Dunkin Donuts franchise ordered to pay P64M in tax deficiencies

MANILA, Philippines — The Court of Tax Appeals has ordered Golden Donuts Inc., the company that operates Dunkin' Donuts in the Philippines, to pay more than P64 million in unpaid taxes.

In a decision made public Monday, the appellate tax court partially granted the company's 2020 petition to nullify and cancel an assessment for income tax, sales tax and value-added tax among other levies for 2010.

The disputed amount was P159.3 million of tax deficiencies, which the Bureau of Internal Revenue ordered Golden Donuts to pay in July 2020.

The court reduced the amount to P41.8 million, plus a 25% penalty, 20% interest on the unpaid amount and 20% interest for late payment.

The court partly upheld the tax assessments for income tax, sales tax and documentary stamp tax for 2010. The assessment for withholding tax, meanwhile, is thrown out.

The court also ordered Golden Donuts to pay P23 million in interest, calculated at 12% per year since March 2015.

In 2018, the Bureau of Internal Revenue filed a complaint against Golden Donuts with the Department of Justice, alleging the company had not paid P1.12 billion in income tax, sales tax and withholding tax as well as surcharges and interest for 2007.

Golden Donuts petitioned the court in 2020 to cancel the tax assessment, arguing it was invalid and lacked factual and legal basis. — Ian Laqui