Philippines: Foreign shipping companies entitled to VAT zero-rating (Supreme Court decision)

A Supreme Court decision concerning whether foreign shipping companies were entitled to VAT zero-rating.

July 30, 2024

The Supreme Court held that fees received by the taxpayer from foreign shipping companies for services related to manning vessels were subject to 0% value added tax (VAT).

The tax authority argued that the taxpayer’s activities resulted in the shipping companies being engaged in business in the Philippines, and thus that the fees paid by the companies to the taxpayer would not be entitled to VAT zero-rating.

The court rejected the tax authority’s position, finding that the shipping companies had no command over the taxpayer in the operation of its business, even in the conduct of its recruitment process, and thus its activities could not be attributed to the companies.

Read a July 2024 report prepared by the KPMG member firm in the Philippines

Thank you!

Thank you for contacting KPMG. We will respond to you as soon as possible.

Contact KPMG

Use this form to submit general inquiries to KPMG. We will respond to you as soon as possible.

By submitting, you agree that KPMG LLP may process any personal information you provide pursuant to KPMG LLP's Privacy Statement.

An error occurred. Please contact customer support.

Job seekers

Visit our careers section or search our jobs database.

Submit RFP

Use the RFP submission form to detail the services KPMG can help assist you with.

Office locations

International hotline

You can confidentially report concerns to the KPMG International hotline

Press contacts

Do you need to speak with our Press Office? Here's how to get in touch.

Headline