TAXATION LAWS 1

GENERAL PRINCIPLES OF TAXATION

I. Definition of Taxation
1. City of Milwaukee v. Milwaukee and Suburban Transport Corporation, 6 Wis.
2d 299 (1959), see its citation of 51 Am. Jur., Taxation, p. 34, Section 2.
2. Mactan Cebu International Airport Authority v. Hon. Ferdinand J. Marcos,
G.R. No. 120082, 11 September 1996

II. Characteristics of Taxation

1. Comprehensive
2. Unlimited
a. Mactan Cebu International Airport Authority v. Hon. Ferdinand J.
Marcos, G.R. No. 120082, 11 September 1996
b. Philippine Health Care Providers, Inc. Vs. CIR, G.R. No. 167330, 18
September 2009
c. Sison vs. Ancheta, 130 SCRA 654, G.R. No. L-59431, July 25, 1984
d. Tio v. Videogram Regulatory Board, 151 SCRA 208
e. Tolentino v. Secretary of Finance, 235 SCRA 730
f. Antonio Roxas, Eduardo Roxas v. Court Of Tax Appeals, G.R. No. L-
25043, April 26, 1968
3. Plenary
4. Supreme

III. Theories in Taxation

1. Lifeblood Theory
2. Necessity Theory
3. Benefits-Protection Theory
4. Symbiotic Relationship Theory
5. Cases:
a. Commissioner Of Internal Revenue v. Algue, Inc., and The Court Of Tax
Appeals, G.R. No. L-28896, February 17, 1988
b. Commissioner Of Internal Revenue v. Pilipinas Shell Petroleum
Corporation, G.R. No. 197945, July 09, 2018
c. Commissioner Of Internal Revenue v. Basf Coating + Inks Phils., Inc., G.R.
No. 198677, 26 November 2014
d. CIR v. Nippon Express Phils., 771 SCRA 27
e. CIR V. Dash Engineering Philippines, 712 SCRA 347

IV. Nature of Taxation

1. Attribute of Sovereignty
a. The Philippine Guaranty Co., Inc. v. The Commissioner Of Internal
Revenue And The Court Of Tax Appeals, G.R. No. L-22074, April 30,
1965
b. Batangas City v. Pilipinas Shell Petroleum Corporation, G.R. No.
187631, July 8, 2015
c. Film Development Council Of The Philippines v. Colon Heritage Realty
Corporation, G.R. No. 203754, June 16, 2015
2. Legislative
a. Pepsi Cola Bottling Co. of the Phils. Inc. vs Municipality of Tanauan,
Leyte G. R. L-31156
b. Pepsi vs. City of Butuan, 24 SCRA 827
3. Non-delegable
Exceptions:
a. Taxing power of local governments (Section 5, Art. X, 1987 Constitution)
b. When allowed by the Constitution [Section 28(2), Article VI, 1987
Constitution]
i. Hon. Exec. Sec V. Southwing Heavy Industries, et al., GR No.
164171
c. Administrative Implementation
i. Cervantes v. Auditor Gen. 91 Phil. 359

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ii. Maceda v. Macaraig, 197 SCRA 771

iii. CIR v. Central Luzon Drug, G.R. No. 159647, 15 April 2005
iv. Secretary v. Lazatin, G.R. No. 210588, 29 November 2016
v. Abakada Guro Party List (Formerly Aasjas) Officers Samson S.
Alcantara And Ed Vincent S. Albano v. The Honorable Executive
Secretary Eduardo Ermita; Honorable Secretary Of The
Department Of Finance Cesar Purisima, G.R. No. 168056,
September 01, 2005
4. It is not the contract between the State and its citizens.
a. Francia v. Intermediate Appellate Court, G.R. No. 76749, 28 June 1988
5. It is not political in nature.
a. Emilio Y. Hilado v. The Collector Of Internal Revenue And The Court
Of Tax Appeals, G.R. No. L-9408, 31 October 1956
6. Subject to Constitution and Inherent limitations.
a. Inherent Limitations
i. Public purpose
1. Esso Standard Eastern, Inc. v. Acting Comissioner of
Customs, 18 SCRA 488
2. Planters Products, Inc. v. FertiPhil Corp., G.R. No. 166006, 14
March 2008
3. Bagatsing v. Ramirez, 74 SCRA 306
4. Gomez vs. Palomar, 24 SCRA 827
5. Pascual vs. Secretary of Public Works, 110 Phil 331
6. Lutz vs. Araneta, 98 Phil 148, G.R. No. L-7859, 22 December
1955
7. Ferrer v. Bautista, 760 SCRA 652
 Taxpayer’s Suit
i. Tolentino v. Comelec, 41 SCRA 702
ii. Sanidad v. Comelec, 73 SCRA 333
iii. Jumamil v. Café, G. R No. 144570
iv. Pascual v. Secretary of Public Works, 110 Phil.
331
ii. Non- delegability
iii. Exemption of the Government
1. LRTA vs. CBAA, G.R. No. 127316, 12 October 2000
2. MCIAA vs. Marcos, G.R. No. 120082, 11 September 1996
3. MIAA vs. Paranaque, G.R. No. 155650, 20 July 2006
4. MIAA vs. Pasay City, G.R. No. 163072, 02 April 2009
5. Republic v. Parañaque, G.R. No. 191109, July 18, 2012, 677
SCRA 246
6. MCIAA v. Lapu-Lapu, G.R. No. 181756, 15 June 2015
iv. International Comity
Sec 2, Article II of the Philippine Constitution
1. See Resolution in the First National Tax Association cited in
International Comity in Taxation by Clyde J. Crobaugh,
University of Chicago Press, p. 269.
v. Territorial Jurisdiction or Situs
1. CIR v. Marubeni Corp. G.R No. 137377
2. Commissioner v. British Overseas Airways Corporation, 149
SCRA 395

b. Constitutional Limitations
i. Due Process Clause (Section 1, Article III, 1987 Constitution)
1. Villegas v. Hiu Chiong Tsai Pao Ho, 86 SCRA 270
2. CREBA v. Exec. Sec Romulo, 09 March 2010
3. City of Baguio v. De Leon, 25 SCRA 938
4. CIR v. M.J. Lhuiller Pawnshop, Inc., 15 July 2003
5. Province of Abra v. Hernando, 107 SCRA 104

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6. Francis A. Churchill v. Venancio Concepcion, G.R. No. 11572,

September 22, 1916
7. British American Tobacco v. Camacho, G.R. No. 163583, 15
April 2009

ii. Equal Protection Clause (Section 1, Article III, 1987 Constitution)

1. Commissioner of Customs v. Hypermix Feeds Corporation,
G.R. No. 179579, February 1, 2012
2. ABAKADA Guro Party List v. Purisima, G.R. No. 166715, 14
August 2008
3. Kapatiran v. Tan, 30 June 1988
4. Tan v. Del Rosario, 3 October 1994
5. Abakada Guro Party List (Formerly Aasjas) Officers Samson
S. Alcantara And Ed Vincent S. Albano v. The Honorable
Executive Secretary Eduardo Ermita; Honorable Secretary
Of The Department Of Finance Cesar Purisima, G.R. No.
168056, September 01, 2005

iii. The rule of taxation shall be uniform and equitable. The Congress
shall evolve a progressive system of taxation (Section 28[1], Article
III, 1987 Constitution)
1. Punzalan v. Mun. Board of Manila, 96 Phil. 46
2. Tolentino v. Secretary of Finance, 25 August 1994
3. British American Tobacco v. Camacho, G.R. No. 163583, 15
April 2009
4. Association of Customs Brokers v. City of Manila, 93 Phil. 107
5. Abakada Guro Party List v. The Honorable Executive
Secretary Eduardo Ermita, G.R. No. 168056, September 01,
2005
6. Francis A. Churchill v. Venancio Concepcion, G.R. No. 11572,
September 22, 1916

iv. No law impairing the obligation of contracts shall be passed

(Section 10, Article III, 1987 Constitution)
1. Casanovas v. Hord, 8 Phil 125
2. RCPI v. Provincial Assessor of South Cotabato, 13 April 2005
3. City Government of Quezon City v. Bayantel, 06 March 2006
4. Smart Communications v. City of Davao, 16 September 2008
5. Quezon City v. ABS-CBN, 06 October 2008

v. No person shall be imprisoned for debt or non-payment of a poll

tax (Section 20, Article III, 1987 Constitution)

vi. The free exercise and enjoyment of religious profession and

worship, without discrimination or preference, shall forever be
allowed (Section 5, Article III, 1987 Constitution)
1. American Bible Society v. City of Manila, 101 Phil.386
2. Tolentino v. Sec. of Finance

vii. Freedom of the Press (Section 4, Article III, 1987 Constitution)

1. Philippine Press Institute, et al. v. Chato, et al., G.R. No.
115754, August 25, 1994

viii. Tax Exemption of Properties for Religious, Charitable, and

Education Purposes [Section 28(3), Article III, 1987 Constitution)
1. Hospital de San Juan de Dios v. Pasay City, 16 SCRA 226
2. Commissioner v. Court of Appeals, G.R. No. L-124043,
October 14, 1998

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3. Lung Center of the Philippines v. Quezon City, 433 SCRA 119

[2004]
4. Abra Valley College v. Aquino, 15 June 1988
5. CIR v. St. Luke’s Medical Center, GR Nos. 195909 and
195960, 26 September 2012

ix. All appropriation, revenue of tariff bills shall originate from the
House of Representatives, but the Senate may propose or concur
with amendments (Section 24, Article VI, 1987 Constitution)
1. ABAKADA Guro Party List v. Hon. Exec. Sec. Ermita, 01
September 2005

x. No law granting any tax exemption shall be passed without the

concurrence of a majority of all the members of the Congress
[Section 28(4), Article VI, 1987 Constitution]
1. John Hay Peoples Alternative Coalition, et al. v Lim, G.R.
No.119775, October 24, 2003

xi. Every bill passed by Congress shall be embrace only one subject,
which shall be expressed in the title thereof [Section 26(1), Article
VI, 1987 Constitution]
1. Philippine Airlines v. Secretary of Finance and Commissioner,
G. R. No. 115873, August 25,1994

xii. Congress shall evolve a progressive system of taxation [Section

28(1), Article VI, 1987 Constitution]

xiii. The President shall have the power to veto any particular item or
items in an appropriation, revenue, or tariff bill, but the veto shall
not affect the item or items to which he does not object [Section
27(2), Article VI, 1987 Constitution]

xiv. The Congress may, by law, authorize the President to fix within
specified limits, and subject to such limitations and restrictions as
it may impose, tariff rates, import and export quotas, tonnage and
wharfage dues, and other duties or imposts within the framework
of the national development program of the Government [Section
28(2), Article VI, 1987 Constitution]

xv. All revenues and assets of non-stock, non-profit educational

institutions used actually, directly, and exclusively for educational
purposes shall be exempt from taxes and duties [Section 4(3),
Article XIV, 1987 Constitution]
1. Commissioner Of Internal Revenue v. De La Salle University,
Inc., G.R. No. 196596, 9 November 2016

xvi. Supremacy of the National Government over Local Government.

1. Manila International Airport Authority v. Court of Appeals,
G.R. No. 155650, July 20, 2006
2. Mactan Cebu International Airport Authority v. Hon.
Ferdinand J. Marcos, G.R. No. 120082, 11 September 1996

V. Purposes and Objectives of Taxation

1. To Raise Revenue
2. Regulatory
a. Lutz v. Araneta, G.R. No. L-7859, 22 December 1955
b. Caltex Philippines v. Commission on Audit, 208 SCRA 726
c. Philippine Airlines v. Edu G. R. L-41383

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3. Promotion of General Welfare

a. Republic of the Philippines v. Central Azucarera Del Danao, G.R. No. L-
19842, 26 December 1969
4. Reduction of Social Inequality
a. National Power Corporation v. City of Cabanatuan, G.R. No. 149110, 9
April 2003
5. Encourage Economic Growth by granting Incentives and Exemptions
6. Protectionism

VI. Stages or Aspects of Taxation

1. Levy
2. Assessment and Collection
3. Payment

VII. Basic Principles of Sound Tax System

1. Fiscal Adequacy
2. Administrative Feasibility
a. Diaz v. Secretary of Finance, 19 July 2011
3. Theoretical Justice
a. Article VI, Section 28, Phil. Constitution

VIII. Definition of Taxes

IX. Attributes or Characteristics of Taxes
1. It is a forced charge, imposition or contribution.
a. Panay Electric Co. v. Collector of Internal Revenue, L- 10574, May 28,
1958
2. It is assessed in accordance with some reasonable rule of apportionment
which means that conformably with the constitutional mandate for
Congress to evolve a progressive tax system, taxes must be based on
taxpayer’s ability to pay [Section 28(A), Article VI, 1987 Constitution]
3. It is pecuniary burden payable in money.
a. Borja v. Gella, 8 SCRA 602
4. It is imposed by the State on person, property, or excises within its
jurisdiction, in accordance with the principle of territoriality.
5. It is levied by the legislative body of the State.
a. Vera v. Fernandez, 89 SCRA 199
6. It is levied for a public purpose.
7. It is personal to the taxpayer.

X. Taxes Distinguished from Other Impositions

1. Taxation v. Eminent Domain v. Police Power

a. Quezon City v. Ericta, 122 SCRA 759
b. Velasco v. Villegas, 120 SCRA 568
c. Tio v. Videogram, 151 SCRA 208
d. Ortigas v. Feati Bank, 94 SCRA 533
2. Tax v. Debt
a. Commissioner Of Internal Revenue v. Carlos Palanca, Jr., G.R. No. L-
16626, 29 October 1966
3. Tax v. Toll
4. Tax v. License Fee
a. Progressive Development Corporation v. Quezon City, G.R. No. L-
36081, 24 April 1989)
b. Land Transportation Office v. City of Butuan, G.R. No. 131512, 20
January 2000
5. Tax v. Penalty
6. Tax v. Special Assessment

XI. Classification of Taxes

1. As to subject matter:

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a. Personal, Capitation, or Poll

b. Property
c. Excise or Privilege
d. Custom Duties
2. As to purpose:
a. General, Fiscal or Revenue
b. Special or Regulatory
3. As to who bears the burden:
a. Direct Tax
b. Indirect Tax
4. As to graduation or rate:
a. Proportional
b. Progressive or graduated
c. Regressive
5. As to Taxing Authority
a. National Tax
b. Local/ Municipal Tax
6. As to scope:
a. General
b. Special
7. As to basis of amount
a. Specific
b. Ad Valorem

J. Double Taxation
1. Kinds:
a. Indirect duplicate taxation
b. Direct duplicate taxation (obnoxious double taxation)
2. Requisites
3. Schemes to Avoid Double Taxation
a. Tax Credit
b. Tax Deductions
c. Tax Reduction
d. Tax Exemption
e. Tax Treaties
4. International Juridical Double Taxation (IJDT) – the imposition of comparable
taxes in two or more states on the same taxpayer in respect of the same subject
matter and for identical periods.
5. Approaches to Avoid IJDT:
a. Territorial based system – foreign source income is normally exempted
from domestic tax
b. Imposition of tax on the worldwide income of their individual citizens and
residents and domestic corporations
6. Cases:
a. Compania General de Tabacos de Filipinas v. City of Manila, 8 SCRA 367
b. City of Baguio v. de Leon, G.R. No. L-24756
c. Serafica v. City Treasurer of Ormoc, G.R. No. 24813, 28 April 1968
d. Acebedo Optical Company v. Court of Appeals, G.R. No. 100152, 31 March
2000
e. Pepsi Cola Bottling Co. of the Phils. Inc. vs Municipality of Tanauan,
Leyte G. R. L-31156
f. Villanueva v. City of Iloilo, 26 SCRA 578
g. Nursery Care Corporation v. Anthony Acevedo, G.R. No. 180651, 30 July
2014
h. Ferrer v. Bautista, 760 SCRA 652
i. City of Manila v. Coca-Cola Bottlers Philippines, Inc., 595 SCRA 299

K. Exemption from Taxation

1. Classifications:

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a. As to source:
1. Constitutional
2. Statutory/Ordinance
3. Treaty/Executive Order
4. Contractual
b. As to manner:
1. Express
2. Implied
c. As to scope:
1. Total/Full
2. Partial
2. Characteristics:
a. It is not presumed.
b. It must be justified by words too plain to be mistaken.
c. It is a personal privilege.
d. It is not created by implication.
e. There must be convincing proof.
f. Equity does not apply.
g. Tax exemption is not inherent.
h. It cannot be granted by regulation.
i. There is no vested right in a tax exemption, more so when the latest
expression of legislative intent renders its continuance doubtful.

3. Cases:
a. David Nitafan v. CIR, G.R. No. L-78780
b. Mactan Cebu International Airport Authority v. Hon. Ferdinand J.
Marcos, G.R. No. 120082, 11 September 1996
c. Meralco v. Vera, 67 SCRA 351
d. Commissioner Of Internal Revenue v. A. D. Guerrero, G.R. No. L-20942,
22 September 1967
e. CIR v. Solidbank Corporation, 462 SCRA 96 (2003)
f. Smart Communications, Inc., v. The City Of Davao, G.R. No. 155491, July
21, 2009
g. Commissioner Of Internal Revenue v. St. Luke’s Medical Center, Inc., G.R.
No. 203514, 13 February 2017
h. Commissioner Of Internal Revenue v. Philippine-Aluminum Wheels, Inc.,
G.R. No. 216161, 9 August 2017

L. Tax Laws and Implementing Rules and Regulations

1. Requisites for validity of regulations:
a. It is issued under authority of law.
b. It must be within the scope and purview of the law.
c. It is reasonable.
d. It must be published in the Official Gazette or in a newspaper of general
circulation.
e. Where the regulations impose penal sanctions, the law itself must declare
as punishable the violation of the administrative, and the law should fix or
define the penalty for the violation of the rule or regulation.
2. Section 246
3. Cases:
a. Pilmico-Mauri Foods Corp. v. CIR, 802 SCRA 618
b. Collector v. Fireman’s Fund Insurance Co., 148 SCRA 315
c. Hilado v. Collector, 100 Phil. 288
d. Accenture v. CIR, G.R. No. L-190102
e. Philex Mining Corporation v. CIR, 29 August 1998
f. Commissioner v. Burroughs, 142 SCRA 324
g. Secretary Of Finance v. Representative Carmelo F. Lazatin, G.R. No.
210588, 29 November 2016

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h. Commissioner Of Internal Revenue v. Philippine-Aluminum Wheels, Inc.,

G.R. No. 216161, 9 August 2017
i. CIR v. Filinvest, G.R. No. 163653, 19 July 2011
j. CIR v. Ledesma, G.R. No. L-17509, 30 January 1970

M. Escape from Taxation

1. Forms:
a. Tax Shifting
b. Tax Capitalization or Amortization
c. Tax Transformation
d. Transfer Pricing
e. Resorting to Tax Haven
f. Tax Deferral
g. Tax Shelter
h. Doctrine of Equitable Recoupment
i. Tax Avoidance
j. Tax Dodging or Tax Evasion
2. Cases:
a. CIR v. The Estate of Benigno P. Toda, Jr., G.R. No. L-147188
b. CIR v. Seagate Technology (Phils.), G.R. No. 153866, 11 February 2005
c. CIR v. PLDT, 15 December 2005
d. Contex v. CIR, 02 July 2004
e. Republic v. Mambulao Lumber Company 4 SCRA 622
f. Francia v. Intermediate Appellate Court, G.R. No. 76749, 28 June 1988
g. CIR v. Gonzales 633 SCRA 139

TAX REMEDIES (National Internal Revenue Code)

I. BUREAU OF INTERNAL REVENUE
A. Organizational Structure
1. Chief Officials of the Bureau of Internal Revenue (Section 3)
2. Agents of the Commissioner of Internal Revenue (Section 12)

B. Powers and Duties of the BIR

1. Powers and Duties of the Bureau of Internal Revenue (Section 2)
2. Power of the Commissioner to Interpret Tax Laws and to Decide Tax Cases
(Section 4)
3. Power of the Commissioner to Obtain Information, and to Summon, Examine,
and Take Testimony of Persons (Section 5)
a. CIR v. Raul M. Gonzales, G.R. No. 177279, 13 October 2010
b. Fitness by Design v. CIR, G.R. No. 177982, 17 October 2008
4. Power of the Commissioner to Make Assessments and Prescribe Additional
Requirements for Tax Administration and Enforcement (Section 6)
a. Revenue Memorandum Circular No. 23-2000
b. Oceanic Wireless Network, Inc. v. CIR, G.R. No. 148380, 9 December 2005
c. CIR v. Kudos Metal Corp., G.R. No. 178087, 5 May 2010
d. Republic v. Aquafresh Seafoods, Inc., G.R. No. 170389, 20 October 2010
5. Authority of the Commissioner to Delegate Power (Section 7)
6. Duty of the Commissioner to Ensure the Provision and Distribution of Forms,
Receipts, Certificates, and Appliances, and the Acknowledgment of Payment of
Taxes (Section 8)

II. PRESCRIPTIVE PERIODS

A. Imprescriptibility of taxes
Exceptions:
1. Section 222
2. Section 430, RA No. 10863
3. Section 194, LGC
4. Section 270, LGC
B. Sections 203, 222, 223

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1. Fraud v. Fraudulent Return

2. See Section 248(B)
3. Cases:
a. Talento v. Escalada 556 SCRA 491 (2008)
b. CIR v. Goodrich, Phils., 104171, 24 February 1999
c. See Section 6(A)
d. CIR v. United Salvage and Towage, 729 SCRA 113
e. BPI v. CIR, G.R. No. 139736, 17 October 2005
f. Commissioner Of Internal Revenue v. Transitions Optical Philippines,
Inc., G.R. No. 227544, 22 November 2017
g. Republic Of The Philippines v. GMCC United Development Corporation,
G.R. No. 191856, 07 December 2016
h. CIR v. FMF Dev. Corp., 556 SCRA 698
i. CIR vs. Stanley Works (Phils.) Incorporated, GR No. 187859, 3 December
2014
j. See RMC 6-2005 for the format of the Waiver
k. Revenue Memorandum Order No. 14-2016
l. CIR vs. Kudos Metal, GR No. 178087, 5 May 2010
m. RCBC v. CIR, G.R. No. 170257, 7 September 2011
n. CIR v. Phoenix Assurance Inc., L-19727, 20 May 1965
o. BPI v. CIR, G.R. No. 139736, 17 October 2005
p. Aznar vs. CTA, GR No. L-20569, 23 August 1974
q. CIR vs. Philippine Daily Inquirer, GR No. 213943, 22 March 2017
r. CIR vs. Asalus Corporation, GR No. 221590, February 22, 2017
s. CIR v. Ayala Securities Corp., 101 SCRA 231

III. ASSESSMENT
A. BASIS OF ASSESSMENT
1. Question of Fact
2. Question of Law
a. Commissioner v. CA & YMCA, 298 SCRA 83
b. Cyanamid Philippines v. CA, 322 SCRA 639
B. ASSESSMENT PROCESS
1. Revenue Regulations No. 12-99 as amended by Revenue Regulations No. 18-
2013
a. Revenue Memorandum Order No. 26-2016
b. Revenue Memorandum Order No. 40-2019
2. Kinds of Assessment:
a. Voluntary Assessment or Self-Assessment
b. Jeopardy Assessment
c. Deficiency Assessment
3. Taxpayer’s Part:
a. Self-assessment;
b. Filing of tax return;
c. Payment of tax
4. Government’s part:
a. Letter of Authority
a. See Section C of Revenue Memorandum Order No. 43-90 dated
September 20, 1990
b. CIR v. Sony Phils. Inc., 635 SCRA 234
c. CIR vs. De La Salle University, Inc., GR No. 196596, November 9,
2016
b. Letter Notice
a. Medicard Philippines, Inc. vs. CIR, GR No. 222743, 5 April 2017
c. Persons authorized to issue Letter of Authority
a. CIR v. Sony Phils. Inc., 635 SCRA 234
d. Examination of books of accounts and other accounting records of
taxpayers by revenue officers to determine correct tax liability [Sections
5(B) and 6(A)]

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i. Best Evidence Obtainable [Section 6(B)]

1. Commission Of Internal Revenue v. Hantex Trading Co., G.R.
No. 136975, 31 March 2005
ii. Net-worth Method of Investigation
1. Section 43
2. Eugenio Perez v. The Court Of Tax Appeals, G. R. No. L-10507,
30 May 1958
e. Requisites of a valid assessment (Section 228)
a. Basilan Estates v. CIR, L-22492, 5 Sept. 1967
b. CIR vs. United Salvage Towage (Phils.), Inc., GR No. 197515, 4 July
2014
c. SMI-ED Technology Corporation, Inc. vs. CIR, GR No. 175410, 12
November 2014
d. Samar-I Electric Cooperative v. CIR, GR No. 193100, 10 December
2014
e. Cagayan Robina Sugar Milling v. CA, 122451, 12 October 2000
f. Commissioner Of Internal Revenue v. De La Salle University, Inc.,
G.R. No. 196596, 9 November 2016
g. Section 235
h. CIR vs. Fitness By Design, GR No. 215957, 9 November 2016
i. Oceanic Wireless Network, Inc. v. CIR, G.R. No. 148380, 9 December
2005
f. Preparation of tentative findings and holding of informal conference.
g. Issuance of Preliminary Assessment Notice (PAN)
a. Section 228
b. See Revenue Regulations No. 12-99 as amended by Revenue
Regulations No. 18-2013 and further amended by Revenue
Regulations 7-2018
h. Reply
i. In both issuance of PAN and FAN, modes of service:
i. Personal Service to the taxpayer:
1. At the registered address, or if not possible;
2. At the known address, or
3. Both simultaneously.
ii. Substituted Service only in case service cannot be made to the
taxpayer himself:
1. To be done at the registered or known address personally by the
revenue officer concerned
iii. By Registered Mail
1. LG Collins Electronics Phil. Inc. v. CIR, CTA Case No. 6186,
June 9, 2004
2. Adamson v. CA, 588 SCRA 27
3. Commissioner v. Enron Subic Power Corp., G.R. No. 166387
4. Republic v. CA, 149 SCRA 35
5. CIR v. Metro Star Suprema Inc., 185371, 8 December 2010
j. Issuance of Formal Assessment Notice (FAN) or Formal Letter of Demand
(FLD)
a. Requisites
b. Instances when the FAN becomes final, executory, and demandable
1. CIR vs. Metro Star Superama, Inc., GR No. 185371 , 8 December
2010
2. CIR vs. Enron, GR No. GR No. 166387, 19 January 2009
k. Protest
ii. Requisites
iii. 2 types of protest:
1. Request for reconsideration
2. Request for reinvestigation
l. Denial of protest by Commissioner or his authorized representative and
Final Decision on Disputed Assessments

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m. Actions of the BIR considered as a denial of a pending protest:

a. Issuance of a Warrant of Distraint of Levy
b. Filing of Collection Case
c. Issuance of a Final Notice before Seizure
d. Issuance of a Final Demand Letter
n. Appeal
a. Fishwealth Canning Corporation v. CIR, 179343, 21 January 2010
b. CIR vs. First Express Pawnshop, GR Nos. 172045-46, 16 June 2009
c. CIR vs. Liquigaz Phils. Corporation, GR No. 215534, 18 April 2016
d. RCBC v. CIR, G.R. No. 170257, 7 September 2011
e. PAGCOR vs. BIR, GR No. 208731, 27 January 2016
f. Lascona Land vs. CIR, GR No. 171251 dated March 5, 2012
g. Allied Banking Corporation vs. CIR, GR No. 175097, 5 February 2010

IV. DEFENSES OF THE TAXPAYER

A. Non-Retroactivity of Rulings (Section 246)
B. Failure to inform the taxpayer in writing of the law and the facts on which the
assessment is made (Section 228)
C. Preservation of Books and Accounts and Other Accounting Records (Section
235)
D. Cases:
1. Chamber of Real Estate and Builders’ Association v. Executive Secretary,
G.R. No. 160756, 9 March 2010
2. Commissioner v. Michel Lhuillier Pawnshop, G.R. No. 150947, 15 July 2003

V. COMPROMISE AND ABATEMENT

A. Differentiate Compromise from Abatement (Section 204)
B. Compromise v. Compromise Penalty
C. Revenue Regulations No. 7-2001 as amended by Revenue Regulations No. 30-
2002

VI. TAX CREDIT AND TAX REFUND

A. Nature
1. Section 204(C), 229, 230
2. FEBTC v. CIR, G.R. No. 149589, 15 September 2006
3. CIR v. Fortune Tobacco Corporation 559 SCRA 160 (2008)
4. CIR v. PNB, G.R. No. 161997, 25 October 2005
5. Philippine Phosphate Fertilizer Corp. v. CIR, G.R. No. 141973, 28 June
2005
B. Tax Credit v. Tax Refund
C. What may be the subject of tax credit and tax refund
1. Taxes erroneously or illegally received
2. Penalties imposed without authority
3. Documentary Stamps
D. When to file request for Tax Credit/Refund:
1. Administrative – Section 229
2. Judicial – Section 230
E. When to start counting the 2-year prescriptive period
Exceptions:
1. Income Tax
2. Withholding Tax
3. VAT [Section 112(A)]
4. Cases:
a. Lu Do & Ym Corp. v. Central Bank, 108 Phil. 566
b. Banco Filipino v. CA, CTA, and CIR, 155682, 27 March 2007
c. CIR vs. Far East Bank & Trust Company, GR No. 173854, 15 March
2010

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d. Metropolitan Bank & Trust Company v. The Commissioner Of

Internal Revenue, G.R. No. 182582, 17 April 2017
e. See Section 76
f. Belle Corporation vs. CIR, GR No. 181298, 10 January 2011
g. See also Resolution on the Motion for Clarification dated March 2,
2011 on the same case in f. above
h. CIR vs. BPI, GR No. 178490, 7 July 2009
i. Winebrenner & Inigo Insurance Brokers, Inc. vs. CIR, GR No.
206526, 28 January 2015
j. Systra Phils. Inc. vs. CIR, GR No. 176290, 21 September 2007
F. Why is the filing of an administrative claim with the BIR necessary:
1. To afford the Commissioner an opportunity to consider the claim and to
have a chance to correct the errors of subordinate officers;
2. To notify the Commissioner that such taxes have been questioned and the
notice should be borne in mind in estimating the revenue available for
expenditures
G. Person entitled to refund:
1. Statutory taxpayer
2. Withholding agent
a. CIR v. Smart Communication Inc. 629 SCRA 342
H. Remedies in case of denial of claim

VII. VAT REFUND/TCC/CARRY-OVER

A. Zero-rated sales of goods [Section 106 (A)(2)]
B. Zero-rated sales of services [Section 108 (B)]
C. Effectively zero-rated sales [Section 108(B)(3)]
1. CIR v. Seagate Technology Phils., G.R. No. 153866, 11 February 2005
D. Tax credit method
E. Quantum of evidence needed to prove claim
1. CIR v. Mirant Pagbilao Corp., G.R. 172129, 12 September 2008
F. Proper party to claim refund/credit
1. Contex Corporation v. CIR, G.R. No. 151135, 2 July 2004
2. Philippine Geothermal v. CIR, 154028, 29 July 2005
G. Prescriptive Period [Section 112(C)]
1. Administrative
2. Judicial
H. Cases:
1. Atlas Consolidated v. CIR, G.R. Nos. 141104 & 148763, June 8, 2007
2. Surigao Consolidated Mining Co., Inc. v. CIR, 119 Phil. 33, 26 December
1963
3. Southern Philippines Power Corp. v. CIR, 179632, 19 October 2011
4. San Roque Power Corporation v. Commissioner of Internal Revenue, G.R.
No. 180345, 25 November 2009
5. CIR v. Aichi Forging Co. of Asia, Inc., G.R. No. 184823, 6 October 2010
6. Commissioner of Internal Revenue v. San Roque Power Corporation, G.R.
No. 187485, 12 February 2013
7. San Roque Power Corporation v. Commissioner of Internal Revenue, G.R.
No. 203249, 23 July 2018
8. Panasonic Communications Imaging Corporation of the Philippines v. CIR
612 SCRA 28
I. 2-year period is not jurisdictional and may be suspended for reasons of equity
and other special circumstances, such as:
1. Assurance on the part of the BIR that steps were being taken to credit
taxpayer with the amount sought to be refunded.
2. An agreement or understanding with the BIR that they await the result of
a pending case involving similar issue raised in the claim for refund.

VIII. CIVIL PENALTIES

A. Surcharge (Section 248)

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B. Interest (Section 249)

1. Delinquency Tax v. Deficiency Tax
C. Compromise Penalty

IX. COLLECTION
A. Administrative Remedies
1. Tax Lien (Section 219)
a. CIR v. NLRC, G.R. No. 74965, November 9, 1994
2. Distraint of personal property, or levy of real property, or garnishment of
bank deposits [Section 205(A)]
b. Actual Distraint [Section 207(A)]
c. Constructive Distraint (Section 206)
i. BPI v. Commissioner, G.R. No. 139736
3. Sale of property (Section 209, 213)
4. Forfeiture (Section 215)
5. Compromise and Abatement (Section 204)
6. Penalties and fines
7. Suspension of business operations

X. JUDICIAL REMEDIES OF THE GOVERNMENT

A. Civil Actions
1. Form and Mode of Proceeding in Actions Arising under this Code (Section
220)
2. Injunction not Available to Restrain Collection of Tax (Section 218)
3. Jurisdiction
4. Cases:
a. Republic v. Hizon, 320 SCRA 574

B. Criminal Actions
1. Attempt to Evade or Defeat Tax (Section 254)
2. Failure to File Return, Supply Correct and Accurate Information, Pay Tax
Withhold and Remit Tax and Refund Excess Taxes Withheld on
Compensation (Section (255)
3. Penal Liability of Corporations (Section 256)
4. Penal Liability for Making False Entries, Records or Reports, or Using
Falsified or Fake Accountable Forms (Section 257)
5. Unlawful Pursuit of Business (Section 258)
6. Failure to Obey Summons (Section 266)
7. Prescription for Violations of any Provision of this Code (Section 281)
8. Cases:
a. Ungab v. Cusi, Jr., GR No. L-41919-24, 30 May 1980
b. CIR v. CA, GR No. 119322, 4 June 1996
c. CIR v. Pascor, 309 SCRA 402

REPUBLIC ACT NO. 9282 An act expanding the jurisdiction of the Court of Tax
Appeals, elevating its rank to the level of a collegiate court with special jurisdiction
and enlarging its membership, amending for the purpose certain sections of R.A.
1125, as amended, otherwise known as the law creating the Court of Tax Appeals,
and for other purposes.

I. Compare R.A. No. 1125 from R.A. 9282

A. Composition
B. Appeal
C. Jurisdiction
II. Cases:
A. British American Tobacco v. Jose Isidro Camacho, et al, GR No. 163583, August
20, 2008
B. Dacudao Brothers, Inc. v. CTA, CTA EB 819, Sept 30, 2013 and May 2, 2014
C. City of Manila v. Hon. Caridad H. Grocia-Cuerdo, GR No. 175723, Feb. 4, 2014

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D. St. Paul College of San Rafael v. CIR, CTA EB 874, May 27, 2013
E. Erwin Salaveria& Portia Gonzales v. CIR, CTA Case No. 8681, October 1, 2013
F. CIR v. Fortune Tobacco Corporation, GR No. 167274-75 & 192576, Sept. 11, 2013
G. CIR v. First Express Pawnshop Company, Inc. 172045-46, 16 June 2009
H. CIR v. Citytrust, G.R. No. 150812, 22 August 2006
I. RCBC v. CIR, G.R. No. 168498, 24 April 2007
J. CIR vs. Hambrecht & Quist Philippines, Inc., GR No. 169225, 17 November 2010
K. Philippine Journalists, Inc. vs. CIR, GR No. 162852, 16 December 2004
L. City of Manila vs. Grecia-Cuerdo, GR No. 175723, 4 February 2014
M. CIR vs. CTA and Petron, GR No. 207843, 15 July 2015
N. BDO vs. Republic, GR No. 198756, 16 August 2016

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