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SAINT LOUIS UNIVERSITY

SCHOOL OF LAW
Baguio City

OUTLINE IN TAXATION LAW

REAL PROPERTY TAXATION

A. Governing Law
B. Nature of Real Property TaxesNational or Local?
C. Fundamental Principles (Section 198, LGC)
a. Appraisal at current fair market value and based on actual
use: Allied Banking Corporation v. Quezon City, GR No.
154126, 15 September 2006 in relation to Local Ass. Reg.
1-92
D. Properties Covered
a. Article 415, et seq, Civil Code
b. Caltex v. CBAA, 31 May 1982
c. Sta. Lucia Realty & Development, Inc. vs. City of Pasig, G.R.
No. 166838, June 15 2011
E. Properties Exempt
a. Section 234, LGC
b. Section 238, LGC
c. Constitutional Exemptions
d. Cases
i. MIAA v. Paranaque, GR No. 155650, 20 July 2006;
MIAA v. Pasay GR No. 163072, April 2, 2009
ii. Lung Center of the Philippines v. QC, 29 June 2004
iii. LRTA v. CBAA, 12 October 2000
iv. NAPOCOR v. Province of Quezon, GR No. 171586,
15 July 2009; NAPOCOR v. CBAA, GR No. 171470,
30 January 2009
v. Philippine Fisheries Development Authority v. CBAA,
etc., G.R. No. 178030, December 15, 2010
vi. City of Pasig v. Republic of the Philippines, GR No.
185023, 24 August 2011
F. May LGUs grant exemption?
G. Who are liable for the Real Property Taxes
a. Ownership v. Use
b. Testate Estate of Concordia Lim v. Manila, 21 February
2000
c. Government Service Insurance System v. City Treasurer and
City Assessor of the City of Manila, G.R. No. 186242 23
December 2009
H. Procedure in Real Property Taxation
a. Lopez v. City of Manila, 19 February 1999
b. Declaration of real propertieswhose duty?
c. Valuation by Assessors
Callanta v. Ombudsman, 30 January 1998
d. Preparation of Schedule of Fair Market Values
e. Enactment of a Real Property Tax Ordinance
i. Levy annual ad valorem tax
1. Scope of the LGUs taxing power (Sec. 232,
LGC)
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a. Provinces1%; Cities, Municipalities in

MM2%
b. SEF1%; Idle land tax5%; Special
Assessments
ii. Fix assessment levels
iii. Provide for appropriations
iv. Adopt Schedule of Fair Market Values
1. Fair Market Value and Assessed ValueWhats
the difference?
I. Remedies in Local Taxation
a. Remedies of the Government
i. Administrative
1. Contents of Assessment
a. Meralco v. Barlis, 2 February 2002
2. Who is entitled to the notice of assessment?
a. Talusan v. Tayag, G.R. No. 133698, 4
April 2001
ii. Judicial
1. Period within which to collect
iii. Other Provisions
1. Accrual of the tax
2. Time of Payment
3. Surcharges, Interests and Penalties
b. Remedies of the Taxpayer
i. Administrative
1. Appeal to the Secretary of Justice re newly
enacted tax ordinance (Section 187, LGC)
a. Drilon v. Lim, 4 August 1994
b. Reyes v. Court of Appeals, 1999
c. Hagonoy Market Vendors Association v.
Municipality of Hagonoy, Bulacan, G.R.
No. 137621. February 6, 2002
d. Ty v. Trampe, 1 December 1995
2. Appeal to the Board of Assessment Appeals,
(Section 226, 252, LGC)
a. Systems Plus Computer College v.
Caloocan City, G.R. No. 146382, August 7,
2003
b. Olivares v. Marquez, G.R. No. 155591,
September 22, 2004
3. Protest of the Assessment (Section 226, 252,
LGC)
a. Cagayan Robina v. Court of Appeals, 12
October 2000
b. Meralco v. Barlis, 18 May 2001
c. Meralco v. Barlis, 2 February 2002
d. Meralco v. Barlis, 29 June 2004
e. National Power Corporation v. Province of
Quezon and Municipality of Pagbilao, G.R.
No. 171586 25 January 2010
4. Claim for refund (Section 253, LGC)
a. Period
5. Remedies from a denial of the protest and
refund
a. Mandamus is not a proper remedy:
Habawel v. Court of Tax Appeals, G.R. No.
174759, 7 September 2011
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6. Redemption of Property Sold (Section 261,

LGC; City Mayor of Quezon City v. RCBC, GR
No. 171033, 3 August 2010)
ii. Judicial
1. Questioning tax sale: Aquino v. QC, GR No.
137534, 3 August 2006; NHA v. Iloilo City, GR
No. 172267, 20 August 2008

TARIFF AND CUSTOMS LAWS

A. Scope of Tariff and Customs Laws

B. Meaning of Tariff and Customs Duties
C. Governing Laws
D. Agency tasked with enforcement of Tariff and Customs Laws
a. Powers and Functions of the Bureau of Customs
E. What may be the subject of customs duties
F. Concept & Relevance of Importation
a. When does importation begin
b. When does importation end
G. Classification of Goods for Importation Purposes
i. Dutiable v. Duty-Free
ii. Prohibited
iii. Conditionally Free
H. Kinds of Customs Duties
a. Regular
b. Special
I. Valuation of Goods
a. Home Consumption Value
b. Transaction Value (Republic Act No. 9135)
J. Flexible Tariff
K. Cases that may be decided by the Bureau of Customs
a. Customs Protest Cases
i. Procedure
ii. Case: Nestle Philippines v. Court of Appeals, G.R.
No. 134114. July 6, 2001
iii. Concept of Automatic Review
b. Seizure and Forfeiture Cases
i. Proceeding In Rem
ii. Primary Jurisdiction
iii. Search of Dwelling House
iv. Some Illustrative Cases: Mison v. Natividad, GR No.
82526, 11 September 1992; Provident Tree Farms v.
Batario, GR No. 92285, 28 March 1994; Zuno v.
Cabredo, A.M. No. RTJ-03-1779. April 30, 2003

TRANSFER TAXATION

A. Transfer Taxation: Its general concepts

B. Kinds of transfer taxes
C. Kinds of transfers subject to transfer taxes
D. Governing Rules: Revenue Regulations 2-2003

ESTATE TAXATION
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A. Nature of estate tax

B. Reasons/doctrines supporting the imposition of estate tax
a. Benefits-received principle
b. Ability to pay principle
c. State partnership principle
d. Redistribution of wealth principle
e. Back-tax theory
C. The Gross Estate
a. What comprise the gross estate? (Section 85, NIRC)
b. Kinds of decedent for estate tax purposes
c. Inclusions in the gross estate
i. Decedents Interest
ii. Transfers in contemplation of death
iii. Revocable transfers
iv. Property passing under a general power of appointment
v. Proceeds of life insurance
vi. Prior interest
vii. Transfers for insufficient consideration
d. Exclusions in the gross estate
i. The merger of usufruct in the owner of the naked title
ii. The transmission or delivery of the inheritance or legacy
by the fiduciary heir or legatee to the fideicommissary
iii. The transmission from the first heir, legatee or donee in
favor of another beneficiary, in accordance with the
desire of the predecessor
iv. Transfers to social welfare, cultural and charitable
institutions
D. The Net Estate and the Deductions from the Gross Estate (Section 86)
a. Expenses, Losses, Indebtedness, Taxes
i. Funeral Expenses
ii. Judicial Expenses
1. CIR v. CA and Pajonar, GR No. 123206, 22 March
2000
iii. Claims against the estate
iv. Claims against insolvent persons
v. Unpaid mortgage indebtedness
1. Accommodated loans
b. Vanishing deductions
c. Transfers for public use
d. Family Home
e. Standard deduction
f. Medical expenses
g. Amount received by heirs under Republic Act No. 4917
h. Tax treatment of share in conjugal or community property
i. Tax credits
E. Valuation
F. Administrative provisions
a. Filing of notice of death
b. Filing of estate tax return
c. Payment of tax
G. Provisions safeguarding the interest of the government in the
collection of estate tax (Sections 94-97)
a. Relevant cases:
i. Marcos II v. CA, G.R. No. 120880, June 5, 1997
ii. CIR v. Pineda, G.R. No. L-22734, September 15, 1967
iii. Lorenzo v. Posadas, G.R. No. 43082, June 18, 1937
iv. Dizon v. Court of Tax Appeals. G.R. No. 140944 dated
May 6, 2008
v. Gabriel v. Court of Appeals, 11 October 2007
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GIFT TAXATION

H. Nature of gift tax

I. Concept of gifts subject to gift taxes (Section 98)
a. Direct gifts
b. Indirect gifts
i. Condonation of indebtedness
ii. Transfers for insufficient consideration (Section 100)
ii.a. PALGIC v. SOF, 24 November 2014
iii. Waivers
iv. Renunciation of Inheritance
J. Factors that affect liability for gift taxes
a. Relationship of the donor and the donee (Section 99)
K. Deductions/Exemptions from the gift tax (Section 101)
L. Tax treatment of properties transferred for less than full or adequate
consideration (Section 100)
a. In general
b. Real properties classified as capital asset
M. Tax treatment of political contributions
a. Case in point: Abello, et al. v. CIR, GR No. 120721, 23 February
2005
b. Rev. Regs 8-2009, 22 October 2009 re Creditable Withholding
Tax
N. Valuation
O. Administrative provisions
a. Filing of notice of donation (Rev. Regs. 2-2003)
b. Filing of donors tax return
c. Payment of tax

VALUE ADDED TAXATION

A. Nature of Value Added Tax

a. Kapatiran v. Tan, G.R. No. L-81311, June 30, 1988
b. Tolentino v. Secretary of Finance, G.R. No. 115455,
August 25, 1994 (Original Decision) and G.R. No. 115455,
October 30, 1995 (Motion for Reconsideration)
c. ABAKADA Guro Party List v. Ermita G.R. No. 168056, 1
September 2005
B. VAT as an indirect tax
a. Distinctions between direct and indirect taxes
b. Specific characteristics of an indirect tax
i. Imposed on the seller/lessor/importer/service
provider
1. CIR v. Magsaysay Lines, GR No. 146984, 28
July 2006
ii. Not a tax on the buyer/lessee/service availer
1. Cases in point:
a. Philippine Acetylene v. CIR, 17 August
1967
b. CIR v. American Rubber, 29 November
1966
c. CIR v. John Gotamco and Sons, 27
February 1987
C. Specific characteristics of Value Added Tax
a. Tax imposed on the sale/barter/exchange/lease
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i. CIR v. Sony Philippines, GR No. 178697, 17

November 2010
b. Tax imposed on all levels of the production/distribution
process
c. Tax imposed on the value added
i. Tax Credit Mechanism
1. Input Tax
2. Output VAT
ii. Impact of tax and Incidence of tax

d. Consumption based tax

i. Destination Principle
ii. Cross-border Doctrine
D. Transactions subject to VAT
E. Governing Regulations
a. Revenue Regulations 16-2005, as amended by RR 4-2007
(Consolidated Regulation)
b. Revenue Regulations 16-2011 (adjustment re threshold
amount for liability)
c. Revenue Regulations 10-2011 (clarifying the VAT rules re
certain transactions)
F. Rates of VAT
a. Ordinary
b. Exempt Transactions
i. Philippine Packing Corporation vs. CIT, December
26, 1956
c. Zero-Rated Transactions
i. Western Mindanao Power Corporation v. CIR, GR
No. 181136, 13 June 2012; Panasonic v. CIR, GR No.
178090, 8 February 2010; Hitachi v. CIR, GR No.
174212, 20 October 2010 (Zero-rated must be
indicated in the O.R.)
ii. Silicon Philippines, Inc v. Commissioner of Internal
Revenue, G.R. No. 172378, dated January 17, 2011
(Failure to indicate ATP)
iii. CIR v. Manila Mining Corp, GR No. 153204, 31
August 2005 (Zero Rating for the benefit of the
seller/lessor/service provider)
d. Effectively Zero-Rated Transactions
e. Cases in Point (Exempt and Zero Rated)
1. Contex v. CIR, G.R. No. 151135, July 2, 2004
2. CIR v. Seagate Technology (Phils.), GR No.
153866, 11 February 2005
3. CIR v. Acesite Hotel Corporation, 16 February
2007
4. PAGCOR v. BIR, GR No. 172087, 15 March
2011
G. VAT on Services
a. CIR v. Placerdome Tech Services (Phils.), GR No. 164365,
8 June 2007
b. CIR v. American Express Phil Branch, GR No. 152609, 29
June 2005
H. Transactions Deemed Sale
i. CIR v. Magsaysay Lines, GR No. 146984, 28 July
2006
I. Transitional Input Tax
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Fort Bonifacio Development Corporation v.

Commissioner of Internal Revenue, GR Nos. 158885 &
170680, dated April 2, 2009
J. Presumptive Input Tax
K. Procedure re Refund of VAT
a. Section 112 v. Section 229, NIRC
b. Southern Philippines Power Corporation v. CIR, G.R. No.
179632, 19 October 2011 (Requirements of VAT Refund)
c. CIR v. Mirant Pagbilao Corporation, G.R. No. 172129,
September 12, 2008, 565 SCRA 154
d. CIR v. Aichi Forging Company of Asia, Inc., GR No.
184823, 06 October 2010**
e. CIR v. San Roque Power Corporation, G.R. No. 187485.
February 12, 2013; Taganito Mining Corporation v. CIR,
G.R. No. 196113. February 12, 2013; Philex Mining
Corporation v. CIR, G.R. No. 197156. February 12, 2013
(See also: Ruling on the Motion for Reconsideration dated
08 October 2013)
f. Silicon Philippines v. CIR, GR No. 172378, 17 January
2011
g. Procter & Gamble Asia Pte Ltd vs. CIR, G.R. No. 202071,
19 February 2014
h. Rohm Apollo Semiconductor Philippines, Petitioner, V.
Commissioner Of Internal Revenue, Respondents., G.R.
No. 168950, January 14, 2015
L. Compliance Requirements

END OF OUTLINE