TITLE : 015 Bank of Amerika vs CA, 234 SCRA 302

FACTS : Petitioner is a foreign corporation duly licensed to engage in business in the Philippines with
Philippine branch office at Makati, Metro Manila. On July 20, 1982 it paid 15% branch profit remittance
tax in the amount of P7,538,460.72 on profit from its regular banking unit operations and P445,790.25 on
profit from its foreign currency deposit unit operations or a total of P7,984,250.97. The tax was based on
net profits after income tax without deducting the amount corresponding to the 15% tax.

Petitioner filed a claim for refund with the Bureau of Internal Revenue of that portion of the payment
which corresponds to the 15% branch profit remittance tax, on the ground that the tax should have been
computed on the basis of profits actually remitted, which was P45,244,088.85, and not on the amount
before profit remittance tax, which was P53,228,339.82. The basis should be based on the tax remitted
abroad. The CIR contended otherwise.

The CTA upheld petitioner bank in its claim for refund. The CIR filed a timely appeal to the Supreme
Court which referred it to the Court of Appeals following this Court's pronouncement in DBP vs. CA.
Court of Appeals set aside the decision of the CTA.

ISSUE : Whether or not the branch profit remittance tax should be based on the amount actually remitted
abroad.

HELD : Branch profit remittance tax should be based on the amount actually remitted abroad.

In the 15% remittance tax, the Sec 24 NIRC specifies its own tax base to be on the "profit remitted
abroad." There is absolutely nothing equivocal or uncertain about the language of the provision. The tax
is imposed on the amount sent abroad, and the law (then in force) calls for nothing further.

The remittance tax was conceived in an attempt to equalize the income tax burden on foreign corporations
maintaining, on the one hand, local branch offices and organizing, on the other hand, subsidiary domestic
corporations where at least a majority of all the latter's shares of stock are owned by such foreign
corporations.

Alan A Gultia