Commissioner of Internal Revenue v. Citibank, N.A.

TWELFTH DIVISION [CA-G.R. SP No. 35366. July 11, 1996.] COMMISSIONER OF INTERNAL REVENUE , petitioner , vs . CITIBANK, N.A. and THE COURT OF TAX APPEALS , respondents . D E C I S I O N ELBINIAS , J p : This is a petition for review praying to annul the decision rendered by respondent Court of Tax Appeals on September 16, 1994 granting herein private respondent Citibank, N.A. a tax credit or refund of P38,386,674.00 representing overpaid branch profit remittance tax. On July 22, 1987, private respondent Citibank N.A., a corporation duly organized and existing under the laws of the United States of America and duly licensed to operate a branch and engage in banking activities here in the Philippines, filed a claim with the Commissioner of Internal Revenue for the above stated amount alleging that it represented overpaid branch profits remittance tax. Citibank claimed that the branch profits remittance tax should be computed on profits actually remitted and not on the total branch profits out of which the remittance is to be made, citing Commissioner vs. Burroughs, Ltd . (142 SCRA 324). Since Citibank had actually remitted profits in the total amount of P1,450,163,273.08 for a period of five years from 1981 to 1985, it should have only paid P217,524,490.98 representing the 15% branch profits remittance tax. But Citibank paid P255,911,155.83 based on its total branch profit of P1,706,074,438.91 and not on the profits actually remitted. Since Citibank did not receive any response to its letter, and the two-year period for filing claims was nearing its expiration date Citibank filed the petition a quo with the Court of Tax Appeals. The Court of Tax Appeals ruled in favor of Citibank, the pertinent portion of its decision reads: "WHEREFORE, respondent is hereby ordered to grant petitioner a tax credit or refund in the amount of P38,386,764.00 representing overpaid branch profit remittance tax. No costs. SO ORDERED." In the recent case of Bank of America NT & SA vs. Court of Appeals (234 SCRA 302), cited by the Court of Tax Appeals in its decision, the Supreme Court held that in the 15% remittance tax, the law specifies its own tax base to be on the "profit remitted abroad." There is absolutely nothing equivocal or uncertain about the language of the provision. The tax is imposed on the amount sent abroad, and the law calls for nothing further. There having no other issues to be resolved as the tax based for branch profit remittance taxes has been clearly defined in the ruling of Bank of America NT & SA vs. Court of Appeals , (supra), this Court finds no reason to disturb the Court of Tax Appeals' findings. WHEREFORE, premises considered, petition is hereby DENIED and the decision rendered by respondent Court of Tax Appeals is AFFIRMED in toto. No costs. SO ORDERED. Verzola and Agcaoili, JJ . , concur.