THE Court of Tax Appeals affirmed the award of tax certificate (TCC) to Ayala Corp. value P127 million over its unutilized creditable withholding tax (CWT) for 2012 and 2013.
In a 10-page choice, the court, sitting en banc, denied the allure of the Bureau of Internal Revenue, saying the arguments raised replicated those in its own motion for partial reconsideration in the distinctive first branch.
The court said Ayala Corp created the simple fact of its own entitlement to a TCC with a presentation of Summary Alphalist of Withholding Agents of Income Payment Subjected to Withholding Tax (SAWT) along with other relevant certifications of CWT at source, that are supplied by authorised agents as proof of tax withheld “Hence, a respondent shouldn’t longer be burdened to show proof of actual remittance within his claim to the issuance of such TCC, the court stated.
“Therefore, the foregoing considered, petitioner Commissioner of Internal Revenue’s Petition for Review filed on 23 August 2019 is denied,” it added.
The bureau maintained that the court erred in ruling that Ayala Corp. is entitled to refund of unutilized surplus CWT “despite no signs of true remittance” for it. It stated that taxpayer-claimant needs to verify that the taxes withheld were actually remitted to the BIR from the withholding agents.
It argued that Revenue Regulations No. 2-2006 requires the submission of SAWT and monthly alphalist of payees.
Ayala Corp., asserted that it has “sufficiently proven its entitlement to the claim for issuance of a TCC.” It also noted that the authorised brokers are the bureau’s agents.
The court also cited a prior Supreme Court decision that favored the appellate court’s decision, rejecting the bureau’s contention that”proof of actual remittance is required prior to a refund of surplus or unutilized creditable withholding taxes might be granted.
The court stated that the agent’s receipt of tax is directly into the BIR’s receipt. It included the failure on the portion of the withholding agent to remit the amount withheld to the agency is a violation on the part of the agent rather than by the taxpayer.
The court’s branch in February 2018, partially given the claim of Ayala Corp, permitting only the amount of P81.7 million as tax certificate from its P128.7 million maintain.
On March 29, the court increased the grant to P127.3 million after the company filed its own appeal. The court upheld the decision in July last year.