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3M Phil., Inc. vs. Comm. Of Internal Revenue

3M PHILIPPINES, INC., petitioner, vs. COMMISSIONER OF INTERNAL REVENUE, respondent.

G.R. No. 82833 | 1988-09-26

D E C I S I O N


GRIá'O-AQUINO, J.:

This is a petition for review of the decision of the Court of Tax Appeals which affirmed the assessment of deficiency income tax on the petitioner's 1974 income tax return, for deductions of "business expenses" in the form of royalty payments to its foreign licensor which the respondent Commissioner of Internal Revenue disallowed. This case hinges on the propriety or impropriety of the deductions.

3M Philippines, Inc. is a subsidiary of the Minnesota Mining and Manufacturing Company (or "3M-St. Paul") a non-resident foreign corporation with principal office in St. Paul, Minnesota, U.S.A. It is the...