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Tuesday, April 19, 2005
Tax notes: Used vehicle sale by securities dealer
THE sale of a used motor vehicle by a company engaged in stock brokering and in dealing in securities may be deemed done in the course of trade or business and may be subject to VAT if the articles of incorporation of said company also vests incidental powers to acquire, purchase and sell personal property of every kind and description. (ING Barings Securities Philippines Inc. v. Commissioner of Internal Revenue, CTA Case 6188, Jan. 14, 2005)
The VAT is imposed on any person who, in the course of trade or business, sells goods or properties. The phrase “in the course of trade or business” means the regular conduct or pursuit of a commercial or an economic activity, including the transactions incidental to this activity. If an activity is among the functions identified in the company’s articles of incorporation, the activity shall be considered in the course of trade or business. (Source: Punongbayan & Araullo)
(April 19, 2005 issue)
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