Metrobank v. Commissioner of Internal Revenue
REITERATIONFacts
The Antecedents: Metropolitan Bank and Trust Co. (Metrobank) was investigated by the Bureau of Internal Revenue (BIR) for its tax liabilities for 1999. The BIR assessed Metrobank for a deficiency Documentary Stamp Tax (DST) on its Universal Savings Account (UNISA) product, based on Section 180 of the National Internal Revenue Code (NIRC). The assessment, including surcharge and interest, amounted to P473,207,457.97. Procedural History: Metrobank protested the assessment, arguing that UNISA was not subject to DST. The Commissioner of Internal Revenue (CIR) denied the protest. Metrobank then appealed to the Court of Tax Appeals (CTA) Second Division, which dismissed the petition and affirmed the CIR's decision, with modifications to the amount due. Metrobank's motion for reconsideration was denied. Subsequently, Metrobank filed a petition for review with the CTA en banc, which also affirmed the prior decisions, citing Supreme Court rulings in similar cases. Metrobank's motion for reconsideration was again denied, leading to the present petition. The Petition: Metrobank filed a Petition for Review on Certiorari under Rule 45 of the Revised Rules of Court, seeking to reverse the CTA en banc's decision. The core issue presented is whether the UNISA was subject to DST under Section 180 of the NIRC in 1999, prior to its amendment. Metrobank argued that its UNISA, evidenced by a passbook, did not fall under the taxable instruments enumerated in Section 180, which it contended applied only to negotiable certificates of deposit with fixed maturity dates. Metrobank also raised the issue of its subsequent availment of the Tax Amnesty Program under Republic Act No. 9480, asserting immunity from the disputed tax liability.
Issue(s)
Whether the Universal Savings Account (UNISA) of Metrobank is subject to Documentary Stamp Tax (DST) under Section 180 of the National Internal Revenue Code (NIRC) for the taxable year 1999. Whether Metrobank is entitled to immunity from the assessed deficiency DST by virtue of its availment of the Tax Amnesty Program under Republic Act No. 9480.
Ruling
The Supreme Court GRANTED the Petition. The Decision and Resolution of the Court of Tax Appeals en banc were REVERSED and SET ASIDE, and the Assessment No. DST-2-99-000022 was CANCELLED, solely on the ground that Metrobank availed itself of the Tax Amnesty Program under Republic Act No. 9480.
Ratio Decidendi
On the issue of DST liability on UNISA: The Court reiterated its rulings in Banco de Oro Universal Bank v. Commissioner of Internal Revenue (BDO case) and International Exchange Bank v. Commissioner of Internal Revenue (IEB case). It held that a special savings account like Metrobank's UNISA, evidenced by a passbook, which grants a higher interest rate conditioned on maintaining a minimum deposit balance for a specified holding period, is considered a certificate of deposit drawing interest. Such an instrument is subject to DST under Section 180 of the NIRC, as it possesses the essential attributes of a time deposit, despite the difference in the form of evidence (passbook versus certificate of deposit). The Court emphasized that substance, not form, is paramount in determining taxability, and that the amendment by Republic Act No. 9243 merely clarified, rather than introduced, the taxability of such instruments. On the issue of Tax Amnesty: The Court found Metrobank's availment of the Tax Amnesty Program under Republic Act No. 9480 to be decisive. The Court noted that Republic Act No. 9480 grants immunity from all national internal revenue taxes for taxable year 2005 and prior years, provided the conditions are met. The Court rejected the CIR's arguments that Metrobank was disqualified as a withholding agent or that the assessment was final and executory. It cited previous rulings in C.T.A. EB No. 269 and Philippine Banking Corporation v. Commissioner of Internal Revenue (PBC case) where it was determined that Metrobank had complied with the requirements of the tax amnesty program. Therefore, Metrobank was immune from the payment of the assessed deficiency DST for 1999.
Main Doctrine
A Universal Savings Account (UNISA), evidenced by a passbook, which offers a higher interest rate conditioned on maintaining a minimum balance for a specified period, is considered a certificate of deposit drawing interest subject to Documentary Stamp Tax (DST) under Section 180 of the National Internal Revenue Code (NIRC) prior to its amendment by Republic Act No. 9243. However, availment of the Tax Amnesty Program under Republic Act No. 9480 extinguishes such tax liabilities.