BIR asks gov’t prosecutors to charge Golden Donuts Inc for tax evasion

February 23, 2018

The Bureau of Internal Revenue (BIR) on Friday has asked government prosecutors to go after officials of the local franchise holder of Dunkin Donuts owned by the Prieto family for alleged tax evasion amounting to P1.18 billion.

In a complaint filed with the justice department, the BIR accused Golden Donuts Inc., exclusive franchisor and license grantee of the American donut company Dunkin Donuts of America Inc. (DDAI), of violating the National Internal Revenue Code (NIRC) for alleged willful attempt to evade and deliberate failure to supply correct and accurate information.

Impleaded as respondents were top Golden Donuts Inc executives: president Walter Spakowski, treasurer Miguel Prieto, chief financial officer Pedro Paraiso and vice president for finance and administration Jocelyn Santos.

The BIR alleged Golden Donuts Inc is liable for non-payment of P1.118 billion in income tax, value added tax (VAT) and expanded withholding tax - including surcharges and interests - for the year 2007.

BIR deputy commissioner for legal and inspection group Marissa Cabreros said they filed the charges after investigation showed Golden Donuts Inc used a "scheme" to significantly lower its tax payment and also substantially under-declared its sales.

“Through this scheme, GDI was able to claim the altered invoices as deductions from its income and as input VAT credits in the amount of P99, 297, 036.47 and P11, 915,644.38, respectively,” the BIR said.

The BIR alleged that Golden Donuts Inc under-declared its sales by 39 percent as well as its royalty income.

"The under-declaration of sales was noted by comparing the donut sales declared by GDI vis-a-vis sales derived from the grossed-up value of franchise fee paid to DDAI," Cabreros said. DMS