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    CIR Vs GCL Retirement Plan

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    Franz Garcia
    The CIR appealed a CTA ruling that granted a refund to the GCL Retirement Plan for amounts withheld under the 15% final withholding tax on interest income earned from investments. The CIR argued that under PD 1959, employees' trusts ceased to be tax exempt. However, the Supreme Court upheld the CTA decision. It found that the GCL Retirement Plan was granted tax exemption under RA 4917. As the income of pension trusts is also exempt to avoid diminishing benefits received, PD 1959 did not revoke this exemption for employees' trusts. The Court therefore held that the GCL Retirement Plan was entitled to the refund claim.

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    CIR Vs GCL Retirement Plan

    Uploaded by

    Franz Garcia
    123 views2 pages
    The CIR appealed a CTA ruling that granted a refund to the GCL Retirement Plan for amounts withheld under the 15% final withholding tax on interest income earned from investments. The CIR argued that under PD 1959, employees' trusts ceased to be tax exempt. However, the Supreme Court upheld the CTA decision. It found that the GCL Retirement Plan was granted tax exemption under RA 4917. As the income of pension trusts is also exempt to avoid diminishing benefits received, PD 1959 did not revoke this exemption for employees' trusts. The Court therefore held that the GCL Retirement Plan was entitled to the refund claim.

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    CIR vs GCL Retirement Plan

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    The CIR appealed a CTA ruling that granted a refund to the GCL Retirement Plan for amounts withheld under the 15% final withholding tax on interest income earned from investments. The CIR argued that under PD 1959, employees' trusts ceased to be tax exempt. However, the Supreme Court upheld the CTA decision. It found that the GCL Retirement Plan was granted tax exemption under RA 4917. As the income of pension trusts is also exempt to avoid diminishing benefits received, PD 1959 did not revoke this exemption for employees' trusts. The Court therefore held that the GCL Retirement Plan was entitled to the refund claim.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    123 views2 pages

    CIR Vs GCL Retirement Plan

    Uploaded by

    Franz Garcia
    The CIR appealed a CTA ruling that granted a refund to the GCL Retirement Plan for amounts withheld under the 15% final withholding tax on interest income earned from investments. The CIR argued that under PD 1959, employees' trusts ceased to be tax exempt. However, the Supreme Court upheld the CTA decision. It found that the GCL Retirement Plan was granted tax exemption under RA 4917. As the income of pension trusts is also exempt to avoid diminishing benefits received, PD 1959 did not revoke this exemption for employees' trusts. The Court therefore held that the GCL Retirement Plan was entitled to the refund claim.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    Title: CIR vs GCL Retirement Plan, CTA and CA

    G.R. No. 95022 March 23, 1992


    Topic and Doctrine: Tax exemption of employee trusts

    Facts: 

    Respondent GCL Retirement plan filed for refund for amounts withheld by Anscor Capital and
    Investment Corp and Commercial Bank of Manila for 15% withholding tax which were earned based on
    interest income realized from investments made by respondent with the latter corporations. Petitioner
    CIR denied respondent’s claim for refund. Petitioner contends that it is an entity exempt from income
    taxation based on RA 4917. Respondent appealed the claim for refund to the CTA. The latter ruled in
    favor of GCL, holding that employees' trusts are exempt from the 15% final withholding tax on interest
    income and ordering a refund of the tax withheld. Upon appeal, originally to this Court, but referred to
    respondent Court of Appeals, the latter upheld the CTA Decision. Before us now, Petitioner assails that
    disposition. Petitioner's position is that from 15 October 1984 when Pres. Decree No. 1959 was
    promulgated, employees' trusts ceased to be exempt and thereafter became subject to the final
    withholding tax.

    Issue: Whether or not Respondent GCL Retirement Plan is entitled to the refund claim?

    Held: 
    Yes, Respondent GCL Retirement Plan is exempt from income taxation.

    It is significant to note that the GCL Plan was qualified as exempt from income tax by the Commissioner
    of Internal Revenue in accordance with Rep. Act No. 4917 approved on 17 June 1967. This law
    specifically provided:

    Sec. 1. Any provision of law to the contrary notwithstanding, the retirement benefits


    received by officials and employees of private firms, whether individual or corporate, in
    accordance with a reasonable private benefit plan maintained by the employer shall
    be  exempt from all taxes and shall not be liable to attachment, levy or seizure by or
    under any legal or equitable process whatsoever except to pay a debt of the official or
    employee concerned to the private benefit plan or that arising from liability imposed in
    a criminal action; . . . (emphasis ours)

    It is evident that tax-exemption is likewise to be enjoyed by the income of the pension trust. Otherwise,
    taxation of those earnings would result in a diminution accumulated income and reduce whatever the
    trust beneficiaries would receive out of the trust fund. This would run afoul of the very intendment of
    the law. The deletion in Pres. Decree No. 1959 of the provisos regarding tax exemption and preferential
    tax rates under the old law, therefore, cannot be deemed to extend to employees' trusts. Said Decree,
    being a general law, cannot repeal by implication a specific provision, Section 56(b) now 53 [b]) in
    relation to Rep. Act No. 4917 granting exemption from income tax to employees' trusts. A subsequent
    statute, general in character as to its terms and application, is not to be construed as repealing a
    special or specific enactment, unless the legislative purpose to do so is manifested. This is so even if
    the provisions of the latter are sufficiently comprehensive to include what was set forth in the special
    act. If an employees' trust like the GCL enjoys a tax-exempt status from income, we see no logic in
    withholding a certain percentage of that income which it is not supposed to pay in the first place. Pres.
    Decree No. 1959 did not have the effect of revoking the tax exemption enjoyed by employees' trusts.

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