QUESTIONS AND ANSWERS ON SIGNIFICANT SUPREME COURT TAXATION LAW JURISPRUDENCE FROM JANUARY 2013 TO JUNE 2018

QUESTIONS AND ANSWERS ON SIGNIFICANT SUPREME COURT TAXATION LAW JURISPRUDENCE FROM JANUARY 2013 TO JUNE 2018 PIERRE MARTIN D. REYES

GENERAL PRINCIPLES Q. The City of Manila imposed against ABC a tax on manufacturers under Section 14 of the Revenue Code of Manila and at the same time a tax on other businesses under Section 21 of the same Code. ABC argues that the collection of taxes under both Sections 14 and 21 of the Code constitutes double taxation. Is ABC correct? Yes. While the City of Manila could impose against ABC a manufacturer's tax under Section 14 of the Revenue Code of Manila, it cannot at the same time impose the tax under Section 21 of the same code; otherwise, an obnoxious double taxation would set in. Citing its previous ruling in The City of Manila v. Coca-cola Bottlers, Inc., G.R. No. 181845, August 4, 2009, there is indeed double taxation if the taxpayer is subjected to the taxes under both Sections 14 and 21 of Tax Ordinance No. 7794, since these are being imposed: (1) on the same subject matter – the privilege of doing business in the City of Manila; (2) for the same purpose - to make persons conducting business within the City of Manila contribute to city revenues; (3) by the same taxing authority-petitioner City of Manila; (4) within the same taxing jurisdiction - within the territorial jurisdiction of the City of Manila; (5) for the same taxing periods – per calendar year; and (6) of the same kind or character - a local business tax imposed on gross sales or receipts of the business (City of Manila v. Cosmos Bottling Corporation, G.R. No. 196681, June 27, 2018)

Q. ABC Petroleum sold XYZ Airlines petroleum fuel. ABC Petroleum passed on the related excise tax to XYZ Airlines. Now, XYZ Airlines sought to refund the said excise taxes on the basis of the tax exemption privileges provided for in its franchise. The CIR argues that XYZ Airlines has no personality to file the subject tax refund claim because it is not the statutory taxpayer. Does XYZ Airlines have personality to file the refund? Yes. The rule in the Silkair case is inapplicable to a case where the party to which the economic burden is shifted is provided an exemption from both direct and indirect taxes. In Silkair, the Court held that the the proper party to question, or seek a refund of, an indirect tax is the statutory taxpayer, the person on whom the tax is imposed by law and who paid the same even if he shifts the burden thereof to another. The abovementioned rule should not apply to instances where the law clearly grants the party to which the economic burden of the tax is shifted an exemption from both direct and indirect taxes. In which case, the latter must be allowed to claim a tax refund even if it is not considered as the statutory taxpayer under the law. The Court applied the Maceda case, where it upheld the National Power Corporation’s (NPC) claim for a tax refund since its own charter specifically granted it an exemption from both direct and indirect taxes.

NOTICE This material supplements the author’s 2013 Bar Reviewer and its supplements. No portion of this work may be copied or reproduced without the written permission of the author. Possessors may reproduce and distribute this supplement provided the name of the author remains clearly associated with my work and no alterations in the form and content of this supplement are made.

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QUESTIONS AND ANSWERS ON SIGNIFICANT SUPREME COURT TAXATION LAW JURISPRUDENCE FOR THE 2018 BAR PIERRE MARTIN D. REYES

The propriety of a tax refund claim is hinged on the kind of exemption which forms its basis. If the law confers an exemption from both direct or indirect taxes, a claimant is entitled to a tax refund even if it only bears the economic burden of the applicable tax. On the other hand, if the exemption conferred only applies to direct taxes, then the statutory taxpayer is regarded as the proper party to file the refund claim, (Commissioner of Internal Revenue v. Philippine Airlines, G.R. Nos. 212536-37, August 27, 2014; Philippine Airlines v. Commissioner of Internal Revenue, G.R. No. 198759, July 1, 2013) NOTE: This was later clarified in Chevron Philippines v. Commissioner of Internal Revenue, G.R. No. 210836, September 1, 2015. In Chevron, the Supreme Court held that, as a general rule, it is the statutory taxpayer, not the party who only bears the economic burden, who is entitled to claim the tax refund or tax credit. However, this rule does not apply where the law grants the party (to whom the economic burden of the tax is shifted) an exemption from both direct and indirect taxes. Such party may claim the refund or tax credit even if it is not the statutory taxpayer. The general rule applied in the case because Chevron did not pass on the excise taxes. Q. A non-stock, non-profit educational institution argues that is rental income from restaurants/canteens and bookstores operating within its campus are exempt from income tax considering that such revenues derived therefrom are used for educational purposes. The BIR argues that under the Tax Code, income of whatever kind and character of a non-stock and nonprofit educational institution from any of its properties, real or personal, or from any of its activities conducted for profit regardless

of the disposition made of such income shall be subject to income tax. Is the BIR correct? No. The income, revenues and assets of nonstock, non-profit educational institutions proved to have been used actually, directly, and exclusively for education purposes are exempt from duties and taxes. There is a distinction between the tax treatment of non-stock, non-profit educational institutions and proprietary educational institutions. The latter is granted tax exemption conditioned only on the actual, direct and exclusive use of their revenues and assets for educational purposes while tax exemptions for the former are subject to limitations imposed by law such as Section 30(H) of the Tax Code. The Tax Code cannot qualify the exemption constitutionallygranted to non-stock, non-profit educational institutions. (Commissioner of Internal Revenue v. De La Salle University, G.R. No. 196596, 198841, and 198941, November 9, 2016) It is clear and unmistakable from the Constitution that non-stock, non-profit educational institutions are constitutionally exempt from tax on all revenues derived in pursuance of its purpose as an educational institution and used actually, directly and exclusively for educational purposes. This constitutional exemption gives the non-stock, non profit educational institutions a distinct character. And for the constitutional exemption to be enjoyed, jurisprudence and tax rulings affirm the doctrinal rule that there are only two requisites: (1) The school must be non-stock and non-profit; and (2) The income is actually, directly and exclusively used for educational purposes. There are no other conditions and limitations. (RMO 44-2016 dated July 25, 2016 as cited in Commissioner

Page 2 of 36 NOTICE This material supplements the author’s 2013 Bar Reviewer, 2014 Bar Supplement, 2015 Bar Supplement, 2016 Bar Supplement, 2017 Bar Supplement, Tax Audit Primer, and Flowchart of Tax Remedies. No portion of this work may be copied or reproduced without the written permission of the author. Possessors may reproduce and distribute this supplement provided the name of the author remains clearly associated with the work and no alterations in the form and content of this supplement are made. No stamping is allowed.


of Internal Revenue v. St. Paul College of Makati, G.R. No. 215383, March 8, 2017) Q. St. Lukes Medical Center (SLMC) is a hospital organized as a non-stock and nonprofit corporation. It admits both paying and non-paying patients. The BIR claimed that SLMC was liable for income tax at 10% as provided under Section 27(B) of the NIRC. SLMC argues that it is a non-stock, nonprofit institution for charitable and social welfare purposes exempt from income tax under Section 30(E) and (G) of the NIRC. Is SLMC correct? No. To be exempt, Section 30(E) and (G) of the NIRC requires an institution to operate exclusively for charitable or social welfare purpose. In case an exempt institution earns income from its profit activities, it will not lose its tax exemption. However, its income from profit activities shall be subject to income tax. For proprietary educational institutions and hospitals, the rate shall be 10%. (Commissioner of Internal Revenue v. St. Luke’s Medical Center, G.R. No. 203514, February 13, 2017) Q. The governments of Japan and the Philippines executed an Exchange of Notes, whereby the former agreed to extend a loan amounting to Forty Billion Four Hundred Million Japanese Yen (¥40,400,000,000) to the latter for the implementation of a CoalFired Thermal Power Plant Project. In Paragraph 5 (2) of the Exchange of Notes, the Philippine Government, by itself or through its executing agency, i.e. National Power Corporation, undertook to assume all taxes imposed by the Philippines on Japanese contractors, i.e. Mitsubishi Corporation, engaged in the Project. Mitsubishi Corporation included in its income tax payments to the BIR income pertaining to the Japanese Government-

funded portion of the project. Thus, Mitsubishi filed for a claim for refund. The BIR argues that (a) Mitsubishi is not entitled to the refund as the Exchange of Notes cannot be read as a treaty validly granting tax exemption considering the lack of Senate concurrence; and (b) that, based on a revenue memorandum circular it issued, the proper remedy of Mitsubishi is to recover or obtain a refund from the National Power Corporation, the executing agency. Is the BIR correct? No. The subject taxes was erroneously collected from the taxpayer, considering that the obligation to pay the same had already been assumed by the Philippine Government by virtue of its Exchange of Notes with the Japanese Government. Case law explains that an exchange of notes is considered as an executive agreement, which is binding on the State even without Senate concurrence. Further, the Tax Code vests upon the CIR, being the head of the BIR, the authority to credit or refund taxes which are erroneously collected by the government. This specific statutory mandate cannot be overridden by averse interpretations made through mere administrative issuances, which - as argued by the CIR - shifts to the executing agencies the power to refund the subject taxes. (Mitsubishi Corporation – Manila Branch v. Commissioner of Internal Revenue, G.R. No. 175772, June 29, 2017)

INCOME TAX Q. ABC Airways is a foreign airline. While it did not carry passengers and/or cargo to or from the Philippines, ABC maintains a general sales agent of its tickets in the Philippines. Is the sale of the tickets taxable as income from sources within the Page 3 of 36

NOTICE This material supplements the author’s 2013 Bar Reviewer, 2014 Bar Supplement, 2015 Bar Supplement, 2016 Bar Supplement, 2017 Bar Supplement, Tax Audit Primer, and Flowchart of Tax Remedies. No portion of this work may be copied or reproduced without the written permission of the author. Possessors may reproduce and distribute this supplement provided the name of the author remains clearly associated with the work and no alterations in the form and content of this supplement are made. No stamping is allowed.


Philippines? A. Yes. An offline international air carrier selling passage tickets in the Philippines, through a general sales agent, is a resident foreign corporation doing business in the Philippines. As such, it is taxable under Section 28(A)(1), and not Section 28(A)(3) of the 1997 National International Revenue Code, subject to any applicable tax treaty to which the Philippines is a signatory. (Air Canada v. Commissioner of Internal Revenue, G.R. No. 169507, January 11, 2016) Q. ABC is a PEZA-registered corporation engaged in the business of manufacturing microprocessors. After its registration, ABC constructed buildings and purchased machineries and equipment. ABC failed to commence operations. ABC sold the said building and its machineries and equipment to another PEZA-registered enterprise. Are properties considered “capital assets” or ordinary assets”? A. The properties are not among the exclusions enumerated in Section 39(A)(1) of the National Internal Revenue Code of 1997 which defines “ordinary assets.” None of the properties were used in trade or ordinary course of business because petitioner never commenced operations. They were not part of the inventory. None of them were stocks in trade. Based on the definition of capital assets under Section 39 of the National Internal Revenue Code of 1997, they are capital assets. (SMI-ED Philippines v. Commissioner of Internal Revenue, G.R. No. 175410, November 12, 2014) Q. Differentiate between the tax treatment of capital gains of individuals and corporations from the sale of real properties. A.

Capital

gains

of

individuals

corporations from the sale of real properties are taxed differently. Individuals are taxed on capital gains from sale of all real properties located in the Philippines and classified as capital assets. For corporations, the National Internal Revenue Code of 1997 treats the sale of land and buildings, and the sale of machineries and equipment, differently. Domestic corporations are imposed a 6% capital gains tax only on the presumed gain realized from the sale of lands and/or buildings. The National Internal Revenue Code of 1997 does not impose the 6% capital gains tax on the gains realized from the sale of machineries and equipment. Therefore, only the presumed gain from the sale of petitioner’s land and/or building may be subjected to the 6% capital gains tax. The income from the sale of petitioner’s machineries and equipment is subject to the provisions on normal corporate income tax. (SMI-ED Philippines v. Commissioner of Internal Revenue, G.R. No. 175410, November 12, 2014) Q. A law was passed granting income tax exemption for minimum wage earners (MWE) as well as increase in personal and additional exemptions. The law became effective on July 6, 2008. The BIR issued a revenue regulation providing for (a) the prorated application of the personal and additional exemptions for taxable year 2008 and for the period of applicability of the MWE exemption for taxable year 2008 to begin only on 6 July 2008; and (b) the disqualification of MWEs who earn purely compensation income, whether in the private or public sector, from the privilege of availing themselves of the MWE exemption in case they receive compensation related benefits exceeding the statutory ceiling of P30,000 (now P82,000). Is the revenue regulation valid?

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No. The personal and additional exemptions should be applied to the entire taxable year 2008. The test is whether the new set of personal and additional exemptions was available at the time of the filing of the income tax return. In other words, while the status of the individual taxpayers is determined at the close of the taxable year, their personal and additional exemptions - and consequently the computation of their taxable income - are reckoned when the tax becomes due, and not while the income is being earned or received. As in the case of the adjusted personal and additional exemptions, the MWE exemption should apply to the entire taxable year 2008, and not only from 6 July 2008 onwards. The revenue regulations adds a requirement not found in the law by effectively declaring that an MWE who receives other benefits in excess of the statutory limit is no longer entitled to the exemption provided by the law. To be exempt, one must be an MWE, a term that is clearly defined. Section 22(HH) says he/she must be one who is paid the statutory minimum wage if he/she works in the private sector, or not more than the statutory minimum wage in the non-agricultural sector where he/she is assigned, if he/she is a government employee. Thus, one is either an MWE or he/she is not. Simply put, MWE is the status acquired upon passing the litmus test whether one receives wages not exceeding the prescribed minimum wage.(Soriano v. Secretary of Finance, G.R. Nos. 184450, 184508, 184538, and 185234, January 24, 2017) Q. MERALCO obtained a loan from Norddeutsche Landesbank Girozentrale (NORD/LB) Singapore Branch, which is a foreign government-owned financing institution of Germany. Under the loan agreement, the income received by NORD/LB, by way of MERALCO’s interest

payments, shall be paid in full without deductions, as MERALCO shall bear the obligation of paying and remitting to the BIR the final withholding tax. MERALCO paid and remitted to the BIR the corresponding final withholding taxes. Is the income derived by NORD/LB subject to income tax? A. No. NORD/LB is owned, controlled or enjoying refinancing from the Federal Republic of Germany, a foreign government. Section 32(B)(7)(a) of the Tax Code, as amended, exempts from income tax income derived from investments in the Philippines in loans by financing institutions owned, controlled, or enjoying refinancing from foreign governments. (Commissioner of Internal Revenue v. Meralco, G.R. No. 181459, June 9, 2014) In 2001, the Caucus of Development NGO Networks (CODE-NGO) with the assistance of its financial advisors, requested an approval from the Department of Finance for the issuance by the Bureau of Treasury of 10-year zero-coupon treasury bonds. The said bonds would initially be purchased by a special purpose vehicle on behalf of CODENGO and then repackaged and sold at a premium to investors as Poverty Eradication and Alleviation Certificates or PEACe Bonds. The net proceeds from the sale will be used to endow a permanent fund to finance meritorious activities and projects of accredited non-government organizations (NGOs) throughout the country. The BIR issued BIR Ruling No. 020-2001 which confirmed that the PEACe Bonds would not be classified as deposit substitutes and would not be subject to the corresponding withholding tax. This was reiterated in subsequent rulings. During the auction, RBCB which participated on behalf of CODE-NGO was declared the winning bidder having tendered the lowest bids. Page 5 of 36



RCBC entered into an underwriting agreement with CODE-NGO whereby RBCB was appointed as the Issue Manager and Lead Underwriter for the offering of the PEACe Bonds. In the agreement, CODE-NGO represented that all income derived from the Bonds, inclusive of premium on redemption and gains on the trading of the same, are exempt from all forms of taxation as confirmed by BIR Rulings. RCBC then sold the government bonds in the secondary market. However, in 2011, the BIR issued BIR Ruling No. 370-2011 declaring that the PEACe Bonds being deposit substitutes are subject to the 20% final withholding tax. Pursuant to this ruling, the Secretary of Finance directed the Bureau of Treasury to withhold a 20% final tax from the face value of the PEACe Bonds upon their payment at maturity on October 18, 2011. Is the discount or interest income arising from the PEAce bonds subject to the 20% final withholding tax?

Bonds by the Bureau of Treasury to RCBC/CODE-NGO; and (2) the sale and distribution by RCBC (underwriter) on behalfof CODE-NGO of the PEACe Bonds to undisclosed investors. It may seem that there was only one lender — RCBC on behalf of CODE-NGO — to whom the PEACe Bonds were issued at the time of origination.

A. No. The term ‘deposit substitutes’ shall mean an alternative form of obtaining funds from the public other than deposits, through the issuance, endorsement, or acceptance of debt instruments for the borrower’s own account, for the purpose of relending or purchasing of receivables and other obligations, or financing their own needs or the needs of their agent or dealer. The term 'public' means borrowing from twenty (20) or more individual or corporate lenders at any one time). Based on this definition, the number of lenders is determinative of whether a debt instrument should be considered a deposit substitute and consequently subject to the 20% final withholding tax.

However, a reading of the underwriting agreement and RCBC term sheet reveals that the settlement dates for the sale and distribution by RCBC Capital (as underwriter for CODE-NGO) of the PEACe Bonds to various undisclosed investors would fall on the same day, October 18, 2001, when the PEACe Bonds were supposedly issued to CODE-NGO/RCBC. In reality, therefore, the entire borrowing received by the Bureau of Treasury in exchange for the PEACe Bonds was sourced directly from the undisclosed number of investors to whom RCBC Capital/CODE-NGO distributed the PEACe Bonds — all at the time of origination or issuance. However, the number of investors to which the PEACe Bonds were sold to by RCBC is not known. Should there have been a simultaneous sale to 20 or more lenders/investors, the PEACe Bonds are deemed deposit substitutes and RCBC Capital/CODE-NGO would have been obliged to pay the 20% final withholding tax on the interest or discount from the PEACe Bonds. Further, the obligation to withhold the 20% final tax on the corresponding interest from the PEACe Bonds would likewise be required of any lender/investor had the latter turned around and sold said PEACe Bonds, whether in whole or part, simultaneously to 20 or more lenders or investors.

BIR Ruling No. 370-2011 is void because it completely disregarded the 20 or more lender rule. The transactions executed for the sale of the PEACe Bonds are: (1) the issuance of the

It must be noted, however, that interest income received by individuals from long-term deposits or investments with a holding period of not less than five (5) years is exempt from Page 6 of 36



the final tax. Thus, should the PEACe Bonds be found to be within the coverage of deposit substitutes, the proper procedure was for the Bureau of Treasury to pay the face value of the PEACe Bonds to the bondholders and for the Bureau of Internal Revenue to collect the unpaid final withholding tax directly from RCBC Capital/CODE-NGO, or any lender or investor if such be the case, as the withholding agents. (Banco de Oro v. Republic, G.R. No. G.R. No. 198756, January 13, 2015) Q. The BIR contends that the 20-lender rule should not strictly apply to issuances of government debt instruments, which by nature, are borrowings from the public. Considering that the PEACe Bonds were intended to be freely tradable in the secondary market to 20 or more lenders/investors, they, like other similarly situated government securities-awarded to 19 or less Government Securities Eligible Dealers (GSEDs) in the primary market but freely tradable to 20 or more lenders/investors in the secondary market should be treated as deposit substitutes subject to the 20% final withholding tax. Is the BIR’s contention correct? No. The definition of deposit substitutes in Section 22(Y) specifically defined "public" to mean "twenty (20) or more individual or corporate lenders at any one time." Hence, reckoning of whether there are 20 or more individuals or corporate lenders is crucial in determining the tax treatment of the yield from the debt instrument. In other words, if there are 20 or more lenders, the debt instrument is considered a deposit substitute and subject to 20% final withholding tax. The existence of 20 or more lenders should be reckoned at the time when the successful GSED-bidder distributes (either by itself or through an underwriter) the government

securities to final holders. When the GSED sells the government securities to 20 or more investors, the government securities are deemed to be in the nature of a deposit substitute, taxable as such. (Banco de Oro v. Republic, G.R. No. 198756, August 16, 2016) Q. The taxpayer initially opted to be refunded of its excess creditable tax for 2006 through the issuance of a tax credit certificate. The taxpayer subsequently indicated in its 2007 ITR that it carried over the 2006 excess creditable tax and applied the same against income tax due for 2007. The taxpayer filed with the BIR a claim for refund and/or issuance of a TCC for the alleged excess credit for 2006. This was later elevated to the Court of Tax Appeals (CTA). Both CTA Division and CTA En Banc ruled that the taxpayer effectively exercised the carry-over option when it included the excess tax credit for 2006 in the original ITR for 2007. The taxpayer, on the other hand, contended that the option to be refunded through the issuance of a TCC is irrevocable. Thus, when it indicated in its annual ITR for 2006 the option “To be issued a Tax Credit Certificate,” such choice precluded the other option to carry over. Is the taxpayer correct? No. The irrevocability rule is limited only to the option of carry-over. There is nothing in the law which prevents the taxpayer who originally opted for a refund or TCC to shift to the carry-over of the excess creditable taxes to the taxable quarters of the succeeding taxable years. However, if the taxpayer decides to shift its option to carry-over, it may no longer revert to its original choice due to the irrevocability rule. Here, the taxpayer is barred from recovering its excess creditable tax for 2006 through refund or TCC since it constructively chose the option of carry-over when, despite its initial option to refund, it subsequently indicated in its 2007 ITR that it Page 7 of 36



carried over the 2006 excess creditable tax and applied the same against income tax due for 2007. (University Physicians Services, Inc. – Management, Inc. v. Commissioner of Internal Revenue, G.R. No. 205955, 7 March 2018) Q. When is the payor/employer obliged to deduct and withhold the related withholding taxes on accrued bonuses? The obligation of the payor/employer to deduct and withhold the related withholding tax arises at the time the income was paid or accrued or recorded as expense in the payor’s/employer’s books, whichever comes first. In ING Bank v. Commissioner of Internal Revenue, G.R. No. 167679, July 22, 2015, at issue is whether ING Bank was liable for deficiency withholding tax on accrued bonuses for the taxable years 1996 and 1997. The accrued bonuses were recorded in ING Bank’s books as expenses for taxable years 1996 and 1997, although no withholding of tax was effected. ING Bank asserted that the liability of the employer to withhold the tax does not arise until such bonus is actually distributed. Since the supposed bonuses were not distributed to the officers and employees in 1996 and 1997 but were distributed in the succeeding year when the amounts of the bonuses were finally determined, ING Bank asserts that its duty as employer to withhold the tax during these taxable years did not arise. The Supreme Court ruled that ING bank is liable for the withholding tax on the bonuses since it claimed the same as expenses in the year they were accrued. Three provisions of the NIRC of 1997, as amended, were reconciled:

1. Section 72 (now Section 79), which provides that an employer is required to deduct and pay the income tax on compensation paid to its employees, either actually or constructively. 2. Section 39 (now Section 35), which provides that deductions from gross income are taken for the taxable year in which “paid or accrued” or “paid or incurred” is dependent upon the method of accounting income and expenses adopted by the taxpayer. If the taxpayer is on cash basis, the expense is deductible in the year it was paid, regardless of the year it was incurred. If he is on the accrual method, he can deduct the expense upon accrual thereof. 3. Section 29(j) (now Section 34(K)), which provides that, as a condition for deductibility of an expense, the tax required to be withheld on the amount paid or payable must be shown to have been remitted to the BIR by the withholding agent. Reconciling the above provisions, the Court held that the obligation of the payor/employer to deduct and withhold the related withholding tax arises at the time the income was paid or accrued or recorded as an expense in the payor’s/employer’s books, whichever comes first. Q. The BIR assessed ABC with deficiency final withholding taxes (FWT) on interest payments on loan agreements with XYZ for the taxable year 2000. The CTA found that ABC was not liable for the said deficiency FWT since its liability for interest payment became due and demandable only on June 1, 2002. The BIR contends that ABC was liable to pay the interest from the date of the execution of the contract on January 5, 2000, Page 8 of 36



not from the date of first payment on June 1, 2002. Is the BIR correct? No. Under Section 2.57.4 of RR No. 2-98, the obligation of ABC to deduct or withhold tax arises at the time an income is paid or payable, whichever comes first. Further, the same Section provides that the term “payable” refers to the date the obligation becomes due, demandable or legally enforceable. (Edison (Bataan) Cogeneration Corporation v. Commissioner of Internal Revenue, G.R. No. 201665, August 30, 2017)

DONOR’S TAX Q. Philamlife owns 498,590 shares in Philam Care Health Systems. To divest itself of interests in the health maintenance organization industry, Philamlife sold the said shares to STI Investments at a price lower than their book value. The BIR contends that donor’s tax became imposable on the price difference. Philamlife argues that the same is not subject to donor’s tax as there was no donative intent. Is the Philamlife correct? No. The absence of donative intent, if that be the case, does not exempt the sales of stock transaction from donor's tax since Sec. 100 of the Tax Code categorically states that the amount by which the fair market value of the property exceeded the value of the consideration shall be deemed a gift. Thus, even if there is no actual donation, the difference in price is considered a donation by fiction of law. Pursuant to RR 6-2008, “fair market value” shall be, in the case of shares of stock not listed and traded in the local stock exchanges, the book value of the shares of stock as shown in the financial statements duly certified by an independent certified public accountant nearest to the date of sale

shall be the fair market value. The difference between the book value and the selling price in the sales transaction is taxable donation subject to donor’s tax. (Philippine American Life and General Insurance Company v. The Secretary of Finance and Commissioner of Internal Revenue, G.R. No. 210987, November 24, 2014)

VALUE-ADDED TAX Q. Invoking Section 108(B)(2) of the Tax Code, a business process outsourcing company filed a claim for refund or credit of input VAT attributable to zero-rated sales of its call services to foreign corporations. Is it indispensable that the said company prove that the recipient of its call services are foreign corporations doing business outside the Philippines? Yes. An essential condition to qualify for zerorating under Section 108(B)(2) of the Tax Code is that the service-recipient must be doing business outside the Philippines. A taxpayer claiming for a VAT refund or credit under Section 108(B)(2) has the burden to prove not only that the recipient of the service is a foreign corporation, but also that said corporation is doing business outside the Philippines. (Sitel v. Commissioner of Internal Revenue, G.R. No. 201326, February 8, 2017) Q. What are the rules on the determination of the prescriptive period for filing a tax refund or credit of unutilized input VAT? The rules are as follows: 1. An administrative claim must be filed with the CIR within two years after the close of the taxable quarter when the zero-rated or effectively zero-rated sales were made. Page 9 of 36



2. The CIR has 120 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. The 120-day period may extend beyond the two-year period from the filing of the administrative claim if the claim is filed in the later part of the two-year period. If the 120-day period expires without any decision from the CIR, then the administrative claim may be considered to be denied by inaction. 3. A judicial claim must be filed with the CTA within 30 days from the receipt of the CIR’s decision denying the administrative claim or from the expiration of the 120-day period without any action from the CIR. 4. All taxpayers, however, can rely on BIR Ruling No. DA-489-03 from the time of its issuance on 10 December 2003 up to its reversal by this Court in Aichi on 6 October 2010, as an exception to the mandatory and jurisdictional 120+30 day periods. (Team Energy Corporation v. Commissioner of Internal Revenue, G.R. No. 197663 & G.R. No. 197770, March 14, 2018; Team Sual Corporation v. Commissioner of Internal Revenue, G.R. Nos. 201225-26, April 18, 2018; CE Luzon Geothermal v. Commissioner of Internal Revenue, G.R. No. 197526, July 26, 2017; Aichi Forging Company v. Commissioner of Internal Revenue, G.R. No. 193525, August 30, 2017; Procter & Gamble Asia v. Commissioner of Internal Revenue, G.R. No. 205652, September 6, 2017; Mindanao I Geothermal Partnership v. Commissioner of

Internal Revenue, G.R. No. 197519, November 8, 2017; Commissioner of Internal Revenue, G.R. No. 209306, September 27, 2017; Harte-Hanks Philippines v. Commissioner of Internal Revenue, G.R. No. 205721, September 14, 2016; Tekenaka Corporation v. Commissioner of Internal Revenue, G.R. No. 193321, October 19, 2016; Commissioner of Internal Revenue v. Deutsche Knowledge Services, G.R. No. 211072, November 7, 2016; Deutsche Knowledge Services Pte v. Commissioner of Internal Revenue, G.R. No. 197980, December 1, 2016; Sitel v. Commissioner of Internal Revenue, G.R. No. 201326, February 8, 2017; Visayas Geothermal v. Commissioner of Internal Revenue, G.R. No. 205279, April 26 2017; Marubeni Philippines v. Commissioner of Internal Revenue, G.R. 198485, June 5, 2017; Cargill Philippines, Inc. v. CIR, G.R. No. 203774, March 11, 2015; Commissioner of Internal Revenue v. Air Liquide, G.R. No. 210646, July 29, 2015; Commissioner of Internal Revenue v. Toledo Power Company, G.R. No. 195175 & 199645, August 10, 2015; Commissioner of Internal Revenue v. Toledo Power Company, G.R. No. 196415 & 196451, December 2, 2015; Commissioner of Internal Revenue v. Mirant Pagbilao Corporation, G.R. No. 180434, January 20, 2016; Silicon Philippines v. Commissioner of Internal Revenue, G.R. No. 182737, March 2, 2016; Miramar Fish Company Inc. v. CIR, G.R. No. 185432, June 4, 2014; Visayas Geothermal Power Company v. CIR, G.R. No. 197525, June 4, 2014; CIR v. Mindanao II Geothermal Partnership, G.R. No. 189440, June 18, 2014; Page 10 of 36



Taganito Mining Corporation v. CIR, G.R. No. 197591, June 18, 2014; San Roque Power Corporation v. CIR, G.R. No. 205543, June 30, 2014; CIR v. CE Luzon Geothermal Power Company, G.R. No. 190198, September 17, 2014; CNK Power Company Limited v. CIR, G.R. No. 202066 and G.R. No. 205353, September 30, 2014; CIR v. Aichi, G.R. No. 183421, October 22, 2015; CIR v. Burmeistor, G.R. No. 190021, October 22, 2014; Taganito Mining Corporation v. CIR, G.R. No. 198076, November 19, 2014; AT&T Communications Services Phils., Inc. v. CIR, G.R. No. 185969, November 19, 2014; Taganito Mining Corporation v. CIR, G.R. No. 201195, November 26, 2014; CBK Power Company Limited v. CIR, G.R. No. 198928, December 3, 2014; Mindanao II Geothermal Partnership v. CIR, G.R. No. 204745, December 8, 2014; Panay Power Corporation v. CIR, G.R. No. 203351, January 21, 2015; Nippon Express (Philippines) Corporation v. CIR, G.R. No. 185666, February 4, 2015; Northern Mindanao Power Corporation v. CIR, G.R. No. 185115, February 18, 2015; Cargill Philippines, Inc. v. CIR, G.R. No. 203774, March 11, 2015) Q. When does the 120-day period begin to run? A distinction must be made between claims filed before June 14, 2014 and claims filed on June 14, 2014 to present. Claims filed prior to Claims filed on June 14, 2014 (RMC 49- June 14, 2014 to 2003 – prevailing rule) present (RMC 54-2014 – prevailing rule)

1. The CIR has 120 days 1. As it now from the date of stands, RMC submission of complete 54-2014 documents to decide a dated June claim for tax credit or 11, 2014 refund. Pursuant to mandates RMC No. 49-2003, that the from the date an application administrative claim for for VAT excess unutilized VAT refund/tax is filed, a taxpayer has credit must 30 days within which to be submit the accompanied documentary by complete requirements sufficient supporting to support his claim. documents. 2. If in the course of the 2. Under the investigation and current rule, processing of the claim, the reckoning additional documents of the 120are required for the day period proper determination has been of the legitimacy of the withdrawn claim, the taxpayerfrom the claimants shall submit taxpayer by such documents within RMC 54thirty (30) days from 2014, since it request of the requires him investigating/processin at the time he g office. Notice, by way files his claim of a request from the to complete tax collection authority his to produce the supporting complete documents in documents these cases, is and attest essential. that he will no longer submit 3. Then, upon filing by the any other taxpayer of his document to complete documents to prove his support his application, claim. or expiration of the Further, the period given, the BIR taxpayer is has 120 days within Page 11 of 36



which to decide the claim for tax credit or refund. 4. Should the taxpayer, on the date of filing, manifest that he no longer wishes to submit any other additional documents to complete his administrative claim, the 120-day period allowed to the BIR begins to run from the date of filing. 5. In all cases, whatever documents a taxpayer intends to file to support his claim must be completed within the 2-year period under Section 112(A) of the NIRC.

barred from submitting additional documents after he has filed his administrativ e claim. Thus, the 120-day has to be counted from the filing of the administrativ e claim. (Pilipinas Total Gas v. Commissione r of Internal Revenue, G.R. No. 207112, December 8, 2015)

Thus, for claims filed prior to June 14, 2014, the 120-day period begins to run from the date of submission of complete documents supporting the administrative claim. If there is no evidence showing that the taxpayer was required to submit – or actually submitted – additional documents after the filing of the administrative claim, it is presumed that the complete documents accompanied the claim when it was filed. (Silicon Philippines v. Commissioner of Internal Revenue, G.R. No. 182737, March 2, 2016) Failure of the taxpayer to submit all relevant documents is not fatal to its claim for refund or tax credit of unutilized input VAT. If the taxpayer indeed failed to submit the complete documents in support of its application, the CIR could have informed the taxpayer of its

failure. (Commissioner of Internal Revenue v. Toledo Power Company, G.R. No. 196415 & 196451, December 2, 2015; Pilipinas Total Gas v. Commissioner of Internal Revenue, G.R. No. 207112, December 8, 2015) Q. Who determines when the completeness of documents submitted in a claim for refund or tax credit of unutilized input taxes? It is the taxpayer who ultimately determines when complete documents have been submitted for the purpose of commencing and continuing the running of the 120-day period. To allow the CIR to determine the completeness of the documents submitted and, thus, dictate the running of the 120-day period, would undermine these objectives, as it would provide the CIR the unbridled power to indefinitely delay the administrative claim, which would ultimately prevent the filing of a judicial claim with the CTA. Whether these documents are actually complete as required by law – is for the CIR and the courts to determine. (Pilipinas Total Gas v. Commissioner of Internal Revenue, G.R. No. 207112, December 8, 2015) Q. ABC filed its administrative claim for the refund of excess and unused input VAT for the 2nd quarter of taxable year 2008 on 28 December 2009. Counting 120+30 days, the taxpayer should have elevated the same to the CTA on 27 May 2010. The judicial claim was belatedly filed on 6 July 2010. ABC now argues that it filed its complete documents on 20 September 2010 and thus the 120-day period should be counted from said date. Is ABC correct? No. To allow the taxpayer’s position to prevail would set a dangerous precedent, as the reckoning period for the 120 days would be at the mercy of taxpayers. They will then submit complete supporting documents even after the two-year prescriptive period for filing an Page 12 of 36



administrative claim has lapsed. This is obviously not the intention of the law. The burden of proving entitlement to a tax refund is on the taxpayer. It is logical to assume that in order to discharge this burden, the law intends the filing of an application for a refund to necessarily include the filing of complete supporting documents to prove entitlement for the refund. Otherwise, the mere filing of an application without any supporting document would be as good as filing a mere scrap of paper. Peculiar to this case is that prior to the alleged completion of its supporting documents, the taxpayer had already filed its judicial claim with the CTA. Assuming arguendo that the 120-day period should commence to run only upon receipt of the complete documents or from 20 September 2010, the judicial claim will still fail. By that time, the period for filing an administrative application for a refund would have already on 30 June 2010 or two (2) years from the close of the taxable quarter when the relevant sales were made. (Hedcor, Inc. v. Commissioner of Internal Revenue, G.R. No. 207575, July 15, 2015) Q. If the taxpayer fails to submit a document at the administrative level, can the taxpayer cure such failure by filing the said document in its judicial claim before the CTA? A distinction must, thus, be made between an administrative claimed appealed due to inaction and those dismissed at the administrative level due to the failure of the taxpayer to submit supporting documents. Administrative If the judicial claim claim dismissed by is an appeal due to the BIR due to the inaction of the BIR taxpayer’s failure to submit complete

documents despite notice/request The judicial claim before the CTA would be dismissible, not for lack of jurisdiction, but for the taxpayer’s failure to substantiate the claim at the administrative level. In case of claims dismissed at the administrative level due to the failure of the taxpayer to submit supporting documents, it is, thus, crucial for a taxpayer in a judicial claim for refund or tax credit to show that its administrative claim should have been granted in the first place.

The CTA may give credence to all evidence presented by the taxpayer, including those that may not have been submitted to the CIR as the case is being essentially decided in the first instance. The taxpayer must prove every minute aspect of its case by presenting and formally offering its evidence to the CTA, which must necessarily include whatever is required for the administrative claim. (Pilipinas Total Gas v. Commissioner of Internal Revenue, G.R. No. 207112, December 8, 2015)

A taxpayer cannot cure its failure to submit a document requested by the BIR at the administrative level by filing the said document before the CTA.



Q. Can an entity located within an ECOZONE be entitled to refund of its unutilized input taxes? No. ECOZONES are by legal fiction foreign territory. Thus, sales made by suppliers from a customs territory to a purchaser located within an ECOZONE shall be considered exportations. Following the Cross Border Doctrine and Destination Principle, no VAT shall be imposed to form part of the cost of goods destined for consumption outside the territorial border of the taxing authority. As such, purchases of goods and services that are destined for consumption within the ECOZONE should be free of VAT. No input should be paid on such purchases and thus the entity located within the ECOZONE is not entitled to claim a tax refund or credit. If the taxpayer paid the input VAT, the proper recourse is not a claim for tax refund or credit against the government, but reimbursement against the seller who shifted the output VAT. (Coral Bay Nickel Corporation v. Commissioner of Internal Revenue, G.R. No. 190506, June 13, 2016) Q. ABC Corporation purchased from the government in 1995 portion of the Fort Bonifacio reservation, now known as the Fort Bonifacio Global City. No VAT on the sale of the land was passed on by the government to ABC. On January 1, 1996, Republic Act 7716 took effect, which extended the coverage of the VAT to sale of real properties held primarily for sale to customers or held for lease in the ordinary course of business. In September 1996, ABC submitted to the BIR an inventory of all its real properties, claiming that it is entitled to the transitional input tax credit on said inventories. ABC started selling Global City

lots in October 2006. For the 1st quarter of 1997, ABC paid output taxes on the sale of lots after deducting input taxes. Realizing that the transitional input taxes were not applied against the output VAT, which would have resulted to no net output VAT liability (the transitional input taxes being higher), FBDC filed a claim for refund for the VAT payment. The BIR argues that (1) transitional input tax is limited to improvements to real properties; and (2) there should have been prior payment of taxes. Is the BIR correct? No. There is nothing in the law that prohibits the inclusion of real properties, together with the improvements thereon, in the beginning inventory of goods, materials and supplies, based on which inventory the transitional input tax credit is computed. Further, there is nothing in the law that indicates that prior payment of taxes is necessary for the availment of the transitional input tax credit. All that is required is for the taxpayer to file a beginning inventory with the BIR. (Fort Bonifacio Development Corporation v CIR, G.R. Nos. 175707, 180035, and 181092, November 19, 2014) NOTE: The same issues have been passed upon in Fort Bonifacio Development Corporation v CIR, G.R. No. 173425, January 22, 2013; Fort Bonifacio Development Corporation v CIR, G.R. No. 173425, September 4, 2012; Fort Bonifacio Development Corporation v CIR, G.R. Nos. 158885 and 170680, October 2, 2009; Fort Bonifacio Development Corporation v CIR, G.R. Nos. 158885 and 170680, April 2, 2009.

TAX REMEDIES UNDER THE NIRC Q. A Letter of Authority (LOA) was issued authorizing the BIR officers to examine the books of account of the taxpayer for the Page 14 of 36



taxable year 1998 only or, since the taxpayer adopted a fiscal year, for the period April 1, 1997 to March 31, 1998. The deficiency tax assessment which the BIR eventually issued against the taxpayer was based on disallowance of expenses reported in fiscal year 1999, or for the period April 1, 1998 to March 31, 1999. Is the assessment valid? No. The LOA gives notice to the taxpayer that it is under investigation for possible deficiency tax assessment; at the same time it authorizes or empowers a designated revenue officer to examine, verify, and scrutinize a taxpayer's books and records, in relation to internal revenue tax liabilities for a particular period. In this case, the LOA shows that the period of examination is the taxable year 1998. A valid LOA does not necessarily clothe validity to an assessment issued on it, as when the revenue officers designated in the LOA act in excess or outside of the authority granted them under said LOA. The taxable year covered by the assessment being outside of the period specified in the LOA, the assessment issued against the taxpayer is void. (Commissioner of Internal Revenue v. Lancaster, G.R. No. 183408, July 12, 2017) Q. The BIR issued a Letter of Authority authorizing its revenue officers to examine the taxpayer’s books of accounts and other accounting records for all internal revenue taxes for the period “Fiscal Year Ending 2003 and Unverified Prior Years.” Is the assessment made pursuant to this Letter of Authority valid? Partly. A LOA which contains a specified year and unverified prior years is not entirely void. The assessment for the year clearly specified remains to be valid while the assessments which pertain to the unverified prior years are

void for having been unspecified on separate LOAs. (Commissioner of Internal Revenue v. De La Salle University, G.R. No. 196596, 198841, and 198941, November 9, 2016) Q. Is an assessment based merely on a Letter Notice (LN) valid? No. An assessment based only on a LN is void. A Letter of Authority (LOA) cannot be dispensed with just because none of the financial books or records being physically kept was examined. The SC opined that the statutory requirement of a LOA is not dependent on whether the taxpayer may be required to physically open his books or financial records but only on whether a taxpayer is being subject to examination. A LN is issued only for the purpose of notifying the taxpayer that a discrepancy is found based on the BIR’s RELIEF System and nothing more. Revenue Memorandum Order (RMO) No. 322005 states that in case the discrepancies shown in the LN remained unresolved within 120 days from issuance of the LN, the revenue officer shall recommend the issuance of a LOA to replace the LN. Due process requires that the revenue officer should secure first a LOA before proceeding with the further examination and assessment of a taxpayer. The Court cannot convert or treat the LN into the LOA required under the law. If no LOA is secured, the assessment on the basis of a LN is void. (Medicard Philippines v. Commissioner of Internal Revenue, G.R. No. 222743, April 5, 2017) Q. (1) What is the consequence if a FAN does not contain a definite due date for payment by the taxpayer? (2) Can the reckoning date of the accrual of the penalties and surcharges be considered as the due date for payment? Page 15 of 36



(1) A Final Assessment Notice that does not contain a definite due date for payment by the taxpayer is void. (2) The reckoning date of the accrual of penalties and surcharges cannot be considered as the due date for payment of tax liabilities In the absence of an actual due date, a FAN does not contain a definite and actual demand to pay. (Commissioner of Internal Revenue v. Fitness by Design, Inc., G.R. No. 215957, November 9, 2016) Q. The BIR issued a Letter of Authority to examine the books of account and other accounting records of the taxpayer for income and withholding taxes for the period 1997 to 1999. BIR then sent a Notice of Informal Conference. Attached thereto is a Summary Report containing an explanation of the legal and factual bases for the deficiency assessment. The taxpayer requested for copies of working papers indicating how the deficiency withholding taxes were computed. The BIR promptly responded in a letter-reply. Thereafter, the taxpayer received a PAN which contained the computations of its deficiency income and withholding taxes. Attached to the PAN was the detailed explanation of the particular provision of law and revenue regulation violated. The taxpayer replied to the PAN. The BIR replied in a letter explaining the factual and legal bases of the deficiency assessment and denying the reply. A FAN and demand letter were then issued, unaccompanied by any written explanation of the legal and factual bases of the deficiency taxes assessed against the taxpayer. Is the assessment valid?

A. Although the FAN and demand letter issued to the taxpayer were not accompanied by a written explanation of the legal and factual bases of the deficiency taxes assessed against the petitioner, the records showed that the BIR in its letter responded to the taxpayer’s reply to the PAN, explaining at length the factual and legal bases of the deficiency tax assessments. Considering the foregoing exchange of correspondence and documents between the parties, the requirement of Section 228 was substantially complied with. The BIR had fully informed the taxpayer in writing of the factual and legal bases of the deficiency taxes assessment, which enabled the latter to file an "effective" protest. Petitioner's right to due process was thus not violated. (Samar-I Electric Cooperative v. CIR, G.R. No. 193100, December 10, 2014) Q. ABC Corporation was dissolved by shortening its corporate term. As a result thereof, ABC moved out of its address in Las Pinas City and transferred to Calamba Laguna. ABC sent a notice of dissolution to the BIR as well as an update of information contained in its BIR Certificate of Registration. ABC was assessed for deficiency income taxes. The Final Assessment Notice was sent via registered mail to ABC’s former address in Las Pinas City. Is the assessment valid? No. The taxpayer’s right to due process is violated when there is no valid notice of assessment sent to it. Here, the CIR was aware of the new address and yet sent the assessment to the taxpayer’s former address. As a consequence thereof, the running of the three-year period was not suspended and had already prescribed.1

1 Commissioner of Internal Revenue v BASF Coating + Inks Phils., Inc., G.R. No. 198677, November 26, 2014



Q. What is the effect of failure of the waiver to strictly conform to the requirements of a waiver of the statute of limitations under RMO 20-90? The requirements are mandatory and must strictly be followed. Defective and invalid waivers of Statute of Limitations do not extend the CIR's period to issue assessments. Thus, the right of the government to assess or collect the alleged deficiency taxes is already barred by prescription. Assessments issued by the BIR beyond the three-year prescriptive, are considered void and of no legal effect. (Commissioner of Internal Revenue v. Systems Technology Institute, G.R. No. 220835, July 26, 2017; Philippine Daily Inquirer v. Commissioner of Internal Revenue, G.R. No. 213943, March 22, 2017) Q. If the taxpayer actively participated in the administrative investigation by filing a request for reinvestigation, which resulted in a reduced assessment, does that fact amount to estoppel that prescription can no longer be invoked? No. The doctrine of estoppel cannot be applied as an exception to the statute of limitations on the assessment of taxes considering that there is a detailed procedure for the proper execution of the waiver, which the BIR must strictly follow. The BIR cannot hide behind the doctrine of estoppel to cover its failure to comply with RMO 20-90 and RDAO 05-01, which the BIR itself had issued. Having caused the defects in the waivers, the BIR must bear the consequence. It cannot simply shift the blame to the taxpayer. (Commissioner of Internal Revenue v. Systems Technology Institute, G.R. No. 220835, July 26, 2017) Q. Can a waiver of the statute of limitations which does not comply with the

requirements specified under RMO No. 2090 and RDAO No. 01-05 become valid? Yes. Generally, a waiver of the statute of limitations that does not comply with the requisites for its validity specified under RMO No. 20-90 and RDAO 01-05 is invalid, but may still be valid due to peculiar circumstances. In Commissioner of Internal Revenue v. Next Mobile, G.R. No. 212825, December 7, 2015, five (5) waivers were executed by the taxpayer and the BIR. The CTA found the following defects: (1) they were executed without a notarized board authority; (2) the dates of acceptance by the BIR were not indicated therein; and (3) the fact of receipt by respondent of its copy of the Second Waiver was not indicated on the face of the original Second Waiver. The Court ruled that, due to peculiar circumstances and as exception to the general rule, the supposedly invalid waivers may be considered valid for the following reasons: 1. If the parties are in pari delicto or “in equal fault” and thus they shall have no action against each other. Taxpayer violated RMO No. 20-90 which states that in case of a corporate taxpayer, the waiver must be signed by its responsible officials and RDAO 01-05 which requires the presentation of a written and notarized authority to the BIR. Similarly, BIR violates its own rules when it did not ensure that the waiver is duly signed by an authorized representative and by not ensuring that the delegation of authority is in writing and duly notarized. 2. Parties who do not come to Court with clean hands cannot be allowed to benefit from their own wrongdoing. Taxpayer should not be allowed to Page 17 of 36



benefit from the flaws in its own waivers and successfully insist on their invalidity in order to evade its responsibility to pay taxes.

taxpayer is obviously in bad faith. (Commissioner of Internal Revenue v. Next Mobile, G.R. No. 212825, December 7, 2015)

3. Taxpayer is estopped from questioning the validity of its waivers. The taxpayer executed 5 waivers and delivered them to the BIR and did not raise any objection against their validity until the BIR assessed taxes against it. In its Letter Protest to the BIR, respondent did not even question the validity of the Waivers or call attention to their alleged defects.

Q. ABC received a Letter of Authority for the examination of its books of accounts for internal revenue purposes for the taxable year 2004. On October 9, 2007, the parties executed a Waiver to extend the prescriptive period for the year 2004 to June 20, 2008. On the part of ABC, this was signed by its Finance Manager. The waiver was followed by another waiver extending the prescriptive period to November 30, 2008. Thereafter, the BIR issued a PAN. ABC filed a protest against the PAN arguing that it not liable for the deficiency taxes. It did not raise as an issue the invalidity of the waiver and the prescription of the BIR’s right to assess. In its protest against the FAN, ABC argued that the year being audited in the FAN has already prescribed at the time such FAN was mailed on December 4, 2008. ABC received the FAN on December 5, 2008 which is 5 days after the waiver it issued had prescribed. In the CTA, ABC further argued that the signatories in the waivers were not duly sanctioned to act on its behalf.

4. The Court cannot tolerate a highly suspicious situation. In this case, after the taxpayer voluntarily executing the waivers, insisted on their invalidity by raising the very same defects it caused. On the other hand, the BIR miserably failed to exact from the taxpayer compliance with its rules. The BIR’s negligence in the compliance of its duties was so gross such that it seemed that it consented to the mistakes in the waivers. Such a situation is dangerous and open to abuse by unscrupulous taxpayers who intend to escape their responsibility to pay taxes by mere expedient of hiding behind technicalities. Further, the Court said that while the BIR was also at fault here because it was careless in complying with the requirements of RMO No. 20-90 and RDAO 01-05, such negligence may be addressed by enforcing the provisions imposing administrative liabilities upon the officers responsible for these errors. The BIR's right to assess and collect taxes should not be jeopardized merely because of the mistakes and lapses of its officers, especially in cases like this where the

(1) Are the two waivers valid? (2) Is the assessment barred already by prescription? (1) Estoppel applies against a taxpayer who did not only raise at the earliest opportunity its representative's lack of authority to execute two (2) waivers of defense of prescription, but was also accorded, through these waivers, more time to comply with the audit requirements of the Bureau of Internal Revenue. Citing its previous ruling in Commissioner of Internal Revenue v. Next Mobile, Inc., G.R. No. Page 18 of 36



212825, December 7, 2015, a defective waiver will be upheld when both the taxpayer and the BIR were in pari delicto. In this case, the Bureau of Internal Revenue was at fault when it accepted the waivers despite their non-compliance with the requirements of RMO No. 20-90 and RDAO No. 05-01. The taxpayer’s acts also show its implied admission of the validity of the waivers. First, the taxpayer never raised the invalidity of the Waivers at the earliest opportunity, either in its Protest to the PAN, Protest to the FAN, or Supplemental Protest to the FAN. It thereby impliedly recognized these waivers' validity and its representatives' authority to execute them. Second, the taxpayer benefitted from the waivers executed as it gave the taxpayer more time to comply with the audit requirements of the BIR. (2) Yes, the assessment is void because it was served beyond the extended period. The FAN/FLD was mailed on December 4, 2008. Since the validity period of the second waiver is only until November 30, 2008, prescription had already set in at the time the FAN and the FLD were actually mailed on December 4, 2008. (Commissioner of Internal Revenue v. Transitions Optical Philippines, G.R. No. 227544, November 22, 2017) Q. PAGCOR received a Final Assessment Notice (FAN) signed by the Regional Director. Claiming exemption based on its charter, PAGCOR timely filed a protest to the FAN. After 203 days, PAGCOR elevated its protest to the CIR. After 209 days, PAGCOR filed a Petition for Review with the CTA. Does the CTA have jurisdiction over the appeal? A. No, a protesting taxpayer has only three options:

denied by the CIR or his authorized representative, then the taxpayer may appeal to the CTA within 30 days from receipt of the whole or partial denial of the protest. 2. If the protest is wholly or partially denied by the CIR's authorized representative, then the taxpayer may appeal to the CIR within 30 days from receipt of the whole or partial denial of the protest. 3. If the CIR or his authorized representative failed to act upon the protest within 180 days from submission of the required supporting documents, then the taxpayer may appeal to the CTA within 30 days from the lapse of the 180-day period. A whole or partial denial by the CIR's authorized representative may be appealed to the CIR or the CTA. A whole or partial denial by the CIR may be appealed to the CTA. The CIR or the CIR's authorized representative's failure to act may be appealed to the CTA. There is no mention of an appeal to the CIR from the failure to act by the CIR's authorized representative. (PAGCOR v. BIR, G.R. No. 208731, January 27, 2016) Q. Can the BIR collect deficiency taxes from a corporation subject of rehabilitation proceedings and where a Commencement Order has already been issued? No. Section 16 of RA 10142 or the Financial Rehabilitation and Insolvency Act (FRIA) provides that upon issuance of a Commencement Order which includes a Stay or Suspension Order – all actions or proceedings, in court or otherwise, for the enforcement of “claims” against a distressed company shall be suspended.

1. If the protest is wholly or partially Page 19 of 36 NOTICE This material supplements the author’s 2013 Bar Reviewer, 2014 Bar Supplement, 2015 Bar Supplement, 2016 Bar Supplement, 2017 Bar Supplement, Tax Audit Primer, and Flowchart of Tax Remedies. No portion of this work may be copied or reproduced without the written permission of the author. Possessors may reproduce and distribute this supplement provided the name of the author remains clearly associated with the work and no alterations in the form and content of this supplement are made. No stamping is allowed.


“Claims” includes all claims of the government, whether national or local, including taxes, tariffs and customs duties. Creditors, including the government, must ventilate their claims before the rehabilitation. Thus, it is improper for the BIR to collect, or even attempt to collect deficiency taxes outside of the rehabilitation proceedings in willful disregard of a Commencement Order lawfully issued by a Rehabilitation Court. (Bureau of Internal Revenue v. Lepanto Ceramics, G.R. No. 224764, April 24, 2017) Q. A taxpayer filed its administrative claim and judicial claim for refund of tax erroneously or illegally collected only 13 days apart. The BIR argues that this does not satisfy the requirement of exhaustion of administrative remedies. Is the BIR correct? No. Section 229 of the Tax Code states that judicial claims for refund of tax erroneously or illegally collected must be filed within 2 years from the date of payment of the tax or penalty providing further that the same may not be maintained until a claim for refund or credit has been duly filed with the CIR. Section 229 does not mean that the taxpayer must await the final resolution of its administrative claim. Section 229 only requires that the administrative claim should first be filed. The purpose of the administrative claim is to serve as notice of warning to the CIR that court action would follow unless the tax erroneously or illegally collected is refunded. (Commissioner of Internal Revenue v. Goodyear Philippines, G.R. No. 216130, August 3, 2016) Q. Can the date of issuance of a BIR Ruling confirming the tax-exemption status of a taxpayer be used as the reckoning point of the prescriptive period for recovery of

erroneously or illegally assessed or collected internal revenue taxes? A. No. The claim for refund must be filed within two (2) years from the date of payment of the tax regardless of any supervening cause that may arise after payment. While the prescriptive period of two (2) years commences to run from the time that the refund is ascertained, the propriety thereof is determined by law (in this case, from the date of payment of tax), and not upon the discovery by the taxpayer of the erroneous or excessive payment of taxes. The issuance of the BIR of a Ruling declaring the tax-exempt status of a taxpayer, if at all, is merely confirmatory in nature. Such ruling is not the operative act from which an entitlement of refund is determined. (Commissioner of Internal Revenue v. Meralco, G.R. No. 181459, June 9, 2014) Q. A taxpayer-bank extended a foreign currency denominated loan to a company. As agreed, the company withheld and paid to the BIR the final withholding tax on taxpayer-bank’s interest income on the said loan. However, the taxpayer-bank mistakenly remitted the same amounts to the BIR on April 25, 2001. Thus, the taxpayer-bank filed its administrative claim for refund on December 27, 2002 while the judicial claim was filed only on September 10, 2003. The taxpayer-bank argues that the two-year prescriptive period of its claim for refund should be reckoned not from April 25, 2001, when it remitted the tax to the BIR but at the time it filed its Final Adjustment Return or Annual Income Tax Return for the taxable year of 2001, or in April 2002, as it was only at this time that its right to refund was ascertained. Is the taxpayer-bank correct?



No. In claims for refund of tax erroneously or illegally collected, both the administrative and judicial claims for refund should be filed within the two-year prescriptive period. The twoyear prescriptive period is counted from the date of the payment of the tax or penalty. In this case, the tax involved in the case is the final withholding tax on the taxpayer’s interest income on its foreign currency denominated loan. Final withholding taxes are considered as full and final payment of the income tax due and thus are not subject to any adjustments. Thus, the two-year prescriptive period shall commence to run from the time the refund is ascertained, i.e. date such tax was paid, and not upon discovery of the taxpayer of the erroneous or excessive payment of taxes. (Metropolitan Bank and Trust Company v. Commissioner of Internal Revenue, G.R. No. 182582, April 17, 2017) Q. For taxpayers using the On-line Electronic Documentary Stamp Metering Machine (DS metering machine), what should be deemed the “date of payment” of the DST for the purpose of counting the two-year prescriptive period for filing a claim for a refund or tax credit? The “date of payment” of the DST when the prescriptive period to file a claim for refund/credit must commence shall be the date when the documentary stamps are imprinted upon the documents and not the date of purchase of documentary stamps for loading or reloading on the DS metering machine. The payment of the DST and the filing of the DST Declaration Return upon loading/reloading of the DS Metering machine must not be considered as the “date of payment” when the prescriptive period to file

a claim for refund/credit must commence. For DS metering machine users, the payment of DST upon loading/reloading is merely an advanced payment for future application. The liability of the payment of DST falls due only upon occurrence of the taxable transaction. (Philippine Bank of Communications v. Commissioner of Internal Revenue, G.R. No. 194065, June 20, 2016) Q. Whether evidence not presented in the administrative claim for refund in the Bureau of Internal Revenue can be presented in the Court of Tax Appeals? Yes. The Court of Tax Appeals is not limited by the evidence presented in the administrative claim in the Bureau of Internal Revenue. The claimant may present new and additional evidence to the Court of Tax Appeals to support its case for tax refund. The power of the Court of Tax Appeals to exercise its appellate jurisdiction does not preclude it from considering evidence that was not presented in the administrative claim in the Bureau of Internal Revenue. Parties are expected to litigate and prove every aspect of their case anew and formally offer all their evidence. No value is given to documentary evidence submitted in the Bureau of Internal Revenue unless it is formally offered in the Court of Tax Appeals. Thus, the review of the Court of Tax Appeals is not limited to whether or not the Commissioner committed gross abuse of discretion, fraud, or error of law, as contended by the Commissioner. As evidence is considered and evaluated again, the scope of the Court of Tax Appeals' review covers factual findings. (Philippine Airlines v. Commissioner of Internal Revenue, G.R. No. 206079-80 & 206309, January 17, 2018)



Note: The case involved a claim for refund pursuant to Section 229 of the Tax Code. Q. What are the requisites for claiming a refund of excess creditable withholding taxes? The requisites for claiming a refund of excess creditable withholding taxes are: 1.

The claim for refund was filed within the two-year prescriptive period;

2.

The fact of withholding is established by a copy of a statement duly issued by the payor (withholding agent) to the payee, showing the amount of tax withheld therefrom; and

3.

The income upon which the taxes were withheld was included in the income tax return of the recipient as part of the gross income. (Commissioner of Internal Revenue v. Cebu Holding, G.R. No. 189792, June 29, 2018; Commissioner of Internal Revenue v. Team (Philippines) Operations Corporation, G.R. No. 179260, April 2, 2014.) LOCAL GOVERNMENT TAXATION

Q. Do LGUs have the power to impose taxes on the gross receipts of keepers of garages, cars for rent or hire driven by the lessee, transportation contractors, persons who transport passenger or freight for hire, and common carriers by land, air, or water? No. Section 133(j) of the LGC clearly and unambiguously proscribes LGUs from imposing a tax on the gross receipts of transportation contractors and common carriers. Exemption of transportation contractors and common carriers from local

business tax is consistent with the intent of our laws, which is to prevent the duplication of the so-called common carriers tax. (City of Manila v Hon. Colet and Malaysian Air System, G.R. No. 120051, December 10, 2014) Q. Do LGUs have the power to impose taxes on persons or entities engaged in the business of manufacturing and distribution of petroleum products? No. Among the common limitations on the taxing powers of LGUs provided under Section 133 of the LGC are “excise taxes on articles enumerated under the National Internal Revenue Code, as amended, and taxes, fees or charges on petroleum products.” The prohibition with respect to petroleum products extends not only to excise taxes thereon, but all “taxes, fees or charges.” (Batangas City v. Pilipinas Shell, G.R. No. 187631, July 8, 2015) Q. Uniwide conducted business in buildings and establishments constructed on parcels of land covered by Transfer Certificates of Title (TCTs) issued by the Registry of Deeds of Pasig City. In the said TCTs, the location of the parcels of land is indicated as being in Pasig. From 1989 to 1996, Uniwide paid business and realty taxes, fees, and other charges to the City of Pasig. However, beginning 1997 and after receiving notice from the Municipality of Cainta that the subject properties were within its territorial jurisdiction, Uniwide no longer paid local taxes to the City of Pasig. For purposes of complying with local tax liabilities in case of a boundary dispute between local governments, to whom should the taxpayer pay its local business tax and realty taxes? The taxpayer should pay its local business tax to the City of Pasig who has the apparent Page 22 of 36



right to levy and collect local business tax and realty taxes on the subject properties on the basis of the TCTs. Under the Local Government Code, local business taxes are payable for every separate or distinct establishment or place where business subject to the tax is conducted, which must be paid by the person conduct the same. The situs of taxation shall be paid to the local government where such branch or sales outlet is located. For real property taxes, collection is vested in the locality where the property is situated. In determining the location for purposes of identifying the local government entitled to collect taxes, the taxpayer should follow the location stated in the certificate of title until amended through proper judicial proceedings. (Municipality of Cainta v. City of Pasig and Uniwide, G.R. No. 176703, June 28, 2017) Q. On 26 December 1992, the Sangguniang Bayan of the Municipality of Pasig enacted Ordinance No. 25 which imposed a franchise tax on all business venture operations carried out through a franchise within the municipality. On 25 January 1995, the Municipality of Pasig was converted into a highly urbanized city now known as the City of Pasig. The City Treasurer assessed the Manila Electric Company for deficiency franchise taxes for the period 1996 to 1999 pursuant to Municipal Ordinance No. 25. Does the City of Pasig have valid basis for its imposition of franchise tax for the period 1996 to 1999? No. The power to impose franchise tax belongs to the province by virtue of Section 137 of the Local Government Code. On the other hand, Section 142 of the Code provides that the municipalities are prohibited from levying the taxes specifically provided to provinces. Section 151 empowers the cities to levy taxes, fees and charges allowed to both

provinces and municipalities. Unlike a city, a municipality is bereft of authority to levy franchise tax, thus, the ordinance enacted for that purpose is void. The ordinance in question was enacted in 1992 when the local government of Pasig was still a municipality and, as such, had no authority to levy franchise tax. The conversion of the municipality into a city does not lend validity to the void ordinance. The ordinance is void for being in direct contravention with Section 142 of the Local Government Code. Being void, it cannot be given any legal effect. An assessment and collection pursuant to the said ordinance is legally infirm. (City of Pasig v. Manila Electric Company, G.R. No. 181710, March 7, 2018) Q. The City of Manila assessed ABC local business taxes for the taxable year 2007 using the gross sales for the calendar year 2005. ABC argues that the computation of the business tax should be on the basis of its gross sales in 2006 which amount was lower than the gross sales in 2005. Is ABC correct? Yes. Section 14 of the Revenue Code of Manila, which is derived from Section 143(a) of the Local Government Code, provides that an assessment for business tax should be computed based on the taxpayer’s gross sales or receipts of the preceding calendar year. (City of Manila v. Cosmos Bottling Corporation, G.R. No. 196681, June 27, 2018) Q. In the imposition of the surcharge on local taxes due and unpaid, should the 25% surcharge be computed yearly based on the unpaid tax due for each particular year? No. Section 168 of the Local Government Code categorically provides that the local government unit may impose a surcharge not exceeding 25% of the amount of taxes, fees, Page 23 of 36



or charges not paid on time. The surcharge is a civil penalty imposed once for late payment of a Contrast this with the succeeding provisions on interest, which was imposable at the rate not exceeding 2% per month of the unpaid taxes until fully paid. The fact that the interest charge is made proportionate to the period of delay, whereas the surcharge is not, clearly reveals the legislative intent for the different modes in their application. If the legislative intent was to make the 25% surcharge proportionate to the period of delay, the law should have provided for the same in clear terms. (NPC v. City of Cabanatuan, G.R. No. 177332, October 1, 2014) Q. On January 15, 2007, ABC protested, thru a letter, the imposition of business tax under Section 21 of the Manila Revenue Code on the ground that it constitutes double taxation. The City Treasurer acknowledged receipt of the letter but said that she will await the formal protest. On March 27, 2007, ABC wrote a letter-reply reiterating that ABC already protested. On April 17, 2007, ABC filed a Petition for Review with the Regional Trial Court (“RTC”). On appeal, the CTA ruled that ABC belatedly filed its petition with RTC by 1 day. ABC countered it timely filed now claiming that reckoning point should be from March 27, 2007. Was the petition timely filed? No. Section 195 of the Local Government Code states that the taxpayer shall have thirty (30) days from the receipt of the denial of the protest or from the lapse of the sixty (60)-day period prescribed herein within which to appeal with the court of competent jurisdiction otherwise the assessment becomes conclusive and unappealable. In the instant case, the period within which the City Treasurer must act on the protest, and the consequent period to appeal a “denial due to

inaction,” should be reckoned from January 15, 2007, the date the taxpayer filed its protest, and not March 27, 2007. (China Banking Corporation v. City Treasurer of Manila, G.R. No. 204117, July 1, 2015) Note: The Court likewise stated that, at any rate, the RTC has no jurisdiction. Following R.A. No. 9282, the authority to exercise either original or appellate jurisdiction over local tax cases depended on the amount of the claim. In cases where the amount sought to be refunded is below the jurisdictional amount of the RTC, the Metropolitan, Municipal, and Municipal Circuit Trial Courts (“MTC”) have jurisdiction. RTC has jurisdiction if amount exceeds exceed P300,000 outside Metro Manila (P400,000 in Metro Manila); MTC if amount does not exceed P300,000 outside Metro Manila (P400,000 in Metro Manila). Q. The City of Manila assessed ABC local business taxes. ABC protested the assessment arguing that it constitutes as double taxation. ABC tendered payment of what they believe to be the correct computation of their local business tax. The payment was refused by the City Treasurer. ABC also received a letter from the City Treasurer denying their protest. ABC then paid the assessment and filed a claim for refund with the Office of the City Treasurer raising the same grounds in their protest. ABC then filed its refund with the RTC of Manila. The City of Manila argues that the assessment against ABC became final and executory when the latter effectively abandoned its protest and instead sued in court for the refund of the assessed taxes. Is the City of Manila correct? No. A taxpayer who had protested and paid an assessment is not precluded from later on instituting an action for refund or credit.



While Section 196 does not expressly mention an assessment made by the local treasurer, this simply means that its applicability does not depend upon the existence of an assessment notice. By consequence, a taxpayer may proceed to the remedy of refund of taxes even without a prior protest against an assessment that was not issued in the first place. This is not to say that an application for refund can never be precipitated by a previously issued assessment, for it is entirely possible that the taxpayer, who had received a notice of assessment, paid the assessed tax, fee or charge believing it to be erroneous or illegal. Thus, under such circumstance, the taxpayer may subsequently direct his claim pursuant to Section 196 of the LGC. When a taxpayer is assessed a deficiency local tax, fee or charge, he may protest it under Section 195 even without making payment of such assessed tax, fee or. charge. This is because the law on local government taxation, save in the case of real property tax, does not expressly require ''payment under protest" as a procedure prior to instituting the appropriate proceeding in court. This implies that the success of a judicial action questioning the validity or correctness of the assessment is not necessarily hinged on the previous payment of the tax under protest. Needless to say, there is nothing to prevent the taxpayer from paying the tax under protest or simultaneous to a protest. Thus, a taxpayer facing an assessment may protest it and alternatively: (1) appeal the assessment in court, or (2) pay the tax and thereafter seek a refund. (City of Manila v. Cosmos Bottling Corporation, G.R. No. 196681, June 27, 2018) Q. What are the remedies of the taxpayer in case of an assessment for deficiency local taxes?

Where an assessment is to be protested or disputed, the taxpayer may proceed (a) without payment, or (b) with payment of the assessed tax, fee or charge. Whether there is payment of the assessed tax or not, the protest in writing must be made within sixty (60) days from receipt of the notice of assessment; otherwise, the assessment shall become final and conclusive. Additionally, the subsequent court action must be initiated within thirty (30) days from denial or inaction by the local treasurer; otherwise, the assessment becomes conclusive and unappealable. a. Where no payment is made, the taxpayer's procedural remedy is governed strictly by Section 195. That is, in case of whole or partial denial of the protest, or inaction by the local treasurer, the taxpayer's only recourse is to appeal the assessment with the court of competent jurisdiction. The appeal before the court does not seek a refund but only questions the validity or correctness of the assessment. b. Where payment was made, the taxpayer may thereafter maintain an action in court questioning the validity and correctness of the assessment (Section 195) and at the same time seeking a refund of the taxes. It would be illogical for the taxpayer to only seek a reversal of the assessment without praying for the refund of taxes. Once the assessment is set aside by the court, it follows as a matter of course that all taxes paid under the erroneous or invalid assessment are refunded to the taxpayer. The same implication should ensue even if the taxpayer were to style his suit in court as an action for refund or recovery of erroneously paid Page 25 of 36



or illegally collected tax as pursued under Section 196 of the LGC. In such a suit for refund, the taxpayer cannot successfully prosecute his theory of erroneous payment or illegal collection of taxes without necessarily assailing the validity or correctness of the assessment he had administratively protested.

serve the owner's business or tend to meet the needs of his industry or works that are on real estate. (Capitol Wireless v. Provincial Treasurer of Batangas, G.R. No. 180110, May 30, 2016)

Note that where an assessment is issued, the taxpayer cannot choose to pay the assessment and thereafter seek a refund at any time within the full period of two years from the date of payment as Section 196 may suggest. If refund is pursued, the taxpayer must administratively question the validity or correctness of the assessment in the 'letter claim for refund' within 60 days from receipt of the notice of assessment, and thereafter bring suit in court within 30 days from either decision or inaction by the local treasurer. (City of Manila v. Cosmos Bottling Corporation, G.R. No. 196681, June 27, 2018)

No. The Local Government Code exempts duly registered cooperatives from payment of real property taxes without distinction. Nothing in the law suggests that real property tax exemption only applies when the property is used by the cooperative itself. Thus, the exemption from real property taxes given to cooperatives applies regardless of whether or not the land owned is leased. The instance that the real property is leased to either an individual or corporation is not a ground for withdrawal of tax exemption. (Provincial Assessor of Agusan del Sur v. Filipinas Palm Oil Plantation, G.R. No. 183416, October 5, 2016)

REAL PROPERTY TAXATION Q. May submarine communications cables be classified as taxable real property by the local governments? Yes. Submarine or undersea communications cables are akin to electric transmission lines which the Court has previously declared as “machinery” subject to real property tax under the Local Government Code to the extent that the equipment's location is determinable to be within the taxing authority's jurisdiction. Both electric lines and communications cables, in the strictest sense, are not directly adhered to the soil but pass through posts, relays or landing stations, but both may be classified under the term "machinery" as real property under Article 415(5) of the Civil Code for the simple reason that such pieces of equipment

Q. Does the exemption from real property taxes given to cooperatives exclude real property leased to other persons?

Q. Is the Philippine Economic Zone Authority (PEZA) exempt from the payment of real property taxes? Yes. The PEZA is exempt from the payment of real property taxes. The general rule is that real properties are subject to real property taxes. This is true especially since the Local Government Code has withdrawn exemptions from real property taxes of all persons, whether natural or juridical. Exceptions to the rule are however also provided in the Local Government Code. Under Section 133(o), local government units have no power to levy taxes of any kind on the national government, its agencies and instrumentalities and local government units. Specifically on real property taxes, Section 234 enumerates the persons and real property exempt from real Page 26 of 36



property taxes, which includes “real property owned by the Republic of the Philippines or any of its political subdivisions except when the beneficial use thereof has been granted, for consideration or otherwise, to a taxable person.” The PEZA is an instrumentality of the national government. Being an instrumentality of the national government, the PEZA cannot be taxed by local government units. Further, the real properties under the PEZA’s title are owned by the Republic of the Philippines. Properties of public dominion, even if titled in the name of an instrumentality as in this case, remain owned by the Republic of the Philippines. (City of Lapu-Lapu v. PEZA, G.R. No. 184203 & 187583, November 26, 2014) NOTE: Even the PEZA’s lands and buildings whose beneficial use have been granted to other persons may not be taxed with real property taxes. The PEZA may only lease its lands and buildings to PEZA-registered economic zone enterprises and entities. These PEZA-registered enterprises and entities, which operate within economic zones, are not subject to real property taxes. Under Section 24 of the Special Economic Zone Act of 1995, no taxes, whether local or national, shall be imposed on all business establishments operating within the economic zones. Q. May a municipality within the Metropolitan Manila Area, a city, or a province have an additional levy on real property for the special education fund at the rate of less than 1%.? Yes. Section 235 of the Local Government Code provides that “a province or city, or a municipality within the Metropolitan Manila Area, may levy and collect an annual tax of one percent (1%) on the assessed value of real property which shall be in addition to the basic real property tax. The proceeds thereof shall

exclusively accrue to the Special Education Fund (SEF).” The operative phrase in Section 235’s grant to municipalities in Metro Manila, cities, and provinces of the power to impose an additional levy for the special education fund is prefixed with “may,” thus, “may levy and collect an annual tax of one percent (1%).” There is no limiting qualifier to the articulated rate of 1% which unequivocally indicates that any and all special education fund collections must be at such rate. Setting the rate of the additional levy for the special education fund at less than 1% is within the taxing power of local government units. (Demaala v. COA, G.R. No. 199752, February 17, 2015) Q. The Provincial Treasurer assessed ABC for real property taxes on its submarine cables. Thereafter, ABC received a Warrant of Levy and a Notice of Auction Sale. ABC filed a Petition for Prohibition and Declaration of Nullity of Warrant of Levy, Notice of Auction Sale and/or Auction Sale with the RTC. ABC argues that the submarines cables are not subject to tax. Further, ABC argues that such issue involves purely questions of law and, thus, exhaustion of administrative remedies is not required. Is ABC’s remedy proper? No. In disputes involving real property taxation, the general rule is to require the taxpayer to first avail of administrative remedies and pay the tax under protest before allowing any resort to a judicial action, except when the assessment itself is alleged to be illegal or is made without legal authority. The instant case, however, is one replete with questions of fact instead of pure questions of law, which renders its filing in a judicial forum improper because it is instead cognizable by local administrative bodies like the Board of Assessment Appeals, which are the proper venues for trying these factual issues such as Page 27 of 36



the extent and status of the taxpayer’s ownership of the system, the actual length of the cable/s that lie in Philippine territory, and the corresponding assessment and taxes due on the same. (Capitol Wireless v. Provincial Treasurer of Batangas, G.R. No. 180110, May 30, 2016) Q. Distinguish between an illegal assessment and an erroneous assessment of real property taxes in terms of remedies to be taken? A. An erroneous assessment is different from an illegal assessment, and the proper remedy of a taxpayer issued an assessment depends on whether the assessment was erroneous or illegal.

Erroneous Assessment

Illegal Assessment

An erroneous assessment “presupposes that the taxpayer is subject to the tax but is disputing the correctness of the amount assessed.” With an erroneous assessment, the taxpayer claims that the local assessor erred in determining any of the items for computing the real property tax, i.e., the value of the real property or the portion thereof subject to tax and the proper

An assessment is illegal if it was made without authority under the law.

assessment levels. The taxpayer must exhaust the administrative remedies provided under the Local Government Code before resorting to judicial action. The taxpayer must first pay the real property tax under protest. Should the taxpayer find the action on the protest unsatisfactory, the taxpayer may appeal with the Local Board of Assessment Appeals within 60 days from receipt of the decision on the protest. If the taxpayer is still unsatisfied after appealing with the Local Board of Assessment Appeals, the taxpayer may appeal with the Central Board of Assessment Appeals within 30 days from receipt of the Local Board’s decision. The decision of the Central Board of Assessment Appeals is appealable before the Court of Tax

The taxpayer may directly resort to judicial action without paying under protest the assessed tax and filing an appeal with the Local and Central Board of Assessment Appeals. The taxpayer shall file a complaint for injunction before the Regional Trial Court to enjoin the local government unit from collecting real property taxes. The party unsatisfied with the decision of the Regional Trial Court shall file an appeal, not a petition for certiorari, before the Court of Tax Appeals, the complaint being a local tax case decided by the Regional Trial Court. The appeal shall be filed within fifteen (15) days from notice of the trial court’s decision. The Court of Tax Appeals’ decision may then be appealed before the Supreme Court through a petition Page 28 of 36



Appeals En Banc. The Court of Tax Appeals’ decision may then be appealed before the Supreme Court through a petition for review on certiorari under Rule 45 of the Rules of Court raising pure questions of law.

for review on certiorari under Rule 45 of the Rules of Court raising pure questions of law. (City of Lapu-Lapu v. PEZA, G.R. No. 184203 & 187583, November 26, 2014)

Q. A taxpayer argues that payment under protest is not required before it could challenge the authority of the local government to assess tax on its tax exempt properties before the LBAA. Is the taxpayer correct? No. Settled is the rule that should the taxpayer/real property owner question the excessiveness or reasonableness of the assessment, the law directs that the taxpayer should first pay the tax due before his protest can be entertained. A claim for exemption from the payment of real property taxes does not question the assessor’s authority to assess and collect such taxes, but pertains to the reasonableness or correctness of the assessment by the local assessor. Thus, payment under protest is required. (National Power Corporation v. The Provincial Treasurer of Benguet, G.R. No. 209303, November 14, 2016) Q. Does the filing of a Motion for Reconsideration before the LBAA toll the 30day period within which to appeal before the CBAA?

No. Filing of a Motion for Reconsideration before the Local Board of Assessment Appeals (LBAA) will not toll the 30-day period within which to appeal before the Central Board of Assessment Appeals (CBAA). The “fresh period rule” in Neypes does not apply as the appeal from a decision of the LBAA to the CBAA is administrative in nature, not judicial. (National Power Corporation v. The Provincial Treasurer of Benguet, G.R. No. 209303, November 14, 2016) TARIFF AND CUSTOMS DUTIES Q. Who has jurisdiction to hear and determine questions involving the seizure and forfeiture of dutiable goods? The Collector of Customs has exclusive jurisdiction over seizure and forfeiture proceedings, and regular courts cannot interfere with his exercise thereof or stifle or put it at naught. The Collector of Customs sitting in seizure and forfeiture proceedings has exclusive jurisdiction to hear and determine all questions touching on the seizure and forfeiture of dutiable goods. Regional trial courts are devoid of any competence to pass upon the validity or regularity of seizure and forfeiture proceedings conducted by the BOC and to enjoin or otherwise interfere with these proceedings. Regional trial courts are precluded from assuming cognizance over such matters even through petitions for certiorari, prohibition or mandamus. (Agriex Co. Ltd. v. Commissioner of Customs, G.R. No. 158150, September 10, 2014) JUDICIAL REMEDIES Q. Does the CTA have the power to issue writs of certiorari in its appellate jurisdiction? Page 29 of 36



Yes. The Court of Tax Appeals has the power to issue writs of certiorari in the exercise of its appellate jurisdiction. The CTA can 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 assessment is based, so long as it is within its appellate jurisdiction. (City of Manila v. Hon. Grecia-Cuerdo, G.R. No. 175723, February 4, 2014) Q. Is an adverse ruling of the Secretary of Finance in the exercise of its power of review under Section 4 of the NIRC appealable to the Court of Tax Appeals? Yes. Review by the Secretary of Finance pursuant to Section 4 of the NIRC, as amended, of a BIR Ruling is appealable to the Court of Tax Appeals. The Court opined that Section 7(a)(1) of RA 1125, as amended by RA 9282, addresses the seeming gap in the law as it vests in the Court of Tax Appeals, albeit impliedly, with jurisdiction over the appeal from the Secretary of Finance’s review of rulings of the Commissioner of Internal Revenue as “other matters” arising under the NIRC or other laws administered by the BIR. (Philippine American Life and General Insurance Company v. The Secretary of Finance and Commissioner of Internal Revenue, G.R. No. 210987, November 24, 2014; Banco de Oro v. Republic, G.R. No. G.R. No. 198756, January 13, 2015) Q. Does the CTA have jurisdiction relative to matters involving the validity of a rule or regulation issued by the Bureau of Internal Revenue? Yes. The Court of Tax Appeals 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 assessment is based. It is now within the power of the Court of Tax Appeals, through its power of certioriari, to rule on the validity of a particular administrative rule or regulation so long as it is within its appellate jurisdiction. (Philippine American Life and General Insurance Company v. The Secretary of Finance and Commissioner of Internal Revenue, G.R. No. 210987, November 24, 2014) Q. The Philippine Ports Authority (PPA) received a letter from the City Assessor for the assessment and collection of real property taxes against its administered properties. It appealed the assessment to the Local Board of Assessment Appeals (LBAA) through the Office of the City Treasurer. While the case was pending, the City of Davao posted a notice of sale of delinquent real properties including the properties of the PPA. The LBAA dismissed the appeal. The PPA appealed before the Central Board of Assessment Appeals (CBAA) and was denied. Thus, it filed an appeal with the CTA. The PPA claimed it did not receive any warrant of levy and thus it filed a Petition for Certiorari with the Court of Appeals (CA). The CTA ruled in favor of the PPA declaring the properties as exempt from real property tax and declaring void the assessments issued. The CA, on the other hand, dismissed the petition ruling that the CTA has exclusive jurisdiction and said that the PPA should have applied for issuance of a writ of injunction or prohibition. PPA filed a Motion for Reconsideration with the CA and was denied. Hence, the PPA filed a Petition for Review with the Supreme Court. Does the CA have jurisdiction to issue the injunctive relief prayed for by PPA?



No. When a tax case is pending on appeal with the CTA, the CTA has exclusive jurisdiction to enjoin the levy of taxes and auction of the taxpayer’s properties in relation to that case. Section 7(a)(5) of RA No. 1125, as amended by RA No. 9282 provides that the CTA has exclusive appellate jurisdiction over decisions of the CBAA in the exercise of its appellate jurisdiction over cases involving the assessment and taxation of real property originally decided by the provincial or city board of assessment appeals. The CTA has the power to determine whether or not there has been grave abuse of discretion in cases falling within its exclusive appellate jurisdiction and its power to issue writs of certiorari. The Court of Tax Appeals had jurisdiction over PPA’s appeal to resolve the question of whether or not it was liable for real property tax. The real property tax liability was the very reason for the acts which petitioner wanted to have enjoined. It was, thus, the Court of Tax Appeals, and not the Court of Appeals, that had the power to preserve the subject of the appeal, to give effect to its final determination, and, when necessary, to control auxiliary and incidental matters and to prohibit or restrain acts which might interfere with its exercise of jurisdiction over petitioner's appeal. Even if the law had vested the Court of Appeals with jurisdiction to issue injunctive relief in real property tax cases such as this, the Court of Appeals was still correct in dismissing the petition before it. Once a court acquires jurisdiction over a case, it also has the power to issue all auxiliary writs necessary to maintain and exercise its jurisdiction, to the exclusion of all other courts. Thus, once the Court of Tax Appeals acquired jurisdiction over petitioner's appeal, the Court

of Appeals would have been precluded from taking cognizance of the case. (Philippine Ports Authority v. The City of Davao, G.R. No. 190324, June 6, 2018) Q. Does the CTA have exclusive jurisdiction to determine the constitutionality or validity of tax laws, rules and regulations, and other administrative issuances of the CIR? Yes. The CTA has exclusive jurisdiction to determine the constitutionality or validity of tax laws, rules and regulations, and other administrative issuances of the Commissioner of Internal Revenue. The CTA has not only jurisdiction to pass upon the constitutionality or validity of a tax law or regulation when raised by the taxpayer as a defense in disputing or contesting an assessment or claiming a refund, but also jurisdiction to take cognizance of cases directly challenging the constitutionality or validity of a tax law or regulation or administrative issuance (revenue orders, revenue memorandum circulars, rulings). The law intends the CTA to have exclusive jurisdiction to resolve all tax problems. Petitions for writs of certiorari against the acts and omissions of the said quasi-judicial agencies should, thus, be filed before the CTA. Except for local tax cases, actions directly challenging the constitutionality or validity of a tax law or regulation or administrative issuance may be filed directly before the CTA. With respect to administrative issuances (revenue orders, revenue memorandum circulars, or rulings), these are issued by the Commissioner under its power to make rulings or opinions in connection with the implementation of the provisions of internal revenue laws. Tax rulings, on the other hand, are official positions of the Bureau on inquiries Page 31 of 36



of taxpayers who request clarification on certain provisions of the National Internal Revenue Code, other tax laws, or their implementing regulations. Hence, the determination of the validity of these issuances clearly falls within the exclusive appellate jurisdiction of the CTA, subject to prior review by the Secretary of Finance. (Steel Corporation v. Bureau of Customs & Bureau of Internal Revenue, G.R. No. 220502, February 12, 2018; Banco de Oro v. Republic, G.R. No. 198756, August 16, 2016) NOTE: This reverses the previous ruling of the Supreme Court in Clark Investors and Locators Association v. Secretary of Finance, G.R. No. 200670, July 6, 2015 where it held that the proper remedy to assail a Revenue Regulation is via a special civil action of declaratory relief under Rule 63 which falls under the exclusive jurisdiction of the Regional Trial Courts. This likewise reverses the ruling of the Supreme Court in Commissioner of Internal Revenue v. Court of Tax Appeals and Petron Corporation, G.R. No. 207843, July 15, 2015 where it held that the CTA has no jurisdiction to determine the validity of a ruling issued by the CIR or the COC in the exercise of their quasi-legislative powers to interpret tax laws. Q. Can a taxpayer directly question a tax ruling with the Supreme Court? No. Rulings of the CIR (including Revenue Memorandum Circulars) are appealable to the Court of Tax Appeals, and not to any other courts. If a remedy in the administrative machinery can still be resorted to, then such remedy must first be exhausted before the court’s power of judicial review can be sought. In questioning the validity of a Revenue Memorandum Circular, taxpayers should not resort directly to the Supreme Court.

Taxpayers should comply with the doctrine of administrative remedies and the rule on hierarchy of courts. (Bloomberry Resorts and Hotels v. Bureau of Internal Revenue, G.R. No. 212530, August 10, 2016) Interpretative rulings of the Bureau of Internal Revenue are reviewable by the Secretary of Finance. However, in one case, the Supreme Court has held that because of special circumstances - namely: the question involved is purely legal; the urgency of judicial intervention given impending maturity of the PEACe Bonds; and the futility of an appeal to the Secretary of Finance as the latter appeared to have adopted the challenged Bureau of Internal Revenue rulings - there was no need to exhaust all administrative remedies before seeking judicial relief directly with the Supreme Court. (Banco de Oro v. Republic, G.R. No. 198756, August 16, 2016) Q. The National Power Corporation (NPC) received a notice of franchise tax delinquency from the Provincial Government of Bataan. NPC argued that it was exempt from the local franchise tax. Eventually, the Provincial Government issued Warrants of Levy on 14 properties owned by NPC in Limay, Bataan. The same were likewise sold via public auction where the Provincial Government was the winning bidder. NPC filed a Petition for declaration of nullity of foreclosure sale with prayer for preliminary mandatory injunction with the Regional Trial Court (RTC). The RTC dismissed the same. NPC appealed to the Court of Appeals (CA). The Provincial Government of Bataan moved to dismiss the same for lack of jurisdiction of the CA over the subject matter as the suit was essentially a local tax case questioning the validity of the imposition of the local franchise tax. Is the Provincial Government of Bataan correct?



Yes. The Court of Tax Appeals is vested with the exclusive appellate jurisdiction over, among others, appeals from the "decisions, orders or resolutions of the Regional Trial Courts in local tax cases originally decided or resolved by them in the exercise of their original or appellate jurisdiction." The case a quo is a local tax case that is within the exclusive appellate jurisdiction of the Court of Tax Appeals. Parenthetically, the case arose from the dispute between Napocor and the Provincial Government of Bataan over the purported franchise tax delinquency of Napocor. Although the complaint filed with the trial court is a “Petition for declaration of nullity of foreclosure sale with prayer for preliminary mandatory injunction,” the petition essentially assails the correctness of the local franchise tax assessments by the Provincial Government of Bataan. (Napocor v. Provincial Government of Bataan, G.R. No. 180654, March 6, 2017) Q. Does the CTA have jurisdiction over cases asking for the cancellation and withdrawal of a warrant of distraint and/or levy? Yes. Section 7 of RA No. 9282 provides that the CTA has jurisdiction over other matters arising under the National Internal Revenue Code or other laws administered by the Bureau of Internal Revenue. (Commissioner of Internal Revenue v. Bank of the Philippine Islands, G.R. No. 224327, June 11, 2018) Q. Does the Secretary of Justice have jurisdiction to review disputed assessments involving government owned and controlled corporations? No. Under Presidential Decree No. 242 (PD 242), all disputes and claims solely between government agencies and offices, including government-owned or controlled

corporations, shall be administratively settled or adjudicated by the Secretary of Justice, the Solicitor General, or the Government Corporate Counsel, depending on the issues and government agencies involved. The use of the word "shall" in PD 242 means that administrative settlement or adjudication of disputes and claims between government agencies and offices, including government owned or controlled corporations, is not merely permissive but mandatory and imperative. The second paragraph of Section 4 of the 1997 NIRC, providing for the exclusive appellate jurisdiction of the CTA as regards the CIR's decisions on matters involving disputed assessments, refunds in internal revenue taxes, fees or other charges, penalties imposed in relation thereto, or other matters arising under NIRC, is in conflict with PD 242. To harmonize Section 4 of the 1997 NIRC with PD 242, the following interpretation should be adopted: 1. As regards private entities and the BIR, the power to decide disputed assessments, refunds of internal revenue taxes, fees or other charges, penalties in relation thereto, or other matters arising under the NIRC or other laws administered by the. BIR is vested in the CIR subject to the exclusive appellate jurisdiction of the CTA, in accordance with Section 4 of the NIRC; and 2. Where the disputing parties are all public entities (covers disputes between the BIR and other government entities), the case shall be governed by PD 242. Even if the 1997 NIRC, a general statute, is a later act, PD 242, which is a special law, will Page 33 of 36



still prevail and is treated as an exception to the terms of the 1997 NIRC with regard solely to intragovernmental disputes. PD 242 is a special law while the 1997 NIRC is a general law, insofar as disputes solely between or among government agencies are concerned. (Power Sector Assets and Liabilities Management Corporation v. Commissioner of Internal Revenue, G.R. No. 198146, August 8, 2007) NOTE: Previously, the Supreme Court ruled that the Secretary of Justice does not have jurisdiction to review disputed assessments and it is the CTA that has the exclusive appellate jurisdiction to review, among others, the decisions of the Commissioner of Internal Revenue in cases involving disputed assessments. (Commissioner of Internal Revenue v. Secretary of Justice and Philippine Amusement and Gaming Corporation, G.R. No. 177387, November 9, 2016) Q. Does the CTA have jurisdiction over a petition for certiorari assailing a Department of Justice (DOJ) resolution in a preliminary investigation involving tax and tariff offenses? Jurisdiction over a petition for certiorari assailing a DOJ resolution in a preliminary investigation involving tax and tariff offenses is now with the CTA, not the Court of Appeals (“CA”). In Bureau of Customs v. Hon. Devanadera, G.R. No. 193253, September 8, 2015, the Supreme Court said that the elementary rule is that the Court of Appeals has jurisdiction to review the resolution of the DOJ through a petition for certiorari under Rule 65 of the Rules of Court on the ground that the Secretary of Justice committed grave abuse of his discretion amounting to excess or lack of jurisdiction. However, with the enactment of

Republic Act (RA) No. 9282 expanding the CTA’s jurisdiction, it is no longer clear which between the CA and the CTA has jurisdiction to review through a petition for certiorari the DOJ resolution in preliminary investigations involving tax and tariff offenses. The Supreme Court then declared that the CA’s original jurisdiction over a petition for certiorari assailing the DOJ resolution in a preliminary investigation involving tax and tariff offenses was necessarily transferred to the CTA pursuant to Section 7 of RA No. 9282, amending R.A. No. 1125. Q. Does the CTA en banc have jurisdiction over interlocutory orders issued by the CTA Division? No. The CTA en banc has jurisdiction over final orders or judgments but not over interlocutory orders issued by the CTA in division. An interlocutory order may not be questioned on appeal. (Commissioner of Internal Revenue v. Court of Tax Appeals and CBK Power, G.R. No. 203054-55, July 29, 2015) Q. The BIR issued several assessment notices to the taxpayer for deficiency income tax and VAT for the taxable years 1999 to 2002. The taxpayer filed protests, but they were denied by the BIR. The taxpayer then filed a Petition for Review with the CTA in Division. The CTA Division denied the Petition. The CTA Division likewise denied the Motion for Reconsideration. The taxpayer then appealed directly to the Supreme Court. Does the Supreme Court have jurisdiction? No. The Court is without jurisdiction to review decisions rendered by a division of the CTA, exclusive appellate jurisdiction over which is vested in the CTA en banc. RA 1125, as amended by RA 9282, provides that the CTA en banc shall have exclusive jurisdiction over Page 34 of 36



appeals from the decision of its divisions. A party adversely affected by the resolution of the CTA division may, on motion for reconsideration, file a petition for review with the CTA en banc. Thereafter, the decision or ruling of the CTA en banc may be elevated to this Court. Simply stated, no decision of the CTA division may be elevated to this Court under Rule 45 of the 1997 Rules of Civil Procedure without passing through the CTA en banc. (Duty Free Philippines v. BIR, G.R. No. 197228, October 8, 2014) Q. Does the CTA En Banc have jurisdiction to take cognizance of a petition for annulment of judgment to annul and set aside a final decision of a CTA division ? No. The Revised Rules of the CTA and even the Rules of Court which apply suppletorily thereto provide for no instance in which the en banc may reverse, annul or void a final decision of a division. The Revised Rules of the CTA provide for no instance of an annulment of judgment at all. The Rules of Court are silent as to whether a collegial court sitting en banc may annul a final judgment of its own division.The silence of the Rules may be attributed to the need to preserve the principles that there can be no hierarchy within a collegial court between its divisions and the en banc, and that a court's judgment, once final, is immutable. Further, a direct petition for annulment of a judgment of the CTA to the Supreme Court, meanwhile, is likewise unavailing, for the same reason that there is no identical remedy with the High Court to annul a final and executory judgment of the Court of Appeals. The proper remedy of the taxpayer is to file a petition for certiorari under Rule 65, which can be filed as an original action with the Supreme Court and not before the CTA En Banc. (Commissioner of Internal Revenue v. Kepco

Ilijan Corporation, G.R. No. 199422, June 21, 2016) Q. What is the effect of filing a Petition for Review with the CTA En Banc without filing a prior motion for reconsideration or new trial before the CTA Division? The filing of a motion for reconsideration or new trial before the CTA Division is an indispensable requirement for filing an appeal before the CTA En Banc. Failure to file such motion for reconsideration or new trial is cause for dismissal of the appeal before the CTA En Banc. (City of Manila v. Cosmos Bottling Corporation, G.R. No. 196681, June 27, 2018) Q. Within sixty days from receipt of the resolution of the CTA En Banc on the Motion for Reconsideration of the CTA En Banc Decision, the taxpayer filed a Petition for Certiorari with the Supreme Court alleging grave abuse of discretion amounting to lack or excess of jurisdiction on the part of the CTA En Banc when it issued the assailed decision and resolution. Did the taxpayer avail of the proper remedy? No. The taxpayer adopted the wrong remedy in assailing the resolution of the CTA En Banc. What the petitioner should have done to question the decision of the CTA En Banc was to file before the Supreme Court a petition for review under Rule 45 of the same Rules of Court in conformity with Section 11 of R.A. No. 9282. A petition for certiorari under Rule 65 of the Rules of Court is a special civil action that may be resorted to only in the absence of appeal or any plain, speedy and adequate remedy in the ordinary course of law.54 In this case, there is a plain, speedy and adequate remedy that is available - appeal by certiorari under Rule 45. (Aichi Forging Company v. Commissioner of Internal Revenue, G.R. No. Page 35 of 36



193625, August 30, 2017; Bureau of Internal Revenue v. Hon. Ernesto Acosta, G.R. No. 195320, April 23, 2018)

Appeals and Commissioner of Internal Revenue, G.R. No. 215950, June 20, 2016) ***Nothing else follows***

Q. May the requirement of a bond for the CTA to suspend the collection of tax be dispensed with? Yes. The authority of the CTA to issue such injunctive writs to restrain the collection of tax and to dispense with the deposit of the amount claimed or the filing of the required bond is not simply confined to cases where prescription has set in. Whenever it is determined that the method employed by the CIR in the collection of tax is not sanctioned by law or jeopardies the interests of a taxpayer for being patently in violation of the law, the bond requirement under Section 11 of R.A. 1125 should be dispensed with. (Pacquiao v. Court of Tax Appeals – First Division, G.R. No. 2133394, April 6, 2016) The requirement of the bond as a condition precedent to suspension of collection applies only in cases where the processes by which the collection ought to be made by means thereof are carried out in consonance with the law, not when the processes are in plain violation of the law that they have to be suspended for jeopardizing the interests of the taxpayer. The CTA should conduct a preliminary hearing to ascertain and rule whether the bond may be dispensed or reduced. The CTA should consider other factors recognized by law towards suspending the collection of the assessment, like whether or not the assessment would jeopardize the interest of the taxpayer, or whether the means adopted by the CIR in determining the liability of the taxpayer was legal and valid. (Tridharma Marketing Corporation v. Court of Tax


QUESTIONS AND ANSWERS ON SIGNIFICANT SUPREME COURT TAXATION LAW JURISPRUDENCE FROM JANUARY 2013 TO JUNE 2018

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