Documents needed to be allowed as Zero-VAT sales

Section 106 (A)(2)(a)(1) of the Tax Code, in relation to Section 113(A) of the same Code and Section 4.108-1 of Revenue Regulations No. 7-95, any person claiming VAT zero-rated direct export sales must present at least three (3) types of documents, to wit:

1. a)  Sales invoice as proof of sale of goods;
   
2. b)  The export declaration and bill of lading or airway bill as proof of actual shipment of
   goods from the Philippines to the foreign country; and
   
3. c)  Bank credit advice, certificate of bank remittance or any other document proving
   payment for the goods in acceptable foreign currency or its equivalent in goods and services.
   

Without the bills of lading or airway bills, the export declarations submitted by petitioner Marubeni are insufficient to prove there was actual shipment of petitioner’s goods from the Philippines to Tokyo, Japan. Likewise, petitioner failed to submit documents establishing the existence of its foreign currency payables to Marubeni Tokyo alleged to be offset with the proceeds of its export sales to the same.
Another essential condition for qualification to VAT zero-rating under Section 108 (B)(2) is that the recipient of such services is doing business outside the Philippines. Petitioner failed to substantiate the receipt of the foreign currency proceeds thereof with proper VAT official receipts and that its clients are non-resident foreign entities doing business outside the Philippines. Marubeni Philippines Corporation v. Commissioner of Internal Revenue, C.T.A. Case No. 7223, December 15, 2009