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CIR vs MANILA BANKER'S G.R. No. 169103 March 16, 2011 On December 14, 1999, the CIR issued a PAN against the respondent for its deficiency interna re!enue ta"es.
CIR vs MANILA BANKER'S G.R. No. 169103 March 16, 2011 On December 14, 1999, the CIR issued a PAN against the respondent for its deficiency interna re!enue ta"es.
CIR vs MANILA BANKER'S G.R. No. 169103 March 16, 2011 On December 14, 1999, the CIR issued a PAN against the respondent for its deficiency interna re!enue ta"es.
On December 14, 1999, the CIR issued a PAN against the respondent for its deficiency interna re!enue ta"es for the year 199#$ %he respondent agreed to a the assessments issued against it e"cept to the amount representing deficiency documentary stamp ta"es on its poicy premiums and penaties$ %hus, on &anuary 4, '(((, the petitioner issued against the respondent a )orma *etter of Demand 1( +ith the corresponding Assessment Notices attached$ %he ta" deficiency +as computed by incuding the increases in the ife insurance co!erage or the sum assured by some of respondent,s ife insurance pans$ On )ebruary -, '(((, the respondent fied its *etter of Protest 1# ./IR0 contesting the assessment for deficiency documentary stamp ta" on its insurance poicy premiums$ 1o+e!er, respondent,s Protest +as not acted upon by the /IR +ithin the 12(3day period +ithin +hich to rue on the protest$ 1ence, on October '4, '(((, the respondent fied a Petition for Re!ie+ +ith the C%A for the canceation of Assessment Notice %he respondent in!o5ed the C%A,s 6arch -(, 199- ruing in the simiar case of *incon Phiippine *ife Insurance Company, Inc$ CIR, '( +herein the C%A hed that the ta" base to be used in computing the documentary stamp ta" is the !aue at the time the instrument is issued because the documentary stamp ta" is e!ied and paid ony once, +hich is at the time the ta"abe document is issued$ On Apri 4, '((', the C%A granted the respondents, Petition$ Aggrie!ed by the decision, the petitioner +ent to the Court of Appeas on a Petition for Re!ie+ '- %he petitioner as5ed for reconsideration of the abo!e Decision and cited this Court,s 6arch 19, '((' Decision in CIR !$ *incon Phiippine *ife Insurance Company, Inc$, '2 the !ery same case the respondent in!o5ed before the C%A$ %he petitioner argued that in *incon, this Court sustained the !aidity of the deficiency documentary stamp ta" imposed on the increase in the sum insured e!en though no ne+ poicy +as issued because the increase, by reason of the 7Automatic Increase Cause,7 +as aready definite at the time the poicy +as issued$ On &uy '#, '((8, the Court of Appeas sustained its ruing, and stated that the *incon Case +as not appicabe because the increase in the sum assured in *incon,s insurance poicy +as definite and determinabe at the time such poicy +as issued as the automatic increase cause, +hich ao+ed for the increase, formed an integra part of the poicy9 +hereas in the respondent,s case, 7the ta" base of the disputed deficiency assessment +as not :a; definite or determinabe increase in the sum assured$7 '9 ISSUE: 1$ Whether or not respondent is liable for deficiency documentary stamp tax on increases in the life insurance coverage brought about by the Guaranteed Continuity Clause. '$ Whether or not respondent is liable for the deficiency DST on the additional premiums represented by the additional members of the same existing group insurance policy. 1. I !h"s "ss#$, !h$ SC r#%$& " 'avor o' ($!"!"o$r %he continuity of the poicy after its term +as not guaranteed as the decision to rene+ it beonged to the insured, sub<ect to certain conditions$ Any increase in the sum assured, as a resut of the cause, had to sur!i!e a ne+ agreement bet+een the respondent and the insured$ The increase in the life insurance coverage was only corollary to the new premium rate imposed based upon the insureds age at the time the continuity clause was availed of. t was not automatic! was never guaranteed! and was certainly neither definite nor determinable at the time the policy was issued. %herefore, the increases in the sum assured brought about by the guaranteed continuity cause cannot be sub<ect to documentary stamp ta" under =ection 12- as insurance made upon the i!es of the insured$ 2. I !h"s "ss#$, !h$ SC r#%$& " 'avor o' ($!"!"o$r >hene!er a master poicy admits of another member, another ife is insured and co!ered$ %his means that the respondent, by appro!ing the addition of another member to its e"isting master poicy, is once more e"ercising its pri!iege to conduct the business of insurance, because it is yet again insuring a ife$ It does not matter that it did not issue another poicy to effect this change, the fact remains that insurance on another ife is made and the reationship of insurer and insured is created bet+een the respondent and the additiona member of that master poicy$ In the respondent,s case, its group insurance pan is embodied in a contract +hich incudes not ony the master poicy, but a documents subse?uenty attached to the master poicy$50 )ERS*NAL EN+ N*,ES %his Court +oud i5e to ma5e it cear that the assessment for deficiency documentary stamp ta" is being uphed not because the additiona premium payments or an agreement to change the sum assured during the effecti!ity of an insurance pan are sub<ect to documentary stamp ta", but because documentary stamp ta" is e!ied on e!ery document +hich estabishes that insurance +as made or rene+ed upon a ife$