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

The Philippine Court of Tax Appeals Nov. 26 issued a decision in CTA Case No. 10465, clarifying the validity of assessments for alleged tax deficiencies. The taxpayer, a domestic corporation, challenged deficiency assessments for income tax (IT), VAT, expanded withholding tax (EWT), final withholding tax (FWT), and final withholding VAT (FWVAT). The Commissioner of Internal Revenue argued in part that the taxpayer wasn’t entitled to the 5 percent preferential tax rate because over 30 percent of its total income was from domestic sources outside the Subic Special Economic and Freeport Zone (SSEFZ). On appeal, the Court of Tax Appeals, Second ...