SC: Only Authorized Representatives of Taxpayer May Receive BIR Assessment Notice
Other Relevant Tax Updates:
- TAX & BUSINESS-RELATED NEWS [DECEMBER 21-27]
- CTA CASES ON LGU ASSESSMENTS, NEA-REGISTERED ELECTRIC COOPERATIVES TAXABILITY & EXEMPTION & DEPARTMENT OF JUSTICE JURISDICTION ON GOVERNMENT AGENCIES DISPUTE
- TAX & BUSINESS-RELATED NEWS [DECEMBER 21-27]
- Employers, workers still waiting for word on PhilHealth, Pag-IBIG hikes
- 20 Countries with Highest Income Tax Rates in the World
- Meralco’s MGreen completes P15.9B investment in SPNEC, MVP takes over as chairman
- Metal miners back government call for local processing
- DOLE: Wage hike in 2024 possible but boards make final say
- Until next time: Well-loved restaurants that closed in 2023
- Baguio hailed Philippines’ most affordable holiday destination
- Rising star: ADB-backed DALI to shake up retail giants SM, Robinsons, Puregold
- Palace: January 23 a special non-working day in Bulacan
- IPO on the radar of Dennis Uy-led Wendy’s and Conti’s
- MORE Power brings antipilferage drive to barangays
- Registered 4Ps beneficiaries to enjoy electricity bill discounts in January 2024
- Marcos seeks analysis of nat’l gov’t tasks for transfer to LGUs
- Rep. Castro asks DAR to check ‘conflict of interest’ between DENR chief Yulo in Palawan ranch
- PEZA: Transport modernization lures EV firms to set up factory in PH
- SSS extends options for contributions, sickness benefits
- Ramon Ang’s SMC eyes January finish for 1,000 MWh battery energy storage systems
- Aboitiz Infra lures more firms in Batangas industrial estate
- Kapa ministry leaders get life imprisonment — SEC
- Ayala buys into popular North Luzon chain St. Joseph Drug
- PPA suspends 2 firms over ‘cruise chaos’
- SC: Only Authorized Representatives of Taxpayer May Receive BIR Preliminary Assessment Notice
- Hiring of priests for gov’t not allowed under law – COA
- CTA CASES
[“ASSESSMENTS” OF LBT THAT MUST BE PAID AS A PREREQUISITE FOR THE RENEWAL OF BUSINESS PERMIT COULD NOT BE CONSIDERED AS THE “NOTICE OF ASSESSMENT”] [BILLING STATEMENTS ARE NOT IN THE NATURE OF NOTICE OF ASSESSMENTS]
Petitioner Holcim Philippines, Inc. filed a Petition for Review praying that the Court render judgment granting its claim for a refund of alleged illegally and/or erroneously collected Local Business Tax (LBT). The Petitioner argued that the Billing Statements issued by the Business Permit and Licensing Office (BPLO) of the Respondent City of Taguig are not the “assessments” contemplated in Section 195 of the Local Government Code (LGC) and are not formal “assessments” that should be formally protested. On the other hand, the Respondent countered that the Billing Statements issued to the Petitioner are in the nature of Notice of Assessment as contemplated in Section 195 of the LGC, and that the lower court is correct in ruling that the Petitioner’s claims for a refund were filed out of time. In ruling, a perusal of the Billing Statements shows that the same did not provide notice of the facts and laws on which the billed amounts were based. From the details indicated in the said Billing Statements, it can be observed that the same was issued not as assessments of LBT but for the renewal of the Petitioner’s business permit. No deficiency tax, surcharge, or interest were indicated in the subject Billing Statements. Thus, the said Billing Statements cannot be considered as the notice of assessment contemplated under Section 195 of the LGC. Moreover, the Court found that the Petitioner complied with the prescriptive period for filing claims for a refund of LBT and that the Petitioner is entitled to a refund of the amount claimed. Hence, the Petition was GRANTED. [HOLCIM PHILIPPINES, INC. VS. THE CITY OF TAGUIG & CITY TREASURER OF THE CITY OF TAGUIG, CTA AC NO. 268, NOVEMBER 15, 2023]
[UNDER THE CURRENT STATE OF LAW, ELECTRIC COOPERATIVES REGISTERED WITH THE NEA ARE SUBJECT TO INCOME TAX ON CERTAIN SOURCES]
[THE STATE OF LAW, AS IT IS NOW, CONFERS NO ABSOLUTE INCOME TAX EXEMPTION PRIVILEGE TO NEA-REGISTERED COOPERATIVES]
[TAXPAYERS WHO RELY ON A PREVIOUS RULING OF THE CIR IN GOOD FAITH MAY NOT BE PREJUDICED BY ITS SUBSEQUENT REVERSAL]
[LACK OF AUTHORITY OF THE REVENUE OFFICERS IS TANTAMOUNT TO THE ABSENCE OF A LETTER OF AUTHORITY ITSELF WHICH RESULTS IN A VOID ASSESSMENT]
[CIR’S FAILURE TO CONSIDER THE TAXPAYER’S REPLY & PROTEST & TO PROVIDE AN EXPLANATION WHY THE ARGUMENTS RAISED THEREIN WERE REJECTED, ARE VIOLATIVE OF THE TAXPAYER’S DUE PROCESS RIGHTS THAT RENDERS THE ASSESSMENT VOID]
Petitioner Nueva Ecija I Electric Cooperative, Inc. filed two (2) Petitions for Review seeking the cancellation of the assessments issued by the Respondent Commissioner of Internal Revenue (CIR) for taxable years (TYs) 2012 and 2013. The Petitioner, by the very nature of its franchise, argued that it is not liable to income tax. Likewise, it is a non-stock, non-profit electric cooperative duly organized under Presidential Decree (P.D.) No. 269 and enjoys permanent exemption from income taxes. On the other hand, the Respondent countered that the Petitioner is not exempt from the payment of income tax based on Revenue Memorandum Circular (RMC) No. 74-2013, which circularized the BIR’s MARELCO Ruling, providing that electric cooperatives registered with the National Electrification Administration (NEA) are subject to income tax on their electric service operations. In ruling, the Court held that the supposed permanent income tax exemption of electric cooperatives under P.D. No. 269, as amended, which has been effectively withdrawn by subsequent legislation, was not entirely restored by the Fiscal Incentives Review Board (FIRB) Resolution No. 24-87. Thus, at present, electric cooperatives registered with the NEA are subject to income tax for income derived from (1) electric service operations; and (2) other sources such as interest income from bank deposits and yield or any other monetary benefit from bank deposits and yield or any other similar arrangements. Notwithstanding that the Petitioner is subject to income tax, the assessment for TY 2012 is void for being violative of Section 246 of the Tax Code, as amended, which provides for the non-retroactivity of Rulings. Moreover, the Revenue Officers (ROs) who conducted the audit of the Petitioner for TY 2013 were not clothed with the proper authority as one of the ROs was not named in the Letter of Authority (LOA) authorizing the audit as her supposed authority only emanated from a Memorandum of Assignment (MOA) issued by the Revenue District Officer, and the other RO was never named in the LOA nor the MOA. A review of the records also showed that the Preliminary Assessment Notice (PAN), Formal Letter of Demand (FLD), and Final Decision on Disputed Assessment (FDDA) for TY 2012 are all identical, as well as the PAN, FLD, and FDDA for TY 2013. Consequently, Respondent failed to consider any of the arguments raised by the Petitioner in its Replies and Protests. Thus, the Respondent failed to observe the due process rights of the Petitioner rendering the assessments for TYs 2012 and 2013 void. Consequently, the Petitions were GRANTED, and the assessments and their resulting Warrant of Distraint and/or Levy were all CANCELLED. [NUEVA ECIJA I ELECTRIC COOPERATIVE, INC. VS. COMMISSIONER OF INTERNAL REVENUE & REGIONAL DIRECTOR OF REVENUE REGION NO. 4, CITY OF SAN FERNANDO PAMPANGA OF THE BIR, CTA CASE NO. 10587 & 10632, NOVEMBER 13, 2023]
[JURISDICTION IS NOT DICTATED BY TAXPAYER BY INVOKING THE LACK THEREOF WHEN ITS CLAIM FOR A REFUND WAS DENIED DUE TO ITS OWN FAILURE TO ESTABLISH ITS ENTITLEMENT] [JURISDICTION, ONCE ACQUIRED, CONTINUES UNTIL THE CASE IS FINALLY TERMINATED] [SECRETARY OF JUSTICE HAS JURISDICTION BETWEEN & AMONG GOVERNMENT AGENCIES & GOCCS]
Petitioner National Development Company filed a Petition for Review seeking to nullify the Court of Tax Appeals (CTA) 3rd Division’s earlier Decision denying its request for a refund of Value-Added Tax (VAT). Petitioner maintained that the dispute between a Government-Owned and Controlled Corporation (GOCC) (i.e., Petitioner) and the Respondent Commissioner of Internal Revenue (CIR), representing the BIR, a government agency, is within the jurisdiction of the Secretary of Justice (SOJ) pursuant to the Presidential Decree (P.D.) No. 242. Likewise, the Court in Division should not have denied its claim for a refund but rather dismissed the case for lack of jurisdiction. In ruling, the Court referred to the Supreme Court’s ruling in CIR vs. SOJ and MCWD case, which held that a party cannot invoke jurisdiction at one time and reject it at another time in the same controversy to suit its interests and convenience. While it was already settled that the SOJ has jurisdiction between and among government agencies and GOCCs, regardless of the nature of the dispute, i.e., all, without exception, save for those cases already pending at the time of the effectivity of the P.D. No. 242, the Court cannot allow the Petitioner to change its stance when it lodged its claim for a refund before the Court in Division and eventually allege lack of jurisdiction when it filed its Petition for Review before the Court En Banc after the CTA 3rd Division denied its claim for lack of merit. Moreover, the Petitioner failed to establish its entitlement to a refund. After a perusal of records, the Petitioner indeed failed to prove not only its actual input VAT incurred, evidenced by official receipts and/or invoices issued from its purchases, but also its own sales to government, which may be substantiated by the official receipts and/or invoices it issued. Consequently, the Petition was DENIED. [NATIONAL DEVELOPMENT COMPANY VS. COMMISSIONER OF INTERNAL REVENUE, CTA EN BANC CASE NO. 2572, NOVEMBER 13, 2023]
Employers, workers still waiting for word on PhilHealth, Pag-IBIG hikes [ABS-CBN News, December 27, 2023]
From the current 4 percent, Philhealth contribution is set to increase to 5 percent by law, but officials are still awaiting the go signal from Malacanang.
For Pag-IBIG Fund, the current P100 per month will increase to P200 with employers matching the increased contribution.
20 Countries with Highest Income Tax Rates in the World [Yahoo Finance, December 27, 2023]
In this article, we will look at 20 countries with highest income tax rates in the world.
Meralco’s MGreen completes P15.9B investment in SPNEC, MVP takes over as chairman [GMA News Online, December 27, 2023]
SPNEC is the developer of a planned 3.5 gigawatts (GW) solar and 4.5 GW-hour battery project centered in Nueva Ecija —envisioned to be the world’s largest single contracted solar project.
Metal miners back government call for local processing [The Philippine Star, December 27, 2023]
The country’s biggest metallic miners have expressed full support for the government’s push for local mineral processing of green metals to help in energy transition despite perceived challenges next year.
DOLE: Wage hike in 2024 possible but boards make final say [Cebu Daily News, December 26, 2023]
Laguesma said he respects the RTWPBs’ need to maintain their integrity and credibility in being impartial –without any influence, even from the labor secretary.
Until next time: Well-loved restaurants that closed in 2023 [Rappler, December 26, 2023]
Here’s a tribute to the names we’ll miss – and here’s to hoping that comebacks will be made one day!
Baguio hailed Philippines’ most affordable holiday destination [The Philippine Star, December 26, 2023]
This is a worldwide phenomenon observed by travel app Agoda. People are always on the lookout for the best deals, and Agoda, analyzing the average room rates of tourist destinations from December 22 to 31, has come up with a list of the 10 most affordable destinations around Asia Pacific for Christmas and New Year.
Rising star: ADB-backed DALI to shake up retail giants SM, Robinsons, Puregold [Bilyonaryo, December 25, 2023]
Philippine retail powerhouses SM of the Sy family, Robinsons Retail led by the Gokongweis and Lucio Co’s Puregold, may face a formidable contender in DALI, an emerging Swiss grocer backed by the Asian Development Bank, discreetly reshaping the local retail landscape.
Palace: January 23 a special non-working day in Bulacan [ABS-CBN News, December 25, 2023]
This is to allow the province to celebrate the anniversary of the inauguration of the First Philippine Republic, which took place at the Barasoain Church, in Malolos, Bulacan on January 23, 1899.
IPO on the radar of Dennis Uy-led Wendy’s and Conti’s [Philippine Daily Inquirer, December 25, 2023]
Davao-based tycoon Dennis A. Uy’s food businesses Conti’s Bakeshop & Restaurant and fast food chain Wendy’s Philippines are potential initial public offering (IPO) candidates once market conditions improve, according to the head of the country’s biggest investment bank.
MORE Power brings antipilferage drive to barangays [Inquirer Mobile, December 25, 2023]
Iloilo power distributor MORE Electric and Power Corp. is banking on the cooperation of newly elected barangay officials for the success of its campaign against power pilferage in one of the Visayas’ most populous and power-hungry cities.
Registered 4Ps beneficiaries to enjoy electricity bill discounts in January 2024 [The Philippine Star, December 25, 2023]
The Lifeline Rate Subsidy Program — which will be fully implemented by the start of 2024 — will provide discounts for registered electricity customers who cannot pay their electricity bills at full cost.
Marcos seeks analysis of nat’l gov’t tasks for transfer to LGUs [Inquirer.Net, December 25, 203]
The Presidential Communication Office (PCO) said Marcos issued the directive as part of a full transfer responsibilities, but noted the importance of first defining and identifying the priority core functions and services that should be given to LGUs.
Rep. Castro asks DAR to check ‘conflict of interest’ between DENR chief Yulo in Palawan ranch [Inquirer.Net, December 25, 2023]
According to ACT Teachers party-list Rep. France Castro, they are studying what measures can be taken as the Yulo King Ranch (YKR) in Palawan has been the subject of petitions regarding the distribution of land to farmers beneficiaries, under the Comprehensive Agrarian Reform Program (CARP).
PEZA: Transport modernization lures EV firms to set up factory in PH [Philippine News Agency, December 24, 2023]
Panga told reporters over the weekend that at least four EV manufacturers from the United States, China and Indonesia are looking into investing in the country and establishing their factories within PEZA ecozones.
SSS extends options for contributions, sickness benefits [The Philippine Star, December 24, 2023]
The SSS circular comes after employers and CCPs were affected in the multi-factor authentication and added security features in the log-in details of the SSS portal.
Ramon Ang’s SMC eyes January finish for 1,000 MWh battery energy storage systems [Bilyonaryo, December 24, 2023]
BESS technology was first introduced in the Philippines by SMC’s Masinloc power facility in 2016, pioneering advanced lithium-ion battery technologies in Southeast Asia.
Aboitiz Infra lures more firms in Batangas industrial estate [The Philippine Star, December 24, 2023]
Aboitiz InfraCapital Economic Estates has lured more foreign investors into the country as more locators continue to set up production hubs in its industrial estate in Batangas.
Kapa ministry leaders get life imprisonment — SEC [GMA News Online, December 23, 2023]
The Regional Trial Court of Butuan City-Branch 33 has convicted the masterminds behind the Kapa Community Ministry International Inc. investment scam to life imprisonment.
Ayala buys into popular North Luzon chain St. Joseph Drug [Inquirer Mobile, December 22, 2023]
Established in 1958 by pharmacist Jose “Pepe” Cruz and his wife Leila Lagman, the pharmaceutical company has grown to 112 stores across the region.
PPA suspends 2 firms over ‘cruise chaos’ [The Philippine Star, December 22, 2023]
In a statement yesterday, the PPA said it suspended ship agent Ben Line Agencies Inc. and shore excursion provider TravelPeople Ltd. after a cruise disembarkation controversy at the Port of Manila went viral on social media.
SC: Only Authorized Representatives of Taxpayer May Receive BIR Preliminary Assessment Notice [Supreme Court, December 22, 2023]
This was the ruling of the Supreme Court’s Third Division, in a Decision penned by Associate Justice Japar B. Dimaampao, as it granted the petition for review on certiorari filed by Mannasoft Technology Corporation (Mannasoft). The petition challenged the rulings of the Court of Tax Appeals (CTA) En Banc which had upheld the deficiency tax assessments issued against Mannasoft.
Hiring of priests for gov’t not allowed under law – COA [Rappler, December 21, 2023]
In its report, the auditing body reminded the Capiz State University (CapSU) in the Visayas that the hiring of a priest, minister, preacher, pastor or any member of a religious sect for a government entity such as a state university is banned under section 29 (2) of article VI of the 1987 Constitution.