CIR vs. Solidbank Corporation 416 SCRA 436 Summary

COMMISSIONER OF INTERNAL REVENUE, petitioner, vs. SOLIDBANK CORPORATION, respondent.

G.R. No. 148191 | 2003-11-25

Legislative approval by reenactment
Gross receipts include those actually or constructively received
Final withholding tax forms part of the total gross receipts for purposes of computing the Gross Receipts Tax, the term "gross receipts" do not admit of any deduction
Statutory construction; taxation law; US cases have persuasive effect in our jurisdiction, because Philippine income tax law is patterned after its US counterpart

D E C I S I O N

PANGANIBAN, J.:

Under the Tax Code, the earnings of banks from "passive" income are subject to a twenty percent final withholding tax (20% FWT). This tax is withheld at source and is thus not actually and physically received by the banks, because it is paid directly to the government by the entities from which the banks derived the income. Apart from the 20% FWT, banks are also subject to a five percent gross receipts tax (5% GRT) which is imposed by the Tax Code on their gross receipts, including the "passive" income.

Since the 20% FWT is constructively received by the banks and forms part of their gross...