Practice question
A seller decides to absorb an indirect-tax cost instead of increasing its sale price. Does that choice alone eliminate a tax imposed by law on the seller?
- Yes, passing on is mandatory for liability
- Yes, only buyers can owe indirect taxes
- No; absorbing or passing on the economic cost does not by itself determine the seller’s statutory liability
- Only an invoice label decides
- Yes, every absorbed tax is automatically refunded
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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