buyer's input tax that is available as tax credit or refund in the same transaction. It ensures the proper collection of taxes at all stages of distribution, facilitates computation of tax credits, and provides accurate audit trail or evidence for BIR monitoring purposes. 139 Based on the records of the case and the I CPA's findings, l40 not all of petitioner's claimed input VAT were supported by invoices, ORs, and other supporting documents. Moreover, several of the submitted documents did not meet the invoicing and substantiation requirementst 138 Eastern Telecommunications Philippines, Inc. v. Commissioner of Internal Revenue, G.R. No. 183531 , 25 March 2015. 139 Team Energy Corporation v. Commissioner of Internal Revenue, supra at note 136. 140 See ICPA Report, supra at note 46.

CTA Case No. 10617 Avaloq Philippines Operating Headquarters v. Commissioner of Internal Revenue DECISION x------------------------------------------------------ -- - - ----------x under the law and rules. In particular, several documents were found: (1) containing countersigned corrections, but without a sworn certification of the person making the correction; (2) lacking in the nature of service, TIN, VATable amount, and VAT amount; (3) containing an incomplete or incorrect address, and incorrect business style; and (4) with dates not within the covered period of the instant VAT refund claim. As such, only the following amounts were supported by sales invoices: Amou nt Amou nt Description reported per supported by Exhibit Reference VAT Return sales invoices Input tax on purchase of 373.772.70 373.772.70 "P-74-1 , ' "P-74-2 , ' "P -74-3 "141 capital goods exceeding PI million - QI 2019 Purchase of capital goods not exceeding PI million: up -72-4411142 • QI2019 4,500.00 4,500.00 up 11 up 11 • Q2 20I9 59,033·42 10,037·14 -72-4 ' -72-27 143 Domestic purchase of goods other than capital goods: • QI 2019 36,956.29 30,264.65 "P-72-I "' "P-72-2 "' "P-72-3" ' up -72-11 11 ' up-72-1211 ' up-72-16" ' up 11 up 11144 -72-17 ' -72-25 up -72- 811 ' "P-72-9 11 ' up-72-10 11 ' • Q2 2019 14,974·27 10,195·70 up-72-1811 ' up -72-1911145 Domestic purchase of services: • Q12019 I,520,613·96 1,Jll,971·22 "P -72-5 "' up-72- 6" ' "P-72-13, ' Hp-72-14, ' Hp -72-15 ' "P-72-21" ' JJ "P-72-22 "' "P -72-23 "' "P-72-24" ' up-72-2 611 ' up-72-2 8 11 ' up -72-32 11 ' "P -72-33 "' "P-72-34 "' "P-72-35 "' "P-72-36"' tcp-72-39 "' "P-72-40 "' up 11 up 11 up 6" -72-43 ' -73-3 ' -73- ' ''P-73-7"' ''P-73- 8"' ''P-73-9 '' ' "P-73-10 , ' "P-73-11 , ' "P-73-I2 "t46 • Q2 20I9 1,382,103.21 1,I91,228.09 "P-72-7 , ' "P-72-20 "' "P-72-29 "' 141 Sales Invoices, see Exhibit " P-44-1 ", USB. 142 Id. 143 Id. 144 Id. 145 Id. 146 Id.

, CTA Case No. 10617 Avaloq Philippines Operating Headquarters v. Commissioner of Internal Revenue DECISION x- - - ------------------ - - - - ---- - - - -- - ---- - ------- - - - - -- --- - - --- - - - ----x Amount Amount Description report ed per supported by Exhibit Reference VAT Return sales invoices "P-72-30""P, -72-31""P , -72-37" , "P-72-3 8", "P-72-41""P, -72-4 2", "P-73-1, , "P-73-4 ", "P-73-5", "P -73-13", "P-73-14 ", up-73-15" , "P-73-16", "P-73-17", "P-73-18" , "P-73-19, , "P-73-20 , , "P-73-21 " 147 However, the First Division, in its Resolution dated 09 October 2024,148 denied the admission of Exhibits "P-72-1" to "P-72-44", "P -73-1" to "P-73-22", "P -74-1" to "P -74-6", "P-75-1" to "P -75-134", and "P-76-1" to "P-76-5" for failure of the ICPA to specifically identify these exhibits in the ICPA Report, and thus, cannot be considered by this Court in arriving at a decision. Accordingly, petitioner failed to discharge the burden of proof to establish that the claimed input VAT has been paid, in accordance with the 4th requisite for VAT zero-rating. Therefore, insofar as the 4 th requisite is concerned, while petitioner was able to demonstrate that the input VAT claimed: (t) does not constitute transitional input VAT; and (2) were not offset against output VAT, it nevertheless fell short in substantiating its claimed that the input VAT has been paid. As such, petitioner also failed to satisfy the 4 th requisite for entitlement to VAT zero-rating. In summary, petitioner was only able to meet the 1s t and 3rd requisites (i.e., VAT registration and timely filing of administrative and judicial claims), but failed to comply with the 2"d requisite, i.e., to establish that its export sales for Q1 and Q2 2019 were paid for in acceptable foreign currency through an offsetting arrangement, and 4th requisite, i.e., to properly substantiate input VAT payments for the relevant period. Accordingly, the present Petition for Review must necessarily fail. t 147 Id. 148 Supra at note 51 .

CTA Case No. 10617 Avaloq Philippines Operating Headquarters v. Commissioner of Internal Revenue DECISION x--------------------------------------------------------------------x In Coca-Cola Bottlers Philippines, Inc. v. Commissioner of Internal Revenue, l49 the Supreme Court explained that the burden of proof in refund cases is on the taxpayer-claimant, and that such cases are construed strictly against the taxpayer, to wit: On a final note, the Court reiterates its consistent ruling that actions for tax refund or credit, as in the instant case, are in the nature of a claim for exemption and the law is not only construed in strictissimi juris against the taxpayer, but also the pieces of evidence presented entitling a taxpayer to an exemption is strictissimi scrutinized and must be duly proven. The burden is on the taxpayer to show that he has strictly complied with the conditions for the grant of the tax refund or credit. Since taxes are the lifeblood of the government, tax laws must be faithfully and strictly implemented as they are not intended to be liberally construed. Thus, in view of petitioner's failure to prove, to the satisfaction of the Court, its entitlement to the grant of tax refund or issuance of tax credit of input VAT in the amount of P123.459,647·70 it inadvertently failed to include in its VAT Return, the Court deems it necessary to deny the same. WHEREFORE, premises considered, the instant Petition for Review filed by petitioner Avaloq Philippines Operating Headquarters on 21 October 2021 is hereby DENIED. SO ORDERED. JEANMARI I CONCUR: ~ihl£ LANEE S. CUI-DAVID Associate Justice 149 G.R. No. 222428, I 9 February 20 I 8; Citations omitted and emphasis supplied.

CTA Case No. 10617 Avaloq Philippines Operating Headquarters v. Commissioner of Internal Revenue DECISION X----- ----------- --------- ------------------------------- - ----- --- --- X CERTIFICATION Pursuant to Article VIII, Section 13 of the Constitution, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court's Division. ' ... JEAN MARl l\. ACORRO-VILLENA residing Justice