Pilipinas Shell gets P22 M tax refund
Pilipinas Shell Petroleum Corp. will be getting P22 million in tax refund. That is because the Court of Appeals (CA) upheld the decision of the Court of Tax Appeals (CTA) to compel the Bureau of Internal Revenue (BIR) to refund or issue a tax credit certificate worth more than P22 million to Pilipinas Shell.
According to the CTA, Pilipinas Shell was said to have been erroneously levied P22,101,407 in documentary stamp tax in 1999 following its merger with its affiliate Shell Philippine Petroleum Corp.
The BIR imposed the tax on Pilipinas Shell in connection with transfer of Shell Philippines’ pieces of property to Pilipinas Shell under the Section 196 of the National Internal Revenue Code.
In the ruling issued by the appellate court’s Eight Division, it upholds the CTA’s decision that BIR committed an error in imposing the documentary stamp tax on Pilipinas Shell. This was because Section 196 covers property transfers by way of sale.
The CA said the transfer of property between Shell Philippines and Pilipinas Shell was a legal consequence of a merger wherein Pilipinas Shell is the surviving entity, and therefore it absorbed the rights, powers, privileges, assets and liabilities of Shell Philippines.
It further states that the transfer was not in exchange for shares of stock.
“Considering that the basis of the BIR is not applicable to a transfer of real property by operation of law, PSPC erroneously paid the DST and is therefore entitled to a tax refund,” the appellate court said.
September 22, 2009
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Tags: BIR, Court of Appeals, Court of Tax Appeals, documentary stamp tax, Philippines, Pilipinas Shell, tax credit certificate, tax refund, taxes В· Posted in: Announcement, Corporations, Government, Law, money, Philippine business news, Philippines, Taxation
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