Tutuban Properties, Inc. vs. CIR, April 21, 2008 Facts
Taxpayer was assessed with deficiency income tax, withholding tax, and value added tax for the fiscal year ended 2008. It protested the assessment and, because of the inaction of the Bureau of Internal Revenue, filed a Petition for Review with the Court of Tax Appeals.
The Taxpayer filed a Motion for Partial Withdrawal of Petition attaching therein its Tax Amnesty Payment Form/Acceptance of Payment Form (BIR Form No. 0617); Notice of Availment of Tax Amnesty indicating the previous SALN/Balance Sheet; Statement of Assets and Liabilities and Networth (SALN); and Tax Amnesty Return (BIR Form 2116) showing the amnesty tax due of P500,000.
Issue
Did the taxpayer fully comply with the requirements of the Tax Amnesty Law?
Ruling
No. The Taxpayer has not fully complied with the requirements of Republic Act No. 9480 as it failed to pay the complete amnesty tax.
Section 5(d) of R.A. No. 9480 provides:
Taxpayers who filed their balance sheets/SALN, together with their income tax returns for 2005, and who desire to avail of the tax amnesty under this act shall amend such previously filed statement by including still undeclared assets and/or liabilities and pay an amnesty tax equal to 5 percent of the resulting increase in networth: provided, that such taxpayers shall likewise be categorized in accordance with, and subjected to the minimum amounts of amnesty tax prescribed under the provisions of this section.
The taxpayer only paid P500,000 where in fact it should have paid P21,852,139.25 which is 5 percent of the Taxpayer’s networth in its June 2005 SALN amounting to P437,042,785.
Also, the taxpayer did not attach its 2005 income tax return. Said requirements are necessary to determine the increase in the Taxpayer’s networth considering that it paid the tax amnesty using the amnesty rate under Section 5(d) of R.A. No. 94801, which is 5 percent of the alleged increase in its networth.
Since the taxpayer failed to comply with the prescribed requirements of the law, it cannot base the 5 percent rate on the alleged net increase of its networth, but it should be based on the networth of its June 2005 SALN.
A tax amnesty is in the nature of a tax exemption and must be construed strictly against the applicant.
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