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    Howden Vs CIR, GR L-19392 (April 14, 1965)

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    Rem Ramirez
    Alexander Howden & Co., a British corporation, represented 32 British insurance companies that entered into reinsurance contracts with Commonwealth Insurance Co., a domestic Philippine corporation, in 1950. Under the contracts, Commonwealth ceded portions of premiums from risks it underwrote in the Philippines to the British insurers. Commonwealth remitted P798k in reinsurance premiums to Howden in 1951. Howden filed an income tax return and paid P66k in taxes. Howden later filed a claim for refund, which was denied. The issues on appeal are whether the ceded premiums received by the foreign reinsurers are subject to income tax, and if so, whether tax can be withheld pursuant to the relevant code sections.

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    Howden Vs CIR, GR L-19392 (April 14, 1965)

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    Rem Ramirez
    43 views1 page
    Alexander Howden & Co., a British corporation, represented 32 British insurance companies that entered into reinsurance contracts with Commonwealth Insurance Co., a domestic Philippine corporation, in 1950. Under the contracts, Commonwealth ceded portions of premiums from risks it underwrote in the Philippines to the British insurers. Commonwealth remitted P798k in reinsurance premiums to Howden in 1951. Howden filed an income tax return and paid P66k in taxes. Howden later filed a claim for refund, which was denied. The issues on appeal are whether the ceded premiums received by the foreign reinsurers are subject to income tax, and if so, whether tax can be withheld pursuant to the relevant code sections.

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    Howden

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    Alexander Howden & Co., a British corporation, represented 32 British insurance companies that entered into reinsurance contracts with Commonwealth Insurance Co., a domestic Philippine corporation, in 1950. Under the contracts, Commonwealth ceded portions of premiums from risks it underwrote in the Philippines to the British insurers. Commonwealth remitted P798k in reinsurance premiums to Howden in 1951. Howden filed an income tax return and paid P66k in taxes. Howden later filed a claim for refund, which was denied. The issues on appeal are whether the ceded premiums received by the foreign reinsurers are subject to income tax, and if so, whether tax can be withheld pursuant to the relevant code sections.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    43 views1 page

    Howden Vs CIR, GR L-19392 (April 14, 1965)

    Uploaded by

    Rem Ramirez
    Alexander Howden & Co., a British corporation, represented 32 British insurance companies that entered into reinsurance contracts with Commonwealth Insurance Co., a domestic Philippine corporation, in 1950. Under the contracts, Commonwealth ceded portions of premiums from risks it underwrote in the Philippines to the British insurers. Commonwealth remitted P798k in reinsurance premiums to Howden in 1951. Howden filed an income tax return and paid P66k in taxes. Howden later filed a claim for refund, which was denied. The issues on appeal are whether the ceded premiums received by the foreign reinsurers are subject to income tax, and if so, whether tax can be withheld pursuant to the relevant code sections.

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    Taxation - Sec 42, NIRC : Case #

    Howden vs CIR, GR L-19392 (April 14, 1965)

    ALEXANDER HOWDEN & CO., LTD., H. G. CHESTER & OTHERS, ET AL., petitioners, vs. THE
    COLLECTOR (NOW COMMISSIONER) Of INTERNAL REVENUE, respondent.

    In 1950 the Commonwealth Insurance Co., a domestic corporation, entered into reinsurance contracts
    with 32 British insurance companies not engaged in trade or business in the Philippines, whereby the
    former agreed to cede to them a portion of the premiums on insurances on fire, marine and other risks it
    has underwritten in the Philippines.

    Alexander Howden & Co., Ltd., also a British corporation not engaged in business in this country,
    represented the aforesaid British insurance companies.

    The reinsurance contracts were prepared and signed by the foreign reinsurers in England and sent to
    Manila where Commonwealth Insurance Co. signed them.

    Commonwealth, in 1951, remitted P798k to Howden as reinsurance premiums.

    In behalf of Howden, Commonwealth filed in April 1952 an income tax return declaring the
    sum of P798k as Howden's gross income for CY 1951 with P66k income tax.

    On May 12, 1954, within the 2-year period provided for by law, Howden filed with BIR a claim for
    refund.
    o

    A ruling of the CIR (Dec 8, 1953) was invoked, stating that it exempted from withholding tax
    reinsurance premiums received from domestic insurance companies by foreign insurance
    companies not authorized to do business in the Philippines.

    On Nov 24, 1961 the Tax Court denied the claim.

    Plaintiffs have appealed, thereby squarely raising the following issues:

    1.
    1. Are portions of premiums earned from insurances locally underwritten by a domestic
    corporation, ceded to and received by non-resident foreign reinsurance companies, thru a nonresident foreign insurance broker, pursuant to reinsurance contracts signed by the reinsurers
    abroad but signed by the domestic corporation in the Philippines, subject to income tax or not?
    2. If subject thereto, may or may not the income tax on reinsurance premiums be withheld
    pursuant to Sections 53 and 54 of the National Internal Revenue Code?

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