CIR v.

Standard Chartered Bank

GR No. 192173, July 29, 2015
Perez, J.
In 2004, Standard Chartered Bank received from the Commissioner of Internal Reve
nue a Formal Letter of Demand and Assessment Notice for the payment of alleged d
eficiency income tax, final income tax-FCDU, Withholding Tax-Compensation, Expan
ded Withholding Tax, with the aggregate amount of Php 33,326,211.37 for the year
1998. Respondent then filed a protest against the CIR and requested that it be
withdrawn and cancelled. Upon inaction of the CIR, Standard Chartered filed a Pe
tition for Review with the Court of Tax Appeals.The Court ruled in favor of the
respondent, stating that the claims for the said taxes were already barred by pr
escription. Moreover, the petitioner's contention that Standard Chartered execut
ed Waivers of Statute of Limitations, these waivers failed to conform with the r
equirements under RMO No. 20-90; thus, the waivers were invalid.
ISSUE/S
WON the petitioner's right to assess respondent for the said taxes has already p
rescribed, despite
HELD
No. The CIR can only assess and collect internal revenue tax for three years, as
provided by the NIRC. This prescriptive period aims to protect taxpayers from u
nreasonable investigation by not indefinitely extending the period of assessment
and depriving the taxpayer of the assurance that it will no longer be subjected
to further investigation for taxes after the expiration of reasonable period of
time. However, the NIRC also allows the extension of the three-year period via
the execution of a waiver of the Statute of Limitations. Such must be strictly c
omplied with, as provided under RMO No. 20-90, which prescribes the proper form
of the waiver, and failure to comply with any of the requisites renders it defec
tive and ineffectual. In the case at bar, the waiver executed by the respondent
was defective for non-compliance with RMO No. 20-90; hence, it did not validly e
xtend the original three-year prescriptive period for assessment and collection,
and the right of the CIR to go after the liabilities of Standard Chartered has
already prescribed.
It must be remembered that the execution of a Waiver of Statute of Limitations m
ay be beneficial to the taxpayer or to the BIR, or to both. Considering however,
that it results to a derogation of some of the rights of the taxpayer, the same
must be executed in accordance with pre-set guidelines and procedural requireme
nts. Otherwise, it does not serve its purpose, and the taxpayer has all the righ
t to invoke its nullity.
2. ING Bank v. CIR
GR No. 167679, July 22, 2015
Leonen, J.:p
ING Bank, a foreign banking corporation incorporated in the Netherlands, receive
d a Final Assessment Notice in 1999 for deficiency tax assessments (1996-97). IN
G Bank made partial payments, but protested the remaining deficiency tax assessm
ents amounting to P 672,576,939.18, and filed a Petition for Review with the Cou
rt of Tax Appeals. The Court cancelled the 1996-97 deficiency branch profit remi
ttance tax and 1997 deficiency documentary stamp tax, but upheld the 1996-97 def
iciency withholding tax on compensation, 1996 deficiency onshore tax, and 1996-9
7 deficiency documentary stamp tax on special savings.
During the pendency of the Petition for Review, ING Bank vailed itself of the ta
x amnesty authorized and granted under RA 9480 in 2007. The CIR contested this a
vailment because both the CTA second Division and En Banc ruled in the responden

t's favor that confirmed the liability of ING Bank for the upheld deficiency tax
assessments, as per RMC No. 19-2008. For its part, ING Bank alleged that the Me
morandum Circular cannot ovverride RA 9480 which only excludes from tax amnesty
the "tax cases subject of final and executory judgment by the courts."
ISSUE/S
1. WON ING Bank may avail itself of the tax amnesty granted under Republic Act N
o. 9480
2. WON the assessment for deficiency withholding tax on compensation is proper
HELD
1. Yes. It is clear under RA 9480 that the only exception to those who may avail
the tax amnesty are the tax cases subject of final and executory judgment by th
e courts. Since ING Bank availed of the tax amnesty during the pendency of its a
ppeal, it is not excluded from the availment.
2. Yes.