GR 178797; (August, 2009) (Digest)
G.R. No. 178797 ; August 4, 2009
METROPOLITAN BANK AND TRUST CO., Petitioner, vs. COMMISSIONER OF INTERNAL REVENUE, Respondent.
FACTS
Petitioner Metropolitan Bank and Trust Co. (Metrobank) offers a Universal Savings Account (UNISA), a special savings account evidenced by a passbook that provides a higher interest rate if a substantial minimum daily balance is maintained. For the taxable year 1999, the Bureau of Internal Revenue (BIR) assessed Metrobank for deficiency Documentary Stamp Tax (DST) on its UNISA deposits under Section 180 of the National Internal Revenue Code (NIRC), amounting to over Php 477 million including surcharges and interest. Metrobank protested, arguing that UNISA, as a savings account, was not subject to DST. The Commissioner of Internal Revenue denied the protest, a decision affirmed by the Court of Tax Appeals (CTA) Second Division and subsequently by the CTA en banc.
ISSUE
Whether Metrobank’s Universal Savings Account (UNISA) was subject to Documentary Stamp Tax (DST) for the year 1999 under Section 180 of the National Internal Revenue Code, prior to its amendment by Republic Act No. 9243 .
RULING
Yes. The Supreme Court affirmed the CTA en banc and held that the UNISA was subject to DST. The legal logic rests on the clear language of Section 180 of the NIRC of 1997, which imposed a DST on “all bills of exchange, drafts, instruments, and promissory notes… for the payment of money… and all certificates of deposits drawing interest.” The Court, citing its prior rulings in International Exchange Bank v. CIR and Banco de Oro Universal Bank v. CIR, clarified that a “certificate of deposit” under the tax law is not limited to a formal certificate but includes any written acknowledgment of a deposit of money, withdrawable on demand, that earns interest. A passbook representing a savings account, including special accounts like UNISA, constitutes such an acknowledgment. The fact that the UNISA had specific conditions for earning preferential interest did not alter its fundamental nature as an interest-bearing deposit account evidenced by a written instrument. The amendment introduced by R.A. No. 9243 , which explicitly exempted certain savings and time deposits, was a subsequent legislative act that created a new exemption; it did not imply that such deposits were already exempt prior to the amendment. Therefore, for the taxable year 1999, Metrobank’s UNISA deposits fell squarely within the ambit of Section 180 and were properly subject to DST.