Supreme Court clarifies which parties are criminally liable in cases of company tax code violations

August 5, 2022

Under article 253(d) of the National Internal Revenue Code (NIRC), when an association, partnership or corporation commits an act or omission that violates the Tax Code, the penalty "shall be imposed on the partner, president, general manager, branch manager, treasurer, officer-in-charge, and the employees responsible for the violation". This means that any of the persons enumerated may be criminally prosecuted for the corporation or partnership's criminal act or omission under the code.

In its 6 October 2021 decision in Genoveva S Suarez v People of the Philippines and the Bureau of Internal Revenue, the Supreme Court further clarified and explained the circumstances under which the persons enumerated in article 253(d) of the NIRC may be criminally prosecuted for criminal acts or omissions of their corporation or partnership. In Suarez, the corporate officer involved was the executive vice president of the erring corporation, which is not among the officers specifically enumerated under article 253(d). She was, however, prosecuted by the Bureau of Internal Revenue (BIR) for writing a letter to the BIR on behalf of the corporation, in which she offered to settle the corporation's tax liabilities. For that reason, the BIR identified her as an "employee responsible for the violation".

Read the full article on Lexology.