MANILA - News website Rappler did not have to pay income tax or value added tax for the sale of its Philippine depositary receipts or PDRs, contrary to allegations made in a tax evasion complaint, its lawyer said Tuesday.
The documentary stamp tax on the PDRs was "all they (Rappler) had to pay," Rappler counsel Francis Lim told ANC's Headstart.
"When you issue capital, that’s not income...You pay VAT only when it’s in the ordinary course of your business," Lim said.
The PDR's sold to a fund led by eBay founder Pierre Omidyar could not be considered income since these were not converted to shares in Rappler, Lim said.
The BIR filed a tax evasion complaint against the holding company of Rappler and 2 of its officials, accusing it of having P133.84 million in unpaid taxes over the sale of P181.67 million in PDRs to 2 foreign firms.
The Securities and Exchange Commission earlier revoked Rappler's incorporation papers because of the same PDR sale, which supposedly violated constitutional restrictions on foreign ownership. Rappler has appealed this case.