Cited Laws
Accordingly, the gross receipts of condominium corporations including association dues, membership fees, and other assessments/charges are subject to VAT, income tax and income payments made to it are subject to applicable withholding taxes under existing regulations. [4] x x x The First E-Bank's Allegation s In its Petition dated December 20, 2012, the First E-Bank essentially alleged: It was a non-stock non-profit condominium corporation. It owned and possessed, through its members, a condominium office building. RMC No. 65-2012 imposed on it two (2) tax liabilities: 1) value-added tax (VAT) of P118,971. 53 to be paid on December 2012 and every month thereafter; and b) income tax ofP665,904.12 to be paid on or before April 15, 2013 and every year thereafter. [5] RMC No. 65-2012 burdened the owners of the condominium units with income tax and VAT on their own money which they exclusively used for the maintenance and preservation of the building and its premises. RMC No. 65-2012 was oppressive and confiscatory because it required condominium unit owners to produce additional amounts for the thirty-two percent (32%) income tax and twelve percent (12%) VAT. [6] Through the Makati Commercial Estate Association, Inc., it sent a Letter dated December 5, 2012 to the BIR Commissioner requesting deferment of RMC No. 65-2012. A Letter dated December 19, 2012 was likewise sent to Makati City Revenue District Officer Ricardo B. Espiritu informing him of the continuous judicial consignation of the income tax and VAT payments due under RMC No. 65-2012. [7] The BIR et al .'s Comments Under Comment dated February 11, 2013, the BIR and RDO Espiritu through the Office of the Solicitor General (OSG) riposted that declaratory relief was no longer proper here considering that RMC No. 65-2012 already took effect on October 31, 2012. The alleged injury which the First E-Bank sought to prevent had already arisen as of that date. [8] By its separate comment,* the BIR's Litigation Division argued that the petition should be dismissed for violation of the principle of primary jurisdiction. Several condominium corporations had already referred the issue to the BIR Law Division for further clarification. Ultimately, only the Secretary of Finance had primary jurisdiction over the issue raised here. Too, a petition for declaratory relief will not prosper if the questioned statute had already been breached, as in this case. RMC No. 65-2012 was only a clarificatory issuance on pertinent laws, specifically the National Internal Revenue Code (NIRC). It was merely a restatement of the BIR's prevailing position on the issue of taxation. [9] The First E-Bank's Reply The First E-Bank replied that judicial consignation of its tax payments under protest was necessary. [10] The Trial Court's Ruling By Resolution [11] dated September 5, 2013, the trial court ruled that the First E-Bank correctly resorted to a petition for declaratory relief for the purpose of invalidating RMC No. 65-2012