BIR files tax evasion charges worth P100M

MANILA, Philippines - The Bureau of Internal Revenue (BIR) filed yesterday tax evasion charges worth P100.4 million against two real estate companies.

BIR Commissioner Kim Henares led the filing at the Department of Justice (DOJ) against Virkar Realty Corp. and Woodheights Realty and Development Corp. and their respective corporate officers.

According to Henares, Virkar, formerly Kronbi Realty Corp. sold in 2008 a 927-square meter commercial property along Jupiter St. in Makati City for P55.62 million.

The company paid the six percent expanded withholding tax on the sale but did not declare it as part of its gross sales for 2008.

“As a realty company, Virkar Realty Corp. should have declared the land as an ordinary asset subject to the regular 32-percent income tax rate and the 12-percent value added tax,” the BIR said in the case filed before the Justice department.

The agency said that in its income tax return (ITR) and financial statement, Virkar made it appear the property is a capital asset subject to the six-percent capital gains tax.

The BIR named as respondents Virkar’s corporate officers Nora Bitong and Reynaldo Bitong.

Based on the BIR assessment, the real estate company owes the agency least P83.9 million in income and value added taxes for the sale of the property.

According to the BIR complaint, the Bitongs are being charged for two counts of attempting to evade taxes, one count of failing to supply correct and accurate information on its value added tax (VAT) return and one count of failing to supply correct and accurate information in its income tax return.

Aside from Virkar, the BIR also filed a criminal complaint yesterday against Woodheights and its corporate officers Edwin Gardiola, Judy Gardiola, Kim Ann Gardiola, Katrina Mara Gardiola and Donna Nicanor for attempting to evade taxes and deliberate failure to file income tax returns.

The charge stemmed from Woodheights’ purchase of three Lexus vehicles worth P20.834 million in 2009 from Lexus Manila Inc. When the BIR checked Woodheights’ tax returns for 2008 to 2010, it learned that the company did not declare any income or paid taxes for the period.

Henares said the BIR is seeking P16.5 million in taxes from Woodheights representing P11.77 million in income tax and P4.75 million in VAT.

Under heavy pressure to raise P1.066 trillion this year, the BIR continues to file cases against tax evaders under its Run After the Tax Evaders (RATE) program.