The earnings from junket operations – the practice of inviting high rollers to the casinos and place wagers – is now subject to a 30 percent corporate income tax in the Philippines.
The decision was made by the Court of Tax Appeals (CTA). It came as the court rejected the petition of Prime Investment Korea (PIK). The company was seeking a refund of the income tax that was deducted at source.
The company contested that it has been giving a five percent franchise tax which was for all other charges including the income tax and cited the Presidential Decree 1869.
The company had already paid P24.3 million from its earnings of P394 million to the Bureau of Internal Revenue (BIR) from junket operations in 2014.
The court ruled that the Franchise tax applies only to the regular casino operations and not Junket operation.
The court said that junket operations or the practice of bringing in high-rollers to wager in the country are not classified as regular gambling operations and therefore they do qualify for a higher corporate income tax.
It is a common practice of the casino and gambling operators to bring in high-rollers from across the world to their gambling venues. The casinos often allow them exclusive perks including stays, private jets, and many other different luxurious amenities.