MANILA - The Court of Tax Appeals has approved the P17.837 million tax compromise agreement between the Bureau of Internal Revenue and Sarimanok News Network, Inc., now ABS-CBN News Channel, for taxable year 2009.

The CTA Special 1st Division approved the agreement as it granted the joint motion for approval of compromise agreement of the two parties, it said in a judgment promulgated on July 8.

With the approval of the compromise agreement, the court said the tax case was deemed “closed and terminated.”

The joint motion was filed on Sept. 3, 2018 by the two parties, represented by former SNN CFO Rolando Valdueza and BIR Commissioner Cesar Dulay.

“The parties are hereby enjoined to faithfully comply with all the terms and conditions of the aforesaid compromise agreement,” the court said in the judgment signed by Presiding Justice Roman Del Rosario and Associate Justices Erlinda Uy and Cielito Mindaro-Grulla.

The court noted that the internal revenue tax deficiencies of SNN in the final assessment notice dated April 10, 2014 amounted to P88.314 million while the final decision on disputed assessment after SNN filed a protest letter was P97.079 million.

After lodging the case before the CTA, a judicial compromise amount of P17.837 million was reached, which includes 40 percent of the basic income tax, basic value added tax and documentary stamp as well as 100 percent of the basic expanded withholding tax and withholding tax on compensation.

The court said that under the National Internal Revenue Code of 1997, the minimum compromise rate is 40 percent of the basic assessed tax.

“A compromise is a contract whereby parties, by making reciprocal concessions, avoid litigation or put an end to one already commenced. It is an accepted and desirable practice in court of law and administrative tribunals,” the court said.