THE Court of Tax Appeals (CTA) affirmed the cancellation of the tax assessment on GF & P Partners, Architects Co. for the taxable years 2010 to 2013 worth P3.3 million.

In a 21-page decision on Sept. 16, The CTA Special Second Division ruled that the architecture firm is not liable to pay local business tax under the Revised Makati Revenue Code (RMRC) since it is a professional partnership.

The Makati City treasurer, who filed the petition, argued that GF & P is liable to pay professional tax since it should be classified as a contractor under the RMRC.

Citing Makati City’s revenue code, the court noted that architects are already required to pay an annual professional tax and are not included in occupations subject to local business tax.

“Given the foregoing and in the absence of any convincing evidence and argument that respondent (GF & P) is engaged in any trade or business other than the general practice of architecture as a profession, we rule that respondent (GF & P) is not subject to the local business tax imposed under the [RMRC],” CTA Associate Justice Lanee Cui-David said in the ruling.

The RMRC imposes a local business tax on “contractors and other independent contractors” that are not subject to professional tax.

The city treasurer asserted that the firm did not file its administrative complaint within the period mandated under the law.

The tax court disagreed as it pointed out that GF & P filed its protest on Jan. 14, 2015, which is within the 60 days mandated by the local government code.

Under the local government code, a taxpayer may file a written protest with the local treasurer within 60-days from receipt of the notice of assessment.

The city official also argued that the firm’s protest is not valid since it did not pay the business tax, which makes the assessment final and unappealable.

The court noted that payment under protest is only required for real property tax assessments and not the subject local business tax.

“Considering the above discussions, We rule that payment under protest is not required for the validity of respondent’s protest against the subject tax assessment,” said the tribunal.

“Finally, the court sees no need to address and discuss the other issues and arguments advanced by the parties.” — John Victor D. Ordoñez