CTA affirms Toyota’s P144-M tax refund

By Benjamin Pulta

November 30, 2022, 3:30 pm

MANILA – The Court of Tax Appeals (CTA) en banc has affirmed a judgment for a PHP144.13 million tax refund for Toyota Motor Philippines Corp.

In its Nov. 4 decision published online Wednesday, the tax court dismissed the petition for review filed by the Bureau of Customs in March 2021 questioning an earlier ruling by the CTA's First Division in January 2021.

The company argued that it was entitled to the refund representing overpayment of VAT and excise taxes on importations since under Executive Order 905 implementing the Japan Philippines Economic Partnership Agreement (JPEPA), the applicable duty rate on motor vehicles with cylinder capacity above 3,000cc is zero percent.

The tax court’s First Division ruling in January last year through Presiding Justice Roman D. Del Rosario ordered the Bureau of Customs (BOC) "to refund or issue a tax credit certificate in favor of Toyota Motor Philippines Corp. the amount of PHP144.13 million."

The amount represents excess customs duties, excise taxes and value-added tax paid on its importations from Japan of completely built-up (CBU) motor vehicles with a cylinder capacity above 3,000 cc and knock-down components, parts and accessories for the assembly of motor vehicles from Jan. 1 to June 30, 2010.

The case arose after local BOC offices ruled to disallow the Import Entry and Internal Revenue Declarations (IEIRDs) and/or Single Administrative Documents (SADs) which were not machine validated and claims the company failed to exhaust administrative remedies.

Toyota claimed that the practice was contrary to the administrative regulations applicable during the time of its importation of goods. (PNA)