Republic of the Philippines

Supreme Court
Manila

THIRD DIVISION

FIRST PLNT!RS "#R# No# $%&$'&
P(NSHOP) INC#)
Petitioner, Present:

YNARES-SANTIAGO, J.,
Chairperson,
- versus - AUSTRIA-MARTINEZ,
CHICO-NAZARIO,
NACHURA, and
REYES, JJ.
COMMISSION!R OF
INT!RNL R!V!N*!) Promul!te":
Res#on"ent$ %ul& '(, )((*
+ - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - +

D ! C I S I O N

*STRI+MRTIN!,) J.:

,irst Pl!nters P!-ns.o#, In/$ 0#etitioner1 /ontests t.e "e2i/ien/& v!lue-!""e" !n"
"o/ument!r& st!m# t!+es im#ose" u#on it 3& t.e 4ure!u o2 Intern!l Revenue 04IR1 2or
t.e &e!r )((($ T.e /ore o2 #etitioner5s !rument is t.!t it is not ! len"in investor -it.in
t.e #urvie- o2 Se/tion 6(*0A1 o2 t.e N!tion!l Intern!l Revenue Co"e 0NIRC1, !s
!men"e", !n" t.ere2ore not su37e/t to v!lue-!""e" t!+ 08AT1$ Petitioner !lso /onten"s
t.!t ! #!-n ti/9et is not su37e/t to "o/ument!r& st!m# t!+ 0:ST1 3e/!use it is not #roo2
o2 t.e #le"e tr!ns!/tion, !n" even !ssumin t.!t it is so, still, it is not su37e/t to t!+ sin/e
! "o/ument!r& st!m# t!+ is levie" on t.e "o/ument issue" !n" not on t.e tr!ns!/tion$

T.e 2!/ts:

In ! Pre-Assessment Noti/e "!te" %ul& ;, )((', #etitioner -!s in2orme" 3& t.e
4IR t.!t it .!s !n e+istin t!+ "e2i/ien/& on its 8AT !n" :ST li!3ilities 2or t.e &e!r
)((($ T.e "e2i/ien/& !ssessment -!s !t P<=6,6()$;> 2or 8AT !n" P)',?=?$'' 2or :ST$
Petitioner #roteste" t.e !ssessment 2or l!/9 o2 le!l !n" 2!/tu!l 3!ses$

Petitioner su3se@uentl& re/eive" ! ,orm!l Assessment Noti/e on :e/em3er )>,
)((', "ire/tin #!&ment o2 8AT "e2i/ien/& in t.e !mount o2 P<=6,6()$;> !n" :ST
"e2i/ien/& in t.e !mount o2 P)=,;=;$6', in/lusive o2 sur/.!re !n" interest$ Petitioner
2ile" ! #rotest, -.i/. -!s "enie" 3& A/tin Reion!l :ire/tor Anselmo G$ A"ri!no #er
,in!l :e/ision on :is#ute" Assessment "!te" %!nu!r& )>, )((=$

Petitioner t.en 2ile" ! #etition 2or revie- -it. t.e Court o2 T!+ A##e!ls 0CTA1$
In ! :e/ision "!te" M!& >, )((<, t.e )
n"
:ivision o2 t.e CTA u#.el" t.e "e2i/ien/&
!ssessment$ Petitioner 2ile" ! motion 2or re/onsi"er!tion -.i/. -!s "enie" in !
Resolution "!te" O/to3er ;, )((<$

Petitioner !##e!le" to t.e CTA En Banc -.i/. ren"ere" ! :e/ision "!te" %une ;,
)((?, t.e "is#ositive #ortion o2 -.i/. re!"s !s 2ollo-s:

AHERE,ORE, #remises /onsi"ere", t.e Petition 2or Revie- is .ere3&
:ENIE: 2or l!/9 o2 merit$ T.e !ss!ile" :e/ision "!te" M!& >, )((< !n" Resolution
"!te" O/to3er ;, )((< !re .ere3& A,,IRME:$

SO OR:ERE:$

Petitioner sou.t re/onsi"er!tion 3ut t.is -!s "enie" 3& t.e CTA En Banc #er
Resolution "!te" Auust 6=, )((?$

Hen/e, t.e #resent #etition 2or revie- un"er Rule =< o2 t.e Rules o2 Court 3!se"
on t.e 2ollo-in roun"s:

I
THE HONORA4BE COURT O, TAC APPEABS EN BANC GRA8EBY ERRE: IN
,IN:ING PETITIONER BIA4BE ,OR 8AT$

II
THE HONORA4BE COURT O, TAC APPEABS EN BANC GRA8EBY ERRE: IN
RUBING THAT PETITIONER IS BIA4BE ,OR :ST ON PAAN TICDETS$

T.e "etermin!tion o2 #etitioner5s t!+ li!3ilit& "e#en"s on t.e t!+ tre!tment o2 !
#!-ns.o# 3usiness$ O""l&, t.ere .!s not 3een !n& "e2initive "e/l!r!tion in t.is re!r"
"es#ite t.e 2!/t t.!t #!-ns.o#s .!ve lon 3een in e+isten/e$ All t.!t .!s 3een st!te" is
-.!t #!-ns.o#s !re not, 3ut not -.!t #!-ns.o#s !re$

T.e 4IR itsel2 .!s m!int!ine" !n !m3iv!lent st!n/e on t.is issue$ Initi!ll&, in Revenue
Memorandum Order No. 15-91 issue" on M!r/. 66, 6>>6, ! #!-ns.o# 3usiness -!s
/onsi"ere" !s E!9in to len"in investorFs 3usiness !/tivit&G !n" su37e/t to <H #er/ent!e
t!+ 3einnin %!nu!r& 6, 6>>6, un"er Se/tion 66? o2 t.e T!+ Co"e o2 6>;;, !s !men"e"
3& E$O$ No$ );'$

Ait. t.e #!ss!e o2 Re#u3li/ A/t 0R$A$1 No$ ;;6? or t.e E8AT B!- in 6>>=, t.e
4IR !3!n"one" its e!rlier #osition !n" m!int!ine" t.!t #!-ns.o#s !re su37e/t to 6(H
8AT, !s im#lemente" 3& Revenue Reul!tions No$ ;-><$ T.is -!s /om#lemente" 3&
Revenue Memorandum Circuar No. !5-"1 "!te" O/to3er 6), )((6, -.i/. #rovi"e" t.!t
#!-ns.o# o#er!tors !re li!3le to t.e 6(H 8AT 3!se" on ross re/ei#ts 3einnin %!nu!r&
6, 6>>?, -.ile #!-ns.o#s -.ose ross !nnu!l re/ei#ts "o not e+/ee" P<<(,((($(( !re
li!3le 2or #er/ent!e t!+, #ursu!nt to Se/tion 6(>0I1 o2 t.e T!+ Co"e o2 6>>;$

CTA "e/isions !22irme" t.e 4IR5s #osition t.!t #!-ns.o#s !re su37e/t to 8AT$ In
#. $am%un&in' (a)nshop, *nc. v. Commissioner o+ *n&erna Revenue, t.e CTA rule" t.!t
t.e #etitioner t.erein -!s su37e/t to 6(H 8AT un"er Se/tion 6(* o2 t.e T!+ Co"e o2
6>>;$ An&am (a)nshop Corpora&ion v. Commissioner o+ *n&erna Revenue reiter!tes s!i"
rulin$ It -!s t.e CTA5s vie- t.!t t.e servi/es ren"ere" 3& #!-ns.o#s 2!ll un"er t.e
ener!l "e2inition o2 Es!le or e+/.!ne o2 servi/esG un"er Se/tion 6(*0A1 o2 t.e T!+
Co"e o2 6>>;$

On %ul& 6<, )((', t.e Court ren"ere" Commissioner o+ *n&erna Revenue v.
Miche J. ,huiier (a)nshop, *nc. in -.i/. it -!s /!teori/!ll& rule" t.!t -.ile
#!-ns.o#s !re en!e" in t.e 3usiness o2 len"in mone&, t.e& !re not /onsi"ere"
Elen"in investorsG 2or t.e #ur#ose o2 im#osin #er/ent!e t!+es$ T.e Court !ve t.e
2ollo-in re!sons: 2irst, un"er t.e 6>>; T!+ Co"e, #!-ns.o#s !n" len"in investors -ere
su37e/te" to "i22erent t!+ tre!tmentsJ se/on", Conress never inten"e" #!-ns.o#s to 3e
tre!te" in t.e s!me -!& !s len"in investorsJ t.ir", Se/tion 66? o2 t.e NIRC o2 6>;;
su37e/ts to #er/ent!e t!+ "e!lers in se/urities !n" len"in investors onl&J !n" l!stl&, t.e
4IR .!" rule" sever!l times #rior to t.e issu!n/e o2 RMO No$ 6<->6 !n" RMC ='->6 t.!t
#!-ns.o#s -ere not su37e/t to t.e <H #er/ent!e t!+ on len"in investors im#ose" 3&
Se/tion 66? o2 t.e NIRC o2 6>;;, !s !men"e" 3& E+e/utive Or"er No$ );'$

In vie- o2 s!i" rulin, t.e 4IR issue" Revenue Memorandum Circuar No. -.-
/""! "!te" %une 6?, )((=, /!n/elin t.e #revious len"in investor5s t!+ !ssessments on
#!-ns.o#s$ S!i" Cir/ul!r st!te", in&er aia:

In vie- o2 t.e s!i" Su#reme Court "e/ision, !ll !ssessments on #!-ns.o#s 2or
#er/ent!e t!+es !s len"in investors !re .ere3& /!n/elle"$ T.is Cir/ul!r is 3ein issue"
2or t.e sole #ur#ose o2 resolvin t.e t!+ li!3ilit& o2 #!-ns.o#s to t.e <H len"in
investors t!+ #rovi"e" un"er t.e t.en Se/tion 66? o2 t.e NIRC o2 6>;;, !s !men"e", !n"
s.!ll not /over issues rel!tin to t.eir ot.er t!+ li!3ilities$ All intern!l revenue o22i/i!ls
!re en7oine" 2rom issuin !ssessments on #!-ns.o#s 2or #er/ent!e t!+es on len"in
investors, un"er t.e t.en Se/tion 66? o2 t.e NIRC o2 6>;;, !s !men"e"$
,or #ur#oses o2 t.e ross re/ei#t t!+ #rovi"e" 2or un"er Re#u3li/ A/t No$
>)>=, t.e #!-ns.o#s !re no- su37e/t t.ereo2$ T.is s.!ll .o-ever, 3e /overe" 3& !not.er
issu!n/e$

Revenue Memorandum Circuar No. -0-/""! -!s issue" on t.e s!me "!te
-.ere3& #!-ns.o# 3usinesses -ere !llo-e" to settle t.eir 8AT li!3ilities 2or t.e t!+
&e!rs 6>>?-)(() #ursu!nt to ! memor!n"um o2 !reement entere" into 3& t.e
Commissioner o2 Intern!l Revenue !n" t.e C.!m3ers o2 P!-n3ro9ers o2 t.e P.ili##ines,
In/$ T.e Cir/ul!r li9e-ise instru/te" !ll revenue o22i/ers to ensure t.!t E!ll 8AT "ue
2rom #!-ns.o#s 3einnin %!nu!r& 6, )((', in/lu"in in/rements t.ereto, i2 !n&, !re
!ssesse" !n" /olle/te" 2rom #!-ns.o#s un"er its 7uris"i/tion$G

In t.e interim, .o-ever, Conress #!sse" Re#u3li/ A/t 0R$A$1 No$ >)'* on
,e3ru!r& <, )((= entitle", EAn A/t Amen"in Cert!in Se/tions o2 t.e N!tion!l Intern!l
Revenue Co"e o2 6>>;, !s !men"e", 3& E+/lu"in Sever!l Servi/es 2rom t.e Cover!e o2
t.e 8!lue-!""e" T!+ !n" Re-im#osin t.e Gross Re/ei#ts T!+ on 4!n9s !n" Non-3!n9
,in!n/i!l Interme"i!ries Per2ormin Ku!si-3!n9in ,un/tions !n" Ot.er Non-3!n9
,in!n/i!l Interme"i!ries 3einnin %!nu!r& (6, )((=$G

Pen"in #u3li/!tion o2 R$A$ No$ >)'*, t.e 4IR issue" 4!n9 4ulletin No$ )((=-(6
on ,e3ru!r& 6(, )((= !"visin !ll 3!n9s !n" non-3!n9 2in!n/i!l interme"i!ries t.!t t.e&
s.!ll rem!in li!3le un"er t.e 8AT s&stem$

A.en R$A$ No$ >)'* too9 e22e/t on ,e3ru!r& 6?, )((=, t.e :e#!rtment o2
,in!n/e issue" Revenue Re'ua&ions No. 1"-/""! "!te" O/to3er 6*, )((=, /l!ssi2&in
#!-ns.o#s !s Ot.er Non-3!n9 ,in!n/i!l Interme"i!ries$ T.e 4IR t.en issue" Revenue
Memorandum Circuar No. 0--/""! on Novem3er )<, )((=, #res/ri3in t.e ui"elines
!n" #oli/ies on t.e !ssessment !n" /olle/tion o2 6(H 8AT 2or ross !nnu!l s!lesLre/ei#ts
e+/ee"in P<<(,((($(( or 'H #er/ent!e t!+ 2or ross !nnu!l s!lesLre/ei#ts not
e+/ee"in P<<(,((($(( o2 #!-ns.o#s #rior to %!nu!r& 6, )((<$

In 2ine, #rior to t.e E8AT B!-, #!-ns.o#s -ere tre!te" !s len"in investors
su37e/t to len"in investor5s t!+$ Su3se@uentl&, -it. t.e Court5s rulin in ,huiier,
#!-ns.o#s -ere t.en tre!te" !s 8AT-!3le enter#rises un"er t.e ener!l /l!ssi2i/!tion o2
1sae or e2chan'e o+ services3 un"er Se/tion 6(*0A1 o2 t.e T!+ Co"e o2 6>>;, !s
!men"e"$ R$A$ No$ >)'* 2in!ll& /l!ssi2ie" #!-ns.o#s !s Ot.er Non-3!n9 ,in!n/i!l
Interme"i!ries$

T.e Court 2in"s t.!t #!-ns.o#s s.oul" .!ve 3een tre!te" !s non-3!n9 2in!n/i!l
interme"i!ries 2rom t.e ver& 3einnin, su37e/t to t.e !##ro#ri!te t!+es #rovi"e" 3& l!-,
t.us M

N Un"er t.e N!tion!l Intern!l Revenue Co"e o2 6>;;, #!-ns.o#s s.oul" .!ve
3een levie" t.e <H #er/ent!e t!+ on ross re/ei#ts im#ose" on 3!n9 !n" non-3!n9
2in!n/i!l interme"i!ries un"er Se/tion 66> 0no- Se/tion 6)6 o2 t.e T!+ Co"e o2 6>>;1J
N Ait. t.e im#osition o2 t.e 8AT un"er R$A$ No$ ;;6? or t.e E8AT B!-,
#!-ns.o#s s.oul" .!ve 3een su37e/te" to t.e 6(H 8AT im#ose" on 3!n9s !n" non-3!n9
2in!n/i!l interme"i!ries !n" 2in!n/i!l institutions un"er Se/tion 6() o2 t.e T!+ Co"e o2
6>;; 0no- Se/tion 6(* o2 t.e T!+ Co"e o2 6>>;1J
N T.is -!s rest!te" 3& R$A$ No$ *)=6, -.i/. !men"e" R$A$ No$ ;;6?,
!lt.ou. t.e lev&, /olle/tion !n" !ssessment o2 t.e 6(H 8AT on servi/es ren"ere" 3&
3!n9s, non-3!n9 2in!n/i!l interme"i!ries, 2in!n/e /om#!nies, !n" ot.er 2in!n/i!l
interme"i!ries not #er2ormin @u!si-3!n9in 2un/tions, -ere m!"e e22e/tive %!nu!r& 6,
6>>*J
N R$A$ No$ *=)= or t.e T!+ Re2orm A/t o2 6>>; li9e-ise im#ose" ! 6(H 8AT
un"er Se/tion 6(* 3ut t.e lev&, /olle/tion !n" !ssessment t.ereo2 -ere !!in "e2erre"
until :e/em3er '6, 6>>>J
N T.e lev&, /olle/tion !n" !ssessment o2 t.e 6(H 8AT -!s 2urt.er "e2erre" 3&
R$A$ No$ *;?6 until :e/em3er '6, )(((, !n" 3& R$A$ No$ >(6(, until :e/em3er '6,
)(()J
N Ait. no 2urt.er "e2erments iven 3& l!-, t.e lev&, /olle/tion !n" !ssessment
o2 t.e 6(H 8AT on 3!n9s, non-3!n9 2in!n/i!l interme"i!ries, 2in!n/e /om#!nies, !n"
ot.er 2in!n/i!l interme"i!ries not #er2ormin @u!si-3!n9in 2un/tions -ere 2in!ll& m!"e
e22e/tive 3einnin %!nu!r& 6, )(('J
N ,in!ll&, -it. t.e en!/tment o2 R$A$ No$ >)'*, t.e servi/es o2 3!n9s, non-
3!n9 2in!n/i!l interme"i!ries, 2in!n/e /om#!nies, !n" ot.er 2in!n/i!l interme"i!ries not
#er2ormin @u!si-3!n9in 2un/tions -ere s#e/i2i/!ll& e+em#te" 2rom 8AT, !n" t.e (H to
<H #er/ent!e t!+ on ross re/ei#ts on ot.er non-3!n9 2in!n/i!l interme"i!ries -!s
reim#ose" un"er Se/tion 6)) o2 t.e T!+ Co"e o2 6>>;$

At t.e time o2 t.e "is#ute" !ssessment, t.!t is, 2or t.e &e!r )(((, #!-ns.o#s -ere
not su37e/t to 6(H 8AT un"er t.e ener!l #rovision on Es!le or e+/.!ne o2 servi/esG !s
"e2ine" un"er Se/tion 6(*0A1 o2 t.e T!+ Co"e o2 6>>;, -.i/. st!tes: E5sae or e2chan'e
o+ services5 me!ns t.e #er2orm!n/e o2 !ll 9in"s o2 servi/es in t.e P.ili##ines 2or ot.ers
2or ! 2ee, remuner!tion or /onsi"er!tion + + +$G Inste!", "ue to t.e s#e/i2i/ n!ture o2 its
3usiness, #!-ns.o#s -ere t.en su37e/t to 6(H 8AT un"er t.e /!teor& o2 non-3!n9
2in!n/i!l interme"i!ries, !s #rovi"e" in t.e s!me Se/tion 6(*0A1, -.i/. re!"s:

SEC$ 6(*$ 4aue-added $a2 on 5ae o+ 5ervices and 6se or ,ease o+ (roper&ies.
-
0A1 Ra&e and Base o+ $a2. - T.ere s.!ll 3e levie", !ssesse" !n" /olle/te", !
v!lue-!""e" t!+ e@uiv!lent to ten #er/ent 06(H1 o2 ross re/ei#ts "erive" 2rom t.e s!le or
e+/.!ne o2 servi/es, in/lu"in t.e use or le!se o2 #ro#erties$
T.e #.r!se 7sae or e2chan'e o+ services7 me!ns t.e #er2orm!n/e o2 !ll 9in"s
or servi/es in t.e P.ili##ines 2or ot.ers 2or ! 2ee, remuner!tion or /onsi"er!tion,
in/lu"in + + + ser-ices of ban.s) non+ban. financial interme/iaries an/ finance
companiesJ !n" non-li2e insur!n/e /om#!nies 0e+/e#t t.eir /ro# insur!n/es1, in/lu"in
suret&, 2i"elit&, in"emnit& !n" 3on"in /om#!niesJ !n" simil!r servi/es re!r"less o2
-.et.er or not t.e #er2orm!n/e t.ereo2 /!lls 2or t.e e+er/ise or use o2 t.e #.&si/!l or
ment!l 2!/ulties$ T.e #.r!se 5s!le or e+/.!ne o2 servi/es5 s.!ll li9e-ise in/lu"e: + + +
0Em#.!sis !n" un"ers/orin su##lie"1

T.e t!+ tre!tment o2 #!-ns.o#s !s non-3!n9 2in!n/i!l interme"i!ries is not
-it.out 3!sis$

R$A$ No$ '';, !s !men"e", or t.e Gener!l 4!n9in A/t /.!r!/teriIes t.e terms
%an8in' ins&i&u&ion !n" %an8 !s s&non&mous !n" inter/.!ne!3le !n" s#e/i2i/!ll& in/lu"e
/ommer/i!l 3!n9s, s!vins 3!n9, mort!e 3!n9s, "evelo#ment 3!n9s, rur!l 3!n9s, sto/9
s!vins !n" lo!n !sso/i!tions, !n" 3r!n/.es !n" !en/ies in t.e P.ili##ines o2 2orein
3!n9s$ R$A$ No$ *;>6 or t.e Gener!l 4!n9in B!- o2 )(((, me!n-.ile, #rovi"e" t.!t
%an8s s.!ll re2er to entities en!e" in t.e len"in o2 2un"s o3t!ine" in t.e 2orm o2
"e#osits$ R$A$ No$ *;>6 !lso in/lu"e" /oo#er!tive 3!n9s, Isl!mi/ 3!n9s !n" ot.er 3!n9s
!s "etermine" 3& t.e Monet!r& 4o!r" o2 t.e Ban'8o 5en&ra n' (iipinas in t.e
/l!ssi2i/!tion o2 3!n9s$

9inancia in&ermediaries, on t.e ot.er .!n", !re "e2ine" !s E#ersons or entities
-.ose #rin/i#!l 2un/tions in/lu"e t.e len"in, investin or #l!/ement o2 2un"s or
evi"en/es o2 in"e3te"ness or e@uit& "e#osite" -it. t.em, !/@uire" 3& t.em, or ot.er-ise
/ourse" t.rou. t.em, eit.er 2or t.eir o-n !//ount or 2or t.e !//ount o2 ot.ers$G

It nee" not 3e el!3or!te" t.!t #!-ns.o#s !re non-3!n9sL3!n9in institutions$
Moreover, t.e n!ture o2 t.eir 3usiness !/tivities #!rt!9es t.!t o2 ! 2in!n/i!l interme"i!r&
in t.!t its #rin/i#!l 2un/tion is len"in$

A #!-ns.o#5s 3usiness !n" o#er!tions !re overne" 3& Presi"enti!l :e/ree 0P$:$1 No$
66= or t.e P!-ns.o# Reul!tion A/t !n" Centr!l 4!n9 Cir/ul!r No$ ';= 0Rules !n"
Reul!tions 2or P!-ns.o#s1$ Se/tion ' o2 P$:$ No$ 66= "e2ines pa)nshop !s E! #erson or
entit& en!e" in t.e 3usiness o2 len"in mone& on #erson!l #ro#ert& "elivere" !s
se/urit& 2or lo!ns !n" s.!ll 3e s&non&mous, !n" m!& 3e use" inter/.!ne!3l&, -it.
#!-n3ro9er or #!-n 3ro9er!e$G

T.!t #!-ns.o#s !re to 3e tre!te" !s non-3!n9 2in!n/i!l interme"i!ries is 2urt.er
3olstere" 3& t.e 2!/t t.!t #!-ns.o#s !re un"er t.e reul!tor& su#ervision o2 t.e Ban'8o
5en&ra n' (iipinas !n" /overe" 3& its M!nu!l o2 Reul!tions 2or Non-4!n9 ,in!n/i!l
Institutions$ T.e M!nu!l in/lu"es #!-ns.o#s in t.e list o2 non-3!n9 2in!n/i!l
interme"i!ries, vi:$:

O =6(6K$6 9inancia *n&ermediaries
+ + +
Non-3!n9 2in!n/i!l interme"i!ries s.!ll in/lu"e t.e 2ollo-in:
061 A #erson or entit& li/ense" !n"Lor reistere" -it. !n& overnment
reul!tor& 3o"& !s ! non-3!n9 2in!n/i!l interme"i!r&, su/. !s investment .ouse,
investment /om#!n&, 2in!n/in /om#!n&, se/urities "e!lerL3ro9er, len"in investor,
pa0nshop, mone& 3ro9er + + +$ 0Em#.!sis su##lie"1

Revenue Re'ua&ions No. 1"-/""!, in 2!/t, re/oniIe" t.ese 3!ses, to -it:

SEC$ )$ 4ASES O, KUABI,YING PAANSHOPS AS NON-4AND
,INANCIAB INTERME:IARIES$ - A.ere!s, in rel!tion to Se/$ )$' o2 Rev$ Res No$ >-
)((= "e2inin ENon-3!n9 ,in!n/i!l Interme"i!ries, t.e term E#!-ns.o#G !s "e2ine"
un"er Presi"enti!l :e/ree No$ 66= -.i/. !ut.oriIe" its /re!tion, &o %e a person or en&i&;
en'a'ed in &he %usiness o+ endin' mone;, !ll 2!ll -it.in t.e /l!ssi2i/!tion o2 Non-3!n9
,in!n/i!l Interme"i!ries !n" t.ere2ore, /overe" 3& Se/$ = o2 R$A$ No$ >)'*$
T.is /l!ssi2i/!tion is e@u!ll& su##orte" 3& Su3se/tion =6(6K$6 o2 t.e 4SP
M!nu!l o2 Reul!tions 2or Non-4!n9 ,in!n/i!l Interme"i!ries !n" reiter!te" in 4SP
Cir/ul!r No$ )(=->>, /l!ssi2&in #!-ns.o#s !s one o2 Non-3!n9 ,in!n/i!l Interme"i!ries
-it.in t.e su#ervision o2 t.e 4!n9o Sentr!l n Pili#in!s$

Ultim!tel&, R$A$ No$ >)'* /!teori/!ll& /on2irme" t.e /l!ssi2i/!tion o2
#!-ns.o#s !s non-3!n9 2in!n/i!l interme"i!ries$

Comin no- to t.e issue !t .!n" - Sin/e #etitioner is ! non-3!n9 2in!n/i!l
interme"i!r&, it is su37e/t to 6(H 8AT 2or t.e t!+ &e!rs 6>>? to )(()J ho0e-er) 0ith the
le-1) assessment an/ collection of VT from non+ban. financial interme/iaries bein2
specificall1 /eferre/ b1 la0, then petitioner is not liable for VT /urin2 these ta3
1ears$ 4ut -it. t.e 2ull im#lement!tion o2 t.e 8AT s&stem on non-3!n9 2in!n/i!l
interme"i!ries st!rtin %!nu!r& 6, )((', #etitioner is li!3le 2or 6(H 8AT 2or s!i" t!+ &e!r$
An" 3einnin )((= u# to t.e #resent, 3& virtue o2 R$A$ No$ >)'*, #etitioner is no loner
li!3le 2or 8AT 3ut it is su37e/t to #er/ent!e t!+ on ross re/ei#ts 2rom (H to < H, !s t.e
/!se m!& 3e$

B!stl&, #etitioner is li!3le 2or "o/ument!r& st!m# t!+es$

T.e Court .!s settle" t.is issue in Miche J. ,huiier (a)nshop, *nc. v.
Commissioner o+ *n&erna Revenue, in -.i/. it -!s rule" t.!t t.e su37e/t o2 :ST is not
limite" to t.e "o/ument !lone$ Ple"e, -.i/. is !n e+er/ise o2 ! #rivilee to tr!ns2er
o3li!tions, ri.ts or #ro#erties in/i"ent t.ereto, is !lso su37e/t to :ST, t.us M
+ + + t.e su37e/t o2 ! :ST is not limite" to t.e "o/ument em3o"&in t.e
enumer!te" tr!ns!/tions$ A :ST is !n e+/ise t!+ on t.e e+er/ise o2 ! ri.t or #rivilee to
tr!ns2er o3li!tions, ri.ts or #ro#erties in/i"ent t.ereto$ In (hiippine #ome Assurance
Corpora&ion v. Cour& o+ Appeas, it -!s .el" t.!t:
+ + + +
Ple"e is !mon t.e #rivilees, t.e e+er/ise o2 -.i/. is su37e/t to :ST$ A
#le"e m!& 3e "e2ine" !s !n !//essor&, re!l !n" unil!ter!l /ontr!/t 3& virtue o2 -.i/. t.e
"e3tor or ! t.ir" #erson "elivers to t.e /re"itor or to ! t.ir" #erson mov!3le #ro#ert& !s
se/urit& 2or t.e #er2orm!n/e o2 t.e #rin/i#!l o3li!tion, u#on t.e 2ul2illment o2 -.i/. t.e
t.in #le"e", -it. !ll its !//essions !n" !//essories, s.!ll 3e returne" to t.e "e3tor or to
t.e t.ir" #erson$ T.is is essenti!ll& t.e 3usiness o2 #!-ns.o#s -.i/. !re "e2ine" un"er
Se/tion ' o2 Presi"enti!l :e/ree No$ 66=, or t.e P!-ns.o# Reul!tion A/t, !s #ersons or
entities en!e" in len"in mone& on #erson!l #ro#ert& "elivere" !s se/urit& 2or lo!ns$
Se/tion 6) o2 t.e P!-ns.o# Reul!tion A/t !n" Se/tion )6 o2 t.e Rules !n"
Reul!tions ,or P!-ns.o#s issue" 3& t.e Centr!l 4!n9 to im#lement t.e A/t, re@uire
ever& #!-ns.o# or #!-n3ro9er to issue, !t t.e time o2 ever& su/. lo!n or #le"e, !
memor!n"um or ti/9et sine" 3& t.e #!-n3ro9er !n" /ont!inin t.e 2ollo-in "et!ils:
061 n!me !n" resi"en/e o2 t.e #!-nerJ 0)1 "!te t.e lo!n is r!nte"J 0'1 !mount o2
#rin/i#!l lo!nJ 0=1 interest r!te in #er/entJ 0<1 #erio" o2 m!turit&J 0?1 "es/ri#tion o2 #!-nJ
0;1 sin!ture o2 #!-n3ro9er or .is !ut.oriIe" !entJ 0*1 sin!ture or t.um3 m!r9 o2
#!-ner or .is !ut.oriIe" !entJ !n" 0>1 su/. ot.er terms !n" /on"itions !s m!& 3e !ree"
u#on 3et-een t.e #!-n3ro9er !n" t.e #!-ner$ In !""ition, Centr!l 4!n9 Cir/ul!r No$
==<, #res/ri3e" ! st!n"!r" 2orm o2 #!-n ti/9ets -it. entries 2or t.e re@uire" "et!ils on its
2!/e !n" t.e m!n"!te" terms !n" /on"itions o2 t.e #le"e !t t.e "ors!l #ortion t.ereo2$
Se/tion ' o2 t.e P!-ns.o# Reul!tion A/t "e2ines ! #!-n ti/9et !s 2ollo-s:
+ + + +
True, t.e l!- "oes not /onsi"er s!i" ti/9et !s !n evi"en/e o2 se/urit& or
in"e3te"ness$ Ho-ever, 2or #ur#oses o2 t!+!tion, t.e s!me #!-n ti/9et is #roo2 o2 !n
e+er/ise o2 ! t!+!3le #rivilee o2 /on/lu"in ! /ontr!/t o2 #le"e$ At !n& r!te, it is not
s!i" ti/9et t.!t /re!tes t.e #!-ns.o#Fs o3li!tion to #!& :ST 3ut t.e e+er/ise o2 t.e
#rivilee to enter into ! /ontr!/t o2 #le"e$ T.ere is t.ere2ore no 3!sis in #etitionerFs
!ssertion t.!t ! :ST is liter!ll& ! t!+ on ! "o/ument !n" t.!t no t!+ m!& 3e im#ose" on !
#!-n ti/9et$
T.e settle" rule is t.!t t!+ l!-s must 3e /onstrue" in 2!vor o2 t.e t!+#!&er !n"
stri/tl& !!inst t.e overnmentJ !n" t.!t ! t!+ /!nnot 3e im#ose" -it.out /le!r !n"
e+#ress -or"s 2or t.!t #ur#ose$ T!9in our 3e!rin 2rom t.e 2oreoin "o/trines, -e
s/rutiniIe" Se/tion 6>< o2 t.e NIRC, 3ut t.ere is no -!& t.!t s!i" #rovision m!& 3e
inter#rete" in 2!vor o2 #etitioner$ Se/tion 6>< un4ualifie/l1 sub5ects all ple/2es to :ST$
It st!tes t.!t EPoQn ever; 2 2 2 ped'e 2 2 2 &here sha %e coec&ed a documen&ar; s&amp
&a2 2 2 2.G It is /le!r, /!teori/!l, !n" nee"s no 2urt.er inter#ret!tion or /onstru/tion$ T.e
e+#li/it tenor t.ereo2 re@uires .!r"l& !n&t.in t.!n ! sim#le !##li/!tion$
+ + + +
In t.e inst!nt /!se, t.ere is no l!- s#e/i2i/!ll& !n" e+#ressl& e+em#tin #le"es
entere" into 3& #!-ns.o#s 2rom t.e #!&ment o2 :ST$ Se/tion 6>> o2 t.e NIRC
enumer!te" /ert!in "o/uments -.i/. !re not su37e/t to st!m# t!+J 3ut ! #!-ns.o# ti/9et
is not one o2 t.em$ Hen/e, #etitionerFs ne3ulous /l!im t.!t it is not su37e/t to :ST is
-it.out merit$ It /!nnot 3e over-em#.!siIe" t.!t t!+ e+em#tion re#resents ! loss o2
revenue to t.e overnment !n" must, t.ere2ore, not rest on v!ue in2eren/e$ E+em#tion
2rom t!+!tion is never #resume"$ ,or t!+ e+em#tion to 3e re/oniIe", t.e r!nt must 3e
/le!r !n" e+#ressJ it /!nnot 3e m!"e to rest on "ou3t2ul im#li/!tions$

Un"er t.e #rin/i#le o2 s&are decisis e& non <uie&a movere 02ollo- #!st #re/e"ents
!n" "o not "istur3 -.!t .!s 3een settle"1, on/e ! /!se .!s 3een "e/i"e" one -!&, !n&
ot.er /!se involvin e+!/tl& t.e s!me #oint !t issue, !s in t.e /!se !t 3!r, s.oul" 3e
"e/i"e" in t.e s!me m!nner$

(H!R!FOR!, t.e #etition is PRTILL6 "RNT!D$ T.e :e/ision "!te"
%une ;, )((? !n" Resolution "!te" Auust 6=, )((? o2 t.e Court o2 T!+ A##e!ls En Banc
is MODIFI!D to t.e e22e/t t.!t t.e 4ure!u o2 Intern!l Revenue !ssessment 2or 8AT
"e2i/ien/& in t.e !mount o2 P<=6,6()$;> 2or t.e &e!r )((( is R!V!RS!D an/ S!T
SID!, -.ile its !ssessment 2or :ST "e2i/ien/& in t.e !mount o2 P)=,;=;$6', in/lusive
o2 sur/.!re !n" interest, is *PH!LD$

SO ORD!R!D$



M# LICI *STRI+MRTIN!,
Asso/i!te %usti/e






AE CONCUR:



CONS*!LO 6NR!S+SNTI"O
Asso/i!te %usti/e
C.!ir#erson



MINIT V# CHICO+N,RIO
Asso/i!te %usti/e
NTONIO !D*RDO 7# NCH*R
Asso/i!te %usti/e



R*7!N T# R!6!S
Asso/i!te %usti/e



TT!STTION


I !ttest t.!t t.e /on/lusions in t.e !3ove :e/ision .!" 3een re!/.e" in
/onsult!tion 3e2ore t.e /!se -!s !ssine" to t.e -riter o2 t.e o#inion o2 t.e CourtFs
:ivision$


CONS*!LO 6NR!S+SNTI"O
Asso/i!te %usti/e
C.!ir#erson, T.ir" :ivision



C!RTIFICTION

Pursu!nt to Se/tion 6', Arti/le 8III o2 t.e Constitution, !n" t.e :ivision C.!ir#ersonFs
Attest!tion, it is .ere3& /erti2ie" t.!t t.e /on/lusions in t.e !3ove :e/ision .!" 3een
re!/.e" in /onsult!tion 3e2ore t.e /!se -!s !ssine" to t.e -riter o2 t.e o#inion o2 t.e
CourtFs :ivision$


R!6NTO S# P*NO
C.ie2 %usti/e
Roo, Anne+ ECG, #$ *=$
I"$, Anne+ E:G, ##$ *<->($
I"$, Anne+ EEG, ##$ >6-><$
I"$, Anne+ E,G, ##$ >?-6(;$
I"$, Anne+ EGG, #$ 6(*$
I"$, Anne+ EHG, ##$ 6(>-6))$
I"$, Anne+ EIG, ##$ 6<(-6?*$
I"$, Anne+ E%G, ##$ 6?>-6*'$
I"$, Anne+ EDG, ##$ 6*=-6**$
I"$ !t *($
Roo, ##$ *)-*'$
I"$ !t '=$
As /l!ri2ie" 3& 4IR Revenue Memor!n"um Cir/ul!r No$ ='->6 issue" on
M!& );, 6>>6$
Entitle", EAn A/t Restru/turin t.e 8!lue-A""e" T!+ 08AT1 S&stem,
Ai"enin its T!+ 4!se !n" En.!n/in its A"ministr!tion, !n" 2or t.ese #ur#oses
Amen"in !n" Re#e!lin t.e Relev!nt Provisions o2 t.e N!tion!l Intern!l Revenue Co"e,
!s !men"e", !n" 2or Ot.er Pur#oses$G
C$T$A$ C!se No$ ?>6<, A#ril 66, )((=$
C$T$A$ C!se No$ ;(?>, %une 6;, )((<$
G$R$ No$ 6<(>=;, %ul& 6<, )((', =(? SCRA 6;*$ Penne" 3& C.ie2 %usti/e
Hil!rio G$ :!vi"e, %r$ -it. t.e /on/urren/e o2 Asso/i!te %usti/es %ose 8itu, Consuelo
Yn!res-S!nti!o, Antonio T$ C!r#io !n" A"ol2o S$ AI/un!$
I"$ !t 6*<$
2t#:LL2t#$3ir$ov$#.L-e3!"min6L#"2L6**;rm/'?R(=$#"2$
Re#u3li/ A/t 0R$A$1 No$ >)'* l!#se" into l!- on ,e3ru!r& (<, )((= -it.out
t.e sin!ture o2 t.e Presi"ent, in !//or"!n/e -it. Arti/le 8I, Se/tion ); 061 o2 t.e
Constitution$
Presi"enti!l :e/ree No$ 66<*$
E22e/tive M!& )*, 6>>=$
T.e im#lement!tion o2 t.e 8AT s&stem un"er R$A$ No$ ;;6? -!s m!"e
e22e/tive %!nu!r& 6, 6>>? 0see Commissioner o+ *n&erna Revenue v. (hiippine =o%a
Communica&ions, *nc., G$R$ No$ 6==?>?, Auust 6?, )((?, =>> SCRA <'1$
A##rove" on :e/em3er )(, 6>>?$
R$A$ No$ *)=6, Se/tion 66 #rovi"es:
SEC$ 66$ Se/tion 6; o2 Re#u3li/ A/t No$ ;;6? is .ere3& !men"e"
to re!" !s 2ollo-s:
EEC$ 6;$ E++ec&ivi&; o+ &he *mposi&ion o+ 4A$ on Cer&ain =oods, (roper&ies and 5ervices$
M T.e v!lue-!""e" t!+ s.!ll 3e levie", !ssesse" !n" /olle/te" on t.e 2ollo-in
tr!ns!/tions, st!rtin %!nu!r& 6, 6>>*:
+ + + +
031 Servi/es ren"ere" 3& 3!n9s, non-3!n9 2in!n/i!l interme"i!ries, 2in!n/e /om#!nies
!n" ot.er 2in!n/i!l interme"i!ries not #er2ormin @u!si-3!n9in 2un/tionsJ
+ + + +:G
R$A$ No$ *=)= ren!me" t.e N!tion!l Intern!l Revenue Co"e o2 6>;; to
N!tion!l Intern!l Revenue Co"e o2 6>>;, or t.e T!+ Co"e o2 6>>;, !n" too9 e22e/t on
%!nu!r& 6, 6>>*$
R$A$ No$ *=)*, Se/tion < #rovi"es:
SEC$ <$ $ransi&or; (rovisions. - :e2erment o2 t.e
E22e/tivit& o2 t.e Im#osition o2 8AT on Cert!in Servi/es$ - T.e e22e/tivit& o2 t.e
im#osition o2 t.e v!lue-!""e" t!+ on servi/es !s #res/ri3e" in Se/tion 6;0!1 !n" 031 o2
Re#u3li/ A/t No$ ;?6?, !s !men"e" 3& Re#u3li/ A/t$ *)=6, is .ere3& 2urt.er "e2erre"
until :e/em3er '6, 6>>>, unless Conress "eems ot.er-ise: (rovided, T.!t t.e s!i"
servi/es s.!ll /ontinue to #!& t.e !##li/!3le t!+ #res/ri3e" un"er t.e #resent #rovisions
o2 t.e N!tion!l Intern!l Revenue Co"e, !s !men"e"$
R$A$ No$ >)'*, Se/tion ) #rovi"es:
SEC$ )$ Se/tion 6(> o2 t.e s!me Co"e is .ere3& !men"e" 3&
re-or"in #!r!r!#. 061 !n" insertin !""ition!l #!r!r!#.s !2ter 0I1 -.i/. s.!ll no-
re!" !s 2ollo-s:
SSEC$ 6(>$ E2emp& $ransac&ions. > T.e 2ollo-in s.!ll 3e
e+em#t 2rom t.e v!lue-!""e" t!+:
+ + + +
0!!1 Servi/es o2 3!n9s, non-3!n9 2in!n/i!l interme"i!ries
#er2ormin @u!si-3!n9in 2un/tions, !n" ot.er non-3!n9 2in!n/i!l interme"i!riesJ
+ + + +
T.e 2oreoin e+em#tions to t.e /ontr!r& not-it.st!n"in,
!n& #erson -.ose s!le o2 oo"s or #ro#erties or servi/es -.i/. !re ot.er-ise not su37e/t
to 8AT, 3ut -.o issue ! 8AT invoi/e or re/ei#t t.ere2or s.!ll, in !""ition!l to .is li!3ilit&
to ot.er !##li/!3le #er/ent!e t!+, i2 !n&, 3e li!3le to t.e t!+ im#ose" in Se/tion 6(? or
6(* -it.out t.e 3ene2it o2 in#ut t!+ /re"it, !n" su/. t!+ s.!ll !lso 3e re/oniIe" !s in#ut
t!+ /re"it to t.e #ur/.!ser un"er Se/tion 66(, !ll o2 t.is Co"e$S
R$A$ No$ >)'*, Se/tion = re!"s:
Se/tion =$ Se/tion 6)) o2 t.e N!tion!l Intern!l Revenue
Co"e o2 6>>;, !s !men"e", is .ere3& restore" -it. !men"ments to re!" !s 2ollo-s:
SSe/$ 6))$ $a2 on O&her Non-Ban8 9inancia *n&ermediaries$> T.ere s.!ll
3e /olle/te" ! t!+ o2 2ive #er/ent 0<H1 on t.e ross re/ei#ts "erive" 3& ot.er non-3!n9
2in!n/i!l interme"i!ries "oin 3usiness in t.e P.ili##ines, 2rom interest, /ommissions,
"is/ounts !n" !ll ot.er items tre!te" !s ross in/ome un"er t.is /o"e: (rovided, t.!t
interests, /ommissions !n" "is/ounts 2rom len"in !/tivities, !s -ell !s in/ome 2rom
2in!n/i!l le!sin, s.!ll 3e t!+e" on t.e 3!sis o2 rem!inin m!turities o2 t.e instruments
2rom -.i/. su/. re/ei#ts !re "erive", in !//or"!n/e -it. t.e 2ollo-in s/.e"ule:
m!turit& #erio" is 2ive 0<1 &e!rs or less$$$$$$$$$$$$$$$$$$$$$$$ <H
m!turit& #erio" is more t.!n 2ive 0<1 &e!rs$$$$$$$$$$$$$$$$$$6H
(rovided, ho)ever, t.!t in /!se t.e m!turit& #erio" is s.ortene" t.ru
#retermin!tion, t.en t.e m!turit& #erio" s.!ll 3e re/9one" to en" !s o2 t.e "!te o2
#retermin!tion 2or #ur#oses o2 /l!ssi2&in t.e tr!ns!/tion !n" t.e /orre/t r!te s.!ll 3e
!##lie" !//or"inl&$
(rovided, +ina;, t.!t t.e ener!ll& !//e#te" !//ountin #rin/i#les !s m!&
3e #res/ri3e" 3& t.e Se/urities !n" E+/.!ne Commission 2or ot.er non-3!n9 2in!n/i!l
interme"i!ries s.!ll li9e-ise 3e t.e 3!sis 2or t.e /!l/ul!tion o2 ross re/ei#ts$
Not.in in t.is /o"e s.!ll #re/lu"e t.e Commissioner 2rom im#osin t.e
s!me t!+ .erein #rovi"e" on #ersons #er2ormin simil!r 2in!n/in !/tivities$S
Se/tion )$
Se/tion '$6$
Se/tion '$6 0e1, 021, !n" 01$
Gener!l 4!n9in A/t, Se/tion )-:0/1J M!nu!l o2 Reul!tions 2or Non-4!n9
,in!n/i!l Institutions, O =6(6K$6$
See #!es ;-* o2 t.is :e/ision$
G$R$ No$ 6??;*?, M!& ', )((?, =*> SCRA 6=;$
Commissioner o+ *n&erna Revenue v. $rus&)or&h; (a)nshop, *nc., G$R$ No$
6=>*'=, M!& ), )((?, =** SCRA <'*, <=<$