Belle Corp. gets P63.25-M tax refund
The Court of Tax Appeals (CTA) has granted a P63.25-million refund to Belle Corp. for the capital gains tax (CGT) charged on eight Aseana Business Park properties which it received from a liquidated affiliate.
In a recent 15-page decision, the CTA Third Division ordered the Bureau of Internal Revenue to either refund or issue a tax credit certificate for the “erroneously paid capital gains tax.”
The tax court noted CGT is imposed when there is a profit or gain from the sale or exchange of real property.
But since Belle only received the land in 2012 as liquidating dividends following the dissolution of affiliate Belle Bay City Corp., (BBCC) the court said no taxable sale arose.
The Nov. 12, 2012 deed of conveyance covered eight parcels of land totaling 42,166 square meters and located at Aseana Business Park in Parañaque City. This reflected as a net liquidating gain of P413.63 million in its 2012 income tax return.
On Nov. 28, 2012, Belle paid the P63.25-million CGT “under protest,” as it treated the transaction as a return of the capital it invested in BBCC.
“Considering that the conveyance by BBCC in favor of petitioner was done in pursuance of BBCC’s dissolution and considering further that the real property is conveyed as a liquidating dividend, the transaction is therefore not subject to capital gains tax,” read the decision penned by Justice Ma. Belen M. Ringpis-Liban.
