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Latest tax
jurisprudence
13 January 2011
Disclaimer
The information contained in this presentation is for general guidance
on matters of interest only and should not be regarded as a substitute
for professional advice. The application and impact of laws can vary
widely based on the specific facts involved. Before taking any action,
please ensure that you obtain advice specific to your circumstances
from your usual Isla Lipana & Co., PwC member firm, Tax Client
Service Team.
13 January 2012
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Agenda
Supreme Court Cases
Southern Philippines Power Corporation vs. CIR, G.R. No. 179632
dated October 19, 2011
CIR vs. Filinvest Development Corporation, G.R. Nos. 163653 &
167689 dated July 19, 2011
Wilson P. Gamboa vs. Teves, et al., SC EB Case, G.R. No. 176579
dated June 28, 2011
Rizal Commercial Banking Corporation vs. CIR, G.R. No. 170257
dated September 07, 2011
Prudential Bank vs. CIR, G.R. No. 180390 dated July 27, 2011
13 January 2012
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Agenda
CTA cases
Triumph International (Philippines), Inc. vs. CIR, CTA EB Case No.
595 dated February 16, 2011 (CTA Case No. 7947)
- Allied Banking Corporation vs. CIR, G.R. No. 175097, 5 February
2010
Marubeni Philippines Corporation v. Commissioner of Internal
Revenue, CTA EB Case No. 557 dated March 23, 2011
CIR v. The Insular Life Assurance Co., Ltd., CTA EB Case No. 585
dated March 14, 2011
Aerotech Industries Philippines, Inc. vs. CIR, CTA Case No. 7964, 20
October 2011
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Facts
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Issue
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Ruling:
Yes
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Facts
Filinvest
Development
Corp. (FDC)
Filinvest
Alabang,
Inc. (FAI)
Income Tax
150M - 1996
5.7M - 1997
1.5B - 1997
DST
10.4M 1996
5.8M - 1997
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Facts
1st Issue
80%
Filinvest
Development
Corporation
FDC
67.42%
1996
Deed of Exchange
Land PhP4.3B Shares 463M
Filinvest
Alabang, Inc.
FAI
Filinvest
Land, Inc.
FLI
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FilinvestStockholder
Development
FDC
Corporation
FDC
FAI
Before
After
67.42%
61.03%
9.96%
Others
32.58%
29.01%
Total
100%
100%
Filinvest
February 1997 Ruling
Filinvest
No gain or loss shall be recognized based
Alabang,
on Sec.
Inc.34(C)(2), now
Land,
Sec.
Inc.
40(C)(2) of the Tax Code.
FAI
FLI
Latest tax jurisprudence
Isla Lipana & Co., PwC member firm
13 January 2012
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1st
issue
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FDC
-Tax-free exchange pursuant to
Sec. 34 (C)(2), now Sec. 40 (C)(2) of
the Tax Code
Ruling
CTA
CA
SC
Not subject
Not subject
Not subject
Same
Same
control of FLI.
-Non-retroactivity of rulings
(Sec. 246 of the Tax Code)
Latest tax jurisprudence
IIsla Lipana & Co., PwC member firm
13 January 2012
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Facts
2nd and
3rd Issues
FDC
1996 and 1997
PhP2.6B in 1996
PhP3.4B in 1997
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2nd
issue
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FDC
Ruling
CTA
CA
SC
Subject
Not subject
Not subject
as implemented by 1965-69
Regulations have persuasive
effect
-It is dubious for an entity to
advance money without
interest
-contribution of capital
-not loan agreements,
hence, no interest
-no fraud or evasion
-foreign laws must be
alleged and proved
3rd
issue
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FDC
Ruling
CTA
CA
SC
Not subject
Not subject
Subject
-non-retroactivity not
applicable to FDC since
it is not the party who
sought the ruling
-Sec. 180 and RR 9-94
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Facts
4th issue
Reco Herrera
Pte Ltd RHPL
FDC
PhP500.7M
60%
PhP500.7M =
53.58%
1996
Joint Venture
Filinvest Asia
Corp. FAC
PhP433.8M
40%
PhP433.8M =
46.42%
The JV was tasked to develop and manage FDCs 50% ownership of its
PBCom Office Tower Project the Project.
FDC paid its subscription by executing a Deed of Assignment of its rights
and interests in the Project worth PhP500.7M in favor of the JV.
The BIR assessed deficiency income tax on the gain on the supposed
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4th
issue
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FDC
Ruling
CTA
CA
SC
Not subject
Not subject
Not subject
Same
Same
-no deficiency income tax can be
assessed on the gain on the
supposed dilution and/or
increase in the value of FDC's
shareholdings in FAC
-mere appreciation of
capital not taxable
-gain is realized upon
disposition
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Facts
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Issue
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Ruling:
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Facts
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Issues
1.
2. Whether or not the petitioner, as payeebank, can be held liable for deficiency
onshore tax, which is mandated by law to
be collected at source in the form of FWT.
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Ruling
1st issue
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Ruling
2nd
issue:
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Facts
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Issue
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Ruling
Yes
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Facts
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Issue
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Ruling:
Yes
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Facts
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Facts
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Issue
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Ruling:
Yes
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12 October 2010
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Facts
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Administrative Claim
Judicial Claim
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Issue
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Ruling
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reckon the 2-year prescriptive period from reckon the 2-year prescriptive period
the date of filing of the return and payment
from the close of the taxable quarter
of the tax due
when the sales were made
interpretation of the 1977 NIRC
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Facts
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Issue
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Ruling:
Yes
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Facts
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Issues
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Ruling
1st issue:
No
Ruling
2nd issue:
Yes
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