BIR Ruling [UN-075-94]

February 28, 1994 BIR RULING [UN-075-94] Philippine Communications Satellite Corporation (PHILCOMSAT) Telecoms Plaza Building, 316 Sen. Gil Puyat Ave., 1200 Makati, Metro Manila Gentlemen : With reference to your protest against the deficiency assessments for franchise tax, income tax, withholding taxes and increments, for the fiscal years 1987 and 1988, please be informed that after a careful review of the facts of your case, the laws and court decisions pertinent thereto, this Office is a of the opinion as it hereby holds as follows: cdtech A. That you are not liable to pay (1) the deficiency franchise tax of P22,703,921.03, inclusive of surcharge interest and compromise penalty for the FY ending March 31, 1988; and (2) the amount of P2,886,177.55 representing increments imposed for late payment of withholding taxes on compensation/bonuses, and expanded withholding tax on management fees, for the FYs ending March 31, 1987 and March 31, 1988, which total increments were included in the deficiency income tax assessment of P4,106,802.55; and (3) the surcharge and compromise penalty in the respective amounts of P1,078,266 and P15,000 imposed for late payment of franchise tax for the 3rd quarter of 1987 in the amount of P4,312,904.00; B. That you are liable to pay (1) the interest portion amounting to P9,450.89, of the assessed increments of P1,102,676.60 imposed for late payment of the franchise tax for the 3rd quarter of 1987; (2) the amount of P1,220,625.00, as deficiency income tax, interest and compromise penalty arising from the disallowance of P1,500,000 representing unsupported representation and transportation expenses in your income tax return filed for FY 1988, and (3) the amount of P78,296.27 as surcharge and interest for late payment of the franchise tax of P228,866.41 for the 4th quarter of 1988. In view thereof, you are requested to pay within fifteen (15) days from receipt hereof, the said amounts of P9,450.89, P1,220,625.00 and P78,296.27 or a total of P1,308,372.16 in order that this case may be considered closed. cd Very truly yours, LIWAYWAY VINZONS-CHATO Commissioner of Internal Revenue