taxation ii syllabus

8/20/2019 Taxation II Syllabus

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Taxation II 1

Course Outline2

First Semester, S.Y. 2014-2015

Atty. Rosabel Socorro Teston-Balan

J.D., Ateneo Law School

M.B.A. De la Salle University

Week 1

ESTATE TAX

I. THE GROSS ESTATE

Rev. Regs. No. 02-2003, Dec. 16, 2002

A. Introduction

Lorenzo v. Posadas, 64 Phil. 353 (1937)

Beam v. Yatco, 82 Phil. 30 (1948)

B. General Definition of Gross EstateSecs. 85 and 104, NIRC

CIR v. Campos Rueda, 42 SCRA 23 (1971)

C. Constitution

1. Property in Which Decedent Had an Interest

Sec. 85(A), NIRC

2. Transfers in Contemplation of Death

Sec. 85(B), NIRC

3. Transfers Taking Effect at Death

Sec. 85(B), NIRC

BIR Ruling No. 81-98, May 28, 1998BIR Ruling No. 10-03, Sept. 8, 2003

4. Transfers with Retained Interest

Sec. 85(B), NIRC

a. Period for Which Interest is Retained

i. For life

ii. For any period which does not in fact end before death

b. Nature of Interest Retained

i. Possession or enjoyment

ii. Right to income

iii. Right to designate person who shall have possession or enjoyment

iv. Right to designate person who shall receive income

5. Revocable Transfers

Sec. 85(C), NIRC

BIR Ruling No. 013-2005, Aug. 16, 2005

BIR Ruling No. DA-279-2006, April 25, 2006

a. Nature of Power

i. Power to alter or amend


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ii. Power to revoke

iii. Power to terminate

b. Meaning of Power in “Whatever Capacity”

c. Meaning of Power Exercisable in “Conjunction with any Other

Person”

d. Meaning of “Relinquishment of Power in Contemplation of Death”

1 Based on the course outline of Atty. Carlos G. Baniqued in Tax II, Ateneo de Manila University

School of Law, as revised and updated by Atty.

Terence Conrad H. Bello.

2 Additional readings and cases will be required based on recent regulations, rulings and cases

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6. Power of Appointment

Sec. 85(D), NIRC

a. Meaning of “Power of Appointment”

b. Applicability in the Philippines

7. Proceeds of Life InsuranceSec. 85(E), NIRC

a. Estate as Beneficiary

b. Third Person as Beneficiary

II. VALUATION OF ESTATE AND AMOUNT TO BE INCLUDED IN

CASES COVERED BY SECS. 85(B), (C) AND (D) OF THE NIRC

Secs. 85(G) and 88, NIRC

III. EXEMPT TRANSFERS

Sec. 87, NIRC

IV. EXCLUSION OF CONJUGAL SHARE OF SURVIVING SPOUSE

Sec. 85(H), NIRC

Week 2

V. DEDUCTIONS FROM GROSS ESTATE

Sec. 86, NIRC

A. Expenses, Losses, Indebtedness, Taxes, Etc. (ELITE)

1. Funeral Expenses

2. Expenses for Testamentary of Intestate Proceedings

3. Claims Against the Estate

Dizon v. Court of Tax Appeals, G.R. No. 140944, May 6, 2008

4. Claims Against Insolvent Persons5. Unpaid Debts/Mortgages

6. Losses

B. Vanishing Deduction

C. Transfers for Public Use

D. Family Home

E. Standard Deduction

BIR Ruling 009-99, Jan. 22, 1999


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F. Medical Expenses

G. Retirement Benefits and Separation Pay under NIRC Sec. 32(B)(6)(a) and (b)

VI. FOREIGN TAX CREDITS

Sec. 86(E), NIRC

A. Per Country Limitation

B. Global Limitation

VII. SPECIAL RULES FOR NON-RESIDENT ALIENS

A. Meaning of Resident or Non-Resident

B. Inclusions in Gross Estate

Secs. 85 and 104, NIRC

C. Deductions from Gross Estate

Sec. 86(B) and (D), NIRC

D. Foreign Tax Credits

Sec. 86(E), NIRC

VIII. ADMINISTRATIVE PROVISIONS

A. Tax RatesSec. 84, NIRC

B. Notice of Death

Sec. 89, NIRC

C. Estate Tax Return

Sec. 90, NIRC

D. Payment of Estate Tax

Sec. 91, NIRC

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E. Consequences of Non-Payment of Estate Tax

Secs. 248, 249, 94 to 97, NIRCDONOR’S TAX

I. MEANING OF “GIFT”

Sec. 104, NIRC

Pirovano v. CIR, 14 SCRA 832 (1965)

II. VALUATION OF GIFTS

Sec. 102, NIRC

III. TRANSFER FOR LESS THAN ADEQUATE CONSIDERATION

Sec. 100, NIRC

IV. EXEMPT GIFTS

Sec. 101, NIRCV. FOREIGN TAX CREDIT

Sec. 101(C), NIRC

A. Per Country Limitation

B. Global Limitation

VI.ON WHOM IMPOSED

Sec. 98(A), NIRC

VII.ADMINISTRATIVE


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A. Tax Rates

Sec. 99, NIRC

B. Donor’s Tax Return

Sec. 103(A), NIRC

C. Payment of Donor’s Tax

Sec. 103(B), NIRC

D. Consequences of Non-Payment of Donor’s Tax

Secs. 248- Sec. 249, NIRC Sec. 95, NIRC Sec. 97, NIRC

Week 3

VALUE-ADDED TAX

I. TAXABLE TRANSACTIONS

A. In General

Sec. 105, NIRC

BIR Ruling 98-97, Aug. 28, 1997

BIR Ruling No. 18-05, Sept. 16, 2005

VAT Ruling No. 444-88VAT Ruling No. 207-90, Nov. 8, 1990

BIR Ruling No. 10-98, Feb. 5, 1998

CIR v. Commonwealth Mgt. & Services Corp., G.R. 125355, March 30, 2000

VAT Ruling No. 26-97, April 1, 1997

Tourist Trade and Travel Corp. v. CIR, CTA Case No. 4806, Jan. 19, 1996

BIR Ruling No. 113-98, July 23, 1998

Magsaysay Lines, Inc. v. CIR, CTA Case No. 4353, April 27, 1992, aff. in G.R.

No. 146984, July 28, 2006

Lapanday Foods Corp. v. CIR, CTA Case No. 7097, Oct. 18, 2007

CS Garments, Inc. vs. Commissioner of Internal Revenue, CTA Case No. 6520 datedJanuary 4, 2007

Kepco Ilijan Corporation v CIR, CTA Case No. 8091, October 23, 2012

B. Sale of Goods or Properties

1. Transactions Covered

a. Actual Sale

Sec. 106(A)(1), NIRC, as amended by Rep. Act. No. 9337

BIR Ruling 424-2014

b. Transactions Deemed Sale

Sec. 106(B), NIRC, as amended by Rep. Act No. 9337

4Sec. 4.106-7, Rev. Regs. No. 16-2005, Sept. 1, 2005, as amended by Rev.

Regs. No. 4-2007, Feb. 7, 2007

c. Changes in or Cessation of Status of a VAT-Registered Person

Sec. 106(C), NIRC, as amended by Rep. Act. No. 9337

Sec. 4.106-8, Rev. Regs. No. 16-2005, Sept. 1, 2005, as amended by Rev.

Regs. No. 4-2007, Feb. 7, 2007

BIR Ruling No. 24-2005, Dec. 23, 2005


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2. Taxable Base

a. Gross Selling Price

Sec. 106(A)(1), 2nd par., NIRC, as amended by Rep. Act No. 9337


Regs. No. 4-2007, Feb. 7, 2007

b. Sales Discounts, Returns and Allowances

Sec. 106(D), NIRC, as amended by Rep. Act No. 9337

Sec. 4.106-9, Rev. Regs. No. 16-2005, Sept. 1, 2005

VAT Ruling No. 204-90, Oct. 16, 1990

c. Taxable Base for Transactions Deemed Sale and Below Market Gross Selling Price

Sec. 4.106-7(b), Rev. Regs. No. 16-2005, Sept. 1, 2005, as amended by

Rev. Regs. No. 4-2007, Feb. 7, 2007

C. Importation of Goods

Sec. 107, NIRC, as amended by Rep. Act. No. 9337

D. Sale of Services

1. Meaning of “Sale or Exchange of Service”Sec. 108(A), NIRC, as amended by Rep. Act. No. 9337


Lhuillier v. CIR, CTA Case No. 6533, May 16, 2003

Revenue Memorandum Circular 42-2003

BIR Ruling DA 320-07

2. Taxable Base: Gross Receipts Actually and Constructively Received

Sec. 108(A), NIRC, as amended by Rep. Act. No. 9337


Regs. No. 4-2007, Feb. 7, 2007

BIR Ruling No. 195-89, Sept. 8, 1989VAT Ruling No. 111-88, April 25, 1989

VAT Ruling No. 205-90, Oct. 16, 1990

a. Amounts Earmarked for Payment to Third Parties


Regs. No. 4-2007, Feb. 7, 2007

CIR v. Tours Specialists, Inc., G.R. 66416, March 21, 1990

BIR Ruling No. DA-069-2006, March 1, 2006

b. Reimbursement of Expenses


Regs. No. 4-2007, Feb. 7, 2007VAT Ruling No. 283-88, July 4, 1988




Officemetro Philippines, Inc. (formerly Regus Centres, Inc.) vs. Commissioner of Internal

Revenue, CTA Case No. 8382, June 3, 2014, the Court of Tax Appeals – Third Division (CTA)

II. RELIEF FROM VAT: ZERO-RATING AND EXEMPTIONS


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A. Difference Between Zero-Rating and Exemption

Secs. 4.106-5, 1st par., and 4.108-5(a), Rev. Regs. No. 16-2005, Sept. 1, 2005

Cf. Sec. 4.109-1(A), Rev. Regs. No. 16-2005, Sept. 1, 2005

CIR v. Seagate Tech. (Phil.), G.R. 153866, Feb. 11, 2005

Contex Corp. v. CIR, G.R. No. 151135, July 2, 2004

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B. Automatically Zero-Rated Transactions

1. Sale of Goods and Properties

Sec. 106(A)(2)(a)(1), (2), (4) and (b), NIRC, as amended by Rep. Act. No. 9337

Toshiba Information Equipment (Phils) Inc. v CIR GR No. 157594, March 9, 2010

Revenue Regulations No 2-2012, February 17, 2012

BIR Ruling DA 30-07, January 19, 2007

BIR Ruling 031-07 January 19, 2007

2. Sale of Services

Sec. 108(B)(1), (2), (6) and (7), NIRC, as amended by Rep. Act. No. 9337

CIR v. American Express Int’l, Inc. (Phil.), G.R. 152609, June 29, 2005CIR v. Burmeister & Wain Scandinavian Contractor Mindanao, Inc., G.R.

153205, Jan. 22, 2007

3. Meaning of “Accounted for in Accordance with the Rules and

Regulations of the BSP”

BIR Rul. No. 176-94

VAT Ruling No. 47-00, Oct. 26, 2000

C. Effectively Zero-Rated Transactions

1. Sale of Goods and Properties

Sec. 106(A)(2)(3), (5), (6) and (c), NIRC, as amended by Rep. Act No. 9337

Sec. 4.106-6, Rev. Regs. No. 16-2005, Sept. 1, 20052. Sale of Services

Sec. 106(B)(3), (4) and (5), NIRC, as amended by Rep. Act No. 9337


3. Requirement to Obtain Approved Application for Effective Zero-Rating: Deleted by Rev.

Regs. No. 4-2007, Feb. 7, 2007


Regs. No. 4-2007, Feb. 7, 2007 (which deleted par. requiring approved application for

effective zero-rating)


Regs. No. 4-2007, Feb. 7, 2007 (which deleted par. requiring approved application foreffective zero-rating)

D. Exempt Transactions

Sec. 109(1), NIRC, as amended by Rep. Act. No. 9337

1. Coverage of Exemption

a. General Rule

Philippine Acetylene Co., Inc. v. CIR, 20 SCRA 1056 (1967)

Phil. National Police Multi-Purpose Cooperative, Inc. v. CIR, CTA Case


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No. 4845, March 10, 1994

BIR Ruling No. 155-98, Oct. 21, 1998

BIR Ruling No. 47-99, April 13, 1999

VAT Ruling No. 009-07, June 21, 2007

BIR Revenue Regulation No 16-2011, effective January 1, 2012

b. Exception

CIR v. John Gotamco & Sons, Inc., 148 SCRA 36 (1987)

Maceda v. Macaraig, Jr., 223 SCRA 217 (1993)

2. Waiver of VAT Exemption/Election to be Subject to VAT

Sec. 109(2), NIRC, as amended by Rep. Act No. 9337

III. RATES OF VAT

A. For Output Tax

B. For Input Tax

C. Transitional Input Tax

D. Presumptive Input Tax

E. Final Withholding VAT on Government or GOCCsWeek 4

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IV. TAX CREDITS & REFUNDS

A. Input Tax Credit

Sec. 110, NIRC, as amended by Rep. Act. No. 9337, as further amended by

Rep. Act. No. 9361


1. Persons Who Can Avail of the Input Tax Credit

Sec. 110(A)(1)(b) and (A)(2), NIRC, as amended by Rep. Act. No. 9337

Sec. 4.110-2, Rev. Regs. No. 16-2005, Sept. 1, 20052. Special Rules on Amortization of Input Tax on Depreciable Goods

Sec. 110(A), proviso, NIRC, as amended by Rep. Act. No. 9337


Regs. No. 4-2007, Feb. 7, 2007

3. Special Rules on Apportionment of Input Tax on Mixed Transactions

Sec. 110(A)(3), NIRC, as amended by Rep. Act. No. 9337


Regs. No. 4-2007, Feb. 7, 2007

4. Substantiation of Input Tax Credits

Sec. 4.110-8, Rev. Regs. No. 16-2005, Sept. 1, 2005BIR Ruling No. 61-00, Nov. 8, 2000

B. Transitional Input Tax


Sec. 4.111-1(a), Rev. Regs. No. 16-2005, Sept. 1, 2005

C. Presumptive Input Tax

Sec. 111(B), NIRC, as amended by Rep. Act. No. 9337

Sec. 4.111-1(b), Rev. Regs. No. 16-2005, Sept. 1, 2005


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D. Final Withholding VAT

Sec. 114(C), NIRC, as amended by Rep. Act. No. 9337

Sec. 4.114-2(a), Rev. Regs. No. 16-2005, Sept. 1, 2005, as amended by Rev.

Regs. No. 4-2007, Feb. 7, 2007

See Illustration in Sec. 4.110-4, Rev. Regs. No. 16-2005, Sept. 1, 2005, as amended by Rev. Regs.

No. 4-2007, Feb. 7, 2007

E. Claims for Refund or Issuance of Tax Credit Certificates

Sec. 112, NIRC, as amended by Rep. Act. No. 9337

1. Zero-Rated or Effectively Zero-Rated Transactions


2. Cancellation of VAT Registration

Sec. 112(B), NIRC, as amended by Rep. Act. No. 9337

3. Period within which Refund or Tax Credit of Input Tax shall be made

Sec. 112(C), NIRC, as amended by Rep. Act. No. 9337 correlate with Sec. 229, NIRC

Atlas Consolidated Mining and Dev’t. Corp. v. CIR, G.R. Nos. 141104 & 148763, June 8, 2007

CIR v. Aichi Forging Co. of Asia, Inc., G.R. No. 184823, October 6, 2010Commissioner of Internal Revenue vs. Mindanao II Geothermal Partnership G.R. No. 191498

January 15, 2014

Rohm Apollo Semiconductor Philippines v CIR SC First Division GR No. 168950 January 14, 2015

V. COMPLIANCE REQUIREMENTS

A. Registration with the BIR

Sec. 236, NIRC, as amended by Rep. Act No. 9337

1. Mandatory VAT Registration

Sec. 236(G), NIRC, as amended by Rep. Act No. 9337


2. Optional VAT Registration7

Sec. 236(H), NIRC, as amended by Rep. Act No. 9337

Sec. 9.236-1(c), Rev. Regs. No. 16-2005, Sept. 1, 2005

3. Consequence of Failure to Register as a VAT Person

Sec. 236(G)(2), NIRC, as amended by Rep. Act No. 9337

4. Cancellation of VAT Registration

Sec. 236(F), NIRC, as amended by Rep. Act No. 9337


B. Record Keeping Requirements

Sec. 113(C), NIRC, as amended by Rep. Act No. 9337Sec. 4.113-3, Rev. Regs. No. 16-2005, Sept. 1, 2005

C. Invoices and Receipts


1. General Requirements

Sec. 113(A) and (B), NIRC, as amended by Rep. Act No. 9337

Sec. 4.113-1(A) and (B), Rev. Regs. No. 16-2005, Sept. 1, 2005

2. Invoicing and Recording of Deemed Sale Transactions


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3. Consequences of Erroneous Issuance of VAT Invoice or O/R

Sec. 113(D), NIRC, as amended by Rep. Act No. 9337


D. Creditable Withholding Tax


VI. FILING OF RETURN AND PAYMENT OF TAX Sec. 114, NIRC, as amended by Rep. Act No.

9337

Sec. 4.114-1(A), Rev. Regs. No. 16-2005, Sept. 1, 2005

Week 5

OTHER PERCENTAGE TAXES

I. PERSONS/TRANSACTIONS SUBJECT TO PERCENTAGE TAXES

A. Persons Exempt from VAT


B. Domestic Carriers and Keepers of Garages

Sec. 117, NIRC, as amended by Rep. Act No. 9337C. International Carriers

Sec. 118, NIRC

D. Franchises


E. Overseas Dispatch, Message or Conversation

Sec. 120, NIRC

F. Banks and Non-Bank Financial Intermediaries


CIR v. Solidbank Corp., G.R. No. 148191, Nov. 5, 2003

G. Finance CompaniesSec. 122, NIRC

H. Life Insurance Premiums

Sec. 123, NIRC

I. Agents of Foreign Insurance Companies

Sec. 124, NIRC

J. Amusement

Sec. 125, NIRC

K. Winnings

Sec. 126, NIRC

L. Stock Transactions in Philippine Stock ExchangeSec. 127, NIRC

II. RETURNS AND PAYMENT OF PERCENTAGE TAX

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Sec. 128, NIRC

EXCISE TAX

I. GOODS SUBJECT TO EXCISE TAX

A. In General


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Sec. 129, NIRC

B. Alcohol Products

Secs. 141 – 143, NIRC, as amended by Rep. Act No. 9334

C. Tobacco Products

Secs. 144 – 145, NIRC, as amended by Rep. Act No. 9334

Secs. 146 – 147, NIRC H. Petroleum Products


D. Miscellaneous Articles

1. Automobiles

Sec. 149, as amended by Rep. Act No. 9224

2. Non-Essential Goods

Sec. 150, NIRC

E. Mineral Products


F. Petroleum Products

CIR v Pilipinas Shell Petroleum Corporation SC First Division G.R. No. 188497 February 19, 2014II. PAYMENT OF EXCISE TAXES

Sec. 130, NIRC


Secs. 132 – 140, NIRC

]III. ADMINISTRATIVE REQUIREMENTS

Sec. 130(C), NIRC

Secs. 152 – 172, NIRC

DOCUMENTARY STAMP TAX

I. IN GENERAL

Sec. 173, NIRCCIR v. Heald Lumber, 10 SCRA 372

Michel J. Lhuillier Pawnshop, Inc. v. CIR, G.R. No. 166786, May 3, 2006

II. TRANSACTIONS/DOCUMENTS SUBJECT TO DST

A. Original Issuance of Shares


B. Transfer of Shares


Compagnie Financiere Sucres et Deneres v. CIR, G.R. No. 133834, Aug. 28, 2006

C. Foreign-Issued Bonds, Debentures, Shares or Certificates of Indebtedness, and Other

InstrumentsSec. 176, NIRC

D. Issue and Transfer of Certificate of Interest in Property or Accumulations

Sec. 177, NIRC

E. Bank Checks, Drafts, Certificates of Deposit not Bearing Interest

Sec. 178, NIRC

F. Debt Instruments



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Banco de Oro Universal Bank v. CIR, CTA Case No. 6588, Aug. 5, 2005

Belle Corp. v. CIR, CTA Case No. 6156, June 17, 2005

Filinvest Dev corp v CIR 16353 167687

G. Bills of Exchange or Drafts


H. Acceptance of Foreign-Drawn Bills of Exchange

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Sec. 181, NIRC

I. Foreign Bills of Exchange and LCs

Sec. 182, NIRC

J. Life Insurance Policies


BIR Ruling No. DA-182-2005, April 20, 2005

K. Non-Life Insurance Policies

Sec. 184, NIRC

BIR Ruling No. DA-288-2005, June 27, 2005L. Fidelity Bonds and Other Insurance Policies

Sec. 185, NIRC

M. Annuities and Pre-Need Plans


N. Indemnity Bonds

Sec. 187, NIRC

O. Certificates

Sec. 188, NIRC

P. Warehouse Receipts

Sec. 189, NIRCQ. Jai-Alai, Horse Race, Lotto, etc.

Sec. 190, NIRC

R. Bills of Lading or Receipts

Sec. 191, NIRC

S. Proxies

Sec. 192, NIRC

T. Powers of Attorney

Sec. 193, NIRC

U. Leases of Real Property

Sec. 194, NIRCV. Mortgages, Pledges and Deeds of Trust

Sec. 195, NIRC

W. Deed of Sale of Real Property

Sec. 196, NIRC

BIR Ruling No. DA-076-2005

BIR Ruling No. DA-084-2005, March 14, 2005

BIR Ruling No. DA-065-2005, Feb. 23, 2005


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BIR Ruling No. DA-640-2004, Dec. 17, 2004

BIR Ruling No. DA-648-2004, Dec. 21, 2004

BIR Ruling 079-2014

CIR v Shell GR 192398 September 29, 2014

X. Charter Party and Similar Instruments

Sec. 197, NIRC

Y. Assignment, Transfer, and Renewal of Certain Instruments

Sec. 198, NIRC

III. TRANSACTIONS/DOCUMENTS NOT SUBJECT TO DST


BIR Ruling No. DA-244-2005, June 7, 2005

Belle Corp. v. CIR, CTA Case No. 6156, June 17, 2005

IV. PAYMENT OF DST

Sec. 200, NIRC

V. EFFECT OF NON-PAYMENT OF DST Sec. 201, NIRC

Week 6RIGHTS AND REMEDIES OF THE GOVERNMENT UNDER THE NATIONAL INTERNAL

REVENUE CODE

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I. EXAMINATION AND AUDIT OF RETURNS

A. Statutory Basis

Secs. 5 and 6, NIRC

II. BIR’S INVESTIGATIVE AUTHORITY

A. Statutory Basis

1. Administrative Summons to Taxpayer

Sec. 5(C), (D), NIRCSec. 6(C), NIRC

2. Third-Party Summons

Sec. 5(B), (C), NIRC

B. Informer’s Reward

Sec. 282, NIRC

BIR Rul. No. 071-00, Dec. 18, 2000

Meralco Securities Corp. v. Savellano, 117 SCRA 804 (1982)

Fitness by Design, Inc. v. CIR, G.R. No. 177982, Oct. 17, 2008

III. BIR’S POWER TO MAKE ASSESSMENTS

A. Upon Examination of Returns FiledSec. 6(A), NIRC

B. In Case of Failure to Submit Required Reports

Sec. 6(B), NIRC

C. After Inventory Taking or Surveillance

Sec. 6(C), NIRC

D. Where CIR Terminates Taxpayer’s Taxable Period

Sec. 6(D), NIRC


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E. Prescribe Zonal Value

Sec. 6(E), NIRC

CIR v. Aquafresh Seafoods, Inc., G.R. No. 170389, Oct. 20, 2010

F. Issuance of Pre-Assessment Notice

Sec. 228, NIRC

Sec. 3, Rev. Regs. No. 12-99, Sept. 6, 1999

G. Issuance of Final Assessment Notice

Sec. 228, NIRC


1. What Constitutes an Assessment

CIR v. Pascor Realty and Dev. Corp., 309 SCRA 402 (1999)

Fort Bonifacio Dev. Corp. v. CIR, CTA Case No. 5665, Aug. 11, 2000

Republic v. Court of Appeals, 149 SCRA 351 (1987)

2. Presumption of Correctness of Assessment

Sy Po v. CTA, 164 SCRA 524 (1988)

3. Assessment Must be Based on Actual FactsCIR v. Benipayo, 4 SCRA 182 (1962)

Chemical Industries of the Phil., Inc. v. CIR, CTA Case No. 5257, Oct. 29,1998

4. Assessment Issued Outside Scope of Letter of Authority

Sony Philippines, Inc. v. CIR, CTA Case No. 6185, Oct. 26, 2004

Week 7 MIDTERMS

WEEK 8

IV. COLLECTION OF UNPAID TAXES

A. Distraint, Garnishment, Levy and Seizure

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Secs. 205-217, 224-225 NIRCSec. 202, NIRC

B. Civil Action

Sec. 205, NIRC

Sec. 220, NIRC

Sec. 7(b)(2)(c), Rep. Act. No. 1125, as amended by Rep. Act. No. 9282

Sec. 11, Rep. Act. No. 1125, as amended by Rep. Act. No. 9282

Republic v. Lim Tian Teng Sons & Co., 16 SCRA 584 (1966)

San Juan v. Vasquez, 3 SCRA 92 (1961)

Yabes v. Flojo, L-46954, July 20, 1982

C. Criminal ActionSec. 220, NIRC

CIR v. Pascor Realty and Dev. Corp., supra

Republic v. Patanao, 20 SCRA 712 (1967)

Ungab v. Cusi, G.R. No. L-41919-24, May 30, 1980

D. Anti-Injunction Rule

1. General Rule

Sec. 218, NIRC


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Churchill v. Rafferty, 32 Phil. 580 (1915)

CIR v. Cebu Portland Cement Co., 156 SCRA 535, 541 (1987)

2. Exception


Rule 10, Revised Rules of the CTA (S.C. A.M. No. 05-11-07-CTA, Nov. 2005)

E. Nature and Extent of Tax Lien

Sec. 219, NIRC

F. Compromise and Abatement

Sec. 204(A) and (B), NIRC

BIR Ruling No. 111-99, July 22, 1999

BIR Ruling No. 059-01, Dec. 20, 2001

V. IMPOSITION OF SURCHARGE, INTEREST, AND COMPROMISE PENALTY

A. Civil Penalties

Sec. 248, NIRC

Secs. 250-252, NIRC

Secs. 4 & 5, Rev. Regs. No. 12-99, Sept. 6, 1999CIR v. Javier, Jr., 199 SCRA 824, 831 (1991)

CIR v. Japan Air Lines, 202 SCRA 450, 458 (1991)

PICOP v. CIR, CTA Case No. 3215, Feb. 15, 1987

CIR v. Pilipinas Shell Petroleum Corporation, CTA E.B. No. 64 (CTA Case

No. 6003), April 28, 2006

BIR Ruling No. 002-95, Jan. 6, 1995

BIR Ruling No. 048-99, April 13, 1999

BIR Ruling No. 205-99, Dec. 28, 1999

BIR Ruling No. 078-98, May 28, 1998

B. InterestSec. 249, NIRC


Cagayan Electric v. CIR, 138 SCRA 629 (1985)

Republic v. Heras, 32 SCRA 507, 513-514 (1970)

C. Compromise Penalty


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CIR v. Lianga Bay Logging Co., Inc., 193 SCRA 86, 92-93 (1991)

Atlas Consolidated Mining & Dev. Corp. v. CIR, CTA Case No. 5671, Aug.

29, 2002Week 9

RIGHTS AND REMEDIES OF TAXPAYER UNDER THE NATIONAL INTERNAL REVENUE CODE

I. AMEND TAX RETURN

Sec. 6(A), NIRC, last paragraph

Rev. Mem. Cir. No. 40-2003, July 3, 2003

II. PROTEST ASSESSMENT

A. Procedure


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Rev. Regs. No. 12-85, Nov. 27, 1985


B. Notice of Informal Conference

Revenue Regulations 18-2013


C. Preliminary Assessment Notice (PAN) Sec. 228, NIRC

Pier 8 Arrastre and Stevedoring Services v. CIR, CTA Case No. 3789, Aug. 1,1991

1. Exceptions

Sec. 228(a) to (e), NIRC

2. Effect of Failure to Receive PAN

CIR v. Menguito, G.R. No. 167560, Sept. 17, 2008

CIR v. Metro Star Superama, CTA EB Case No. 306, Sept. 16, 2008

D. Final Assessment Notice

Sec. 228, NIRC

CIR v Basf Coating +Inks Phils Inc. SC 3rd Division GR No. 198677 November 26 2014

E. Requirement to Inform Taxpayer of Factual and Legal Basis of AssessmentSec. 228, NIRC

CIR v. Reyes, G.R. No. 159694, Jan. 27, 2006

CIR v. Enron Subic Power Corp., G.R. No. 166387, Jan. 19, 20

Australasia Cylinder Corp. v. CIR, CTA Case No. 6014, Aug. 14, 2002

Abbot Laboratories v. CIR, CTA Case No. 5718, Feb. 16, 2001

PNZ Marketing v. CIR, CTA Case No. 5726, Dec. 14, 2001

Sevilla v. CIR, CTA Case No. 6211, Oct. 4, 2004

FMF Development Corp. v. CIR, CTA Case No. 6153, March 20, 2003

Subic Power Corp. v. CIR, CTA Case No. 6059, May 8, 2003

Phil. Mining Service Corp. v. CIR, CTA Case No. 5725, July 25, 2002Oceanic Wireless Network v. CIR, CTA Case No. 6111, Nov. 3, 2004

F. Submission of Supporting Documents

Sec. 228, NIRC

1. Effect of Non-Compliance

Sec. 228, NIRC, 4th par.

2. What Constitutes “Relevant Supporting Documents”

G. Tambunting Pawnshop, Inc. v. CIR, CTA Case No. 6238, Oct. 8, 2004

CIR v. First Express Pawnshop Co., Inc., G.R. No. 172045-46, June 16, 2009

H. Effect of Failure to File Protest

Sec. 228, NIRC13

Dayrit v. Cruz, 165 SCRA 571 (1988)

Week 10

III. IN CASE OF DENIAL OF PROTEST OR INACTION, APPEAL TO CTA

A. Scope of Jurisdiction of CTA/What is Appealable to CTA

Sec. 4, 2nd par., NIRC Sec. 228, NIRC

Sec. 7, Rep. Act No. 1125, as amended by Rep. Act No. 9282


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CIR v. Villa, 22 SCRA 4 (1968)

B. Application of 180-day Rule

Sec. 3(a)(2), Rule 4 and Sec. 3(a), Rule 8, Revised Rules of the CTA (S.C. A.M.

No. 05-11-07-CTA, Nov. 22, 2005)

Lascona Land Co., Inc. v. CIR, CTA Case No. 5777, Jan. 4, 2000

Rizal Commercial Banking Corp. v. CIR, G.R. No. 168498, April 24, 2007

C. What Constitutes Denial of Protest/Decision on Disputed Assessment

1. General Rule

2. Issuance of Revised Assessment Upon Reinvestigation

Avon Products Mfg., Inc. v. CIR, CTA Case No. 5908, Jan. 20, 2005

3. Final Notice Before Seizure

CIR v. Isabela Cultural Corp., 361 SCRA 71 (2001)

4. Final Demand Letter

CIR v. Ayala Securities Corp., 70 SCRA 204 (1976)

Surigao Electric Co. Inc. v. CTA, 57 SCRA 523 (1974)

5. Filing of Collection SuitCIR v. Union Shipping Corp., 185 SCRA 547 (1990)

6. Referral to Solicitor General for Collection

Republic v. Lim Tian Teng Sons & Co., supra

7. Issuance of Warrant of Distraint and Levy

Central Cement Corporation v. CIR, CTA Case No. 4312, Sept. 1, 1993

CIR v. Algue, Inc., 158 SCRA 9 (1988)

Advertising Associates, Inc. v. CA, 133 SCRA 765 (1984)

D. Period to Appeal/Effect of Failure to Appeal

Sec. 228, last par., NIRC

Sec. 11, Rep. Act. No. 1125, as amended by Rep. Act. No. 9282St. Stephen’s Association v. Collector of Internal Revenue, 104 Phil. 314 (1958)

Roman Catholic Archbishop of Cebu v. Collector, 4 SCRA 279 (1962)

Pantranco v. Blaquera, 107 Phil. 975 (1960)

Basa v. Republic, 138 SCRA 34 (1985)

Mambulao Lumber Co. v. CIR, 132 SCRA 1 (1984)

E. Mode of Appeal and Effect of Appeal

1. Appeal to a Division of the CTA


2. Appeal to CTA En Banc

Sec. 18, Rep. Act. No. 1125, as amended by Rep. Act. No. 9282IV. APPEAL TO SUPREME COURT


Week 11

V. REFUND AND/OR TAX CREDIT OF ERRONEOUSLY PAID TAX

14

A. What Constitutes Erroneous Payment

CIR v. Central Azucarera Don Pedro, 49 SCRA 474 (1973)


17/24

B. Requirement of Filing Administrative Claim

Sec. 229, NIRC Sec. 204(C), NIRC

Bermejo v. Collector, 87 Phil. 96 (1950)

Andrea Vda. De Aguinaldo v. CIR, 13 SCRA 269 (1965)

Chemical Industries of the Phil., Inc. v. CIR, CTA Case No. 5887, Aug. 8, 2000

C. Exception to Requirement of Filing Administrative Claim

Sec. 229, NIRC, proviso, last paragraph

Sec. 204(C), NIRC

D. Effect of Supervening Event

Sec. 229, NIRC

Manila Electric Co. v. CIR, CTA Case No. 7107, October 16, 2006

CIR v. Central Azucarera Don Pedro, supra

E. Offsetting Against Deficiency Tax Assessments

CIR v. Cebu Portland Cement Co., 156 SCRA 535, 541 (1987) BPI Securities Corp. v. CIR, CTA

Case No. 6089, Aug. 22, 2002

FNCB Finance v. CIR, CTA Case No. 3717, May 10, 1993F. Whether Government is Liable for Interest, Attorney’s Fees, Etc.

Philex Mining Corp. v. CIR, et. al., 306 SCRA 126 (1999) G. Taxes Not Subject of Set-Off

Francia v. IAC, 162 SCRA 753 (1988) BIR Ruling No. 415-93, Oct. 15, 1993

VI. APPEAL IN CASE OF DENIAL OF REFUND/TAX CREDIT CLAIM

A. CTA (Division and En Banc)

Sec. 4, 2nd par., NIRC

Sec. 7(a)(1), (2), Rep. Act. No. 1125, as amended by Rep. Act. No. 9282



B. Supreme CourtSec. 19, Rep. Act. No. 1125, as amended by Rep. Act. No. 9282

Week 12

VII. STATUTE OF LIMITATIONS

A. Period to Assess

Secs. 203, 222, 223 NIRC

1. When is an Assessment Deemed Made?

Basilan Estates, Inc. v. CIR, 21 SCRA 17 (1967)

2. Effect of Filing an Amended Return

CIR v. Phoenix Assurance Co., Ltd., L-19127, May 20, 1965

3. Effect of Filing a Wrong ReturnButuan Sawmill, Inc. v. CTA, L-20601, Feb. 28, 1966

4. How Prescriptive Period is Counted

CIR v. Primetown Prop. Group, Inc., G.R. No. 162155, August 28, 2007

5. Ordinary Prescription

Sec. 203, NIRC

6. Extraordinary Prescription

a. False/Fraudulent Return or No Return


18/24

Sec. 222(a), NIRC

Taligaman Lumber Co., Inc. v. CIR, 4 SCRA 842, 847 (1962)

15

Aznar v. CTA, 58 SCRA 519 (1974)

CIR v. BF Goodrich Phil., Inc., 303 SCRA 546 (1999)

CIR v. Ayala Hotels, CA-G.R. SP No. 70025, April 19, 2004

b. Waiver of Prescriptive Period

Sec. 222(b), NIRC

Republic v. Acebedo, 22 SCRA 1356 (1968) CIR v. CA, et. al., 303 SCRA 614 (1999)

Philippine Journalists, Inc. v. CIR, 447 SCRA 214 (2004)

Pfizer, Inc. v. CIR, CTA Case No. 6135, April 21, 2003

c. Suspension of Prescriptive Period

Sec. 223, NIRC

Continental Micronesia, Inc. - Phil. Branch v. CIR, CTA Case No. 6191, March 22, 2006

B. Period to Collect

Secs. 203, 222, 223, NIRCRepublic v. Ablaza, 108 Phil. 1105 (1960)

Palanca v. CIR, 4 SCRA 263 (1962)

Republic v. Ker & Co. Ltd., 18 SCRA 208 (1966)

Republic v. Hizon, 320 SCRA 574 (1999)

CIR v. Wyeth Suaco Laboratories, Inc. and CTA, 202 SCRA 125, 131 (1991)

Bank of the Phil. Islands v. CIR, G.R. No. 139736, Oct. 17, 2005

CIR v. Hambrecht & Quist Phil., Inc., CTA E.B. No. 73 (CTA Case No. 6362), Aug. 12, 2005

C. Period to File Protest

Sec. 228, NIRC

D. Period to Appeal Decision on Disputed Assessment to CTASee III(D) above

E. Period to File Refund or Tax Credit Claim

Sec. 204(C), NIRC Sec. 229, NIRC

Collector v. Sweeney, 109 Phil. 59 (1959)

Gibbs v. CIR, 107 Phil. 232 (1960)

CIR v. CA, et. al., 301 SCRA 435 (1999)

ACCRA Investments Corp. v. CA, G.R. No. 96322, Dec. 20, 1991

CIR v. TMX Sales, Inc., G.R. No. 83736, Jan. 15, 1992

1. How Is Two-Year Prescriptive Period Counted

CIR v. Primetown Prop. Group, Inc., supraF. Period to Prosecute Violations of any Provisions of NIRC Sec. 281, NIRC

Lim v. CA, 190 SCRA 616 (1990)

VIII. APPEAL OF RULINGS TO DOF, NON-RETROACTIVITY

A. Power of Review of DOF over Rulings

Sec. 4, 1st par., NIRC (distinguish from appeal of “other matters” to CTA

under the 2nd par. of Sec. 4)

CIR v. Leal, 392 SCRA 9 (2002)


19/24

B. Non-Retroactivity of Revocation of Rulings or Regulations

Sec. 246, NIRC

CIR v. Burroughs Ltd., G.R. No. 66653, June 19, 1986

PBCom v. CIR, 302 SCRA 241 (1999) ABS-CBN v. CTA, 108 SCRA 142 (1981)

Week 13

LOCAL GOVERNMENT CODE

I. GENERAL PRINCIPLES

16

A. Local Autonomy

Sec. 129, Local Government Code of 1991 (“LGC”)

Mactan Cebu Int’l Airport Authority v. Marcos, G.R. No. 120082, Sept. 11,1996

Manila Electric Co. v. Prov. of Laguna, G.R. No. 131359, May 5, 1999

B. Fundamental Principles

Sec. 130, LGC

Pepsi Cola Bottling Co. of the Phils., Inc. v. Mun. of Tanauan, L-31156, Feb. 27, 1976

Ormoc Sugar Co., Inc. v. Mun. Board of Ormoc City, L-24322, July 21, 1967Asiatic Integrated Corporation v. Alikpala, 72 SCRA 285

Matalin Coconut Co. v. Mun. Council of Malabang, 143 SCRA 404

C. Common Limitations on Taxing Powers of LGUs

Sec. 133, LGC

Prov. of Bulacan v. CA, G.R. No. 126232, Nov. 27, 1998

Phil. Petroleum Corp. v. Mun. of Pililla, G.R. No. 90776 June 3, 1991

San Miguel Corp. v. Mun. Council of Mandaue, L-30761, July 11, 1973

II. SCOPE OF TAXING POWERS OF LGUS

A. Province

Secs. 135-141, LGCB. Municipality

Secs 142-143, LGC

C. City

Sec. 151, LGC

Art. 237, IRR

D. Barangay

Sec. 152, LGC

III. COMMUNITY TAX CERTIFICATE (CTC)

A. Who are liable

Secs. 157-159, LGC Art. 246, IRRB. Exemptions

Sec. 159, LGC

C. Place and time of payment of tax

Secs. 160-161, LGC

IV. TIME, MANNER AND PLACE OF PAYMENT OF LOCAL BUSINESS TAX

A. Time of payment

1. General rule


20/24

Secs. 165-167, LGC

2. In case of new ordinance levying new tax or increasing rates

Sec. 166, LGC

3. In case of retirement of business

Sec. 145, LGC Art. 241, IRR

B. Manner of payment


Standard Vacuum Oil Co. v. Antigua, 96 Phil. 909

Ali Nam v. City of Manila, 109 Phil. 808

C. Place of payment

1. Location of branch or sales outlet

Sec. 150(a), LGC Art. 243, IRR

2. Allocation to 2 or more LGUs

Sec. 150(b) to (e), LGC Art. 243, IRR

3. Sales by route trucks or vans

Art. 243(d), IRRV. ENACTMENT OF TAX ORDINANCES AND OTHER REVENUE MEASURES

A. Public hearing

Sec. 186, last proviso, LGC Sec. 187, LGC

Art. 275, IRR

17

Figueras v. CA, G.R. No. 119172, March 25, 1999

Tuzon v. CA, 212 SCRA 739, 745 (1992)

B. Publication


Figueras v. CA, et. al., supraC. Appeal to Secretary of Justice

Sec. 187, LGC

Reyes, et. al. v. CA, G.R. No. 118233, Dec. 10, 1999

Drilon v. Lim, G.R. No. 112497, Aug. 4, 1994

Hagonoy Market Vendor Assoc. v. Mun. of Hagonoy, Bulacan, 376 SCRA 376

D. Appeal to court of competent jurisdiction

Id.

E. Effect of appeal

Id.

VI. REMEDIES OF LOCAL GOVERNMENT AND TAXPAYERA. Remedies of local government

1. Examination of taxpayer’s books of accounts

Sec. 171, LGC

2. Issuance of deficiency assessment

Sec. 195, LGC Sec. 194, LGC

3. Imposition of surcharge and interest

Secs. 168-169, LGC


21/24

4. Summary remedies

a. Distraint of personal property

Sec. 175, LGC

b. Levy on real property

Secs. 176, 178-182, LGC

c. Further distraint and levy

Sec. 184, LGC

5. Judicial remedy (Collection) Sec. 183, LGC

B. Remedies of taxpayer

1. Protest of assessment


California Mfg. Co., Inc. v. City of Las Piñas, CTA AC No. 4, Sept. 28,2005

2. Claim for refund or tax credit


VII. AUTHORITY OF LGUS TO GRANT TAX EXEMPTION PRIVILEGES

Sec. 192, LGC and Art. 282, IRRSee also Sec. 193, LGC and Art. 283, IRR re. withdrawal of existing tax exemption privileges

Week 14

REAL PROPERTY TAXATION

I. GENERAL PRINCIPLES AND DEFINITIONS

Sec. 198, LGC

Sec. 199, LGC

Reyes v. Almanzor, 196 SCRA 322 (1991)

Meralco v. Central Board of Assessment Appeals (CBAA), 114 SCRA 260 (1982)

Caltex Phils. Inc. v. CBAA, 114 SCRA 296

Benguet Corp. v. CBAA, 218 SCRA 271 (1993)Prov. of Nueva Ecija v. Imperial Mining Co., Inc., 118 SCRA 632 (1982)

Ty v. Trampe, 250 SCRA 500 (1995)

Lopez v. City of Manila, 303 SCRA 448 (1999)

II. REAL PROPERTY TAX AND ADDITIONAL OR SPECIAL LEVIES

A. Basic real property tax

Sec. 233, LGC

18

Lopez v. City of Manila, supra

B. Special Education Fund (SEF)

Sec. 235, LGCC. Tax on idle lands

Secs. 236-237, LGC

D. Special levy due to improvements

Secs. 240-243, LGC

III. EXEMPTIONS FROM REAL PROPERTY TAX Sec. 234, LGC

Light Rail Transit Authority v. CBAA, 342 SCRA 692 (2000)

IV. PAYMENT OF REAL PROPERTY TAX AND SPECIAL LEVIES


22/24

A. Date of accrual

Sec. 246, LGC Sec. 245, LGC

B. Payment on installment

Sec. 250, LGC

C. Discount for Advance Payment

Sec. 251, LGC

VI. APPRAISAL AND ASSESSMENT OF REAL PROPERTY

A. Appraisal

Sec. 201, LGC (Real Property)

Secs. 224-225, LGC (Machineries)

1. Voluntary

Secs. 202-203, LGC

See also Sec. 208, LGC

2. Involuntary

Sec. 204, LGC

See also Sec. 213, LGCAllied Banking Corp. v. QC Gov’t, 472 SCRA 303 (2005)

B. Assessment

1. Classifying real property

Sec. 217, LGC

Secs. 215-216, LGC

2. Assessment levels

Sec. 218, LGC

3. General revision

Sec. 219, LGC

Art. 310, IRRLopez v. City of Manila, supra

4. Reassessment

Sec. 220, LGC

Sec. 221, LGC

Callanta v. Office of the Ombudsman, 285 SCRA 648 (1998)

Meralco v. Barlis, 375 SCRA 570 (2002)

VI. REMEDIES OF LOCAL GOVERNMENT

A. Posting of notice of delinquency

Sec. 254, LGC

B. Imposition of interestSec. 255, LGC

C. Administrative remedies

Secs. 256-257, LGC

Secs. 258-265, LGC

D. Judicial action (collection)

Sec. 256, LGC

Sec. 266, LGC


23/24

Sec. 270, LGC

E. Unpaid tax constitutes a lien

19

Sec. 257, LGC

VII. REMEDIES OF TAXPAYER

A. Dispute assessment

1. Appeal to local Board of Assessment Appeals

Sec. 226, LGC

Callanta, et. al. v. Office of the Ombudsman, supra

2. If denied, appeal to Central Board of Assessment Appeals

Sec. 229(c), LGC

3. If denied, appeal to Court of Tax Appeals

Sec. 7, Rep. Act No. 1125, as amended by Rep. Act No. 9282

4. Effect of appeal

Sec. 231, LGC

B. Payment under protestSec. 252, LGC Art. 343, IRR

Camp John Hay Dev’t Corp. v. CBAA, CTA E.B. No. 48 (CBAA Case No. L-37; Tax Appeal Case

No. 2002-2003 Board of Tax Assessment Appeals, Baguio City), July 27, 2005

National Power Corp. v. Prov. of Quezon and Mun. of Pagbilao, CTA E.B. No. 46 (CBAA Case

No. L-29)

C. Claim for refund or credit

Sec. 253, LGC

China Banking Corp. v. City Treasurer of Kalookan, CTA Case AC No. 12, Aug. 31, 2005

Week 15

TARIFF AND CUSTOMS CODEI. Introduction

II. Basis of Assessment of Duty

A. Basis of dutiable value

Sec. 201, TCCP

B. Basis of dutiable weight

Sec. 202, TCCP

III. Special Duties

A. Anti-Dumping Duty

Sec. 301, TCCP

B. Countervailing DutySec. 302, TCCP

C. Marking Duty

Sec. 303, TCCP

D. Discriminating Duty

Sec. 304, TCCP

IV. Ascertainment and Collection of Import Duty

A. When importation begins and deemed terminated


24/24

Sec. 1202, TCCP

B. Who is deemed owner of imported articles

Sec. 1203, TCCP

C. Liability of importer for duties

Sec. 1204 ,TCCP

V. Remedies of Government

A. Search, seizure and arrest

Secs. 2202-2212, TCCP

Secs. 2301-2306, TCCP

B. Impose surcharges, fines and forfeitures

Sec. 2307, TCCP

Secs. 2501-2536, TCCP

C. File civil or criminal action

Sec. 2401, TCCP

20

D. Impose fine and imprisonmentSecs. 3601-3612, TCCP

E. Compulsory Acquisition

Sec. 2317, TCCP

F. Automatic review by Secretary of Finance of adverse ruling

Sec. 2313, TCCP

VI. Remedies of Importer

A. Payment under protest

Secs. 2308-2312, TCCP

B. Appeal to Commissioner of Customs

Sec. 2313, TCCPC. Compromise

Sec. 2316, TCCP

Week 16 -Finals