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    CIR Vs Toshiba Information Equipment

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    ShaneBeriñaImperial
    Toshiba, a company registered with PEZA and located within an ecozone, claimed a refund for input tax paid on unutilized capital goods. CIR denied the refund, saying the goods were not used for VAT taxable business. The court ruled that Toshiba was a VAT-exempt entity under the law establishing ecozones as foreign territory. Therefore, suppliers could not pass on output VAT, and Toshiba was entitled to a refund. Similarly, in another case, Seagate Technology's request for a refund of input tax was granted because companies registered and operating within ecozones are considered exempt from all revenue taxes, including VAT, under the legal fiction that ecozones represent foreign territory.

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    CIR Vs Toshiba Information Equipment

    Uploaded by

    ShaneBeriñaImperial
    112 views2 pages
    Toshiba, a company registered with PEZA and located within an ecozone, claimed a refund for input tax paid on unutilized capital goods. CIR denied the refund, saying the goods were not used for VAT taxable business. The court ruled that Toshiba was a VAT-exempt entity under the law establishing ecozones as foreign territory. Therefore, suppliers could not pass on output VAT, and Toshiba was entitled to a refund. Similarly, in another case, Seagate Technology's request for a refund of input tax was granted because companies registered and operating within ecozones are considered exempt from all revenue taxes, including VAT, under the legal fiction that ecozones represent foreign territory.

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    taxation case digest

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    CIR vs Toshiba Information Equipment

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    Toshiba, a company registered with PEZA and located within an ecozone, claimed a refund for input tax paid on unutilized capital goods. CIR denied the refund, saying the goods were not used for VAT taxable business. The court ruled that Toshiba was a VAT-exempt entity under the law establishing ecozones as foreign territory. Therefore, suppliers could not pass on output VAT, and Toshiba was entitled to a refund. Similarly, in another case, Seagate Technology's request for a refund of input tax was granted because companies registered and operating within ecozones are considered exempt from all revenue taxes, including VAT, under the legal fiction that ecozones represent foreign territory.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    112 views2 pages

    CIR Vs Toshiba Information Equipment

    Uploaded by

    ShaneBeriñaImperial
    Toshiba, a company registered with PEZA and located within an ecozone, claimed a refund for input tax paid on unutilized capital goods. CIR denied the refund, saying the goods were not used for VAT taxable business. The court ruled that Toshiba was a VAT-exempt entity under the law establishing ecozones as foreign territory. Therefore, suppliers could not pass on output VAT, and Toshiba was entitled to a refund. Similarly, in another case, Seagate Technology's request for a refund of input tax was granted because companies registered and operating within ecozones are considered exempt from all revenue taxes, including VAT, under the legal fiction that ecozones represent foreign territory.

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    CIR vs Toshiba Information Equipment (Phil.) G.R. No.

    150154, 9 August 2005

    Facts:

    Toshiba was claiming a refund for the input tax it paid on unutilized capital goods
    purchased. However, the CIR said that it cannot because the capital goods and
    services it purchased are considered not used in VAT taxable business and
    therefore, it is not entitled to refund of input taxes. Toshiba, on the other hand,
    contended that it is PEZA-registered and located within the ecozone and therefore
    for, VAT-exempt entity.

    Issue:

    Whether or not Toshiba is entitled to refund for the input tax it paid on unutilized
    capital goods purchased considering that it is registered with PEZA and located
    within the ecozone.

    Ruling:

    Yes. CIR failed to differentiate between VAT-exempt transactions from VAT-exempt


    entities. An exempt transactions are transactions specifically listed in and expressly
    exempted from VAT under the Tax Code without regard to the tax status, VAT-
    exempt or not, of the taxpayer. An exempt party, on the other hand, is a person or
    entity granted VAT-exemption under the Tax Code, special law or an international
    agreement to which the Philippines is a signatory and by virtue of which its taxable
    transactions become exempt from VAT.

    Toshiba, a PEZA-registered and located within a ecozone is a VAT-exempt entity


    because of Sec 8 of Ta 7916 which establishes the fiction that ecozones are foreign
    territory. Therefore, a supplier from the custom territory cannot pass on output VAT
    to an ecozone enterprise, like Toshiba, since it is exempt.
    \
    CIR vs Seagate Technology (Philippines) G.R. No. 153866, 11 February 2005

    Facts:

    Seagate Technology was claiming a refund for the input tax it paid on the unutilized
    capital goods purchased. It asserted that it is exempt from all internal revenue taxes
    including VAT since it is registered in and operating from the Special Economic Zone
    in Naga, Cebu.

    Issue:

    Whether or not an entity registered and operating within an ecozone is exempt from
    all revenue taxes including VAT.

    Ruling:

    Yes. Ecozone is considered by law as a separate customs authority. It means that in


    such zone is created the legal fiction of foreign authority although it is a
    geographical territory of the Philippines.

    Under the cross-border principle of the VAT system, no VAT shall be imposed to form
    part of the cost of the goods destined for consumption outside of the territorial
    border of the taxing authority. If exports of goods and services from the Philippines
    to a foreign authority are free of VAT, then the same rule holds for such exports
    from the national territory to an ecozone.

    This is to encourage foreign investments in order to win international markets and


    to promote sustainable economic growth.

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