malaysiangManila: The Court of Tax Appeals (CTA) has granted the petition filed by a Special Purpose Trust (SPT) run by the National Home Mortgage Finance Corporation (NHMFC) seeking a refund of PHP1.6 million representing erroneously paid final withholding taxes (FWT) on interest income payments to bondholders for the period 2019 to 2020.
In a 14-page decision dated Sept. 17, the tax court’s Third Division ordered the Bureau of Internal Revenue to refund or issue a tax credit certificate sought in the petition filed by the Bahay Bonds 2 Special Purpose Trust (SPT) administered by the NHMFC.
The court noted that under statutes covering the nature and purpose of NHFMC, such bonds are low-cost or housing-related asset-backed securities (ABS) and that “the interest income arising therefrom is tax-exempt as expressly set out (in tax laws on the matter).”
“The Supreme Court already upheld this tax exemption in a previous case also involving a refund claim by herein petitioner,” the CTA said.
The tax court also said the
petitioner SPT is required to return the same tax credit to the bondholders.
“While petitioner’s right and entitlement to the refund sought has been established, the payment/release of the refund granted in this case gives rise to petitioner’s concomitant obligation to return the amount to its bondholders from whom the taxes were withheld,” the court said.
“Otherwise, he would be unjustly enriching himself at the expense of the principal taxpayer from whom the taxes were withheld, and from whom he derives his legal right to file a claim for refund.” (PNA)
Source: Philippines News Agency
