CIR v. BCDA

BCDA owned four lots in Bonifacio Global City, Taguig, the 'Expanded Big Delta Lots', with a total area of 12,036 sq. m. It entered into a contract to sell them to the 'Net Group,' an unincorporated joint venture of four corporations, for Php2,032,749,327.96. The Net Group agreed not to remit Php101,637,466.40 in creditable withholding tax (CWT) to the BIR, to give BCDA until June 9, 2008 to present a certification of tax exemption. BCDA asked the CIR for a certification of tax exemption on May 28, 2008, but received no response. When the deeds of sale were executed on July 31, 2008, BCDA still had no certification, so the Net Group deducted the CWT and remitted it to the BIR. BCDA sought a refund from the BIR on March 9, 2009, again without response. On July 29, 2010, it filed a claim for refund with the CTA, invoking its charter, RA 7227 as amended by RA 7917. The CTA First Division ordered the refund on September 13, 2013, and the CTA En Banc affirmed. The CIR appealed.

1. 1Whether BCDA is exempt from creditable withholding tax on the sale of its Global City properties.
2. 2Whether Section 27(C) of the NIRC repealed the exemption in Section 8 of RA 7227, as amended, and whether BCDA had to satisfy the ordinary documentary requirements for a refund.

The petition was denied, and BCDA is exempt. The answer lies in Section 8 of RA 7227, as amended by RA 7917, which has two prongs. First, the proceeds from the sale of the listed Fort Bonifacio and Villamor lands are 'deemed appropriated' by Congress for specified beneficiaries and purposes. They are therefore not BCDA income but public funds, usable only for the purposes for which they were appropriated. Second, the law expressly provides that 'the proceeds of the sale thereof shall not be diminished and, therefore, exempt from all forms of taxes and fees.' Where the law is clear, it must simply be applied. The CIR argued that Section 27(C) of the NIRC, which subjects GOCCs to income tax, repealed Section 8. The Court rejected this. Section 27 is a general law, while Section 8 is a special law, and a general law does not impliedly repeal a special law (citing CIR v. Semirara Mining Corporation). Section 27 also assumes that the funds are taxable income, whereas Section 8 covers specific sale proceeds already appropriated by law. The ordinary procedural and documentary requirements for refunds by GOCCs therefore did not apply, since 'there is no income to speak of here'. The CTA En Banc's December 16, 2014 Decision and April 15, 2015 Resolution were affirmed.