Only the amortized portion of the input taxes paid on capital goods may be the subject of a refund.

This claim for refund of input taxes by the taxpayer involves the input taxes paid on capital goods with aggregate acquisition cost that exceeds One Million Pesos. According to the taxpayer, since its entire sales are zero-rated, the total amount of input taxes on capital goods is refundable. The amortization applies only when the input tax is creditable against output tax. On the other hand, the BIR contends that only the amortized portion of the input tax on capital goods may be the subject to a refund.
The Court disagreed with the taxpayer. There is nothing in the law which states that the amortization of VAT paid on capital goods with acquisition cost of more than P1M applies only when the input VAT is creditable against the output VAT. The law does not state that the amortization does not apply to claims for refund or application for issuance of tax credit certificate. The law being silent, the rule on the amortization of input VAT necessarily applies to claims for refund. (Taganito Mining Corporation vs. Commissioner of Internal Revenue, CTA EB No. 1039, June 10, 2014)