THE Court of Tax Appeals (CTA) has ordered SM Development Corp. (SMDC) to pay a 2009 tax deficiency amounting to P576.1 million.
In an 88-page decision on April 8, the CTA second division partially granted the petition of SMDC, canceling its deficiency value-added tax (VAT) for lack of merit and the corresponding documentary stamp tax (DST) deficiency for 2009.
However, it found the corporation liable for deficiency income tax, withholding tax compensation (WTC), expanded withholding tax (EWT), and fringe benefit tax (FBT) worth P576.1 million.
SMDC was also ordered by the CTA to pay delinquency interest with the rate of 12% computed from Jan. 1, 2018 until its full payment in the amount of P426.9 million, pursuant to the Tax Code as amended by Republic Act No. 10963 of the Tax Reform for Acceleration and Inclusion Law.
“Based on the computation above, there was an overpayment of the total amount due by petitioner in the amount of P135,234.05. Hence, with this payment, the assessment on DST is thus cancelled,” the CTA said.
The CTA said that there had been no underdeclared sales which would could be attributed to deficiency assessment in VAT and income tax.
SMDC sought the cancellation of its alleged tax deficiencies for 2009 amounting to P2.1 billion. However, the Court only canceled P221 million VAT and P17.4 million DST deficiencies.
“(T)he deficiency income tax, WTC, EWT, and FBT assessments for taxable year 2009 are affirmed but with modifications. Accordingly, petitioner is ordered to pay respondent the amount of…P576,107,688.31, representing basic deficiency tax, twenty-five percent (25%) surcharge, twenty percent (20%) deficiency interest and 20% delinquency interest imposed on the basic deficiency income tax, WTC, EWT, and FBT,” the CTA ruled.
The modification was due to the partial payment made by SMDC on the tax deficiencies as computed by the Court, among others.
The decision was written by Associate Justice Juanito C. Castañeda, Jr. and concurred in by Associate Justice Catherine T. Manahan. — Vann Marlo M. Villegas