Bank of America NT & SA v.

CA 234 SCRA 302 (July 21, 1994) filed a petition for review with the CTA.

Petitioner: Bank of America NT & SA
Respondent: Commissioner of Internal Revenue
Topic: Tax on Branch Profit Remittances
Doctrine: Where the law does not qualify that the tax is
imposed and collected at source based on profit to be
remitted abroad, that qualification should not be read into the
law.
Petitioner: Bank argues that the 15% branch profit remittance
tax on the basis of the above provision should be assessed on
the amount actually remitted abroad, which is to say that the
15% profit remittance tax itself should not form part of the tax
base.
Respondent: CIR holds that in computing the 15% remittance
tax, the tax should be inclusive of the sum deemed remitted.

Facts: BIR Computation

Petitioner is a foreign corporation duly licensed to Net Profit After
Income Tax But Branch Profit
engage in business in the Philippines with Philippine branch Before Profit Tax Tax Remittance
office at Makati. On July 20, 1982, it paid 15% branch profit Remittance Rate Tax
remittance tax in the amount of P7,538,460.72 on profit from
Regular
its regular banking unit operations and P445,790.25 on profit Banking Unit
from its foreign currency deposit unit operations or a total of Ops 50,256,404.82 15% 7,538,460.72
P7,984,250.97. The tax was based on net profits after income Foreign
tax without deducting the amount corresponding to the 15% Currency
Deposit Unit
tax.
Ops 2,971,935 15% 445,790.25
Total Branch
Petitioner filed a claim for refund with the Bureau of Profit
Internal Revenue of that portion of the payment which Remittance
corresponds to the 15% branch profit remittance tax, on the Tax 53,228,339.82 15% 7,984,250.97
ground that the tax should have been computed on the basis
of profits actually remitted, which is P45,244,088.85, and not
on the amount before profit remittance tax, which is
P53,228,339.82. Without awaiting BIR’s decision, petitioner
 Petitioner Computation CTA: petitioner
Branch Profit
Branch Profit Tax Remittance CA: respondent
Remittance Rate Tax
Regular Issue: Whether the 15% remittance tax should be computed
Banking Unit based on the amount actually remitted abroad or the total
Ops 6,555,183.24 15% 983,277.49
Foreign
amount actually applied for by the branch with the Central
Currency Bank of the Philippines as profit to be remitted abroad
Deposit Unit
Ops 387,643.70 15% 58,146.56 Held: Petitioner- actual amount remitted abroad
Total Branch
Profit The Court noted that in cases of ad valorem tax, the
Remittance tax paid or withheld is not deducted from the tax base. Such
Tax 6,942,826.94 15% 1,041,424.04
impositions as the ordinary income tax, estate and gift taxes,
and the value added tax are generally computed in like
Net Profit Total Branch Branch Profit Profit Actually manner. In these cases, however, it is so because the law, in
After Income Profit Remittance Remitted defining the tax base and in providing for tax withholding,
Tax Remittance Tax Abroad
clearly spells it out to be such.
53,228,339.82 -6,942,826.94 -1,041,424.04 45,244,088.84
However, there is nothing in Sec. 24(b)(2)(ii) of the
NIRC, which indicates that the 15% tax on branch profit
Relevant Law: remittance is on the total amount of profit to be remitted
Section 24(b)(2)(ii) of the National Internal Revenue Code abroad which shall be collected and paid in accordance with
1982: the tax withholding device provided in Sections 53 and 54 of
Sec. 24. Rates of tax on corporations. . . . the Tax Code.
(b) Tax on foreign corporations. . . .

(2) (ii) Tax on branch profit and remittances. — The statute employs "Any profit remitted abroad by a
Any profit remitted abroad by a branch to its head office shall branch to its head office shall be subject to a tax of fifteen
be subject to a tax of fifteen per cent (15%) . . . ." per cent (15%)" — without more. Nowhere is there said of
"base on the total amount actually applied for by the branch
with the Central Bank of the Philippines as profit to be
remitted abroad, which shall be collected and paid as
provided in Sections 53 and 54 of this Code." Where the law
does not qualify that the tax is imposed and collected at
source based on profit to be remitted abroad, that
qualification should not be read into the law.

In the 15% remittance tax, the law specifies its own tax
base to be on the "profit remitted abroad." There is absolutely
nothing equivocal or uncertain about the language of the
provision. The tax is imposed on the amount sent abroad, and
the law (then in force) calls for nothing further.