The Market Monitor Minding the Nation's Business
The Court of Tax Appeals (CTA) has granted the Bangko Sentral ng Pilipinas’ (BSP) petition for a refund of ₱24,684 in documentary stamp taxes (DST) it paid in connection with the foreclosure of mortgaged properties of the Rural Bank of San Miguel.
In a nine-page decision released Friday, the CTA Special First Division ruled that under its charter, the BSP is authorized to grant emergency loans and advances to banks secured by real estate mortgages.
“Consequently, if deemed to be the highest bidder in foreclosure sales of unpaid loans, it may acquire real properties as part of the conduct of its business, thus falling squarely within the exemption mentioned,” the court said.
The tribunal emphasized that the consolidation of titles over properties acquired by the BSP is part of its regular business operations, making the DST assessment erroneous. “The law clearly provides that all contracts, deeds, documents, and transactions related to the conduct of business of the BSP are exempt from DST,” the decision read.
The BSP foreclosed the Rural Bank of San Miguel’s mortgaged assets after it defaulted on an emergency loan from the central bank.
While it settled the capital gains tax, the Bureau of Internal Revenue assessed an additional DST of ₱24,684, which the BSP paid under protest before filing the suit.