Practice question
A Philippine payor, legally responsible for withholding, erroneously withholds and remits tax from a foreign service provider. The principal has filed no competing refund claim. The payor satisfies the other requirements, but the CIR argues it lacks standing solely because the parties are unrelated companies. Following Smart, which answer is best?
- Lack of corporate affiliation alone does not defeat the withholding agent’s recognized legal interest
- Only a wholly owned subsidiary can ever qualify
- Economic burden is the agent’s only possible basis
- Unrelated companies can never have withholding duties
- The agent automatically owns the principal’s tax recovery
Legal references
- CIR v. Smart Communication, G.R. 179045-46, August 25, 2010: https://elibrary.judiciary.gov.ph/thebookshelf/showdocs/1/54268
Answer this question in flashcards to review your response and continue practicing.