‘UNIVERSITY OF THE PHILIPPINES COLLEGE OF LAW SYLLABUS TAX2 2né SEM, A.Y. 2014-2015 Prof. Dina D. Lucenario Section IV-E Mondays, 6:00 - Primary References/Sources The Local Government Code (RA 7160), as amended [LGC] The National Internal Revenue Code (RA 8424), as amended [NIRC] ‘The Tariff and Customs Code (PD 1464), amended [TCC] Republic Act No. 1125, as amended [RA 1125] PART A: LOCAL TAXATION AND REAL PROPERTY TAXATION L.LocaL Taxation A. Taxing Powers of LGUs 1. Legal Basis = Secs, 128-196, LGC See. 5, Art. X, 1987 Constitution - Philippine Petroleum v. Municipality of Piilia, 198 SCRA 82 2. Power to Create Sources of Fund ~See. 129, LGC = MCIAA vs, Marcos, 261 SCRA 667 - NPC v. City of Cabanatuan, 401 SCRA 259 - City of San Pablo v. Reyes, 305 SCRA 353 = Iloilo Bottlers, Inc. v. City of Iloilo, 164 SCRA 607 3, Fundamental Principles ~ Secs, 130 and 132, LGC - Pepsi-Cola Bottling Co. vs. City of Cabanatuan, 24 SCRA 789 - City of Baguio v. De Leon, 25 SCRA 938 - Association of Customs Brokers v. Municipal Board, 98 Phil 107, 1053, - Ormoc Sugar Company v, Ormoc City, 22 SCRA 603 - Gaston v. Republic Planters Bank, 158 SCRA 626 - Progressive Development Corp. v. Quezon City, 172 SCRA 629 - Ancheta v. Sison, 130 SCRA 654 - Matalin Coconut Company v. Malabang, 143 SCRA 404 - Villanueva v. City of lloilo, 26 SCRA 578 - Ericsson Telecommunications v. City of Pasig, 538 SCRA 99 -Ormoc Sugar Company, Inc. v. Municipal Board of Ormoe, 20 SCRA 739~ Bagatsing v. Ramirez, 74 SCRA 306 ~ Asiatic Integrated Corporation v. Alikpala, 67 SCRA 60 4. Common Limitations = Secs. 133, LGC - BLGF Opinion dated Novernber 26, 2007 ~ Progressive Development Corporation vs. Quezon City, G.R. No. 36081, April 24, 1989 (172 SCRA 629) ~ Philippine Petroleum Corporation vs. Municipality of Pililia, 198 SCRA 82 ~ Pepsi-Cola Bottling Company vs. Municipality of Tanauan, 69 SCRA 460 ~ People vs, Nazario, 165 SCRA 186 ~ First Philippine Industrial Corporation vs, Court of Appeals, 300 SCRA 661 ~ Land Transportation Office vs. City of Butuan, 322 SCRA 805 ~ Mactan Cebu International Airport Authority vs. Marcos, 261 SCRA 667 ~ Manila International Airport Authority vs. Court of Appeals and City of Paranaque, 495 SCRA 591 B. Levy of Tax; Tax Ordinance ~ Secs. 186-193, LGC 1. Procedure for Approval - Drilon v. Lim, GR 112497, August 4, 1994 2. Publication and Furnishing of Copies - Figuerres vs. Court of Appeals, GR. No. 119172, March 25, 1999 (805 SCRA 206) B. Local Taxing Authorities and Scope of Taxing Power 1. Provinces a. Real Property Transfer Tax ~See. 135, LGC b, Tax on Printing and Publication ~See. 136, LGC ¢. Franchise Tax ~See. 137, LGC - BLGF Opinion dated September 11, 2007 - City Government of San Pablo v. Reyes, GR 127708, March 25, 1999 ~ Province of Misamis Oriental vs. Cagayan Electric Power and Light Company, Inc, 181 SCRA 38 - National Power Corporation vs. City of Cabanatuan, 401 SCRA 259 - City Government of San Pablo, Laguna vs. Reyes, 305 SCRA 353, = Manila Electric Company vs. Province of Laguna, 306 SCRA 750. - PLDT vs. City of Davao, 363 SCRA 522 - Palma Devt v. Municipality of Malangas, GR 152492, October 16, 2003 ~ PLDT v. Province of Laguna, GR 151899, August 16, 2005 - Smart Communications v. City of Makati, October 13, 2004 - NPC v. Province of Isabela, GR 165827, June 16, 2006 . Tax on Quarry Resources ~Sec. 138, LGC. Professional Tax ~Sec. 139, LGC £, Amusement Tax = Sec. 140, LGC ~ Sec, 125, NIRC ~ Philippine Basketball Association vs. Court of Appeals, 337 SCRA 358 g. Tax on Delivery Trucks See. 141, LGC 2. Municipalities a. Taxes, fees and charges not otherwise levied by provinces ~Sec. 142, LGC b, Local Business Taxes = Secs, 143-146, LGC ~ BLGF Opinion dated June 13, 2006 - BLGF Opinion dated December 11, 2002 = BLGF Opinion dated August 5, 2002 ~ BLGF Opinion dated August 1, 2005 ~ BLGF Opinion dated January 17 and 29, 2002 ~ BLGF Opinion dated June 11, 2008 ~ BLGF Opinion dated November 5, 2007 - BLGF Opinion dated September 7, 2007 - BLGF Opinion dated September 5, 2007 ~ Luz Yamane v. BA Lepanto Condominium, GR 154993, October 25, 2005 ~ Steniel Mindanao Packaging v. City Treasurer of Davao, CTA AC No. 39, November 27, 2008 ~ Kepco llijan Corporation v. City of Makati, CTA AC No. 30, September 5, 2008, ~ Honest Service Providers v. City of Makati, CTA AC No. 40, May 29, 2008 = Petron v, Mayor Tiangco, GR 158881, April 16, 2008 ~ Batangas City v. Pilipinas Shell, CTA EB Case No. 350, January 22, 2009 - Lindberg Philippines v. City of Makati, CTA EB Case No. 349, Novernber 11, 2008. - City of Las Pinas v. Sealed Air, CTA EB Case No. 280, March 12, 2008 lloilo Bottlers, Inc. vs. Iloilo City, 164 SCRA 607 ~ Manila Trading & Supply Co. vs. City of Manila, 105 Phil 581 = Central Azucarera Don Pedro vs, City of Manila, 97 Phil o7 ~ Caltex Philippines, Inc. vs. City of Manila, 28 SCRA 840 ~ City of Manila vs, Manila Remnant Co,, Inc., 100 Phil 796 ' Ericsson Telecommunications, Inc. vs. City of Pasig, 538 SCRA 99 ' ¢. Fees and Charges ~Sec. 147, LGC - BLGF Opinion dated September 7, 2007 . Fees for sealing and licensing of weights and measures ~Sec. 148, LGC . Fishery rentals, fees and charges= Sec. 149, LGC £, Tax Situs ~See. 150, LGC - Philippine Match Co. v. City of Cebu, 81 SCRA 99 - BLGF Opinion dated July 13, 2004 3. Cities ‘a Scope of taxing powers = See. 151, LGC -Estanislao v. Costales, 196 SCRA 853 - BLGF Opinion dated July 13, 2004 4. Barangays a, scope of taxing powers ~See. 152, LGC 5, Common revenue-raising powers = Secs, 153-155, LGC a, service fees and charges ». public utility charges «. toll fees and charges C. Community Tax 1 Persons Liable = Secs, 157-158, LGC 2. Exemptions/Optional Secs. 159 and 162, LGC 3, Payment/ Penalties/ Certificate ~ Sees. 160-161, 163, LGC D. Tax Exemption Privileges = Quezon City v, ABS-CBN, GR 166408, October 6, 2008 1.Grant - PLDT vs. City of Davao, 963 SCRA 522 - NAPOCOR vs. City of Cabanatuan, 401 SCRA 259 + PLDT vs. Province of Laguna, 467 SCRA 93 2. Withdrawal = Mactan Cebu International Airport Authority vs, Marcos, 261 SCRA 667 = City Government of San Pablo, Laguna vs. Reyes, 305 SCRA 353 = Manila Electric Company vs. Province of Laguna, 306 SCRA 750 E Collection of Local Taxes 1. Tax Period and Manner of Payment 2. Accrual = Sees, 165-171, LGC - Mobil Philippines v. City Treasurer of Makati, GR 154092, july 14, 2005 3. Collection of Local Taxes ~ Sees, 172-185, LGC a. Assessment ’. Payment c, Reduction/ Discount 4, Surcharges and Penalties 5. Interest 6. Examination of Books of Accounts 7. Government Remedies ~ Sees. 172-185, LGC ~ Sees, 254-270, LGC —_a. Lien = Hongkong & Shanghai Banking Corporation vs. Rafferty, 39 Phil 145 b. Administrative Actions; Distraint and Levy - Spouses Federico Serfino vs. Court of Appeals, 154SCRA 19 ~ Estate of the Late Mercedes Jacob vs. Court of Appeals, 283 SCRA 474 ¢. Judicial Action 8. Taxpayer's Remedies ~Secs, 194-196, LGC a. Assessment b. Collection ¢. Interruption 4. Protest ~ Manila Electric Company vs. Barlis, 483 SCRA 11) = Yamane vs. BA Lepanto Condominium Corporation, 474 SCRA 258 = Lopez vs. City of Manila, 303SCRA 448 ¢. Tax Refund and Tax Credit - BLGF Opinion dated December 10, 2007 ~Toledo v. Metro Manila Shopping Mecca, CTA AC Case No. 35, October 31, 2008 - Alabang Supermarket Corp v. City of Muntinlupa, CTA EB ‘Case No, 386, February 12, 2009 IL REAL PROPERTY TAXATION ‘A. Definition and Nature 1. Tax on ownership; ad valorem tax ~ Secs. 199, 224-225, 257, LGC 2. Real Property - BLGF Opinion dated November 13, 2007 ~ Meralco v. CBAA, 144 SCRA 273 = Meraleo Securities v. CBA, 114 SCRA 260 ~ Caltex v, CBAP, 114 SCRA 296 - BLGF Opinion dated November 21, 2002 - BLGF Opinion dated October 8, 2002 - BLGF Opinion dated March 10, 2006 B, Power to Levy Real Property Tax 1. Taxing Authorities ~ See. 232, LGC a. Provinces b. Cities . Municipalities in Metro Manila 2. Tax Rates ~Sec, 233, LGC 3. Special Education Fund - BLGF Opinion dated October 7, 2002 4. Idle Land Taxroperties 720.334, Lge “FLGE Opinion dat May 2, 2007 {BLCF Opinion a September 7, aoq7 TRIE Opinion da November 23,2597 TSE Opinion date December 17 ern o® date January ~BLGR. inion, March 7, 2008 ~BLGE Opinion dated March 19, 29 {BLGF Opinion dat May 12,3 January 39, 2009 2 ote ts GR TIS, 15, ap) International. Airport September 11, 1996 ~ Quimpo v. + Abra. Valley “shorty v Marcos, GR rong, lendoza, 107 SCRA 73 ¥. Aquino, 1625CRA 665 Gottiing judge, 190SCRA try ~ {Ay Government of Gucms. City 162018, March 6, 2006 ag ot Dav20 v.IC and is, GR D. Tax Declaration '27383, August 18, 2005 ~ BLGF Opinion dated January 22, 2009, E- Appraisal; Assessment, Pap ment + Sees. 198-231, Lo 1. Appraisal {Reyes v. Almanzor, 196 SCRA 392 + Patalinhug v. CA, 229 SCRA Sst _Sesbreno v. CBAA, GR 106588, March 2, 1997 ~ Allied Banking Corporation v. Quentin City Government, GR 154126, October 11, 2005, 2. Classification of Real Proper + Secs, 215-217, 199, LGC 3. Assessment 8. Assessment Levels Secs. 199(, fg h), 218-223, LGC ~ BLGF Opinion dated Novernber 13, 2007 “Laer ya CE ay 6p 4 Colleton and Payment ~ Secs. 246.251, LGC a. Time of Payment . Discounts F. Disposition of Proceeds Secs 272 1S G. Government Remedies *: Bayan Telecommunicatons, Gi~ Secs, 254-270, LGC 1. Lien 2. Administrative Actions; Distraint and Levy 3. Judicial Action H. Taxpayer's Remedies 1. Assessment ~ Caltex v. CBAA, 114 SCRA 296 ~ Chavez. v. Ongpin, 186 SCRA 331 2. Protest ~ Secs, 246-252, 276-277, LGC ~ California Manufacturing v. City of Las Pinas, CTA EB Case No. 156, February 22, 2007 3. Tax Refund and Tax Credit |. Prescription = Sec. 270, LGC - BLGF Opinion dated November 13, 2007 PART B: TARIFF AND CUSTOMS CODE I. TARIFF AND Duries A. Definition = Secs. 100, 3519, TCC ~ Garcia v. Executive Secretary, GR No. 101273, July 3, 1992 ~ Bastida v. Customs Collector, 35 SCRA 448 1. Tariff 2. Duties B. Purpose for Imposition; Flexible Tariff Clause ~ Sec. 28(2), Art. VI, 1987 Constitution =Sec. 401, TCC ~ Garcia v. Executive Secretary, GR No, 101273, July 3, 1992 C. Requirements of Importation ~ Secs, 205, 1201-1205, 1301-1307, 1405-1408, 1601-1603, 1801-1802, 2503, 2521-2523, 3514-3515, TCC = RA 7651 - Customs Memorandum Order 20-2004 - Customs Administrative Order No. 10-93 = Customs Administrative Order No. 5-93 1. Beginning and End of Importation 2. Obligations of Importer a, Cargo Manifest = Commissioner v. Delgado, 184 SCRA 579 b, Import Entry ¢. Declaration of Correct Weight and Value 4. Importer’s Remedy - Commissioner v. CTA, 188 SCRA 61 e, Abandonment £, Liability for Payment of Duties - Republic v. Peralta, 150 SCRA 48 g. Keeping of Records D. Importation in Violation of the TCC ~See. 3601-3612, TCC -RAATI2-RA9I35 1. Smuggling - Rodriguez v. CA, 248 SCRA 288 2. Other Fraudulent Practices E. Classification of Imported Goods ~ Secs. 100-101, 105, 1207, 1401-1408, TCC -RA 7650 ~ Commissioner v. Campos Rueda, 188 SCRA 613 ~ Customs Administrative Order No. 7-72 1. Taxable Importation 2. Prohibited Importation 3. Conditionally-Free Importation F. Classification of Duties 1. Ordinary / Regular Duties ~ Secs. 204, 201-205, 1308-1310, 1313, TCC ~ Customs Administrative Order 2-96, June 14, 1996 - RA 8181 -RA 9135 - Customs Administrative Order No. 2-99 ~ Customs Administrative Order No. 05-2001 = Customs Administrative Order No. 4-2004 a. Ad Valorem; Methods of Valuation b. Specific 2. Special Duties = Secs, 301-304, TCC =RA 8752, ~Tanada v. Angara, 272SCRA 18 a. Dumping Duty b, Countervailing Duty . Marking Duty d. Retaliatory /Discriminatory Duty G. Drawbacks = Sec. 106, TCC = Uy Chaco v. Collector, 24 Phil 562 Hi. Remedies 1. Government = Secs, 1508, 2205, 2301-2316, 2401-2402, TCC a. Extrajudicial b. Judicial 2 Taxpayer = Secs. 1707-1708, 1801-1803, 2308-2317, 3514, 1517, TCC -RA9135 a. Protest b. Abandonment c. Refund PART C: TRANSFER TAXES LL ESTATE Tax A. Concept and Overview~ Secs. 84-97, NIRC = RR 02-03 = RR 17-93 + Att. 777, Civil Code ~ Lorenzo v. Posadas, 64 Phil 353, = BIR Ruling 100-96 1. Gratuitous Transfers Mortis Causa 2. Inheritance Tax vs. Estate Tax 3. Privilege Tax vs. Property Tax 4, Applicable Law 5. Reciprocity ~Colllector v. Fisher, 1SCRA 93 B.Gross Estate ~ Secs. 85, 87, 104, NIRC + Art. 50, 730-731, Civil Code ~ BIR Ruling DA 013-05, August 16, 2005 -RR17-93 1. Deceased a, Resident Citizens b. Non-resident Citizens Resident Aliens d. Non-resident Aliens . Married vs. Single 2. Inclusions a. Decedent's Interest, ~ BIR Ruling 130-98 ~ BIR Ruling 103-96 ~ BIR Ruling 186-81 b. Transfer in Contemplation of Death = Vidal dela Roces v. Posadas 58 Phil 108 ~ Dizon v. Posadas 57 Phil 465 ¢ Revocable Transfers = Unnumbered BIR Ruling [UN-041-1-20-95] 1 4. Property Passing Under General Power of Appointment ~ BIR Ruling 086-95 ©. Proceeds of Life Insurance ~ BIR Ruling 87-423 ~ BIR Ruling 314-87 £ Prior Interests | g, Transfer for Insufficient Consideration h. Specific Items 3. Valuation of Properties Secs. 6(E) and 88, NIRC ~Sec. 5, RR 0208 - Revenue Audit Memo Order 1-82 ~ BIR Ruling 95-98 BIR Ruling 103-96 ~ BIR Ruling 11-86 ~RR6-2008 ~ BIR Ruling 186-81 ~BIR Ruling 60-8110 -RR282 a. Real Properties b, Shares of Stock c. Receivables d. Bank Deposits C. Exemptions/ Exclusions ~ Secs. 85(E), 85(H), 87, NIRC = Arts. 91-92 and 109, Family Code 1. First P200,000 2. Proceeds of Life Insurance 3, Capital of Surviving Spouse 4. Merger in Usufruct 5. Transmission of fiduciary 6. Donee Institution 7. Family Home D. Net Estate + Estate of Hilario Ruiz v. CA, 252 SCRA 541 Sec, 86, NIRC ~Sec. 6, RR 02-03 1. Deductions; Citizens and Residents ~ BIR Ruling No. 009-99 a. Expenses, losses, indebtedness and taxes ~ Rules 81, 86 and 89, Rules of Court - Ozaeta v. Palanca, 101 Phil 976 -Sison v. Teodoro, 100 Phil 1056 = Vera v. Navarro, 79 SCRA 408 = CIR v. CA, GR 123206, March 22, 2000 + Vera v. Fernandez, 89 SCRA 199 ~ De Guzman v, R C Guzman, 83 SCRA 256 ~ De la Vina vs. Collector, 65 Phil 520 i, Funeral Expenses ii, Judicial Expenses ill. Claims against the Estate iv. Claims against Insolvent Persons v. Unpaid Mortgages, taxes and Casualty Losses , Property previously taxed (Vanishing Deductions) ~ Sec, 86, NIRC =Sec. 4, RR17-93 ¢. Transfers for Public Use d. Share of Surviving Spouse = Arts, 94-95, 106, 108, and 121, Family Code e. Family Home - Arts, 152, 153, 154, 156, and 161, Civil Code Sec. 6(D), RR 02-03 - BIR Ruling 010-00 (January 5, 2000) {, Standard Deduction & Medical Expenses 1. Amounts received under RA 4917 2. Deductions; None-resident Aliens a, Expenses, losses, indebtedness and taxes i, Funeral Expenses ii, Judicial Expensesu iii, Claims against the Estate iv. Claims against Insolvent Persons vv, Unpaid Mortgages, taxes and Casualty Losses a. Property previously taxed (Vanishing Deductions) b. Transfers for Public Use ¢. Share of Surviving Spouse D. Computation of Tax Liability = Secs. 84 and 104, NIRC ~Sec. 2, RR 0203 1. Tax Rate 2. Tax Credit E, Procedural Requirements = Sees, 89-92, NIRC -Sec. 9, RR 02-03 - BIR Ruling No. DA-169-06 (March 27, 2006) ~ Ruiz v.CA, GR 118671, January 29, 1996 ~ Commissioner v. Cu Unyieng, 66 SCRA 1 = BIR Ruling 46-98 -RMO19-07 1. Notice of Death; Period 2. Tax Return 3. Payment 4, Surcharges F, Assessment and Collection Secs, 90.97, NIRC ~ Hegado v. CTA, 173 SCRA 285 = Commissioner v. Pineda, 21 SCRA 104 ~Gonwales v. CTA, 101 SCRA 633 = Marcos v. CA, GR 120880, June 5, 1997 G. Liabilities of Executors and Heirs = Secs. 92:93, NIRC “Government v. Pamintuan, 55 Phil 13, H, Other Matters ~ BIR Ruling 455-98 BIR Ruling [DA-536-12-01-98] BIR Ruling[DA-251-4-23-99] {Ona v. Commissioner, GR 1-19342, May 25, 1972 BIR Ruling 102-87 = BIR Ruling 258-91 = BIR Ruling 66-98 II, Donor’s TAX {A Definition and Nature; Applicable Law ~Secs, 98-104, NIRC = RR 0203 = Lladoe v. Commissioner, 14 SCRA 202 ~ BIR Ruling No. 029-01, july 18, 2001 = Arts, 725, 734, 749, Civil Code *Tuazon v. CIR, GR L-30403, July 3, 1969 = Dizon v. Posadas, 57 Phil 465 Roces v. Posadas, 58 Phil 10812 ~ BIR Ruling 076-89 (April 17, 1989) - BIR Ruling 03-80 ~ BIR Ruling [DA-060-2-5-99] B. Persons Liable ~ Secs. 98.99, NIRC 1. Citizens and Residents 2. Non-resident Aliens C. Transfers Subject to Donor’s Tax ~ Secs. 98 and 100, NIRC ~ Sec, 10, RR 02-68 ~ Pirovano v. Commissioner, 14 SCRA 832 ~ BIR Ruling 016-05 (August 24, 2005) ~ BIR Ruling DA-475-05 (November 21, 2005) ~ BIR Ruling 013-05 (August 16, 2005) - Estate of Fidel Reyes v. CIR, CTA Case No. 67747, January 16, 2006 BIR Ruling DA-346-06 (June 5, 2006) 1. Nature of Transfers 2. Transfers for Less Than Adequate or Full Consideration D. Reversion of Donation - BIR Ruling 104-95 (July 11, 1995) E, Exemptions = Antonio v. CIR, CTA Case No. 6175, July 9, 2001 ~ Philippine Stock Exchange v. CIR, CTA Case No. 5995, Oct. 15, 2002 - BIR Ruling 115-99 (August 6, 1999) - BIR Ruling DA-435-05 (November 10, 2005) - BIR Ruling DA-329-05 (July 27, 2005) = BIR Ruling DA~408-05 (October 3, 2005) ~ BIR Ruling 67-98 ~ BIR Ruling 100-98 ~ BIR Ruling, 42-80 - BIR Ruling 101-80 1. Residents a, P100,000 b, Donation Propter Nuptias ¢. Gifts to National Government dd. Gifts to Educational and/or Charitable Organizations 2. Non-resident Aliens a. Gifts to National Government b. Gifts to Educational and/or Charitable Organizations 3, Credits for Donor’s Taxes Paid Abroad F. Computation of Tax =See. 12, RR 02-03, 1. Gross Gift = Sec. 104, NIRC 2. Net Gift = See, 101, NIRC = Sec. 12, RR 02-03 - Tang Ho v. CA, 97 Phil 890 -RA7798 a, Donation on Account of Marriage b. Gifts to National Government ¢. Gifts to Educational /Charitable/ Religious/ Non-profit Entities d. Special LawsFr 3 3. Valuation of Gifts ~ Secs. 88 and 102, NIRC 4. Tax Rate = Sec. 99, NIRC = Sec. 10, RR 02-03 - BIR Ruling 159-89 ~ BIR Ruling 204-81 - BIR Ruling 081-98 = CIR v. ACCRA, CA GR SP No. 27134, April 20, 1994 - Tang Ho vs. Board of Tax Appeals, 97 Phil 899 8. Contributions to Political Parties = Sec 99(C), NIRC = Sec, 10, RR 02-03 - Secs. 93-94, Omnibus Election Code ~ ACCRA v, CIR, GR 120721, February 23, 2005 6. Credits for Donor’s Taxes Paid Abroad G, Tax Returns and Payment = Secs, 103-104, NIRC = Sec. 13, RR 02-03 1. Tax Returns 2. Date and Place of Filing 3. Payment H. Assessment and Collection = Sees. 103-104, NIRC 1. Other Matters ~ BIR Ruling 085-82 = BIR Ruling 107-82 - BIR Ruling 220-83 - BIR Ruling 440-93 ~ BIR Ruling dated 25 August 1977 ~ BIR Ruling 455-93 =Secs. 34 (H)(1) and (2)(C) NIRC Sec. 100 (A)(3), NIRC = BIR Ruling 145-98 (October 9, 1998) = BIR Ruling DA 499-11-18-98 ~ BIR Ruling No. 192-90 PART D: OTHER INTERNAL REVENUE TAXES LL EXCISE TAX ‘A. Concept and Definition Secs, 129-140, NIRC = RA 9334 ~ RR 12-2004 - Shell vs. Mun. of = RR1-97 = RR 297 = RR9-2003 B. On Alcohol Products = Sec, 141-143, NIRC f Cordova, 94 Phil 3894 C. On Tobacco Products ~See. 144 - 147, NIRC - RA 7654 = RR 22-2003, - RR 12-2004 D. On Petroleum Products ~ Sec, 148-150, NIRC -RA 9337 E.On Miscellaneous Products - RR 4-203, -RR14-99 RA 9224 F, On Mineral Products ~Sec. 151, NIRC - RA 9337 G. Returns and Payments = Gigare v. Commissioner, 17 SCRA 1001 = Good Day Corporation v. Board of Tax Appeals, 95 Phil 569 = Secs, 171-172, 263 and 269, NIRC = RR 7-202 1. Mode of Computing Contents 2. Filing of Returns 3, Payment IL. PERCENTAGE TAXES ‘A. Tax on Persons Exempt from VAT ~ Sec 116, NIRC - RA 9337 “CIR v, Insular Life Assurance Co., CA GRSP 46516 = CIR v. Lhuiller, GR 150%, July 15, 2003 = RR 10-2008 B, Carrier's Tax = Sec. 117, NIRC -RA%37 ~ Commissioner v. US Lines, 5 SCRA 175 South African Airways v. CIR, CTA Case No. 6760, June 9, 2005 - BIR Ruling [DA 158-05] 1. Domestic 2. International C. Franchise Tax = Sec, 119, NIRC = Visayan Electric Co. v. David, 92 Phil 969 “Commissioner v. CA, 195 SCRA 445 “CAR v. Republic Broadcasting, CA-GR 32831, 19 Sept. 1994 - RA 9337 D. Overseas Communications Tax = Sec. 120, NIRC E, Tax on Banks and Financial Intermediaries = Sec. 121, NIRC -RA 9337 -RA 8761 -RA 901015 ~RA9238 - China Banking Corp. v. CT: pe ey ‘A, GR 146749, June 10, 2003 F, Tax on Finance Companies = Sec, 122, NIRC - BIR Ruling dated August 16, 1990 G. Tax on Insurance Premiums ~Sec. 123, NIRC - Meralco v. Yatco, 69 Phil 89 - Standard Vacuum Oil v. Antigua, 9 Phil 909 H. Tax on Agents of Foreign Insurance Companies ~ Sec. 124, NIRC 1. Amusement Tax ~ Sec. 25, NIRC - RMC 8-88 ( February 19, 1988) J. Tax on Winnings ~Sec. 126, NIRC K. Tax on Listed and Traded Shares = See 127, NIRC L. Returns and Payment of Taxes IL, VALUE ADDED TAX A. Definition; Legality ~Secs. 105-115, NIRC - BIR Ruling 88-243 - BIR Ruling 91-151 = CIR v. Gotamco, Feb 27, 1987 = RR 16-2005 = RA 9238 -RA9337 = RR 16-2005 = RR288 = RMO 22-92 caer tino v. Guingos, GR 15855, Augint 25,196 andl October, 1995 resetada Guro Party List, etal. v. Erma, GR 268056, Saptember 1 2005 and October 18, 2005 B. Persons Liable; “Business” “Imperial vs. Collector, 97 Phil. 992 = BIR Ruling }13-98 | Manila Polo Club v. Meer, 106 Phil. 885 = RR 7-95 = RR6-97 BIR Ruling 88-190 ~ BIR Ruling 89-106 BIR Ruling 88-112 - BIR Ruling 88-204 ~ BIR Ruling 89-7116 ~ BIR Ruling 88-84 -RMC7-88 -BIR Ruling 041-98, ~ BIR Ruling 91-136 -RMC 91-79 ~ BIR Ruling 88-80 ~ BIR Ruling 88-272 ate Mgt. & Services Corp. v. CIR, CA SP 34032, May 28, C. Input VAT vs, Output VAT D. VAT on Sale of Goods or Properties = Sec. 106, NIRC 1. Tax Base and Rate 2. Goods or Properties a. Real Properties =RMC3-96 - BIR Ruling 19-98 = BIR Ruling 60-98 - BIR Ruling 110-98 ~ BIR Ruling 5-88 = BIR Ruling 88-60 - BIR Ruling 88-291 = BIR Ruling 88-378 = BIR Ruling 88-198, - BIR Ruling 89-3 - BIR Ruling 88-245 - BIR Ruling 152-98 ~ BIR Ruling 174-98 “VAT Ruling 037-01 = RR 4.2007 b. Patents, Copyrights, Design Model ~ BIR Ruling 129-98 ~ BIR Ruling 104-98 ¢. Industrial, Commercial and Scientific Equipment d. Motion Pictures e, Airtime - BIR Ruling 14-98 - BIR Ruling 38-98 “BIR Ruling 88-59 ~ BIR Ruling 88-85, £. Others ~ BIR Ruling 27-98 3, Gross Selling Price 44. Zero-Rated Sales = RMC 17-96 a. Export Sales ~ BIR Ruling 113-94 - BIR Ruling 88-182 "DIR Ruling 87-170 = RMC 7-94 ~ BIR Ruling 88-182 bb Foreign Currency Denominated Sales ~ BIR Ruling 032-987 ~ BIR Ruling 033.98 = RMC 74-99 ~ BIR Ruling 009-98 ~ BIR Ruling 033-96 ~ BIR Ruling 10-94 - BIR Ruling 06-97 ~ BIR Ruling 321-88 - BIR Ruling 65.99 c. Exemptions under Special Laws ~ BIR Ruling 89-78 ~ BIR Ruling 88-244 72.98 153.97 -RMC 25.99 5. Transaction Deemed Sale; Merger and Consolidation - BIR Ruling 063-93 - BIR Ruling 472-93 ~ See. 4.1005, RR 7-95 = RMC 19.99 E. VAT on Importation ~Sec. 107, NIRC =RMC 74-99 - BIR Ruling 032.98 1 Importation - BIR Ruling 72-98 = BIR Ruling 88-96 - BIR Ruling 88-160 ~ BIR Ruling 88-193 BIR Ruling 88-13 - BIR Ruling 128-98 - BIR Ruling 163-98 2. Transfer of Goods of Tax Exempt Entities ~ BIR Ruling 100-95 F. VAT on Sale of Services =See, 108, NIRC - BIR Ruling 88-61 ~ BIR Ruling 88-363 - BIR Ruling 88-360 BIR Ruling 142-98 ~ BIR Ruling 154-98 American Express v. Commissioner, ~American Express v. Commissioner, = RR 1-2003 = RR 11-2003 5 -RA 9238 = RR 7-2004 = RR 9.2004 1, Tax Base and Rate ~BIR Ruling 002-97 = RMC 32-99 - BIR Ruling 023-99 - BIR Ruling 55-98 = BIR Ruling 83-98 CA GR SP 62727, February 28, 2002 GR 152609, June 29, 200518 ~ BIR Ruling 88-426 ~ BIR Ruling 89-107 ~ BIR Ruling 94-48 ~ BIR Ruling 87-335 = BIR Ruling 88.79 - BIR Ruling 88-83 BIR Ruling 88-250 ~ BIR Ruling 88-163, ~ BIR Ruling 88-59 ~ BIR Ruling 88-332 = RR 1-2003 - RR 12-2003 2. Zero-Rated Sales = RMC 17-96 - BIR Ruling 88-161 ~ BIR Ruling 88-107 ~ BIR Ruling 88-191 ~ BIR Ruling 044-98 =CIR vs. Amexco, GR 152609, June 29, 2005 G. Exempt Transactions and Other Matters =See. 109, NIRC ~ BIR Ruling 335-88, = RMC 4.98 = Sec. 4.1 14, RR 2-98 = BIR Ruling 43-98 ~ BIR Ruling 074-98 - BIR Ruling 87-98 - BIR Ruling 99-98 - BIR Ruling 104-98 ~ BIR Ruling 88-181 - BIR Ruling 88-291 ~ BIR Ruling 122-98 - BIR Ruling 152-98 - BIR Ruling 154-98 -RR8-99 - BIR Ruling 174-98 - VAT Ruling 037-01 = RR 16-2003 H. Returns and Payment IV. DOCUMENTARY STAMP TAX A. Accrual ~ Secs. 173-201, NIRC = RR9-94 = RA 9243 = RR 13-2004 = BPLv. Trinidad, 47 Phil. 495 ~ Pinceln Philippine Life Insurance v. CA, GR 118043, July 25, 1998 B, Documents/ Transactions subject to DST MER v, Construction Resources of Asia, Inc, 145 SCRA 679 “Phil, Consolidated Coconut Industries, 70 SCRA 22 C. Documents/ Transactions not subject to DST19 ~Sec. 199, NIRC -RA9243 RR 13-2004 D. Returns and Payments ~ RR6-2001 = RR 15-2001 E. Effect of Failing to attach DST ~ Gabucan v. Manta, 95 SCRA 752 ~ Rodriguez v. Martinez, 5 Phil 67 ~ Azarraga v. Rodriguez, 9 Phil 376 PART E: TAX REMEDIES UNDER THE NIRC 1. ASSESSMENT OF TAXES A. Definition and Concepts = Secs. 4-17, 203, 222, 223, 228, NIRC -RR12.99 = CIR v. Hantex Trading Co,, Inc, GR 136975, March 31, 2005 ~RMC 44-2001 - DOF Order 7-02 - RP v.CTA & Nielson &Co., GR L-38540, 149 SCRA 351 - Collector v. Bautista, L-12250, L-12259, May 27, 1959 ~ ABS-CBN Broadcasting Corp. v. CTA, 108 SCRA 143, 1. Tax Assessment 2. Tax Audit 3, Letter of Authority / Audit Notice 4. Pre-Assessment Notice 5, Notice of Assessment or Formal Assessment Notice 6. Deficiency vs. Delinquency 7. Jeopardy Assessment B. Period to Assess 1. Prescription Secs, 203, 222, NIRC " Estate of Fidel F. Reyes v. CIR, CTA Case No. 6747, January 16, 2006 = Republic v. Ricarte, GR L-46893, November 12, 1985 a. Ordinary b, Extraordinary 2. Suspension = Secs. 203, 222, and 223, NIRC = RMO 20-90 “Revenue Delegation Authority Order No. 05-01 = RMC 6-2005 = RMC 48-90 = CIR v. CTA, 195 SCRA 444 - CIR v. Gonzales, 18 SCRA 757 ~ Republic v. Kerr, 18 SCRA 20 ~ Agnar v.CTA, 58SCRA 519 = Philippine Journalists Inc. v. Commissioner, GR 162852 3, Requisites of a Valid AssessmentSk 20 stay 59 196 SCRA 335 Facio Sy Pov. CTA, 164 SCRA 524 feralco v. Savellano, 117 SCRA 804 legado v. CTA, 173 SCRA 285 CIR v. Island Garment, 153 SCRA 665 ~Collector v. Benipayo, 4 SCRA 182 ~ CIR v. Construction Resources, 145 SCRA 671 ~ Marcos v. CA, GR 120880, June 5, 1997 ~ CIR v. Hantex Trading Co,, Inc., GR 136975, March 31, 2005 ~ Meguinto v. CIR, CA-GR Sp No. 73679, March 31, 2005 ~ ATR Kim Eng Financial Corp v. CIR, CTA Case No. 5598, April 21, 2005 ~ Azucena Reyes v. CIR, GR No. 159694/163581, January 27, 2006 ~ Barcelon Roxas Securities, Inc. v. CIR, GR 157064, August 7, 2006 Tl, PROTESTING AN ASSESSMENT - Mambulao Lumber Co v. Republic, 132SCRA 1 ~ Dayrit v. Cruz, 165 SCRA 571 ~ CIR v. Wyeth Suaco, 202 SCRA 125 A. How to Protest = Sec. 228, NIRC = Sec. 3.15, RR 12.99 1. Time 2. Place 3. Other Requirements B, Effect of Protest - BPI v. CIR, GR 139736, October 17, 2005 C. Effect of Failure to Protest = Unique Dyeworks v. CIR, CTA Case No. 5931, June 26, 2002 = Oceanic Wireless Network Inc. v. CIR, CTA EB No. 76 [CTA Case No. 6111], June 22, 2006 D. Decision on Disputed Assessments ' ~ Sec. 228, NIRC - Antam Consolidated, Inc. v. CTA and CIR, CA-GR SP No. 33588, March 31, 2004 - Advertising Associates v. CTA, 133 SCRA 765 - Commissioner v. Union Shipping, GR 66160, May 21, 1990 = Surigao Electric v. CTA, 57 SCRA 523 ~ CIR v. Isabela Cultural Corporation, GR 135210, July 11, 2001 1. Period 2. Denial of Protest E, Subsequent Remedies of Taxpayer 1.3.5.1, RR1299 =Sees. 4 and 228, NIRC -RAM25 -RA 9282 = CIR v. Union Shipping, 185 SCRA 547 -CIR v. Algue, 158SCRA 9 - Advertising Associates v.CA, 133 SCRA 765 = Rule 4, Sec. 3 (a)(2), SC-A.M. No. 05-11-07-CTA ~ Lascona Land Co,, Inc. v. CIR, CTA Case No. 5777, January 4, 2000a -M Toe Controls Corp Phil. Branch v. CIR, CTA EB No. 44, May 10, 2005 - Allied asian Network, Inc. v. CIR, GR 148380, December 9, 2005 “San age enking Corporation v, Parayno, CTA 6565, November 3,2004 ‘Gustin v. CIR, GR 138485, September 10, 2001 m1. CLAIM FOR Tax REFUND OR Tax CREDIT A. Claimant = cu Portland v. Collector, GR L-20563, October 29, 1968 Siar (Gingapore) Pte. Ltd. v. CIR, CA GR SP No. 82902, September 13, A ee v. Procter and Gamble, 204 SCRA 377 istrative Claim for Refund ~ Secs. 204 and 229, NIRC ~ CIR v. Philamlife, GR 105208, May 29, 1995 ~ CIR v. Tokyo Shipping, GR 68252, May 25, 1995 ~ San Carlos v. CIR, 228 SCRA 135 - CIR v. CA and Citytrust, 234 SCRA 348 - CIR v.CA and Atlas Consolidated, 232 SCRA 321 C. Subsequent Remedy of Taxpayer ~ Secs. 4 and 229, NIRC - Maceda v. Macaraig, 223 SCRA 217 = CIR v. Concepcion, 22SCRA 1058 - CIR v. Philamlife, GR 105208, May 29, 1995 = Gibbs v. CIR, 15 SCRA 318 CIR v. Palanca, 18 SCRA 496 1. With CIR Decision 2. Without CIR Decision 3, Period D. Requirements for Refund Cases “= Gibbs v. Commissioner, GR L-17406, November 29, 1965 = Gibbs v. Collector, GR L-13453, February 29, 1960 ~ Collector v. Prieto, 2SCRA 1007 ~ ACCRA Investment v. CA, 204 SCRA 957 T CAR v. Alltel International Resource Management, CA GR SP No. 65875, April 16, 2002 - Sithe Philippines Holdings v. CIR, CTA Case No, 6274, April 4, 2003 ~ Calamba Steel Center, Ine. v. CIR, GR 151857, April 28, 2005 “ philam Asset Management, Inc. v. CIR, GR 156637/162002, December 14, 2005 _ CIR v. TMX Sales & CTA, GR 83736, January 16, 1992 Gar v. Philamlife Insurance Co., GR 105208, May 29, 1995 «pacific Pro, Ltd. Case, GR 68013, November 12, 1984 IV. CourT OF TAX APPEALS A.CTA Jurisdiction ~Sec. 218, NIRC -RA 1125 RA 9282 Phil. Refining Co. v. CA, 256 SCRA 661 = Rule 4, Revised Rules of the CTA B. Appeal to the CTA 1~Secs. 7 and 11, TRA Suey TERA 1125 ~ Limitations cre V. PG-PMC, 204 SCRA 377 ~ Lim v. CTA, 105 Phil 974 : fe v. Villa, 22SCRA 4 ~ CIR v. Joseph, Dero ig ~ Rules 7-9, 11-16, Revised Rules 11-16, of the CTA E Appeal from a CTA Division to CTA En Bane From CTA En Bane to Supreme Court ~ Secs, 18 and 19, RA 1125 ~RA 9282 ~ Rules 15-16, Revised Rules of the CTA ~ Magsaysay Lines v. CA, GR No. 111184, August 12, 1996) = Liboro v. CA, 173 SCRA 285 ¢ ‘V. COLLECTION OF Taxes A. Prescription = Secs, 203, 22-223, NIRC = CIR v. Wyett Suaco, 202 SCRA 1250 ~ CIR v. Philippine Global Communication, Inc., GR 167146, October 31, 2006 - CIR v. Wyeth, GR 76281, September 30, 1991 V. GOVERNMENT'S REMEDIES A. Administrative/Summary Remedies = Secs. 205-227 NIRC -CIR v. Wyeth Suaco, 202 SCRA 125 1. Distraint of Personal Property = Secs. 205-27, 217, 208-209, 210, 212, NIRC 2. Levy of Real Property = Secs. 205-207, 217, 208-209, 213-214, NIRC 3. Forfeiture = Sec, 215, NIRC 4. Tax Lien = See. 219, NIRC = RMC 2-94 = Republic v. Enriquez, 166 SCRA 608 = CIR v. NLRC, 238 SCRA 42 7 Hongkong and Shanghai Bank v. Rafferty, 39 SCRA 145 5. No Injunction - Sec. 218, NIRC = Northern Lines v. CTA, 163 SCSRA 25 ~Sec. 11, RA 1125 = Rule 10, Revised Rules of the CTA B. Judicial Remedies ~ Secs. 220-21, 281, NIRC = Ungab v. Cusi, 97 SCRA 877 “CIR v. CA, 257 SCRA 200, MR (7 February 1997) “CAR v. Pascor Realty, GR 128315, June 29, 19992B -CIR 7 ¥- CTA and Fortune Tobacco, GR 119761, August 29, 1996 + OFFENSES AND Penatries A. Civil Penalties ~ Sees. 247-251, NIRC ~ RR 12.99 - Javier v. CIR, 199 1. Surcharges SERA EDS a. False v. Fraudulent Return b, Fraud Assessment ©. Mandatory Imposition of Penalties Substantial Underdeclaration €. Substantial Overstatement of Deductions 2. Interest a. Rate b, Computation B. Registration; Receipts ~ Secs. 236-243, 263 NIRC 1. Registration 2. Printing and Issuance of Receipts 3. Violations and Penalties C. Compliance Requirements = Secs, 232-236, NIRC 1. Keeping of Books of Account 2. Securing TIN D. Crimes ~ Secs. 224-227, 253-281, NIRC ~Sec. 6, RR 12-99 - RMO1-90 Estate of Fidel P. Reyes v. CIR, CTA Case No. 6747, January 16, 2006 ~ Emilio S, Lim v. CA, GR L-48134-37, October 18, 1990 1. Revised Penalties 2 Compromise Penalty 3, Tax Evasion 4, Prescription of Offenses = RMC 101-90 = Lim v. CA, 190 SCRA 616 = Ungab v. Cusi, 97 SCRA 877 ~CIR v. JAL, 202 SCRA 450 ~ CIR v. Pascor Realty, GR 128315, July 29, 1999 VIL. TAX ABATEMENT AND TAX COMPROMISE 'A.CIR’s Authority to Abate Taxes ~Sec. 204, NIRC = RR 15-06 = RMC 66-06 = RR 15-2005 1. Grounds 2. Conditions B, Power to Compromise -RR7-01-RR30.02 RR 8.2004 1. Cases that can be Compromised 2. Cases that cannot be Compromised 3. Basis for Acceptance of Compromise Settlement a. Doubtful Validity of Assessment | ». Financial Incapacity ‘VUL INFORMER’s REWARD + Sec. 282, NIRC -RMO 12.93 ~ Meralco Securities v. Savellano, 117 SCRA 704 ~Penid v. Virata, 121 SCRA 166 = CIR v. COA, 218 SCRA 203