tax must read cases

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For Departmentals AY 15-16


  • TAX MUST READ CASES AY 15-16 | 1

    TAX I Paseo Realty & Development Corporation v. Court of Appeals, GR No. 119286, October 13, 2004 Taxation is described as a destructive power which interferes with the personal and property rights of the people and takes from them a portion of their property for the support of the government. Commissioner of Internal Revenue v. Fortune Tobacco Corporation, 559 SCRA 160 (2008) The power to tax is inherent in the State, such power being inherently legislative, based on the principle that taxes are a grant of the people who are taxed, and the grant must be made by the immediate representative of the people, and where the people have laid the power, there it must remain and be exercised. Mactan Cebu International Airport Authority v. Marcos, 261 SCRA 667 (1996) As an incident of sovereignty, the power to tax has been described as unlimited in its range, acknowledging in its very nature no limits, so that security against its abuse is to be found only in the responsibility of the legislature which imposes the tax on the constituency who are to pay it. PLANTERS PRODUCTS, INC. v. FERTIPHIL CORPORATION, G.R. No. 166006, March 14, 2008 It is a settled principle that the power of taxation by the state is plenary. Comprehensive and supreme, the principal check upon its abuse resting in the responsibility of the members of the legislature to their constituents. Commissioner of Internal Revenue v. SM Prime Holdings, Inc., 613 SCRA 774 (2010) The power to tax is sometimes called the power to destroy. Therefore, it should be exercised with caution to minimize injury to the proprietary rights of the taxpayer. It must be exercised fairly, equally and uniformly, lest the tax collector kills the hen that lays the golden egg. MANILA MEMORIAL PARK, INC. AND LA FUNERARIA PAZ-SUCAT, INC. vs. SECRETARY OF THE DSWD, G.R. No. 175356 (2013). The 20% senior citizen discount and tax deduction scheme are valid exercises of police power of the State absent a clear showing that it is arbitrary, oppressive or confiscatory. The discount is intended to improve the welfare of the senior citizens who, at their age, are less likely to be gainfully employed, more prone to illnesses and other disabilities, and thus, in need of subsidy in purchasing commodities. As to its nature an effects, although the regulation affects the pricing, and, hence, the profitability of a private establishment, it does not purport to appropriate or burden specific properties, used in the operation or conduct of the business of private establishments, for the use or benefit of the public, or senior citizens for that matter, but merely regulates the pricing of goods and services relative to, and the amount of profits or

    income/gross sales that such private establishments may derive from, senior citizens. The State can employ police power measures to regulate the pricing of goods and services, and, hence, the profitability of business establishments in order to pursue legitimate State objectives for the common good, provided, the regulation does not go too far as to amount to taking. SOUTHERN CROSS CEMENT CORPORATION v. CEMENT MANUFACTURERS ASSOCIATION OF THE PHILIPPINES, G.R. No. 158540, August 3, 2005 The motivation behind many taxation measures is the implementation of police power goals. Progressive income taxes alleviate the margin between rich and poor; the so-called sin taxes on alcohol and tobacco manufacturers help dissuade the consumers from excessive intake of these potentially harmful products. ABAKADA GURO PARTY LIST (Formerly AASJAS) OFFICERS SAMSON S. ALCANTARA and ED VINCENT S. ALBANO v. THE HONORABLE EXECUTIVE SECRETARY EDUARDO ERMITA, G.R. No. 168056, September 1, 2005 The expenses of government, having for their object the interest of all, should be borne by everyone, and the more man enjoys the advantages of society, the more he ought to hold himself honored in contributing to those expenses. RENATO V. DIAZ and AURORA MA. F. TIMBOL v. THE SECRETARY OF FINANCE, G.R. No. 193007, July 19, 2011 A tax is imposed under the taxing power of the government principally for the purpose of raising revenues to fund public expenditures; toll fees, on the other hand, are collected by private tollway operators as reimbursement for the costs and expenses incurred in the construction, maintenance and operation of the tollways. Taxes may be imposed only by the government under its sovereign authority, toll fees may be demanded by either the government or private individuals or entities, as an attribute of ownership. PAMBANSANG KOALISYON NG MGA SAMAHANG MAGSASAKA AT MANGGAGAWA SA NIYUGAN v. EXECUTIVE SECRETARY G.R. Nos. 147036-37 April 10, 2012 The Court was satisfied that the coco-levy funds were raised pursuant to law to support a proper governmental purpose. They were raised with the use of the police and taxing powers of the State for the benefit of the coconut industry and its farmers in general. GEROCHI v. DEPARTMENT OF ENERGY, 527 SCRA 696 (2007) The theory behind the exercise of the power to tax emanates from necessity, without taxes, government cannot fulfill its mandate of promoting the general welfare and well being of the people.

  • TAX MUST READ CASES AY 15-16 | 2

    COMMISSIONER OF INTERNAL REVENUE v. ALGUE, INC., and THE COURT OF TAX APPEALS, G.R. No. L-28896, February 17, 1988 Despite the natural reluctance to surrender part of ones hard earned income to the taxing authorities, every person who is able to must contribute his share in the running of the government. The government for its part is expected to respond in the form of tangible and intangible benefits intended to improve the lives of the people and enhance their moral and material values. This symbiotic relationship is the rationale of taxation and should dispel the erroneous notion that it is an arbitrary method of exaction by those in the seat of power. COMMISSIONER OF INTERNAL REVENUE v. ROSEMARIE ACOSTA G.R. No. 154068 August 3, 2007 As well said in a prior case, revenue laws are not intended to be liberally construed. Considering that taxes are the lifeblood of the government and in Holmess memorable metaphor, the price we pay for civilization, tax laws must be faithfully and strictly implemented. SWEDISH MATCH PHILIPPINES INC. v. THE TREASURER OF THE CITY OF MANILA, G.R. No. 181277, July 3, 2013 Double taxation means taxing the same property twice when it should be taxed only once; that is, taxing the same person twice by the same jurisdiction for the same thing. There is indeed double taxation if a taxpayer is subjected to the taxes under both Section 14 (Tax on Manufacturers, Assemblers and other Processors) and Section 21 (Tax on Business Subject to the Excise, Value-Added or Percentage Taxes under the NIRC) of the Tax Ordinance No. 7794. SERAFICA v. CITY TREASURER OF ORMOC, G.R. No. L- 24813, April 28, 1968 Regulation and taxation are two different things, the first being an exercise of police power, whereas the latter involves the exercise of the power of taxation. While R.A. 2264 provides that no city may impose taxes on forest products and although lumber is a forest product, the tax in question is imposed not on the lumber but upon its sale; thus, there is no double taxation and even if there was, it is not prohibited. COMMISSIONER OF INTERNAL REVENUE v. S.C. JOHNSON AND SON, INC. G.R. No. 127105 June 25, 1999 In negotiating tax treaties, the underlying rationale for reducing the tax rate is that the Philippines will give up a part of the tax in the expectation that the tax given up for this particular investment is not taxed by the other country. Thus, if the rates of tax are lowered by the state of source, in this case, by the Philippines, there should be a concomitant commitment on the part of the state of residence to grant some form of tax relief, whether this be in the form of a tax credit or exemption. DEUTSCHE BANK AG MANILA BRANCH v. COMMISSIONER OF INTERNAL REVENUE, G.R. No. 188550, August 19, 2013

    Tax conventions are drafted with a view towards the elimination of international juridical double taxation, which is defined as 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. A corporation who has paid 15% Branch Profit Remittance Tax (BPRT) has the right to avail (by way of refund ) of the benefit of a preferential tax rate of 10% BPRT in accordance with the RP-Germany Tax Treaty despite non-compliance with an application with ITAD at least 15 days before the transaction for the lower rate. Bearing in mind the rationale of tax treaties, the requirements for the application for availment of tax treaty relief as required by RMO No. 1-2000 should not operate to divest entitlement to the relief as it would constitute a violation of the duty required by good faith in complying with a tax treaty. CBK Power Company Limited vs. Commissioner of Internal Revenue/Commissioner of Internal Revenue vs. CBK Power Company Limited, G.R. No. 193383-84/G.R. No. 193407-08 (January 14, 2015). The Philippine Constitution provides for adherence to the general principles of international law as part of the law of the land. The time-honored international principle of pacta sunt servanda demands the performance in good faith of treaty obligations on the part of the states that enter into the agreement. In this jurisdiction, treaties have the force and effect of law. The obligation to comply with a tax treaty must take precedence over the objective of RMO No. 1-2000. Logically, noncompliance with tax treaties has negative implications on international relations, and unduly discourages foreign investors. The objective of RMO No. 1-2000 in requiring the application for treaty relief with the ITAD before a partys availment of the preferential rate under a tax treaty is to avert the con