CTA rules against BIR in withholding tax dispute

The Court of Tax Appeals (CTA) has partially granted an appeal by Tullet Prebon Philippines, Inc. (TPPI), a financial services company, to review an assessment of the company’s 2016 unutilized and excess credit withholding tax amounting to P11.3 million.

In a 24-page decision on May 11, the CTA Third Division ordered the Commissioner of Internal Revenue to issue a tax credit certificate to the petitioner, reducing its tax liabilities to P7.5 million.

“(TPPI’s) administrative claim was filed on June 26, 2018, while the judicial claim via the instant petitioner for review was filed on April 11, 2019, it is clear that both the administrative judicial claims were timely filed,” the court said in the ruling written by CTA Associate Justice Erlinda P. Uy.

TPPI is based in Taguig City and brokers foreign exchange transactions, deposits, and other income security agreements.

The tax court noted that since the company was able to prove that it filed its administrative claim within the prescribed period, the Court had jurisdiction to handle the dispute.

“Timeliness of the filing of the claim is mandatory and jurisdictional and the court cannot take cognizance of a judicial claim for a refund either prematurely or out of time,” it said. “As long as the administrative claim and the judicial claim were filed within the two-year prescriptive period, then there was the exhaustion of the administrative remedies.”

The CTA noted that the certificate of creditable taxes withheld presented by the TPPI was deemed competent and conclusive evidence of payment and remittance to the revenue bureau.

The petitioner was able to substantiate only P7.5 million of the P11.3 million unutilized credit withholding tax for 2016. — John Victor D. Ordoñez