Case Digest (G.R. No. 209755)
Facts:
I-Remit, Inc. petitioned for refund of IPO tax after its October 17, 2007 initial public offering of 140,604,000 shares, of which 107,417,000 were primary and 33,187,000 were secondary, having paid PHP 26,321,069 based on a joint computation that used total shares sold and a divisor that included 50,000 treasury shares. Petitioner filed an administrative claim on April 18, 2008 and thereafter a Petition for Review with the Court of Tax Appeals; the CTA Second Division ultimately denied the refund and the CTA En Banc dismissed petitioner’s appeal, prompting this petition to the Supreme Court.Issues:
- Whether the tax under Section 127(B) of the National Internal Revenue Code (1997) on shares sold through initial public offering must be computed jointly for primary and secondary offerings or separately for each offering.
Ruling:
The Supreme Court denied the petition and affirmed the CTA En Banc Decision. The Court held in the affirmative that the t Case Digest (G.R. No. 209755)
Facts:
- Parties and their capacities
- I-Remit, Inc. (Petitioner) — a domestic corporation listed with the Philippine Stock Exchange, principally engaged in fund transfer and remittance services, and acting for itself and on behalf of JPSA Global Services Co., JTKC Equities, Inc., and Surewell Equities, Inc. for purposes of the refund claim.
- Commissioner of Internal Revenue (Respondent) — official vested with authority to decide, approve and/or grant refund of national internal revenue taxes.
- Antecedent transactions and tax payment
- On October 17, 2007, petitioner conducted an initial public offering (IPO) offering 140,604,000 shares at P4.68 per share.
- Of the offered shares, 107,417,000 were offered in primary offering by petitioner as the issuing corporation, and 33,187,000 were offered in secondary offering by JTKC, JPSA, and Surewell as selling shareholders.
- On November 19, 2007, petitioner paid tax in the amount of P26,321,069.00 computed as: (140,604,000 shares × P4.68 × 4%), where the percentage ratio used was 140,604,000 ÷ 562,417,000 = 24.999% (tax rate 4%).
- The divisor 562,417,000 was obtained by adding 50,000 treasury shares to petitioner’s 562,367,000 outstanding shares after listing.
- Claim for refund and grounds
- On April 18, 2008, petitioner filed a claim for refund with Revenue District Office No. 43 of Pasig City and thereafter with the respondent.
- Petitioner asserted overpayment in the amount of P13,160,534.06, arguing that inclusion of the 50,000 treasury shares in the divisor produced an erroneous 4% rate and that exclusion of the treasury shares would yield a 2% rate.
- Petitioner also contended that the tax under Section 127(B) should be computed jointly for total shares sold in primary and secondary offerings, using the combined number of shares sold as the dividend against total outstanding shares after listing.
- Administrative and judicial proceedings below
- Petitioner filed a Petition for Review with the Court of Tax Appeals (CTA) on November 13, 2009 for failure of respondent to act and to toll prescription.
- The CTA Second Division in its May 23, 2011 Decision agreed that the 50,000 treasury shares should be excluded from the divisor but denied the refund for insufficiency of evidence to prove petitioner’s status as a closely held corporation; it also stated that a joint computation usi...(Subscriber-Only)
Issues:
- Legal question presented
- Whether the tax on sale of shares of stock sold or exchanged through initial public offering under Section 127(B) of the National Internal Revenue Code is separately...(Subscriber-Only)
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)