Sources of Tax Laws

1. Constitution
2. Statutes
3. Issuances by the Secretary of Finance
-are in the form of Revenue Regulations, promulgated upon recommendation of
the CIR, specify, prescribe, and define the rules and regulations for the effective
enforcement of the provisions of the NIRC and related statutes.

Revenue Regulations are different from administrative rulings. Their differences

are:

Revenue Regulation Administrative Ruling

Issuing body It is issued by the Secretary It is issued by the CIR (if

of Finance ruling of first impression),
or his subordinates (if the
ruling is not in the nature of
a ruling of first
impression.)

Nature It is in the nature of an It is the best guess of the

implementing rule of tax Commissioner concerning
laws tax applications

Scope It is applicable to all It is applicable to taxpayer

taxpayers who requested the ruling,
except when the ruling is in
the nature of a general
interpretative rule.

Binding effect upon the It is binding upon courts It is not binging, but it is
courts for being a subordinate entitled to great weight.
legislation.

*Ruling of first impression - the interpretation, made by the CIR, which has no
established precedents. It must be issued only by the CIR. the authority to issue such
ruling is non-delegable.
 *General interpretative rule - a response to a query made, not by a particular taxpayer
but, by a government agency tasked with implementation of tax laws. It is applicable to
all taxpayers.

Gulf-Air Company vs. CIR, G.R. No. 182045 Sept. 19, 2012
An administrative rule deserves to be given weight and respect by the courts, in
view of the rule making authority accorded to those who formulate them and their
specific expertise in their respective fields.

4. Administrative Issuances - issued by the CIR

a. Revenue Memorandum Orders (RMOs) - issuances that provide directives or

instructions; prescribe guidelines; and outline processes, operations, activities,
workflows, methods, and procedures necessary in the implementation of stated
policies, goals, objectives, plans, and programs of the Bureau in all areas of
operations, except auditing.

b. Revenue Memorandum Circulars (RMCs) - those that publish pertinent and

applicable portions, as well as amplifications, of laws, rules, regulations, and
precedents issued by the BIR and other agencies or offices.

c. Revenue Administrative Orders (RAOs) - promulgated to deal strictly with the

permanent administrative set-up of the Bureau. More specifically, RAOs
prescribe the organizational structure, statement of functions and/or
responsibilities of BIR offices, definitions, and delegations of authority, staffing,
and personnel requirements, as well as standards of performance.

d. Revenue Delegation of Authority Orders (RDAOs) - refers to functions delegated

by the Commissioner to revenue officials in accordance with law.

e. Rulings - are official interpretations of the CIR on the inquiries of a taxpayer who
requests clarification or confirmation on certain provisions of the Tax Code, other
tax laws, or their implementing rules and regulations.

CIR VS. CA AND FORTUNE (G.R. NO. 119761, 29 AUGUST 1996)

The Supreme Court discussed two types of administrative issuances - a legislative
rule and an interpretative rule. The two administrative issuances were distinguished in this wise:

LEGISLATIVE RULE INTERPRETATIVE RULE

 Nature It is in the nature of It is interpretative in nature.
subordinate legislation.

purpose It is designed to implement a It is designed to provide

primary legislation by guidelines to the law which
providing the details thereof. the administrative agency is
in charge of enforcing.

Requirement for applicability
There must be publication and Its applicability needs nothing
hearing. further than its bare issuance,
for it gives no real
consequence more than what
the law itself has already
prescribed.

An administrative rule should not go beyond merely providing for the means that can facilitate
or render least cumbersome the implementation of the law. Hence, if an administrative rule
already substantially adds to or increases the burden of those governed, it behooves the
concerned agency to provide at least to those directly affected a chance to be heard, and
thereafter to be duly informed, before that new issuance is given the force and effect of law.

5. Tax ordinances - LGUs

6. Tax treaties - a bilateral agreement between two states. The purpose of such international
fiscal legislation is to reconcile the national fiscal legislations of the contracting parties in order
to help the taxpayer avoid simultaneous tax liabilities in two different jurisdictions.