The determination of the prescriptive period and the assessment of tax liabilities during tax audits require careful consideration due to some of its complexities. In a recent case decided by the Supreme Court concerning a domestic corporation (petitioner), the significance of the prescription period in assessing value-added tax (VAT) deficiency and the issue of VAT imposed on interest on loan transactions were brought to the forefront. The decision, in this case, hinged on the impact of the taxpayer’s amendment of return to the prescriptive period to assess and on when loan transactions are considered incidental business transactions subject to VAT.
Source: philstar.com
