Metro Manila (CNN Philippines) — The Supreme Court (SC) has affirmed the Court of Tax Appeals’ decision granting Ginebra San Miguel’s claim for tax refund or tax credit amounting to more than P14 million.
The high court’s second division dismissed the petition of the Bureau of Internal Revenue (BIR) seeking to reverse the Court of Tax Appeals’ ruling favoring Ginebra.
In a decision penned by Associate Justice Mariano Del Castillo, the court ruled that the transfer of real property to a surviving corporation pursuant to a merger is not subject to Documentary Stamp Tax.
In 2001, La Tondeña Distillers, Inc. entered into a Plan of Merger with Sugarland Beverage Corporation, SMC Juice, Inc., and Metro Bottled Water Corporation.
As a result of the merger, the assets and liabilities of the absorbed corporations were transferred to the respondent.
La Tondeña later changed its corporate name to Ginebra San Miguel.
The company then requested for a confirmation of the tax-free nature of the merger from the BIR.
In turn, the BIR ruled transfer of assets — such as real properties — shall be subjected to documentary stamp tax imposed under the law.
