MANILA, Philippines - BDO Unibank Inc. has signed a definitive agreement for the acquisition of the trust business of Deutsche Bank AG Manila Branch comprising trust, fiduciary and investment management activities.
In a statement, the main banking arm of the SM Group said it is now in the process of securing approvals for the purchase.
“The transaction is still subject to closing conditions and applicable regulatory approvals,” it said.
As this developed, the Supreme Court (SC) recently upheld with finality its earlier decision granting tax treaty relief to the local Deutsche Bank unit.
In its 11-page decision, the SC said, the landmark decision would reinforce the need for the Philippines to honor its international agreements.
The resolution of the case – Deutsche Bank AG Manila Branch vs. Bureau of Internal Revenue (BIR) – issued by the First Division of the High Court was dated Oct. 23, 2013 but was delivered only last Jan. 29.
In its earlier decision on Aug. 28, 2013 and subject of the appeal from the BIR, the SC ordered the “Commissioner of Internal Revenue to refund or issue a tax credit certificate in favor of petitioner Deutsche Bank AG Manila Branch the amount of (P22.56 million).”
“Considering that the basic issues have already been passed upon and that there is no substantial argument to warrant a modification of this Court’s decision, the Court resolves to deny reconsideration with finality,” the SC said.
The SC’s resolution which denied the motion for reconsideration filed by the BIR, noted that the bank is still entitled to tax treaty relief despite the late filing of its application.
Deutsche Bank failed to follow the procedure under Revenue Memorandum Order (RMO) 01-2000 requiring that an application to claim tax treaty benefits be filed at least 15 days prior to a transaction.
The High Court, in its decision, also nullified a provision in RMO 072-2010 which contends that failure to file a tax treaty relief application within the prescribed period will result in its disqualification.