SAN BEDA COLLEGE ALABANG

SCHOOL OF LAW
TAXATION I
ATTY. DEBORAH S. ACOSTA-CAJUSTIN
FIRST SEMESTER SY 2019-2020

Learning without thinking is useless

Thinking without learning is dangerous

Confucius

PART A: GENERAL PRINCIPLES OF TAXATION

I. TAXATION

A. Definition
a. Paseo Realty & Development Corporation v. Court of Appeals, GR No. 119286,
October 13, 2004
B. Nature of Internal Revenue Law
a. Hilado v. CIR, 100 Phil. 288
C. Scope and Nature of Taxation
a. Sec. 28, Art. VI, 1987 Constitution
b. C.N. Hodges v. Municipal Board of the City of Iloilo, G.R. No. L-18129, January 31,
1963
c. CIR v. Algue, Inc. L-28896, Feb. 17, 1988
d. Commissioner of Internal Revenue v. Cebu Portland Cement Company, GR No. L-
29059, December 15, 1987
e. Mactan Cebu International Airport Authority v. Marcos, 261 SCRA 667 (1996)
f. Abakada Guro Party List v. Sec. Ermita, et al., GR No. 168056, September 1, 2005
D. Underlying Theory and Basis; Necessity Theory; Benefit-Received Principle
a. CIR v. Algue, supra.
b. NPC v. Cabanatuan, GR No. 149110, April 19, 2003
c. Lorenzo v. Posadas, 64 Phil 353
E. Purpose of Taxation
a. General/Fiscal/Revenue
i. CIR v. Algue, supra.
ii. PAL v. Edu, 164 SCRA 320
iii. Tolentino v. Sec. of Finance, 235 SCRA 630; 249 SCRA 628
b. Non-Revenue/Special or Regulatory
i. Osmena v. Orbos, 220 SCRA 703
ii. Caltex v. COA, 208 SCRA 755
F. Principles of a Sound Tax System
a. Chavez v. Ongpin, 186 SCRA 331
b. Diaz v. Secretary of Finance, GR No. 193007, July 19, 2011
G. Comparison with Police Power and Eminent Domain
a. Roxas v. CTA, 23 SCRA 276
b. Tanada v. Angara, GR No. 118295, May 2, 1997
c. LTO v. City of Butuan, GR No. 131512, January 20, 2000
d. Phil Match Co. v. Cebu, 81 SCRA 99
 e. Matalin v. Mun. Council of Malabang, 143 SCRA 404
f. Lutz v. Araneta, 98 Phil. 48
g. NTC v. CA, 311 SCA 508

II. TAXES

A. Essential Characteristics of Taxes

a. Tan v. Del Rosario, 237 SCRA 324
b. CIR v. Santos, GR No. 119252, August 18, 1997
c. Gerochi v. DOE, GR No. 159796, July 17, 2007
B. Taxes Distinguished from:
a. Debts
i. Caltex v. COA, 208 SCRA 726
ii. Francia v. IAC, 162 SCRA 735
iii. RP v. Ericta and Sampaguita Pictures, 172 SCRA 653
iv. Republic v. Mambulao Lumber Company, 4 SCRA 622
v. Philex Mining v. CIR, GR No. 125704, August 28, 1998
vi. Domingo v. Carlitos, 8 SCRA 443
b. License Fees/Fees
i. Progressive Dev. Corp. v. QC, 172 SCRA 629
ii. PAL v. Edu, 164 SCRA 320
iii. ESSO v. CIR, 175 SCRA 149
c. Special Assessments/Levies
i. Apostolic Prefect v. Treasurer of Baguio, 71 Phil 547
ii. PCGG v. Cojuangco, GR No. 147062-64, December 14, 2001
iii. Osmena v. Orbos, GR No. 99886, March 31, 1993
d. Toll
i. Diaz v. Secretary of Finance, GR No. 193007, July 19, 2011
e. Penalties
i. NDC v. CIR, 151 SCRA 472
f. Customs Duties
i. Collector of Customers v. Torres, GR No. L-22977, May 31, 1972
C. Tax Evasion; Tax Avoidance
a. Tax Code, Sec. 254
b. Republic v. Gonzales, 13 SCRA 633
c. Delpher Traders v. IAC, 157 SCRA 349, January 26, 1988
d. Heng Tong Textiles Co., Inc. v. CIR, GR No. L-19737, August 26, 1968
e. CIR v. Lincoln Life, GR No. 119176, March 19, 2002
f. CIR v. Toda, GR No. 147188, September 14, 2004

III. Sources of Tax Law

A. Constitution
B. Statutes
a. RA 8424, as amended
b. RA 9337
c. RA 10963 - TRAIN
d. Tariff and Customs Code
e. Book II, Local Government Code
f. Special Laws
C. Administrative Issuances
 a. Revenue Regulations – issuances signed by the Secretary of Finance, upon
recommendation of the Commissioner of Internal Revenue, that specify, prescribe or
define rules and regulations for the effective enforcement of the provisions of the
NIRC and related statutes.
i. Tax Code, Secs. 244-245
ii. Civil Code, Article 7
iii. Asturias Sugar Central v. Comm, 29 SCRA 617
iv. Tan v. Del Rosario, 237 SCRA 234
v. CIR v. Seagate Technology, GR No. 153866, February 11, 2005
vi. CIR v. Bicolandia Drug Corporation, GR No. 148083, July 21, 2006
vii. Medicard Philippines, Inc. v. CIR, GR No. 222743, April 5, 2017
b. Revenue Memorandum Orders – issuances that provide directives or instructions;
prescribe guidelines; and outline processes, operations, activities, workflows,
methods and procedures necessary in the implementation of stated policies, goals,
objectives, plans and programs of the Bureau in all areas of operations, except
auditing.
c. Revenue Memorandum Circulars – 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.
i. Consolidated Cases of Confederation for Unity, Recognition and
Advancement of Government Employees et al. v. Commissioner, Bureau of
Internal Revenue, et al., GR Nos. 213446 and 213658, July 3, 2018
d. Revenue Administrative Orders – issuances that cover subject matters dealing strictly
with permanent administrative set-up of the Bureau, more specifically, the
organizational structure, statements of functions and/or responsibilities of BIR
offices, definitions, delegations of authority and personnel requirements and
standards of performance.
e. Revenue Delegation of Authority Orders – Refer to functions delegated by the
Commissioner to revenue officials in accordance with law.
f. BIR Revenue Administrative Order Nos. 1-2014, 2-2014, 3-2014
g. BIR Rulings
i. Tax Code, Secs. 4 and 246
ii. CIR v. Burroughs Ltd., GR No. 66653, June 19, 1986
iii. CIR v. Mega Gen. Merchandising, 166 SCRA 166
iv. PBCom v. CIR, 302 SCRA 241
v. BDO, et al. v. Republic of the Philippines, GR No. 198756, January 13, 2015
h. Tax/Revenue Ordinances
i. Tuazon v. CA, 212 SCRA 739
ii. Hagonoy Market Vendor v. Municipality of Hagonoy, GR No. 137621,
February 6, 2002
iii. Jardine Davies v. Aliposa, GR No. 118900, February 27, 2003
i. Tax Treaties
i. Tanada v. Angara, GR No. 118295, May 2, 1997
ii. Deutsche Bank AG Manila Branch v. CIR, GR No. 188550, August 19, 2013
j. Case Laws
k. Legislative Materials

IV. Limitations upon the Power of Taxation

INHERENT LIMITATIONS
A. Public Purposes
a. Lutz v. Araneta, 98 Phil. 48
b. Pascual v. Sec. of Public Works, 110 Phil. 331
B. Delegation of Taxation Power
a. Constitution, Art. X, Sec. 5
b. Constitution, Art. VI, Sec. 28(2)
c. Tariff and Customs Code, Sec. 401
d. Smith Bell & Co. v. CIR, L-28271, July 25, 1975
e. City of Government of Quezon City v. Bayantel, GR 162015, March 6, 2006
f. Garcia v. Executive Secretary, 210 SCRA 219
g. Mindanao Shopping Destination Corporation, et al. v. Duterte, GR No. 211093, June
6, 2017
C. Exemption of Government Agencies
a. Tax Code, Sec. 27(C) and 30(I)
b. Mactan Cebu Airport v. Marcos, supra.
c. Maceda v. Macaraig, supra.
D. Territoriality of Situs of Taxation
a. Manila Gas v. Collector, 62 Phil 895
b. Vegetable Oil Corp. v. Trinidad, 45 Phil. 822
c. Iloilo Bottlers v. Iloilo City, 164 SCRA 607
d. CIR v. BOAC, 149 SCRA 395
e. Collector v. Lara, 102 Phil. 813
E. International Comity
a. Constitution, Art. 11, Sec. 2
b. Tanada v. Angara, GR No. 118295, May 2, 1997
c. Commissioner of Internal Revenue v. Mitsubishi Metal Corp., GR Nos. 54908,
80041, January 22, 1990
d. Commissioner of Internal Revenue v. Pilipinas Shell Petroleum Corporation, GR No.
188497, April 25, 2012
F. Double Taxation
a. Procter & Gamble Co. v. Mun. of Jagna, 94 SCRA 894
b. CIR v. SC Johnson & Sons, Inc., 309 SCRA 87
c. CIR v. Goodyear Philippines, Inc., GR No. 216130, August 3, 2016

CONSTITUTIONAL LIMITATIONS

A. Due Process Clause

a. Constitution, Art. III, Sec. 1
b. Com. of Customs v. CTA & Campos Rueda Co., 152 SCRA 641
c. Phil. Bank of Comm v. CIR, 302 SCRA 241
d. Sison V. Ancheta, 130 SCRA 654
B. Equal Protection Clause
a. Constitution, Art. III, Sec. 1
b. Ormoc Sugar Co. v. Treasurer of Ormoc City, 22 SCRA 603
c. Shell Co. v. Vano, 94 Phil. 388
d. Tiu v. CA, 301 SCRA 279
e. Tan v. Del Rosario, 237 SCRA 324
f. Phil. Rural Electric v. Secretary, GR No. 143706, June 10, 2003
g. Southern Luzon Drug Corporation v. DSWD, GR No. 199669, April 25, 2017
C. Rule of Taxation shall be Uniform and Equitable
a. Constitution, Art. VI, Sec. 28(1)
 b. Pepsi-Cola v. Butuan City, 24 SCRA 789
c. Manila Race Horse v. dela Fuente, 88 Phil. 69
d. Sison v. Ancheta 130 SCRA 654
e. Tolentino v. Sec. of Finance, 249 SCRA 628
D. Non-Impairment of Contracts
a. Constitution, Art. III, Sec. 10 and Art. XII, Sec. 11
b. CIR v. Lingayen Gulf Electric Co., 164 SCRA 67
c. Misamis Oriental v. CEPALCO, 181 SCRA 38
d. Phil. Rural Electric v. Secretary, supra.
E. Non-Imprisonment for Non-Payment of Poll Tax
a. Constitution, Art. III, Sec. 20
F. Prohibition Against Taxation of Religious and Charitable Institutions
a. Constitution, Art. VI, Sec. 28(3)
b. Lladoc v. CIR, 14 SCRA 292
c. Province of Abra v. Hernando, 107 SCRA 1021
d. Abra Valley College v. Aquino, 162 SCRA 106
G. Prohibition Against Taxation of Non-Stock Non-Profit Educational Institutions
a. Constitution, Art. XIV, Sec. 4(3)
b. Constitution, Art. VI, Sec. 28(3)
c. Tax Code, Secs. 27(B) and 30(H)
d. DOF Order 137-87
e. DOF Order 149-95
f. BIR RMC 76-2003
g. BIR RMC 45-95
h. BIR RR 13-98
i. CIR v. CA and YMCA, 298 SCRA 83
j. CIR v. De La Salle University, Inc., GR No. 196596, November 9, 2016
k. CIR v. St. Luke’s Medical Center, Inc. GR No. 203514, February 13, 2017
H. Freedom of Religious Worship
a. Constitution, Art. III, Sec. 5
b. American Bible Society v. Manila, 101 Phil. 386
I. Passage of Tax Bills/Granting of Tax Exemption
a. Constitution, Art. VI, Sec. 24
b. Constitution, Art. VI, Sec. 28(4)
c. Tolentino v. Sec. of Finance, supra
J. Veto Power of the President
a. Constitution, Art. VI, Sec. 27(2)
K. Non-Impairment of SC Jurisdiction
a. Constitution, Art. VIII, Sec. 5(2)(b)

V. Construction of Tax Laws

A. General Rules of Construction of Tax Laws

a. Stevedoring v. Trinidad, 43 Phil. 803
b. Lorenzo v. Posada, 64 Phil. 353
c. Umali v. Estanislao, 209 SCRA 446
d. CIR v. Solidbank, GR No. 148191, Nov. 25, 2003
e. Collector v. La Tondena, 5 SCRA 665
B. Mandatory v. Directory Provisions
a. Serafica v. Treasurer of Ormoc City, 27 SCRA 110
b. Roxas v. Rafferty, 37 Phil. 958
 c. Pecson v. CA, 222 SCRA 580
C. Application of Tax Laws,
a. Civil Code, Art. 2
b. CIR v. CA, GR No. 119761, August 29, 1996
c. CIR v. Telefunken, 249 SCRA 401
d. CIR v. Michel Lhuillier, GR No. 150947, July 25, 2003
e. CIR v. Benguet Corp., GR No. 134587, July 8, 2005

VI. Exemption from Taxation

A. In General
a. Greenfield v. Meer, 77 Phil. 394
b. Basco v. PAGCOR, 196 SCRA 52
c. CIR v. Botelho Shipping Corp., 20 SCRA 487
d. CIR v. CTA, GCL Retirement Plan, 207 SCRA 487
e. CIR v. Guerrero, 21 SCRA 180
f. Phil. Acetylene v. CIR, 20 SCRA 1056
g. Maceda v. Macaraig, Jr., 197 SCRA 771
h. Sea-Land Service v. CA, 357 SCRA 441
i. Davao Gulf v. CUR, GR No. 117359, July 23, 1998
j. PLDT v. Davao City, GR No. 143867, August 22, 2001
B. Compared with Other Terms
a. Tax Remission/Condonation
i. Surigao Con. Min. v. Collector, 9 SCRA 728
b. Tax Amnesty
i. CIR v. CA, 240 SCRA 368
ii. CIR v. Marubeni, GR No. 137377, December 18, 2001
iii. Commissioner of Internal Revenue v. Covanta Energy Philippine Holdings,
Inc., GR No. 203160, January 24, 2018
iv. CIR v. APO Cement Corporation, GR No. 193381, February 8, 2017
c. Exclusion/Deduction
i. Tax Code, Sec. 32(B)
ii. Tax Code, Sec. 34
C. Construction of Tax Exemptions
a. Wonder Mechanical Engineering v. CTA, 64 SCRA 555
b. Luzon Stevedoring Corp. v. CTA, 163 SCRA 647
c. Floro Cement v. Hen. Gorospe, 200 SCRA 480
d. CIR v. CA & YMCA, supra
e. CIR v. CA, GR No. 124043, October 14, 1998
f. Misamis Oriental Ass. V. DOF, 238 SCRA 63
g. Nestle Philippines v. CA, GR No. 134114, July 6, 2001
h. Coconut Oil Refiners v. Torres, GR No. 132527, July 29, 2005
i. Maceda v. Macaraig, 196 SCRA 771
j. Maceda v. Macaraig, 223 SCRA 217
k. Soriano, et al. v. Secretary of Finance, GR No. 184450, January 24, 2017
l. Secretary of Finance v. Lazatin, GR No. 210588, November 29, 2016

PART B: TAX REMEDIES

Tax Remedies under the National Internal Revenue Code

I. Bureau of Internal Revenue

A. BIR Organizational Structure, Tax Code, Secs 3, 9, 10, 11, 13

1. National Office
a. Commissioner of Internal Revenue
b. Deputy Commissioners and National Evaluation Board
c. Assistant Commissioners
d. Division Chiefs

2. Regional Offices
a. Regional Directors
b. Assistant Regional Directors
c. Division Chiefs
d. Revenue District Officers, LTDO, and Special Investigation Division

B. Duties of the BIR, Tax Code, Sec. 2

C. Collecting Agents of the BIR, Tax Code, Sec. 12
D. Powers of the Commissioner, Tax Code, Secs. 4, 5, 6, 7, 246; Rev. Regulations No. 10-2010

II. Assessment of Internal Revenue Taxes

A. Definition/ nature / effects, Tax Code, Secs. 4, 6, 203, 222, 223, 228; Rev. Regulations 12-99;
Revenue Regulations 18-2013; Revenue Regulations 7-2018

1. Tax Assessment (Self-Assessment)

2. Tax Audit
3. Letter of Authority/Audit Notice
4. Notice for Informal Conference
5. Pre-Assessment Notice (PAN); when not required
6. Formal Letter of Demand and Final Assessment Notice (FLD/FAN)
7. Deficiency/delinquency
8. Jeopardy assessment
9. Power of the Commissioner to assess deficiency tax/best evidence obtainable

a. CIR v. Hantex Trading Co., Inc., GR No. 136975, March 31, 2005
b. CIR v. Enjay Hotels, Inc., CTA (En Banc) Case Nos. 1498 and 1500, May 22,
2018
c. Medicard Philippines, Inc. v. CIR, GR No. 222743, April 5, 2017

B. Period to assess deficiency tax

1. Prescription

a. Ordinary - Tax Code, Sec. 203

b. Extraordinary – Tax Code, Sec. 222

2. Suspension of prescriptive period/exceptions

a. Tax Code, Secs. 203, 222, and 223

 b. Revenue Memorandum Order No. 14-2016, April 14, 2016; RMO No. 20-1990;
Revenue Delegated Authority Order No. 5-2001; and Revenue Memorandum
Circular No. 6-2005
c. Commissioner of Internal Revenue v. Next Mobile, Inc., GR No. 212825,
December 7, 2015
d. RMC No. 48-90, April 23, 1990
e. CIR v. CTA, 195 SCRA 444
f. Philippine Journalists, Inc. v. Commissioner, GR 162852, December 16, 2004
g. CIR v. The Stanley Works Sales (Phils.), Incorporated, GR 187589, December
3, 2014
h. China Banking Corporation v. CIR, GR 172509, February 4, 2015
i. CIR v. Standard Chartered Bank, GR 192173, July 29, 2015 – withholding
taxes; estoppel (partial payment)
k. CIR v. Air India, GR 72443, January 29, 1988
l. CIR v. BASF Coating + Inks Phils., Inc., GR 198677, November 26, 2014-
wrong address
m. Estate of Fidel F. Reyes v. CIR, CTA EB No. 189, March 21, 2007
n. The Premier Insurance & Surety Corp. v. CIR, CTA Case No. 6707, December
24, 2008
o. Ayala Hotels, Inc. v. CIR, CTA Case No. 6002
p. Samar-I Electric Cooperative (SIEC) v. CIR, GR 193100, December 10, 2014 -
falsity
q. CIR v. Philippine Daily Inquirer, GR 213943, March 22, 2017
r. CIR v. GJM Philippines Manufacturing, Inc., GR 202695, February 29, 2016
t. RCBC v. CIR, GR No. 170257, September 7, 2011

C. Requisites of a valid assessment

1. Rev. Regulations 12-99, as amended by Revenue Regulations 18-2013, Sec. 3

a. Azucena Reyes v. CIR, GR 159694/163581, January 27, 2006

b. Barcelon Roxas Securities, Inc. v. CIR, GR 157064, August 7, 2006
c. CIR v. BIR, GR 134062, April 17, 2007
d. CIR v. Metro Star Superama, Inc., GR 185371, December 8, 2010
e. CIR v. United Salvage and Towage (Phils.), Inc., GR 197515, July 2, 2014
f. Medtecs International Corporation Limited v. CIR, CTA Case No. 8538,
November 15, 2016
g. Collector of Internal Revenue v. Benipayo, GR L-13656, January 31, 1962
h. Farcon Marketing Corporation v. BIR, CTA Case No. 8367, February 3, 2015
i. CIR v. Agrinurture, Inc., CTA EB 1054, January 13, 2015

III. Protesting an Assessment/Remedy BEFORE payment

A. How to protest or dispute an assessment administratively

Tax Code, Sec. 228

Rev. Regulations 12-99, as amended by Revenue Regulations 18-2013, Sec. 3

1. When to file protest

a. Fishwealth Canning Corp. v. CIR, GR No. 179343, January 21, 2010

 2. Where to file
3. Other requirements

a. Submission of additional documents, when required; CIR v. First Express

Pawnshop Co., Inc., GR Nos. 172-45-46, June 16, 2009

4. Effect of protest – assessment deemed disputed; suspension of the prescriptive period

to collect

a. BPI v. CIR, GR No. 139736, October 17, 2005

b. BPI v. CIR, GR No. 174942, March 7, 2008
c. BPI v. CIR, GR No. 181836, July 9, 2014
d. China Banking Corporation v. CIR, GR 172509, February 4, 2015

5. Effect of failure to protest/failure to submit additional documents

a. Ocean Wireless Network, Inc. v. CIR, GR No. 148380, December 9, 2005

b. Allied Banking Corp. v. CIR, GR No. 175097, February 5, 2010
c. CIR v. BPI, GR No. 134062, April 17, 2007

6. Pre-Assessment Notice (PAN); when not required

B. CIR Renders a Decision on the Disputed Assessment

1. Period to decide – Tax Code, Sec. 228

2. CIR’s actions equivalent to denial of protest

a. CIR v. Union Shipping Corporation, 185 SCRA 547

b. Antam Consolidated, Inc. v. CTA, CA-GR No. 33588, March 31, 2004

C. Remedy of the Taxpayer

Rev. Regulations 12-99, as amended by Revenue Regulations 18-2013, Sec. 3

Tax Code, Secs. 4 and 228
RA 1125, as amended by RA 9282

1. If protest denied
2. CIR fails to act on the protest within 180 days from submission of relevant documents

Lascona Land Co., Inc. v. CIR, GR No. 171251, March 5, 2012

Philippine Amusement and Gaming Corp. v. BIR, GR No. 208731, January 27, 2016

3. Effect of failure to appeal

4. Matter appealable to the CTA; What constitutes the final decision of the CIR on the
disputed assessment?

a. Ocean Wireless Network, Inc. v. CIR, supra.

b. Allied Banking Corp. v. CIR, supra.

III. Claims for refund and credit of taxes/Remedy AFTER payment

A. Who may file claim for refund/tax credit

1. CIR v. Procter and Gamble, 204 SCRA 377

2. Silkair (Singapore) PTE Ltd., v. CIR, GR 166482, January 25, 2012
3. CIR v. Petron Corporation, GR No. 186668, March 21, 2012
4. Diageo Philippines, Inc. v. CIR, GR No. 183553, November 12, 2012
5. University Physicians Services, Inc. – Management Inc. v. Commissioner of
Internal Revenue, GR No. 205955, March 7, 2018

B. Tax Credit v. Tax Deduction

1. CIR v. Bicolandia Drug Corporation, GR No. 148083, July 21, 2006

C. Administrative Claim for Refund

1. Cases where refund not allowed – Tax Code, Sec. 204

Air Canada v. CIR, GR No. 169507, January 11, 2016
2. Refund without claim (payment under protest not a requirement) – Tax Code,
Sec. 204(C), 229, 112
3. Filinvest Development Corp. v. CIR, GR No. 146941, August 9, 2017
4. Calamba Steel Center v. CIR, GR 151857, April 28, 2005
5. United International Pictures v. CIR, GR No. 168331, October 11, 2012
6. Deutsche Bank AG v. CIR, GR No. 188550, August 19, 2013
7. University Physicians Services Inc. – Management Inc. v. CIR, GR No. 2015955,
March 7, 2018

D. Remedy of the Taxpayer

Tax Code, Secs. 4 and 229, 112

1. CIR – no decision
2. CIR renders a decision
a. Maceda v. Macaraig, 223 SCRA 217
3. Appeal to CTA by filing a Petition for Review
a. Within 2 years from date of payment to initiate judicial remedy
CIR v. Philamlife, supra.
CIR v. Meralco, GR No. 181459, June 9, 2014
CIR v. PNB, GR No. 161997, October 25, 2005
Metropolitan Bank & Trust Company v. CIR, GR No. 182582, April 17,
2017

b. 30-day period to appeal is jurisdictional

Gibbs v. CIR, 15 SCRA 318

c. The two periods (30 days and 2 years) must concur; exception

CE Luzon Geothermal Power Co., Inc. v. CIR, GR No. 197526, July 26,
2017
 Aichi Forging Company of Asia, Inc. v. CTA, GR No. 193625, August
30, 2017
CIR v. Team Sual Corp., GR No. 194105, February 5, 2014
Pilipinas Total Gas, Inc. v. CIR, GR No. 207112, December 8, 2015

E. Requirements for Refund Cases

1. Fortune Tobacco Corporation v. CIR, GR No. 192024, July 1, 2015

2. ACCRA Investment v. CA, 204 SCRA 957
3. Calamba Steel Center v. CIR, GR No. 151857, April 28, 2005
4. Philam Asset Management, Inc. v. CIR, GR Nos. 156637 and 162004, December 14, 2005
5. CIR v. Mirant (Phil.) Operations Corp., GR No. 171742, June 15, 2011

F. Taxpayers’ Suit

1. Joya v. PCGG, GR No. 96541, August 24, 1993

2. Lozada v. Comelec, GR No. L-59068, January 27, 1983

IV. Jurisdiction of the Court of Tax Appeals

Tax Code, Sec. 218

RA 1125, as amended by RA 9282

A. Why was the CTA created?

1. Phil. Refining Co. v. CA, 256 SCRA 661

B. Jurisdiction of the CTA

1. RA 1125, as amended by RA 9282, Sec. 7

2. Revised Rules of the CTA, Rule 4
3. Pacquiao v. CTA, GR No. 213394, April 6, 2016
4. Tridharma Marketing Corp. v. CTA, GR No. 215950, June 20, 2016
5. CIR v. CTA, GR No. 207843, July 15, 2015
6. Duty Free Phil. v. BIR, GR No. 197228, October 8, 2014
7. SMI-ED Technology, Inc. v. CIR, GR No. 175410, November 12, 2014
8. CIR v. V.Y. Domingo Jewellers, Inc., GR No. 221780, March 25, 2019

C. Final decisions of the CIR – disputed assessment

Rule 4, Sec. 3(a)(2), Revised Rules of the CTA

D. Who may appeal to the CTA

RA 1125, as amended, Secs. 7 and 11

E. New issues cannot be raised for the first time on appeal; exceptions

1. CIR v. PG-PMC, 204 SCRA 377

2. Lim v. CTA, 105 Phil 974
3. CIR v. Villa, 22 SCRA 4
 4. CIR v. Joseph, 5 SCRA 895
5. Philippine Airlines, Inc. v. Commissioner of Internal Revenue, GR. Nos. 206079-80,
206309, January 17, 2018

F. Procedure in the CTA

Revised Rules of the CTA, Rules 7-9, 11-16
CTA Circular No. 1-2013
CTA En Banc Resolution 8-2013
CTA En Banc Resolution 8-2016

G. Appeal from the CTA Division to CTA En Banc, from CTA En Banc to the Supreme Court

RA 1125, as amended, Secs. 18-19

Revised Rules of the CTA, Rules 15-16
Magsaysay Lines v. CA, GR No. 111184, August 12, 1996
Liboro v. CA, 173 SCRA 285

VI. Collection of Internal Revenue Taxes

A. Prescriptive period to collect

1. Tax Code, Sec. 203 – 3 years

2. Tax Code, Sec. 222 – 5 years

CIR v. Wyeth Suaco, 202 SCRA 125

CIR v. Philippine Global Communication, Inc., GR No. 167146, October 31, 2006
BPI v. CIR, GR No. 181836, July 9, 2014

VII. Remedies Available to the Government

A. Administrative remedies/summary remedies

Tax Code, Secs. 205 – 277

CIR v. Wyeth Suaco, 202 SCRA 125

1. Distraint of personal property, Tax Code, Secs. 205-207, 217, 208-209, 210-212
2. Levy of real property, Tax Code, Secs. 205-207, 217, 208-209, 213-214; RMC No.
46-2018, May 21, 2018

BPI v. Commissioner, GR No. 139736, October 17, 2005

3. Forfeiture, Tax Code, Sec. 215

4. Tax lien, Tax Code, Sec. 219; Revenue Memorandum Circular No. 2-94

Republic v. Enriquez, 166 SCRA 608

CIR v. NLRC, 238 SCRA 42
Hongkong and Shanghai Bank v. Rafferty, 39 SCRA 145

B. Judicial remedies
 Tax Code, Sec. 281
Tax Code, Secs. 220-221

Ungab v. Cusi, 97 SCRA 877

CIR v. CA, 257 SCRA 200; Resolution on MR (February 1997)
CIR v. Pascor Realty, GR No. 128315, June 29, 1999
Adamson v. CA, GR No. 120935, May 21, 2009
Gaw v. CIR, GR No. 222837, July 23, 2018

VIII. Statutory Offenses and Penalties

A. Civil penalties/surcharge/interest

Tax Code, Secs. 247-251

Revenue Regulations No. 12-99; RMC No. 54-2018, May 29, 2018

1. Applicable interest rate

2. Computation of interest
3. Deficiency v. delinquency tax
4. Surcharge – 25% or 50%

Tektite Insurance Brokers, Inc. v. Commissioner of Internal Revenue, CTA (First Division)
Case No. 8903, April 12, 2018
Moog Controls Corporation – Philippine Branch v CIR, CTA (Second Division) Case Nos.
9077, February 22, 2018

Tax Code, Sec. 248

a. False v. Fraudulent return

Aznar v. CTA, 58 SCRA 519

b. Fraud assessment

Javier v. CIR, 199 SCRA 824

c. Mandatory imposition of penalties

d. Substantial underdeclaration of income, sales and receipts
e. Substantial overstatement of deduction

B. Issuance of/printing receipts; Registration of name; Violation; Penalties

Tax Code, Secs. 236-243

C. Compliance Requirements

1. Keeping of books of accounts, Tax Code, Secs. 232-235

2. Securing of a Tax Identification Number, Sec. 236

D. Crimes/Offenses/Penalties/Forfeitures
1. Revised penalties, Tax Code, Secs. 224-227; 253-281
 2. Compromise penalty, Rev. Reg. 12-99, Sec. 6; Rev. Memo Order, 1-90
3. Tax Evasion, Tax Code, Sec. 254

a. Elements of tax evasion

b. Persons liable in case taxpayer is a juridical entity
c. Payment of tax not a valid defense

4. Prescription of violations of the Tax Code

Rev. Memo Circular 101-90 (Determination of when cause of action for willful failure to
pay deficiency tax occurs under Section 280 of the Tax Code)

Ungab v. Cusi, 97 SCRA 877

CIR v. JAL, 202 SCRA 450
CIR v. Pascor Realty, GR No. 128315, June 29, 1999
Aguinaldo Industries Corporation v. CIR, GR No. L-29790, February 25, 1982

IX. Abatement of Tax / Tax Compromise

Tax Code, Sec. 204

A. Authority of the Commissioner to abate taxes

Revenue Regulations No. 15-06

RMC No. 66-06

1. Grounds for abating taxes and penalties

2. Conditions

B. Power to compromise

Revenue Regulations No. 7-01, as amended by Revenue Regulations No. 30-02 and 8-2004

1. Cases that can be compromised

2. Cases that cannot be compromised
3. Basis for acceptance of compromise settlement
a. Doubtful validity of assessment
b. Financial incapacity

XI. Informers Reward

Tax Code, Sec. 282

Revenue Memorandum Order No. 12-93 (Guidelines in the Filing of Confidential Information for
Violation of the NIRC and Investigation by Authorized Revenue Officer)

Meralco Securities v. Savellano, 117 SCRA 704

Penid v. Virata, 121 SCRA 166
CIR v. CIR on Audit, 218 SCRA 203

PART C: REMEDIES UNDER THE LOCAL GOVERNMENT CODE

I. Local Taxes in General

Local Government Code (LGC), Secs. 129 - 133, 134-164

Provinces, Secs. 134-141; Municipalities, Secs. 142-150; Cities, Sec. 151; Barangays, Sec. 152;
Common Revenue-Raising Powers, Secs. 153-155; Community Tax, Secs. 156-164

Petron v. Pililla, 198 SCRA 82

Palma Dev. Corp. v. Mun. of Malangas, Zambo del Sur, 413, SCRA 572 (2003)
Progressive Development Corporation v. Quezon City, GR No. 36081, April 24, 1989
Panaligan v. City of Tacloban, GR No. L-9319, September 27, 1957
Batangas Power Corporation v. Batangas City, 428 SCRA 250 (2004)
Consolidated Cases of Municipality of Cainta v. City of Pasig, et al., GR Nos. 176703 and
176721, June 28, 2017
City of Pasig, et al. v. Manila Electric Company, GR No. 181710, Mach 7, 2018

A. Assessment/Collection

1. Accrual / tax period / manner of payment / surcharge and penalties

LGC, Secs. 165-171

Pajaro v. Sandiganbayan, 160 SCRA 763
Ericson Telecommunications v. City of Pasig, GR No. 176667, November 22, 2007

2. Collection of the tax

LGC, Secs. 172-185

Estate of the late Mercedes Jacob v. Court of Appeals, 283 SCRA 474 (1997)

3. Assessment of deficiency / delinquent tax

LGC, Sec. 194

B. Taxpayers’ remedies

1. Protesting an assessment

LGC, Sec. 195

a. Protest to the city/municipal treasurer

b. Appeal to the regular court of competent jurisdiction

Mobil Philippines, Inc. v. The City Treasurer of Makati, GR No. 154092, July 14, 2005

C. Claim for refund/tax credit

LGC, Sec. 196

D. Contesting the validity of a new tax ordinance

 LGC, Secs. 186-193

Magtajas v. Pryce Properties Corporation, 234 SCRA 225

Figuerres v. CA, GR No. 119172, March 25, 1999
Hagonoy Market Vendor Association v. Municipality of Hagonoy, GR No. 137621, February
6, 2002
Coca-Cola Philippines, Inc. v. City of Manila, GR No. 156252, June 27, 2006

a. When a taxpayer can contest the legality of a tax ordinance: 30 days from effectivity
b. Appeal to the Secretary of Justice: 60 days to decide
c. Appeal to a court of competent jurisdiction

Philippine Ports Authority v. The City of Davao, et al., GR No. 190324, June 6, 2018

II. Real Property Taxes

LGC, Secs. 198-218

A. Assessment/Collection

1. Assessment of land value

FELS Energy, Inc. v. The Prov. Of Batangas, GR No. 168557, February 16, 2007
Caltex Phils. v. Central Board of Assessment Appeals, 114 SCRA 296
National Power Corp. v. The Province of Pangasinan and the Provincial Assessor of
Pangasinan, GR No. 210191, March 4, 2019

LGC, Secs. 219-225

2. Collection of real property tax

LGC, Secs. 246-251

a. Payment in installments – LGC, Sec. 250

b. Condonation of tax – LGC, Secs. 276-277
c. Reduction/Discount – LGC, Sec. 251
d. Remedies of government to collect – LGC, Secs. 254-270

Spouses Ramon and Rosita Tan v. Bantegui, GR No. 154027, October 24, 2005

B. Taxpayers’ remedies

1. Contesting the assessment of land value

LGC, 226-231

a. Appeal to the Local Board of Assessment Appeals (LBAA)

Systems Plus Computer College v. Caloocan City, GR No. 146382, August 7, 2003
 b. Appeal to the Central Board of Assessment Appeals (CBAA)

Caltex v. CBAP, 114 SCRA 296

Chavez v. Ongpin, 186 SCRA 331
Cagayan Robina Sugar Milling v. CA, GR No. 122451, October 12, 2000

2. Payment of real property tax under protest

LGC, Sec. 252

Manila Electric Company v. Barlis, GR No. 114231, May 18, 2001

a. File protest with the local treasurer

b. Protest to be filed with the LBAA; within 60 days from receipt of assessment; 120
days to decide

City Government of Quezon City v. Bayantel, GR No. 162015, March 6, 2006

d. Appeal to the CBAA: within 30 days from receipt of denial

e. Appeal to the CTA
f. Appeal to the SC