Case Summary (G.R. No. 117472)
Facts of the Case
Charles Marvin Romig, an American national, passed away intestate in the Philippines on November 20, 2011. At the time of his death, he resided in Aguada, Poblacion, Puerto Galera, Oriental Mindoro. Following his death, Maricel Narciso Romig executed an Affidavit of Self-Adjudication, claiming the decedent's properties, including a dollar deposit in a foreign currency deposit unit at the Hong Kong and Shanghai Banking Corporation (HSBC). An Estate Tax Return was filed, and an estate tax of PHP 26,152.00 was paid on May 18, 2012. Subsequently, on June 30, 2015, the Estate filed an Amended Estate Tax Return and paid an additional PHP 4,565,349.07 concerning the HSBC USD Savings Account.
Administrative Claim for Refund
On June 28, 2017, the Estate filed an administrative claim for a refund concerning the erroneously paid estate tax of PHP 4,565,349.07 with the Bureau of Internal Revenue (BIR), followed by a judicial claim before the Court of Tax Appeals (CTA) on the same day. The CIR contested the claim by arguing that the Estate was not entitled to the refund and raised several defenses, including issues on the decedent's residency, allowable deductions, and claims regarding the non-exhaustion of administrative remedies.
Ruling of the CTA Second Division
The CTA Second Division ruled in favor of the Estate on September 2, 2019, granting the refund. The court concluded that the administrative and judicial claims were filed within the prescribed two-year period. Additionally, it affirmed that the exemption of foreign currency deposits under Republic Act No. 6426 had not been revoked by the 1997 National Internal Revenue Code (NIRC), thus allowing for the refund claim related to the estate tax paid.
Ruling of the CTA En Banc
The CTA En Banc affirmed the Second Division's decision on October 28, 2021. The En Banc noted that the Estate complied with the two-year period requirement for filing claims, asserting that the required affirmative votes to reverse the previous ruling were not achieved, thereby upholding the lower court's decision. However, it expressed that, regarding the HSBC USD Savings Account, the reliance on Republic Act No. 6426 for tax exemption was misplaced as the law addresses income tax specifically.
Motion for Reconsideration
In a subsequent Resolution dated July 19, 2022, the CTA En Banc reiterated that the Estate satisfied the requirements for a refund of erroneously paid estate tax. It reconfirmed that the provisions of the 1997 NIRC could not infer a repeal of the tax exemptions provided under Republic Act No. 6426.
Issues Presented
The key issues for the Court's resolution included whether the Estate had complied with the two-year period establish
...continue readingCase Syllabus (G.R. No. 117472)
Background and Procedural History
- The case involves a Petition for Review on Certiorari filed by the Commissioner of Internal Revenue (CIR) against the Estate of Mr. Charles Marvin Romig.
- The Circuit Court affirmed the decision of the Court of Tax Appeals (CTA) En Banc and the CTA Second Division which ruled in favor of the Estate.
- Charles Marvin Romig, an American national and Philippine resident, died intestate in the Philippines on November 20, 2011.
- His sole heir, Maricel Narciso Romig, executed an Affidavit of Self-Adjudication adjudicating estate properties including a foreign currency deposit account (HSBC USD Savings Account).
- The Estate filed estate tax returns and initially paid estate tax, later amending the return and paying additional estate tax on the foreign currency deposit.
- The Estate filed both an administrative claim for refund and a judicial claim for review within the statutory two-year period.
Facts of the Case
- Romig was a resident of Puerto Galera, Oriental Mindoro at the time of death.
- The foreign currency deposit was maintained at the Hongkong and Shanghai Banking Corporation (HSBC) Premiere-Makati Branch.
- The Estate sought confirmatory ruling about the tax exemption of the foreign currency deposit under the Foreign Currency Deposit Act (Republic Act No. 6426, as amended).
- The CIR contested the exemption and contended the foreign currency deposit was subject to estate tax.
Issues Presented
- Whether the Estate complied with the two-year prescriptive period under the 1997 National Internal Revenue Code (NIRC) to file administrative and judicial claims for refund.
- Whether the foreign currency deposit of the decedent is exempt from estate tax under the applicable laws.
HELD: Compliance with the Two-Year Period for Filing Claims
- The Estate filed an administrative claim at 8:00 a.m. and a judicial claim at 4:47 p.m. on June 28, 2017, within the two-year period from the payment date of June 30, 2015.
- The law requires only that both claims be filed within two years; the brief interval between them does not suffice to deny the claim