Philippines Court of Tax Appeals Issues Decision Clarifying Validity of Assessments for Alleged Tax Deficiencies

The Philippine Court of Tax Appeals Feb. 10 issued a decision in CTA Case No. 10561, clarifying the validity of assessments for alleged tax deficiencies. The taxpayer, a domestic corporation, asserted entitlement to the 5 percent preferential gross income tax (PGIT) rate, and exemption from 12 percent VAT, on the grounds that the Commissioner of Revenue incorrectly determined it exceeded the 30 percent threshold for income from Philippine sources outside the Subic Special Economic and Freeport Zone (SSEFZ). The taxpayer argued the sales at issue were within the SSEFZ. On appeal, the Court of Tax Appeals, Special Second Division, found ...