CTA CASE NO. 9305: Spouses Michael Gavin Richard L. Delos Reyes and Jennifer C.

Delos
Reyes VERSUS Commissioner of Internal Revenue

I. General Principles of Income Taxation (about Resident, Citizen, NRA-ETB, NRA-

NETB) (DEX)
In this case, the petitioners: spouses Michael Gavin Richard L. Delos Reyes and
Jennifer C. Delos Reyes are both Filipino citizens residing in the Philippines. They are
both considered as a resident citizen taxpayers of the Philippines. Their income derived
within and outside the Philippines will be taxed by the Bureau of the Internal Revenue.

II. General Principles of Income Taxation - Revenue Memorandum Circulars (SHEILA)

These are issuances that publish pertinent and applicable portions as well as
amplifications of laws, rules, regulations, and precedents issued by the BIR and other
agencies/offices.
In this case, the Revenue Memorandum Circular (RMC) No. 31-2013 issued is
valid because it is only a clarification of existing policies already in the law. It cannot be
considered void because it is within the power of the Bureau of Internal Revenue to issue
such memorandum circulars.

III. Compensation Income (KARREN)

The said petitioners are both earning a compensation income as employees of the
Asian Development Bank (ADB) and their compensation income are subject to basic
income tax using graduated rates prior to TRAIN Law since the case happened last 2013.

IV. Tax Exemptions (ALELIE)

Despite that both of them are employees of the Asian Development Bank, their
salaries are subject to income tax in the absence of a specific grant of tax exemption. It
was stated in the Article 56 of the ADB Chapter that no tax shall be levied on or in respect
of salaries and emoluments paid by the Bank to Directors, alternates, officers or
employees of the ADB but there is also a statement in the Senate Resolution No. 6 that
that ADB Chapter is subject to reservation that the Philippines retains for itself and its
political subdivision the right to tax their salaries so there were no exemptions for the
salaries of the said petitioners.

V. Powers of the Commissioner of Internal Revenue (INGRID)

The CIR plays an important role in this case because he has a power to
decide, approve and grant refund or tax credit of erroneously or excessively paid taxes.
Not Related to TAX 1: (PRINCESS)

I. Agreement between the Asian Development Bank and the Government of the
Republic of the Philippines regarding the Headquarters of the Asian Development
Bank