Philippines vs Filinvest Development Corporation, July 2011, Supreme Court, G.R. No. 163653

Category: Financial Transactions, Tax Avoidance Schemes | Tag: , , , , ,
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In the Filinvest case an assessment had been issued where the tax authorities had imputed interest on an interest free loan.

Judgement of the Tax Court

The Court set aside the assessment.

The tax authorities power to allocate gross income does not include the power to impute ‘theoretical interest’ because there must be actual or, at the very least, probable receipt or realisation by the taxpayer of the income that is being allocated.

 






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