Request for Review and Appropriate Action on the Assessment for Local Business Tax and Regulatory Fees Against Luzviminda Landholdings, Inc. Issued by the Office of the Municipal Treasurer of Solano, Nueva Vizcaya

February 11, 2016 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION Atty. Leonardo D. Aurelio Law Office of A. M. Sison & Partners Suite 2002-A Security Bank Centre 6776 Ayala Ave., 1226 Makati City SUBJECT : Request for Review and Appropriate Action on the Assessment for Local Business Tax and Regulatory Fees Against Luzviminda Landholdings, Inc. Issued by the Office of the Municipal Treasurer of Solano, Nueva Vizcaya Sir : This refers to your letter dated January 28, 2016, requesting for a review and appropriate action of this Bureau on the assessment made by the Office of the Municipal Treasurer of Solano, Nueva Vizcaya against your client, Luzviminda Landholdings, Inc. (LLI). In a letter dated January 15, 2016, it appears that the Treasurer of Solano, Nueva Vizcaya issued an Assessment Notice against LLI for local business tax (LBT) and regulatory fees deficiencies covering the period 2006-2015 in the total amount of P103,074.20. It appears also that said Assessment is being protested by LLI through your Law Office thereby demanding that the total amount of P103,074.20 being contested be "completely cancelled and withdrawn." In this connection, we regret that we cannot make any review or act on the matter as it is beyond our authority and jurisdiction to do so. However, R.A. No. 7160, otherwise known as the Local Government Code (LGC) of 1991, provides remedies that a taxpayer may availed of when such taxpayer has any question or doubt to the legality or validity of an assessment concerning local taxation. In particular is Article 284 of the Implementing Rules and Regulations (IRR) implementing Section 195, Chapter 6 (Taxpayer's Remedies), Title One of the Code, which provides: "Article 284. Period of Assessment and Collection . (a) Local taxes, fees, or charges shall be assessed within five (5) years from the date they become due. No action for the collection of such taxes, fees, or charges, whether administrative or judicial, shall be instituted after the expiration of such period provided that taxes, fees or charges which have accrued before the effectivity of the Code may be assessed within a period of three (3) years from the date they became due. (b) In case of fraud or intent to evade the payment of taxes, fees, or charges, the same may be assessed within ten (10) years from discovery of the fraud or intent to evade payment. (c) Local taxes, fees, or charges may be collected within five (5) years from the date of assessment by administrative or judicial action. No such action shall be instituted after the expiration of said period provided that taxes, fees, or charges assessed before the effectivity of the Code may be collected within a period of three (3) years from the date of assessment. (d) The running of the periods of prescription provided in the preceding paragraphs shall be suspended for the time during which: (1) The treasurer is legally prevented from making the assessment of collection; (2) The taxpayer requests re-investigation and executes a waiver in writing before expiration of the period within which to assess or collect; and (3) The taxpayer is out of the country or otherwise cannot be located." Very truly yours, (SGD.) JOCELYN T. PENDON OIC-Executive Director ATTACHMENT MEMORANDUM FOR : TOMAS R. CARILLO Acting Chief, Policy, Planning and Programming Division (PPPD) FROM : (SGD.) JOSEPHINE A. ASEO Acting Chief, LTOD THRU : Channels SUBJECT : Situs of Taxation DATE : February 4, 2016 Respectfully referred to the Policy, Planning and Programming Division (PPPD) the herein letter dated January 28, 2016 of Atty. Leonardo A. Aurelio on behalf of their client Luzviminda Landholdings, Inc. (LLHI) regarding the situs of taxation. Thank you. Law Office of A. M. Sison, Jr. & Partners Suite 2002-A Security Bank Centre Tel. Nos. 891-1338 to 40 6776 Ayala Avenue, 1226 Makati City Fax (632) 891-1136 Philippines, P.O. Box 3222, MCPO E-mail [emailprotected] January 28, 2016 Bureau of Local Government Finance Department of Finance 8th Floor EDPC Building, Bangko Sentral ng Pilipinas Complex, Roxas Boulevard, Manila 1004 Assessment for Local Business Tax and Regulatory Fees Against Luzviminda Landholdings, Inc. for the years 2006 to 2015 in the Total Amount of P103,074.20 For and on behalf of our client, Luzviminda Landholdings, Inc. (LLHI) , we are furnishing you with our letter regarding the above subject, dated January 15, 2016, received on January 21, 2016 by the Municipal Treasurer of Solano, Nueva Vizcaya, for your review and appropriate action. acEHCD Hoping for your preferential attention on this matter. Yours Very Truly, (SGD.) ATTY. LEONARDO A. AURELIO January 15, 2016 Mr. Fernando D. Corpuz Municipal Treasurer Solano, Nueva Vizcaya Dear Sir: Assessment for Local Business Tax and Regulatory Fees Against Luzviminda Landholdings, Inc. for the years 2006 to 2015 in the Total Amount of P103,074.20 For and on behalf of our client, Luzviminda Landholdings, Inc. (LLHI) we are protesting the undated and unsigned by the authorized officer the assessment for local business tax and regulatory fees as lessor of land located in Solano, Nueva Vizcaya, for the years 2006 to 2015, in the total amount of P103,074.20. LLHI is a corporation duly organized and existing under Philippine laws with principal office located at 27/F Net Lima Bldg., 5th Avenue corner 26th Street, Bonifacio Global City, Taguig City. Said company is engaged in the business of leasing properties, principally land located in various parts of the Philippines. It does not maintain any sales or branch office in Solano, as well as in any city or municipality outside of Taguig City. LLHI records all its transactions and issues invoices and official receipts in its principal office. Thus, it declares all its revenues and pays its local business taxes and regulatory fees to Taguig City. The above practice is in accordance with Section 150 of the Local Government Code which provides that: "SEC. 150. Situs of the Tax. (a) For purposes of collection of the taxes under Section 143 of this Code, manufacturers, assemblers, repackers, brewers, distillers, rectifiers and compounders of liquor, distilled spirits and wines, millers, producers, exporters, wholesalers, distributors, dealers, contractors, banks and other financial institutions, and other businesses, maintaining or operating branch or sales outlet elsewhere shall record the sale in the branch or sales outlet making the sale or transaction, and the tax thereon shall accrue and shall be paid to the municipality where such branch or sales outlet is located. In cases where there is no such branch or sales outlet in the city or municipality where the sale or transaction is made, the sale shall be duly recorded in the principal office and the taxes due shall accrue and shall be paid to such city or municipality . . . ." (Emphasis Supplied) Furthermore, this practice has been declared to be correct in the previous ruling of the Bureau of Local Government Finance (BLGF) in the case of Sandoz Realty Corporation dated February 23, 2015, a copy of which is hereto attached for your ready reference. With respect to regulatory fees being assessed, same have no basis because LLHI has no presence in Solano, no signboard, no office, no building, and no personnel. In fine, there is nothing to regulate or inspect that will entail any expenses for Solano. Moreover, we wish to point out that your assessment with respect to the years 2006 to 2010 assuming that it was valid, had already prescribed as provided under Section 194 of the Local Government Code, which is quoted below: "SEC. 194. Periods of Assessment and Collection. (a) Local taxes, fees, or charges shall be assessed within five (5) years from the date they became due . No action for the collection of such taxes, fees, or charges, whether administrative or judicial, shall be instituted after the expiration of such period: Provided, That, taxes, fees or charges which have accrued before the effectivity of this Code may be assessed within a period of three (3) years from the date they became due. . . ." (Emphasis Supplied) In view of the foregoing, we respectfully demand that your subject undated and unsigned assessment against our client LLHI for the years 2006 to 2015 in the total amount of P103,074.20 be completely cancelled and withdrawn. Yours Very Truly, (SGD.) ANTONIO L. CARDIO Roll of Attorney No. 25458 (SGD.) LEONARDO A. AURELIO Roll of Attorney No. 25411 Bureau of Local Government Finance Opinion February 23, 2015