Meralco v Yatco
GR No. 45697, November 1, 1939
FACTS:
Meralco entered into an insurance contract with a new york based insurance company. Yatco, the Commissioner of
Internal Revenue, levied taxes on the premium paid. Meralco paid under protest alleging that the Philippines had no jurisdiction.
ISSUE:
Whether the CIR exceeded his powers in taxing Meralco’s paid premium
RULING:
No. Where the risk insured against and certain incidents of the contract are to be attended in the Philippines such as
payment of dividends when received in cash, the Philippines may impose tax regardless whether the contract is executed abroad. Under such circumstances, substantial elements of the contract may be said to be so situated in the Philippines as to give its government the power to tax. Even if it be assumed that the tax imposed upon the insured will ultimately be passed on to the insurer, thus constituting an indirect tax upon the foreign corporation, by stipulations of its contract, has subjected itself to the taxing jurisdiction of the Philippines.
After all, the Government of the Philippines, by protecting the properties insured, benefits the foreign corporation. It is thus reasonable that the latter should pay a just contribution therefor.
GR No. 45697, November 1, 1939
FACTS:
Meralco entered into an insurance contract with a new york based insurance company. Yatco, the Commissioner of
Internal Revenue, levied taxes on the premium paid. Meralco paid under protest alleging that the Philippines had no jurisdiction.
ISSUE:
Whether the CIR exceeded his powers in taxing Meralco’s paid premium
RULING:
No. Where the risk insured against and certain incidents of the contract are to be attended in the Philippines such as
payment of dividends when received in cash, the Philippines may impose tax regardless whether the contract is executed abroad. Under such circumstances, substantial elements of the contract may be said to be so situated in the Philippines as to give its government the power to tax. Even if it be assumed that the tax imposed upon the insured will ultimately be passed on to the insurer, thus constituting an indirect tax upon the foreign corporation, by stipulations of its contract, has subjected itself to the taxing jurisdiction of the Philippines.
After all, the Government of the Philippines, by protecting the properties insured, benefits the foreign corporation. It is thus reasonable that the latter should pay a just contribution therefor.
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