BIR ordered to return income tax to POGO

The Bureau will have to return over US$2.37 million to a gaming company located in City of Dreams Manila.

Philippines.- The Court of Tax Appeals (CTA) in the Philippines has ordered the Bureau of Internal Revenue (BIR) to return incorrectly charged tax to a Philippine offshore gaming operator (POGO).

The court’s First Division determined that Premium Leisure and Amusement (PLAI) was erroneously charged Php115 million (US$2.37 million) for the 5 per cent franchise tax in 2015.

The BIR has been ordered to return the payment or issue a tax credit certificate after the court found that PLAI was not obliged to pay income tax to the Philippine Amusement and Gaming Corporation (PAGCOR) on its gross income.

PLAI is a co-licensee in City of Dreams Manila, the integrated resort and casino project in Entertainment City.

The Manila Bulletin reported that the court’s ruling states that the company’s licence fee was already “inclusive of the five percent franchise tax in lieu of all other taxes.”

It also cited precedent from the Supreme Court in a similar case in which PAGCOR licensees and contractors were found exempt from the payment of corporate and other taxes.

The ruling came just a day after the Philippines approved a new law that will change the way POGOs are taxed in a bid to double tax income from the companies.