7/23/2019 CIR v. Telefunken digest
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October 23, 1995
COMMISSIONER OF INTERNAL REVENUE,petitioner,vs.TELEFUNKEN
SEMICONDUCTOR PHILIPPINES, INC., COURT OF TAX APPEALS, and the
COURT OFAPPEALS, respondents.
Romero, J.:
SUMMARY:Telefunken wanted a refund or credit of contractors ta
w!ic!, it alle"es, was erroneousl# $aid, on t!e"round t!at it is
eem$ted from t!e ta b# virtue of bein" a $ioneer enter$rise under
R% &135. '(R contends t!at t!eeem$tion a$$lies onl# to $ioneer
enter$rises under R% 51)& so Telefunken must re"ister under
t!at law to avail oft!e eem$tion. *T% "ranted t!e refund and *%
affirmed. On a$$eal b# '(R, +* construed t!e 3 laws -(R*,
R%&135 and R% 51)&, concludin" t!at $ioneer enter$rises
under R% &135 are also eem$ted from contractors ta. +*noted
t!at t!e '(R !as alread# ruled t!is wa#, but '(R ar"ued t!at its
rulin" !as been abro"ated b# t!e new -(R*.+* re$lied t!at t!e
wordin" of t!e $rovision in uestion !as not c!an"ed, so t!e
construction remains t!e same./urt!ermore, under -(R* +ec. 20&,
'(R rulin"s ma# not be "iven retroactive effect if $reudicial to
t!e ta$a#er.
DOCTRINE:+*: A comparison of [Sec. 191(16) of the previous NIRC
!ith Section "#$(16) of the 19%% &a' Codereveas that oth
provisions specifica* mention pioneer industries re+istered !ith
the ,oard of Investments underRepuic Act No. $1-6 as e'empt from
pa*ment of the contractors ta'. In fact/ the !ordin+ of the reevant
part ofoth provisions are the same. T!e '(R rulin" under t!e $re419
-(R* was still u$!eld.
'(R rulin"s ma# not be "iven retroactive effect if $reudicial to
t!e ta$a#er 6-(R*, +ec. 20&.7.
NATURE:8etition for review on certiorari. Ori"inal action for
refund or ta credit before '(R %$$ellate ivision.
FACTS
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61&7 'usiness a"ents and ot!er inde$endent contractors
includin" $rivate detective orwatc!man a"encies, except gross
receipts of a pioneer enterprise registered withthe Board of
Investments under Republic Act !"#$.
o R% &135, +ec.
+ection . (ncentives to re"istered e$ort $roducers. Re"istered
e$ort $roducers. 4
Re"#$te%ed e&'(%t '%(d)*e%$ )n+e$$ the a+%ead en-( the $ae
'%#/#+e"e$ )nde%(the% +a0$ shall be entitled to the incentives set
forth in paragraphs %h&' %i& and %(& of
)ection * of +RA !"#$,' nown as the Investment Incentives Act.
and registeredexport producers that are pioneer enterprises shall
be entitled also to theincentives set forth in paragraphs %a&'
%b& and %c& of section # of the said Act(naddition to t!e
said incentives, and in lieu of ot!er incentives $rovided in
+ection and in+ection 9 of t!at %ct, re"istered e$ort $roducer
s!all be entitled to benefits and incentivesas enumerated
!ereunder
o R% 51)&, +ec. )6a7, as amended b# 8 92
+ec. ). (ncentives to a 8ioneer nter$rise. (n addition to t!e
incentives $rovided in t!e
$recedin" section, $ioneer enter$rises s!all be "ranted t!e
followin" incentive benefits:6a7 Ta em$tion. 4 /xemption from all
taxes under the National Internal Revenue0ode' except income tax'
from the date the area of investment is included in theInvestment
1riorities 1lan' to the following extent2
617 One !undred $er cent 61??>7 for t!e first five #earsH627
+event#4five $er cent 65>7 for t!e sit! t!rou"! t!e ei"!t!
#earH
637 /ift# $er cent 65?>7 for t!e nint! and tent! #earsH607
Twent# $er cent 62?>7 for t!e elevent! and twelft! #earsH and657
Ten $er cent 61?>7 for t!e t!irteent! t!rou"! t!e fifteent!
#ear.
CIR: T!e eem$tion in-(R* +ec. 2?561&7 refers onl# to
enter$rises re"istered under R% 51)&. (t cannot b
etended to firms re"istered under R% &135. T!erefore,
Telefunken must first re"ister under R% 51)& to availof t!e
eem$tion from contactors ta.
SC:-o ambi"uit# in t!e law. D!en construed to"et!er, t!e
fore"oin" $rovisions can onl# mean t!at t!e
"ross recei$ts of a $ioneer enter$rise re"istered wit! t!e 'O(
6like Telefunken7 are eem$t from contractorsta.
o T!e $olic# be!ind t!e law is t!e $romotion and develo$ment of
8!ili$$ine e$ort industries 6+ec.
27.
o N4 5IRNC ,&3N 7R4SS RCI0&S 4 0I4NR N&R0RISS 8N5R
RA61$ AN5 RA $1-6/ AS :25 ,; &: CIR :I
