NextGen Day

Online marketing and delivery company Lazada was ordered by the Court of Appeals (CTA) to pay Makati City more than PHP8 million in local business taxes (LBT).

Lazada E-Services Philippines Inc. shall pay PHP8,167,694 in LBT for the tax years 2015 (PHP3,420,782.61) and 2017 (PHP4,746,912.15), including interest and surcharges, according to the 22-page ruling.

The taxes were calculated using the business’s declared gross sales and revenues for 2015 and 2017 of PHP2,292,557,230 and PHP1,550,132,654.20, respectively.

Lazada had a PHP21.84 million first assessment, however, the PHP13.67 million LBT for 2016 was thrown out for a lack of supporting documentation.

The Makati Regional Trial Court Branch 132 decision was the subject of a petition for review that was submitted and “affirmed with modification” on November 15, 2021, leading to the CTA decision.

The corporation was unable to demonstrate that operations in its Makati office were restricted to non-revenue producing activities, according to the court.

In 2016, Lazada relocated its main office to Taguig City, but it had a branch in Makati until September 30, 2017.

The firm’s failure to timely object to the LBT evaluation for 2015, which has since become final, was highlighted by the court.

Therefore, the petitioner is no longer permitted to contest the same (2015 assessment),” the court stated.

Regarding the 2017 LBT, the court decided that “nothing on record would remotely support the petitioner’s argument that the operations of its marketing office were limited to non-revenue producing activities and that no sales were recorded therein.”

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