Taxation Law Ii

Polytechnic University of the Philippines College of Law

Prepared by: Arlan P. Cruz

VALUED-ADDED TAX

I. BASIC CONCEPTS:

a. Definition (Section 105, NIRC, as amended)

 Commissioner of Internal Revenue vs. Seagate Technology (Philippines), G.R. No. 153866,
February 11, 2005.

b. Characteristics (Section 105, NIRC, as amended)

 Commissioner of Internal Revenue vs. Seagate Technology (Philippines), supra.

c. Indirect Tax –Definition (Section 105, NIRC, as amended)

 Commissioner of Internal Revenue vs. American Express International, Inc., G.R. No. 152609,
June 29, 2005.

d. Tax on Consumption – Concept

 Commissioner of Internal Revenue vs. Placer Dome Technical Services (Phils.), Inc., G.R. No.
164365, June 8, 2007.

e. Cross-Border Doctrine/Destination Principle (Sections 105 in relation to Section 108(B), NIRC, as

amended)
 Toshiba Information Equipment (Phils.), Inc. vs. Commissioner of Internal Revenue, G.R. No.
157594, March 9, 2010.
 Commissioner of Internal Revenue vs. Burmeister and Wain Scandinavian Contractor Mindanao,
G.R. No. 153205, January 22, 2007.

f. Impact and Incidence of Tax (Section 105, NIRC, as amended)

 Contex Corporation vs. Commissioner of Internal Revenue, G.R. No. 151135, July 2, 2004.

g. Tax Credit Method (Section 110, NIRC, as amended)

 Panasonic Communications Imaging Corp. vs. Commissioner of Internal Revenue, G.R. No.
178090, February 8, 2010.

h. In the course of trade or business or transactions incidental thereto (Section 105, NIRC, as amended)

 Mindanao II Geothermal Partnership vs. Commissioner of Internal Revenue, G.R. No. 193301,
March 11, 2013;
 PSALM vs. Commissioner of Internal Revenue, G.R. No. 198146, August 8, 2017;
 PSALM vs. Commissioner of Internal Revenue, G.R. No. 226556, July 3, 2019;
 Commissioner of Internal Revenue vs. Magsaysay Lines, Inc., G.R. No. 146984, July 28, 2006;

i. Person liable (Section 105, NIRC, as amended);

j. Difference between zero-rated and VAT-exempt transaction;

 Commissioner of Internal Revenue vs. Cebu Toyo Corporation, G.R. No. 149073, February 17,
2005;

II. VAT at 12%

a. On sale of goods/properties; Requisites (Sections 105, 106(A)(1) and (2) in relation to 109(BB) of the
NIRC, as amended);

 San Roque Power Corporation vs. Commissioner of Internal Revenue, G.R. No. 180345,
November 25, 2009.
b. On importation; Requisites (Section 105 in relation to Section 107(A), NIRC, as amended);
 Subsequent sale of VAT-exempt imported goods (Section 107(B), NIRC, as amended);

c. On rendition of services; Requisites (Sections 105, 108(A) and (B) in relation to 109(BB) of the NIRC, as
amended);

 Commissioner of Internal Revenue vs. Sony Philippines, Inc., G.R. No. 178697, November 17,
2010;
 Commissioner of Internal Revenue vs. SM Prime Holdings, Inc., G.R. No. 183505, February 26,
2010;

III. VAT at 0%

a. On sale of goods/properties (Section 106(A)(2)(a) and (b), NIRC, as amended);

 Atlas Consolidated Mining Corporation vs. Commissioner of Internal Revenue, 534 SCRA 51.
 Commissioner of Internal Revenue vs. Toshiba Information Equipment (Phils.), Inc. G.R. No.
150154, August 9, 2005;

b. On services (Section 108(B), NIRC, as amended);

 AT & T Communications Services Philippines, Inc. vs. Commissioner of Internal Revenue, G.R.
No. 182364, August 3, 2010;
 Commissioner of Internal Revenue vs. Burmeister and Wain Scandinavian Contractor Mindanao,
Inc., G.R. No. 153205, January 22, 2007;
 Accenture, Inc. vs. Commissioner of Internal Revenue, G.R. No. 190102, July 11, 2012;
 Commissioner of Internal Revenue vs. American Express International, Inc., G.R. No. 152609,
June 29, 2005.

IV. VAT-Exempt Transactions (Section 109, NIRC, as amended);

V. Input Tax and Output Tax and Invoicing Requirements (Sections 110, 111 and 113, NIRC,
as amended);

 Commissioner of Internal Revenue vs. Manila Mining Corporation, G.R. No. 153204, August 31,
2005;
 Microsoft Philippines, Inc. vs. Commissioner of Internal Revenue, G.R. No. 180173, April 6, 2011;
 KEPCO Philippines Corporation vs. Commissioner of Internal Revenue, G.R. No. 179961, January
31, 2011;
 Panasonic Communications Imaging Corporation vs. Commissioner of Internal Revenue, G.R. No.
178090, February 8, 2010

VI. Refund of Input Taxes (Section 112 of the NIRC, as amended)

a. Under TRAIN;
b. Old Rule;
 Applied Food Ingredients, Inc. vs. Commissioner of Internal Revenue, G.R. No. 184266,
November 11, 2013;
 Commissioner of Internal Revenue vs. San Roque Power Corporation, G.R. No. 187485, February
12, 2013;
 Silicon Philippines, Inc. vs. Commissioner of Internal Revenue, G.R. No. 182737, March 2, 2016;

c. Requisites;

VII. Filing and Payment of VAT (Section 114, NIRC, as amended);

VIII. Withholding of Final VAT on sales to government (Ibid.)

IX. Temporary Closure or Suspension of Operations (Section 115, NIRC, as amended)