Court frees Hard Rock Cafe from P28-M taxes
It all boiled down on proving that the music bistro is not a cabaret.
Hard Rock Cafe scored a win before the Court of Tax Appeals (CTA) after justices ordered the Bureau of Internal Revenue (BIR) to drop the P28-million tax case it lodged against the Makati-based hub.
In a decision penned by Associate Justice Esperanza Fabon-Victorino, the court freed Hard Rock from supposed deficiencies in percentage tax demanded by BIR representing receipts for tax year 2013.
The BIR insisted on collecting an 18 percent amusement tax on Hard Rock as they classify it as a night and day club and cabaret. But the court ruled that it wasn’t the main business model of Hard Rock at all.
“The evidence presented show that the actual business activities of petitioner are those of a restaurant, with the entertainment usually by the performances of live bands, which is merely incidental to its main business to encourage or attract customers with the end in view of promoting sales of food and drinks served in the restaurant,” the CTA was quoted as saying in a Business World news report.