Philippines sues Maybank affiliate for tax evasion

Philmay Property, Inc being sued for US$4.2 million in unpaid taxes.

The v (BIR) claims Philmay accumulated a US$4.2 million tax deficiency, including surcharge and interest, consisting of some US$925,000 in income tax deficiency; US$1.8 millionin value-added tax deficiencies; US$382,000 in documentary stamp tax deficiency and US$1.1 million in expanded withholding tax.

Criminal charges were filed against Philmay president Ong Seet-Joon, treasurer Atty. Rafael Morales, corporate secretary Atty. Jonathan Ong, sales and marketing department head Benjamin Lira and remedial accounting associate Michelle Reyes. Philmay has refused to comment on the case.

Philmay was among the real estate companies that were allowed to have foreign equity for a limited period under the Philippines’ Special Purpose Vehicle Law to help banks unload foreclosed assets after the 1997 Asian financial crisis.

The BIR said Philmay declared a US$1.2 loss on its annual income tax return for the fiscal year ending June 30, 2009. It said three of its revenue officers initially came up with a tax assessment of US$1.27 million that was suspiciously reduced to only US$10,000.

The BIR also filed criminal cases against the three revenue officers who first investigated Philmay’s books and records.

Philmay is 39.99% owned by Malayan Banking Berhad, that also owns 99.99 percent of Maybank Philippines, said the BIR