The Court of Tax Appeals in the Philippines has confirmed its prior decision and denied Melco Resorts Leisure Corp’s demand for a PHP 81.12-million (US$1.49-million) refund on VAT paid in the first quarter of 2016. The court judgement, delivered on July 11 and made public on Monday, noted the company’s insufficient proof to back its refund request.
While the court acknowledged that Melco Resorts Leisure Corp, a subsidiary of global casino operator Melco Resorts & Entertainment Ltd, was entitled to certain tax benefits under the Philippine Amusement and Gaming Corp (Pagcor) charter and Presidential Decree 1869, the company’s submission allegedly lacked critical records. The court determined that there was a lack of documentation about the filing date of VAT returns and the payment of VAT allegedly passed on to the company by its suppliers.
Without the required paperwork, the court was unable to determine the timely and proper filing of a petition under the Tax Code for the refund or credit of wrongfully or unlawfully collected taxes, resulting in the rejection of Melco Resorts Leisure’s VAT refund claim.
Melco Resorts Leisure Corp manages the well-known City of Dreams Manila, a lavish casino resort in the heart of the Philippine capital’s Entertainment City. The world-class amenities, luxurious gaming facilities, and unrivaled entertainment experiences have made the integrated resort famous.
The court highlighted that Melco Resorts Leisure qualified for tax breaks under the Pagcor charter and Presidential Decree 1869. Companies licensed by Pagcor are exempt from most taxes, with the exception of a 5% franchise tax calculated on gross revenue earned from their operations, according to section 13 of the decree.
The Philippines’ Bureau of Internal Revenue (BIR) denied Melco Resorts Leisure Corp’s request for a VAT tax refund, claiming that it did not meet the eligibility requirements. According to a 2013 memorandum, income from gaming operations is subject to a 12% VAT and is not eligible for tax credits.
Melco Resorts Leisure Corp. may face financial consequences if the court refuses to give the VAT refund. The firm is a major player in the Philippine gaming sector as the operator of City of Dreams Manila. It is unclear how this decision would affect the company’s financial performance and future operations.
This decision offers insight on the complicated taxation structure in the Philippine casino industry and demonstrates the intense scrutiny focused on tax refund applications. Legal conflicts over tax concerns continue to be keenly observed by business stakeholders and government agencies alike as the industry evolves.
The post Philippine Court of Tax Appeals Denies Melco Resorts Leisure Corp’s VAT Refund Claim appeared first on iGaming.org.