CIR v American Express International, Inc. (Philippine Branch); G.R. No. 152609; 29 Jun 2005

in Legal Chyme by

Respondent is a servicing unit of American Express International, Inc. – Hongkong Branch (AmEx-HK) and is engaged primarily to facilitate the collections of AmEx-HK receivables from card members situated in the Philippines and payments to service establishments in the country.

On 23 March 1999, it amended its quarterly VAT returns for the period January to December 1997. On 13 April 1999, it filed with the BIR a letter-request for the refund of its 1997 excess input taxes.

Whether or not petitioner’s sale of service is VAT zero-rated.

YES. Respondent met all three requirements for exemption from the destination rule. Its facilitation service is performed in the Philippines. It is a service other than “processing, manufacturing or repacking of goods.” Such service meets the statutory condition that it be paid in acceptable foreign currency duly accounted for in accordance with BSP rules and regulations. Thus, it should be zero-rated.


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