The Court of Tax Appeals (CTA) has ordered the Bureau of Internal Revenue (BIR) to refund the P50.62-million surcharges it imposed on the documentary stamp tax (DST) liabilities of San Miguel Holdings Corp. (SMHC) for the year 2011.
In a 28-page decision dated June 5, the court’s Second Division partially granted the petition of SMHC — the infrastructure arm of the Ramon Ang-led San Miguel Corp. — to be refunded for the tax it paid under protest.
DST on advances
The CTA, however, let the BIR keep the principal amount of P59.32 million as basic tax, saying it was proper to impose the DST on SMHC’s advances from its parent company and other affiliates.
The court said the Supreme Court’s July 19, 2011, decision on the case of the Commissioner of Internal Revenue v. Filinvest Development Corp. should be retroactively applied to SMHC’s tax liabilities.
Filinvest case
In the Filinvest ruling, the high tribunal declared that instructional letters and journal and cash vouchers extended by a parent company to its affiliates were loan agreements subject to the DST.
Three months later, the BIR issued Revenue Memorandum Circular No. 48-2011 as guidelines to implement the high court’s decision.
The CTA said the BIR should refund the surcharges because it was not SMHC’s fault that it relied on existing court decisions and BIR rulings at the time. —VINCE F. NONATO