Ing Bank N.V v. Revenue

LEONEN, J.:

Qualified taxpayers with pending tax cases may still avail themselves of the tax amnesty program under Republic Act No. 9480,1 otherwise known as the 2007 Tax Amnesty Act. Thus, the provision in BIR Revenue Memorandum Circular No. 19-2008 excepting "[i]ssues and cases which were ruled by any court (even without finality) in favor of the BIR prior to amnesty availment of the taxpayer" from the benefits of the law is illegal, invalid, and null and void.2 The duty to withhold the tax on compensation arises upon its accrual.

This is a Petition for Review3 appealing the April 5, 2005 Decision4 of the Court of Tax Appeals En Banc, which in turn affirmed the August 9, 2004 Decision5 and November 12, 2004 Resolution6 of the Court of Tax Appeals Second Division. The August 9, 2004 Decision held petitioner ING Bank, N.V. Manila Branch (ING Bank) liable for (a) deficiency documentary stamp tax for the taxable years 1996 and 1997 in the total amount of ₱238,545,052.38 inclusive of surcharges; (b) deficiency onshore tax for the taxable year 1996 in the total amount of ₱997,333.89 inclusive of surcharges and interest; and (c) deficiency withholding tax on compensation for the taxable years 1996 and 1997 in the total amount of ₱564,542.67 inclusive of interest. The Resolution denied ING Bank's Motion for Reconsideration.7 While this case was pending before this court, ING Bank filed a Manifestation and Motion8 stating that it availed itself of the government's tax amnesty program under Republic Act No. 9480 with respect to its deficiency documentary stamp tax and deficiency onshore tax liabilities.9 What is at issue now is whether ING Bank is entitled to the immunities and privileges under Republic Act No. 9480,and whether the assessment for deficiency withholding tax on compensation is proper.

ING Bank, "the Philippine branch of Internationale Nederlanden Bank N.V., a foreign banking corporation incorporated in the Netherlands[,] is duly authorized by the Bangko Sentral ng Pilipinas to operate as a branch with full banking authority in the Philippines."10 On January 3, 2000, ING Bank received a Final Assessment Notice11 dated December 3, 1999.12 The Final Assessment Notice also contained the Details of Assessment13 and 13 Assessment Notices "issued by the Enforcement Service of the Bureau of Internal Revenue through its Assistant Commissioner Percival T. Salazar[.]"14 The Final Assessment Notice covered the following deficiency tax assessments for taxable years 1996 and 1997:15 Particulars Basic Tax( ) Surcharge( ) Interest( ) Total( ) Deficiency Income Tax 1996 (ST-INC-96-0174-99) 20,916,785.03 11,346,639.55 32,263,424.58 1997 (ST-INC-97-0185-99) 133,533,114.54 45,730,518.68 179,263,633.22 Deficiency Withholding Tax on Compensation 1996 (ST-WC-96-0175-99) 1,027,267.20 602,288.17 1,629,555.37 1997 (ST-WC-97-0184-99) 2,505,925.25 968,042.36 3,473,967.61 Deficiency Onshore Tax 1996 (ST-OT-96-0176-99) 8,267,437.54 4,847,209.95 13,114,647.49 Deficiency Branch Profit Remittance Tax 1996 (ST-RT-96-0177-99) 39,215,700.00 22,992,218[.]63 62,207,918.63 1997 (ST-RT-97-0181-99) 92,587,381.60 6,729,180.18 40,799,690.39 140,116,252.17 Deficiency Documentary Stamp Tax 1996 (ST-DST-96-0178-99 3,838,753.06 959,688.27 4,798,441.33 1997 (ST-DST-97-0181-99) 1,569,990.18 392,497.55 1,962,487.73 1997 (ST-DST-97-0180-99) 186,997,288.84 46,749,322.21 233,746,611.05 Compromise Penalty 1996 (ST-CP-96-0179-99) 1,000.00 1,000.00 1997 (ST-CP-97-0186-99) 1,000.00 1,000.00 Deficiency Final Tax 1997 (ST-FT-97-0183-99) 53,200.89 20,551.58 73,752.47 TOTALS