The Court of Tax Appeals (CTA) has cancelled the P112-million deficiency tax assessment issued by the Bureau of Internal Revenue (BIR) against a marketing firm, saying the claim has no “legal and factual bases”.
The court’s third division said that the final assessment notice (FAN) issued to Berringer Marketing, Inc. of Quezon City did not contain the due date when the tax liabilities should be paid.
It said the Tax Code and regulations require that a taxpayer must be informed of the specific date when the liabilities must be settled.
It explained that the due date signals the start for the imposition of 50 percent surcharge and the 20 percent annual interest until the liabilities are settled.
The deficiency assessment covered income, value-added, and withholding taxes for 2010.
The 17-page decision written by Associate Justice Ma. Rowena Modesto-San Pedro cited at least two resolutions of the Supreme Court (SC) that ordered the BIR to put in the FAN the demand when a taxpayer shall pay the deficiency taxes.
It stated that the FAN must not only include the legal basis and the computation of the tax liability, but also the definite demand for payment.