BIR REGIONAL DIRECTOR HAS NO POWER TO CLOSE A BUSINESS, TAX LAWYER SAYS + SSS OTHER AGENCIES BACK TRABAHO BILL
Dear Clients & Friends,
We are sending the following relevant tax updates for this week, for your reference and information:
COURT OF TAX APPEALS (CTA) DIGEST
TTRA SHOULD NOT OPERATE TO DIVEST ENTITLEMENT
FAILURE TO COMPLY WITH ADMINISTRATIVE ISSUANCE DOES NOT DEPRIVE THOSE WHO ARE
ENTITLED TO THE BENEFIT OF A TTRA
AVAILMENT OF THE PREFERENTIAL RATES UNDER TAX TREATIES ENTERED INTO BY THE PHILIPPINES IS NOT CONDITIONED UPON THE FILING OF A PRIOR TTRA
The Petitioner Commissioner of Internal Revenue (CIR) filed a Petition for Review seeking reversal of the earlier decision of the Court in Division cancelling the assessment on deficiency Final Withholding Tax (FWT) on royalties against the Respondent Toyota Motor Philippines Corporation. The issue arose from the Technical Assistance Agreement entered into by the Respondent with Toyota Motor Corporation, a foreign corporation and a resident of Japan. In the trial, it was noted that the Respondent applied for a Tax Treaty Relief Application (TTRA) requesting confirmation that the royalties it paid is subject to ten percent (10%) income tax rate pursuant to “Philippines-Japan Tax Treaty”. After two (2) years, the Respondent received a copy of BIR Ruling denying its application for tax treaty relief due to failure in filing the TTRA with the ITAD within the period provided under Revenue Memorandum Order (RMO) No. 72-2010 and RMO No. 1-2000 which requires that the TTRA must be filed before the transaction. Thereafter, an assessment was issued to Respondent which was also countered arguing that the availment of the preferential tax treaty rates under tax treaties entered into by the Philippines is not a prerequisite upon the filing of a prior TTRA. In the resolution, the Court En Banc agrees with the findings of the Court in Division citing the case of Deutsche Bank AG Manila Branch vs. Commissioner of Internal Revenue in which the Supreme Court has already pronounced that the BIR cannot totally deprive those who are entitled to the benefit of a treaty relief for failure to strictly comply with an administrative issuance requiring prior application for tax treaty relief. Thus, the fact that Respondent failed to file an application for tax treaty relief does not preclude it from enjoying the benefits of the preferential tax rate. The Petition for Review is DENIED and the earlier decision is AFFIRMED. [COMMISSIONER OF INTERNAL REVENUE VS. TOYOTA MOTOR PHILIPPINES, CTA CASE NO. 8772, SEPTEMBER 19, 2018]
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- Yuchengco-led solar project gets tax perks
- Pag-ibig H1 income reaches P16.09 billion
- BIR reg’l director has no power to close a business, tax lawyer says
- DOF expects P11 B from mining tax reforms
- SSS, other agencies back TRABAHO bill
Yuchengco-led solar project gets tax perks [Manila Bulletin, September 20, 2018]
The 20-megawatt solar power project expansion of Yuchengco-led PetroSolar Corporation had cornered warranted investment incentives from the Board of Investments (BOI), the company has announced.
Pag-ibig H1 income reaches P16.09 billion [BusinessMirror, September 20, 2018]
THE Home Development Mutual Fund (Pag-IBIG) has reported a net income of P16.09 billion for the first six months of the year, increasing by around 20 percent compared to the recorded income of P13.3
billion in 2017.
BIR reg’l director has no power to close a business, tax lawyer says [Manila Bulletin, September 18,
A former BIR regional director and now a tax practitioner asked the question as she appealed to BIR
Commissioner Caesar R. Dulay to lift the closure order issued by Cebu Revenue Regional Director
Eduardo Pagulayan, Jr. against her client Ong Kin King and Company of Mandaue City.
DOF expects P11 B from mining tax reforms [Manila Bulletin, September 17, 2018]
The Department of Finance (DOF) expects higher revenues once the proposed amendment to the
existing fiscal regime covering all mining operations is passed into law.
SSS, other agencies back TRABAHO bill [Manila Bulletin, September 16, 2018]
State-run Social Security System (SSS) and other government agencies have expressed support for the
Department of Finance’s (DOF) proposed second tax reform measure that lowers the present corporate
income tax (CIT) rate and modernizing investment incentives.
Thanks and best regards.
WILLIE B. SANTIAGO
Lawyer and Certified Public Accountant
Tax & Corporate Services Division