Ayala fights P8 M tax, wins, but will end up paying about P15 M
This case is a classic example of winning the battle, but losing the war.
In 2012 a subsidiary of the Ayala conglomerate that operated the now demolished InterContinental hotel was assessed P8.4 million in deficiency income tax for the fiscal year 2008.
Claiming that the assessment was “premature and defective,” Ayala then sued the Bureau of Internal Revenue, saying the tax brigade had failed to include the revenues from in-room video and broadband services and parking fees as part of its income tax holiday entitlements.
While the case was being litigated, then BIR commissioner Kim Jacinto-Henares advised Ayala to settle the undisputed amount so as to stop the clock of interest rate penalty from ticking.
Instead of paying the entire amount under protest, Ayala chose to settle only about P3.4 million, while it elevated its appeal to the Office of the President.
To make a long story short, Ayala won and last week managed to have the Court of Tax Appeals reduce the original income tax deficiency of P8.4 million down to P3.5 million, surcharge and interests not included. In all, the total amount due was P5.5 million. But here’s the kicker. Since Ayala only partially settled the contested amount on Aug. 1, 2013, the tax appellate court ruled that Ayala must also pay the deficiency (20 percent annually) and delinquency (another 20 percent a year) interest penalties from then up to end-2017.
From Jan. 1, 2018, a 12 percent interest a year will be added on the basic tax and surcharge “until the amount is fully paid pursuant to the relevant provisions of the TRAIN Law,” the tax court said, ruling en banc.
A back-of-the envelope calculation showed that Ayala will have to contribute to the now DU30 administration a little over P15 million in back taxes, unless it takes another chance and elevates the case all the way to the Supreme Court, which it normally does.
Knives out at Mario’s
Knives are flying out of Mario’s into the social media as a bubbling family feud pitting the oldest son against his two male siblings threatens one of the country’s most enduring Spanish-Filipino restaurant.
Jose Teofilo “Fil” Benitez has taken to Facebook to protest what he claims as efforts by his two younger male siblings to stop him from being appointed by their mother as chief executive of the two Mario’s restaurants in Baguio and Quezon City.
Unfortunately for Fil, not only has his mother, who is 84 this year, apparently sided with his brothers, one of them even sent a police team to his Pasig condo unit for his alleged substance abuse problem.
Worse, Fil said he was being thrown out of the Alexandra condo, since the unit is still registered in his late father’s name.
“A scenario is unfolding that jives with the objectives of the two brothers: get rid of me for a bigger slice,” Fil wrote.
Friends from all over the world, including former Gabby Lopez crush Cristina Valdes from New York, and Raymond Moreno, who was on holiday in San Francisco, have expressed support.
For the not-so-savory details, go check Fil’s Facebook page.
Heard through the grapevine
A police team armed with arrest warrants descended on the Australian International School Friday noon, and managed to snag one school official.
The police swoop stemmed from a criminal complaint filed by the Hongkong-based owners of the Mahatma Gandhi International School, whom the Australian International School took in as joint-venture partners to share campus and administrative expenses.
The hapless official was, fortunately, bailed out in time and did not have to endure a sweltering staycation at the Pasay police jail over the weekend.