Practice question
A private contract says the purchaser will reimburse all VAT cost. During collection, the seller points to that contract as replacing the person liable under the Tax Code. The buyer insists the contract is economically meaningless. Which is correct?
- The contract automatically changes statutory taxpayers
- The allocation can never affect price
- The BIR is bound to collect only from the buyer
- The entire Tax Code is suspended
- The agreement can allocate the economic cost between parties without substituting the statutory taxpayer
Legal references
- Bagong Alyansang Makabayan v. Abaya, G.R. No. 221190, October 8, 2024, en banc main decision, discussion of VAT shifting: https://lawphil.net/judjuris/juri2024/oct2024/gr_221190_2024.html
- Philippine Airlines, Inc. v. CIR, G.R. No. 198759, July 1, 2013, main decision: https://lawphil.net/judjuris/juri2013/jul2013/gr_198759_2013.html
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