Tax court approves PBA, BIR compromise deal

THE COURT of Tax Appeals (CTA) approved the compromise agreement between the Philippine Basketball Association (PBA) and the Bureau of Internal Revenue (BIR) over deficiencies from 1988 to 2000. In a 12-page decision dated Sept. 21, the court’s second division allowed the P48.5 million settlement reached by the professional league and tax agency. “Judicial Compromise Agreement is hereby approved and this Judgement Based on Compromise Agreement is hereby rendered in accordance therewith. The parties are hereby enjoined to faithfully comply with all the terms and conditions of the aforesaid Judicial Compromise Agreement,” the ruling read. “Accordingly, this case is now deemed closed and terminated,” it said. Under the compromise agreement, BIR accepted in July 2019 PBA’s payment offer of P48.5 million, the net amount of 40% of all deficiency percentage taxes and 100% of all withholding taxes less than the more than P23.2 million previously paid in 2002 and 2003. The BIR issued formal assessment notices and letters of demand in January 2003 for the years 1988-1998, 1999 and 2000 over tax deficiencies worth more than P532.7 million inclusive of interests and surcharges, according to the agreement. The PBA availed of the voluntary assessment and abatement program in 2002 and paid P3 million in advance. The association also offered a compromise settlement of 15% of basic deficiency taxes in 2003 and paid the amount of P20.2 million. The tax bureau denied the offer and PBA then raised the case before the tax court. According to the court, the basic tax was P164.9 million and when the compromise rate is applied, the amount is P71.8 million. The judicial compromise agreement is reduced to P48.5 million with the previously paid amount of P23.2 million deducted.