BIR told to refund Php 63.25 M to Belle

cta

Here’s an article from Philippine Star correspondent, Elizabeth Marcelo re a controversial issue regarding a Bureau of Internal Revenue regulation.  Take note of the last paragraph on the definition of Capital Gains Tax, it has been sometime since we have been questioning this ruling as the tax imposed on the sale of a property doesn’t necessarily mean a gain on the sale of a Capital Asset.  I’ve seen losses on sale of properties that are Capital Assets yet Capital Gains Tax was still imposed, the same rule still holds today.  Hopefully this new administration and Bureau of Internal Revenue Commissioner will address and correct this issue soon.

BIR told to refund P63.25 M to Belle

MANILA, Philippines – The Court of Tax Appeals (CTA) has ordered the Bureau of Internal Revenue (BIR) to refund P63.25 million to Belle Corp. which was unlawfully withheld from the firm’s capital gains tax (CGT) in November 2012.

In a 15-page decision, the CTA Third Division said the withholding of the CGT has no legal basis and was in contravention to a previous Supreme Court ruling.

The case stemmed from the real properties Belle’s affiliate Belle Bay City Corp. (BBCC) relinquished to the former by way of liquidating dividends.

Belle owned 852,455,306 common shares of stocks in BBCC.

Following BBCC’s dissolution in 2005, it relinquished to Belle through a deed of conveyance executed on Nov. 12, 2012 its existing properties which included eight parcels of land located at Aseana Business Park in Parañaque City with an aggregate area of 42,166 square meters.

The BIR said the properties BBCC transferred to Belle must be subjected to six percent final withholding CGT prescribed under Section 27 (D) of the Tax Code.

Belle paid the P63.249 million CGT to BIR in 2012 but filed a petition for review before the CTA in 2014.

In its ruling, the CTA sided with Belle that the transfer of the properties was due to BBCC’s dissolution and not by way of sale, thus it should not be covered by any gains tax.

 “Capital Gains Tax is a tax on the Gain from the Sale of the taxpayer’s property forming part of Capital Assets. It implies that in order to be liable for payment of capital gains tax, one has to profit or gain from the sale, exchange or disposition of the real property,” the ruling penned by Associate Justice Ma. Belen Ringpis-Liban said.

*********************************************************************************************************************************************************

Visit www.robertgsarmiento.org for blogs, news, case studies, updated rulings and property listings which you may find informative.

We are currently migrating all posts to www.robertgsarmiento.com which will be the main website and will advise you when ready.

Subscribe to my daily postings by filling in your email address at the SUBSCRIBE section located at the mid right hand portion of the webpage of www.robertgsarmiento.org

View properties you are looking for by using the SEARCH engine ( highlighted in Green on the right hand corner of the webpage ).

Finally, should you have a property for SALE or LEASE, let me know if our office could be of assistance.

Thank you.

robert
Robert G. Sarmiento Properties
Professional Affiliation :
Philippine Association of Real Estate Boards
Member, City of Taguig Real Estate Board 2016 – 2017
Real Estate Broker’s Association of the Philippines 2000-2015
President, Greenhills Chapter 2008, 2009
Philippine Association of Real Estate Brokers
San Juan Mandaluyong Chapter 1998, 1999
PRC # 6569
AIPO # 000897
02 5148481 ( direct line )
+ 632 5536051 ( trunkline )
+ 632 4781316 ( telefax )
+ 632 8561365 ( line 3 )
+ 632 8041701 ( line 4 )
+ 63 917 5364829 ( globe )
Email : [email protected]
Website : www.robertgsarmiento.org
Website: http://condosphil.wordpress.com
Website: www.philippinecommercialproperties.com
Website: http://philippinewarehouses.wordpress.com
Website: http://philippineoffices.wordpress.com
Website: http://philippinetownhouse.wordpress.com

 

Leave a Reply

Compare listings

Compare