Junket operators subject to corporate income tax, says court

A Philippines tax court has denied a local junket operator from claiming an income tax refund, which it said, is reserved only for casino operators, local media reports.

Prime Investment Korea (PIK), the junket operator in question, argued that it has been remitting the five percent franchise tax, which was in lieu of other taxes like income as provided under Presidential Decree 1869.

However, the Court of Tax Appeals (CTA) explained that franchise tax covered only earnings generated from regular casino operations, not junket activity – which has been classed as a “related service” – and thus subject to the higher corporate income tax.

The company has already paid P24.3 million from its earnings of P394 million to the Bureau of Internal Revenue (BIR) from junket operations in 2014.