Manila: The Court of Tax Appeals (CTA) has directed BASF Philippines, the local subsidiary of the multinational chemicals firm, to remit PHP10.2 million in back taxes for the taxable year 2017.

According to Philippines News Agency, the CTA's Second Division, in a 44-page decision dated October 21, also instructed BASF Philippines to pay delinquency interest at a rate of 12 percent per annum, amounting to PHP3,289, calculated from February 26, 2021, until the complete settlement is made. The assessments pertain to deficiencies in income tax, expanded withholding tax (EWT), and withholding tax on compensation (WTC) for the year 2017.

The CTA dismissed the company's claims that the tax assessments were invalid, arguing that the Bureau of Internal Revenue did not adhere to due process when transitioning the preliminary assessment notice (PAN) into a formal letter of demand (FLD) without considering the company's defenses and supporting documentation. The court noted that BASF Philippines failed to provide evidence of the attachments mentioned in its reply to the PAN, rendering the reply as mere factual allegations unsupported by relevant documents.

In a related ruling dated October 21, the CTA's Second Division rejected a petition from L.T.J.S. Store, an importer of Vietnamese rice, seeking a PHP879,513 tax refund for alleged overpayment in 2021. The court concluded that the importer had not demonstrated it pursued its appeal with the Bureau of Customs prior to approaching the tax court, as required by procedural rules.

The CTA emphasized that jurisdiction is defined as the authority of a court to hear and resolve a case, and it must have jurisdiction over the subject matter to decide on the merits. If it is evident from pleadings or evidence that the court lacks jurisdiction, the court must dismiss the claim without ruling on the merits.