tax law_case compilations 2010-2012

8/13/2019 Tax Law_case Compilations 2010-2012

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July 2011 Philippine Supreme Court

Decisions on Tax LawPosted on August 22, 2011by Carina C. Laforteza

Here are selected July 2011 rulings of the Sure!e Court of the Philiines on ta" la#$

%ational &nternal 'e(enue Code) inco!e ta") ad(ances to affiliates) ) i!utation of interestinco!e) o#er of Co!!issioner of &nternal 'e(enue. Section *+ no# Section -0 of the 1//+

%ational &nternal 'e(enue Code %&'C ro(ides that. in case of t#o or !ore organizations,

trades or businesses #hether or not incororated and #hether or not organized in the

Philiines o#ned or controlled directly or indirectly by the sa!e interests, the Co!!issionerof &nternal 'e(enue C&' is authorized to distribute, aortion or allocate gross inco!e or

deductions bet#een or a!ong such organization, trade of business, if he deter!ines that such

distribution, aortion!ent or allocation is necessary in order to re(ent e(asion of ta"es orclearly to reflect the inco!e of any such organization, trade or business,3 Section 14/ of

'e(enue 'egulations %o. 2 ro(ides in art that in deter!ining the true net inco!e of a

controlled ta"ayer, the C&' is not restricted to the case of i!roer accounting, to the case of

a fraudulent, colorable, or sha! transaction, or to the case of a de(ice designed to reduce ofa(oid ta" by shifting or distorting inco!e or deductions. 5he authority to deter!ine true net

inco!e e"tends to any case in #hich either by inad(ertence or design the ta"able net inco!e in

#hole or in art, of a controlled ta"ayer, is other than it #ould ha(e been had the ta"ayer inthe conduct of his affairs been an uncontrolled ta"ayer dealing at ar!6s length #ith another

uncontrolled ta"ayer.3 7esite the broad ara!eters ro(ided, ho#e(er, the C&'6s o#er of

distribution, aortion!ent or allocation of gross inco!e and deductions under the %&'C and'e(enue 'egulations %o. 2 do not include the o#er to i!ute theoretical interests3 to the

ta"ayer6s transactions. Pursuant to Section 28 no# Section +2 of the %&'C, the ter! gross

inco!e3 is understood to !ean all inco!e fro! #hate(er source deri(ed, including, but notli!ited to certain ite!s. 9hile it has been held that the hrase fro! #hate(er source deri(ed3

indicates a legislati(e olicy to include all inco!e not e"ressly e"e!ted #ithin the class ofta"able inco!e under Philiine la#s, the ter! inco!e3 has been (ariously interreted to !eancash recei(ed or its e:ui(alent,3 the a!ount of !oney co!ing to a erson #ithin a secific

ti!e3 or so!ething distinct fro! rincial or caital.3 ;ther#ise stated, there !ust be roof of

the actual or, at the (ery least, robable receit or realization by the controlled ta"ayer of the

ite! of gross inco!e sought to be distributed, aortioned or allocated by the C&'. &n this case,there is no e(idence of actual or ossible sho#ing that the ad(ances ta"ayer e"tended to its

affiliates had resulted to interests subse:uently assessed by the C&'.


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9hen read in con=unction #ith Section 14+ of the %&'C, Section 180 concededly alies toall loan agree!ents, #hether !ade or signed in the Philiines, or abroad #hen the obligation

or right arises fro! Philiine sources or the roerty or ob=ect of the contract is located or used

in the Philiines.3 Section + b of 'e(enue 'egulations %o. /?/* ro(ides in art that the ter!loan agree!ent3 shall include credit facilities, #hich !ay be e(idenced by credit !e!o,

ad(ice or dra#ings.3 Section @ of the sa!e re(enue regulations further ro(ides that in cases

#here no for!al agree!ents or ro!issory notes ha(e been e"ecuted to co(er credit facilities,the docu!entary sta! ta" shall be based on the a!ount of dra#ings or a(ail!ent of the

facilities, #hich !ay be e(idenced by creditdebit !e!o, ad(ice or dra#ings by any for! of

checB or #ithdra#al sli3 Alying the foregoing to the case, the instructional letters as #ell

as the =ournal and cash (ouchers e(idencing the ad(ances ta"ayer e"tended to its affiliates in1//@ and 1//4 :ualified as loan agree!ents uon #hich docu!entary sta! ta"es !ay be

i!osed. Commissioner of Internal Revenue vs. Filinvest Development Corporation, G.R. No.

163653, July 19, !11" Commissioner of Internal Revenue vs. Filinvest DevelopmentCorporation, G.R. No. 16#6$9, July 19, !11.

%ational &nternal 'e(enue Code) non?retroacti(ity of !odification of rulings, circulars, rules and

regulations) #ho is entitled to the benefit of such rule. Any re(ocation, !odification or re(ersal

of a Dureau of &nternal 'e(enue D&' ruling shall not be alied retroacti(ely if to so aly it#ould be re=udicial to the ta"ayer. 5his rule does not aly$ a #here the ta"ayer

deliberately !isstates or o!its !aterial facts fro! his return or in any docu!ent re:uired of hi!

by the D&') b #here the facts subse:uently gathered by the D&' are !aterially different fro!the facts on #hich the ruling is based) or c #here the ta"ayer acted in bad faith. 5he foregoing

rincile of non?retroacti(ity of D&' !ay be in(oBed by the ta"ayer #ho, in the first lace,

sought the ruling fro! the Co!!issioner of &nternal 'e(enue. Commissioner of InternalRevenue vs. Filinvest Development Corporation, G.R. No. 163653, July 19, !11" Commissioner

of Internal Revenue vs. Filinvest Development Corporation, G.R. No. 16#6$9, July 19, !11.

%ational &nternal 'e(enue Code) inco!e ta") ta"?free e"change) ac:uisition of control. 5he

re:uisites for the non?recognition of gain or loss under section +* c 2 no# Section *0 c 2of the 1//+ %ational &nternal 'e(enue Code %&'C are the follo#ing$ a the transferee is a

cororation) b the transferee e"changes its shares of stocB for roertyies of the transferor) cthe transfer is !ade by a erson, acting alone or together #ith others, not e"ceeding four ersons)and d as a result of the e"change the transferor, alone or together #ith others, not e"ceeding

four, gains control of the transferee. Prior to the e"change, transferor already had a controlling

interest in the transferee. 5he ta"ayer, together #ith another affiliate #hich #as not an e"isting

stocBholder of the transferor rior to the e"change, e"changed roerty for shares of stocB in thetransferee. 5he ta"ayer6s controlling interest #ent do#n fro! @4.*2E rior to the e"change to

@1.0+E after the e"change. 5he affiliate ac:uired /./@E of the transferee as a result of the

e"change.5he Co!!issioner of &nternal 'e(enue C&' argues that ta"able gain should berecognized for the e"change considering that the ta"ayer6s controlling interest in the transferee

#as decreased as a result of the transfer #hile the affiliate ac:uired only /./@E of the transferee.

'ather than isolating the sa!e as roosed by the C&', the ta"ayer6s @1.0+E control oftransferee should be areciated in co!bination #ith the /./@E #hich as issued to its affiliate.

Since, the ter! control3 is clearly defined as o#nershi of stocBs in a cororation ossessing at

least fifty?one ercent of the total (oting o#er of classes of stocB entitled to (ote,3 the e"change

of roerty for stocBs bet#een ta"ayer, the affiliate and the transferee clearly :ualify as a ta"free e"change under the %&'C. Commissioner of Internal Revenue vs. Filinvest Development

Corporation, G.R. No. 163653, July 19, !11" Commissioner of Internal Revenue vs. Filinvest

Development Corporation, G.R. No. 16#6$9, July 19, !11.
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%ational &nternal 'e(enue Code) inco!e ta") gross inco!e. %o deficiency ta" can be assessedon the gain on the suosed dilution andor increase in the (alue of ta"ayer6s shareholdings in

the transferee #hich the Co!!issioner of &nternal 'e(enue C&', at any rate, failed to establish.

Dearing in !ind the !eaning of gross inco!e,3 it cannot be gainsaid that a !ere increase orareciation in the (alue of the shares cannot be considered inco!e for ta"ation uroses. Since

a !ere ad(ance in the (alue of the roerty of a erson or cororation in no sense constitute the

Finco!e6 secified in the re(enue la#,3 it has been held in the early case of Fis%er vs. &rini'a'that it constitutes and can be treated !erely as an increase of caital.3 Hence, the C&' has no

factual and legal basis in assessing inco!e ta" on the increase in the (alue of the ta"ayer6s

shareholdings in the transferee until the sa!e is actually sold. Commissioner of Internal Revenue

vs. Filinvest Development Corporation, G.R. No. 163653, July 19, !11" Commissioner ofInternal Revenue vs. Filinvest Development Corporation, G.R. No. 16#6$9, July 19, !11.

%ational &nternal 'e(enue Code) (alue?added ta") toll fees as gross receits deri(ed fro! sale of

ser(ices. Section 108 of the %ational &nternal 'e(enue Code %&'C i!oses (alue added ta" onall Binds of ser(ice3 rendered in the Philiines for a fee, including those secified in the list.

5he enu!eration of affected ser(ices is not e"clusi(e. Dy :ualifying ser(ices #ith the #ords all

Binds,3 Congress has gi(en the ter! ser(ices3 an all?enco!assing !eaning. 5hus, e(ery

acti(ity that can be i!agined as a for! of ser(ice3 rendered for a fee should be dee!edincluded unless so!e ro(ision of la# esecially e"cludes it. 9hen a toll#ay oerator taBes a

toll fee fro! a !otorist, the fee is in effect for the latter6s use of the toll#ay facilities o(er #hich

the oerator en=oys ri(ate rorietary rights that its contract and the la# recognize. &n thissense, the toll#ay oerator is no different fro! those enu!erated under Section 108 of the %&'C

#ho allo# others to use their roerties or facilities for a fee. Renato (. Dia) an' *urora +a. F.

&imol vs. t%e -eretary of Finane an' t%e Commissioner of Internal Revenue, G.R. No. 193!!#" July 19, !11.

%ational &nternal 'e(enue Code) (alue?added ta") toll#ay oerators as franchise grantees.

Section 108 of the %ational &nternal 'e(enue Code %&'C also i!oses (alue added ta" GA5

on all other franchise grantees3 other than those under Section 11/ of the %&'C. 5oll#ayoerators are franchise grantees and they do not belong to the e"cetions the lo#?inco!e radio

andor tele(ision broadcasting co!anies #ith gross annual inco!es of less than PhP 10 !illionand gas and #ater utilities that Section 11/ sares fro! GA5. 5he #ord franchise3 broadlyco(ers go(ern!ent grants of a secial right to do an act or series of acts of ublic concern. &t has

been broadly construed as referring, not only to authorization that Congress directly issues in the

for! of a secial la#, but also to those granted by ad!inistrati(e agencies to #hich the o#er to

grant franchises has been delegated by Congress. 5oll#ay oerators are, o#ning to the natureand ob=ect of their business, franchise grantees.3 5he construction, oeration, and !aintenance

of toll facilities on ublic i!ro(e!ents are acti(ities of ublic conse:uence that necessarily

re:uire a secial grant of authority fro! the state. Aart fro! Congress, toll#ay franchise !ayalso be granted by the 5oll 'egulatory Doard, ursuant to the e"ercise of its delegated o#ers

under Presidential 7ecree %o. 1112. 5he franchise in this case is e(idence by a 5oll ;eration

Certificate.3 Renato (. Dia) an' *urora +a. F. &imol vs. t%e -eretary of Finane an' t%eCommissioner of Internal Revenue, G.R. No. 193!!#" July 19, !11.

%ational &nternal 'e(enue Code) (alue?added ta") toll fee is not a user6s ta". Petitioners argue

that toll fee is a user6s ta" and to i!ose (alue?added ta" on toll fees is tanta!ount to ta"ing a

ta". >ees aid by the ublic to toll#ay oerators for use of the toll#ays, are not ta"es in anysense. A ta" is i!osed under the ta"ing o#er of the go(ern!ent rincially for the urose of

raising re(enues to fund ublic e"enditures. 5oll fees, on the other hand, are collected by
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ri(ate toll#ay oerators as rei!burse!ent for the costs and e"enses incurred in theconstruction, !aintenance and oeration of the toll#ays, as #ell as to assure the! a reasonable

!argin of inco!e. Although toll fees are charged for the use of ublic facilities, they are not

go(ern!ent e"actions that can be roerly treated as ta". 5a"es !ay be i!osed only by thego(ern!ent under its so(ereign authority, toll fees !ay be de!anded by either the go(ern!ent

or ri(ate indi(iduals or entities, as an attribute of o#nershi.Renato (. Dia) an' *urora +a. F.

&imol vs. t%e -eretary of Finane an' t%e Commissioner of Internal Revenue, G.R. No. 193!!#" July 19, !11.

%ational &nternal 'e(enue Code) (alue?added ta" GA5) e(en if toll fee is a user6s ta", GA5 is

not a ta" on ta". or ;ther Puroses3) ta" credit) cost of the

20E senior citizens6 discount. Prior to its a!end!ent, Section * of 'eublic Act %o. 4*+2,

allo#s the 20E senior citizens6 discount to be clai!ed by the ri(ate establish!ent as a ta"credit and not !erely as a ta" deduction fro! gross sales or gross inco!e. %ote that currently

the la# treats the discount as a ta" deduction instead of as a ta" credit. 5he la# is ho#e(er is

silent as to ho# the cost of discount3 as a ta" credit should be construed. >ollo#ing other caseson this issue, the ter! cost3 is the a!ount of the 20E discount e"tended by a ri(ate

establish!ent to senior citizens . +erury Dru/ Corporation vs. Commissioner of Internal

Revenue, G.R. No. 160!5!" July !, !11.

%ational &nternal 'e(enue Code) docu!entary sta! ta") sa(ings account lus roduct. 5hesa(ings account lus SAP roduct is sub=ect to docu!entary sta! ta" 7S5 under Section

180 no# 14/ of the %ational &nternal 'e(enue Code #here, although the !oney is ayable
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anyti!e, the #ithdra#al of the !oney before the e"iration of the ter! results in the reduction ofthe interest rate. 5he fact that the SAP is e(idence by a assbooB does not re!o(e it fro! the

co(erage of Section 180. A docu!ent to be considered a certificate of deosit need not be in a

secific for!. 5hus, a assort issued by a banB :ualifies as a certificate of deosit dra#inginterest because it is considered a #ritten acBno#ledg!ent by a banB that it has acceted a

deosit of a su! of !oney fro! a deositor. ru'ential 2an vs. Commissioner of Internal

Revenue, G.R. No. 1$!39!" July #, !11.

September 2011 Philippine Supreme Court

Decisions on Tax Law

Posted on ;ctober 2-, 2011by Carina C. Laforteza

Here are selected Sete!ber 2011 rulings of the Sure!e Court of the Philiines on ta" la#$

%ational &nternal 'e(enue Code) Ci(il Code) #ai(er of statute of li!itations) estoel. 5a"ayer

assails the (alidity of the #ai(ers of the statute of li!itations on the ground that the #ai(ers #ere

!erely attested to by the coordinator for the Co!!issioner of &nternal 'e(enue C&' and hefailed to indicate the accetance or agree!ent of the C&', as re:uired under Section 22+ of the

%ational &nternal 'e(enue Code. 5a"ayer argues that the rincile of estoel cannot be used

against it because its ay!ent of the other ta" assess!ent does not signify a clear intention on itsart to gi(e u its right to :uestion the (alidity of the #ai(ers. 5he Court ruled that estoel

alied to the ta"ayer. nder Article 1*+1 of the Ci(il Code, the doctrine of estoel is

anchored on the rule that an ad!ission or reresentation is rendered conclusi(e uon the erson

!aBing it, and cannot be denied or disro(ed as against the erson relying thereon.3 5hus, aarty is recluded fro! denying his o#n acts, ad!issions or reresentation to the re=udice of the

other arty in order to re(ent fraud and falsehood. &n this case, ta"ayer, through its artial

ay!ent of the re(ised assess!ents issued #ithin the e"tended eriod as ro(ided for in the:uestioned #ai(ers, i!liedly ad!itted the (alidity of those #ai(ers. Had ta"ayer belie(ed that

the #ai(ers #ere in(alid and that the assess!ents #ere issued beyond the rescriti(e eriod,

then it should not ha(e aid the reduced a!ount of ta"es in the re(ised assess!ent. &tssubse:uent action effecti(ely belie(es its insistence that its #ai(ers are in(alid. 5he records sho#

that ta"ayer i!!ediately !ade ay!ent on the uncontested ta"es i!!ediately uon receit of

the re(ised assess!ent. &t is thus estoed fro! :uestioning the (alidity of the #ai(ers. 5o hold

other#ise and allo# a arty to gainsay its o#n act of deny rights #hich it had re(iouslyrecognized #ould run counter to the rincile of e:uity #hich the Court holds dear. Ri)al

Commerial 2anin/ Corporation vs. Commissioner of Internal Revenue, G.R. No. 1#!5#,

-eptemer #, !1199$.

%ational &nternal 'e(enue Code) foreign currency deosit units) liability for final #ithholding

ta" on onshore inco!e) ta"ayer (ersus #ithholding agent. 5he liability of the #ithholding agent

is indeendent fro! that of the ta"ayer. 5he for!er cannot be !ade liable for the ta" due

because it is the latter #ho earned the inco!e sub=ect to #ithholding ta". 5he #ithholding agentis liable only insofar as he failed to erfor! his duty to #ithhold the ta" and re!it the sa!e to

the go(ern!ent. 5he liability for the ta", ho#e(er, re!ains #ith the ta"ayer because the gain

#as realized and recei(ed by hi!. 9hile the ayor?borro#er can be held accountable for its
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negligence in erfor!ing its duty to #ithhold the a!ount of ta" due on the transaction,etitioner, as the ta"ayer and the one #hich earned inco!e on the transaction, re!ains liable for

the ay!ent of ta" as the ta"ayer shares the resonsibility of !aBing certain that the ta" is

roerly #ithheld by the #ithholding agent, so as to a(oid any enalty that !ay arise fro! thenon?ay!ent of the #ithholding ta" due. 5a"ayer banB cannot e(ade its liability for foreign

currency deosit unit onshore ta" by shifting the bla!e on the ayor?borro#er as the #ithholding

agent. As such, it is liable for ay!ent of deficiency onshore ta" on interest inco!e deri(ed fro!foreign currency loans, ursuant to Section 2*c + of the %ational &nternal 'e(enue Code.

Ri)al Commerial 2anin/ Corporation vs. Commissioner of Internal Revenue, G.R. No.

1#!5#, -eptemer #, !11.

%ational &nternal 'e(enue Code) e"cise ta"es) 'e(enue 'egulations %o. 14?//. 5he ro(ision inSection 1 of 'e(enue 'egulations %o. 14?// that re:uires the ay!ent of e"cise ta" actually

being aid rior to January 1, 2000 if this a!ount is higher than the ne# secific ta" rate clearly

#ent beyond the ter!s of the la# it #as suosed to i!le!ent and, therefore, entitles theta"ayer to clai! a refund of the o(eraid e"cise ta"es collected ursuant to the ro(ision. &t

effecti(ely e"tended the :ualification stated in the third aragrah of Section 1*- c of the

%ational &nternal 'e(enue Code that #as suosed to aly only during the transition eriod.

5he said aragrah states$ the e"cise ta" fro! any brand of cigarettes #ithin the ne"t three +years fro! the effecti(ity of '.A. %o. 82*0 shall not be lo#er than the ta", #hich is due fro!

each brand on ;ctober 1, 1//@ %ote that Section 1*- #as subse:uently a!ended by 'eublic

Act %o. /++* in 200-. Commissioner of Internal Revenue vs. Fortune &oao Corporation,G.R. No. 1$!!!6, -eptemer $, !11.

December 2011 Philippine Supreme Court

Decisions on Tax Laws

Posted on January 18, 2012by Carina C. Laforteza

%ational &nternal 'e(enue Code) Galue Added 5a") Ci(il Code. LG Construction #as

a#arded the construction contract #ith 7P9H. LG as the contractor entered into a Sub?Contractor Agree!ent #ith a Joint Genture as sub?contractor. As the entity #hich directly dealt

#ith the go(ern!ent insofar as the !ain contract #as concerned, LG #as itself re:uired by

la# to ay the 8.-E GA5 #hich #as #ithheld by the 7P9H. A contract constitutes the la#

bet#een the arties #ho are, therefore, bound by its stiulations #hich, #hen couched in clearand lain language, should be alied according to their literal tenor. 5hat there #as no

agree!ent regarding the offsetting urged by LG !ay liBe#ise be readily gleaned fro! the

arties6 conte!oraneous and subse:uent acts #hich are gi(en ri!ordial consideration in

deter!ining their intention. &n the absence of any stiulation regarding the Joint Genture6ssharing in the GA5 deducted and #ithheld by the 7P9H fro! its ay!ent on the !ain contract,

LG has no basis in offsetting the a!ounts of said ta" fro! the retention still in its ossession.LG, as Contractor for the Pro=ect, #as liable for the 8.-E GA5 #hich #as #ithheld by the

7P9H fro! its ay!ents, ursuant to Section 11* C of the %&'C. Absent any agree!ent to

that effect, LG cannot deduct the a!ounts thus #ithheld fro! the su!s it still o#ed the Joint

Genture #hich, as Sub?Contractor of +0E of the Pro=ect, had its o#n liability for 10E GA5insofar as the su!s aid for the sub?contracted #orBs #ere concerned. Although the burden to
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ay an indirect ta" liBe GA5 can, ad!ittedly, be assed on to the urchaser of the goods orser(ices, it bears e!hasizing that the liability to ay the sa!e re!ains #ith the !anufacturer or

seller liBe LG and the Joint Genture. &n the sa!e !anner that LG is liable for the GA5 due

on the ay!ents !ade by the 7P9H ursuant to the contract on the Pro=ect, the Joint Genture is,conse:uently, liable for the GA5 due on the ay!ents !ade by LG ursuant to the arties6

Sub?Contract. 4(+ Constrution Corporation vs. F.&. -an%e)-CR7I+8* Joint

(enture:, G.R. No. 1$1961, Deemer 5, !11.

January 2012 Philippine Supreme Court

Decisions on Tax Laws

Posted on >ebruary 22, 2012byCarina C. Laforteza

%ational &nternal 'e(enue Code) e"cise ta") roer arty to seeB a ta" refund. SilBair

Singaore is a foreign cororation licensed to do business in the Philiines as an on?line

international carrier. &t urchased a(iation fuel fro! Petron and aid the e"cise ta"es. &t filed an

ad!inistrati(e clai! for refund for e"cise ta"es on the urchase of =et fuel fro! Petron, #hich italleged to ha(e been erroneously aid. >or indirect ta"es, the roer arty to :uestion or seeB a

refund of the ta" is the statutory ta"ayer, the erson on #ho! the ta" is i!osed by la# and

#ho aid the sa!e e(en #hen he shifts the burden thereof to another. 5hus, Petron, not SilBair, isthe statutory ta"ayer #hich is entitled to clai! a refund.


8/25

articiation, rior notice, and ublication or registration #ith the ni(ersity of the PhiliinesLa# Center. >or tariff uroses, C; 24?200+ classified #heat according to the follo#ing$ 1

i!orter or consignee) 2 country of origin) and + ort of discharge. 5his is a (iolation of the

e:ual rotection clause under the Constitution. 5he Court does not see ho# the :uality of #heatis affected by #ho i!orts it, #here it is discharged, or #hich country it ca!e fro!. 5hus, on the

one hand, e(en if other !illers e"cluded fro! C; 24?200+ ha(e i!orted food grade #heat,

the roduct #ould still be declared as feed grade #heat, a classification sub=ecting the! to 4Etariff. ;n the other hand, e(en if the i!orters listed under C; 24?200+ ha(e i!orted feed

grade #heat, they #ould only be !ade to ay +E tariff, thus deri(ing the state of the ta"es due.

5he regulation, therefore, does not beco!e disad(antageous to resondent only, but e(en to the

state. Section 1*0+ of the 5ariff and Custo!s La#, as a!ended !andates that the custo!sofficer !ust first assess and deter!ine the classification of the i!orted article before tariff !ay

be i!osed. nfortunately, C; 2+?2004 has already classified the article e(en before the

custo!s officer had the chance to e"a!ine it. >inally, Co!!issioner of Custo!s di!inished theo#ers granted by the 5ariff and Custo!s Code #ith regard to #heat i!ortation #hen it no

longer re:uired the custo!s officer6s rior e"a!ination and assess!ent of the roer

classification of the #heat. Commissioner of Customs vs. ;ypermi< Fee's Corporation, G.R. No.1#95#9, Feruary 1, !1.

March 2012 Philippine Supreme Court


Posted on Aril 2+, 2012byCarina C. Laforteza

Here are select arch 2012 rulings of the Sure!e Court of the Philiines on ta" la#$

%ational &nternal 'e(enue Code) assess!ent) re!edies. &n case the Co!!issioner of &nternal

'e(enue failed to act on the disuted assess!ent #ithin the 180?day eriod fro! date ofsub!ission of docu!ents, a ta"ayer can either$ 1 file a etition for re(ie# #ith the Court of

5a" Aeals #ithin +0 days after the e"iration of the 180?day eriod) or 2 a#ait the final

decision of the Co!!issioner on the disuted assess!ents and aeal such final decision to theCourt of 5a" Aeals #ithin +0 days after receit of a coy of such decision. 5hese otions are

!utually e"clusi(e and resort to one bars the alication of the other. &n arguing that the

assess!ent beca!e final and e"ecutory by the sole reason that etitioner failed to aeal the

inaction of the Co!!issioner #ithin +0 days after the 180?day regle!entary eriod, resondent,in effect, li!ited the re!edy of Lascona, as a ta"ayer, under Section 228 of the %ational

&nternal 'e(enue Code to =ust one, that is K to aeal the inaction of the Co!!issioner on its

rotested assess!ent after the lase of the 180?day eriod. 5his is incorrect. 5he #ord

decisions3 in aragrah 1, Section 4 of 'eublic Act %o. 112-, has been interreted to !ean the'eisions of the Co!!issioner of &nternal 'e(enue on the protestof the ta"ayer against the

assess!ents. 5a"ayers cannot be left in :uandary by the Co!!issioner6s inaction on therotested assess!ent. 5he ta"ayers !ust be infor!ed infor!ed of its action in order that the

ta"ayer should be able to taBe recourse to the ta" court at the oortune ti!e. >inally, as

ointed out by the Court of 5a" Aeals, to adot the interretation of the Co!!issioner #ill

not only sanction inefficiency, but #ill liBe#ise condone the Dureau of &nternal 'e(enue6s
http://lexoterica.wordpress.com/2012/04/23/march-2012-philippine-supreme-court-decisions-on-tax-law/http://lexoterica.wordpress.com/author/ccllexoterica/http://lexoterica.wordpress.com/author/ccllexoterica/http://lexoterica.wordpress.com/author/ccllexoterica/http://lexoterica.wordpress.com/2012/04/23/march-2012-philippine-supreme-court-decisions-on-tax-law/http://lexoterica.wordpress.com/author/ccllexoterica/


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inaction4asona 4an', In. vs. Commissioner of Internal Revenue, G.R. No. 1#151, +ar% 5, !1.

%ational &nternal 'e(enue Code) ;!nibus &n(est!ents Code) 'e(enue 'egulation %o. -?2000)

ta" credit certificate 5CC) assign!ent of 5CC. nder the ;!nibus &n(est!ents Code, ta"

credit certificates 5CC are granted to entities registered #ith the Doard of &n(est!ent D;&and are gi(en for ta"es and duties aid on ra# !aterials used for the !anufacture of their e"ort

roducts. A 5CC !ay be used by the grantee assignee in the ay!ent of its direct internal

re(enue ta" liability. &t !ay also be transferred to an assignee sub=ect to the follo#ing conditions$1 the 5CC transfer is !ade #ith the rior aro(al of the Co!!issioner of &nternal 'e(enue or

his duly authorized reresentati(e) 2 the transfer of a 5CC is li!ited to one transfer only) and +

the transferee shall strictly use the 5CC for the ay!ent of the assignee6s direct internal re(enueta" liability. 5he rocessing of a 5CC is entrusted to a secialized agency called the ;ne?Sto?

Sho &nter?Agency 5a" Credit and 7uty 7ra#bacB Center3 Center3. A 5CC !ay be assigned

through a 7eed of Assign!ent, #hich the assignee sub!its to the Center for its aro(al. onaro(al of the deed, the Center #ill issue a 7;> 5a" 7ebit e!o 7;>?57, +8 #hich

#ill be utilized by the assignee to ay the latter6s ta" liabilities for a secified eriod. on

surrender of the 5CC and the 7;>?57, the corresonding Authority to Accet Pay!ent of


10/25


11/25

the other hand, under the %ational Duilding Code, only ublic buildings and traditionalindigenous fa!ily d#ellings are e"e!ted fro! the ay!ent of building er!it fees. Hence, not

being e"ressly included in the enu!eration of structures to #hich the building er!it fees does

not aly, etitioner6s clai! for e"e!tion rests solely on its interretation of the ter! othercharges i!osed by the %ational Io(ern!ent3 in the ta" e"e!tion clause of '.A. %o. @0--. A

charge3 is broadly defined as the rice of, or rate for, so!ething,3 #hile the #ord fee3

ertains to a charge fi"ed by la# for ser(ices of ublic officers or for use of a ri(ilege undercontrol of go(ern!ent.3 As used in the Local Io(ern!ent Code of 1//1 '.A. %o. 41@0,

charges3 refers to ecuniary liability, as rents or fees against ersons or roerty, #hile fee3

!eans a charge fi"ed by la# or ordinance for the regulation or insection of a business or

acti(ity. 5hat charges3 in its ordinary !eaning aears to be a general ter! #hich could co(er asecific fee3 does not suort etitioner6s osition that building er!it fees are a!ong those

other charges3 fro! #hich it #as e"ressly e"e!ted. %ote that the other charges3 !entioned

in '.A. %o. @0-- is :ualified by the #ords i!osed by the Io(ern!ent on all roerty usede"clusi(ely for the educational acti(ities of the foundation.3 Duilding er!it fees are not

i!ositions on roerty but on the acti(ity sub=ect of go(ern!ent regulation. 9hile it !ay be

argued that the fees relate to articular roerties, i.e., buildings and structures, they are actuallyi!osed on certain acti(ities the o#ner !ay conduct either to build such structures or to reair,

alter, reno(ate or de!olish the sa!e. Since building er!it fees are regulatory i!ositions and

not charges on roerty, they are not i!ositions fro! #hich the etitioner is e"e!t. *n/eles

>niversity Foun'ation vs. City of *n/eles, et al., G.R. No. 1$9999, June #, !1.

July 2012 Philippine Supreme Court


Posted on August +, 2012by Carina C. Laforteza

Here are select July 2012 rulings of the Sure!e Court of the Philiines on ta" la#$

%ational &nternal 'e(enue Code) Galue Added 5a") zero?rated3 transaction) reciient of

ser(ices. 5he reciient of ser(ices !ust be doing business outside the Philiines for thetransaction to :ualify it as zero?rated under Section 108 D of the %ational &nternal 'e(enue

Code of 1//4 1//4 5a" Code. Since Section 108 D of the 1//4 5a" Code is a (erbati! coy

of Section 102 b of the %ational &nternal 'e(enue Code of 1/44 1/44 5a" Code, any

interretation of the latter holds true for the for!er. 9hen the Sure!e Court decides a case, itdoes not ass a ne# la#, but !erely interrets a re?e"isting one.


12/25

As e"lained by the Court in the Dur!eister case$ &f the ro(ider and reciient of the Fotherser(ices6 are both doing business in the Philiines, the ay!ent of foreign currency is

irrele(ant. ;ther#ise, those sub=ect to the regular GA5 under section 102 a of the 1/44 5a"

Code can a(oid aying the GA5 by si!ly stiulating ay!ent in foreign currency in#ardlyre!itted by the reciient of ser(ices. 5o interret section 102 b 2 to aly to a ayer?reciient

of ser(ices doing business in the Philiines is to !aBe the ay!ent of the regular GA5 under

section 102 a deendent on the generosity of the ta"ayer. 5he ro(ider of ser(ices can chooseto ay the regular GA5 or a(oid it by stiulating ay!ent in foreign currency in#ardly re!itted

by the ayer?reciient. Such interretation re!o(es section 102 a as a ta" !easure in the 5a"

Code, an interretation this Court cannot sanction. A ta" is a !andatory e"action, not a (oluntary

contribution.3 Accenture, &nc. (s. Co!!issioner of &nternal 'e(enue, I.'. %o. 1/0102, July 11,2012.

%ational &nternal 'e(enue Code) Galue Added 5a") zero?rated3 transaction) not doing business

in the Philiines. &t is not enough that the reciient of the ser(ices be ro(en to be a foreigncororation) it !ust be secifically ro(en to be a non?resident foreign cororation. 5here is no

secific criterion as to #hat constitutes doing3 or engaging in3 or transacting3 business.


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Certiorari is an e"traordinary re!edy designed for the correction of errors of =urisdiction and noterrors of =udg!ent. &t is liBe#ise considered !utually e"clusi(e #ith aeal liBe the one

ro(ided by Article 1/- of the Local Io(ern!ent Code for a local treasurer6s denial or inaction

on a rotest. Aeals fro! the =udg!ents, resolutions or orders of the 'egional 5rial Court in ta"collection cases originally decided by the! in their resecti(e territorial =urisdiction !ust be

filed #ith the Court of 5a" Aeal #ithin +0 days fro! receit of the decision. 5ea! Pacific

Cororation (s. 7aza as unicial 5reasurer of 5aguig, I.'. %o. 1@44+2, July 11, 2012.

'eublic Act %o. 112-) Court of 5a" Aeals) e"clusi(e aellate =urisdiction. Dy going directlyto the Sure!e Court on a 'ule *- etition for re(ie# on certiorari, ta"ayer lost sight of the fact

that Court of 5a" Aeals has the e"clusi(e aellate =urisdiction o(er, a!ong others, aeals

fro! =udg!ents, resolutions or orders of the regional trial courts in ta" collection cases originallydecided by the! in their resecti(e territorial =urisdictions Aeals to the Court of 5a" Aeals

!ust be erfected #ithin +0 days fro! receit of the decision and shall be !ade by filing a

etition for re(ie# under a rocedure analogous to that ro(ided for under 'ule *2 of the 1//4'ules of Ci(il Procedure. 5he erfection of an aeal in the !anner and #ithin the eriod fi"ed

by la# is not only !andatory but =urisdictional and non?co!liance #ith these legal

re:uire!ents is fatal to a arty6s cause. 5ea! Pacific Cororation (s. 7aza as unicial

5reasurer of 5aguig, I.'. %o. 1@44+2, July 11, 2012.

Local Io(ern!ent Code) real roerty ta") ta" e"e!tion of the 'eublic. Section 1++ of the

Local Io(ern!ent Code LIC rohibits local go(ern!ents fro! i!osing ta"es of any Bind on

the %ational Io(ern!ent, its agencies or instru!entalities. Ho#e(er, Section 1/+ of the LIC

has #ithdra#n ta" e"e!tions en=oyed by, a!ong others go(ern!ent?o#ned or controlledcororations I;CCs. ;n the other hand, Section 2+* of the LIC e"e!ts fro! real roerty

ta", real roerty o#ned by the 'eublic of the Philiines or any of its olitical subdi(isions

e"cet #hen the beneficial use thereof has been granted, for consideration, or other#ise, to ata"able erson. 5he Philiine 'ecla!ation Authority P'A is not a I;CC because it is neither

a stocB nor non?stocB cororation as re:uired by the Ad!inistrati(e Code, #hich is the

go(erning la# defining the legal relationshi and status of go(ern!ent entities. P'A is ago(ern!ent instru!entality (ested #ith cororate o#ers and erfor!ing an essential ublic

ser(ice. Deing an incororated go(ern!ent instru!entality, it is e"e!t fro! ay!ent of realroerty ta". oreo(er, real roerty o#ned by the 'eublic of the Philiines is e"e!t fro!real roerty ta" unless the beneficial use thereof has been granted to a ta"able erson. 'eublic

of the Philiines reresented by the Philiine 'ecla!ation Authority (s. City of Parana:ue,

I.'. %o. 1/110/, July 18, 2012.

Constitution) Ci(il Code) roerty of ublic do!ain) foreclosure. 5he sub=ect reclai!ed landsare still art of the ublic do!ain, o#ned by the State and, therefore e"e!t fro! real roerty

ta". 5hey are ortions of the foreshore and offshore areas of anila Day. As such, they re!ain

ublic lands and for! art of the ublic do!ain under the Constitution and the Ci(il Code. As

held by the Court in the case of Cha(ez (. Public


14/25

#ithdra#n by la# or residential rocla!ation fro! ublic use. Proerties of ublic do!inionare not sub=ect to e"ecution or foreclosure sale.'eublic of the Philiines reresented by the

Philiine 'ecla!ation Authority (s. City of Parana:ue, I.'. %o. 1/110/, July 18, 2012.

u!ust 2012 Philippine Supreme Court

Decision on Tax LawPosted on Sete!ber 1/, 2012by Carina C. Laforteza

%ational &nternal 'e(enue Code) Galue Added 5a") clai! for credit or refund of inut (alue?added ta") rinting of zero?rated.3. Section 2** of the %ational &nternal 'e(enue Code %&'C

e"licitly grants the Secretary of >inance the authority to ro!ulgate the necessary rules and

regulations for the effecti(e enforce!ent of the ro(isions of the ta" code. Conse:uently, thefollo#ing in(oicing re:uire!ents enu!erated in Section *.108?1 of the 'e(enue 'egulations

'' 4?/- !ust be obser(ed by all GA5?registered ta"ayers$ 1 the na!e, 5&% and address of

seller) 2 date of transaction) + :uantity, unit cost and descrition of !erchandise or nature of

ser(ice) * the na!e, 5&%, business style, if any, and address of the GA5?registered urchaser,custo!er or client) - the #ord zero?rated i!rinted on the in(oice co(ering zero?rated sales)

and the in(oice (alue or consideration. 5he need for ta"ayers to indicate in their in(oices and

receits the fact that they are zero?rated or that its transactions are zero?rated beca!e !oreaarent uon the integration of the abo(e!entioned ro(isions of '' %o. 4?/- in Section 11+

of the %&'C enu!erating the in(oicing re:uire!ents of GA5?registered ersons #hen the %&'C

#as a!ended by 'eublic Act %o. /++4. 5he Court has consistently ruled that the absence of the#ord zero?rated3 on the in(oices and receits of a ta"ayer #ill result in the denial of the clai!

for ta" refund. ?astern &eleommuniations %ilippines, In. vs. Commissioner of Internal

Revenue, G.R. No. 16$$56, *u/ust 9, !1.

February 201" Philippine Supreme Court


Posted on arch 20, 201+by Carina C. LafortezaN Posted in Philiines ? Cases, Philiines ?La#,5a" La#N 5aggeddocu!entary sta! ta",gross receits ta", (alue added ta"N

Here are select >ebruary 201+ rulings of the Sure!e Court of the Philiines on ta" la#$

%ational &nternal 'e(enue Code) docu!entary sta! ta") issuance of ro!issory notes) ersons

liable for the ay!ent of 7S5) accetance. nder Section 14+ of the %ational &nternal 'e(enueCode, the ersons ri!arily liable for the ay!ent of 7S5 are the ersons 1 !aBing) 2

signing) + issuing) * acceting) or - transferring the ta"able docu!ents, instru!ents or

aers. Should these arties be e"e!ted fro! aying ta", the other arty #ho is not e"e!t

#ould then be liable. &n this case, etitioner Philacor is engaged in the business of retailfinancing. 5hrough retail financing, a rosecti(e buyer of ho!e aliance !ay urchase an

aliance on install!ent by e"ecuting a unilateral ro!issory note in fa(or of the aliance

dealer, and the sa!e ro!issory note is assigned by the aliance dealer to Philacor. 5hus, under
http://sc.judiciary.gov.ph/jurisprudence/2012/july2012/191109.pdfhttp://sc.judiciary.gov.ph/jurisprudence/2012/july2012/191109.pdfhttp://sc.judiciary.gov.ph/jurisprudence/2012/july2012/191109.pdfhttp://lexoterica.wordpress.com/2012/09/19/august-2012-philippine-supreme-court-decision-on-tax-law/http://lexoterica.wordpress.com/2012/09/19/august-2012-philippine-supreme-court-decision-on-tax-law/http://lexoterica.wordpress.com/author/ccllexoterica/http://lexoterica.wordpress.com/author/ccllexoterica/http://sc.judiciary.gov.ph/jurisprudence/2012/august2012/168856.pdfhttps://lexoterica.wordpress.com/2013/03/20/february-2013-philippine-supreme-court-decisions-on-tax-law/https://lexoterica.wordpress.com/2013/03/20/february-2013-philippine-supreme-court-decisions-on-tax-law/https://lexoterica.wordpress.com/author/ccllexoterica/https://lexoterica.wordpress.com/author/ccllexoterica/https://lexoterica.wordpress.com/category/philippines-cases/https://lexoterica.wordpress.com/category/philippines-law/https://lexoterica.wordpress.com/category/philippines-law/https://lexoterica.wordpress.com/category/tax-law/https://lexoterica.wordpress.com/category/tax-law/https://lexoterica.wordpress.com/tag/documentary-stamp-tax/https://lexoterica.wordpress.com/tag/documentary-stamp-tax/https://lexoterica.wordpress.com/tag/gross-receipts-tax/https://lexoterica.wordpress.com/tag/gross-receipts-tax/https://lexoterica.wordpress.com/tag/value-added-tax/http://sc.judiciary.gov.ph/jurisprudence/2012/july2012/191109.pdfhttp://sc.judiciary.gov.ph/jurisprudence/2012/july2012/191109.pdfhttp://lexoterica.wordpress.com/2012/09/19/august-2012-philippine-supreme-court-decision-on-tax-law/http://lexoterica.wordpress.com/author/ccllexoterica/http://sc.judiciary.gov.ph/jurisprudence/2012/august2012/168856.pdfhttps://lexoterica.wordpress.com/2013/03/20/february-2013-philippine-supreme-court-decisions-on-tax-law/https://lexoterica.wordpress.com/author/ccllexoterica/https://lexoterica.wordpress.com/category/philippines-cases/https://lexoterica.wordpress.com/category/philippines-law/https://lexoterica.wordpress.com/category/philippines-law/https://lexoterica.wordpress.com/category/tax-law/https://lexoterica.wordpress.com/tag/documentary-stamp-tax/https://lexoterica.wordpress.com/tag/gross-receipts-tax/https://lexoterica.wordpress.com/tag/value-added-tax/


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this arrange!ent, Philacor did not !aBe, sign, issue, accet or transfer the ro!issory notes. &t isthe buyer of the aliances #ho !ade, signed and issued the docu!ents sub=ect to ta" #hile it is

the aliance dealer #ho transferred these docu!ents to Philacor #hich liBe#ise indisutably

recei(ed or acceted3 the!. Accetance, ho#e(er, is an act that is not e(en alicable toro!issory notes, but only to bills of e"change. nder the %egotiable &nstru!ents La#, the act

of accetance refers solely to bills of e"change. &n a ruling adoted by the Dureau of &nternal

'e(enue as early as 1//-, accetance3 has been defined as ha(ing reference to inco!ingforeign bills of e"change #hich are acceted in the Philiines by the dra#ees thereof, and not

as referring to the co!!on usage of the #ord as in recei(ing. 5hus, a arty to a ta"able

transaction #ho accets3 any docu!ents or instru!ents in the lain and ordinary !eaning does

not beco!e ri!arily liable for the ta". %ilaor Cre'it Corporation vs. Commissioner ofInternal Revenue, G.R. No. 169$99. Feruary 6, !13.

%ational &nternal 'e(enue Code) docu!entary sta! ta") issuance of ro!issory notes) ersons

liable for the ay!ent of 7S5) 'e(enue 'egulations %o. 2@ 'e(enue 'egulations %o. [email protected] *2 of 'e(enue 'egulations '' %o. 2@ issued on arch 2@, 1/2* ro(ides that the

erson using a ro!issory note can be held resonsible for the ay!ent of docu!entary sta!

ta" 7S5. 5he rule uses the #ord can3 #hich is er!issi(e, rather than the #ord shall,3 #hich

#ould !aBe the liability of the ersons na!ed definite and unconditional. &n this sense, a ersonusing a ro!issory note can be !ade liable for the 7S5 if the erson is$ a a!ong those ersons

enu!erated under the la# K i.e., the erson #ho !aBes, issues, signs, accets or transfers the

docu!ent or instru!ent) or 2 if these ersons are e"e!t, a non?e"e!t arty to thetransaction. Such interretation #ould a(oid any conflict bet#een Section 14+ of the 1//4

%ational &nternal 'e(enue Code and section *2 of '' %o. 2@ and !aBe it unnecessary for the

latter to be strucB do#n as ha(ing gone beyond the la# it seeBs to interret. Ho#e(er, section *2of '' %o. 2@ cannot be interreted to !ean that anyone #ho uses3 the docu!ent, regardless of

#hether such erson is a arty to the transaction, should be liable, as this reading #ould go

beyond section 14+ of the 1/8@ %ational &nternal 'e(enue Code, the la# it seeBs to i!le!ent.

&!le!enting rules and regulations cannot a!end a la# for they are intended to carry out, notsulant or !odify, the la#. 5o allo# '' %o. 2@ to e"tend the liability for 7S5 to ersons #ho

are not e(en !entioned in the rele(ant ro(isions of the ta" codes articularly the 1/8@ %ational

&nternal 'e(enue Code #hich is the rele(ant la# at that ti!e #ould be a clear breach of the rulethat a statute !ust al#ays be suerior to its i!le!enting regulations. %ilaor Cre'it

Corporation vs. Commissioner of Internal Revenue, G.R. No. 169$99. Feruary 6, !13.

%ational &nternal 'e(enue Code) docu!entary sta! ta") assign!ent or transfer of e(idence of

indebtedness. nder Section 1/8 of the then 1/8@ %ational &nternal 'e(enue Code, anassign!ent or transfer beco!es ta"able only in connection #ith !ortgages, leases and olicies of

insurance. 5he list does not include the assign!ent or transfer of e(idence of indebtedness)

rather it is the rene#al of these that is ta"able. 5he resent case does not in(ol(e a rene#al, but a!ere transfer or assign!ent of the e(idence of indebtedness or ro!issory notes. A rene#al

#ould in(ol(e an increase in the a!ount of indebtedness or an e"tension of a eriod, and not the

!ere change in the erson of the ayee. 5he la# has set a attern of e"ressly ro(iding for thei!osition of docu!entary sta! ta" on the transfer andor assign!ent of docu!ents e(idencing

certain transactions. 9here the la# did not secify that such transfer andor assign!ent is to be

ta"es, there #ould be no basis to recognize an i!osition. %ilaor Cre'it Corporation vs.

Commissioner of Internal Revenue, G.R. No. 169$99. Feruary 6, !13.

%ational &nternal 'e(enue Code) (alue added ta") 120?day eriod gi(en by la# to the

Co!!issioner of &nternal 'e(enue to grant or deny alication for ta" refund or credit
http://sc.judiciary.gov.ph/jurisprudence/2013/february2013/169899.pdfhttp://sc.judiciary.gov.ph/jurisprudence/2013/february2013/169899.pdfhttp://sc.judiciary.gov.ph/jurisprudence/2013/february2013/169899.pdfhttp://sc.judiciary.gov.ph/jurisprudence/2013/february2013/169899.pdfhttp://sc.judiciary.gov.ph/jurisprudence/2013/february2013/169899.pdfhttp://sc.judiciary.gov.ph/jurisprudence/2013/february2013/169899.pdfhttp://sc.judiciary.gov.ph/jurisprudence/2013/february2013/169899.pdfhttp://sc.judiciary.gov.ph/jurisprudence/2013/february2013/169899.pdf


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!andatory and =urisdictional. >ailure to co!ly #ith the 120?day #aiting eriod (iolates a!andatory ro(ision of la#. &t (iolates the doctrine of e"haustion of ad!inistrati(e re!edies and

renders the etition re!ature and thus #ithout a cause of action, #ith the effect that the Court of

5a" Aeals C5A does not ac:uire =urisdiction o(er the ta"ayer6s etition. 5he charter of theC5A e"ressly ro(ides that its =urisdiction is to re(ie# on aeal decisions of the

Co!!issioner of &nternal 'e(enue C&' in cases in(ol(ing """ refunds of internal re(enue

ta"es.3 9hen a ta"ayer re!aturely files a =udicial clai! for ta" refund or credit #ith the C5A#ithout #aiting for the decision of the C&', there is no decision3 of the C&' to re(ie# and thus

the C5A as a court of secial =urisdiction has no =urisdiction o(er the aeal. 5he charter of the

C5A also e"ressly ro(ides that if the C&' fails to decide #ithin a secific eriod3 re:uired by

la#, such inaction shall be dee!ed a denial3 of the alication for a ta" refund or credit. &t is theC&'6s decision or inaction dee!ed a denial,3 that the ta"ayer can taBe to the C5A for re(ie#.

9ithout a decision or an inaction """ dee!ed a denial3 of the C&', the C5A has no =urisdiction

o(er a etition for re(ie#. Commissioner of Internal Revenue vs. -an Ro@ue o=erCorporation&a/anito +inin/ Corporation vs. Commissioner of Internal Revenue%ile< +inin/

Corporation vs. Commissioner of Internal Revenue, G.R. No. 1$#0$5G.R. No. 196113G.R. No.

19#156. Feruary 1, !13.

%ational &nternal 'e(enue Code) (alue added ta") +0?day eriod need not fall #ithin the t#o?year rescriti(e eriod. 5he +0?day eriod ro(ided for under section 112 C of the %ational

&nternal 'e(enue Code %&'C #ithin #hich to aeal the decision of the Co!!issioner of

&nternal 'e(enue C&' to the Court of 5a" Aeals C5A need not necessarily fall #ithin thet#o?year rescriti(e eriod under section 112 A of the %&'C. First, section 112 A clearly

states that the ta"ayer !ay aly #ith the C&' for a refund or credit #ithin t#o 2 years,3

#hich !eans at any ti!e #ithin t#o years. 5hus, the alication for refund or credit !ay be filedon the last day of the t#o?year rescriti(e eriod and it #ill still strictly co!ly #ith the la#.

5he t#o?year rescriti(e eriod is a grace eriod in fa(or of the ta"ayer and he can a(ail of the

full eriod before his right to aly for a ta" refund or credit is barred by rescrition. -eon', as

held by the Court in the case of Commissioner of Internal Revenue v *i%i, the hrase F#ithint#o years """ aly for the issuance of a ta" credit or refund6 refers to alications for

refundcredit #ith the C&' and not to aeals !ade to the C5A.3 &%ir', if the +0?day eriod, or

any art of it, is re:uired to fall #ithin the t#o?year rescriti(e eriod e:ui(alent to 4+0 days,then the ta"ayer !ust file his ad!inistrati(e clai! for refund or credit #ithin the first @10 days

of the t#o?year rescriti(e eriod. ;ther#ise, the filing of the ad!inistrati(e clai! beyond the

first @10 days #ill result in the aeal to the C5A being filed beyond the t#o?year rescriti(eeriod. 5hus, if the ta"ayer files his ad!inistrati(e clai! on the @11thday, the C&', #ith his

120?day eriod, #ill ha(e until the 4+1stday to decide the clai!. &f the C&' decides only on the

4+1stday, or does not decide at all, the ta"ayer can no longer file his =udicial clai! #ith theC5A because the t#o?year rescriti(e eriod e:ui(alent to 4+0 days has lased. 5he +0?day

eriod granted by la# to the ta"ayer to file an aeal before the C5A beco!es utterly useless,

e(en if the ta"ayer co!lied #ith the la# by filing his ad!inistrati(e clai! #ithin the t#o?year

rescriti(e eriod. Commissioner of Internal Revenue vs. -an Ro@ue o=er

Corporation&a/anito +inin/ Corporation vs. Commissioner of Internal Revenue%ile< +inin/Corporation vs. Commissioner of Internal Revenue, G.R. No. 1$#0$5G.R. No. 196113G.R. No.

19#156. Feruary 1, !13.

%ational &nternal 'e(enue Code) (alue added ta") e"cess3 inut GA5 and e"cessi(ely3collected ta". nder Section 22/ of the %ational &nternal 'e(enue Code %&'C, the rescriti(e

eriod for filing a =udicial clai! for refund is t#o years fro! the date of ay!ent of the ta"

erroneously, """ illegally, """ e"cessi(ely or in any !anner #rongfully collected.3 Ho#e(er,
http://sc.judiciary.gov.ph/jurisprudence/2013/february2013/187485.pdfhttp://sc.judiciary.gov.ph/jurisprudence/2013/february2013/187485.pdfhttp://sc.judiciary.gov.ph/jurisprudence/2013/february2013/187485.pdfhttp://sc.judiciary.gov.ph/jurisprudence/2013/february2013/187485.pdfhttp://sc.judiciary.gov.ph/jurisprudence/2013/february2013/187485.pdfhttp://sc.judiciary.gov.ph/jurisprudence/2013/february2013/187485.pdfhttp://sc.judiciary.gov.ph/jurisprudence/2013/february2013/187485.pdfhttp://sc.judiciary.gov.ph/jurisprudence/2013/february2013/187485.pdfhttp://sc.judiciary.gov.ph/jurisprudence/2013/february2013/187485.pdfhttp://sc.judiciary.gov.ph/jurisprudence/2013/february2013/187485.pdf


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in a clai! for refund or credit of e"cess3 inut (alue?added ta" GA5 under Section 110 Dand Section 112 A of the %&'C, the inut GA5 is not e"cessi(ely3 collected as understood

under Section 22/. At the ti!e of ay!ent of the inut GA5, the a!ount aid is the correct and

roer a!ount. nder the GA5 syste!, there is no clai! or issue that the inut GA5 ise"cessi(ely3 collected, that is, that the inut GA5 aid is !ore than #hat is legally due. 5he

erson legally liable for the inut GA5 cannot clai! that he o(eraid the inut GA5 by the !ere

e"istence of an e"cess3 inut GA5. 5he ter! e"cess3 inut GA5 si!ly !eans that the inutGA5 a(ailable as credit e"ceeds the outut GA5, not that the inut GA5 is e"cessi(ely collected

because it is !ore than #hat is legally due. 5hus, the ta"ayer #ho legally aid the inut GA5

cannot clai! for refund or credit of the inut GA5 as e"cessi(ely3 collected under Section 22/.

Commissioner of Internal Revenue vs. -an Ro@ue o=er Corporation&a/anito +inin/Corporation vs. Commissioner of Internal Revenue%ile< +inin/ Corporation vs.

Commissioner of Internal Revenue, G.R. No. 1$#0$5G.R. No. 196113G.R. No. 19#156.

Feruary 1, !13.

%ational &nternal 'e(enue Code) (alue added ta") e:uitable estoel under section 2*@) Dureau

of &nternal 'e(enue 'uling. Dureau of &nternal 'e(enue D&' 'uling %o. 7A?*8/?0+ does

ro(ide a (alid clai! for e:uitable estoel under section 2*@ of the %ational &nternal 'e(enue

Code %&'C. D&' 'uling %o. 7A?*8/?0+ e"ressly states that the ta"ayer?clai!ant need not#ait for the lase of the 120?day eriod before it could seeB =udicial relief #ith the C5A by #ay

of Petition for 'e(ie#.3 Prior to this ruling, the D&' held that the e"iration of the 120?day

eriod is !andatory and =urisdictional before a =udicial clai! can be filed. 5here is no disutethat the 120?day eriod is !andatory and =urisdictional, and that the C5A does not ac:uire

=urisdiction o(er a =udicial clai! that is filed before the e"iration of the 120?day eriod. 5here

are t#o e"cetions to this rule. 5he first e"cetion is if the C&', through a secific ruling,!isleads a articular ta"ayer to re!aturely file a =udicial clai! #ith the C5A. Such secific

ruling is alicable only to such articular ta"ayer. 5he second e"cetion is #here the C&',

through a general interretati(e rule issued under section * of the %&'C, !isleads all ta"ayers

into filing re!aturely =udicial clai!s #ith the C5A. &n these cases, the C&' cannot be allo#edto later on :uestion the C5A6s assu!tion of =urisdiction o(er such clai! since e:uitable

estoel has set in as e"ressly authorized under section 2*@ of the %&'C. A general

interretati(e rule issued by the C&' !ay be relied uon by ta"ayers fro! the ti!e the rule isissued u to its re(ersal by the C&' or the Court. 5a"ayers should not be re=udiced by an

erroneous interretation by the C&', articularly on a difficult :uestion of la#. D&' 'uling %o.

7A?*8/?0+ is a general interretati(e rule because it #as a resonse to a :uery !ade, not by aarticular ta"ayer, but by a go(ern!ent agency tasBed #ith rocessing ta" refunds and credits,

that is, the ;ne Sto Sho &nter?Agency 5a" Credit and 7ra#bacB Center of the 7eart!ent of

>inance. All ta"ayers can rely on D&' 'uling %o. 7A?*8/?0+ fro! the ti!e of its issuance on7ece!ber 10, 200+ u to its re(ersal by the Court in the case of Aichi on ;ctober @, 2010,

#hether the Court held that the 120O+0 day eriods are !andatory and =urisdictional.

Commissioner of Internal Revenue vs. -an Ro@ue o=er Corporation&a/anito +inin/

Corporation vs. Commissioner of Internal Revenue%ile< +inin/ Corporation vs.

Commissioner of Internal Revenue, G.R. No. 1$#0$5G.R. No. 196113G.R. No. 19#156.Feruary 1, !13.

%ational &nternal 'e(enue Code) docu!entary sta! ta") le(ied on the e"ercise of ri(ileges not

on obligations i!osed by la#. 7ocu!entary sta! ta" 7S5 is by nature an e"cise ta" since itis le(ied on the e"ercise by ersons of ri(ileges conferred by la#. 5hese ri(ileges !ay co(er

the creation, !odification or ter!ination of contractual relationshis by e"ecuting secific

docu!ents liBe deeds of sale, !ortgages, ledges, trust and issuance of shares of stocB. 5he sale
http://sc.judiciary.gov.ph/jurisprudence/2013/february2013/187485.pdfhttp://sc.judiciary.gov.ph/jurisprudence/2013/february2013/187485.pdfhttp://sc.judiciary.gov.ph/jurisprudence/2013/february2013/187485.pdfhttp://sc.judiciary.gov.ph/jurisprudence/2013/february2013/187485.pdfhttp://sc.judiciary.gov.ph/jurisprudence/2013/february2013/187485.pdfhttp://sc.judiciary.gov.ph/jurisprudence/2013/february2013/187485.pdfhttp://sc.judiciary.gov.ph/jurisprudence/2013/february2013/187485.pdfhttp://sc.judiciary.gov.ph/jurisprudence/2013/february2013/187485.pdfhttp://sc.judiciary.gov.ph/jurisprudence/2013/february2013/187485.pdfhttp://sc.judiciary.gov.ph/jurisprudence/2013/february2013/187485.pdf


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of >ort Donifacio land #as not a ri(ilege but an obligation i!osed by la# #hich #as to selllands to fulfill a ublic urose. 5o charge 7S5 on a transaction #hich #as basically a

co!liance #ith a legislati(e !andate #ould go against its (ery nature as an e"cise ta". Fort

2onifaio Development Corporation vs. Commissioner of Internal Revenue, G.R. Nos. 160155 A 1#5503. Feruary 5, !13.

%ational &nternal 'e(enue Code) gross receits ta") final #ithholding ta" for!s art of gross

receits. 5he a!ount of interest inco!e #ithheld, in ay!ent of the 20E final #ithholding ta",

for!s art of a banB6s gross receits in co!uting the gross receits ta" on banBs. Iross'eceits3 co!rise the entire receits #ithout any deduction.3 ;ther#ise, if deductions #ere to

be !ade, it #ould ha(e been considered as net receits.3 oreo(er, the e"clusion of the final

#ithholding ta" fro! gross receits oerates as a ta" e"e!tion #hich the la# !ust e"resslygrant. &n this case, etitioner failed to oint to any secific ro(ision of la# allo#ing deduction,

e"e!tion or e"clusion fro! its ta"able gross receits, of the a!ount #ithheld as final ta".

C%ina 2anin/ Corporation vs. Commissioner of Internal Revenue, G.R. No. 1#51!$. Feruary

#, !13.

March 201" Philippine Supreme Court

Decisions on Tax LawPosted on Aril 1-, 201+byCarina C. LafortezaN Posted in Philiines ? Cases, Philiines ?

La#,5a" La#N

Here are select rulings of the Sure!e Court of the Philiines on ta" la#$

%ational &nternal 'e(enue Code) (alue added ta") rescriti(e eriod for filing a ta" refund orcredit of inut (alue?added ta". 5he rules on the deter!ination of the rescriti(e eriod for

filing a ta" refund or credit of unutilized inut (alue?added ta" GA5,as ro(ided in Section

112 of the 1//4 5a" Code, are as follo#s$

1 An ad!inistrati(e clai! !ust be filed #ith the Co!!issioner of &nternal 'e(enue C&'#ithin t#o years after the close of the ta"able :uarter #hen the zero?rated or effecti(ely zero?

rated sales #ere !ade.

2 5he C&' has 120 days fro! the date of sub!ission of co!lete docu!ents in suort of the

ad!inistrati(e clai! #ithin #hich to decide #hether to grant a refund or issue a ta" creditcertificate. 5he 120?day eriod !ay e"tend beyond the t#o?year eriod fro! the filing of the

ad!inistrati(e clai! if the clai! is filed in the later art of the t#o?year eriod. &f the 120?day

eriod e"ires #ithout any decision fro! the C&', then the ad!inistrati(e clai! !ay beconsidered to be denied by inaction.

+ A =udicial clai! !ust be filed #ith the Court of 5a" Aeals C5A #ithin +0 days fro! the

receit of the C&'6s decision denying the ad!inistrati(e clai! or fro! the e"iration of the 120?

day eriod #ithout any action fro! the C&'.

* All ta"ayers, ho#e(er, can rely on Dureau of &nternal 'e(enue 'uling %o. 7A?*8/?0+,#hich e"ressly states that the ta"ayer?clai!ant need not #ait for the lase of the 120?day

eriod before it could seeB =udicial relief #ith the C5A by #ay of Petition for 'e(ie#,3 fro! the
http://sc.judiciary.gov.ph/jurisprudence/2013/february2013/164155.pdfhttp://sc.judiciary.gov.ph/jurisprudence/2013/february2013/164155.pdfhttp://sc.judiciary.gov.ph/jurisprudence/2013/february2013/164155.pdfhttp://sc.judiciary.gov.ph/jurisprudence/2013/february2013/175108.pdfhttp://sc.judiciary.gov.ph/jurisprudence/2013/february2013/175108.pdfhttps://lexoterica.wordpress.com/2013/04/15/march-2013-philippine-supreme-court-decisions-on-tax-law/https://lexoterica.wordpress.com/author/ccllexoterica/https://lexoterica.wordpress.com/author/ccllexoterica/https://lexoterica.wordpress.com/author/ccllexoterica/https://lexoterica.wordpress.com/category/philippines-cases/https://lexoterica.wordpress.com/category/philippines-law/https://lexoterica.wordpress.com/category/philippines-law/https://lexoterica.wordpress.com/category/tax-law/https://lexoterica.wordpress.com/category/tax-law/http://sc.judiciary.gov.ph/jurisprudence/2013/february2013/164155.pdfhttp://sc.judiciary.gov.ph/jurisprudence/2013/february2013/164155.pdfhttp://sc.judiciary.gov.ph/jurisprudence/2013/february2013/175108.pdfhttp://sc.judiciary.gov.ph/jurisprudence/2013/february2013/175108.pdfhttps://lexoterica.wordpress.com/2013/04/15/march-2013-philippine-supreme-court-decisions-on-tax-law/https://lexoterica.wordpress.com/author/ccllexoterica/https://lexoterica.wordpress.com/category/philippines-cases/https://lexoterica.wordpress.com/category/philippines-law/https://lexoterica.wordpress.com/category/philippines-law/https://lexoterica.wordpress.com/category/tax-law/


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ti!e of its issuance on 10 7ece!ber 200+ u to its re(ersal by the Court in CIR vs. *i%iFor/in/ Company of *sia on @ ;ctober 2010, as an e"cetion to the !andatory and

=urisdictional 120O+0 day eriods. +in'anao II Geot%ermal artners%ip vs. Commissioner of

Internal Revenue+in'anao I Geot%ermal artners%ip vs. Commissioner of Internal Revenue.I.'. %o. 1/++01 I.'. %o. 1/*@+4. arch 11, 201+.

%ational &nternal 'e(enue Code) (alue?added ta") isolated transactions. 5a"ayer6s sale of the

%issan Patrol is said to be an isolated transaction. Ho#e(er, it does not follo# that an isolated

transaction cannot be an incidental transaction for uroses of (alue?added ta" GA5 liability.Section 10- of the %ational &nternal 'e(enue Code of 1//4 #ould sho# that a transaction in the

course of trade or business3 includes transactions incidental thereto.3 5a"ayer6s business is to

con(ert the stea! sulied to it by P%;C?


20/25

%ational &nternal 'e(enue Code) 'e(enue 'egulations %o. 12?8@) #ithholding ta"es) i!ositionthereof deendent uon the nature of #orB erfor!ed. >or ta"ation uroses, a director is

considered an e!loyee under Section - of 'e(enue 'egulations %o. 12?8@. An indi(idual

erfor!ing ser(ices for a cororation, #hether as an officer and director or !erely as a director#hose duties are confined to attendance at and articiation in the !eetings of the Doard of

7irectors, is an e!loyee. 5he non?inclusion of the na!es of so!e of etitioner6s directors in the

co!any6s Alha List does not ipso fato create a resu!tion that they are not e!loyees ofthe cororation, because the i!osition of #ithholding ta" on co!ensation hinges uon the

nature of #orB erfor!ed by such indi(iduals in the co!any. 'e(enue 'egulations %o. 2?/8

does not aly to this case as the latter is a later regulation #hile the accounting booBs e"a!ined

#ere for ta"able years 1//4.First 4epanto &ais%o Insurane Corporation vs. Commissioner ofInternal Revenue,I.'. %o. 1/4114. Aril 10, 201+.

Local Io(ern!ent Code) ta"ing o#er of local go(ern!ent units. 5he o#er to ta" is an

attribute of so(ereignty,3 and as such, inheres in the State. Such, ho#e(er, is not true forro(inces, cities, !unicialities and barangays as they are not the so(ereign) rather, they are

!ere territorial and olitical subdi(isions of the 'eublic of the Philiines3. 5he o#er of a

ro(ince to ta" is li!ited to the e"tent that such o#er is delegated to it either by the

Constitution or by statute. DooB && of the Local Io(ern!ent Code establishes the ara!eters ofthe ta"ing o#ers of local go(ern!ent units.eli)loy Realty Corporation vs. &%e rovine of

2en/uet, I.'. %o. 18+1+4. Aril 10, 201+.

Local Io(ern!ent Code) li!itations on ta"ing o#er of local go(ern!ent units) ercentage ta".

Section 1++ i of the Local Io(ern!ent Code LIC rohibits the le(y by local go(ern!entunits LIs of ercentage ta" e"cet as other#ise ro(ided by the LIC. Percentage 5a" is a

ta" !easured by a certain ercentage of the gross selling rice or gross (alue in !oney of goods

sold, bartered or i!orted) or of the gross receits or earnings deri(ed by any erson engaged inthe sale of ser(ices. Since a!use!ent ta"es are fi"ed at a certain ercentage of the gross receits

incurred by certain secified establish!ents, they are actually ercentage ta"es. Ho#e(er,

ro(inces are not barred fro! le(ying a!use!ent ta"es e(en if a!use!ent ta"es are a for! ofercentage ta"es. Section 1*0 of the LIC car(es a clear e"cetion to the general rule in Section

1++ i.eli)loy Realty Corporation vs. &%e rovine of 2en/uet. I.'. %o. 18+1+4. Aril 10,201+.

Local Io(ern!ent Code) li!itations on ta"ing o#er of local go(ern!ent units) a!use!ent ta".Section 1*0 of the Local Io(ern!ent Code LIC e"ressly allo#s for the i!osition by

ro(inces of a!use!ent ta"es on the rorietors, lessees, or oerators of theaters, cine!as,

concert halls, circuses, bo"ing stadia, and other laces of a!use!ent.3eli)loy RealtyCorporation vs. &%e rovine of 2en/uet. I.'. %o. 18+1+4. Aril 10, 201+.

5heaters, cine!as, concert halls, circuses, and bo"ing stadia are bound by a co!!on tyifying

characteristic in that they are all (enues ri!arily for the staging of sectacles or the holding of

ublic sho#s, e"hibitions, erfor!ances, and other e(ents !eant to be (ie#ed by an audience.Accordingly, other laces of a!use!ent3 !ust be interreted in light of the tyifying

characteristic of being (enues #here one seeBs ad!ission to entertain oneself by seeing or

(ie#ing the sho# or erfor!ances3 or being (enues ri!arily used to stage sectacles or holdublic sho#s, e"hibitions, erfor!ances, and other e(ents !eant to be (ie#ed by an audience.

Considering that resorts, s#i!!ing ools, bath houses, hot srings and tourist sots do not

belong to the sa!e category or class as theaters, cine!as, concert halls, circuses, and bo"ing

stadia, it follo#s that they cannot be considered as a!ong the Fother laces of a!use!ent6
http://sc.judiciary.gov.ph/jurisprudence/2013/april2013/197117.pdfhttp://sc.judiciary.gov.ph/jurisprudence/2013/april2013/197117.pdfhttp://sc.judiciary.gov.ph/jurisprudence/2013/april2013/183137.pdfhttp://sc.judiciary.gov.ph/jurisprudence/2013/april2013/183137.pdfhttp://sc.judiciary.gov.ph/jurisprudence/2013/april2013/183137.pdfhttp://sc.judiciary.gov.ph/jurisprudence/2013/april2013/183137.pdfhttp://sc.judiciary.gov.ph/jurisprudence/2013/april2013/183137.pdfhttp://sc.judiciary.gov.ph/jurisprudence/2013/april2013/183137.pdfhttp://sc.judiciary.gov.ph/jurisprudence/2013/april2013/183137.pdfhttp://sc.judiciary.gov.ph/jurisprudence/2013/april2013/183137.pdfhttp://sc.judiciary.gov.ph/jurisprudence/2013/april2013/197117.pdfhttp://sc.judiciary.gov.ph/jurisprudence/2013/april2013/183137.pdfhttp://sc.judiciary.gov.ph/jurisprudence/2013/april2013/183137.pdfhttp://sc.judiciary.gov.ph/jurisprudence/2013/april2013/183137.pdfhttp://sc.judiciary.gov.ph/jurisprudence/2013/april2013/183137.pdf


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conte!lated by Section 1*0 of the LIC and #hich !ay roerly be sub=ect to a!use!entta"es. eli)loy Realty Corporation vs. &%e rovine of 2en/uet. I.'. %o. 18+1+4. Aril 10,

201+.

June 201" Philippine Supreme Court


Posted on July 10, 201+by Carina C. LafortezaN Posted in5a" La#N 5agged local ta",etitionfor re(ie#, ta" certificateN

Here are select June 201+ rulings of the Sure!e Court of the Philiines on ta" la#$

%ational &nternal 'e(enue Code) Certificate of 5a" Clearance under Section -2C) li:uidation

under the %e# Central DanB Act. A ta" clearance is not a rere:uisite to the aro(al of the

ro=ect of distribution of the assets of a banB under li:uidation by the Philiine 7eosit&nsurance Cororation P7&C for the follo#ing reasons$

1 Section -2C of the %ational &nternal 'e(enue Code of 1//4 ertains only to a regulation

of the relationshi bet#een the Securities and


22/25

the Ci(il Code.%ilippine Deposit Insurane Corporation v. 2ureau of Internal Revenue, I.'.%o. 1428/2, June 1+, 201+.

Local Io(ern!ent Code) Clai!s for 5a" 'efund or Credit. Section 1/@ of the Local

Io(ern!ent Code ro(ides that in order to be entitled to a refund or credit of local ta"es, the

follo#ing rocedural re:uire!ents !ust concur$first, the ta"ayer concerned !ust file a #rittenclai! for refundcredit #ith the local treasurer) andseon', the case or roceeding for refund has

to be filed #ithin t#o 2 years fro! the date of the ay!ent of the ta", fee, or charge or fro! the

date the ta"ayer is entitled to a refund or credit. As etitioners ha(e failed to ro(e that theyha(e filed a #ritten clai! for refund #ith the local treasurer, their clai! for local ta"

refundcredit !ust be denied. &t is hornbooB rincile that a clai! for a ta" refundcredit is in the

nature of a clai! for an e"e!tion and the la# is construed instritissimi Buris against the oneclai!ing it and in fa(or of the ta"ing authority.+etro +anila -%oppin/ +ea Corp., et al. v.

+s. 4ierty +. &ole'o, in %er offiial apaity as t%e City &reasurer of +anila, an' t%e City of

+anila,I.'. %o. 1/0818, June -, 201+.

'e(ised 'ules of the Court of 5a" Aeals) e"tension to file etition for re(ie#. 5he 'e(ised'ules of the Court of 5a" Aeals the 'ules6 does not e"licitly sanction e"tensions to file a

etition for re(ie# #ith the Court of 5a" Aeals C5A. Ho#e(er, section 1, 'ule 4 thereof

reads that in the absence of any e"ress ro(ision in the 'ules, 'ules *2, *+, ** and *@ of the'ules of Court !ay be alied in a suletory !anner. &n articular, Section / of 'eublic Act

%o. /282 !aBes reference to the rocedure under 'ule *2 of the 'ules of Court. &n this light,

Section 1 of 'ule *2 states that the eriod for filing a etition for re(ie# !ay be e"tended uon

!otion of the concerned arty. &n other #ords, the regle!entary eriod ro(ided under Section+, 'ule 8 of the 'ules is e"tendible and, as such, the C5A 7i(ision6s grant of resondents6

!otion for e"tension falls s:uarely #ithin the la#. +etro +anila -%oppin/ +ea Corp., et al.

v. +s. 4ierty +. &ole'o, in %er offiial apaity as t%e City &reasurer of +anila, an' t%e City of+anila,I.'. %o. 1/0818, June -, 201+.

July 201" Philippine Supreme Court


Posted on August 4, 201+by Carina C. LafortezaN Posted in Philiines ? Cases,Philiines ?

La#,5a" La#N 5aggeddouble ta"ation, e"cise ta"N 2 Co!!ents

Here are select July 201+ rulings of the Sure!e Court of the Philiines on ta" la#$

%ational &nternal 'e(enue Code) e"cise ta") goods sub=ect to e"cise ta") ersons liable to ay.


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go(ern!ent, they !ay, ho#e(er, shift the econo!ic burden of such ay!ents to so!eone else Kusually the urchaser of the goods K since e"cise ta"es are considered as a Bind of indirect ta".

%ilippine *irlines, In. v. Commissioner of Internal Revenue,I.'. %o. 1/84-/, July 1, 201+.

%ational &nternal 'e(enue Code) e"cise ta") statutory ta"ayer as roer arty to seeB refund)

e"cetion. Since e"cise ta"es are considered as a Bind of indirect ta", the statutory ta"ayer cantransfer to its custo!ers the (alue of the e"cise ta"es it aid or #ould be liable to ay to the

go(ern!ent by treating it as art of the cost of the goods and tacBing it on to the selling rice.

5his not#ithstanding, ursuant to Section 20*c of the 5a" Code, the roer arty to :uestion,or seeB a refund of, e"cise ta" is the statutory ta"ayer, the erson on #ho! the ta" is i!osed

by la# and #ho aid the sa!e e(en if he shifts the burden thereof to another. Accordingly, in

cases in(ol(ing e"cise ta" e"e!tions on etroleu! roducts under Section 1+- of the 5a"Code, the Court has consistently held that it is the statutory ta"ayer #ho is entitled to clai! a

ta" refund based thereon and not the arty #ho !erely bears its econo!ic burden. Ho#e(er, the

abo(e!entioned rule should not aly to instances #here the la# clearly grants the arty to#hich the econo!ic burden of the ta" is shifted an e"e!tion fro! both direct and indirect ta"es.

&n #hich case, the latter !ust be allo#ed to clai! a ta" refund e(en if it is not considered as the

statutory ta"ayer under the la#.5hus, the roriety of a ta" refund clai! is hinged on the Bind

of e"e!tion #hich for!s its basis. &f the la# confers an e"e!tion fro! both direct or indirectta"es, a clai!ant is entitled to a ta" refund e(en if it only bears the econo!ic burden of the

alicable ta". ;n the other hand, if the e"e!tion conferred only alies to direct ta"es, then

the statutory ta"ayer is regarded as the roer arty to file the refund clai!.%ilippine *irlines,In. v. Commissioner of Internal Revenue,I.'. %o. 1/84-/, July 1, 201+.

Philiine Airlines franchise) #ithdra#al of ta" e"e!tion. Letter of &nstructions %o. 1*+8 L;&

1*+8 a!ended Philiine Airlines6s PAL6s franchise by #ithdra#ing the ta" e"e!tion

ri(ilege granted to PAL on its urchase of do!estic etroleu! roducts for use in its do!esticoerations. Dased on Section 1+ of PAL6s franchise, PAL6s ta" e"e!tion ri(ilege on all ta"es

on a(iation gas, fuel and oil !ay be classified into three + Binds$ i all ta"es due on PAL6s

local urchase of a(iation gas, fuel and oil, ii all ta"es directly due fro! or i!osable uon theurchaser of the seller, roducer, !anufacturer, or i!orter of a(iation gas, fuel and oil but are

billed or assed on to PAL, and iii all ta"es due on all i!ortations by PAL of a(iation gas,fuel, and oil. 5he hrase urchase of do!estic etroleu! roducts for use in its do!esticoerations3? #hich characterizes the ta" ri(ilege #ithdra#n by L;& 1*+8? refers only to PAL6s

ta" e"e!tions on assed on e"cise ta" costs due fro! the seller, !anufacturerroducer of

locally !anufacturedroduced goods for do!estic sale and does not, in any #ay, ertain to any

of PAL6s ta" ri(ileges concerning i!orted goods. 'ecords disclose that Calte" i!orteda(iation fuel fro! abroad and !erely re?sold the sa!e to PAL, tacBing the a!ount of e"cise

ta"es it aid or #ould be liable to ay to the go(ern!ent on to the urchase rice. 5he said

etroleu! roducts are in the nature of things i!orted3 and thus, beyond the co(erage of L;&1*8+. %ilippine *irlines, In. v. Commissioner of Internal Revenue, I.'. %o. 1/84-/, July 1,

201+.

Local Io(ern!ent Code) double ta"ation) definition) ele!ents. 7ouble ta"ation !eans ta"ing

the sa!e roerty t#ice #hen it should be ta"ed only once) that is, ta"ing the sa!e erson t#iceby the sa!e =urisdiction for the sa!e thing.3 &t is obno"ious #hen the ta"ayer is ta"ed t#ice,

#hen it should be but once. ;ther#ise described as direct dulicate ta"ation,3 the t#o ta"es

!ust be i!osed on the sa!e sub=ect !atter, for the sa!e urose, by the sa!e ta"ing authority,#ithin the sa!e =urisdiction, during the sa!e ta"ing eriod) and the ta"es !ust be of the sa!e

Bind or character. Petitioner is indeed liable to ay business ta"es to the City of anila)
http://sc.judiciary.gov.ph/jurisprudence/2013/july2013/198759.pdfhttp://sc.judiciary.gov.ph/jurisprudence/2013/july2013/198759.pdfhttp://sc.judiciary.gov.ph/jurisprudence/2013/july2013/198759.pdfhttp://sc.judiciary.gov.ph/jurisprudence/2013/july2013/198759.pdfhttp://sc.judiciary.gov.ph/jurisprudence/2013/july2013/198759.pdfhttp://sc.judiciary.gov.ph/jurisprudence/2013/july2013/198759.pdfhttp://sc.judiciary.gov.ph/jurisprudence/2013/july2013/198759.pdfhttp://sc.judiciary.gov.ph/jurisprudence/2013/july2013/198759.pdfhttp://sc.judiciary.gov.ph/jurisprudence/2013/july2013/198759.pdfhttp://sc.judiciary.gov.ph/jurisprudence/2013/july2013/198759.pdf


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ne(ertheless, considering that the for!er has already aid these ta"es under Section 1* of theanila 'e(enue Code, it is e"e!t fro! the sa!e ay!ents under Section 21 of the sa!e code.

As held in &%e City of +anila v. CoaCola 2ottlers %ilippines, In., #hen a !uniciality or

city has already i!osed a business ta" on !anufacturers, etc. of li:uors, distilled sirits, #ines,and any other article of co!!erce, ursuant to Section 1*+a of the Local Io(ern!ent Code

LIC, said !uniciality or city !ay no longer sub=ect the sa!e !anufacturers, etc. to a

business ta" under Section 1*+h of the sa!e code. Section 1*+h !ay be i!osed only onbusinesses that are sub=ect to e"cise ta", (alue?added ta", or ercentage ta" under the %ational

&nternal 'e(enue Code, and that are not other#ise secified in receding aragrahs.3 5hus,

business already sub=ect to a local business ta" under Section 1* #hich is based on Section

1*+a of the LIC, can no longer be !ade liable for local business ta" under Section 21 #hichis based on Section 1*+h of the LIC. -=e'is% +at% %ilippines In. v. &%e &reasurer of t%e

City of +anila, I.'. %o. 181244, July +, 201+.

July 201" Philippine Supreme Court


Posted on August 1/, 201+by Carina C. LafortezaN Posted in Philiines ? Cases,Philiines ?La#,5a" La#N

Here are select July 201+ rulings of the Sure!e Court of the Philiines on ta" la#$

%ational &nternal 'e(enue Code) (alue?added ta") clai!s for ta" refund or credit. Defore an

ad!inistrati(e clai! for refund or ta" credit can be granted, there !ust be a sho#ing that all

docu!entary and e(identiary re:uire!ents are satisfied. 5he ta"ayer clai!ing the refund !ustco!ly #ith the in(oicing and accounting re:uire!ents !andated by the %ational &nternal

'e(enue 5a" Code, as #ell as the re(enue regulations i!le!enting the!.

5hus, the change of ta"ayer6s na!e to Donifacio I7< 9ater Cororation,3 being

unauthorized and #ithout aro(al of the Securities and actual findings of the Court of 5a" Aeals) gra(e abuse of discretion. &t is doctrinal that the

Sure!e Court #ill not lightly set aside the conclusions reached by the Court of 5a" Aeals
http://sc.judiciary.gov.ph/jurisprudence/2013/july2013/181277.pdfhttps://lexoterica.wordpress.com/2013/08/19/july-2013-philippine-supreme-court-decisions-on-tax-law-2/https://lexoterica.wordpress.com/author/ccllexoterica/https://lexoterica.wordpress.com/category/philippines-cases/https://lexoterica.wordpress.com/category/philippines-cases/https://lexoterica.wordpress.com/category/philippines-law/https://lexoterica.wordpress.com/category/philippines-law/https://lexoterica.wordpress.com/category/tax-law/https://lexoterica.wordpress.com/category/tax-law/http://docs.google.com/viewer?url=http%3A//sc.judiciary.gov.ph/jurisprudence/2013/july2013/175142.pdfhttp://docs.google.com/viewer?url=http%3A//sc.judiciary.gov.ph/jurisprudence/2013/july2013/175142.pdfhttp://sc.judiciary.gov.ph/jurisprudence/2013/july2013/181277.pdfhttps://lexoterica.wordpress.com/2013/08/19/july-2013-philippine-supreme-court-decisions-on-tax-law-2/https://lexoterica.wordpress.com/author/ccllexoterica/https://lexoterica.wordpress.com/category/philippines-cases/https://lexoterica.wordpress.com/category/philippines-law/https://lexoterica.wordpress.com/category/philippines-law/https://lexoterica.wordpress.com/category/tax-law/http://docs.google.com/viewer?url=http%3A//sc.judiciary.gov.ph/jurisprudence/2013/july2013/175142.pdfhttp://docs.google.com/viewer?url=http%3A//sc.judiciary.gov.ph/jurisprudence/2013/july2013/175142.pdf


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C5A #hich, by the (ery nature of its function of being dedicated e"clusi(ely to the resolutionof ta" roble!s, has accordingly de(eloed an e"ertise on the sub=ect unless there has been an

abuse or i!ro(ident e"ercise of authority. &n2arelon, Ro

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