Predictors for individual patient antibiotic treatment effect in hospitalised community-acquired pneumonia patients

REVENUE vs. MIRANT (PHILIPPINES) OPERATIONS, CORPORATION- Tax Credit and Tax Refund

FACTS:

Mirant filed its final adjusted Annual Income Tax Return for fiscal year ending 1999 declaring a net loss. It then amended the said return this time reflecting an increased net loss and showing that it opted to carry over as tax credit its overpayment to the succeeding taxable year. This excess tax credit was unutilized in 2000 as Mirant still reported a net loss. Mirant then filed a claim for refund of its excess creditable income tax for 1999.

ISSUE:

Can Mirant claim for refund its excess credits from 1999?

HELD:

NO. Mirant‘s choice to carry over its 1999 excess income tax credit to succeeding taxable years is irrevocable, regardless of whether it was able to actually apply the said amount to a tax

liability. It is a mistake to understand the phrase "for that taxable period" as a prescriptive period for the irrevocability rule – i.e., that since the tax credit in this case was acquired in 1999, and Respondent opted to carry it over to 2000, then the irrevocability of the option to carry over expired by the end of 2000, leaving Respondent free to again take another option as regards its 1999 excess income tax credit. The Court ruled that this interpretation effectively renders nugatory the irrevocability rule.

35. SUPREME TRANSLINER, INC. VS. BPI FAMILY SAVINGS BANK, INC.- Capital Gains Tax

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Category: Income Taxation

SUPREME TRANSLINER, INC. VS. BPI FAMILY SAVINGS BANK, INC.- Capital Gains Tax

FACTS:

Supreme Transliner took out a loan from respondent and was unable to pay. The respondent bank extrajudicially foreclosed the collateral and, before the expiration of the one-year redemption period, the mortgagors notified the bank of its intention to redeem the property.

ISSUE:

Is the mortgagee-bank liable to pay the capital gains tax upon the execution of the certificate of sale and before the expiry of the redemption period?

HELD:

NO. It is clear that in foreclosure sale there is no actual transfer of the mortgaged real property until after the expiration of the one-year period and title is consolidated in the name of the mortgagee in case of non-redemption. This is because before the period expires there is yet no transfer of title and no profit or gain is realized by the mortgagor.

36. CIR vs. PHILIPPINE AIRLINES, INC. - Minimum Corporate Income Tax

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Category: Income Taxation

FACTS:

PHILIPPINE AIRLINES, INC. had zero taxable income for 2000 but would have been liable for

Minimum Corporate Income Tax based on its gross income. However, PHILIPPINE AIRLINES, INC. did not pay the Minimum Corporate Income Tax using as basis its franchise which exempts it from ―all other taxes‖ upon payment of whichever is lower of either (a) the basic corporate income tax based on the net taxable income or (b) a franchise tax of 2%.

ISSUE:

Is PAL liable for Minimum Corporate Income Tax?

HELD:

NO. PHILIPPINE AIRLINES, INC.‘s franchise clearly refers to "basic corporate income tax"

which refers to the general rate of 35% (now 30%). In addition, there is an apparent distinction under the Tax Code between taxable income, which is the basis for basic corporate income tax under Sec. 27 (A) and gross income, which is the basis for the Minimum Corporate Income Tax under Section 27 (E). The two terms have their respective technical meanings and cannot be used interchangeably. Not being covered by the Charter which makes PAL liable only for basic

corporate income tax, then Minimum Corporate Income Tax is included in "all other taxes" from which PHILIPPINE AIRLINES, INC. is exempted.

The CIR also can not point to the ―Substitution Theory‖ which states that Respondent may not invoke the ―in lieu of all other taxes‖ provision if it did not pay anything at all as basic corporate income tax or franchise tax. The Court ruled that it is not the fact tax payment that exempts Respondent but the exercise of its option. The Court even pointed out the fallacy of the argument in that a measly sum of one peso would suffice to exempt PAL from other taxes while a zero liability would not and said that there is really no substantial distinction between a zero tax and a one-peso tax liability. Lastly, the Revenue Memorandum Circular stating the applicability of the MCIT to PAL does more than just clarify a previous regulation and goes beyond mere internal administration and thus cannot be given effect without previous notice or publication to those who will be affected thereby.

37. CIR vs. PHILIPPINE AIRLINES, INC. - Overseas Communications Tax

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Category: Income Taxation

COMMISSIONER OF INTERNAL

REVENUE vs. PHILIPPINE AIRLINES, INC. - Overseas Communications Tax

FACTS:

PHILIPPINE AIRLINES, INC paid the 10% Overseas Communications Tax (OCT) for overseas telephone calls made through PLDT. It then later filed with the BIR a claim for refund of the amount paid as Overseas Communications Tax, claiming that other than being liable for basic corporate income tax or the franchise tax, whichever was lower, it was exempted from all other taxes by virtue of the "in lieu of all taxes" clause in its charter.

ISSUE:

Is PHILIPPINE AIRLINES, INC liable for the Overseas Communications Tax?

HELD:

NO. The language of PHILIPPINE AIRLINES, INC‘s franchise is clearly all-inclusive --- the basic corporate income tax or franchise tax paid by respondent shall be "in lieu of all other taxes‖

except only real property tax. It is not the fact of tax payment that exempts it, but the exercise of its option. In the event that respondent incurs a net loss, it shall have zero liability for basic corporate income tax, the lowest possible tax liability. There being no qualification to the exercise of its options, then Respondent is free to choose basic corporate income tax, even if it would have zero liability.

38. UNITED AIRLINES, INC. vs. CIR- Gross Philippine Billings (GPB)

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Category: Income Taxation