Case Digest (G.R. No. 148191)
Facts:
- Case: Commissioner of Internal Revenue v. Solidbank Corporation (G.R. No. 148191)
- Date Decided: November 25, 2003
- Parties:
- Petitioner: Commissioner of Internal Revenue, represented by Pablo M. Bastes Jr. and Rhodora J. Corcuera-Menzon
- Respondent: Solidbank Corporation, represented by Esquivas Cruz Conlu & Yabut
- Main Dispute: Tax treatment of a bank's interest income subject to a 20% final withholding tax (FWT) and its inclusion in the computation of the 5% gross receipts tax (GRT).
- Key Details:
- For the calendar year 1995, Solidbank filed Quarterly Percentage Tax Returns showing gross receipts of P1,474,691,693.44 and GRT payments of P73,734,584.60.
- Solidbank claimed P350,807,875.15 of these gross receipts were from passive income already subjected to the 20% FWT.
- On June 19, 1997, Solidbank requested a refund or tax credit certificate for the alleged overpaid GRT amounting to P3,508,078.75.
- Lower Courts:
- The Court of Tax Appeals (CTA) ruled in favor of Solidbank, ordering a refund of P1,555,749.65.
- The Court of Appeals (CA) affirmed the CTA's decision.
Issue:
- (Unlock)
Ruling:
- Supreme Court Decision: The Supreme Court ruled in favor of the Commissioner of Internal Revenue, reversing and setting aside the decision and resolution of the Court of Appeals.
- Holding: The 20% FWT on a bank'...(Unlock)
Ratio:
- Basis of Decision: Interpretation of the Tax Code and relevant revenue regulations.
- Key Points:
- The 5% GRT is imposed on the gross receipts of banks, including interest income subject to the 20% FWT.
- The FWT and the GRT are distinct taxes: the FWT is an income tax on passive income, while the GRT is a percentage tax on business receipts.
- Interest income, although not actually received by the bank due to withholding, is constructively rece...continue reading
Case Digest (G.R. No. 148191)
Facts:
In the case of Commissioner of Internal Revenue v. Solidbank Corporation (G.R. No. 148191), decided on November 25, 2003, the petitioner is the Commissioner of Internal Revenue, represented by Pablo M. Bastes, Jr. and Rhodora J. Corcuera-Menzon, while the respondent is Solidbank Corporation, represented by Esquivas Cruz Conlu & Yabut. The dispute centers on the tax treatment of a bank's interest income subjected to a 20% final withholding tax (FWT) and whether this should be included in the computation of the 5% gross receipts tax (GRT). For the calendar year 1995, Solidbank filed its Quarterly Percentage Tax Returns, reflecting gross receipts amounting to P1,474,691,693.44 and corresponding GRT payments of P73,734,584.60. Solidbank claimed that P350,807,875.15 of these gross receipts were from passive income already subjected to the 20% FWT. On June 19, 1997, Solidbank filed a request for a refund or tax credit certificate for the alleged overpaid GRT amounting to P3,508,078.75. The Court of Tax Appeals (CTA) ruled in favor of Solidbank, or...