Practice question
A withholding agent properly recovers taxes erroneously withheld from the principal taxpayer. Under Smart, what corresponding obligation accompanies that recovery?
- Keep the money as an automatic bonus
- Pay it to every competitor
- Treat the principal’s right as extinguished
- Donate it to an unrelated company
- Return the recovered amount to the principal taxpayer as required by the agency relationship
Legal references
- CIR v. Smart Communication, G.R. 179045-46, August 25, 2010: https://elibrary.judiciary.gov.ph/thebookshelf/showdocs/1/54268
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