CTA orders BIR to refund nearly P1B withholding tax to SM Investments
The Court of Tax Appeals (CTA) has ordered the Bureau of Internal Revenue (BIR) to refund P986.37 million in excess and utilized creditable withholding taxes (CWT) paid by SM Investments Corporation (SMIC) for the year 2013.
In a recent 28-page amended decision, the CTA Special 2nd Division rejected the contention of the BIR that SMIC failed to submit evidence supporting the actual remittance of the CWT.
The court agreed with SMIC that “it is not responsible for the proof of remittance of the creditable taxes withheld” by the buyers of its properties, including SM Prime Holdings, Inc.
Withholding taxes are deducted by the buyers from the payments made to the seller. The court said the withholding agent is the one responsible for proving the remittance of the tax.
The court added that the certificate of creditable tax withheld at source was competent proof to establish the remittance.
The decision was penned by Associate Justice Juanito Castaneda, Jr.
The court, in its March 4, 2019 decision, initially ordered a smaller refund of P179.3 million.