Tag: Sub-consultant fees

Payments made by a principal contractor to a third-party consultant engaged to perform part of a contracted service. Tax authorities challenge deductibility and withholding compliance where cross-border sub-consultant arrangements lack substance, documentation, or arm’s length pricing.

Philippines vs Snowy Owl Energy Inc, March 2021, Tax Court, CTA CASE No. 9618

Philippines vs Snowy Owl Energy Inc, March 2021, Tax Court, CTA CASE No. 9618

/ Services and Fees, Tax Treaty Interpretation, Withholding Tax (WHT), British Virgin Islands, Hong Kong, Management fee, Source Of Income, Sub-consultant fees, Terretoriality Principle, Withholding tax
Snowy Owl Energy Inc paid sub-consultant fees to a Hong Kong-based, BVI-registered firm under a 2013 consultancy agreement. The Philippine tax authorities assessed deficiency income tax and final withholding tax on those payments. The Tax Court decided in favour of the taxpayer in 2021, ruling that fees for services performed outside the Philippines are foreign-source income and therefore not subject to Philippine income tax or withholding tax ... Read more