October 2009 Philippine Supreme Court Decisions on Tax Law

Here are selected October 2009 Philippine Supreme Court decisions on tax law:

Income tax; mortgage. Under Revenue Memorandum Circular 58-2008, if the property is an ordinary asset of the mortgagor, the creditable expanded withholding tax is due and must paid within ten (10) days following the end of the month in which the redemption period expires. The payment of the documentary stamp tax and the filing of the return thereof must be made within five (5) days from the end of the month when the redemption period expires.

Here, the executive judge approved the issuance of the certificate of sale to UCPB on March 1, 2002. Consequently, the three-month redemption period ended only on June 1, 2002. Only on this date then did the deadline for payment of creditable withholding tax and documentary stamp tax on the extrajudicial foreclosure sale become due. UCPB had, therefore, until July 10, 2002 to pay the creditable withholding tax and July 5, 2002 to pay the stamp tax. Since it paid both taxes on July 5, 2002, it is not liable for deficiencies.  Commissioner of Internal Revenue  vs. United Coconut Planters Bank, G.R. No. 179063, October 23, 2009.

 Stamp tax; certificates drawing interest. Chinabank’s special savings deposits (SSD), otherwise known as “Savings Plus Deposit,  are “certificates of deposits drawing interest” subject to documentary stamp tax as provided for in Section 180 of the 1997 NIRC. China Banking Corporation vs. The Commissioner of Internal Revenue, G.R. No. 172359, October 2, 2009.

Value added tax; presumptive input VAT. FBDC is entitled to transitional input tax credit under Section 105 of the NIRC, on its Global City land inventory. Under Revenue Regulations No. 6-97, the allowable transitional input tax credit is not limited to improvements on real properties.  Fort Bonifacio Development Corporation vs. Commissioner of Internal Revenue, et al./Fort Bonifacio Development Corporation vs. Commissioner of Internal Revenue, et al.,  G.R. No. 158885/G.R. No. 170680, October 2, 2009.