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CIR vs. Sekisui Jushi Philippines

COMMISSIONER OF INTERNAL REVENUE, Petitioner, - versus - SEKISUI JUSHI PHILIPPINES, INC., Respondent.

G.R. No. 149671 | 2006-07-21

FIRST DIVISION

DECISION

PANGANIBAN, C J:


Business enterprises registered with the Philippine Export Zone Authority (PEZA) may choose between two fiscal incentive schemes:  (1) to pay a five percent preferential tax rate on its gross income and thus be exempt from all other taxes; or (b) to enjoy an income tax holiday, in which case it is not exempt from applicable national revenue taxes including the value-added tax (VAT).  The present respondent, which availed itself of the second tax incentive scheme, has proven that all its transactions were export sales.  Hence, they should be VAT zero-rated.

The Case

Before us is a Petition...