Bangko Sentral ng Pilipinas. (INQUIRER FILE PHOTO)
The Court of Tax Appeals has cancelled the Bureau of Internal Revenue’s P2.37-billion tax assessment on the Bangko Sentral ng Pilipinas (BSP) for the year 2009.
In a 27-page decision dated Sept. 5, the CTA Second Division said the country’s central bank was not liable to pay the final withholding of gross receipt taxes (GRT) on interest income payments to various banks and financial institutions.
The BIR’s final decision on disputed assessment dated March 28, 2014, was invalidated for being based on the revoked Revenue Regulation No. 2-98.
The tax court explained that the 1998 revenue regulation was “considered as revoked or repealed for being inconsistent” with Republic Act No. 9238 and Revenue Regulation No. 9-04, both of which took effect in 2004.
RA 9238, which introduced various changes in the applicable GRT rates and expanded its coverage, also specified the time and venue for the filing and payment of the tax.
The said law did not include the withholding or deduction of the GRT at the source of the payment (the BSP) as one of the valid modes of payment.
“The provision under RR No. 2-98 on the withholding of percentage GRT on banks shall be considered as revoked or repealed for being inconsistent with… RA No. 9238, as amended, and with RR No. 9-04. Hence, petitioner should not be held liable to pay final withholding of GRT on interest payments to banks,” read the decision.
Besides, the December 7, 2012, final assessment notice that preceded the FDDA was issued more than three years past the last day of payment of the taxes covering the months of January to October 2009.
The decision was penned by Associate Justice Juanito C. Castañeda Jr. and concurred in by Associate Justices Caesar A. Casanova and Catherine T. Manahan. CBB