TAXATION LAWS 1

GENERAL PRINCIPLES OF TAXATION

I. Definition of Taxation

1. City of Milwaukee v. Milwaukee and Suburban Transport

Corporation, 6 Wis. 2d 299 (1959), see its citation of 51 Am.
Jur., Taxation, p. 34, Section 2.

II. Characteristics of Taxation

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

III. Theories in Taxation

1. Lifeblood Theory

2. Necessity Theory

3. Benefits-Protection Theory

4. Symbiotic Relationship Theory

5. Cases:
a. Commissioner Of Internal Revenue v. Algue, Inc., and
The Court Of Tax Appeals, G.R. No. L-28896, February
17, 1988
b. Commissioner Of Internal Revenue v. Pilipinas Shell
Petroleum Corporation, G.R. No. 197945, July 09, 2018
c. CIR v. Nippon Express Phils., 771 SCRA 27
d. CIR V. Dash Engineering Philippines, 712 SCRA 347

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IV. Nature of Taxation

1. Attribute of Sovereignty
a. The Philippine Guaranty Co., Inc. v. The Commissioner
Of Internal Revenue And The Court Of Tax
Appeals, G.R. No. L-22074, April 30, 1965
b. Batangas City v. Pilipinas Shell Petroleum
Corporation, G.R. No. 187631, July 8, 2015
c. Film Development Council Of The Philippines v. Colon
Heritage Realty Corporation, G.R. No. 203754, June 16,
2015

2. Legislative
a. Pepsi Cola Bottling Co. of the Phils. Inc. vs Municipality
of Tanauan, Leyte G. R. L-31156
b. Pepsi vs. City of Butuan, 24 SCRA 827

3. Non-delegable
Exceptions:
a. Taxing power of local governments (Section 5, Art. X,
1987 Constitution)
b. When allowed by the Constitution [Section 28(2), Article
VI, 1987 Constitution]
i. Hon. Exec. Sec V. Southwing Heavy Industries, et
al., GR No. 164171
c. Administrative Implementation
i. Cervantes v. Auditor Gen. 91 Phil. 359
ii. Maceda v. Macaraig, 197 SCRA 771
iii. CIR v. Central Luzon Drug, G.R. No. 159647, 15
April 2005
iv. Secretary v. Lazatin, G.R. No. 210588, 29 November
2016
v. Abakada Guro Party List (Formerly Aasjas) Officers
Samson S. Alcantara And Ed Vincent S. Albano v.
The Honorable Executive Secretary Eduardo
Ermita; Honorable Secretary Of The Department Of
Finance Cesar Purisima, G.R. No. 168056,
September 01, 2005
vi. Icard v. City Council of Baguio, G.R. No. L-1281, 31
May 1949
vii. Pelizloy v. Province of Benguet, G.R. No. 183137, 10
April 2013

4. Not the contract between the State and its citizens.

a. Francia v. Intermediate Appellate Court, G.R. No. L-
67649, 28 June 1988

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 TAXATION LAWS 1
5. Not political
a. Emilio Y. Hilado v. The Collector Of Internal Revenue
And The Court Of Tax Appeals, G.R. No. L-9408,
31 October 1956

6. Subject to Constitution and Inherent limitations.

a. Inherent Limitations
i. Public purpose
1. Planters Products, Inc. v. FertiPhil Corp., G.R.
No. 166006, 14 March 2008
2. Bagatsing v. Ramirez, 74 SCRA 306
3. Gomez vs. Palomar, 24 SCRA 827
4. Pascual vs. Secretary of Public Works, 110 Phil
331
5. Lutz vs. Araneta, 98 Phil 148, G.R. No. L-7859,
22 December 1955
6. Ferrer v. Bautista, 760 SCRA 652
• Taxpayer’s Suit:
i. Tolentino v. Comelec, G.R. No. 148334,
21 January 2004
ii. Sanidad v. Comelec, 73 SCRA 333
iii. Jumamil v. Café, G. R No. 144570
iv. Pascual v. Secretary of Public Works,
110 Phil. 331
v. Landbank of the Philippines v.
Cacayuran, G.R. No. 191667, 17 April 2013
ii. Non- delegability
iii. Exemption of the Government
1. LRTA vs. CBAA, G.R. No. 127316, 12 October
2000
2. MCIAA vs. Marcos, G.R. No. 120082, 11
September 1996
3. MIAA vs. Paranaque, G.R. No. 155650, 20 July
2006
4. MIAA vs. Pasay City, G.R. No. 163072, 02 April
2009
5. Republic v. Parañaque, G.R. No. 191109, July
18, 2012, 677 SCRA 246
6. MCIAA v. Lapu-Lapu, G.R. No. 181756, 15 June
2015
iv. International Comity
Sec 2, Article II of the Philippine Constitution
1. See Resolution in the First National Tax
Association cited in International Comity in
Taxation by Clyde J. Crobaugh, University of
Chicago Press, p. 269.

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v. Territorial Jurisdiction or Situs
1. CIR v. Marubeni Corp. G.R No. 137377
2. Commissioner v. British Overseas Airways
Corporation, 149 SCRA 395

b. Constitutional Limitations

i. Due Process Clause (Section 1, Article III, 1987

Constitution)
1. Villegas v. Hiu Chiong Tsai Pao Ho, 86 SCRA
270
2. CREBA v. Exec. Sec Romulo, 09 March 2010
3. City of Baguio v. De Leon, 25 SCRA 938
4. CIR v. M.J. Lhuiller Pawnshop, Inc., 15 July
2003
5. Province of Abra v. Hernando, 107 SCRA 104
6. Francis A. Churchill v. Venancio Concepcion,
G.R. No. 11572, September 22, 1916
7. British American Tobacco v. Camacho, G.R. No.
163583, 15 April 2009

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

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

iii. The rule of taxation shall be uniform and equitable.

The Congress shall evolve a progressive system of
taxation (Section 28[1], Article III, 1987
Constitution)
1. Punzalan v. Mun. Board of Manila, 96 Phil. 46
2. British American Tobacco v. Camacho, G.R. No.
163583, 15 April 2009
3. Association of Customs Brokers v. City of
Manila, 93 Phil. 107

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4. Abakada Guro Party List v. The Honorable
Executive Secretary Eduardo Ermita, G.R. No.
168056, September 01, 2005
5. Francis A. Churchill v. Venancio Concepcion,
G.R. No. 11572, September 22, 1916

iv. No law impairing the obligation of contracts shall be

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

v. No person shall be imprisoned for debt or non-

payment of a poll tax (Section 20, Article III, 1987
Constitution)

vi. The free exercise and enjoyment of religious

profession and worship, without discrimination or
preference, shall forever be allowed (Section 5,
Article III, 1987 Constitution)
1. 1. American Bible Society v. City of Manila, 101
Phil.386, G.R. No. L-9637, 30 April 1957;
2. 2. Tolentino v. Secretary of Finance, G.R. No.
115455, 25 August 1994.

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

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

viii. Tax Exemption of Properties for Religious,

Charitable, and Education Purposes [Section 28(3),
Article VI, 1987 Constitution)
1. Hospital de San Juan de Dios v. Pasay City, 16
SCRA 226, G.R. No. L-19371, 28 February 1966;
2. Abra Valley College v. Aquino, G.R. No. L-
39086, 15 June 1988;
3. Commissioner v. Court of Appeals, G.R. No. L-
124043, October 14, 1998;
4. Lung Center of the Philippines v. Quezon City,
433 SCRA 119, G.R. 144104, 29 June 2004;

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5. CIR v. St. Luke's Medical Center, GR Nos.
195909 and 195960, 26 September 2012;
6. CIR v. St. Luke's Medical Center, G.R. No.
203514, 13 February 2017

ix. All appropriation, revenue of tariff bills shall

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

x. No law granting any tax exemption shall be passed

without the concurrence of a majority of all the
members of the Congress [Section 28(4), Article VI,
1987 Constitution]
1. John Hay Peoples Alternative Coalition, et al. v
Lim, G.R. No.119775, October 24, 2003

xi. Every bill passed by Congress shall be embrace only

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

xii. Congress shall evolve a progressive system of

taxation [Section 28(1), Article VI, 1987
Constitution]

xiii. The President shall have the power to veto any

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

xiv. The Congress may, by law, authorize the President

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

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xv. All revenues and assets of non-stock, non-profit
educational institutions used actually, directly, and
exclusively for educational purposes shall be exempt
from taxes and duties [Section 4(3), Article XIV,
1987 Constitution]
1. Commissioner Of Internal Revenue v. De La
Salle University, Inc., G.R. No. 196596, 9
November 2016
xvi. No public money or property shall be appropriated,
applied, paid, or employed, directly or indirectly, for
the use, benefit, or support of any sect, church,
denomination, sectarian institution, or system of
religion, or of any priest, preacher, minister, or
dignitary as such, except when such priest, preacher,
minister, or dignitary is assigned to the armed
forces, or to any penal institution, or government
orphanage or leprosarium [Section 29(2), Article VI,
1987 Constitution]
1. Aglipay v. Ruiz, G.R. No. L-45459, 13 March
1937;
2. Re: Letter of Tony Q. Valenciano, Holding of
Religious Rituals at the Hall of Justice Building
in Quezon City, A.M. No. 10-4-19-SC, 7 March
2017;
3. Peralta v. Philippine Postal Corporation, G.R.
No. 223395, 04 December 2018.

xvii. Supremacy of the National Government over Local

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

V. Purposes and Objectives of Taxation

1. Raising Revenue

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

3. Promotion of General Welfare

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a. Republic of the Philippines v. Central Azucarera Del
Danao, G.R. No. L-19842, 26 December 1969

4. Reduction of Social Inequality

a. National Power Corporation v. City of Cabanatuan, G.R.
No. 149110, 9 April 2003

5. Encourage Economic Growth by granting Incentives and

Exemptions

6. Protectionism

VI. Stages or Aspects of Taxation

1. Levy

2. Assessment and Collection

3. Payment

VII. Basic Principles of Sound Tax System

1. Fiscal Adequacy

2. Administrative Feasibility
a. Diaz v. Secretary of Finance, 19 July 2011

3. Theoretical Justice
a. Article VI, Section 28, Phil. Constitution

VIII. Definition of Taxes

IX. Attributes or Characteristics of Taxes

1. It is a forced charge, imposition or contribution.

a. Panay Electric Co. v. Collector of Internal Revenue, L-
10574, May 28, 1958

2. It is assessed in accordance with some reasonable rule of

apportionment which means that conformably with the
constitutional mandate for Congress to evolve a progressive
tax system, taxes must be based on taxpayer’s ability to pay
[Section 28(A), Article VI, 1987 Constitution]

3. It is pecuniary burden payable in money.

a. Borja v. Gella, 8 SCRA 602

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4. It is imposed by the State on person, property, or excises
within its jurisdiction, in accordance with the principle of
territoriality.

5. It is levied by the legislative body of the State.

6. It is levied for a public purpose.

7. It is personal to the taxpayer.

X. Taxes Distinguished from Other Impositions

1. Taxation v. Eminent Domain v. Police Power
a. Quezon City v. Ericta, 122 SCRA 759
b. Velasco v. Villegas, 120 SCRA 568
c. Tio v. Videogram, 151 SCRA 208

2. Tax v. Debt
a. Commissioner Of Internal Revenue v. Carlos Palanca,
Jr., G.R. No. L-16626, 29 October 1966

3. Tax v. Toll

4. Tax v. License Fee

a. Progressive Development Corporation v. Quezon City,
G.R. No. L-36081, 24 April 1989)
b. Land Transportation Office v. City of Butuan, G.R. No.
131512, 20 January 2000

5. Tax v. Penalty

6. Tax v. Special Assessment

XI. Classification of Taxes

1. As to subject matter:
a. Personal, Capitation, or Poll
b. Property
c. Excise or Privilege
d. Custom Duties

2. As to purpose:
a. General, Fiscal or Revenue
b. Special or Regulatory

3. As to who bears the burden:

a. Direct Tax

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b. Indirect Tax

4. As to graduation or rate:
a. Proportional
b. Progressive or graduated
c. Regressive

5. As to Taxing Authority:
a. National Tax
b. Local/ Municipal Tax

6. As to scope:
a. General
b. Special

7. As to basis of amount
a. Specific
b. Ad Valorem

XII. Double Taxation

1. Kinds:
a. Indirect duplicate taxation
b. Direct duplicate taxation (obnoxious double taxation)

2. Requisites

3. Schemes to Avoid Double Taxation

a. Tax Credit
b. Tax Deductions
c. Tax Reduction
d. Tax Exemption
e. Tax Treaties

4. International Juridical Double Taxation (IJDT)

5. Approaches to Avoid IJDT:

a. Territorial based system – foreign source income is
normally exempted from domestic tax
b. Imposition of tax on the worldwide income of their
individual citizens and residents and domestic
corporations

6. Cases:
a. Compania General de Tabacos de Filipinas v. City of
Manila, 8 SCRA 367
b. City of Baguio v. de Leon, G.R. No. L-24756

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c. Serafica v. City Treasurer of Ormoc, G.R. No. 24813, 28
April 1968
d. Acebedo Optical Company v. Court of Appeals, G.R. No.
100152, 31 March 2000
e. Pepsi Cola Bottling Co. of the Phils. Inc. vs Municipality
of Tanauan, Leyte G. R. L-31156
f. Villanueva v. City of Iloilo, 26 SCRA 578
g. Nursery Care Corporation v. Anthony Acevedo, G.R. No.
180651, 30 July 2014
h. Ferrer v. Bautista, 760 SCRA 652
i. City of Manila v. Coca-Cola Bottlers Philippines, Inc., 595
SCRA 299
j. Commissioner Of Internal Revenue v. Central Luzon
Drug Corporation, G.R. No. 159610, 12 June 2008 (NEW
CASE)

XIII. Exemption from Taxation

1. Classifications:
a. As to source:
1. Constitutional
2. Statutory/Ordinance
3. Treaty/Executive Order
4. Contractual
b. As to manner:
1. Express
2. Implied
c. As to scope:
1. Total/Full
2. Partial

2. Characteristics:
a. It is not presumed.
b. It must be justified by words too plain to be mistaken.
c. It is a personal privilege.
d. It is not created by implication.
e. There must be convincing proof.
f. Equity does not apply.
g. Tax exemption is not inherent.
h. It cannot be granted by regulation.
i. There is no vested right in a tax exemption, more so when
the latest expression of legislative intent renders its
continuance doubtful.

3. Cases:
a. David Nitafan v. CIR, G.R. No. L-78780

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b. Mactan Cebu International Airport Authority v. Hon.
Ferdinand J. Marcos, G.R. No. 120082, 11 September
1996
c. Meralco v. Vera, 67 SCRA 351
d. Commissioner Of Internal Revenue v. A. D. Guerrero, G.R.
No. L-20942, 22 September 1967
e. CIR v. Solidbank Corporation, 462 SCRA 96 (2003)
f. Smart Communications, Inc., v. The City Of Davao, G.R.
No. 155491, July 21, 2009
g. Commissioner Of Internal Revenue v. St. Luke’s Medical
Center, Inc., G.R. No. 203514, 13 February 2017
h. Commissioner Of Internal Revenue v. Philippine-
Aluminum Wheels, Inc., G.R. No. 216161, 9 August 2017
i. Esso Standard Eastern, Inc. v. Acting Commissioner of
Customs, 18 SCRA 488

XIV. Tax Laws and Implementing Rules and Regulations

1. Requisites for validity of regulations

2. Section 246

3. Cases:
a. Pilmico-Mauri Foods Corp. v. CIR, 802 SCRA 618
b. Collector v. Fireman’s Fund Insurance Co., 148 SCRA 315
c. Hilado v. Collector, 100 Phil. 288
d. Accenture v. CIR, G.R. No. L-190102
e. Philex Mining Corporation v. CIR, 29 August 1998
f. Commissioner v. Burroughs, 142 SCRA 324
g. Secretary Of Finance v. Representative Carmelo F.
Lazatin, G.R. No. 210588, 29 November 2016
h. Commissioner Of Internal Revenue v. Philippine-
Aluminum Wheels, Inc., G.R. No. 216161, 9 August 2017
i. CIR v. Filinvest, G.R. No. 163653, 19 July 2011
j. CIR v. Ledesma, G.R. No. L-17509, 30 January 1970
k. Association of Non-Profit Clubs, Inc. (ANPC), herein
represented by its authorized representative, Ms.
Felicidad M. Del Rosario Vs. Bureau of Internal Revenue
(BIR), herein represented by Hon. Commissioner Kim S.
Jacinto-Henares, G.R. No. 228539, 26 June 2019

XV. Escape from Taxation

1. Forms:
a. Tax Shifting
b. Tax Capitalization or Amortization
c. Tax Transformation

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d. Transfer Pricing
e. Resorting to Tax Haven
f. Tax Deferral
g. Tax Shelter
h. Doctrine of Equitable Recoupment
i. Tax Avoidance
j. Tax Dodging or Tax Evasion

2. Cases:
a. CIR v. The Estate of Benigno P. Toda, Jr., G.R. No. L-
147188
b. CIR v. Seagate Technology (Phils.), G.R. No. 153866, 11
February 2005
c. CIR v. PLDT, 15 December 2005
d. Contex v. CIR, 02 July 2004
e. Republic v. Mambulao Lumber Company 4 SCRA 622
f. Francia v. Intermediate Appellate Court, G.R. No. 76749,
28 June 1988
g. Commissioner of Internal Revenue v. Spouses Remigio P.
Magaan and Leticia L. Magaan, G.R. No. 232663, 3 May
2021

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TAX REMEDIES

I. BUREAU OF INTERNAL REVENUE

A. Organizational Structure

1. Chief Officials of the Bureau of Internal Revenue (Section 3)

2. Agents of the Commissioner of Internal Revenue (Section 12)

B. Powers and Duties of the BIR

1. Powers and Duties of the Bureau of Internal Revenue (Section

2)

2. Power of the Commissioner to Interpret Tax Laws and to

Decide Tax Cases (Section 4)

3. Power of the Commissioner to Obtain Information, and to

Summon, Examine, and Take Testimony of Persons (Section 5)
a. CIR v. Raul M. Gonzales, G.R. No. 177279, 13 October 2010
b. Fitness by Design v. CIR, G.R. No. 177982, 17 October 2008

4. Power of the Commissioner to Make Assessments and

Prescribe Additional Requirements for Tax Administration and
Enforcement (Section 6)
a. Revenue Memorandum Circular No. 23-2000
b. Oceanic Wireless Network, Inc. v. CIR, G.R. No. 148380, 9
December 2005
c. CIR v. Kudos Metal Corp., G.R. No. 178087, 5 May 2010
d. Republic v. Aquafresh Seafoods, Inc., G.R. No. 170389, 20
October 2010

5. Authority of the Commissioner to Delegate Power (Section 7)

6. Duty of the Commissioner to Ensure the Provision and

Distribution of Forms, Receipts, Certificates, and Appliances,
and the Acknowledgment of Payment of Taxes (Section 8)

II. PRESCRIPTIVE PERIODS

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

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B. Sections 203, 222, 223

1. Fraud v. Fraudulent Return
2. See Section 248(B)
3. Cases:
a. See Section 6(A)
b. See RMC 6-2005 for the format of the Waiver
c. Revenue Memorandum Order No. 14-2016
d. Revenue Memorandum Circular No. 141-2019
e. Talento v. Escalada 556 SCRA 491 (2008)
f. CIR v. Goodrich, Phils., 104171, 24 February 1999
g. CIR v. United Salvage and Towage, 729 SCRA 113
h. BPI v. CIR, G.R. No. 139736, 17 October 2005
i. Commissioner Of Internal Revenue v. Transitions Optical
Philippines, Inc., G.R. No. 227544, 22 November 2017
j. Republic Of The Philippines v. GMCC United
Development Corporation, G.R. No. 191856, 07 December
2016
k. CIR v. FMF Dev. Corp., 556 SCRA 698
l. CIR vs. Stanley Works (Phils.) Incorporated, GR No.
187859, 3 December 2014
m. CIR vs. Kudos Metal, GR No. 178087, 5 May 2010
n. CIR v. Systems Technology Institute, Inc., G.R. No.
220835, 26 July 2017
o. RCBC v. CIR, G.R. No. 170257, 7 September 2011
p. CIR v. Phoenix Assurance Inc., L-19727, 20 May 1965
q. BPI v. CIR, G.R. No. 139736, 17 October 2005
r. Aznar vs. CTA, GR No. L-20569, 23 August 1974
s. CIR vs. Philippine Daily Inquirer, GR No. 213943, 22
March 2017
t. CIR vs. Asalus Corporation, GR No. 221590, February 22,
2017
u. CIR v. Ayala Securities Corp., 101 SCRA 231
v. Commissioner of Internal Revenue v. La Flor dela
Isabela, Inc., G.R. No. 211289, 14 January 2019
w. Commissioner of Internal Revenue v. Bank of the
Philippine Islands, G.R. No. 227049, 16 September 2020
x. Commissioner of Internal Revenue v. Unioil Corporation,
G.R. No. 204405, 4 August 2021

III. ASSESSMENT

A. BASIS OF ASSESSMENT

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1. Question of Fact

2. Question of Law
a. Commissioner v. CA & YMCA, 298 SCRA 83
b. Cyanamid Philippines v. CA, 322 SCRA 639

B. ASSESSMENT PROCESS

1. Revenue Regulations No. 12-99 as amended by Revenue

Regulations No. 18-2013 and as further amended by Revenue
Regulations No. 22-2020
a. Revenue Memorandum Order No. 26-2016
b. Revenue Memorandum Order No. 40-2019
c. Revenue Memorandum Circular No. 15-2020

2. Kinds of Assessment:
a. Voluntary Assessment or Self-Assessment
b. Jeopardy Assessment
c. Deficiency Assessment

3. Taxpayer’s Part:
a. Self-assessment;
b. Filing of tax return;
c. Payment of tax

4. Government’s part:

a. Letter of Authority
a. See Section C of Revenue Memorandum Order No. 43-
90 dated September 20, 1990
b. CIR v. Sony Phils. Inc., 635 SCRA 234
c. CIR vs. De La Salle University, Inc., GR No. 196596,
November 9, 2016;
d. MEDICARD Phils., Inc. vs, CIR, GR No. 222743, 5
April 2017;
e. Commissioner of Internal Revenue v. Mcdonald’s
Philippines Realty Corp., G.R. No. 242670, 10 May
2021
f. Himlayang Pilipino Plans, Inc. v. Commissioner of
Internal Revenue, G.R. No. 241848, 14 May 2021

b. Letter Notice
a. Medicard Philippines, Inc. vs. CIR, GR No. 222743, 5
April 2017

c. Persons authorized to issue Letter of Authority

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a. CIR v. Sony Phils. Inc., 635 SCRA 234

d. Examination of books of accounts and other accounting

records of taxpayers by revenue officers to determine
correct tax liability [Sections 5(B) and 6(A)]
i. Best Evidence Obtainable [Section 6(B)]
1. Commission Of Internal Revenue v. Hantex
Trading Co., G.R. No. 136975, 31 March 2005
ii. Net-worth Method of Investigation
1. Section 43
2. Eugenio Perez v. The Court Of Tax Appeals, G. R.
No. L-10507, 30 May 1958

e. Requisites of a valid assessment (Section 228)

a. Basilan Estates v. CIR, L-22492, 5 Sept. 1967
b. CIR vs. United Salvage Towage (Phils.), Inc., GR No.
197515, 4 July 2014
c. SMI-ED Technology Corporation, Inc. vs. CIR, GR No.
175410, 12 November 2014
d. Samar-I Electric Cooperative v. CIR, GR No. 193100,
10 December 2014
e. Cagayan Robina Sugar Milling v. CA, 122451, 12
October 2000
f. Commissioner Of Internal Revenue v. De La Salle
University, Inc., G.R. No. 196596, 9 November 2016
g. Section 235
h. CIR vs. Fitness By Design, GR No. 215957, 9
November 2016
i. Oceanic Wireless Network, Inc. v. CIR, G.R. No.
148380, 9 December 2005
Notice of Discrepancy
f. Notice of Discrepancy
a. Revenue Regulations No. 22-2020;
b. Annex A of Revenue Memorandum Circular 15-2020;
c. Removed: Notice of Informal Conference.
d. Issuance of Preliminary Assessment Notice (PAN)
a. Section 228
b. See Revenue Regulations No. 12-99 as amended by
Revenue Regulations No. 18-2013 and further
amended by Revenue Regulations No. 7-2018
e. Reply
f. In both issuance of PAN and FAN, modes of service:
i. Personal Service to the taxpayer:
1. At the registered address, or if not possible;
2. At the known address, or
3. Both simultaneously.

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ii. Substituted Service only in case service cannot be
made to the taxpayer himself:
1. To be done at the registered or known address
personally by the revenue officer concerned
iii. By Registered Mail
1. LG Collins Electronics Phil. Inc. v. CIR, CTA Case
No. 6186, June 9, 2004
2. Adamson v. CA, 588 SCRA 27
3. Commissioner v. Enron Subic Power Corp., G.R.
No. 166387
4. Republic v. CA, 149 SCRA 35
5. CIR v. Metro Star Suprema Inc., 185371, 8
December 2010
g. Issuance of Formal Assessment Notice (FAN) or Formal
Letter of Demand (FLD)
a. Requisites
b. Instances when the FAN becomes final, executory,
and demandable
1. CIR vs. Metro Star Superama, Inc., GR No.
185371, 8 December 2010
2. CIR vs. Enron, GR No. GR No. 166387, 19 January
2009
h. Protest
ii. Requisites
iii. 2 types of protest:
1. Request for reconsideration
2. Request for reinvestigation
i. Denial of protest by Commissioner or his authorized
representative and Final Decision on Disputed
Assessments
j. Actions of the BIR considered as a denial of a pending
protest:
a. Issuance of a Warrant of Distraint of Levy
b. Filing of Collection Case
c. Issuance of a Final Notice before Seizure
d. Issuance of a Final Demand Letter
k. Appeal
l. Cases:
a. Fishwealth Canning Corporation v. CIR, 179343, 21
January 2010
b. CIR vs. First Express Pawnshop, GR Nos. 172045-46,
16 June 2009
c. CIR vs. Liquigaz Phils. Corporation, GR No. 215534,
18 April 2016
d. RCBC v. CIR, G.R. No. 170257, 7 September 2011
e. PAGCOR vs. BIR, GR No. 208731, 27 January 2016

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f. Lascona Land vs. CIR, GR No. 171251 dated March 5,
2012
g. Allied Banking Corporation vs. CIR, GR No. 175097,
5 February 2010
h. Commissioner of Internal Revenue v. V.Y. Domingo
Jewellers, Inc., G.R. No. 221780, 25 March 2019.
i. Misnet, Inc. v. Commissioner of Internal Revenue,
G.R. No. 210604. 3 June 2019
j. Commissioner of Internal Revenue v. T Shuttle
Services Inc., G.R. No. 240729, 24 August 2020
k. Commissioner of Internal Revenue v. Unioil
Corporation, G.R. No. 204405, 4 August 2021
l. Commissioner of Internal Revenue v. Court of Tax
Appeals, G.R. No. 239464, 10 May 2021
m. Commissioner of Internal Revenue v. Yumex
Philippines Corporation, G.R. No. 222476, 5 May 2021

IV. DEFENSES OF THE TAXPAYER

A. Non-Retroactivity of Rulings (Section 246)

B. Failure to inform the taxpayer in writing of the law and the

facts on which the assessment is made (Section 228)

C. Preservation of Books and Accounts and Other Accounting

Records (Section 235)

D. Cases:
1. Chamber of Real Estate and Builders’ Association v.
Executive Secretary, G.R. No. 160756, 9 March 2010
2. Commissioner v. Michel Lhuillier Pawnshop, G.R. No.
150947, 15 July 2003

V. COMPROMISE AND ABATEMENT

A. Differentiate Compromise from Abatement (Section 204)

B. Compromise v. Compromise Penalty

C. Revenue Regulations No. 7-2001 as amended by Revenue

Regulations No. 30-2002

VI. TAX CREDIT AND TAX REFUND

A. Nature

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1. Section 204(C), 229, 230
2. FEBTC v. CIR, G.R. No. 149589, 15 September 2006
3. CIR v. Fortune Tobacco Corporation 559 SCRA 160 (2008)
4. CIR v. PNB, G.R. No. 161997, 25 October 2005
5. Philippine Phosphate Fertilizer Corp. v. CIR, G.R. No.
141973, 28 June 2005

B. Tax Credit v. Tax Refund

C. What may be the subject of tax credit and tax refund

1. Taxes erroneously or illegally received
2. Penalties imposed without authority
3. Documentary Stamps

D. When to file request for Tax Credit/Refund:

1. Administrative – Section 229
2. Judicial – Section 230

E. When to start counting the 2-year prescriptive period

Exceptions:
1. Income Tax
2. Withholding Tax
3. VAT [Section 112(A)]
4. Cases:
a. Lu Do & Ym Corp. v. Central Bank, 108 Phil. 566
b. Banco Filipino v. CA, CTA, and CIR, 155682, 27
March 2007
c. CIR vs. Far East Bank & Trust Company, GR No.
173854, 15 March 2010
d. Metropolitan Bank & Trust Company v. The
Commissioner Of Internal Revenue, G.R. No. 182582,
17 April 2017
e. See Section 76
f. Belle Corporation vs. CIR, GR No. 181298, 10
January 2011
g. See also Resolution on the Motion for Clarification
dated March 2, 2011 on the same case in f. above
h. CIR vs. BPI, GR No. 178490, 7 July 2009
i. Winebrenner & Inigo Insurance Brokers, Inc. vs.
CIR, GR No. 206526, 28 January 2015
j. Systra Phils. Inc. vs. CIR, GR No. 176290, 21
September 2007
k. Commissioner of Internal Revenue v. Univation
Motor Philippines, Inc., G.R. No. 231581, 10 April
2019

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 TAXATION LAWS 1
l. Commissioner of Internal Revenue v. Philippine
National Bank, G.R. No. 212699, 13 March 2019.

F. Final Adjusted Return (Section 76)

1. Paseo Realty and Development Corporation v. Court of
Appeals, G.R. No. 119286, 13 October 2000;
2. Commissioner of Internal Revenue v. Philamlife and
General Insurance Corporation, G.R. No. 175124, 29
September 2010;
3. Philam Asset Management, Inc. v. Commissioner of
Internal Revenue, G.R. Nos. 156637, 162004, 14 December
2005;
4. Commissioner of Internal Revenue v. Mirant, G.R. 171742,
15 June 2011;
5. Commissioner of Internal Revenue v. Bank of the
Philippine Islands, G.R. No. 178490, 7 July 2009;
6. Commissioner of Internal Revenue v. McGeorge Food
Industries, Inc., G.R. No. 174157, 20 October 2010;
7. University Physicians Services, Inc. – Management, Inc.,
v. Commissioner of Internal Revenue, G.R. No. 205955, 7
March 2018;
8. Commissioner of Internal Revenue v. Philippine National
Bank, G.R. No. 212699, 13 March 2019

G. Person entitled to refund:

1. Statutory taxpayer
2. Withholding agent
a. CIR v. Smart Communication Inc. 629 SCRA 342
b. Silkair v. Commissioner of Internal Revenue, G.R. No.
184389, 25 February 2010

H. Remedies

VII. VAT REFUND/TCC/CARRY-OVER

A. Zero-rated sales of goods [Section 106 (A)(2)]

B. Zero-rated sales of services [Section 108 (B)]

C. Effectively zero-rated sales [Section 108(B)(3)]

1. CIR v. Seagate Technology Phils., G.R. No. 153866, 11
February 2005

D. Tax credit method

E. Quantum of evidence needed to prove claim

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 TAXATION LAWS 1
1. CIR v. Mirant Pagbilao Corp., G.R. 172129, 12 September
2008

F. Proper party to claim refund/credit

1. Contex Corporation v. CIR, G.R. No. 151135, 2 July 2004
2. Philippine Geothermal v. CIR, 154028, 29 July 2005

G. Prescriptive Period [Section 112(C)]

1. Administrative
2. Judicial

H. Cases:
1. Contex Corporation v. CIR, G.R. No. 151135, 2 July 2004
2. CIR v. Seagate Technology Phils., G.R. No. 153866, 11
February 2005
3. Philippine Geothermal v. CIR, 154028, 29 July 2005
4. Atlas Consolidated v. CIR, G.R. Nos. 141104 & 148763,
June 8, 2007
5. CIR v. Mirant Pagbilao Corp., G.R. 172129, 12 September
2008
6. San Roque Power Corporation v. Commissioner of
Internal Revenue, G.R. No. 180345, 25 November 2009
7. Panasonic Communications Imaging Corporation of the
Philippines v. CIR 612 SCRA 28, G.R. No. 178090, 8
February 2010
8. CIR v. Aichi Forging Co. of Asia, Inc., G.R. No. 184823, 6
October 2010
9. J.R.A. Philippines, Inc. vs. CIR, GR No. 177127, 11
October 2010
10. Silicon Philippines, Inc. vs. CIR, GR No. 172378 17
January 2011
11. Southern Philippines Power Corp. v. CIR, 179632, 19
October 2011
12. Commissioner of Internal Revenue v. San Roque Power
Corporation, G.R. No. 187485, 12 February 2013
13. Pilipinas Total Gas, Inc. vs. CIR, GR No. 207112, 8
December 2015
14. CE Luzon Geothemal Power Company, Inc. v.
Commissioner Internal Revenue, G.R. No. 197526, 26 July
2017
15. San Roque Power Corporation v. Commissioner of
Internal Revenue, G.R. No. 203249, 23 July 2018
16. Steag State Power, Inc. v. Commissioner of Internal
Revenue, G.R. No. 205282, 14 January 2019

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 TAXATION LAWS 1
17. Commissioner of Internal Revenue v. Team Energy
Corporation, G.R. No. 230412, 27 March 2019
18. Commissioner of Internal Revenue v. Chevron, G.R. No.
233301, 17 February 2020
19. Zuellig-Pharma Asia Pacific Ltd. Phils. ROHQ v.
Commissioner of Internal Revenue, G.R. No. 244154, 15
July 2020
20. Commissioner of Internal Revenue v. Philex Mining
Corporation, G.R. No. 218057, 18 January 2021

VIII. CIVIL PENALTIES

A. Surcharge (Section 248)

B. Interest (Section 249)

1. Delinquency Tax v. Deficiency Tax

C. Compromise Penalty

IX. COLLECTION

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

X. JUDICIAL REMEDIES OF THE GOVERNMENT

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

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B. Criminal Actions
1. Attempt to Evade or Defeat Tax (Section 254)
2. Failure to File Return, Supply Correct and Accurate
Information, Pay Tax Withhold and Remit Tax and Refund
Excess Taxes Withheld on Compensation (Section (255)
3. Penal Liability of Corporations (Section 256)
4. Penal Liability for Making False Entries, Records or
Reports, or Using Falsified or Fake Accountable Forms
(Section 257)
5. Unlawful Pursuit of Business (Section 258)
6. Failure to Obey Summons (Section 266)
7. Prescription for Violations of any Provision of this Code
(Section 281)
8. Cases:
a. Ungab v. Cusi, Jr., GR No. L-41919-24, 30 May
1980
b. Commissioner of Internal Revenue v. Spouses
Remigio P. Magaan and Leticia L. Magaan, G.R.
No. 232663, 3 May 2021
c. CIR v. CA, GR No. 119322, 4 June 1996
d. CIR v. Pascor, 309 SCRA 402

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 TAXATION LAWS 1
COURT OF TAX APPEALS
REPUBLIC ACT NO. 1125, AS AMENDED BY RA 3457, RA 9282,
and RA 9503

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

A. Composition
B. Appeal
C. Jurisdiction

II. Cases:
A. British American Tobacco v. Jose Isidro Camacho, et al, GR No.
163583, August 20, 2008
B. Dacudao Brothers, Inc. v. CTA, CTA EB 819, Sept 30, 2013 and
May 2, 2014
C. City of Manila v. Hon. Caridad H. Grocia-Cuerdo, GR No.
175723, Feb. 4, 2014
D. St. Paul College of San Rafael v. CIR, CTA EB 874, May 27, 2013
E. Erwin Salaveria& Portia Gonzales v. CIR, CTA Case No. 8681,
October 1, 2013
F. CIR v. Fortune Tobacco Corporation, GR No. 167274-75 &
192576, Sept. 11, 2013
G. CIR v. First Express Pawnshop Company, Inc. 172045-46, 16
June 2009
H. CIR v. Citytrust, G.R. No. 150812, 22 August 2006
I. RCBC v. CIR, G.R. No. 168498, 24 April 2007
J. CIR vs. Hambrecht & Quist Philippines, Inc., GR No. 169225,
17 November 2010
K. Philippine Journalists, Inc. vs. CIR, GR No. 162852, 16
December 2004
L. City of Manila vs. Grecia-Cuerdo, GR No. 175723, 4 February
2014
M. CIR vs. CTA and Petron, GR No. 207843, 15 July 2015
N. BDO vs. Republic, GR No. 198756, 16 August 2016
O. Association of Non-Profit Clubs, Inc. (ANPC), herein
represented by its authorized representative, Ms. Felicidad M.
Del Rosario Vs. Bureau of Internal Revenue (BIR), herein
represented by Hon. Commissioner Kim S. Jacinto-Henares,
G.R. No. 228539, 26 June 2019;
P. Nippon v. Commissioner of Internal Revenue, G.R. No. 191495,
23 July 2018;
Q. PAL v. Commissioner of Internal Revenue, G.R. No. 206079-80,
17 January 2018;
R. Commissioner of Internal Revenue v. Lancaster Philippines,
G.R. No. 183408, 12 July 2017

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 TAXATION LAWS 1
THE LOCAL GOVERNMENT CODE
REPUBLIC ACT NO. 7160

I. LOCAL GOVERNMENT TAXATION

1. Authority of Local Government Units:
a. Power to Create Sources of Revenue – Section 129
b. Fundamental Principles – Section 130
c. Local Taxing Authority – Section 132
d. Limitations – Section 133
e. Common Revenue-Raising Powers – Sections 153 – 155
f. Power to Levy Other Taxes, Fees, or Charges – Section 186
g. Tax Ordinances – Section 187
h. Adjustment of Rates of Ordinances – Section 191
i. Grant of Tax Exemption Privileges – Section 192
j. Provinces:
i. Scope of Taxing Powers of Cities – Section 151
ii. Scope of Taxing Powers of Provinces – Section 135
iii. Professional Tax – Section 139
iv. Amusement Tax – Section 140
k. Municipalities:
i. Scope of Taxing Powers of Cities – Section 151
ii. Scope of Taxing Powers of Municipalities – Section 142
iii. Tax on Business – Section 143
iv. Fees and Charges – Section 147
v. Situs of Tax – Section 150
2. Collection
a. Sections 165 to 170
3. Prescription and Assessment
a. Section 171 – Assessment
b. Section 194 – Prescriptive Period
c. Section 195 – Protest
d. Section 196 – Refund
4. Civil Remedies
a. Section 173 to 185
5. Cases:
a. Municipality of Cainta v. City of Pasig and Uniwide Sales
Warehouse Club, Inc., G.R. No. 176703, 28 June 2017;
b. Capitol Wireless, Inc. v. The Provincial Treasurer of Batangas,
G.R. No. 180110, 30 May 2016
c. Mindanao Shopping Destination Corporation v. Hon. Rodrigo
R. Duterte, G.R. No. 211093, 06 June 2017;
d. City of Manila v. Cosmos Bottling Corporation, G.R. No.
196681, 27 June 2018;
e. Pelizloy v. Province of Benguet, G.R. No. 183137, 10 April 2013;
f. City Treasurer of Manila v. Philippine Beverage Partners, Inc.,
G.R. No. 233556, 11 September 2019

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 TAXATION LAWS 1
g. University of the Philippines v. City Treasurer of Quezon City,
G.R. No. 214044, 19 June 2019
h. City of Iloilo v. Philippine Ports Authority and Development
Bank of the Philippines, G.R. No. 233861, 12 January 2021

II. REAL PROPERTY TAXATION

1. General Provisions
a. Section 198
b. Actual Use as Basis of Assessments – Section 217
c. Valuation of Property – Section 220
d. Effectivity of Assessment – Section 221
e. Assessment of Property Subject to Back Taxes – Section 222
f. Power to Levy Real Property Tax – Section 232
2. Imposition
a. Rate of Levy – Section 233
b. Exemptions from Real Property Tax – Section 234
3. Collection
a. Accrual of Tax – Section 246
b. Collection of Tax – Section 247
4. Remedies
a. Section 252 – Payment Under Protest
b. Section 253 – Refund
c. Sections 254 – 270
5. Appeals
a. Local Board of Assessment Appeals (LBAA) – Section 226
b. Powers of the LBAA – Section 227
c. Action by the LBAA – Section 229
d. Central Board of Assessment Appeals (CBAA) – Section 230
e. Effect of Appeal – Section 231
6. Cases:
a. Metropolitan Waterworks and Sewerage System v. The Local
Government of Quezon City, G.R. No. 194388, 07 November
2018;
b. Capitol Wireless, Inc. v. The Provincial Treasurer of Batangas,
G.R. No. 180110. 30 May 2016;
c. Caltex Phils. Inc. v. Central Board of Assessment Appeals, 114
SCRA 296;
d. National Power Corporation v. Province of Pangasinan, G.R. No.
210191, 4 March 2019;
e. University of the Philippines v. City Treasurer of Quezon City,
G.R. No. 214044, 19 June 2019
f. National Power Corporation v. the Province of Pangasinan and
the Provincial Assessor of Pangasinan, G.R. No. 210191, 4
March 2019

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 TAXATION LAWS 1
CUSTOMS MODERNIZATION AND TARIFF ACT
REPUBLIC ACT NO. 10863

1. General Provisions
a. Section 102 – Definition of Terms
b. Section 113 – Rulings
c. Section 114 – Right of Appeals, Forms, and Ground
2. Bureau of Customs
a. Section 200 – Officials of the Bureau
b. Section 201 – Powers and Functions of the Commissioner
c. Section 202 – Functions of the Bureau
d. Section 206 – Customs Districts
e. Section 210 – Duties of the District Collector
f. Sections 214 to 224 – Exercise of Police Authority
g. Section 300 – Customs Jurisdiction
3. Assessment – Goods
a. Examination of Goods – Section 419
b. Assessment – Sections 423 to 429
c. Period of Limitation – Section 430
d. Release of Goods – Sections 431 to 435
e. Post Clearance Audit:
i. Sections 1000 to 1006
4. Advance Ruling and Dispute Settlement
a. Sections 1100 to 1104
b. Protest:
i. Sections 1106 to 1110
c. Seizure and Forfeiture:
i. Sections 1113 to 1125
ii. Appeal in Protest and Forfeiture Cases:
1. Appeal to the Commissioner of Customs
2. Automatic Review by the Commissioner
3. Automatic Review by the Secretary of Finance
2. Civil Remedies
a. Sections 1132 to 1134
3. Judicial Proceedings
a. Sections 1135 to 1138
4. Refund and Abatement
a. Sections 903 to 913
5. Special Customs Duties
a. Dumping Duty – Section 711
b. Safeguard Duty – Section 712
c. Countervailing Duty – Section 713
d. Discrimination by Foreign Countries – Section 704
6. Criminal and Other Offenses
a. Sections 1400 to 1430
7. Cases:

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a. Honorable Executive Secretary v. Southwing Heavy Industries,
et al., G.R. No. 164171, 20 February 2006;
b. Jao v. Court of Appeals, G.R. No. 104604, 06 October 1995

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