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    04B - Fort Bonifacio Development Corporation vs. CIR

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    Renard Enrile
    Petitioner bought land from the government that was formerly a military reservation. When petitioner later sold parts of the land, it claimed transitional input VAT on the sale. Respondents denied the claim, arguing that no VAT was paid in the original purchase. However, the court ruled that petitioner was entitled to the transitional input VAT. As a real estate developer, petitioner qualified as a person engaged in commercial trade or business. The purpose of transitional input VAT is to mitigate VAT impact on first-time taxpayers, not just those transitioning from sales to VAT. Therefore, the petition was granted.

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    04B - Fort Bonifacio Development Corporation vs. CIR

    Uploaded by

    Renard Enrile
    73 views1 page
    Petitioner bought land from the government that was formerly a military reservation. When petitioner later sold parts of the land, it claimed transitional input VAT on the sale. Respondents denied the claim, arguing that no VAT was paid in the original purchase. However, the court ruled that petitioner was entitled to the transitional input VAT. As a real estate developer, petitioner qualified as a person engaged in commercial trade or business. The purpose of transitional input VAT is to mitigate VAT impact on first-time taxpayers, not just those transitioning from sales to VAT. Therefore, the petition was granted.

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    04B_Fort Bonifacio Development Corporation vs. CIR

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    Petitioner bought land from the government that was formerly a military reservation. When petitioner later sold parts of the land, it claimed transitional input VAT on the sale. Respondents denied the claim, arguing that no VAT was paid in the original purchase. However, the court ruled that petitioner was entitled to the transitional input VAT. As a real estate developer, petitioner qualified as a person engaged in commercial trade or business. The purpose of transitional input VAT is to mitigate VAT impact on first-time taxpayers, not just those transitioning from sales to VAT. Therefore, the petition was granted.

    Copyright:

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

    04B - Fort Bonifacio Development Corporation vs. CIR

    Uploaded by

    Renard Enrile
    Petitioner bought land from the government that was formerly a military reservation. When petitioner later sold parts of the land, it claimed transitional input VAT on the sale. Respondents denied the claim, arguing that no VAT was paid in the original purchase. However, the court ruled that petitioner was entitled to the transitional input VAT. As a real estate developer, petitioner qualified as a person engaged in commercial trade or business. The purpose of transitional input VAT is to mitigate VAT impact on first-time taxpayers, not just those transitioning from sales to VAT. Therefore, the petition was granted.

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    © All Rights Reserved
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    of 1

    G.R. No.

    173425               September 4, 2012

    FORT BONIFACIO DEVELOPMENT CORPORATION, Petitioner,


    vs.
    COMMISSIONER OF INTERNAL REVENUE and REVENUE DISTRICT OFFICER, REVENUE
    DISTRICT NO. 44, TAGUIG and PATEROS, BUREAU OF INTERNAL REVENUE, Respondents.

    DEL CASTILLO, J.:

    FACTS:

    Petitioner was a real estate developer that bought from the national government a parcel of land that used
    to be the Fort Bonifacio military reservation. At the time of the said sale there was as yet no VAT imposed
    to real properties held primarily for sale so Petitioner did not pay any VAT on its purchase. Subsequently,
    Petitioner sold two parcels of land to Metro Pacific Corp. In reporting the said sale for VAT purposes,
    because the VAT had already been imposed in the interim, Petitioner claimed transitional input VAT
    corresponding to its inventory of land. The BIR disallowed the claim of presumptive input VAT and
    thereby assessed Petitioner for deficiency VAT.

    Respondents maintain that petitioner is not entitled to a transitional input tax credit because no taxes
    were paid in the acquisition of the property. 

    Relevant Section 105 of the NIRC reads:

    SEC. 105. Transitional input tax credits. – A person who becomes liable to value-added tax or
    any person who elects to be a VAT-registered person shall, subject to the filing of an inventory as
    prescribed by regulations, be allowed input tax on his beginning inventory of goods, materials and
    supplies equivalent to 8% of the value of such inventory or the actual value-added tax paid on
    such goods, materials and supplies, whichever is higher, which shall be creditable against the
    output tax. (Emphasis supplied.)

    ISSUE: Is Petitioner entitled to claim the transitional input VAT on its sale of real properties given its
    nature as a real estate dealer applied on the value of the entire real property.

    RULING: YES. Petitioner is entitled to claim transitional input VAT based on the value of the entire real
    property. The provision on transitional input tax credit was enacted to benefit first time VAT taxpayers by
    mitigating the impact of VAT on the taxpayer.

    Obviously then, the purpose behind the transitional input tax credit is not confined to the transition from
    sales tax to VAT. Further, amendments to the VAT law do not show any intention to make those in the
    real estate business subject to a different treatment from those engaged in the sale of other goods or
    properties or in any other commercial trade or business.

    Petition is GRANTED.

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