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Makati’s suit to tax a local firm is dismissed by the CTA.

MANILA – Makati City’s petition to impose a local business tax (LBT) on a firm was denied by the Court of Tax Appeals (CTA) due to a lack of merit.

The CTA en banc refused the petition filed by City Treasurer Jesusa Cuneta against Casop Atlas Corporation in a 21-page ruling released on March 30 and just posted (CAC).

Based on CAC’s gross sales of PHP2.101 billion, which included the sale of shares of its stock in Carmen Copper Corporation (CCC) to Atlas Consolidated Mining and Development Corp. and a foreign exchange gain of PHP57.5 million, Makati City assessed PHP6.69 billion in deficiency LBT, fees, and charges for 2011 to 2012.

Two months later, the company filed a protest, saying that it is not a “holding company” as defined by the Revised Makati Revenue Code, but was denied.

CAC failed to respond to the denial within the statutory 30-day period, prompting the filing of an appeal before Makati Regional Trial Court (RTC) Branch 132, which ruled in favor of the firm.

The tax court upheld the Makati RTC’s decision from 2018, which stated that CAC is not a holding company under the Makati RTC’s tax law because the latter requires a holding company for LBT purposes to have one or more subsidiaries and its activities to be confined primarily to the management of those subsidiaries.

CAC’s corporate records show it has no subsidiary or associate, and it owns only 7.73 percent of CCC, according to the court’s March 30 order.

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