Pointers in Taxation Law 2016 Bar Examinations Professor Victoria V. Loanzon With the assistance as sistance of Atty. Si An!e"o An!e"o Ba#tista Amitte to the Practice of Law$ %ay 2016
&. 'enera" Princi("es ). What is the nat#re of the taxin! (ower of !o*ernment+ A. The power to tax is inherent to the state but constitutional provisions limit the exercise thereo thereof. f. Taxes Taxes are mandat mandatory ory imposition impositionss and not not a contra contract ct betwee between n the state and the taxpayer (in (in invitum) because invitum) because consent, which is an essential element of contract, is absent. It has the power to destroy as it puts rest raint on personal and property rights. ). What is the two,fo" nat#re of the (ower to tax+ A. The two-fold nature of the power of taxation is inherent power and legislative power. It is inherent because it is an exercise of sovereign powers and not granted by the Constitution. The primary purpose of taxation is to generate funds for the state to finance the needs of the citizens and promote the common good. This is carried out by way of legislation. ). What are the re"e*ant theories !o*ernin! the state-s inherent (ower to tax+ A. e"e*ant Theories/ Necessity Theory Theory existence of government is a necessity, therefore it has the right to compel citizens and property to pay taxes! Benefits – Protection Theor y payment of taxes allows a citizen to en"oy benefits in an organized societ y! and Life Blood Theo Theory ry – taxes constitute the lifeblood of the country and taxes support the operations of government and the public services extended to the people. Life"oo Theory/ Taxes are the lifeblood of the nation. The #hilippines has been struggling to impr improv ovee its its tax tax effi effici cien ency cy coll collec ecti tion on for for the the long longes estt time time with with mini minima mall succ succes ess. s. Conse$uently, the #hilippines has suffered the economic adversities arising from poor tax collec collectio tions, ns, forcin forcing g the govern governmen mentt to contin continue ue borrow borrowing ing to fund fund the budget budget defici deficits. ts. (Western Mindanao Power Corp v. CIR, 20!" Taxes Taxes are the lifeblood of the government, for without taxes, the government can neither exist v. Cit$ of Ca%anatuan$ Ca%anatuan$ (%&&' nor endure. ( #ational Power Corporation v. Benefits Protection Theory/ The individual receives the e$uivalent of the tax in the form of protection and benefit he receives from the government as such. Chur&hill and Tait vs. Raffert$, !2 Phil. '(0, #o. 0')2, *e&e+%er *e&e+%er 2, ' ecessity ecessity Theory/ Theory/ The power to tax is an attribute of sovereignty. It is a power emanating from necessity. It is a necessary burden to preserve the )tate*s sovereignty and a means to give the citizenry an army to resist an aggression, a navy to defend its shores from invasion, a corps of civil servants to serve, public improvements designed for the en"oyment of the citizenry and those which come within the )tate*s territory, territory, and facilities and protection which a government is supposed to provide. ( Phil. uarant$ Co., In&, vs. Co++issioner of Int. Rev., ! CRA ))', #o. /-220) April !0, 1' 1'
). What is the istinction etween the (ower to tax an the exercise of (o"ice (ower+ A. +hen the purpose of the imposition of a royalty fee upon an oil company is not for the purpose of generating revenue but but a recognition that the oil industry is imbued with public public interest, then the royalty fee will be considered as a regulatory fee. )imply stated an imposition that is for revenue is generall y a tax while an imposition that has another purpose such as regulation is an exercise of police power. ( Chevron v. C*A and C*C" ). What are the constit#tiona" (roscri(tions (roscri(tions in enactin! tax "aws+ A. All tax measures must originate from the -ouse of epresentatives but )enate may propose or concur with amendments. amendments. The rule on taxation must be uniform uniform and e$uitable! e$uitable! Congress shall evolve a progressive progressive
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system system of taxation taxation (tax rate and tax base are directly directly proportional proportional as against proportional system which system which has a fixed rate regardless of tax base! and regressive regressive system syst em where where the tax rate and tax base are inversely proportional. The constitutional provision has been interpreted to mean simply that 0direct taxes are to be Tolentino v. preferred 1and2 as much as possible, indirect taxes should be minimized. ( Tolentino e&retar$ of 3inan&e, '" The Constitution has delegated legislative power to the #resident to i mpose tariff rates, import and export export $uotas, $uotas, tonnage tonnage and wharfage wharfage dues and other duties or imposts imposts within the framewor3 of the national development program. Charitable institutions, churches and personages or convents appurtenant thereto, mos$ues, a&tuall$, dire&tl$ dire&tl$ and non4pr non4profi ofitt cemete cemeterie riess and all lands, lands, buildi buildings ngs and improv improveme ements nts,, a&tuall$, ex&lusivel$ (A3E used for religious, charitable or educational purposes are tax exempt. A56 means so"e"y used for the purposes enumerated in the Constitution. 7ote also that it is the #se of (ro(erty that determines exemption not the use of income /un4 Center of the Philippines v. 5ue6on Cit$, Cit$, 200 200 coming from such property. 4 /un4 Any law granting tax exem(tion must be approved by ma"ority of all members of Congress. All money collected for a special purpose ( special ( special levy or tax as contrasted to general tax) shall be dedicated only for that purpose and any excess shall be transferred to the general fund of the government. All loca locall gove governm rnmen entt unit unitss may impo impose se toll tollss ( ex. e x. use use of road roads s,, charges charges (ex. (ex. specia speciall assessment for certain activities and fees (ex. fees (ex. building permits, business permits in line with the principle of local autonomy! except for non4payment of community taxes8poll taxes, non4 payment of other taxes such as real property taxes may sub"ect one to imprisonment. +hile taxes are not sub"ect to set4off or compensation and over payment when proven forces the government to restore to the taxpayer the amount it overpaid ( solutio ( solutio indebiti. indebiti. ). 5an a non,(rofit$ non,stoc e#cationa" instit#tion ref#se to sett"e the assessment of a "oca" !o*ernment for its #i"in! (ermit+ A. o. The 5#+- implements the 9uilding Code through the 9uilding :fficials of all local govern governmen mentt units. units. +hile +hile there there is inciden incidental tal revenu revenuee to the local local governm government ent unit, unit, the imposition of a 9uilding #ermit parta3es of a re!#"atory nat#re. The imposition of 9uilding #ermit fee is an exercise of police power to ensure compliance compliance with the standards standards under the 9uilding Code to protect the public from any danger. ( An4eles 7niversit$ 3oundation v. Cit$ of An4eles" ). When enactin! tax meas#res$ what !enera" !#ie"ines m#st the "e!is"ator consier+ A. &n enactin! enactin! tax meas#re meas#ress the "e!is"ator "e!is"ator m#st m#st exert e*ery e*ery effort to distribute the tax burden between individuals or classes of population! in general, to redistribute resources between individuals (to include some form subsidy by way of support to particular classes li3e the senior citizens, the poor, the retired employees, the disabled! to provide basis for fiscal policy! to modify patterns of consumption or employment (may have incentives or factors to ma3e them less attractive. ). What are !enera" characteristics of tax meas#res+ A. Taxes are enforced and never voluntary (does not need consent of the taxpayer! exacted pursuant to law (part of legislative power but limited by constitutional provisions! and must originate from the -ouse of epresentatives! exaction is always in the form of money but failure to pay may result to distraint and levy of properties! taxes are personal and cannot be transferred or transmitted but the burden can be shifted (in case of indirect taxes li3e ;AT, purpose is to raise revenue for public8 governmental purpose! proceeds of tax collection cannot cannot be used used for private private purpo purpose! se! levied levied by author authority ity which which has "urisd "urisdict iction ion over over the follow following ing person person,, proper property ty,, transa transacti ction, on, rights rights and privil privilege egess (which (which is the extent extent of coverage8scope of powers. ). 3isc#ss the norma" tax cyc"e. A. The Tax 5yc"e/ Levy – Congress determines the persons, property or exercises to be taxed, amount to be raised, rates to be imposed and manner of implementation. Assessment and ollection – The The executive branch administers and implements all tax laws! and enforces the levy! levy ! Payment and"or #xercise of $emedies Compliance results in payment but resistance will allow the government and the taxpayer to exercise both administrative and "udicial remedies.
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). What is the (#r(ose of tax+ A.
). 8ow are tax meas#res inter(rete+ A. As a general rule, tax statutes are construed strictly against the government and liberally in favor of taxpayers! taxpayers! under the lifeblood theory, theory, it frowns frowns against exem(tions and there therefore the taxpayer has the burden of proof to show his claim ( strictissimi ( strictissimi &uris)' tax amnesty is never presumed! presumed ! Mira+ar 3ish Co+pan$, In&. v Co++issioner of Internal Revenue., .R. #o. ('!2, :une , 20/ 20/ A claim for tax refund or credit, li3e a claim for tax refund exemption, is construed strictly against the taxpayer. :ne of the conditions for a "udicial claim of refund or credit under the ;AT )ystem is compliance with the =%&>'& day mandatory and "urisdictional periods. CIR v. an Ro;ue Power Corp and other &onsolidated &ases, '. o. 2099:;$ <#ne ;0$ 201:< 201:< The general rule is that a void law or administrative act cannot be the source of legal rights or duties. Article ? of the Civil Code enunciates this general rule, as well as its exception. The Court said that although )ection @ of the =? Tax Code provides that the 0power to interpret the provisions of this Code and other tax laws shall be under the exclusive and original "urisdiction of the Commissioner, sub"ect to review by the )ecretary of
senior for its ser*ices+
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A. #o. The validity of the %&B senior citizen discount and tax deduction scheme under A %?, as an exercise of police power of the )tate, has alread y been settled in Carlos )uperdrug . The isco#nt !i*en to senior citizens meets a"" the re7#irements #ner the Corporation . The e7#a" (rotection c"ass. Senior citizens are "iewise exem(t from 12> VAT im(osition. 4 Manila Manila Me+orial Par=, In& and /a 3uneraria 3uneraria Pa6-u&at v. *W* e&retar$, e&retar$, 20!" ). What are the factors to consier in enactin! re*en#e,raisin! meas#res+ A. #urpose is lawful, identify specific person, property or privilege to be taxed, specify schedule of the rate to be i mposed! distinguish if tax is direct or indirect! apportionment of the tax to be collected! situs collected! situs of taxation! and mode of levy8collection. ). What may e the s#=ect matter of taxes+ A. Personal capitation or poll fixed amount without regard to class! Property Property sub"ect to assessment based on area, location, use and normally distinguishes between land and improvements which may include e$uipment! #xcise #xcise based on exercise of privileges or doing business (6xpect $uestions on input8output tax and zero rated transactions! and ustoms duties duties imposed on commodities exported or imported. ). %ay the (ro*isions of a tax "aw e extene y im("ication+ A. ?es. It is well settled that where the language of the law is clear and une$uivocal, it must be given its literal application and applied without interpretation. The general rule of re$uiring adherence to the letter in construing statutes applies with particular strictness to tax laws and provisions of a taxing act are not to be extended by implication. A careful careful reading of the D:s pertaining to the ;oluntary ;oluntary Assessment #rogram (;A# (;A# shows that the recording of the information in the :fficial egistry 9oo3 of the 9I is a mandatory re$uirement before a taxpayer taxpa yer may be excluded exclude d from the coverage of the ;A#. ;A#. ( CIR v. Ariete et al, 200" ). &s a c"aim for tax exem(tion tantamo#nt to 7#estionin! 7#estionin! the a#thority of the assessor+ A. o. A claim for tax exemption, whether full or partial, does not deal with the authority of local local assesso assessorr to assess assess real real proper property ty tax. tax. )uch )uch claim claim $uestio $uestions ns the correc correctne tness ss of the assessment and compliance with the applicable provisions of epublic Act (A 7o. ?=E& or the Focal Government Code (FGC of ==, particularly as to re$uirement of payment under protest, is mandatory. mandatory. >Ca+p :ohn ?a$ *ev. Corp. v. Central oard of Assess+ent Appeals >@CAA", 20!" ). PE@A ho"s a s(ecia" charter an create y "aw. The main o=ecti*e of the "aw is to (ro*i (ro*iee a (aca! (aca!ee of incent incenti*e i*ess to in*est in*estors ors "ocati "ocatin! n! in areas areas ienti ientifie fie as ex(ort ex(ort (rocessin! zones. Thro#!h the years$ PE@A has esta"ishe a n#mer of these zones. %ay PE@A e taxe as a cor(orate oy+ A. o. 9eing an instrumentality of the national government, the #6HA cannot be taxed by local government government units. Although Although a body corporate corporate vested with some corporate corporate powers, the #6HA is not a governmen government4owne t4owned d or controlled controlled corporation corporation taxable for real property taxes. The #6HA #6HA*s predec predecesso essor, r, the 6#HA, 6#HA, it was declar declared ed non4pr non4profi ofitt in charac character ter with with all its revenues revenues devoted devoted for its developmen development, t, improvemen improvement, t, and maintenance. maintenance. Consistent Consistent with this non4 profit character, the 6#HA was explicitly declared exempt from real property taxes under its charter. 6ven the #6HA*s lands and building whose beneficial use have been granted to other persons persons may not be taxed with real property taxes. The #6HA may only lease its lands and buildings buildings to #6HA4registe #6HA4registered red economic economic zone enterprises enterprises and entities. These #6HA4 registered enterprises and entities, which operate within economic zones, are not sub"ect to CITB 83 /AP7-/ /AP7-/AP7 AP7 vs. P?I/IP P?I/IPPI# PI#9 9 9C 9C8#8M 8#8MIC IC 8#9 8#9 real real prop proper erty ty taxes taxes.. ( CITB A7T?8RITBD PR8EI#C9 83 ATAA#, ATAA#, R9PR99#T9* B 8E9R#8R 8 E9R#8R 9#RI579 T. ARC ARCIA IA,, :R., :R., A#* 9M 9M9R 9R/I /I#* #*A A . TA/9#T /9#T8, 8, I# ?9 ?9R R CA CAP PACITB CITB A PR8EI#CIA/ TR9A7R9R 83 ATAA# ATAA# vs. P?I/IPPI#9 9C8#8MIC 8#9 A7T?8RITB, .R #o. (20!, .R #8. ()'(!, ()'(!, #ove+%er 21, 20" ). What is the cross orer octrine of the VAT system+ A. The cross border doctrine states that no ;AT shall be imposed to form part of the cost of goods destined for consumption consumption outside outside of the territorial territorial border border of the taxing authority authority.. Accordingly, the sales made by suppliers from a customs territory to a purchaser located within within an 6C:H:7 6C:H:76 6 will be consid considere ered d as export exportatio ations. ns. 4Co++ission Co++issioner er of Internal Internal Revenue v. Toshi%a Toshi%a Infor+ation 9;uip+ent >P?I/." In&., .R. #o. '0', Au4ust ,
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200' 200' ). What is the 3estination Princi("e of the VAT system+ A. The destination principle states that goods and s ervices are taxed only in the country where they are consumed >Co++issioner of Internal Revenue v. A+eri&an 9xpress International, .R. #o. '210, :une 2, 200' 200' ). 5an 5an an enti entity ty "oca "ocate te with within in an E5@ E5@ E E see see from from B& B& the the ref# ref#n n of its its #n#ti"ize in(#t taxes+ A. o. 5AL BA? &5EL 5PAT& *. 5%%&SS&E C &TEAL EVEDE$ EVEDE$ '.. o. 10906$ 10906$ <#ne 1;$ 2016/ nder the destination principle and cross border doctrine, sales of goods and services to Coral 9ay 7ic3el Corporation, a #6HA4 registered enterprise located in io Tuba 6xport #rocessing Hone (6cozone is sub"ect to &B ;AT ;AT. The proper party to see3 the tax refunds or credits should be the sellers of the goods, not the 9I. Thus, Coral 9ay 7ic3el is not entitled to claim for refund of input ;AT it paid on its purchases of goods and services. ). When is there o#"e taxation+ A. There is double taxation when the two taxes must be imposed on the same sub"ect matter, for the same purpose, by the same taxing authority, within the same "urisdiction, during the same taxing period! and the taxes must be of the same 3ind or character. ( #7R9RB CAR9 C8RP8RATI8#D ?89MART, I#C.D TAR APP/IA#C9 C9#T9R, I#C.D ?F, I#C.D 7PP/I9 TATI8# TATI8# I#C.D and ?AR*WAR9 ?AR*WAR9 W8RG?8P, W8RG?8P, I#C. vs. A#T?8#B AC9E9*8, in his &apa&it$ as T?9 TR9A7R9R 83 MA#I/AD and T?9 CITB 83 MA#I/A, .R. #8. (01', :ul$ !0, 20" ). F?@ F?@ is a ci!are ci!arette tte man#f man#fact act#ri #rin! n! com(an com(any. y. Th Thee B#r B#rea# ea# of &nter &nterna" na" e*en# e*en#ee assesse it se(arate"y for the raw materia"s it #se for man#fact#rin! its (ro#cts an for its finishe (ro#cts. &s the taxation of raw materia"s an the (ro#cts res#"tin! therefrom consiere o#"e taxation+ A. #o. )temmed leaf tobacco is sub"ect to the specific tax under )ection =@= (b. It is a partially prepared tobacco. The The removal of the stem or midrib from the leaf tobacco ma3es the resulting stemmed leaf tobacco a prepared or partially prepared tobacco. )ince the Tax Code contained no definition of Jpartially prepared tobacco,K then the term should be construed in its general, ordinary, and comprehensive sense x x x.K
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the income. ). 53E,'$ assiste y 5B5 re7#este for the a((ro*a" of the 3e(artment of Cinance 4I3CJ in orer for the B#rea# of Treas#ry-s 4IBTJ iss#ance of ten,year zero co#(on treas#ry certificates 4T,notes. These T,otes wo#" initia""y e (#rchase y a s(ecia s(ecia"" (#r (#r(os (osee *ehic" *ehic"ee on eh eha"f a"f of 53E, 53E,'$ '$ re(aca re(aca!e !e an an so" so" at a (remi#m to in*estors as PEA5E Bons. Thereafter$ the BT iss#e the T,notes to 5B5 on eha"f of 53E,'. 5B5 5a(ita"$ as the "ea #nerwriter$ so" the Peace Bons in the seconary maret. ote that B3 (#rchase se*era" PEA5E Bons on ifferent ates. 8owe*er$ 8owe*er$ the B& iss#e a "ater r#"in! ec"arin! that the PEA5E Bons$ ein! ein! e( e(os osit it s#sti s#stit#t t#tes es$$ are are s#=ec s#=ectt to the the 20> fina" fina" withho withho"i "in! n! tax. tax. Are Are the these se PEA5E Bons s#=ect to fina" withho"in! tax+ A. Les. Les. The )upreme Court held that the number of lenders is determinative of whether a debt instrument should be considered a deposit substitute and conse$uently sub"ect to the %&B final withholding tax.
). What is the nat#re of 3oc#mentary Stam( Tax 4I3STJ+ A. 3ST (artaes of Excise < /ia%ilit$ for pa$+ent of *T is for a&&ount of the eller Cort Bonifacio 3e*. 5or( *. 5&$ 201; . *T is an ex&ise tax levied on the exer&ise %$ persons of privile4es &onferred &onferred %$ law. note that this was as=ed in the 20 %ar even thou4h ex&luded in the &overa4e Phi"acor 5reit 5or( *. 5&$ 201;< 201; < *T is due the person >" +a=in4D >2" si4nin4D >!" issuin4D >" a&&eptin4D or >'" transferrin4 the taxa%le do&u+ents. ). When is 3ST im(ose+ 5)T is in the nature of an excise tax because it is imposed upon the privilege, opportunity or facility offered at exchanges for the transaction of the business. 5)T is a tax on documents, instruments, loan agreements, and papers evidencing the acceptance, assignment, or transfer of an obligation, right or property incident thereto. 5)T is thus imposed on the exercise of these privileges through the execution of specific instruments, independently of the legal status of the transactions giving rise thereto. In a merger of two corporations, the transfer of real properties not conveyed to or vested by means of any specific deed, instrument or writing is not sub"ect to 5)T..A 7o. %@', entitled JAn Act ationalizing the #rovisions of the 5ocumentary )tamp Tax of the 7ational Internal evenue Code of =?K was enacted and too3 effect on April %?, %&&@, which exempts the transfer of real property of a corporation, which is a party to the merger or consolidation, to another corporation, which is also a party C8MMII8#9R 83 to the the merg merger er or conso consolid lidat atio ion, n, from from the the payme payment nt of 5)T 5)T. ( C8MMII8#9R I#T9R#A/ R9E9#79 R9E9#79 vs. PI/IPI#A ?9// P9TR8/97M C8RP8RATI8#, C8RP8RATI8#, .R #o. 2!(, epte+%er 2, 20" ). &s an e"ectronic messa!e with instr#ction to eit an acco#nt an (ay a (erson s#=ect to 3ST+ A. #o. :n review with the )upreme Court, it held that an electronic message containing instructions to debit their respective local or foreign currency accounts in the #hilippines and
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pay a certain named recipient also residing in the #hilippines is not transaction contemplated under )ection =N= of the Tax Code. They are also not bills of exchange due to their non4 negotiability. -ence, they are not sub"ect to 5)T. ( T?9 ?8#G8# A#* ?A#?AI A#GI# C8RP8RATI8# C8RP8RATI8# /IMIT9*-P?I/IPPI#9 RA#C?9 RA#C?9 vs. C8MMII8#9R 83 I#T9R#A/ R9E9#79, .R. #o. 110( F 1))2(, :une , 20" ). ationa" Power 5or(oration 4IAP5J transferre its franchise to the new"y, create create ationa" ationa" Transmis ransmission sion 5or(orat 5or(oration ion 4ITAS5 4ITAS5J. J. At the time of transfer transfer$$ AP5 ha (enin! franchise tax o"i!ations to the "oca" !o*ernment. %ay the "iai"ity to (ay e"in7#ent franchise tax e transferre to TAS5+ ). ?es. ?es. A corporation that has been ordered to pay franchise tax delin$uency but which faci facili litie ties, s, incl includ udin ing g its natio nationw nwid idee fran franch chise ise,, had had been been tran transf sfer erre red d to the the 7atio 7ationa nall Transmission Corporation (TA7)C: by operation of law during the time of the alleged delin$uency, cannot be ordered to pay as it is not the proper party sub"ect to the local franchise tax, the transferee being the one liable. ( AT&AL PWE 5PAT& *s. PV&5&AL 'VE%ET C BATAA$ SA''D&A' PAL PALALA ALAW W&'A &'A C BAT BATAA$ A$ PAST PAST B. V&58D V&58DA5 A5 4& 8&S CC&5& CC&5&AL AL 5APA5&T? AS PV&5&AL TEASDE C BATAA an T8E E'&STE C 3EE3S C T8E PV&5E C BATAA$ '.. o. 1H069:$ A(ri" 21$ 201: ). What is the 120K;0 #"e in a 5"aim for ref#n or creit of #n#ti"ize in(#t tax #ner Section 112 of &5+ A. e$uisites first, administrative claim must be filed with 9I within two years after the close of taxable $uarter when zero4rated or effectively zero rated sales were made! second, "udicial claim must be made within '& days from receipt of 9I decision on tax refund8credit claim or if no action is received from the 9I within =%& days. ( Mindanao eother+al v. CIR, 20!" #ippon 9xpress Corp v. CIR, 20! M
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C.T.A Case 7o. E?% should be dismissed on the ground of lac3 of "urisdiction for being prematurely filed. -owever, -owever, the Court held that since C.T.A C.T.A Case 7o. EN'?, EN'?, the "udicial claim was filed a day after the filing of the administrati administrative ve claim, the same should be sustained sustained based on e$uitable estoppel having been filed i.e., from 5ecember =&, %&&' to :ctober E, %&=&, when 9I uling 7o. 5A4@N4&' 5A4@N4&' was in place. place. The supposed "urisdictiona "urisdictionall defect, defect, which would have attended the filling of its "udicial claim before the expiration of the =%&4day period, was cured. (C8MMII8#9R 83 I#T9R#A/ R9E9#79 vs. C9 /78# 98T?9RMA/ P8W9R C8MPA#B, C8MPA#B, I#C., .R #o. 0(, epte+%er epte+%er ), 20 ) ). &s the 120K;0 ay r#"e a"ways manatory+ A. o. As an exception to the mandatory and "urisdictional nature of the =%&>'& day period, "udicial claims filed between 5ecember =&, %&&' or from from the issuance of 9I uling 7o. 5A4 @N4&', up to :ctober E, %&=& need not wait for the lapse of the =%&>'& day period in consonance with the principle of e$uitable estoppel. )ince Taganito filed its "udicial claim with the CTA on
The )C ruled that the "urisdiction of the CTA over decisions or inaction of the CI is only appellate in nature and, thus, necessarily re$uires the prior filing of an administrative case before the CI under )ection ==%. A petition filed prior to the lapse of the =%&4day period prescribed under said )ection would be premature for violatin4 the do&trine on the exhaustion of ad+inistrative of ad+inistrative re+edies. There is, however, an exception to the mandatory and "urisdictional nature of the =%&>'& day period under 9I uling 7o. 5A4@N4&', dated 5ecember =&, %&&', expressly stated that the Jtaxpayer4claimant need not wait for the lapse of the =%&4day period before it could see3 "udicial relief with the CTA by way of #etition for eview.K ( TAA#IT8 MI#I# C8RP8RATI8# vs. C8MMII8#9R 83 I#T9R#A/ R9E9#79, .R. #o. (0)1, #ove+%er , 20 and .R. #o. 20', 20', #ove+%er 21, 20" ). What are the (#r(oses of the aforementione 120K;0 (erios+ A. )ection ==%(5 of the =? Tax Code states the time re$uirements for filing a "udicial claim for the refund or tax credit of input ;AT ;AT. The legal provision spea3s of two periodsM the (erio of 120 ays$ which ser*es as a waitin! (erio to !i*e time for the 5& to act on the aministrati*e c"aim for a ref#n or creit ! and the period of ;0 ays$ which refers to the (erio for fi"in! a =#icia" c"aim with the 5TA. It is the '&4day period that is at issue in this case. ( R8?M AP8//8 9MIC8#*7CT8R P?I/IPPI#9 vs. C8MMII8#9R 83 I#T9R#A/ R9E9#79, .R. #o. 1('0, :anuar$ , 20'" ). What is the (#r(ose of the re7#irement for (rintin! of sa"es in*oices an officia" recei(ts+ A. In ili&on Ealle$, alle$, Phils., In&. v. CIR, 20, the )uprem )upremee Court Court reiter reiterate ated d that that the re$uirement of 1printing2 the 9I permit to print on the face of the sales invoices and official receipts is a control mechanism adopted by the 9ureau of Internal evenue to safeguard the produ&in4 the Authorit$ to Print, the taxpa$er taxpa$er &annot interest of the government. Without produ&in4 &lai+ an$ tax refundJtax &redit. ). 3ifferentiate a VAT in*oice from a VAT recei(t. ;AT invoice is necessary for every sale, barter or exchange of goods or properties while A. A ;A a ;AT official receipt properly pertains to every lease of goods or properties, and every sale, barter or exchange of services. In other words, the ;AT ;AT invoice invoice is the sellerOs best proof of the sale of the goods or services to the buyer while the ;AT receipt is the buyerOs best evidence of &PP EFPESS EFPESS the the pay payment ment of good goodss or serv servic ices es rece receiv ived ed from from the the sell seller er.. ( &PP 4P8&L&PP&ES 5P *. 5%%&SS&E C &TEAL EVEDE$ '.. o. 1H9666$ Cer#ary :$ 2019 ). What are the re7#irements re7#irements for a tax ref#n or tax creit+ A. The )upreme Court reiterated that it is fatal if the taxpayer failed to print the word Jzero4 ratedK on the ;AT invoices or official receipts in claims for a refund or credit of input ;AT on zero4rated sales, even if the claims were made prior to the effectivity of .A ''?. A ;AT invoice is the seller*s best proof of the sale of goods or services to the buyer, while a ;AT
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receipt is the buyer*s best evidence of the payment of goods or services received from the seller. The re$uirement of imprinting the word Jzero4ratedK proceeds from the rule4ma3ing authority granted to the )ecretary of
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). What is income+ A. Income consists of profit or gains as to the amount of money coming to a person or corporation over a specified period of time. &ncome/ defini definitio tion, n, nature nature,, tests tests when when it becom becomes es taxabl taxable! e! inclus inclusion ionss of gross gross income income,, classif classifica icatio tion n as to source source (compens (compensati ation on income income,, fringe fringe benefi benefits, ts, profess profession ional al income income,, income from business, income from dealings in property! passive income investment (ex.
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Covered transaction transactions, s, payment payment schedule, schedule, allowable allowable deductions deductions (itemized (itemized and optional optional A. Covered standard deductions! treatment of passive incomes sub"ect to tax and those not sub"ect to tax! tax on capital gains! chec3 also on principle of transfer pricing if domestic corporation does business in another foreign country! treatment of accumulated earnings. e&tion 2)>" of the #IRC i+poses a 0L preferential tax rate on the in&o+e of >" proprietar$ non-profit edu&ational institutions and >2" proprietar$ proprietar$ non-profit hospitals. The onl$ ;ualifi ;ualifi&at &ations ions for hospit hospitals als are are that that the$ the$ +ust +ust %e propri proprieta etar$ r$ and non-pr non-profi ofit. t. Propr Propriet ietar$ ar$ +eans +eans privat private, e, follow followin4 in4 the defini definition tion of a propr proprieta ietar$ r$ edu&at edu&ationa ional l institution as an$ private s&hool +aintained and ad+inistered %$ private individuals or 4roups with a 4overn+ent per+it. #on-profit +eans no net in&o+e or asset a&&rues to or %enefits an$ +e+%er or spe&ifi& person, with all the net in&o+e or asset devoted to the institutionNs purposes and all its a&tivities &ondu&ted not for profit.
). What taxes are im(ose i m(ose on an e#cationa" instit#tion+ A. :nly portions actually, actually, directly directly and exclusively exclusively used for charitable purposes are exempt exempt from real property taxes! while portions leased to private entities are not exempt from such An4eles 7niversit$ 3oundation v. Cit$ Cit$ of An4les, 202 202 taxes. ( An4eles ). What taxes are im(ose i m(ose on a hos(ita"H hos(ita" H A. As a general principle, a charitable institution does not lose its character as such and its exemption from taxes simply because it derives income from paying patients, whether out4 patient, or confined in the hospital, or receives subsidies from the government, so long as the money received received is devoted devoted or used altogether altogether to the charitable charitable ob"ect which it is intended to achieve! and no money inures to the private benefit of the persons managing or operating the v. t. /u=eOs Medi&al Center, 202" institution. (CIR v. t. ). What taxes are im(ose i m(ose on resient forei!n cor(orations+ A. General rule foreign corporations are liable for income derived from #hilippine sources! may en"oy certain incentives if covered by a treaty or special provision of law (registration under the 9oard of Investments and the #hilippine 6conomic Hone Authority! minimum corporate tax due and schedule of payment! treatment of other incomes! liability for capital gains tax! treatment of accumulated earnings ). En#merate the ifferent ins of resient forei!n cor(orations an isc#ss their tax "iai"ities$ if any. A. Phi"i((ine Branch is a foreign corporation in the #hilippines that is allowed by the )6C to do business in the #hilippines in such activities it normally does in its home country. It is normally taxable in li3e manner as a local corporation =%B ;AT, '&B corporate income tax, and such other applicable internal revenue taxes. Also, repatriation of its operational income in the #hilippines is sub"ect to =B branch profit remittance tax. e(resentati*e ffice is a foreign corporation licensed to do business in the #hilippines to deal directly with the clients of its parent company abroad on information dissemination, as communication center, product promotion, and $uality control for exports. It is not allowed to earn income in the #hilippines, thus not sub"ect to income tax. e!iona" (eratin! 8ea7#arters in the #hilippines (:-Q is a special type of income producing foreign corporation. The income to be generated is limited to specific services rendered to its affiliates, branches, and subsidiaries within the Asia4#acific egion. It is sub"ect to a special income tax rate of =&B and =%B ;AT in the #hilippines. epatriation of its operational income in the #hilippines is sub"ect to =B branch profit remittance tax. e!iona" e!iona" Area Area 8ea7#arte 8ea7#arters rs (A-Q (A-Q is a non4income non4income generating generating foreign foreign corporatio corporation n tas3ed to act as a supervisory, communications, or coordinating center for its subsidiaries, affiliates, and branches in the Asia4#acific region. It is only a cost center and is i s not allowed to earn income. Air Canada v. Co++issioner of Internal Revenue, .R. #o. 1'0), :anuar$ , , 201 / 201 / An off"in off"inee intern internati ationa ona"" air carrier carrier is a resi resient ent forei! forei!n n cor(or cor(orati ation on for incom incomee tax (#r(oses. (#r( oses. In this case, the Court Court applied applied the doctri doctrine ne in *$ v! British +verseas Air,ays
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orporation orporation that an international air carrier with no landing rights in the #hilippines is a resident foreign corporation if its local sales agent sells and issues tic3ets in its behalf. An offline international carrier selling passage tic3ets in the #hilippines, through a local general sales agent, is considered a resident foreign corporation doing business in the #hilippines. As such, it is taxable on income derived from sources within the #hilippines, and not on Gross #hilippine 9illings, sub"ect to any applicable tax treat y. A&&enture, In&. v. CIR, 202< Tax Tax for ser*ices renere y a resient cor(oration o#tsie Phi"i((ine territory/ The Court held that that the recipient of the service should be doing business outside the #hilippines to $ualify for zero4rating is the only logical interpretation of )ection =&%(b (% of the =?? Tax Code, as we explained in 9urmeisterM JThis can only be the logical interpretation of )ection =&% (b (%. If the provider and recipient of the 0other services0 are both doing business in the #hilippines, the payment of foreign currency is irrelevant. :therwise, those t hose sub"ect to the regular ;AT ;AT under )ection =&% (a can avoid paying the ;AT ;AT by simply stipulating payment pa yment in foreign currency inwardly remitted by the recipient of services. To interpret )ection =&% (b (% to apply to a payer4recipient of services doing business in the #hilippines is to ma3e the payment pa yment of the regular ;AT under )ection =&% (a dependent on the generosity of the taxpayer. The provider of services can choose to pay the regular ;AT or avoid it by stipulating payment in foreign currency inwardly remitted by the payer4recipient. )uch interpretation removes )ection =&% (a as a tax measure in the Tax Tax Code, an interpretation this Court cannot sanction. A tax is a mandatory exaction, not a voluntary contribution. x x x Cina" Witho"in! Tax 4ICWTJ on i*iens+ A. o. The term dividends means any distribution made by a corporation to its shareholders out of its earnings or profits and payable to its shareholders, whether in one or in other property. In light of the foregoing, the Court holds therefore that the redemption price represe representi nting ng the amount amount of #?,?' #?,?'%,' %,'=@. =@.&& && receiv received ed by GTC GTC could could not be treate treated d as accumulated dividends in arrears that could be sub"ected to =B <+T. ;erily, respondent*s A<) covering the years %&&' to %&& show that it did not have unrestricted retained earnings, and in fact, operated in a position of deficit. Thus, absent the availability of unrestricted retained earnings, the board of directors of respondent had no power to issue dividends. (Co++issioner of Internal Revenue v. ood$ear Philippines In&., .R. #o. 21!0, Au4ust !, 201"
&&&. Estate Tax an 3onor-s Taxes #ner the &5 ). 8ow o yo# etermine etermine the *a"#e of estate to e taxe+ A. :nly the net value of the estate is liable to tax. A schedule of brac3ets of amount of net value and the corresponding rate schedule per brac3et are imposed.
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). Who are "ia"e to (ay estate taxes+ A. esidents and citizens covering all properties, real or personal, tangible or intangible, wherev wherever er situate situated! d! and non4re non4resid sident ent aliens aliens coveri covering ng only only proper properties ties in the #hilip #hilippin pines es provided, that, wit h respect to intangible personal property, property, its inclusion in the gross estate is sub"ect to the rule on reciprocity. ). What is !ross estate+ A. 5ecedent*s interest at the time of his death, transfer in contemplation of death, property transfers transfers sub"ect to revocation revocation,, property property passing under a general general power of appointmen appointment, t, proceeds of life insurance! and property property transfers for insufficient consideration ). What may e e#cte from the estate+ A. The fo""owin! may e e#cte from the estate/ 1. 6xpenses, 6xpenses, losses, indebtedness indebtedness and taxes (funeral expenses, "udicial expenses, expenses, claims against the estate, claims against insolvent persons, unpaid mortgages, taxes and casualty losses! and 2. #roperty previously taxed (transfers for public use, family home, standard deduction, medical expenses and amounts received by heirs under .A. @=? on etirement 9enefits of #rivate 6mployee. #lease review the concept of vanishing deduction and the corresponding holding period and the tax rate based on the value of the property under )ection NE(A (% of the 7IC. ). Who are consiere stran!ers for (#r(oses of onor-s tax+ A. ea on definition, transactions covered and schedule of payment based on brac3ets as to the value of the donation ()ection =E of the 7IC! for the JstrangerK, a flat rate of '&B is imposed! the following are 7:T JstrangersK4 brother, sister (whether by whole or half blood, spouse, ancestor and lineal descendant! and relative by consanguinity in the collateral line within the fourth civil degree of relationship. ). What items are not s#=ect to onor-s tax+ A. 5owries or gifts made on account of marriage, gifts made or for use of the national government or entity created by any of its agencies which is not conducted for profit, or to any political subdivision of said government! and gifts in favor of an educational and8or charit charitabl able, e, religi religious ous,, cultur cultural al or social social welfar welfaree corpor corporatio ation, n, instit instituti ution, on, accred accredited ited non4 non4 governmenta governmentall organizat organization, ion, trust or philanthro philanthropic pic organizat organization ion or research research institution institution or organization.
&V. Tax emeies #ner the &5 ). What are the ste(s in the assessment (rocess+ A. Letter of authorit$ issued for tax audit, noti&e of infor+al &onferen&e >ter+inated if taxpa$ taxpa$er er presen presents ts satisf satisfa&t a&tor$ or$ proof" proof"DD releas releasee of preli+i preli+inar nar$$ assess assess+ent +ent in &ase &ase of unsatis unsatisfa& fa&tor tor$$ explan explanati ation on and if taxpa$ taxpa$er er disa4 disa4ree rees, s, he has ' da$s da$s to re;ues re;uestt for re&ons re&onside iderat ration ionDD servi&e servi&e of for+al for+al letter letter of de+and de+andJJ noti&e noti&e of asses assess+e s+ent nt if %asis %asis for re&onsideration is not +eritoriousD taxpa$er +a$ file a protest within the !0-da$ period of the for+al de+and and +ust su%+it supportin4 do&u+ents within 10 da$s >if not, the protest is dee+ed waived"D if the Co++issioner does not de&ide the +atter + atter within (0 da$s or de&ides with finalit$ that the taxpa$er is lia%le for the assess+ent D taxpa$er has !0 da$s fro+ the lapse of the (0 da$ period for the Co++issioner to de&ide or noti&e of final de&ision of the Co++issioner of the Internal Revenue > even %e$ond (0 da$s" to file an appeal with the Court of Tax Appeals >/as&ona /and v Co++issioner of Internal Revenue, 202"D &ase is heard initiall$ %$ a division of the CTA and an appeal &an further %e +ade with the CTA en %an& > within ' da$s under e&tion >A" R7/9, ( in relation to Rule ! of the Rules of Civil Pro&edure" and final ar%iter is the upre+e Court. Through the enactment of epublic Act 7o. %N%, the "urisdiction of the CTA has been expanded to include not only civil tax cases but also cases that are &ri+inal in nature, as well as lo&al tax &ases, propert$ taxes and final &olle&tion of taxes. ). 5an a (rotestin! tax(ayer a((ea" to the 5& from the fai"#re to act y the 5&-s a#thorize re(resentati*e+ re(resentati*e+ A. o. In PAC8R PAC8R v. Co++issioner of Internal Revenue, 2) :an 201 , the )upreme Court
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outlined the remedies available to a protesting taxpayer, to witM (= A whole or partial denial by the CIOs authorized representative ma y be appealed to the CI or the CTA (% A whole or partial denial by the CI may be appealed to the CTA (' The CI or CIOs authorized representativeOs failure to act may be appealed to the CTA. TE/ There is no mention of an a((ea" to the 5& from the fai"#re to act y the 5&Ms a#thorize re(resentati*e. re(resentati*e. ). What cases are within the =#risiction of the 5o#rt of Tax A((ea"s+ A((ea"s+ A. P#rs#ant to the provisions of epublic Act 7o. ==% and other laws prior to .A. %N%, the Court of Tax Appeals retains exclusive appellate "urisdiction to review by appeal, the followingM =. 5ecis 5ecisio ions ns of the the Commi Commissi ssion oner er of Inte Intern rnal al eve evenu nuee in cases cases invo involv lvin ing g disp disput uted ed assessm assessment ents, s, refund refundss of intern internal al revenu revenuee taxes, taxes, fees fees or other other charg charges, es, penalti penalties es impose imposed d in relati relation on theret thereto, o, or other other matter matterss arisin arising g under under the 7ation 7ational al Intern Internal al evenue Code or other law or part of law administered by the 9ureau of Internal evenue! %. 5ecisio 5ecisions ns of the Commis Commission sioner er of Custom Customss in cases involv involving ing liabili liability ty for customs customs duties, fees or other money charges! seizure, detention or release of property affected! fines, fines, forfei forfeitur tures es or other other penalt penalties ies impose imposed d in relati relation on theret thereto! o! or other other matter matterss arising under the Customs Faw or other law or part of law administered by the 9ureau of Customs 1ep. Act. 7o. ==%, (=@, )ec. ?2! '. In auto automa matic tic revie review w case casess wher wheree such such decisi decision onss of the Comm Commiss issio ion n of Custom Customss favorable to the taxpayer is elevated to the )ecretary of
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liability was premised on the C:C*s issuance of CDC 7o. =E@4%&=%, which gave effect to the CI*s Rune %, %&=% Fetter interpreting )ection =@N(e of the 7IC as to include al3ylate among among the articl articles es sub"ec sub"ectt to custom customss duties duties,, hence, hence, #etron #etron*s *s petiti petition on before before the CTA CTA ultimately challenging the legality and constitutionality of the CI*s interpretation of a tax provision. The CTA had no "urisdiction to ta3e cognizance of the petition as its resolution would would necessa necessarily rily involv involvee a declar declarati ation on of the validi validity ty or constit constituti utiona onality lity of the CIOs CIOs interpretation of )ection =@N (e of the 7IC, which is sub"ect to the exclusive review by the Co++issionerr of Internal Internal )ecreta )ecretary ry of
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by the 9I to the taxpayer. Thus, failure of the 9I to file a warrant of distraint or serve a levy on taxpayer*s properties nor file collection case within the three4year period is fatal. Also, the attempt of the 9I to collect the tax through its Answer with a demand for the taxpayer to pay the assessed 5)T in the CTA is not deemed compliance with the Tax Code. (C?I#A A#GI# C8RP8RATI8# vs. C8MMII8#9R 83 I#T9R#A/ R9E9#79, .R. #o. )2'0, 3e%ruar$ 0, 20'" ). Wi"" a re7#est for rein*esti!ation s#s(en the stat#te of "imitations+ A. o. A re$uest for reinvestigation alone will not suspend the statute of limitations. Two things must concurM there must be a re$uest for reinvestigation and the CI must have granted C?I# I#A A A A#G #GI# I# C8RP C8RP8R 8RA ATI8# TI8# vs. vs. C8MM C8MMI II I8# 8#9R 9R 83 I#T9 I#T9R# R#A/ A/ it. (C? R9E9#79, .R. #o. )2'0, 3e%ruar$ 3e%ruar$ 0, 20' 20' ). %s. Sarmiento$ ext %oi"e &nc-s 3irector of Cinance$ exec#te se*era" wai*ers of the stat#te of "imitations to exten the three,year (rescri(ti*e (erio of assessment for taxes taxes #e #e.. at#r at#ra"" a""y$ y$ B& iss#e iss#e its asses assessme sment nt eyon eyon the the (re (rescr scri(t i(ti*e i*e (er (erio io.. Thereafter$ Thereafter$ %s. Sarmiento contests the iss#e assessment ar!#in! that her wai*ers were *oi eca#se of the fo""owin!/ 4a wai*ers were exec#te witho#t a notarize oar a#thorityG 4 the ates of acce(tance y B& were not inicate thereinG 4c se*era" irre!#"arities were (resent in the s#=ect wai*ersG an 4 esto((e" oes not a(("y in 7#estionin! the *a"iity of wai*er of the stat#te of "imitations. Are the Wai*ers Wai*ers *a"i+ the B&-s ri!ht to assess a"reay (rescrie+ A. 7o. The general rule is that a waiver of the statute of limitations that does not comply with the re$uisites re$uisites for its validity specified specified under D: 7o. %&4& and 5A: &=4& is generally generally invalid and ineffective to extend the prescriptive period to assess taxes. -owever, due to peculiar circumstances and as an exception to the general rule, the supposedly invalid waivers may be considered valid for the following reasonsM 3irst , the parties are in pari delicto or in e$ual fault. The two parties to a controversy are e$ually guilty and the y shall have no action against each other. e&ond , #arties must come to court with clean hands. #arties ho do not come to Court with clean hands cannot be allowed to benefit from their own wrongdoing. Taxpayer should not be allowed to benefit from the flaws in its own waivers and successfully insist on their invalidity in order to evade its responsibility to pay taxes. Third , taxpay taxpayer er is estoppe estopped d from from $uesti $uestioni oning ng the validi validity ty of its +aiver aivers. s. ;erily, rily, the application of estoppel in this case would promote the administration of the law, prevent in"ustice and avert the accomplishment of a wrong. 3inall$, the Court cannot tolerate a highly suspicious situation. In this case, the taxpayer, on one hand, after voluntarily executing the +aivers insisted on their invalidity by raising the very same defects it caused. :n the other hand, the 9I miserably failed to exact from the taxpayer strict compliance with the rules. C8MMI II I8# 8#9R 9R 83 I#T9 I#T9R# R#A/ A/ R9 R9E9 E9#9 #97 7 v. #9QT #9QT M8I M8I/9 /9,, I#C. I#C.,, .R. .R. (C8MM #8.22(2', *9C9M9R ), 20'" 20'" ). 8ow to (ro*e that a tax assessment was mae+ A. The Court held that in order to prove the fact of mailing, it is essential to present the registry receipt issued by the 9ureau of #osts or the egistry return card, which would have been signed by b y the taxpayer or its authorized representative. And if said documents could not be located, the CI should have, at the very least, submitted to the Court a certification issued by the 9ureau of #osts and any other pertinent document executed with its intervention. The Court does not put much credence to the self4serving documentations made by the 9I personnel, especially if they are unsupported by substantial evidence establishing the fact of mailing. +hile it is true that an assessment is made when the notice is sent within the prescribed period, the re"ease$ mai"in!$ or senin! of the same m#st sti"" e c"ear"y an satisfactori"y (ro*e. Dere notations made without the taxpayerOs intervention, notice or control, and without ade$uate supporting evidence cannot suffice. :therwise, the defenseless taxpayer would be unreasonably placed at the mercy of the revenue offices. The 9IOs failure to prove GRDOs receipt of the assessment leads to no other conclusion but that no assessment was issued. Conse$uently, the governmentOs right to issue an assessment for the said period has MII8 I8#9R 83 I#T9R#A/ R9E9#97 #97 v. :M alre alread ady y pres prescr crib ibed ed.. ( C8MMI
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P?I/IPPI#9 MA#73ACT7RI#, MA#73ACT7RI#, 2 3e% 201" ). What constit#tes (roof of taxes withhe" P A. The Court held that the certificate of creditable tax withheld at source is the competent proof of establish the fact that taxes are withheld. It is not necessary for the person who executed and prepared the certificate of creditable tax withheld source to be presented and to C8MMII8#9R R 83 testify testify person personally ally to prove prove the authen authentic ticity ity of the certif certifica icates. tes. ( C8MMII8#9 I#T9R#A/ R9E9#79 R9E9#79 vs. P?I/IPPI#9 #ATI8#A/ #ATI8#A/ A#G, .R. #o. (020 (020 epte+%er 2, 20"
). &s a eficiency VAT assessment tantamo#nt to an assessment for withho"in! tax "iai"ities s#ch that the tax(ayer cannot a*ai" of a tax amnesty (ro!ram+ A. 7o. Indirect taxes, li3e ;AT and excise tax, are different from withholding taxes. To distinguish, in indirect taxes, the incidence of taxation falls on one person but the burden thereof can be shifted or passed on to another person, such as when the tax is imposed upon goods before reaching the consumer who ultimately pays for it. :n the other hand, in case of withholding taxes, the incidence and burden of taxation fall on the same entity, the statutory taxpayer. The burden of taxation is not shifted to the withholding agent who merely collects, by withholding, the tax due from income payments to entities arising from certain transactions and remits the same to the government. ). What are the r#"es on (rotest an ref#n for income tax+ A. A taxpayer may protest any assessment administratively! t axes may be paid under protest. General uleM efund may be re$uested by the taxpayer within two years from payment. 5ommissio 5ommissioner ner of &nterna" &nterna" e*en#e e*en#e *. Team Team 4Phi"i((in 4Phi"i((ines es (eration (erationss 5or(oratio 5or(oration n 4former"y %irant Phi"s.$ (eration 5or(oration$ .R. #o. )210 >20< >20 < There are three essential conditions for the grant of a claim for refund of creditable withholding income tax, to witM (= The claim is filed with the Commissioner of Internal evenue within the two4year period from the date of payment payment of the tax! (% It is shown on the return of the recipient that the income payment received was declared as part of the gross income! and (' The fact of withholding is established by a copy of a statement duly issued by the payor to the payee showing the amount paid and the amount of the tax withheld therefrom. therefrom. ). What may the !o*ernment resort to in case of tax(ayer-s e"in7#ency+ e"in7#ency+ A. 5istraint of personal property, levy of real property! civil action and criminal action. ). What are the re7 re7#ire #irements ments for entit"ement entit"ement of a cor(orate cor(orate tax(ayer tax(ayer for a ref# ref#n n or the iss#ance of tax creit certificate in*o"*in! excess withho"in! taxes+ A The Court held that the following re$uisites must be complied with to sustain the claim for refundM = That the claim for refund was filed within the two4year reglementary period pursuant to )ec. %% of the 7IC! % +hen it is shown on the IT that the income payment received is being declared part of the tax payer*s gross income! and ' +hen the fact of withholding is established b y a copy of the withholding tax statement, duly issued by the payor to the payee, showing the amount paid and income tax withheld from that account. . R9P7/IC 83 T?9 P?I/IPPI#9, R9PR99#T9* B T?9 C8MM C8MMI II I8# 8#9R 9R 83 I#T9 I#T9R# R#A/ A/ R9 R9E9 E9#79 #79 vs. vs. T9AM T9AM >P?I >P?I/ /." ." 9#9R 9#9RB B C8RP8RATI8# >38RM9R/B MIRA#T P?I/ 9#9RB C8RP8RATI8#", .R. #o. ((01, :anuar$ , 20'" 20'" ). &s the 5TA 5TA (rohii (rohiite te from from eterm etermini inin! n! whethe whetherr taxes taxes sho#" sho#" ha*e ha*e ee een n (ai (ai eca#se it is an assessment+ The )upr )uprem emee Cour Courtt rule ruled d that that in an actio action n for for the the refu refund nd of taxe taxess alle allege gedly dly A. o. The erroneously paid, the Court of Tax Appeals may determine whether there are taxes that should have been paid is not assessment. It is incidental to determining whether there should be a refu refund nd.. ( MI-9* P?I/IPPI#9 T9C?#8/8B, I#C. vs. C8MMII8#9R 83 I#T9R#A/ R9E9#79, R9E9#79, .R. #o. )'0, #ove+%er 2, 20 20
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T?9 P?I/IPPI#9 AM9RICA# /I39 A#* 9#9RA/ I#7RA#C9 C8MPA#B vs. 9CR9TARB 9CR9TARB 83 3I#A#C9 and C8MMII8#9R 83 I#T9R#A/ R9E9#79, .R #o. 20(), #ove+%er 2, 20/ 20 / The Court ruled that, the CTA can now rule not only on the propriety of an assessment or tax treatment of a certain transaction, but also on the validity of the revenue regulation or revenue memorandum circular on which the said assessment is based. CITB 83 /AP7-/AP7 vs. P?I/IPPI#9 9C8#8MIC 8#9 A7T?8RITBD PR8EI#C9 83 A AT TAA AA#, #, R9PR9 R9PR99#T 9#T9* 9* B 8E9R# 8E9R#8R 8R 9#RI57 9#RI579 9 T. ARCIA ARCIA,, :R., :R., A#* A#* 9M9R/I#*A . TA/9#T8, TA/9#T8, I# ?9R CAPACITB CAPACITB A PR8EI#CIA/ TR9A7R9R 83 ATAA# ATAA# vs. P?I/IPPI#9 9C8#8MIC 8#9 A7T?8RITB, A7T?8RITB, .R. #o. (20!, .R #o. ()'(!, #ove+%er 21, 20< The 5o#rt he" that in case of an illegal assessment where the assessm assessment ent was issued issued withou withoutt author authority ity,, exhaus exhaustio tion n of adminis administra trative tive remedi remedies es is not not necessary and the taxpayer may directly resort to "udicial action. The taxpayer shall file a complaint for in"unction before the egional Trial Court to en"oin the local government unit from collecting real property taxes. The party unsatisfied with the decision of the egional Trial Court shall file an appeal , not a petition for &ertiorari , before the Court of Tax Appeals, Appeals, the complaint being a local tax case decided by the egional Trial Court. The appeal shall be filed within fifteen (= days from notice of the trial court*s decision. #IPP8# 9QPR9 >P?I/IPPI#9" C8RP vs. C8MMII8#9R 83 I#T9R#A/ R9E9#79, .R. #o. ('111, 3e%ruar$ 0, 20'< The Court held the 9I has =%& days from the date of submission of complete documents in support of the administrative claim within which to decide whether to grant a refund or issue a tax credit certificate. In case of failure on the part of the 9I to act on the application within the =%&4day period prescribed by law, the taxpayer has only has '& days after the expiration of the =%&4day period to appeal the unacted claim with the CTA.
). What is the (rinci("e of exha#stion of aministrati*e remeies in tax cases efore a =#icia" action may e instit#te+ instit#te+ A. < Taxpayer submits that the re$uirement to exhaust the =%&4day period under )ection ==% (c of the 7ational Internal evenue Code prior to filing the "udicial claim with the Court of Tax Tax Appea Appeals ls (CTA (CTA is a doctr doctrine ine of Jexhau Jexhaustio stion n of adminis administra trativ tivee remedi remedies. es.KK The non4 non4 observance of the same merely results in lac3 of cause of action which may be waived for Co++issioner er of Internal Internal Revenue Revenue vs. Tea+ Tea+ ual failur failuree to timely timely invo3e invo3e the same. ( Co++ission Corporation >3or+erl$ Mirant ual Corporation", '.. o. 1:109. Cer#ary 9$ 201: " 5ommissio 5ommissioner ner of &nterna" &nterna" e*en#e e*en#e *. Team Team 4Phi"i((in 4Phi"i((ines es (eration (erationss 5or(oratio 5or(oration n 4former"y %irant Phi"s.$ (eration 5or(oration$ .R. #o. )210, April 2, 20 . The findings and conclusions of the Court of Tax Appeals (CTA are accorded the highest respect and will not be lightly set aside. In the absence of any clear and convincing proof to the contrary, the Court must presume that the CTA rendered a decision which is valid in every respect. The 5ity of %ani"a$ etc. et a". *. 8on. 5aria 8. 'recia,5#ero etc.$ et a"$ .R. #o. )')2!. 3e%ruar$ , 20 M #etitioners availed of the wrong remedy when they filed the special special civil action action for certiorari under certiorari under ule E of the ules of Court with the Court in assailing the resolutions of the Court of Appeals (CA which dismissed their petition filed with the said court and their motion for reconsideration of such dismissal. -ence, in the instant case, petitioner should have filed a petition for review on certiorari under certiorari under ule @, which is a continuation of the appellate process over the original case. 5"ar 5"ar &n*e &n*est stor orss an an Loca Locato tors rs Assoc ssocia iati tion on$$ &nc. &nc. *s. *s. Secr Secret etar ary y of Cinan Cinance ce an an 5ommis 5ommissio sioner ner of &ntern &nterna" a" e*en# e*en#e$ e$ '.. '.. o. o. 20060 20060$$ <#"y <#"y 6$ 2019/ 2019/ A petitio petition n for certiorari (ule E cannot be invo3ed against the )ecretary of
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). What taxes may "oca" !o*ernment #nit co""ect+ A. nder )ection of Article S of the Constitution, local government units are allowed to collect to""s$ fees an char!es. (TMCIAA" v. Cit$ of /apu-/apu and 9lena T. Pa&aldo, .R. #o. ()'1, :une ', 20'< Dactan4Cebu Dactan4Cebu Internationa Internationall Airport Airport Authority Authority (DCIAA (DCIAA is a govern governme ment nt instrum instrument entali ality ty and not a govern governmen ment4o t4owne wned d or contro controlled lled corporation (G:CC. Thus, its properties actually, solely and exclusively used for public purposes, consisting of airport terminal building, airfield, runway, taxiway and the lots on which they are situated are not sub"ect to real property tax under )ection =''(o and %'@(a of the FGC. Doreover, when a tax exemption is strictly construed against the taxpayer claiming the exemption. exemption. -owever, -owever, when Congress Congress grants an exemption exemption to a national national governmen governmentt instrumentality from local taxation, such exemption is construed liberally in favor of the national government i nstrumentality. Aitiona" 5ases/ Ca+p :ohn ?a$ *evelop+ent Corporation v. Central oard of Assess+ent Appeals, .R. #o. 12!. 8&to%er 2, 20! ! )ection %% and )ection %%% of the Focal Government Code sets out the administrative remedies available to a taxpayer or real property owner who does not agree with the assessment of the real property property tax sought to be collected. Two Two conditions must be metM the taxpayer8real property owner $uestioning the assessment should first pay the tax due before his protest can be entertained. )econdly, within the period prescribed by law, any owner or person having having legal interest in the property property not satisfied with the action of the provincial, city or municipal assessor in the assessment of his property may file an appeal with the Focal 9oard of Assessment Appeals (F9AA of the province or city concerned. Thereafter, within thirty days from receipt, he may elevate, by filing a notice of appeal, the adverse decision of the F9AA with the Central 9oard of Assessment Appeals Ca+p :ohn ?a$ *evelop+ent Corporation v. Central oard of Assess+ent Appeals, .R. #o. 12!. 8&to%er 2, 20! . A claim for exemption from payment of real property taxes does not actually $uestion the assessor*s authority to assess and collect such taxes, but pertains to the reasonableness or correctness of the assessment by the local local assessor +art Co++uni&ations, In&. v. Muni&ipalit$ of Malvar, atan4as, .R .R.. #o. 20 202 2.. 3e%ruar 3e% ruar$$ (, 20 20 . )ection , Article Article S of the =N? Constitution provides provides that J1e2ach local government unit shall have the power to create its own sources of revenues and to levy taxes, fees, and charges sub"ect to such guidelines and limitations as the Congress may provide, consistent with the basic policy of local autonomy. The FGC defines the term JchargesK as referring to pecuniary liability, as rents or fees against persons or property, while the term JfeeK means Ja charge fixed by law or ordinance for the regulation or inspection of a business
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or activity. The effect is merely incidental. Thus, the fees imposed in :rdinance 7o. =N are not taxes. Considering that the fees in :rdinance 7o. =N are not in the nature of local taxes, and petitioner is $uestioning the constitutionality of the same, the CTA correctly dismissed the petition for lac3 of "urisdiction . Cit$ of Manila, ?on. Alfredo Alfredo . /i+, as Ma$or of the Cit$ of Manila, Manila, et al. v. ?on. An4el Ealera Colet, as Presidin4 ud4e, Re4ional Trial Court of Manila >r.!", et al. .R #o. 200', *e&e+%er 0, 20/ 20 / The power to tax of local government units is a delegated power and must be exercised within the guidelines and limitations that Congress may provide. taxing power of local government units. V&. Tariff an 5#stoms 5oe of 1H$ as amene A. &%PT 3DT&ES ). When oes im(ortation e!in an eeme terminate+ A. Import Importati ation on begins begins when when the carryi carrying ng vessel vessel or aircra aircraft ft enters enters the "urisdi "urisdictio ction n of the #hilippines #hilippines with the intention to unlade unlade therein. therein. Importation Importation is deemed deemed terminated terminated upon payment of the duties, taxes and other charges due upon the articles, or secured to be paid, at a port of entry and the legal permit for withdrawal shall have been granted, or in case said articles are free of duties, taxes and other charges, until they have legally left the "urisdiction of Customs. ). What are orinary im(ort #ties+ A. Tariff duties are levied on imported goods either as a revenue generating measure or a protective scheme to artificially or temporarily inflate prices to protect a country*s domestic output and its industries from their foreign counterparts. +ith the exception of certain articles which can be imported duty4free, upon compliance with certain prescribed conditions or formalities, formalities, goods are levied ordinary ordinary impor i mportt duties under the Dost
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e. 'enera" Safe!#ar %eas#re/ The general safeguard measure is applied by the )ecretary of Trade and Industry, in the case of non4agricultural products, or the )ecretary of Agriculture, in the the case case of agri agricu cult ltur ural al prod produc ucts ts,, upon upon posi positiv tivee fina finall dete determ rmin inat atio ion n of the the Tariff riff Commission that a product is being imported into the country in increased $uantities, whether absolute or relative to domestic production, as to ca#se or threaten to ca#se serio#s in=#ry to the omestic in#stry . In the case of non4agricultural products, however, the )ecretary of Trade and Industry shall first establish that the application of such safeguard measures will be in the course of public interest.
The general safeguard safeguard measure shall be limited to the extent extent of redressing or preventing preventing the in"ury and to facilitate ad"ustments by the domestic industry from the adverse effects directly attributed to the increased imports. f. S(ecia" S(ecia" Safe!#ar Safe!#ar 3#ty/ 3#ty/ An addi additi tion onal al speci special al safe safegu guar ard d duty duty is impo impose sed d on an agricultural product whenever the c#m#"ati*e im(ort *o"#me in a !i*en year excees its tri!!er *o"#me an when the act#a" c.i.f. 45ost$ &ns#rance an Crei!ht im(ort (rice fa""s e"ow its tri!!er (rice . The safeguard duty is imposed by the Commissioner of Customs through the )ecretary of
=. The Commissione Commissionerr of Customs Customs has "urisdiction "urisdiction in cases involving involving liability liability for customs duties, fees or other money charges! seizure, detention or release of property affected! fines, forfeitures or other penalties imposed in relation thereto! or other matters arising under the Customs Faw or other law or part of law administered by the 9ureau of Customs 1ep. Act. 7o. ==%, (=@, (=@, )ec. ?2. %. 5ecisions of the Commission of Customs favorable to the taxpayer are elevated to the )ecretary of
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