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BIR files tax evasion case vs GDI; food firm denies claims

/ 05:35 PM February 23, 2018

The Bureau of Internal Revenue (BIR) on Friday filed before the Department of Justice (DOJ) a tax evasion complaint against Golden Donuts Inc. (GDI), the exclusive franchisor and license grantee of US company Dunkin Donuts.

The company is facing charges for alleged violation of Sections 254 and 255 of the National Internal Revenue Code (NIRC) for willful attempt to evade or defeat tax and for deliberate failure to supply correct and accurate information is GDI and its four officers.

GDI, in a statement, denied the allegations made by the BIR.

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“Golden Donuts, Inc. (GDI) categorically denies the accusations of tax evasion for the year 2007. As a matter of fact, the tax liabilities of GDI for the said year had been settled with the Bureau of Internal Revenue (BIR) as of 2012. Further, it has always been compliant with all tax laws and regulations, as evidenced by tax clearances issued by the BIR over the years,” GDI said in a statement.

In its complaint, BIR added that there was also under declaration by GDI of its sales by 39 percent as well as its Royalty income.

But GDI said that while it has yet to receive a copy of the complaint, “it appears from the news reports that the complaint was filed based on an alleged 39% underdeclaration of sales which arose from the attribution of sales of franchises to GDI. All GDI franchisees are business entities separate from GDI that are responsible for paying their own taxes.”

“GDI is  a professionally-managed organization which has been in the food business for more than 37 years. GDI is prepared to answer the tax evasion case in the proper forum,” GDI added.

Marissa Cabreros, deputy commissioner for the BIR’s Legal and Inspection Group, said GDI is liable for P1.118-billion covering taxable year 2007 inclusive of surcharges and interest.

While she said that under the NIRC, prescription period in filing tax cases involving fraud is 10 years from discovery, she said the investigation against GDI was prompted by a confidential information they received only in 2017.

With the information, the BIR said they issued a Letter of Authority to examine GDI’s books and other accounting records.

The result of the investigation, according to the BIR, showed altered sales invoices while other invoices do not contain GDI’s income tax number.

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“Through this scheme, GDI was able to claim the altered invoices as deductions from its income and as input VAT (Value Added Tax) credits in the amount of P99, 297, 036.47 and P11, 915,644.38, respectively,” the BIR said.

“This is an independent evaluation conducted by an officer on the basis of the information provided to us recently,” Cabreros said./au

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