Pay P236-M back taxes, court tells BGC operator

The Court of tax appeals

MANILA, Philippines — The Court of Tax Appeals (CTA) has directed Fort Bonifacio Development Corp. (FBDC), operator of Bonifacio Global City (BGC), to pay P235.96 million in income tax and value-added tax (VAT) due more than a decade ago.

The amount accounts for P230.9 million in tax deficiencies and P5.06 million in VAT, inclusive of a 25 percent surcharge and 20 percent deficiency interest that FBDC is liable to pay for the year 2012.

The order was based on a petition for review filed in 2020 by FBDC seeking the nullification and revocation of the Bureau of Internal Revenue’s (BIR) tax assessments worth P256.08 million.

The FBDC had argued the BIR assessments “lacked factual and legal bases,” saying it failed to prove the consortium made a “willful and deliberate attempt to mislead and deceive the government.”

But the CTA’s first division, in its Aug. 22 decision, only partially granted FBDC’s petition by canceling and withdrawing the 2016 deficiency assessments on the consortium’s expanded withholding tax (EWT), withheld tax on compensation (WTC), documentary stamp tax (DST) and compromise penalties.

“When the FAN (final assessment notice) was issued on Jan. 21, 2016, respondent’s right to assess petitioner for deficiency VAT for the first to third quarters of 2012, and deficiency EWT, WTC and DST for the entirety of 2012 had already prescribed,” it said.

Citing the National Internal Revenue Code of 1997, the court noted that BIR can assess tax dues within three years from the last day of the mandated filing of tax returns.

Not yet prescribed

“Consequently, respondent’s right to assess petitioner for deficiency (income tax), as well as VAT, for the fourth quarter of 2012 had not yet prescribed when the formal letter of demand/FAN was issued (within the three-year prescriptive period allowed by law),” it said.

The CTA also maintained that BIR’s period to collect FBDC’s tax deficiencies had not yet lapsed as it ended on Aug. 11, 2021, or three years after the BIR granted the consortium’s request for tax reinvestigation.

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