BIR Ruling [DA-310-96]

August 14, 1996 BIR RULING [DA-310-96] A. M. Sison, Jr. & Associates Suite 2002 Pacific Bank Building Makati City, Metro Manila Attention: Atty . Antonio L . Cardino Gentlemen : This refers to your letter dated February 26, 1996 offering to pay in behalf of your client, Johnson & Johnson (Philippines), Inc., the amount of P3,106,613.26 representing deficiency value-added tax from January to June 30, 1995, plus 20% interest to be computed from the time the deficiency value-added taxes in question was due up to the time of payment but without the 25% surcharge imposed under Section 248 of the tax Code, as amended. It is represented that your client's accountant who retired last year, inadvertently committed some errors in the value-added tax returns for the 4th quarter of 1994, 1st and 2nd quarters of 1995 and VAT declaration for January 1995; that the errors arose from erroneous carry forward of figures from VAT declaration to quarterly returns or from one quarterly return to another and in consolidating the input taxes of the company's three operating divisions; that the errors were discovered because of your client's continuing program to review its tax payments to see to it that it complies with existing laws and regulations; and that to correct the errors, your client amended the VAT declaration and quarterly VAT returns for the quarters in question. In your subsequent letter dated March 27, 1996, you informed this Office that you have already paid to the Revenue District Officer of Paraaque, through Land Bank Paraaque Branch, the total amount of P3,618,962.86 as deficiency value-added tax for the above stated period inclusive of interest up to March 5, 1996 under Authority To Accept Payment No. 33364905 dated March 4, 1996. In reply, please be informed that since you have paid the amount of P3,618,962.86 representing deficiency value-added tax from January 5 to June 30, 1995 inclusive of the 20% interest, this Office has decided to forego the imposition of the 25% surcharge imposed under Section 248 of the Tax code, as amended. It is of course understood that the acceptance by this Office of your client's payment of the aforesaid amount of P3,618,962.86 does not preclude us from conducting an investigation/verification of your client's VAT liability for the period January to June 30, 1995 and for issuing an assessment notice against it if it is found out that there is a deficiency in the payment made. cdtech Very truly yours, LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue