Posted on September 30, 2013 10:29:28
PM [ BusinessWorld Online ]
A COURT has ordered the Bureau of
Internal Revenue (BIR) to refund the Bases and Conversion and Development
Authority (BCDA) millions of pesos in tax withheld on the sale of military
land, ruling that while the agency itself was not tax-exempt, proceeds from
such sale was expressly excluded by law.
In a 26-page decision promulgated on Sept. 13, the first division of the
Court of Tax Appeals granted BCDA’s request for a P101.637-million refund
representing the 5% creditable withholding tax (CWT) on the sale of a
1.204-hectare property in the Fort Bonifacio area in Taguig City for some
P2.033 billion.
The property, called “Expanded Big
Delta Lots,” was awarded under four separate contracts to an unincorporated
joint venture of Property Holdings, Inc.; The Net Group Project Management
Corp.; and The Net Group Property Management Corp. in May 23, 2008.
The joint venture remitted to the tax
bureau on July 31, 2008 some P101.637 million in CWTs.
BCDA later asked the bureau for a
refund, arguing that the amount was “erroneously or illegally collected.”
On July 29, 2010, BCDA raised the
issue to the CTA after the tax bureau failed to act on its refund request.
The CTA ruled that while BCDA was not
one of the state firms or agencies exempt from income tax under Republic Act
(RA) No. 9337 -- namely: the Government Service Insurance System, Social
Security System, Philippine Health Insurance Corp. and Philippine Charity
Sweepstakes Office -- an amendment to RA 7227, the law which formed BCDA,
“specifically exempt the proceeds of the sale… of portions of Metro Manila
military camps from all kinds of taxes and fees.”
“Considering that the proceeds from
the sale of petitioner’s subject property are exempt from income tax, the CWTs
which were withheld by buyer-companies amounting to P101,637,466.40 were
erroneously remitted to and collected by the BIR,” read the decision penned by
CTA Presiding Justice Roman G. Del Rosario.
Associate Justices Erlinda P. Uy and
Cielito N. Mindaro-Grulla concurred with the decision.
BCDA was formed under RA 7227, or the
Bases Conversion and Development Act of 1992, to oversee conversion of former
military bases to “productive civilian use” and to raise funds for the
government in the process. -- Mikhail Franz E. Flores
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