Philippine Guaranty Co. Inc. v CIR
GR No L-22074, September 6, 1965
FACTS:
The grounds raised in the instant motion all spring from movant’s view that the Court of Tax Appeals and the Supreme Court, found it innocent of the charges of violating subsection c of Sections 53 and 54 of the NIRC. It alleges that it subsequently cannot be held liable for the assessment of P375,345 based on said sections.
ISSUES:
1. Is PhilGuaranty innocent of the charges?
2. Is PhilGuaranty not expected to withhold taxes for reinsurance premiums?
3. Is PhilGuaranty released from liability for the tax after it was advised by the CIR that reinsurance premiums were not subject to withholding?
RULING:
1. No. Precisely, the mere fact that it was exempted implies violation of Section 53c.
2. No, it should withhold taxes. The law sets no condition for the personal liability of the withholding agent to attach. The reason is to compel the withholding agent to withhold the tax under all circumstances.
3. No, it is liable. It has not been shown that it withheld the amount of tax due before it inquired form the BIR, contrary to the requirements of Section 200. Strict observance of said steps is required of a withholding agent before he could be released from liability. Foreign corporations are taxable on their income from sources within the Philippines. The foreign insurer’s place of business should not be confused with their place of activity. It suffices that the activity creating the income is performed or done in the Philippines.
FACTS:
The grounds raised in the instant motion all spring from movant’s view that the Court of Tax Appeals and the Supreme Court, found it innocent of the charges of violating subsection c of Sections 53 and 54 of the NIRC. It alleges that it subsequently cannot be held liable for the assessment of P375,345 based on said sections.
ISSUES:
1. Is PhilGuaranty innocent of the charges?
2. Is PhilGuaranty not expected to withhold taxes for reinsurance premiums?
3. Is PhilGuaranty released from liability for the tax after it was advised by the CIR that reinsurance premiums were not subject to withholding?
RULING:
1. No. Precisely, the mere fact that it was exempted implies violation of Section 53c.
2. No, it should withhold taxes. The law sets no condition for the personal liability of the withholding agent to attach. The reason is to compel the withholding agent to withhold the tax under all circumstances.
3. No, it is liable. It has not been shown that it withheld the amount of tax due before it inquired form the BIR, contrary to the requirements of Section 200. Strict observance of said steps is required of a withholding agent before he could be released from liability. Foreign corporations are taxable on their income from sources within the Philippines. The foreign insurer’s place of business should not be confused with their place of activity. It suffices that the activity creating the income is performed or done in the Philippines.
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