Court clears actor in P18.23-M tax case
The Court of Tax Appeals (CTA) has affirmed the withdrawal of an P18.23-million demand on Derek Arthur Ramsay, one of the country’s leading celebrity taxpayers, on procedural grounds.
In a 19-page decision dated June 22, the tax court sitting en banc unanimously voted to deny the Commissioner of Internal Revenue’s (CIR) appeal regarding the CTA Third Division’s Sept. 17, 2015 decision in favor of Ramsay.
The tax court said the Bureau of Internal Revenue (BIR) violated the actor’s right to due process because it served only a formal letter of demand (FLD) but not an assessment notice informing him of his tax liabilities between 2006 and 2009.
It also found out that the assessment notices in the BIR’s records were not actually attached to the FLD dated Jan. 4, 2012. At the same time, there were no dates indicated on the assessment notices or any sign that these were received by Ramsay.
Even the final demand letter (FDL) dated Feb. 20, 2012 stated only that the actor had received an FLD with the details of dis- crepancies, confirming that no valid assessment notice was sent.
The FLD itself was deemed void because it did not state a definite time for the payment of the supposed tax liabilities.
The letter, signed by then BIR Commissioner Kim JacintoHenares and Assistant Commissioner James Roldan, stated only that payment should be made “within the time shown in the enclosed assessment notice” which the court noted was not served on Ramsay.
The CIR argued that the CTA should not have entertained Ramsay’s case because the FLD already became final, executory and demandable after the actor failed to file a timely protest.
But the tax court said the assessment never turned into a valid demand because it was riddled with procedural defects.
Ramsay, a resident of Legaspi Village in Makati City, was assessed a deficiency income tax of P11.85 million, a value-added tax of P6.38 million, and a P125,000 compromise penalty for the years 2006 to 2009.
He was consistently listed among the country’s top 500 taxpayers when the BIR disclosed the information from 2012 to 2014. He placed 68th, 157th and 91st for these three years, having paid P16.70 million, P12.74 million and P20.02 million, respectively, in income taxes.
The actor gained popularity for starring in films like “No Other Woman,” “A Secret Affair” and “Trophy Wife.” He is also known for a much-lampooned antipiracy advertisement where he played a policeman who pointed a gun at a camcording suspect.