Manila: The Court of Tax Appeals (CTA) has denied a PHP58-million refund claim by Sony Philippines Inc. representing unutilized creditable withholding taxes (CWT) in 2020. In its 25-page decision dated Oct. 24, the CTA's Third Division affirmed the Bureau of Internal Revenue's (BIR) position that the firm failed to exhaust administrative remedies and did not provide supporting documents to show that the income from which CWT was withheld was declared in its income tax return.

According to Philippines News Agency, the BIR also maintained that a claimant must prove the actual remittance of the alleged withheld taxes to the agency. The court highlighted that the burden of proof lies with the claimant to establish the factual basis of their claim for tax credit or refund. This requirement is due to the nature of tax refunds, which are seen as derogations of sovereign authority and thus construed strictly against the claimant.

The CTA further noted, "In view of petitioner's failure to discharge the burden of proof in the present judicial claim for tax refund, the same must necessarily fail." This decision underscores the importance of thorough documentation and adherence to procedural requirements when seeking tax refunds.