October 2012 Philippine Supreme Court Decisions on Tax Law

Here are select October 2012 rulings of the Supreme Court of the Philippines on tax law:

National Internal Revenue Code; Quarterly income tax; irrevocability of option to carry-over excess or claim for refund. It is clear that once a corporation exercises the option to carry-over, such option is irrevocable “for that taxable period.” Having chosen to carry-over the excess quarterly income tax, the corporation cannot thereafter choose to apply for a cash refund or for the issuance of a tax credit certificate for the amount representing such overpayment. To avoid confusion, the Court has defined the phrase “for that taxable year” as merely identifying the excess income tax, subject of the option, by referring to the “taxable period when it was acquired by the taxpayer.” United International Pictures, AB vs. Commissioner of Internal Revenue, G.R. No. 168331, October 11, 2012.

National Internal Revenue Code; income tax overpayments; claim for refund; requirements. In claiming for refund of excess creditable withholding tax, petitioner must show compliance with the following basic requirements: (1) the claim for refund was filed within two years as prescribed under Section 229 of the NIRC of 1997; (2) the income upon which the taxes were withheld were included in the return of the recipient (Sec 10, Revenue Regulations No. 6-85); and (3) the fact of withholding is established by a copy of a statement (BIR Form 1743.1) duly issued by the payor (withholding agent) to the payee showing the amount paid and the amount of tax withheld therefrom (Section 10, Revenue Regulations No. 6-85). Parenthetically, the Office of Solicitor General pointed out that the amount of income payments in the income tax return must correspond and tally to the amount indicated in the certificate of withholding, since there is no possible and efficacious way by which the Bureau of Internal Revenue can verify the precise identity of the income payments as reflected in the income tax return. United International Pictures, AB vs. Commissioner of Internal Revenue, G.R. No. 168331, October 11, 2012.

(Caren thanks Grace Ann C. Lazaro for assisting in the preparation of this post.)

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