The Philippines Supreme Court ruled that airtime fees paid by Aces Philippines to Aces Bermuda are subject to withholding tax due to data transmission through Philippine gateway facilities.
Payments to non-resident foreign corporations for cross-border services are subject to final withholding tax and final withholding value-added tax. VAT is levied if services are utilized within the Philippines, even if the provider is abroad. Reimbursable expenses among related parties are subject to withholding tax as financial gains benefiting foreign corporations.
Source: P&A Grant Thornton
