BIR wins tax case versus San Miguel

THE Supreme Court has rejected San Miguel Corp.’s bid to claim a P30.4-million tax refund, the Bureau of Internal Revenue (BIR) said on Wednesday.

BIR Commissioner Romeo Lumagui Jr. said the high court, in an April 12, 2023 decision, had ruled that the conglomerate was not entitled to a refund of documentary stamp taxes (DST) on intercompany advances made in 2009 based on Section 179 of the National Internal Revenue Code (NIRC).

Bureau of Internal Revenue

Bureau of Internal Revenue

The firm had claimed a total of P30,424,259.59 in refunds.

The BIR said the Supreme Court also ruled that the use of case law introduced in 2011 would not harm SMC as it merely interpreted the NIRC, which has been in effect since 1993.

“All applications for tax refund should comply with both substantive and formal requirements,” Lumagui said in a statement. “This includes the legal basis for the refund and the documentary requirements to show such basis.”

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The Court of Tax Appeals had previously approved part of San Miguel’s tax refund request, specifically that pertaining to P15,916,794.59 in interest.

The appellate court had reasoned that the company acted in good faith by relying on earlier BIR issuances stating that intercompany loans and advances covered by interoffice memoranda were not subject to DST.

The high court reversed that decision, stating that San Miguel could not claim good faith based on previous BIR issuances as those issuances were not in its favor.

“Since SMC failed to obtain a favorable ruling from the BIR declaring that their advances to related parties were not subject to DST, it cannot belatedly claim good faith under a BIR Ruling issued to a different entity,” the Supreme Court was quoted as having ruled.

San Miguel representatives were not immediately available for comment.

The company’s shares closed 50 centavos lower at P103.50 apiece on Wednesday amid a 0.99-percent gain for the benchmark Philippine Stock Exchange index.

Mike Ibanoz

Mike Ibanoz is an Emmy Award-winning journalist who has spent the better part of two decades covering gadgets and apps, and helping people make smarter tech decisions.

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