Global Business Power wins P10.5-M tax case

THE Court of Tax Appeals (CTA) en banc has affirmed a P10.5-million refund for Global Business Power Corporation (GBP), ruling against the Bureau of Internal Revenue (BIR) in relation to its creditable withholding taxes (CWTs) for 2018.

GBP, part of the country’s energy sector and involved in power generation and supply across Luzon, filed its tax refund claim in August 2020 after identifying overpaid CWTs from its income for 2018.

The company’s claim was based on tax certificates (BIR Form 2307) reflecting taxes withheld from its income that had not been used as credit against its tax liabilities.

The BIR initially did not act on the claim, prompting GBP to escalate the matter to the CTA in May 2021. The commissioner of internal revenue (CIR) challenged the refund, arguing that GBP failed to exhaust administrative remedies and did not fully substantiate its claim.

The CTA en banc, however, found that GBP’s administrative and judicial claims were timely filed under the 1997 National Internal Revenue Code. The court also clarified that proof of actual remittance of withheld taxes to the BIR is not required from the claimant, and failure to submit additional documents at the administrative level does not automatically disqualify a refund claim.

In a decision promulgated on Oct. 10 and penned by Associate Justice Catherine T. Manahan, the tax court ruled that the company is entitled to recover P10.52 million, either as a refund or through a tax credit certificate. — Erika Mae P. Sinaking