The Philippines’ Court of Tax Appeals has confirmed a previous judgement that turned down a claim by Melco Resorts Leisure Corp, the operator of the City of Dreams Manila casino resort, for a PHP81.12-million (US$1.49-million) refund on value-added tax (VAT) it had paid relating to the first quarter of 2016.
The court’s ruling from July 11 and published on Monday, said that although in law the company was entitled to certain tax privileges, the relevant records were “miserably bereft of any proof of the date of the filing of VAT returns and payment of the VAT purportedly passed on to the petitioner [Melco Resorts Leisure] by its suppliers”.
The tax court noted: “Hence, this court cannot determine whether a petition for review praying for a refund or credit of erroneously or illegally collected taxes under the Tax Code is timely and properly filed.”
Melco Resorts Leisure Corp is a Philippine-registered firm under global casino group Melco Resorts & Entertainment Ltd. It runs City of Dreams Manila (pictured) in Entertainment City in the Philippine capital.
The court agreed with an earlier panel that Melco Resorts Leisure was entitled to tax incentives under the charter of the country’s casino regulator, the Philippine Amusement and Gaming Corp (Pagcor) and Presidential Decree 1869, which established Pagcor.
The latest ruling cited section 13 of that decree, which says companies licensed by Pagcor are exempted from paying taxes apart from a 5 percent franchise tax of the gross revenue derived from its operation under its franchise.
The Philippines’ Bureau of Internal Revenue (BIR) had opposed Melco Resorts Leisure’s application for a VAT tax refund, saying it could not be considered. The bureau cited a memo it issued in 2013, mentioning that income related to gaming activities is subject to 12 percent VAT and not entitled to the tax credit.
