The BIR last March 2 claimed that Rappler had profited from the sale of Philippine Depositary Receipts (PDRs) to two foreign entities in 2015 and that it should pay income and value added tax (VAT) for the transaction.
He added that Rappler sold the PDRs to Omidyar Network and North Base Media in 2015. But Rappler did not buy back the PDRs.
As defined in the tax code, a dealer in securities is “a merchant of stocks or securities, whether an individual, partnership or corporation, with an established place of business, regularly engaged in the purchase of securities and the resale thereof to customers; that is, one who, as a merchant, buys securities and re-sells them to customers with a view to the gains and profits that may be derived therefrom.”Lim, senior partner at Angara Abello Concepcion Regala and Cruz Law Firm, also argued that the capital raised from issued PDRs are not yet booked by Rappler as income as of now.
“There is no income taxable event, so to speak. When you raise capital, that’s not income,” Lim said in the ANC interview.
Rappler “definitely did not” evade any tax obligations, he added.
The BIR complaint comes 8 weeks after the Securities and Exchange Commission (SEC) decided to revoke Rappler’s incorporation papers and void the PDRs issued to Omidyar for allegedly violating a Constitutional rule.
The National Bureau of Investigation (NBI) last March 2 also recommended to the Department of Justice (DOJ) that Rappler should be prosecuted for cyber libel over the same story published 5 years ago.