Union Cement Wins P2.68-M Tax Refund From Taguig City, CTA Rules

The Court of Tax Appeals (CTA) has ordered the City of Taguig to refund P2.68 million in local business taxes to Union Cement Holdings Corp., ruling that the city improperly imposed taxes on the company’s dividend income as a holding company, according to BusinessWorld .

In a decision promulgated on June 4, the CTA Special Third Division granted Union Cement’s petition, finding that the company, as a holding firm, should not have been subjected to local business tax on dividends received from its subsidiaries. The tax refund covers payments made for the taxable year 2017.

The ruling clarifies the tax treatment of holding companies under the Local Government Code, which exempts dividend income from local business tax. Union Cement, a publicly listed firm, had argued that Taguig’s imposition violated this provision, leading to the refund order.