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    ABS-CBN Vs CTA

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    Japsalm Lyann Astudillo
    The petitioner ABS-CBN paid film rentals to foreign corporations and withheld income tax of 30% of one-half of the rentals pursuant to existing law and regulations. In 1968, the law was amended to increase the tax rate to 35% and change the tax basis. In 1971, a new circular was issued revoking the prior circular. The Commissioner then issued an assessment against ABS-CBN for deficiency taxes from 1965 to 1968 based on the new circular. However, the court held that the new 1971 circular could not be applied retroactively as it would prejudice ABS-CBN, which had complied with prior law and regulations. General circulars cannot be applied retroactively where it would prejudice taxpayers.

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    ABS-CBN Vs CTA

    Uploaded by

    Japsalm Lyann Astudillo
    148 views1 page
    The petitioner ABS-CBN paid film rentals to foreign corporations and withheld income tax of 30% of one-half of the rentals pursuant to existing law and regulations. In 1968, the law was amended to increase the tax rate to 35% and change the tax basis. In 1971, a new circular was issued revoking the prior circular. The Commissioner then issued an assessment against ABS-CBN for deficiency taxes from 1965 to 1968 based on the new circular. However, the court held that the new 1971 circular could not be applied retroactively as it would prejudice ABS-CBN, which had complied with prior law and regulations. General circulars cannot be applied retroactively where it would prejudice taxpayers.

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    ABS-CBN vs CTA

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    The petitioner ABS-CBN paid film rentals to foreign corporations and withheld income tax of 30% of one-half of the rentals pursuant to existing law and regulations. In 1968, the law was amended to increase the tax rate to 35% and change the tax basis. In 1971, a new circular was issued revoking the prior circular. The Commissioner then issued an assessment against ABS-CBN for deficiency taxes from 1965 to 1968 based on the new circular. However, the court held that the new 1971 circular could not be applied retroactively as it would prejudice ABS-CBN, which had complied with prior law and regulations. General circulars cannot be applied retroactively where it would prejudice taxpayers.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    148 views1 page

    ABS-CBN Vs CTA

    Uploaded by

    Japsalm Lyann Astudillo
    The petitioner ABS-CBN paid film rentals to foreign corporations and withheld income tax of 30% of one-half of the rentals pursuant to existing law and regulations. In 1968, the law was amended to increase the tax rate to 35% and change the tax basis. In 1971, a new circular was issued revoking the prior circular. The Commissioner then issued an assessment against ABS-CBN for deficiency taxes from 1965 to 1968 based on the new circular. However, the court held that the new 1971 circular could not be applied retroactively as it would prejudice ABS-CBN, which had complied with prior law and regulations. General circulars cannot be applied retroactively where it would prejudice taxpayers.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 1

    G.R. No.

    L-52306 October 12, 1981

    ABS-CBN BROADCASTING CORPORATION, petitioner,


    vs.
    COURT OF TAX APPEALS and THE COMMISSIONER OF INTERNAL
    REVENUE, respondents.

    Ponente: MELENCIO-HERRERA, J.:

    FACTS:

    Petitioner corporation(ABS-CBN) was engaged in the business of telecasting local as well as


    foreign films acquired from foreign corporations not engaged in trade or business within the
    Philippines for which petitioner paid rentals after withholding income tax of 30%of one-half of the
    film rentals. The applicable law where the income tax of non-resident corporations is section 24
    (b) of the National Internal Revenue Code, as amended by Republic Act No. 2343. On April 12,
    1961, In implementation of said provision, the CIR issued General Circular No. V-334.Pursuant
    to the foregoing, petitioner ABS-CBN dutifully withheld and turned over to the BIR the amount of
    30% of one-half of the film rentals paid by it to foreign corporations not engaged in trade or
    business within the Philippines. The last year that ABS-CBN withheld taxes pursuant to the
    foregoing Circular was in 1968. On June 27, 1968, Republic Act No. 5431 amended Section 24
    (b) of the Tax Code increasing the tax rate from 30 % to 35 % and revising the tax basis from
    "such amount" referring to rents, etc. to "gross income,". On February 8, 1971, the
    Commissioner of Internal Revenue issued Revenue Memorandum Circular No. 4-71, revoking
    General Circular No. V-334. On the basis of this new Circular, respondent Commissioner of
    Internal Revenue issued against petitioner a letter of assessment and demand dated April 15,
    1971, but allegedly released by it and received by petitioner on April 12, 1971, requiring them to
    pay deficiency withholding income tax on the remitted film rentals for the years 1965 through
    1968 and film royalty as of the end of 1968 in the total amount of P525,897.06

    ISSUE:

    Whether or not respondent can apply General Circular No. 4-71 retroactively

    HELD:

    No. General Circular No. 4-71 cannot be applied retroactively. In point is Sec. 338-A (now Sec.
    327) of the Tax Code provide: Rulings or circulars promulgated by the Commissioner of Internal
    Revenue have no retroactive application where to so apply them would be prejudicial to
    taxpayers. The prejudice to petitioner of the retroactive application of Memorandum Circular No.
    4-71 is beyond question.

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