ING Bank N.V. Manila Branch v. Commissioner of Internal Revenue
REITERATIONFacts
The Antecedents: Petitioner ING Bank N.V. Manila Branch was assessed deficiency documentary stamp taxes (DST) for taxable years 1996 and 1997, and deficiency tax on onshore interest income for taxable year 1996. It was also found liable for deficiency withholding tax on compensation for the same taxable years. Procedural History: The Court of Tax Appeals En Banc affirmed the assessments for deficiency DST, onshore taxes, and withholding taxes. However, the Supreme Court, in a prior Decision dated July 22, 2015, partly granted petitioner's Rule 45 Petition, setting aside the assessments for deficiency DST and onshore interest income due to petitioner's availment of the tax amnesty program under Republic Act No. 9480. The Court affirmed the CTA En Banc's ruling on petitioner's liability for deficiency withholding tax. The Petition: Respondent Commissioner of Internal Revenue filed a Motion for Partial Reconsideration, arguing that DST on petitioner's special savings accounts are excluded from the tax amnesty under Republic Act No. 9480, citing Revenue Memorandum Circulars (RMCs) Nos. 69-2007 and 19-2008, which allegedly exclude "taxes passed-on and collected from customers for remittance to the BIR." Petitioner opposed, arguing that RMCs cannot override the law and that respondent's claim is a rehash of a previously rejected argument.
Issue(s)
Whether documentary stamp taxes are excluded from the tax amnesty granted by Republic Act No. 9480. Whether Revenue Memorandum Circulars Nos. 69-2007 and 19-2008 can validly exclude documentary stamp taxes from the coverage of Republic Act No. 9480.
Ruling
The Motion for Partial Reconsideration is DENIED WITH FINALITY.
Ratio Decidendi
On the issue of whether documentary stamp taxes are excluded from the tax amnesty granted by Republic Act No. 9480: The Court reiterated that Republic Act No. 9480 provides a general grant of tax amnesty subject only to specific exceptions enumerated in Section 8 of the law. The law expressly covers "all national internal revenue taxes for the taxable year 2005 and prior years... that have remained unpaid as of December 31, 2005." Documentary stamp tax is a national internal revenue tax. The exceptions listed in Section 8 of Republic Act No. 9480 do not include documentary stamp taxes in general, nor do they specifically exclude taxes passed on and collected from customers, unless such exclusion is directly tied to the nature of withholding tax liabilities or final court judgments. The Court previously held that DST on special savings accounts are direct liabilities of the bank and not merely taxes passed on and collected from customers. On the issue of whether Revenue Memorandum Circulars Nos. 69-2007 and 19-2008 can validly exclude documentary stamp taxes from the coverage of Republic Act No. 9480: The Court firmly held that administrative issuances, such as revenue memorandum circulars, cannot amend or modify the law. Citing established jurisprudence, the Court emphasized that such issuances must remain consistent and in harmony with the law they seek to apply and implement. To allow RMCs to impose additional requirements or conditions not found in the law itself would be to allow them to override the statute. The Court found that the exceptions provided in the RMCs, specifically the exclusion of "taxes passed-on and collected from customers for remittance to the BIR," were not supported by Republic Act No. 9480 and thus could not validly remove taxpayers otherwise qualified from availing the tax amnesty. The Court also clarified that documentary stamp taxes on special savings accounts are direct liabilities of the bank, not taxes passed on and collected from customers in the same manner as withholding taxes.
Main Doctrine
Administrative issuances, such as Revenue Memorandum Circulars, cannot amend or modify the law. Therefore, exceptions to tax amnesty programs not explicitly provided in the law itself, but only in administrative issuances, are invalid.