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    04 Bloomberry v. BIR

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    CP Lugo
    This case concerns whether Bloomberry Resorts, as a licensee of PAGCOR for casino operations, must pay corporate income tax in addition to the 5% franchise tax on gross income. The Supreme Court had previously ruled that PAGCOR pays the franchise tax on gaming income and corporate income tax on other service income. Following this precedent, the Court ruled that Bloomberry, through its contractual relationship with PAGCOR, is similarly only liable for the 5% franchise tax on gaming income and corporate income tax on other service income. The tax exemptions that PAGCOR receives through its charter inure to the benefit of its third party contractors like Bloomberry.

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    04 Bloomberry v. BIR

    Uploaded by

    CP Lugo
    111 views1 page
    This case concerns whether Bloomberry Resorts, as a licensee of PAGCOR for casino operations, must pay corporate income tax in addition to the 5% franchise tax on gross income. The Supreme Court had previously ruled that PAGCOR pays the franchise tax on gaming income and corporate income tax on other service income. Following this precedent, the Court ruled that Bloomberry, through its contractual relationship with PAGCOR, is similarly only liable for the 5% franchise tax on gaming income and corporate income tax on other service income. The tax exemptions that PAGCOR receives through its charter inure to the benefit of its third party contractors like Bloomberry.

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    This case concerns whether Bloomberry Resorts, as a licensee of PAGCOR for casino operations, must pay corporate income tax in addition to the 5% franchise tax on gross income. The Supreme Court had previously ruled that PAGCOR pays the franchise tax on gaming income and corporate income tax on other service income. Following this precedent, the Court ruled that Bloomberry, through its contractual relationship with PAGCOR, is similarly only liable for the 5% franchise tax on gaming income and corporate income tax on other service income. The tax exemptions that PAGCOR receives through its charter inure to the benefit of its third party contractors like Bloomberry.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    111 views1 page

    04 Bloomberry v. BIR

    Uploaded by

    CP Lugo
    This case concerns whether Bloomberry Resorts, as a licensee of PAGCOR for casino operations, must pay corporate income tax in addition to the 5% franchise tax on gross income. The Supreme Court had previously ruled that PAGCOR pays the franchise tax on gaming income and corporate income tax on other service income. Following this precedent, the Court ruled that Bloomberry, through its contractual relationship with PAGCOR, is similarly only liable for the 5% franchise tax on gaming income and corporate income tax on other service income. The tax exemptions that PAGCOR receives through its charter inure to the benefit of its third party contractors like Bloomberry.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    of 1

    Bloomberry Resorts and Hotels v.

    BIR o Because of the express provision in PD 1869, the corporate income tax
    Exempt Corps and Preferential rates| 10 Aug 2016| Perez, J exemption in Sec. 27(c) of the NIRC before it was repealed by RA 9337
    only refer to income from operations of related services;
    Nature of Case: Certiorari and Prohibition, Rule 65 o RA 9337 therefore only subjected PAGOCR to the payment of corporate
    Digest maker: Banogon income tax from income derived from related services and that for
    SUMMARY: This case concerns whether or not Bloomberry Resorts and Hotels, as income from gaming operations, PAGCOR is still only liable for the 5%
    a contractee or licensee of PAGCOR, is exempt from paying corporate income tax franchise tax on its gross income
    and is only liable for 5% franchise tax on its gross income. After the passage into o Even considering there was a conflict between RA 9337 and PD 1869,
    law of R.A. 9337 that amended Sec. 27(C) of the NIRC, excluding PAGCOR from the statutory construction principle of lex specialis derogate legi generali;
    the enumeration of GOCCs exempt from paying corporate income tax, the CIR PD 1869, as the special law, prevails over RA 9337, the general law.
    issued Rev. Mem. Circ. 33-2013 that subjected contractees and licensees of ● Under Sec. 13(b) of PD 1869, the privileges on exemptions accorded to PAGCOR
    PAGCOR to the payment of corporate income tax and the 5% franchise tax. SC inure to the benefit of third persons with whom PAGCOR has any contractual
    ruled that, following its ruling in PAGCOR v. BIR(2011) that said that PAGCOR is relationship for the conduct of casinos under the Franchise.
    to pay corporate income tax from other services related to gaming operations, ● For the same reasons that made us conclude in the 10 December 2014 Decision of
    with income from gaming operations subject to the 5% franchise tax only, and that the Court sitting En Banc in G.R. No. 215427 that PAGCOR is subject to
    such privilege inures to the benefit of third parties with contractual relationship corporate income tax for "other related services", we find it logical that its
    with PAGCOR for casino operation under the PAGCOR Charter, then third contractees and licensees shall likewise pay corporate income tax for income
    parties such as Bloomberry is only liable to pay the franchise tax for income derived from such "related services."
    derived from gaming operations and corporate income tax for other services
    related to gaming operations. RULING: WHEREFORE, the petition is GRANTED. Accordingly, respondent Bureau of
    Internal Revenue, represented by Commissioner Kim S. Jacinto-Henares is hereby
    DOCTRINE: Third parties that have a contractual relationship with PAGCOR for ORDERED to CEASE AND DESIST from implementing Revenue Memorandum Circular
    the operation of casinos are subject to the payment of a 5% franchise tax on its No. 33-2013 insofar as it imposes corporate income tax on petitioner Bloomberry Resorts and
    gross income derived from gaming operations and corporate income tax for Hotels, Inc.'s income derived from its gaming operations.
    income derived from other services related to gaming operations.
    Sec. 13. Exemptions. –
    ● Petitioner was granted by PAGCOR on April 8, 2009, a provisional license to (2) Income and other taxes. — (a) Franchise Holder: No tax of any kind or form,
    establish and operate a resort and casino complex at the Entertainment City income or otherwise, as well as fees, charges or levies of whatever nature, whether
    project site of PAGCOR. Petitioner and parent company own Solaire Resort & National or Local, shall be assessed and collected under this Franchise from the
    Casino, and as a licensee of PAGCOR, Bloomberry only pays PAGCOR a 5% Corporation; nor shall any form of tax or charge attach in any way to the earnings of
    franchise tax on its gross income, in lieu of all taxes, under the PAGCOR Charter the Corporation, except a Franchise Tax of 5% of the gross revenue or earnings
    (PD 1869). derived by the Corporation from its operation under this Franchise. Such tax shall be
    ● After the taking effect of RA 9337, which amended Sec. 27(C) of the NIRC, due and payable quarterly to the National Government and shall be in lieu of all
    removing PAGCOR from the enumeration of GOCCs exempt from paying kinds of taxes, levies, fees or assessments of any kind, nature or description, levied,
    corporate income tax, the CIR issued Rev. Mem. Circ. 33-2013 that subjected established or collected by any municipal, provincial, or national government
    PAGCOR and its contractees and licensees of PAGCOR to the payment of authority.
    corporate income tax in addition the 5% franchise tax
    ● Bloomberry therefore filed this petition for certiorari and prohibition assailing (b) Others: The exemptions herein granted for earnings derived from the
    the validity of Rev. Mem. Circ. 33-2013. operations conducted under the franchise specifically from the payment of any
    tax, income or otherwise, as well as any form of charges, fees or levies, shall inure
    W/N contractees and licensees of PAGCOR in the operation of gaming services are to the benefit of and extend to corporation(s), association(s), agency(ies), or
    subject to the payment of corporate income tax in addition to the 5% franchise tax on individual(s) with whom the Corporation or operator has any contractual
    its gross income? NO. relationship in connection with the operations of the casino(s) authorized to be
    ● It must be remembered that in the 2011 case of PAGCOR v. CIR, it was held that: conducted under this Franchise and to those receiving compensation or other
    o Under PD 1869, PAGCOR was only subject to the payment of 5% remuneration from the Corporation or operator as a result of essential facilities
    franchise tax from its gross income; furnished and/or technical services rendered to the Corporation or operator.

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