Tax court approves BIR, ABS-CBN News’ deficiency settlement

ABS-CBN News Channel, formerly Sarimanok News Network Inc., has agreed to pay the minimum assessment of P17 million under a compromise agreement with the Bureau of Internal Revenue.

The deal was approved by the Court of Tax Appeals (CTA).

In a ruling dated July 5, the CTA’s Special First Division noted that Sarimanok News and the Bureau of Internal Revenue (BIR) have agreed that the respondent will pay P17,837,721.18 as the compromise amount in settling the tax case.

The amount covers the following items:

• Basic Income Tax
• Basic Value-Added Tax
• Documentary Stamp Tax
• Basic Expanded Withholding Tax
• Withholding Tax on Compensation

“Upon review of the supporting documents attached to the Joint Motion for Approval of Compromise Agreement and Compliance with Submission submitted by the parties, the Court finds that petitioner has fully settled the legally required minimum amounts for compromise settlement,” the CTA decision read.

“The Court finds the parties’ Joint Motion for Approval of Compromise Agreement to be in order, as the same has been validly executed by the parties, and the terms and conditions specified therein as not contrary to law, morals, good customs, public order, and public policy,” the CTA said.

“Wherefore, in light of the foregoing considerations, the parties’ Joint Motion for Approval of Compromise Agreement filed on September 3, 2018 is hereby granted. The Compromise Agreement entered into by the parties is hereby approved and this Judgment on Compromise Agreement is hereby rendered in accordance therewith,” the CTA added.

The BIR initially found that Sarimanok News had a tax deficiency of P88 million as stated in the bureau’s Final Assessment Notice in April 2014.

The company protested the BIR’s findings and requested for a reinvestigation in May 2014.

In September 2015, the BIR issued a final decision on the disputed assessment, denying the protest, and came up with a new assessment that that firm’s tax deficiency actually reached P97 million.

The taxpayer appealed the decision in October 2015, but the BIR again denied the appeal in a February 2016 decision.

The company initially instituted an action against the BIR but ultimately decided to submit its proposal to the bureau with the intention of entering a judicial compromise in line with the Civil Code of the Philippines, jurisprudence, relevant decisions of the CTA and relevant laws on judicial compromise. —VDS, GMA News