SUSPENSION OF PRESCRIPTIVE PERIODS

a) If before the expiration of the time prescribed for the assessment of the tax, both the commissioner and the taxpayer
have agreed in writing to its assessment after such time, the tax maybe assessed within the period agreed upon.
 Period may be extended by subsequent written agreement made before the expiration of the period
previously agreed upon
 A taxpayer’s renunciation of the right to involve prescription as a defense, although executed beyond the
prescriptive period, is binding upon the taxpayer

Requisites for a valid waiver of the three-year prescriptive period for the BIR to assess taxes due in the taxable
year are prescribed under RMO No. 20-90

1. The waiver must be in the proper form prescribed by RMO 20-90

2. The waiver must be signed by the taxpayer himself/authorized representative
 If the taxpayer if a corporation, waiver must be signed by any of its responsible officers
 In case the authority is delegated by the taxpayer to the representative, such delegation should bein
writing and duly notarized
3. The waiver should be duly notarized
4. The CIR or the revenue official authorized by him must sign the waiver indicating that the BIR has accepted and
agreed to the waiver. The date of such acceptance by the BIR should be indicated. However, before signing the
waiver, the CIR or the revenue official authorized by him must make sure that the waiver is in the prescribed form,
duly notarized and executed by the taxpayer or his duly authorized representative
5. Both the date of the execution by the taxpayer and date of acceptance by the bureau should be before the expiration
of the period of prescription or before the lapse of the period agreed upon in case of a subsequent agreement is
executed
6. The waiver must be executed in three copies, the original copy to be attached to the docket of the case, the second
copy for the taxpayer and the third copy for the office accepting the waiver. The fact of receipt by the taxpayer of
his/her file copy must be indicated in the original copy to show that the taxpayer was notified of the acceptance of the
BIR and the perfection of the agreement.

B. The running of the prescriptive period on the making of an assessment and collection of taxes is likewise suspended when

1. when there is a pending petition for review with the CTA from the decision on the protested assessment, the filing of such petition
interrupts the running of the prescriptive period for collection (Republic v. Ker)

- the filing of a criminal case against the taxpayer does NOT suspend the prescriptive period; criminal actions for tax violation are
entirely separate and distinct from the civil action

2. When the taxpayer requests from reinvestigation which is granted by the commissioner

3. when the taxpayer cannot be located in the address given by him in the return

4. when the warrant of distraint and levy is duly served and no property could be located

5. when the taxpayer is outside of the Philippines

Application

- A request for reconsideration must be made within 30 days from the taxpayer’s receipt of the tax deficiency assessment,
otherwise the assessment becomes final, unappealable and therefore demandable. In this case, the respondent only filed
her reconsideration three years after the tax assessment and the issuance of distraint and levy. Thus, the assessment
had long become due and demandable (Republic of the Philippines v. Salud H. Hizon)
 I. Government Remedies
A. Administrative
 Enforcement of a tax lien
 Compromise/reduction of customs duties
 Seizure and forefeiture
 Distraint of Goods, chattels or effects and other personal property of whatever character including stocks
and other securities, debts, credits bank accounts and interest in and rights to personal property and by
levy upon real property and interest in rights to real property
 Constructive distraint
 Summary Remedies
o Distraint of personal property
o Levy of real property
B. Judicial
1. Civil Action
2. Criminal Action

II. Taxpayer’s Remedies

1. Administrative
a. Protest
b. Abandonment
c. Refund, Drawback, Abatement
d. Payment or Redemption
e. Appeal to the Customs Commissioner
2. Judicial
a. Appeal to the CTA
b. Action to question the legality of the seizure

PPT INFO

III. Government Remedies

C. Administrative
 Enforcement of a tax lien
o Tax lien attaches on the goods regardless of ownership while still in the custody of the
government
o Availed of when the importation is neither prohibited nor improperly made
o Liability for duties, taxes, fees and other charges attached to importation constitutes a personal
debt due and demandable against the importer in favor of the government and shall be
discharged only upon payment of duties, taxes, fees and other charges. It also constitutes a lien
on the imported goods which may be enforced while such goods are under customs duty
 Compromise/reduction of customs duties
o Must be approved by the secretary of finance
o COC (commissioner of customs) may compromise any case arising under the CMTA involving
the imposition of fines and surcharges arising from the conduct of a post clearance audit, unless
otherwise specified by law
o Cases involving forefeiture proceedings shall NOT be subject to any compromise

 Seizure and forefeiture

o FORFEITURE
o Adminstrative fines/forefeitures – available only when the importation is unlawful and may be
exercised when the articles are no longer under the custody of the BOC unless the importation
is merely attempted in which case it may be effected only while the goods are still within the
jurisdiction of the BOC or in the hands of the person who is aware thereof
o The BOC has the primary jurisdiction to conduct searches, seizures and forefeitures of
contraband without interference of the government
 Xpn: search is to be conducted in the dwelling place
 Rationale: The policy of placing unnecessary hindrance on the
government’s drive not only to prevent smuggling and other frauds upon
customs, but more importantly to render effective and efficient the collection
of import and export duties due the state, which enables the government to
carry out the functions it has been instituted to perform
o NOTE: Warehouse does not become a dwelling house merely by
reason of the fact that a person employed as a watchman lives in
her place
o Nature of customs seizure and forfeiture cases
 Administrative and civil in nature
 Directed against the res and imported articles and entail the determination of the
legality of the importation
 Lack of knowledge that the vessel owner’s property was used illegally is only a
personal defense for him, and thus, cannot absolve the vessel from forfeiture
 Main purpose is to enforce administrative fines or forfeiture incident to unlawful
importation of goods or their deliberate possession
 Distinct and separate from the criminal liability that might be imposed against the
indicted importer or possessor and both kinds of penalties may be imposed
 Source: Peo v CFI of Rizal
o When can forfeiture be effected?
 Forfeiture shall be effected only when and while the article is in the custody or within
the jurisdiction of the customs authority
 In the hands or subject to the control of importer/exporter, original owner, consignee,
agent or other person effecting the importation entry or exportation
o Settlement in forefeiture cases is allowed
 Xpn: importation is absolutely prohibited
 Release of the goods is contrary to law
 There is fraud
 The discrepancy duties and taxes to be paid between what is determined and what is
declared amounts to more than 30%
o Application
 Forfeiture proceedings are in rem proceedings and are directed against the res. Thus,
if the vessel is a common carrier good faith cannot be a defense that it has no
knowledge that it was carrying contraband. However, if the vessel is a private carrier
good faith that it had no knowledge, participation in the unlawful act has merit (COC
vss. CTA & Pascual)
 The trial court cannot have any jurisdiction over a vessel when such vessel was
already in possession of the BOC, thus the BOC has jurisdiction to the exclusion of
trial courts (COC vs CA)
 A judicial search warrant is NOT necessary in case of customs search and seizures.
Under the CMTA, a search seizure and arrest may be made even without a warrant
for purposes of enforcing customs and tariff laws (Rieta v. People)
 Xpn: A dwelling house can only be searched upon a warrant issued by the
judge of the regular court and upon a sworn application showing probable
cause and particularly describing the places to be searched and
person/thing to be seized
 Giving of a bond in forefeiture cases does not warrant the release of such items under
the custody of BOC, most especially if such items are prohibited by law
o SEIZURE
 The collector of customs upon probable cause that the articles imported or exported,
or are attempted to be imported or exported or are contrary to TCCP
o Customs officers may seize any vessel, aircraft, cargo, article, animal or other movable property
when the same is subject to forfeiture or liable for any time as imposed under tariff and customs
laws, rules and regulation s
o May exercise such powers only in conformity with the laws and provisions of the CMTA
  Distraint of Goods, chattels or effects and other personal property of whatever character including stocks
and other securities, debts, credits bank accounts and interest in and rights to personal property and by
levy upon real property and interest in rights to real property
 Constructive distraint
 Summary Remedies
o Distraint of personal property
o Levy of real property
 Search
 Arrest
D. Judicial
- Availed of when the tax lien is lost by the release of the goods
- Government can seek payment of the tax liability through judicial action since the tax liability of the importer constituted a
personal debt to the government
- Can either be a Civil Action (ordinary suit for collection of money) or a Criminal Action

TAXPAYER’S REMEDIES

A. Administrative
a. Protest
Customs protest cases
 Cases which deal solely with liability for customs duties, taxes, fees and other charges
 Tax protest case under TCCP involves a protest of the liquidation of import entries
 Filed only in case the liability of the taxpayer for duties, taxes, fees and other charges is determined and
the taxpayer disputes said liability, but if there is no dispute there is no need to file a protest

Requirements for protest

 Writing
 Prints out the particular decision or ruling by the collector of customs to which exception is taken or
objection is made
 States the grounds relied upon for relief
 Limited to the subject matter of a single adjustment
 Filed when the amount claimed is paid or within 15 days after payment
 Sample of goods under protest must be furnished by the protestant when required

Customs protest procedure

 (step 1) Decision of the District Collector

o Protest can be filed upon payment or
o Within 15 days after the decision is made
 (step 2) When the protest is filed in the proper form, the commissioner shall render a decision within 30
days from receipt of the protest
o Either accepted, denied or reassessed

Form and Scope of the protest

 Shall specify the specific decision or ruling of the District Collector for which protest is being made
 Particular ground upon which the protesting party bases the claim for relief
 Limited to the particular goods subject of a good declaration, but any number of issues may be raised in a
protest with reference to the goods declaration constituting the subject matter of the protest

Remedy of the aggrieved party by the decision of the collector

OWNER/IMPORTER GOVERNMENT
 Appeal with the COC within 15 days from  Automatic review by the COC
notice  Automatic review by the secretary of
 Then, appeal with the CTA division within 30 finance
 days from receipt of ruling  Appeal to the CTA division within 30
 Motion for reconsideration or new trial within days from notice
15days from notice  Appeal to CTA en banc
 Petition for review with the CTA en banc  Appeal to SC by certiorari within 15
 Petition for review on certiorari with the SC 15 days
days from notice

NOTE: Rationale of automatic review

 No one is expected to appeal a decision which is favourable to the taxpayer and unfavourable to the
government

Automatic Review in Forfeiture Cases

b. Abandonment
c. Refund, Drawback, Abatement
d. Payment of fine or Redemption
e. Appeal to the customs commissioner
B. Judicial
a. Appeal to the CTA
b. Action to question legality of seizure

I. ARREST
Arrest of Vessel or Aircraft Departing Before Entry Made (Sec. 1209)
 When a vessel or aircraft departs or attempts to depart before entry shall have not been made,
not being thereunto compelled by stress of weather, duress of enemies, or other necessity

II. COMPROMISE
Authority of the Commissioner to Make Compromise (Sec. 1131)
 Scope: administrative cases arising from this act involving the imposition of fines and surcharges
o XPN: unless otherwise provided by law
 Not applicable to forfeiture proceedings

Taxpayer Remedies
1. Protest
2. Abandonment
3. Abatement and Refund
4. Advance Classification Ruling

I. PROTEST
Procedure (Sec. 1106, 1107, 1108, 1109, 1110):
1. Collector makes a ruling on the valuation, rules of origin and other custom issues.
 XPN: fixing of fines in seizure cases
2. Importer files a written protest with the Commissioner at the time of payment or within 15 days
after
 Contents:
1. Specify the particular decision or ruling of the District Collector for which the
protest is being made
 2. Indicate the particular ground or grounds upon which the protesting party bases
the claim for relief
 Scope: limited to the particular goods subject of a goods declaration
3. Commissioner has 30 days to decide the protest
3. In case of adverse decision by the Commissioner, importer files a petition for review before the
CTA Division within 30 days

II. ABANDONMENT
Imported goods are deemed abandoned under any of the following circumstances:
1. Owner, etc. signifies in writing the intention to abandon the same;
2. Owner, etc. fails to file the goods declaration within the prescribed period;
 Subject to due to notice requirement (notice to the consignee)
3. Having filed such good declaration, owner, etc. fails to pay the assessed duties, taxes and other
charges thereon or if the regulated goods failed to comply with Sec. 117 (importation and
exportation permits);
 Subject to due notice requirement
4. Having paid the assessed duties, taxes and other charges, owner, etc. fails to claim the goods
within 30 days from payment; or
 Subject to due notice requirement
5. Owner/importer fails to claim goods in customs bonded warehouses within the prescribed period
(Sec. 1129).

NOTE: Due Notice Requirement

 GR: through electronic notice or personal notice
 XPN: for non-regular importers, by registered mail or service

III. ABATEMENT AND REFUND

Abatement Refund

When goods have not yet been released for consumption or have When duties and taxes have
been placed under another customs procedure, provided that no been overcharged as a result of
other offense or violation has been committed, the declarant shall an error in the assessment or
neither be required to pay the duties and taxes nor be entitled to goods declaration
refund in any of the following cases:
1. When, at the request of the declarant, the goods are Should not be granted if the
abandoned, or as determined by the Bureau, the goods are amount of duties and taxes
destroyed or rendered commercially valueless while involved is less than P5,000 (Sec.
under customs control 903)
2. When goods are destroyed or irrevocably lost by
accident or force majeure, the remaining waste or scrap or Claim (Sec. 913)
scrap after destruction, if taken into consumption, shall be
 Must be in writing and
subject to the duties and taxes that would be applicable on
filed with the BOC within
such waste or scrap if imported in the same state.
12 months from the date
3. When there are shortages due to the nature of goods
of payment of duties and
(Sec. 904)
taxes

Not applicable: Applicable:

1. Damages incurred or deterioration suffered during the 1. In case of clerical errors
voyage of importation (Sec. 905) (Sec. 912)

Applicable:
1. Dead or injured animals (Sec. 910)
 Abatement or refund
1. duty on missing package provided:
1. It is certified by the importer or consignee, under pain of penalty for falsification or perjury
2. Upn production of proof satisfactory to the Collector concerned, that the package in
question has not been unlawfully imported into the Philippines (Sec. 906)
b. Deficiency in contents of packages
1. It is certified by the importer or consignee, under pain of penalty for falsification or perjury
2. Proof showing that the shortage occurred before the arrival of the goods in the
Philippines (Sec. 907)
b. Duties on Goods Lost or Destroyed After Arrival: lost due to injury, theft, destruction through fire
or through any other cases under any of the following circumstances:
1. While within the territory of any port of entry, prior to unloading under the Bureau’s
supervision
2. While remaining in customs custody after unloading
3. While in transit from the port of entry to any port in the Philippines
4. While released under sufficient security for export except in case of loss by theft (Sec.
908)
b. Defective Goods (provided the goods have not been worked, repaired or used and re-
exported/re-imported (Sec. 909)

IV. ADVANCE CLASSIFICATION RULING

 Allows the importer to get a ruling before the importation or exportation of goods
 The application must be filed within 90 days before the importation or exportation of the product
or item.
o Must cover only one product or item
 Can cover:
1. Valuation of the goods
2. Rules of origin
 In case of an adverse ruling, the aggrieved party may appeal the same of the CTA without
prejudice to the authority of the SoF to review decisions adverse to the government