Myphone manufacturer triumphs in P66M tax case
by Allan Yves Briones
Myphone manufacturer Mysolid Technologies and Devices Corporation has triumphed over the Bureau of Internal Revenue (BIR) in a P66 million tax case involving value-added taxes (VAT).
In 2012, the local mobile phone company allegedly applied unused input VAT from Mytel Mobility Solutions – a private firm which has since become part of Mysolid after a merger agreement.
This, according to the BIR, is a violation of Sections 235 and 236 of the National Internal Revenue Code, as it requires the private company to notify the nation’s largest tax-collection agency of the merger.
As a result, the BIR disclosed in a tax assessment that it has disallowed the application of the input VAT of Mysolid resulting in a VAT deficiency totaling P66 million.
However, according to the Court of Tax Appeals, the tax code contains no such condition.
“All the rights, properties, and liabilities are acquired by the surviving corporation (Mysolid),” the court said, citing the local corporation code.
In fact, the court added, the Securities and Exchange Commission recognized and approved the merger way back in May 2012 – validating Mysolid’s application of the unused input VAT which it, as the surviving private firm, owns.
The decision was reached en banc, affirming an earlier resolution of the tax court’s 1st Division.