CTA Case No. 4781 (Decision)
~ - -- REPUBLIC OF THE PHILIPPINES COURT UF TAX APPEALS QUEZON CITY t'IIRIGLEY PHILIPPINES, INC., Pr:.>t: :i. t ion�~~-~~ -- vet~sus C. T.A. CASE NO. 4 7 81 THE COMMISSIONER OF lNIERNAL REVE NU E , HE~sponclent. }{---- - -- - - - - x DEC I SION 11\j_s i.s a cJ.;"i.E! i�oi�' jt.tcliciaJ. i�� ef u nd of the allege d o v E�l���pa :i. cl h t i t hh o J. cl in\!~I on d :i. vi cl f:~nd p;:~y m e nt:s of Pt>t it :i.ont~ i-~ l-\l(�:iulc~y 1 -� t ��, :iJ.ippine s~ Inc.~ is .:-:-~ do m e s t i c lt 1 s a wholly-owned subsidiary ut William (,.)) � j_ q .1. l~ ',' 1 u . n . L h :i. L'dq () 1 (t,..Jl- � iq.I. !2Y--:U .. !:-3 .. for~ Jl ' .. �j b. f � O l'' t h 0 .i ':Y~l., :i. t appear�� ~, thc:tt i''t-' lJI i. -i: t Pi. I 1.) Jl l; ~�I(.) o c.:c.::i!~ .i.OJiS to and 1. -J�,.�� i q .1. e �i;�-U. :::-J.. c:l i v .i. tl tJ n �.i �~ .:1m c.n.m i; .i. n q i; o �t-� .I .~;.1 i:::8t~~ i:.~(H). 0 0 l P10,800. 000.002 respe ctivel y. i . .. �- .... Declared on June 20, 19':31 <Exh. "E") . ;-::Declared on October 8, 1 '3'3 1 <Exh ~ "F" >. 551
DECISION - C.T.A. CASE NU. 4~81 - ~- Un said dividend remittances, pet itioner alleged that it paid to the Bureau o~ Internal Revenue a 20X withholding taxes due thereon as follows: <1> On Pl~. ~ ee,~ou.uu P1,~93,230.00 3 a. 1 !:t/. wi t .hholding ta~-::es 664,410.00 4 b. additional 5/. PlU,BUU,OOU.UU 2,150,000.00 15 <2 > Un ~U% withholding taxes P4,81'7,640.UO a. T UT AL Ptu � su ~ln t to Section 25<b ><5J<B> of the Tax Code (providing that the rate of tax of such dividends is only 15%) and the decision o� the Supre me Court in the case o� Commissioner of internal Revenue vs. Procter and Gamble Philippine 11anu�acturing Gorp. and the Court: o.f Tax Appeals, U f~�ce mb er 19'::) 1, 204 SCRA 3'7'7 , petitioner invokt?d entitlentr:>nt to the tax rate on dividend remittances to Wrigley-U.S .. On March 4, 1992, petitioner filed with the BIR Appellat e Divi si on a written claim for refund of the amount. oJ p 1 ,. �04, 4 J u. uu representing the excess 5X 3 Evidencf:d tty Payment llrder No. ClliL4b051 <Exh. "L" > and Centra l Bank Confirmation Heceipt No. B20955765 CExh. "~") both dated July 3, 1991. 4 EvidenCE'd by Payment Ureter No. C10778976 ( Exh. "N") and Cent1� a1 Ban}: Confirmation He�ce?ipt No � .I:I:-LJ1:!�L!J <.E:x.tJ. "0" J both dated August Le, 1991. 0 .E:videnc:ed by I-'nyme nt Urder llo. C11b!:�5926 (Exh. "S") and Central Hardt C:uniirmatiun HE'c:P.ipt. llo. l:C!09!:t8194 (E}th. "T"I both dated November 28, 1991. 552
DECISJON - C.T.A. CASE NU. 4~81 - 3- wi thh oJdi nR p a ym J;:'�nt.s on dividend remitta n ces , com~uted as iollows: ( 1) l> i vidends on June� 1 ~<.=Jl P13,::LC\8 , 200 . 006 < ~ I Uividends on October 199 1 10,800, 000 . 007 Total P2 4,088, 2 00.00 ~ U % wi thh o ldin g tax paid P 4, !:H 'l , 640.00 and remi tt ed to HlH Should be - 1~% withh o lding 3 , 513, 230 . 00 p 1 , 2 04, 410.00 tax <2 4,088, 2 00 x 1~%1 H�?iiJ.ndablf.? a mo unt P e t j _t i .on e 1� with out waiting for the responde n t to act on the claim �or re1und fil ed the instant petition for revie w u 11 Apr i 1 H, 1 '::J'9 ~ to toll the running o:f t h e prescriptive period set for th in Section 243 of t h e Tax Code. Respondent on his part did not submit any evidence to controve:c�t �the correct ne�ss oi the tax return as wel l as cd.lH-:> r :reJ.evant facts , nor refute petitioner's claim , but opted to s ubmit thi s case for decision on t h e bas i s oi t he records and pleadi ng s bi the case. Th e (.IJJ t hiE: appeal are th e following : a) wh e th e r or lJ (It petitio n er is entitled to t h e preie:r e ntiDJ J ::::�/. t a :�: r at e� on d i v i d e rt d s r e rn i t .t .e d �t o i t s .. parent Cor p oration pursuant to Section 25 ( b ) ( =�) ( 1:1 ) o i the 'J' ax Cc.�cl e ; b) whethe r or not petitioner has the �Approved by a letter oi CB-lnternational Sector dated July 24, 1991 <Exh. "G" I for remittance . 7 Approved by a lett er of CB - lnternational Sector da t ed Decem be r 12 , 1991 <Exh. "P " J for !'emittance. 553
- DECISION C. T. A. CASE HU. 4'/81 - 4- personality in br ins1ing the present suit :for .being a withholding agent o:f. Wrigley - U. S. and claim t h e alleged refund . 1 c.:o g a rds � tJ e i:i.rst i ss ue i t i s impor-tant consider the p ertiTJent provisions of the National ln terna.l Hevenue Cude , as amended, particularly Section 2 ~:, < lJ > <:�, l < fJ, l v1 !J :i. c h s t. a t e s , a n d \</ e q u o t e : "(~ ) Ta~ on certain incomes received by nonresid e nt Ju x-e:i(IJI corpor�atio ns >t >t n (!:{) UJJ d:i�J it.let~c.ls received irorn a domestic corpor; ~ Lion .liable to ta >t untler t his Chapt.er, the t.sn: ___s )J.?_l J. .be .I :-_:, ;~ o:t t .he dividend received , >DD: s ubj e cl tt.� 'ltH? co JJdition that t .he country i11 which the nonresiden t foreign corporation is domici .lf;'d shaLl aJ.l c�w the cx� edit. against �the ta :-t du e irt�m t .he nun-resident ietreign corporation, taxes deemed to have been paid in �ttJe Philippines equivalent to 20�. which re presen t the diffe rence between the regular ta x <~ 5 X> o n corporations and the tax <l~X) on dividend s as prn v i.deci in this su bparag r�a ph. " <Und e rs cori ng ::; u ppJ. ie d) By vi :ct ue oi t !H? a bove-cited px �ovision of the Ta>t Code, petitioner claimed thai.. it is required to withhold and remit orlly 1 5% of the dividend s due t .o Wr�jq J.ey -U.S . Th e a ior<?rnP oli�.lTH~�d :i ~ ~ nld. <ll i j r s t irnp:resE:ion. J.n T C-?CE'TI t c~ ase c.a:!. Commissioner of lnt.ernal Hevenue v s. l'r oc-t. e:r and G�- m.ble PhiJ.ippine l1anu:t- c uri.ug Corporat. iun un d the CuurL u� Tax Anp(? al ,, G . H . No. L- E.SB ::-: 18, DE' c ernb u :r ., ~U4 :.:1'1'1, ..:., 554
-- DECISION: - C. T � .A. CASE NU. 4'/ol - !.�� - ~:upreme Cou :rt reconsidered en bane the decision � of the Second .llivisiCJIJ, the C:ottrt said: "Th e o:cdiilary thi.!ty-iive percent (35;~) tax rate applicable to dividend remittances to noJJ - resident forei!,ln corporate st ocl~holders of a Philippine corporation , goes down to fifteen percent ( 1~�% > i i the couutry cd domicile of the fo re ign stockhold~r corporati on ' s h a l l allow' s u ch lu:rE�igrJ co:cpcnat..ion a t .ax credit for � t a)~es dE�emed paid iiJ the Phi 1 i ppines, r appl i cat ioJl against UH? ta;.t :payable to the domiciliary courJtry by the foreign stocltholder corporation . Jn other� words , in the instant ca E.:e , �LhE� reduced Jifteen percent ( 1:'.�/.) ~i_j._yj. Q_S'!.!Q___!,;_a~~- ra..te i s_ _.?..Q..Q l i c a b l e i f the USA �~l@ll allow' to P&G - USA a tax credit for .:._t_!:_l :�: e ::,.:__.._9 l:::l�'..!!!..':"'.JJ..______l@ i d in the Ph i 1 i p pi n_g s ' iiE!!lis:-~�!1:'...-Le a qain s t t .he US tanes of P&G-USA. �rhe NIRC specifies that s u c h tax credit for � ta~�:es deemed p<:iid in the Philippines' must, as a mi ni mum, re;:ich an amount equivalent to twenty (:;,:0) percentage points which represents the diff eJ '�:?nce between the l-egular thirt.y-five percenl (35/.) dividend t;:n: rate and the pr e �en:�e d fifteen percent ( 151.) dividend ta:!o: rate. I t i s impurtan~ o note that Section 24 < 8) < i. >, NTEC:, doe!:: !_!g_.:t_ require that the US must give a 'Q_�'.erne_Q____ paid' tax crec!i t for �the t)j.y_LQ._end_..t..~;__ _.i:f.l)___per~~t._?.,oe points> waived b_y :l:.:h~--- ___t'h:1.J...JI!J:t_;!J1es in making applicable the preferre d dividend taz rate of fifteen percent ( 1 ~~t%) . lo o'lher� words, our NIHC: does [!_pt r e Q u.i r e' 1. it -1 1: tin? U ~; t ax .L a w 9.: e e !!l__tb. ~__p_a r�_~.D-t...: . \-;0!. P9 J,:_?- _Lj u !} __ ~_(_)_ _. __!_!._~-~1,_?- ~-a i _t,!___l,j}(_'i�__1-,_~-~!lt..Y________p_g!-:..~en t a_g_g 1-!....<;!_i _pt?:....____ uf___ <,.li'!_~g- ~J.!.!,L _ lax waived by the Pll .i.l ippj n~�!.-:1. ThE> Nl.RC t.Jnly requires that UJP u;:; ' !::.:hall a .l. low' P&G - USA a 'Deemed paid' ta)t c r e d i t i 1! a_.c J_ _?_!!!_1:-:LlJ. n _�L__ .e g_ l.l-i: _y _al_J?!J. i ____ t U .L!__ 1e __:l,: ~C:.!'~'t..Y ~ :.,: u > 1~12y t ~!? n La u "''- Ji.9. i~~- t 9 wa i vet.J by the Pl!i .l i pp �inE:2, " <Under sco.ci JJ~I S UJ.'J.' lied l /-'!':''( -t i .n e!J t 1� erei..l..�, is h e question of \olhet 1er the u.s. requ~ re r~f--r, ft..I'C 555
DECISION - C.T .A . CASE NO. 4781 -6 - applicab i li ty oi lhe redu c ed or preferential 15% di v i d e n d ta x rat!::� ur1d e r Se ction 24 <b > Cl) o~ the Tax Code wherei n the hiph court concluded that indeed Section 902 o~ t he U. S. Ta '~ Cod e compl iecl with the requirements o~ Section 24 (b)(l) now S ection 2 5 Cb> <5> CB> of the Na �tional Internal Revenue Cod e , to wit : " 'I hu s , :ior � every 1-' ~� !::1. 25 of dividends a c tually remitted <a :Lter withholding at. the rate of 15;�;) by P&G-Phil. �to its U. S . r'&G US A, a tax credit oi P 2 9. 7 ~ is allo wed by Sectio n 9U ~ US Tax Code for Philippine Corporate income tax " deemed paid" by the parent b u t actually by the wholly owned subsidiary." Petitioner asserts that since P29 . 70 is much hi gher than Pl3. 00 <the amount o~ dividend t a x waived by the Pl1ilippine Government), tmder Section 902 , o~ t h e U. S. it haE: there fore specifically and clearly complied with the requirements oi Section 24 Cb)(l) o~ 1hus, it has been ruled: "It remains only to note that under the 1-'!J i l ippines-Uni �ted Stat.es Convention ' Wit h Re ��pect t o Ta)te s o n lncollle' , the P h i l i p pines , by a treaty commitment , reduced the regular r a t e o� dividend tax to a maximum o~ twe n ty p e 1�o.: e nt <:LUI.) oi t h e gro ss amount of dividends paid to US par e nt c orporations : Article 11. - P.ividends_ XXX ( z ) T h e i; a:�~ r�ate imposed by one o� the Lunt:.ractiny State on dividends derived �rom sources within that Gontt-acting State by a 556
DECISION - C.T.A. CASE NU. 4'181 - "1 - resi d e n t o f th e cd . he r Co n t r acting State shall not.. e): ce<? d - a) 2 5 p e rcent o � th e gros s amount of the div i d end ; or b) '1'/h.�"D .. .th_~-----L~c;~;b _p_:i,_�' n t. i s a corporat.ion,_ ;?_Q._.Qe :[.~E:?.D..t_Q.,t_ _:I:;J}e_ g ross. <'~mount o� the dividend i.t du rin g th e pa1� L t ti th e payin~1 corpora �t..ion ' s 'l a.:-ta b.l e y e ar wh ic !J p r ec e des -Lhe date o:f payment o i th e d i v i d e nd a nd du r ing the wh ole o:f its pri o r L i:D: a .bl e )l Pa r <if <~ ny >, �l..i_ke..?t __) ..Q_ Jl�'r ce n t o:1: t h r:.> ou t s ~,.? ndj.,..o.g_:?._hares o� the voting stoc k __o l t .he pa y i nq corporat.i on wa s owne<;i _ Q.y :L _ __ t h "'?_____}: ~~s;;_Ln...!S?.Jl.. _gq_r_ p_Q_l~.?. ~;;_i9..!h. " ( Under s co r i n g Supp l i e d> :>Ot:it "With Respect to Taxes on Income ." the Philippin es , by a tre a ty comm~tment , reduce t h e reg ula r rate of dividend tax to a maximum of tw e nty p erce nti~U X J of the gross amount of div i den ds pa i d t o US p a r e nt corporati on s . x x } t T h e Ta:-: CoJJV e nt:ion , at t .he , same time, established a t r eaty oblipation on the part o:f t .he Un:i.t e cl S t .ate s that i t " s hall allo w" to a US p an:? nt c o r poration rec ei vi r1g dividends f'rctm i �ts F'h i liJ.�P i JJ e s subs i di a ry" a lta x) credit for t .he a ppr up ria l e a mount oi taxes paid or accrued to th E' 1-' tJ i l i pp ir lf::'E' lty the Philippine l s ub s id i a ry l - ." Th i s is , of course, precisely th E� "d ee�rn e d J-' i::l id" 'l ax cr edit. p rovided for in S e cti on YU L , US T a )~ Co de , discussed above. Cl e arl y, th ere i s h ere on the part o1 the 1-' lt:i. .l i pJ-'i ne s a d e J.ib e r �ate underta lting to red t1 ce th e :c e gul a r di v i c.i -=�n d t a:>t rate o:f thirty -:f ive p e :c ce nt<35X). S inGe, however , the treaty r ate of' twenty p erce ntC ~ U % ) i s a maximum rate , there is r::t. i l l a rl i .:ti ere rd. ia J. o i additional. rech.1c �tion {I f t i v f.? ( ~:, ) p erc:e rd. aq e p o ints which cornpl i a nee oJ US .l a w <S e c t i oJJ ~IU L > wi th t .he re qu ire ments ot S t:>c l: i on L 4 <it>< 1) , NIHC , ma lt es available in n :.-�s p ec t ol div i d e nd s l r om R Philippine subsidi a ry." Thu s th e p e tition er is r equired to withhold and remit a s ta x only 15X of the dividends due Wripley U. S .. 557
DEGISILIN -� C.T.A. CASE NO. 4Y01 -8- The q u estion oi the capacity of Wrig~ey Philippines, Inc. to bring the claim :for refund , being a mere withholding agent, was also ans wered four square� in the above ment i oned case of Comm~ssioner of I nternal Revenue vs. Proct.er and GambJ.e Ph~lipp~ne J1anu:factur~ng Corpora t ~ on, (supra ). Pertinent portion o:f s aid decisictn i s quoted belo'r7: " 2 . The question of the capacity of P&G- Phi~. to brill�! t he claim for refund has substan �ti ve di rnensi orJ.B a s well which, as be seen b Pl ow , also ultimately relate will i a i r Tl f.~s E:. to Under Section 30b of t h e NlHC , a claim for refund or tax credit filed with the Commissioner of Internal Hevenue is essential fo r maintenance oj: a suit. :for recovery of �ta::>~es allegedly erroneously or illegally assessed o r collected : "Sec. ::JOb. H e cover y o .f tax erroneously o:r i .llega11y collectecl . No S ltit or p rocee ding shall he maintained in a ny co urt f or the recov e ry ol any national inte rna~ revenue tax her e after alleged to have been e rrone ously or illegally as ses s ed or col ~ ecte d, or of any penalty c~aime d to have bee n collecte d wi t hout authority , o:r o:L any t':lum a.l J ege d to hav e been e .~~cess:i. v e or in any manner wrong f.ully col.,lected , untJ� ..J. a claim :lur re.i." und or c:recli t has been d u ly :til ed ll'i t.h t h e Commissioner oi Intern al Hevenue; but such s u i t or proceeding may be maintain e d, whether or not s uch tax, pen a lty, or su m ha s b e en paid un der prote~ t or dures E:. l n a ; y c ase , no s uch s ui or proceed i n�t sl 1 a ~l l1 e b e\;1\HJ ai t .er t. 1e e ;�tpira ion eli of �t wo ye ;:n El :fx �o m h e da te pa y rnen tl" he ta::-c o r p e� nal �t. y :rega:rciless o:f a n y SUJ..Ie:t verd fl{;l 558
DECISION - C.T.A. CASE NO. 4781 -9- cause that may arise a:fter payment: XXX, n <Italics supplied) "Section ::JOY. J\utho1 �i-Ly o:f Commissioner to Take CornpromiE.;E'S aiJd to Hef und Ta xes . The Cornnt issictne:r may: )C)()t <::rJ c redit u1 refun d ta,tes erroneously or illeqally :recei vee!, ;o:x . No credit or reit~nd of tax~s or p e nalt ies sbal~ be allowed unless the taxpayer 1~~es in writing with the C ommi ssi oner a c~aim 1or credit or refund within two ( 2 ) year s a:fte:r the payment of the t.a .: or pr.,.nalty." (A s amended by P. D. No. b9) <Emphasis su~plied) S ince the claim for re:fun d was filed by P&G- Phil., the q uestion which a rises is: is P&G- Phil. a "t axpaJ�er" under Secti on 309 C3 > o:f the NIRC? The te:rm "taxpayer" is defined in our NIRC as referring to "any person subject to tax imp osed by the Titl e [on Ta}t on lncomeJ." lt thu s become s import.ant to note that under � Section 53Cc) o:f the NIRC, the withholding ag&n t wh o is "re quired to deduct and withhold any taz" is madt? " personal ly liable for such tax" aod ir1deed is inclemni�i ed against any cJ.a :i. ms and d E�marlcl to: wh ic h t!Je stoclthol de:r mi~Jht. wish to make in questioning the amount o1 pay rnent s: ef :f ec t eel .by the wi thlwlding age.nt in accctl"d <-HJCE' wi LlJ lh ~? J-'l"llvi si ons o:f the NIRC. The wi t hholding aqent , P&G - Phi1., is direct~y and independently l2able �or the correct amount. ol t h e tax that ~ hould be withheld f:rom t he eli v idend remittances . The wi t .hholding agent il3 , .. mo Te over, ~~ d.tje L~t t o and liable :for de:f i c ieiJcy aS BS'S S III ""' Jl t S , S\.n �chai �\:;JE'S an d p e nalt ies Bhoul d the a no u n o .f t .}Je t a;'l: withh el d be iinally o u n d ,, be les s t ln::~ n the amoun �h at E~h c-tu lci h::l''E' '�'!?' wi h h eld md e r law. 1\ n rIE' r !'' C� n l i ;J I I I_ e i u l l i:l X " h a .s b E'en 1-1 e�l cl t [I lt:: <1 "p e :rP'tr! L'txbjF_ct to l a :�t" and pr<..tperly C'LlTl"''idPrc�d u 'i:a:��payer. The terms ~lialde i o r ld- " ar1d n.,.. t jPt t L't l a:>;" bui 11 cc �rtJH..:tt> lto>q.3] 559
DECISION - C.T.A. CAHE NO. 478 1 - HI -� obligation ur duty to pay a tax. lt is very d i f f i c u l t , i11d ee d concept.ut-~lly .iJnposE:ible , to consider a pE�rson wl1u is statutorily made "liabl e ior tax" 3B not "subject to ta x ." By any :ceasonable standard , such a person s:hould bE' :ce!:JardE"::>d as a party in interest , or as a person haviTl\;1 s u:f.i :i.cient legal int.ereE:t., to bri np a sui l for rei uod oi ta)tes he believes were illegally collected from him. In PhiLippine Guaranty Company, Jnc. v. Cornmissi oner o:t. J nternal Ji'e o,�enu e , t .his Court pointed out that a withholding a!:Jent is in :fact t .tJE:' a~o-Jent bot.h oi the government and o:f the ta;.~payE�r, and that the witl�holdin~J agent i s not an ordinary government agent: "The JaJo� sets no condition :for the pe:rscmal liability o:f the wi t.hholding agent. �to attach. The reason is to compel the wi hholdin~r a~1ent to wi �thhold the ta)c under a l l circumstances. In e:f:fect , t he respo n sibility �or the collection of the tax as well as t he payment thereof is concentrated upon the person ov er whom the Government ha s jurisdiction. Thus, the l+'it!Jholding agent is constituted the agent of both the Government and the taxpayer. With respect to the collection and/or wi thhol dilltl o1 the t a:�{ , he is the Government ' s a~]E'Jrt. Jn re(;~ard to t he f i l i n g o:f the necessar")-' income tax return and t.he paJ�ment o:t" the tax to t-he Government, he is the Bflent of the taxpa yer. The withholding af}Pnt , there1 ore , ~ s no ord~nary government a9ent. eBpec i ally because unde1� Sect.i on 53( c) h e is held pessonaJJy liable for the tax he is duty f,ound to wi tllho l d; whereas the Co.mmissi cmer and his deputies are not made liable by law." <It alics su pplied> li , as poiot eel out iTJ 1-'hi lippine Ciuarant y , :t.h.fit._. ~_:j_th[Joldinq agent i s also an agent of t .he �l?J\_e_;Li_9_;i.al___g_~_r..)!='~-::_ . __ g_;L :\:.)1_E? . d:j__y idends with resperd..t l_Q__�Lhe ___;filing of the necessary income ta)t r t;> L_\l.!-_n_��-� __? .!.l,...Q -~-;Lt.!!. .._L �' s p s:_~ _t_ :1,;_o______?_Qj;__~.s!_L p a y me_Il..:L_..Q.!" ttw::-J?!.<�t ___i_q _ th\:i::...... ..9.QY..~ I�� ~"lrneut_t. sue[! authori t .y may r: ~aS..QJl _atJ_.j. Y. be . tle.ld 1~9- __;i,ncJ._t,.~._gg_ I_:JJ!=L..i:lU tJ:tQ.!.::..;\,JJ::__ to i.;i..J...E?___.9__.s;:_l i:.'l_:i rn ___;f O[:_LS'....;L1:!!1..t;L and to briTlQ_ _a..rL act_;i...Q.D t.9J"". __..!~ CQ..'{~r y___..Q_:l; ___ !?. U_~ h______ ,;,_.j._?_;i,_J.ll � Th is implied 560
DEClSllJ N. - C. T . A. CASE NU . ~~AI - lJ a ut h c>I i Ly i s E'S f� Fc: i a lly wa i ranted wh ere , as i n th e .in s t a nt case , tlH? wi thh o ldirq;,l age nt, i s t h e wh o lly o~1 e d s ubs idiary o1 th e p arent- s t uckholder and t.hE' r� e :fo re , at all t. irnes , under th e e:[J.ecti 1-�e c ontrol of such paren t. - st.o ckh o l der . 1 n t. fiE' c ircums t a n ces o f t h i s c ase , i l se E' HIS particu l ar ! y un re> al t o deny the i mpli~d authority of P&G - P hil. to c l a im a :re>fu11d a nd to comrnf:�nce an acti o n :for s u c h refun d. \'l e b E:�lieve t h at , e>ven r1o w, th e r e is not h in~1 i..o prec l ude t he B I R :fr orn r-equiring P&G- Phi 1. to sho w .s ome wr i t t e n or t e le::ot ed coJJ1 irma t ioii b y P~,Li - U S A o:f th e subsidiary's au t horit y t o c l a im the r ef und o r ta x credit and to r emit. t ti E' proce e ds ol t h e refu n d , or to app l y the tax c r edit � to some P h ilippin e ta x c1b ligation o f , P &L; - u s A, b efor e actual payme nt of the ref u n d or iss u anc e of a tax credit certificate. Wh a t app ear s t o b e v i t i a te d by Y.3_s ic \illi ..�..i r.n�'. :~ s i s pe l:.i t io n er ., s po s i t i o n th c,t_h a l t h o uql1 P&G-P l li l. i t::: direct.l y a nd (le r� s cma l l v ,).,_.h~. l?JE=---~~,.2.__j: h ~- Go v e rnme n t :f or th e taxe s an d a ny g eii c__t..�'_ncy a.ssE?ssrnents t .o b e c ol l ected , t h e lJ o v ~' r n me n 1: i s n u t__.J__~Y.i!LJ._y _____4, i a ~_J_g_ _:(.Q.!:.___2__ r e f __u n d e_ii"J~l_y__ b ecau_ -=: ~_ _:J:_!__q _id no l d e ma nd a wr i t.ten C O IL[i _,x;:.!l!�:1 t ioq__q_,t;___p ~~--~:.~ h :i,._.J. . ' s im p l i e d autho r i ty ;1 rorn_ _ -_L !.H? �- ve r :y_ __!Jeg inn in q. A sov e r e i gn 9.Q..Y~r n me n t s h o u 1_9.____~ q _L..l.u,l.IJ..9.1: a IJ ,ly__ _ ~_n.Q_:f a i .L!. Y____ _? t �Ill t i mes1_ _g_ven vJ s- a-1-'i s ta xpa y ers . \'/.-~ b E>li t::' VE.? a n d so ho ld th a t , und er the cirt_: u ms t a nc E:>::; o l. t hi s ca s e , P& LJ -P hil . is p ro p e r ly req::~r d ed as a " ta,-:: pa ye r" within t he meani n q o :f Sec tion 309 , NIR C, and as im p li e dly authori z ed to fil. e t h e cl.aim �or refund and the suit to r e cover such c l a im. <Unde r sco ring fJ uppJ.i l' U > We �i ind it very irun i c for � r �e sp on dent to r ely on th e d e c i .si un of the Court . and assE'rt t h at i t c onst it ut e s th e partie s whe n � in �ac t t he S u p r e me Court s itting en b an e h as r�econsider e d its Sec o n d Uivi s iun decisio n on 561
DECISION � C . T. A . CASE NO. 4781 - l:l - December 2 , l~Yl, the d is po s i t i ve portion of whic h re ad as iolJ.ows : "WH.EHEFORE, ior all the foregoing, the Cour �t resol v e d to GHANT private respondent Mot ion for Heconsiderati on da �ted 11 May 1 Y88 , to SET ASIDE the decision � of t h e Second Division of the Supreme Court promulgated on April 15, 1988 and in lieu thereof , REINSTATE and affirm the decision of the Co u rt of Tax /\pJ�E'8ls iJJ CTA Case Nu. 28 83 dated January 1984 an0 to DENY the Petition for Heview for lack of merit." Needless to say, the decision of t h e Supreme Court sittinq e n bane, B�~ ttin~l a s ide -Lhe decision of the Seco n d Division, now constitutes the ruling case law in Ulis particular case. Tl1e Supr �erne Court is t he final a rbiter of all legal questions prope1 �1y ~rough before i t and its decision in any qiven case constitu tes the law of t hat particular case . <Sesbrefio v s. Co urt o f Appeal s , G. R . NO. 1105:.Hb, Se:pternb er 4 , 1992 , 2 13 SCRA 581 > As earlier men�tioned , reE:pondent. has not presen �t.e cl any e�lidence to controver �L the co :crect. ness o:t petit.ion e�r's claim for refund . Instead she submitted h er case on the l�asis of the recorciE: and ple�aclings. t.tJerei ore, may be considered to have no serious objection or opposition to peti �t.ioner's entitlement to the rej: und <Dataprep v s . C omm~ss i o n er o� in-ternal Hevenue , CTA Case N o . Marc h 20, 1 984 ) ; 562
})El:lS .HJN - G.T.A. CASE NU. 4~81 - 13 - ~teneo de Manila University vs. Commissioner of Internal / H e 11 e n �J P , 1.. I r l hi .n , <:�:. �; :1 ., ! � .I .I '/ i-:' 13 ~ :i. '::J H':::! > .. IN I.' IB..i UF !HE FUREGDING ., resp ond e n t Commissioner of to REFUND to p e t i t :i. PllC"l .. (.�.1 (' i q I. c: v I�� h :i. .1 i. p p i n 1' r.; , 1 nc. the s um of l'' i t; h h o J. d i n q t r..1 x on <:!i.�; .i. dt:�n�! �� J�pJ�' i:l1 :�� )''~i:l\ ' .l ':}'..r l , SU ORDERED. / <2v..,~O.~ ~HNESIU D~ ~COSTA i��1� � 1:0 ~- :i. t I :.. lt!J GRUB~l , lq(.i q c� 563
Det:lSlUN - C.T. A. CASE NU. 47 8 1 - 14 - CERTIFICATION .l 11 t?r-��r~ L)y cPt-� t :i. -t- y t h.:.~t t h i s d �~cis j_ on Wi::\ s t~each ed ,,, "I" t e i�-� d 1_1. c: consult i:.\ t :l on d mon ~l t t 1e me 111 be r' s of the Co u t't of lax (��lpp!:) c~.l.!:, in t:':\ccor�clance ~-'.lith Uection 13, (:h~ticle VIII o i � t I i e (.:o r1 s t .i. t u t :i. o n .. ~Q.~ ERNESTO D. ACOSTA Pr��e!:>iding Judge Court of Tax Appeals 56 4
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