Suspends the deadlines in the acceptance of tax returns and payment of Internal Revenue Taxes of Taxpayers in the province of Batangas
Digest | Full Text
___________________________________________________________________
Tax appeals court cancels URC’s P2-B assessment
January 20, 2020 | 12:08 am [] bworldonline.com]
By Vann Marlo M. Villegas
Reporter
THE Court of Tax Appeals (CTA) cancelled the P2-billion tax assessment against Universal Robina Corp. (URC) for lack of due date and exact amount in the assessment notices.
In a 23-page decision dated Jan. 14, the court’s first division said the formal letter of demand issued by the Bureau of Internal Revenue against URC lacked definite amount and due date for the payment of its tax liabilities.
It noted that the demand letter stated that the interest “will still be adjusted if paid beyond the date specified therein” but also does not include the due date.
“Correspondingly, the subject tax assessment is void, and thus, bears no valid fruit,” the decision penned by Associate Justice Catherine T. Manahan read.
“In view of the finding that the subject tax assessments are invalid, it becomes unnecessary to address the arguments raised by the parties,” it added.
The court noted a previous decision of the Supreme Court which ruled that a Final Assessment Notice is invalid for lack of definite amount due despite providing a computation because it meant that its liabilities is still subject to modification depending on payment date.
The lack of due date also “negates…demand for payment,” the High Court’s decision read.
URC was questioning its assessed liability for improperly accumulated earnings tax (IAET) for the year ending on Sept. 30, 2010 worth P2 billion.
It was assessed for the alleged deficiency of P2.5 billion, which consists of IAET, income tax, value-added tax, expanded withholding tax, documentary stamp tax, and withholding tax on compensation.
Section 29(B)(1) of the National Internal Revenue Code of 1997 states that IAET applies to “every corporation formed or availed for the purpose of avoiding the income tax with respect to its shareholders or the shareholders of any other corporation, by permitting earnings and profits to accumulate instead of being divided or distributed.”
URC said it does not have any IAET and that its additional paid-in capital is not earnings or profits. It also said that it is a publicly-held corporation exempt from IAET. BIR contends that it is liable to pay the assessed deficiency.
Presiding Judge Roman G. del Rosario and Associate Justice Esperanza R. Fabon-Victorino concurred in the decision.
________________________________________________
Subscribe to:
Posts (Atom)
KNOWING YOUR BIR REGULATIONS AND ISSUANCESRevenue Regulations (RRs) are issuances signed by the Secretary of Finance, upon recommendation of the Commissioner of Internal Revenue, that specify, prescribe or define rules and regulations for the effective enforcement of the provisions of the National Internal Revenue Code (NIRC) and related statutes
Revenue Memorandum Orders (RMOs) are issuances that provide directives or instructions; prescribe guidelines; and outline processes, operations, activities, workflows, methods and procedures necessary in the implementation of stated policies, goals, objectives, plans and programs of the Bureau in all areas of operations, except auditing.
Revenue Memorandum Rulings (RMRs) are rulings, opinions and interpretations of the Commissioner of Internal Revenue with respect to the provisions of the Tax Code and other tax laws, as applied to a specific set of facts, with or without established precedents, and which the Commissioner may issue from time to time for the purpose of providing taxpayers guidance on the tax consequences in specific situations. BIR Rulings, therefore, cannot contravene duly issued RMRs; otherwise, the Rulings are null and void ab initio
Revenue Memorandum Circular (RMCs) are issuances that publish pertinent and applicable portions, as well as amplifications, of laws, rules, regulations and precedents issued by the BIR and other agencies/offices.
Revenue Bulletins (RB) refer to periodic issuances, notices and official announcements of the Commissioner of Internal Revenue that consolidate the Bureau of Internal Revenue's position on certain specific issues of law or administration in relation to the provisions of the Tax Code, relevant tax laws and other issuances for the guidance of the public.
BIR Rulings are official position of the Bureau to queries raised by taxpayers and other stakeholders relative to clarification and interpretation of tax laws.
