The Philippine Court of Tax Appeals issued a decision on Feb. 10, 2026 (CTA Case No. 10561) clarifying the validity of assessments for alleged tax deficiencies. The case involved a domestic corporation claiming entitlement to a 5 % preferential gross income tax rate and a 12 % VAT exemption, arguing that the Commissioner of Revenue had incorrectly applied a 30 % threshold for income from Philippine sources outside the Subic Special Economic and Freeport Zone. The court examined whether the sales in question were within the zone and the implications for the tax assessments.
The taxpayer claimed entitlement to a 5 % preferential gross income tax (PGIT) rate and a 12 % VAT exemption.
The decision was issued on Feb. 10, 2026.
The Commissioner allegedly misapplied a 30 % threshold for income from Philippine sources outside the Subic Special Economic and Freeport Zone.
The taxpayer argued the sales were within the Subic Special Economic and Freeport Zone.
The case number is CTA Case No. 10561.
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