People v Judy Anne Santos Y Lumagui, CTA Crim

C ON TE NTS Case No. O-012, January 16, 2012 ............................... 15

a. Definition, Concept and purpose of Taxation..................... 1 i. CIR vs. Solidbank Corporation, GR No. 148191, 25
Nov. 2003;............................................................................ 17
Southern Luzon vs DSWD, GR 199669. ............................. 2
ii. Swedish Match Philippines, Inc. vs. City of Manila, GR
Drug Store Association v. National Council on Disability . 2
NO. 181277, 3 July 2013................................................. 17
b. Nature and Characteristic of Taxation ................................ 2
iii. Nursery Care Corporation et al vs. Acevedo, G.R.
d. Theory and Basis of Taxation................................................ 3 No. 180651, July 30, 2014 .............................................. 18
e. Principles of a Sound Tax System......................................... 4 iv. CIR v. S.C. Johnson and Son, Inc., GR No. 127105, 25
DIAZ vs Secretary of Finance and CIR ................................ 5 June 2009 ............................................................................. 18

f. Scope and Limitations of Taxation ........................................ 5 v. Deutsche Bank AG Manila Branch vs. CIR, GR No.
188550, 19 Aug 2013....................................................... 18
i. Planters Products, Inc. vs. Fertiphil Corporation, G.R.
No. 66006, 14 March 2008 ................................................ 8 vi. CBK Power Company Limited vs. CIR, G.R. Nos.
193383-84, January 14, 2015;....................................... 18
ii. ABAKADA Guro Party List vs. Ermita, GR No. 168056,
1 September 2005................................................................. 8 vii. CIR vs. Estate of Toda, GR No. 147188, 14 Sept
2004 ...................................................................................... 18
iii. Gerochi vs. Department of Energy, G.R. No. 159796,
17 July 2007........................................................................... 8 viii. Domingo vs. Carlitos 8 SCRA 443 ............................. 19

iv. Tolentino vs. Sec. of Finance, GR No. 115455, 25 Aug ix. Air Canada vs. CIR, January 11, 2016, G.R. No.
1994 ......................................................................................... 8 169507 ................................................................................. 19

v. PAGCOR vs. BIR, GR No. 172087, 15 March 2011 ... 8 x. CS Garment, Inc., vs. CIR, G.R. No. 182399. March 12,
2014: ..................................................................................... 19
vi. CIR vs. CA,YMCA Gr NO. 123043 ................................ 9
n. Taxpayer’s Suit...................................................................... 19
vii. CIR VS. DLSU, GR NO,196596, 9 Nov 2016 ............. 9
i. Remulla vs Maliksi, G.R. No. 171633, Sept. 18, 2013
viii. La Sallian Educational Innovators Found. vs. CIR,GR ................................................................................................ 19
No. 202792, 27 Feb 2019 .................................................. 9
ii. SOF, et al v. Lazatin And Ecozone Plastic Enterprises
ix. Abra Valley College Inc. vs. Aquino, GR No. L-39086, Corporation, G.R. No. 210588, November 29, 2016 .. 20
June 15, 1988;........................................................................ 9
B. ORGANIZATION AND FUNCTIONS OF THE BUREAU
x. Lung Center of the Philippines vs. QC, G.R. No. OF INTERNAL REVENUE ......................................................... 20
144104. June 29, 2004........................................................ 9
ii. Specific provisions to be contained in rules and
xi. Mandanas, et al. v. Executive Secretary, et al., GR regulations ....................................................................... 20
Nos. 199802 and 208488, 3 July 2018;MR: 10 April
2019 ......................................................................................... 9 ii. Power of the CIR to interpret tax laws and decide
tax cases .......................................................................... 22
g. Stages or Aspects of Taxation ............................................10
i. Philamlife vs. DOF, G.R. No. 210987, November 24,
h. Definition, Nature and Characteristics of Taxes ...............10 2014 ...................................................................................... 22
i. Requisites of a Valid Tax ......................................................10 ii. Clark Investors And Locators Association, Inc. vs SOF,
j. Tax vs. Other Forms of Exactions .........................................10 G.R. No. 200670, July 06, 2015...................................... 22

i. Chevron Philippines, Inc. vs. BCDA, G.R. No. 173863, iii. Banco De Oro vs. RP, 2015 .......................................... 23
15 September 2010 ............................................................11
ii. Angeles University Foundation vs. Angeles City, G.R.
No. 189999, 27 June 2012 ...............................................11 A . DEF IN IT IO N, CO NCE PT A ND PU RP OS E OF
T AX ATI ON .
k. Kinds of Taxes ........................................................................12
▪ TAXATION
l. Construction and Interpretation .........................................12
It is the inherent power by which the sovereign through its
i. CIR vs. Puregold Duty Free, Inc. G.R. No. 202789, June law making body raises revenue to defray the necessary
22, 2015 ................................................................................12 expenses of the government . It is a way to apportion the
m. Doctrines in Taxation ............................................................12 cost of government among those who are privileged to
experience its benefit.

Tabuzo, Tax Remedies Self Notes

S OU THE RN L UZ ON VS D SW D, GR 1 99 669 . 1. The power of taxation is an essential and inherent
attribute of sovereignty belonging as a matter of right to
The petitioners, engaged in the drug store operation every independent government . The power to tax is an
questioned the constitutionality of RA 9257 assailing that attribute of sovereignty it may be exercised without the
the imposition of senior citizens discount is taking without just grant by the constitution.
compensation. The issue here is whether RA 9257 must be
declared as unconstitutional for it takes private property 2. The Constitutional provision relating to the power of
without just compensation. Property rights of private taxation do not operate as a grant of power of taxation to
individuals are subject to the restraint of the state for the the Government but instead merely constitutes as limitation
promotion of general welfare and safety among others. upon the power which would otherwise be practically
Here the senior citizen discount is aimed to improve the without limit.
welfare of senior citizen who at their age are not likely to
be gainfully employed. The imposition of senior citizen b. Legislative
discount is an imposition of police power. In the exercise of
police power, the rights of private individuals are subject to 1. Taxation is a power that is purely legislative in power.
the restraint of the state and its purpose is to promote This means that the legislature primarily lies the discretion to
general welfare, public health and safety among others. determine the nature, kind, object , extent , coverage and
Here, the twenty percent discount is intended to improve the situs of taxation.
lives of citizen
2. However ,where tax measure becomes unconscionable
and unjust as to amount to the confiscation of property, the
D RU G ST OR E A SS OCI AT ION V. NAT IO NA L court will not hesitate to strike it down for despite all its
C OU NCI L ON D ISA BI LI TY
plentitude the power to tax cannot override constitutional
RA 9422 was enacted granting PWD a 20% discount on proscriptions.
purchase of medicine , tax deduction scheme and adopted
Purpose:
where the establishment may deduct discount granted from
gross income based on net cost of goods sold.The petitioner
1. To raise revenue for the support and the existence of the
alleged that the mandate of the PWD discount is an invalid
government
exercise of eminent domain
2. Taxes may be levied with a regulatory purpose To
The petitioners then filed a case questioning the law as the
provide a means for rehabilitation and stabilization of
mandate of PSWD discount as it is an invalid exercise of
threatened industry which is imbued with public interest.
eminent domain. The 20% discount on the purchase of
medicine for senior citizen is a legitimate exercise of police 3. Taxation may be used to reduce social inequality the
power. Police power is the power vested to the legislature
progressive system of taxation prevents the concentration of
to make , ordain and establish laws that are not repugnant wealth in the hands of few individuals
to the constitution of general welfare of the public
4. Taxation promotes protectionism
Eminent Domain Police Power
5.The grant of tax exemption and incentives encourages
1. It is the right of the state 1. Property rights of
economic growth
to take private property individuals must yield to
for public use with just the general welfare and
compensation prosperity to the state . It The power of Taxation as the power to destroy
is the power of the state of
promote public welfare Taxation is the power that interferes with the personal and
through the restraint and property rights of the people and takes from them a portion
regulation of liberty and of their property for the support of the government. Hence,
prosperity it must be exercised with caution and minimize injury to the
Here, the PWD mandatory discount is a valid exercise of proprietary rights of the taxpayer.
police power. The term public welfare is not defined solely
as to the use of the public but pertains to public benefit or Tax Toll Fee
convenience.
Purpose 1. Raising 1.
revenue to fund Reimbursement
B . NA TU RE AN D C HA RAC TE RI ST IC OF TA XA TIO N public for cost and
expenditures expenses plus
a. Inherent Attribute of Sovereignty reasonable
margin

Tabuzo, Tax Remedies Self Notes

 impaired impaired impaired
Imposing Government Government or
authority under its private entity as Transfer of Taxes paid No transfer Transfer is
sovereign an attribute of property become a but only in effected in
authority ownership rights part of restraint of favor of the
public funds exercise state
Effect of non- Business may be Prohibits use of
payment continued but the facility. Scope All person All person Only upon a
state may property property particular
imposed penalty and excises and property.
privilege
Note:
As to Tax License Fee
1. The designation given by the municipal authorities do not
Purpose Revenue Purpose Regulation decide whether the imposition is properly a license fee or a
purpose license tax
Basis Power of Police power
taxation 2. If the generation of revenue is the primary purpose and
regulation is merely incidental, the imposition is a tax, but if
Amount Unlimited Limited to cost of
license and the regulation is the primary purpose the fact that revenue
expenses of is incidentally raised does not make the imposition a tax.
surveillance and
regulation 3. The amount may be so large as to itself show that the
purpose is to raise revenue and not to regulate
Non-Compliance Does not Makes the
necessarily make business illegal
the act business a. Useful and beneficial: Amount determines the
or profession as purpose
illegal
b. Inimical and dangerous: The free may be very
Limitation Subject to Not subject to
large without it being necessarily a tax.
constitutional or such limitation
inherent
limitation D . THE OR Y AND B AS IS OF T AXA TI ON
Collecting power National Local
1. Theory: The existence of a government is a necessity, it
Government and Government
the LGU cannot continue without means to pay its expenses, hence it
has the right to compel citizens to contribute. ( Why is
there a need.) ( LBN)

Taxation Police Eminent a. Lifeblood Theory: Taxes are the lifeblood of the
Power Domain government and so should be collected without unnecessary
hindrance. On the other hand, such collection should be
Purpose 1. Primarily Promote Facilitate the
to raise public state need of made in accordance with law as any arbitrariness will
revenue purpose property for negate the very reason for government itself. It is therefore
through public use necessary to reconcile the apparently conflicting interests
regulation of the authorities and the taxpayers so that the real
Amount of No limit Limited to No exaction purpose of taxation, which is the promotion of the
exaction the cost of private common good, may be achieved.
regulation property is
taken for The government cannot and must not be estopped
public particularly in matters that involve taxes. Taxes are the
purpose lifeblood of the nation through which the government
Benefits No direct No direct Direct agencies continue to operate.
received benefit benefit a benefit
merely healthy results in the Further, the NIRC expressly provides that no court shall have
general economic form of just the authority to grant an injunction or restrain the collection
benefit of standard of compensation of NIRC imposed by the Code.
protection society is
attended
Exception:
Impairment Contracts Contracts Contracts
may not be may be may be

Tabuzo, Tax Remedies Self Notes

 1. When it jeopardize the interest of the international law, among which principles of sovereign
government and the taxpayer. equality exist.

2. When it pertains to the collection of local taxes. 5. Taxation is exempt on Government’s part- Properties
of the estate or any of political subdivisions devoted for
b. Necessity theory- Taxation is a necessary burden to government use and purpose are exempt from taxation.
preserve the States sovereignty and a means to give the
citizenry an army to resist aggression, a navy to defend its
6. Non – Delegability: As a general rule, the power of
shores from invasion, a corps of civil servants to serve, public
taxation is purely legislative and which the central
improvements for the enjoyment of the citizenry, and those
legislative body cannot delegate either to the executive or
which come within the State’s territory and facilities and
judicial department of the government without infringing
protection which a government is supposed to provide.
upon the theory of separation of powers.
Q: Can taxes be paid in cash or kind?
Exceptions : Non- Delegability Rule:
A: There is no law payment of cash and in kind
,then the law is valid. Therefore, the law is valid a. Delegation to the Local Government Units
c. Benefits Received theory- If an individual or entity is b. Delegation to the President
being taxed by the government, there should services c. Delegation to Administrative Agencies
rendered in return. The relationship between the taxpayer a. Completeness test
and the government is reciprocal. Hence, the government
should provide some sort of service or return from the b. Sufficient standard test
payment made by the taxpayer.
Territoriality or Situs of Taxation
Basis: Reciprocal duties of protection and support. In return
for contribution, the taxpayer receives general advantages No state may tax anything not within its jurisdiction without
and protection which the government affords the taxpayer violating the due process clause of the constitution. The
taxing power of the state does not extend beyond its
and his property. ( why can the state impose) territorial limits, but within such limits it may tax persons,
property, income or business.
Inherent Limitations
4. International Comity
The principles of sovereign equality among states and of
1. Taxation must be for public purpose. It must be for the their freedom from suit without their consent limit the
support of the state, for some recognized objective of the authority of a government to effectively imposes taxes in a
government to protect the welfare of the community. sovereign state and its instrumentalities as well as in its
property held, and activities undertaken in the capacity.
2. Taxation is inherently legislative. Only the legislature 5. Tax Exemption of the Government
has the full discretion as to persons, property or occupation a. Property devoted to government use and purpose
or business to be axed. exempt from tax except when the law provides otherwise;
b. Agencies preforming government function, income tax
3. Taxation is inherently territorial- This maybe exercised exempt unless expressly taxed
within the territorial jurisdiction of the taxing authority ( w/ c. Agencies performing proprietary function- Income is
exception income my Ph abroad and domestic taxable unless expressly exempt.
corporations)Taxes are only to be imposed within the
jurisdiction of the taxing authority. Properties for public use are exempt from tax.
i. No state may tax anything not within its
I. Properties devoted to government use and
jurisdiction without violating the due process clause of the purposes exempt from tax except when the law
constitution. The taxing power of a state does not extend provides otherwise.
beyond its territorial limits, but within such limit it may tax ii. Agencies performing governmental functions ,
person , property , income or business. income is tax exempt unless expressly taxed.
iii. Agencies performing proprietary function:
4. Taxation is subject to international comity- A state must Income is taxable unless expressly exempt;
recognize the generally accepted tenets of international 7.The government cannot tax themselves exemption
law among which the principle of sovereign inequality
E . PR IN CI PLE S OF A SO UN D T AX S YST EM
among state exit. : This is a limitation founded on reciprocity
designed to maintain productive relationship between Three basic principles of what constitutes a sound tax system
states. A state must accept generally accepted tenets of (Adam Smith): ( FTA)

Tabuzo, Tax Remedies Self Notes

 1. FISCAL ADEQUACY In this case, it simply means that the tax system must be
Source of the government revenue in the amount capable of being effectively administered and enforced
of tax collected must be sufficient to finance with the least convenience to the taxpayer. Here, the non-
public expenditure. observance of the canon based on administrative feasibility
will not render a tax imposition invalid except to the extent
2. THEORETICAL JUSTICE to specific constitutional or statutory limitation are impaired.
If we design a tax system, we should design it in Even if the imposition of VAT on tollway operations may
a way as based on the taxpayer’s ability to seem burdensome , it is not necessarily invalid unless some
pay. This is synonymous with progressive. aspect of its shown to violate any law or the constitution.
However, it is not always about having a Even if the imposition of VAT seems to be burdensome to
progressive taxation. It is also about the implement, administratively feasible unless the same violates
observance of due process. If this violates equal the constitution or any other law or constitution. In this case,
protection clause, then it is a ground to inviolate there is yet any implementation of VAT on tollway
the law. operators. Any declaration of the court as to the manner of
its implementation is premature.
Note: Tax system need not always be
progressive. There are some provisions in the F . SC OPE A ND LI MI TAT IO NS O F T AX ATI ON
Tax Code that are regressive.
1. Public Purpose: The proceeds of tax must be used to
3. ADMINISTRATIVE FEASIBILITY support the state for some recognized objective of the
The beauty of tax system must always be easy government or to directly promote the welfare of the
to administer or capable of being administered, community.
and easy to enforce. Aside from being
progressive, the taxes should be certain and not 2. Inherently Legislative: Only the legislature has full
arbitrary. Taxes should likewise be subject to discretion as to the person, property occupation or business
limitations. to be taxed provided that it is within the jurisdiction of the
o General Rule: These are not grounds to question state.
the tax law, only THEORETICAL JUSTICE may
invalidate a tax law if it violates the equal Exemption:
protection of the law. The violation must be on 1. Delegation to local government
the equal protection clause and not due to the Article 10: The LGU shall have the power to create their
principle of equity, which held that taxation own ways to earn tax.
need not always be progressive.
2. Delegation to the President
Test to Determine Public Purpose The Congress cannot enact a law to give the president the
power to enact a law giving the president the power to
1. Duty Test: There is a public purpose if the thing to be determine tax rate. The delegation here pertains merely to
furthered y the appropriation of public revenue is something the power of the president to enter into tax treaties, the
which is the duty of the state as the government to provide congress may fix the limits tariff rate, import and export
quotas and tariff dues.
2. Promotion of General Welfare Test: There is pubic 3. Delegation to administrative agencies
purpose if the proceeds of the welfare of the community in
For the delegation to administrative agencies , this is limited
equal measure. to administrative limits. This pertains to the concept of
subordinate legislation, applying the 1. Completeness test 2.
3. The taxing power of the state does not extend beyond its Sufficient standard test.
territorial limits, but within such limit it may tax person ,
Constitutional Limitation of Taxation:
property income or business.
1. Due Process Clause
D IA Z VS SE CR ETA RY O F F IN AN CE AN D CIR
a. Substantive Aspect
The petitioner argued that implementation of the VAT Taxes should not be harsh, confiscatory unjust and
system is not administratively feasible to claim the input oppressive and tax laws should not violate
VAT, names , address and tax tin number of the toll way to inherent limitation of the power to tax.
be indicated in the VAT receipt or notice. Further, the B .Procedural aspect
manner of the BIR to implement the VAT by rounding of the
Taxation must be exercised reasonably without
toll rate and placing the excess of an escrow account is
arbitrariness and in accordance with procedures.
illegal. Also, an alternative of giving change to thousand of
motorist is not feasible. 2. Equal Protection

Tabuzo, Tax Remedies Self Notes

 a. Burden of tax falls equally and impartially Different articles or other subjects like transaction, business
upon all the person and property subject to it; rights , rights may be taxed at different rates provided that
the rate ( not necessarily the amount) is uniform in the same
b. It applies only to persons or things identically classes everywhere with all people at all times.
situated and does not bar a reasonable
classification 2. Taxes are uniform and equal when imposed upon all
property of the same class or character within the taxing
authority.
i. It is based on substantial distinction
7. Progressivity of taxation
ii. There are germane to purpose of law The constitution does not really prohibit the imposition od
iii. The classification applies not only to present indirect taxes which like the VAT are regressive. What is
condition but also to future condition simply provides is that the Congress shall evolve a
progressive system of taxation. It simply means that direct
iv. The classification applies only to those who axes are to be preferred and as much as possible indirect
belong to the same class
taxes must be minimized.

Ex: To recognize all senior citizen as a group without

8. Prohibition Against Taxation of Religious Charitable
distinction as to income is a valid classification. The and Education Entitles .
constitution itself considered the elderly as a class of their
own and deemed it a priority to address their needs . 1. Entities : Charitable, religious or educational entity
Person with disability from a class separate and distinct 2. Tax: Property or realty taxes
from the other citizen of the country. Indubitably, such
3. Test of Exemption: Real properties that are actually ,
substantial distinction is germane and intimately related to
directly and exclusively used for charitable, religious or
the purpose of the law. Hence, the classification and educational purpose
treatment accorded to the PWD fully satisfy the demands of
equal protection. Thus Congress may pass a law providing To be entitled to this exception it must be proven by clear,
for a different treatment to a person with disability apart unequivocal proof that the entity is
from the other citizen of the country.
a. Charitable , religious or educational entity
3. Religious Freedom
b. Its real property are actually directly and exclusively for
1. If tax is levied in order to suppress this basic right and charitable religious purpose
impose prior restraint.
Exemption: This extends to those facilties that re incidental
2. It does not prohibit the imposition of generally applicable thereto
sales and use tax on the sale of religious materials by
religious organization; thus if the sale of religious articles is
on a large scale, he same may be considered as commercial Q: What is the rule on taxability of income that a
in character and therefore subject to tax. government educational institution derives from school
4. Freedom of Speech and of the Press operation
A: Exempt from income taxation if it is actually , directly
1. If a tax is levied in order to suppress this basic right and
and exclusively used for educational purpose.
impose a prior restraint;
2. The registration fee, although a fixed amount of (P1,000)
is not imposed for the exercise of privilege but only for the 8. Prohibition against taxation of non-stock, non-profit
purpose of defraying part of the cost of registration; the educational institution
registration fee is thus a administrative fee , one not
imposed on the exercise of a privilege much less a i. Entities: Non-stock , non profit educational
constitutional right. institution

5. Non-Impairment of Obligation of Contracts ii. Taxes ( assets and revenues)

1. If a tax exemption based on contract is revoked by a i. Internal revenue tax ( income, VAT ,
latter statute but non-impairment clause will only be percentage and donor’s tax) customs
violated if and when the taxing authority was a part of the duties and DST and real property tax
contract in question
2. It does not apply to utility franchise or rights since they
are subject to amendment, alteration or repeal by the Test of Exemption: The revenue/ income is used ADE for
Congress when the public interest so requires. educational purpose.

3. A franchise partakes the nature of a grant which is To be granted the exemption, it must be proven with
beyond the purview of non-impairment clause substantial evidence that 1. It falls under the classification of
non-stock non profit educational institution 2. The income it
6. Uniformity, Equitability and Progressivity of Taxation seeks to be exempted from taxation is actually directly, and
1. Uniformity in Taxation: Means that all articles of exclusively for educational purpose.
properties of same class shall be taxed at the same rate.

Tabuzo, Tax Remedies Self Notes

 a non-stock, non-profit organization which owns the
Q: San Juan University is a non-stock, non profit St. Michael's Hospital (Hospital). Sec. 216 in relation
educational institution. It owns a piece of land in
Caloocan City on which its three 2-storey school buildings to Sec. 215 of the LGC classifies all lands, buildings
stood. Two of the buildings are devoted to classrooms, and other improvements thereon actually, directly,
laboratories, a canteen, a bookstore, and administrative and exclusively used for hospitals as "special." A
offices. The third building is reserved as dormitory for
special classification prescribes a lower assessment
student athletes who are granted scholarships for a
than a commercial classification.
given academic year.
Within the premises of the Hospital, the Association
In 2017, San Juan University earned income from tuition
constructed the St. Michael's Medical Arts Center
fees and from leasing a portion of its premises to various
(Center) which will house medical practitioners who
concessionaires of food, books, and school supplies.
will
a. Can the City Treasurer of Caloocan City collect real
lease the spaces therein for their clinics at prescribed
property taxes on the land and building of San Juan
rental rates. The doctors who treat the patients
University? Explain your answer. (5%) (2017 BAR)
confined in the Hospital are accredited by the
Association.
Q: Can the city treasurer of Caloocan collect real The City Assessor classified the Center as
property taxes on the land and building of San Juan "commercial" instead of "special" on the ground that
University? the Hospital owner gets income from the lease of its
spaces to doctors who also entertain out-patients. Is
A: Yes. but only on the leased partition. The constitution
the City Assessor correct in
provides that the assets, of a non-stock non profit
educational institution is exempt from taxes and duties classifying the Center as "commercial?" Explain. (5%)
only if the same is actually, directly and exclusively for (2016 BAR)
educational purpose. The test of exemption from
taxation is the use of property for purposes mentione in
the constitution. The leased portion of the building may A: No The Medical arts center is an integral part of the
be subject to real property tax since the lease is for hospital and must be classified for assessment purpose as
commercial purpose , it removes the asset from the special. The fact alone that doctors holding clinics in the
property tax exemption granted under the Constitution center are those duly accredited by the association who
owns the hospital and these doctors are the ones who
Q: Is the income earned by San Juan University for the
can treat the hospital patients confined in its takes away
year 2017 is subject to income tax
from the Medical Center from being categorized as
A: No. provided that the revenue used is actually , commercial since a tertiary hospital is required by law to
directly and exclusively used for educational purpose. have a pool of physician required medial department in
The requisite for tax exemption 1. The taxpayer falls various medical field.
under the classification o non-stock non profit educational
institution . 2 The income it seeks to be exempted form
taxation is used actually , directly and exclusively for
educational purpose.

9. Appropriation, revenue and tariff bills hall originate

Q: A group of Philantropist organized a non-stock, exclusively form the House of Representative
non-profit hospital charitable purpose to provide i. It is not the law, but the revenue bill which is
medical services to the poor. The Hospital also accepts required by the constitution to originate exclusively in the
paying patients although none of its income accrued
House of Representative. In fact a bill , originating in the
to any private individual; all income are plowed back
house may undergo such extensive changes in the Senate
for the hospital’s use and not more than 30% of its
that the result may be rewriting of the whole. What the
funds were used for administrative purpose Constitution simply means is that the initiative for filing of
Q: Is the hospital subject to tax on its income? If yes the revenue, tariff or tax bills, bills authorizing an increase
what rate? of the public debt, private bills and bills of local application
must come from the House of Representative.
A: The non stock non profit hospital income form paying
patients is subject to preferential income of 10%. The 10. Grant of Taxing power to the Local Government unit
CIR vs St lukes case provides that the hospitals are
exempt from income tax with respect to the activities a. To create its own sources of revenue accrue
conducted exclusively for charitable purposes or social
exclusively to the LGU
welfare. However ,they are subject to a preferential b. Just share in the national taxes
rate of 10% under charitable and social welfare
i. The just share must be based on national taxes.
purpose. ii. The just share must be determined by law
iii. The just share shall be automatically released
to the LGU.
Basis of Just Share
The Philippine-British Association, Inc. (Association) is

Tabuzo, Tax Remedies Self Notes

1. National internal revenue taxes excessive demands upon the international reserves and to
2. Tariff and customs duties stabilize currency.

3. 50% of the VAT and 30% of the national taxes ARMM

I V. TOL EN TI NO V S. SE C. OF F IN AN CE, GR NO .
4. 60% of the national taxes from exploitation and 1 15 45 5, 25 A UG 19 94
development of the national wealth( 40% will accrue to the
hose LGU) Summary: The petitioner argues that
5. 85% of the excise taxes from locally manufactured
Virgina and other Tobacco products 1. There is a violation of religious freedom as the person
subject to VAT has to pay annual registration in the amount
6. 5% of the franchise taxes in favor of the national
government paid by franchise holders. of P1000 for every separate establishment.

11. Other Constitutional limitation 2. RA 7716 did not originate exclusively in the HREP as
a. Majority vote of Congress for grant of tax exemption required under the constitution.
2. Prohibition on the use of tax levied for special purpose
Ruling: As to the violation of press freedom, the court did
3. Presidential veto power of appropriation , revenue and not stick with the American Bible case where the court
tariff bill invalidated the imposition of license fee ( Prior restraint).The
4. No appropriation or use of public money for religious license fee here is not imposed for the exercise of
purpose. religious freedom but only for the purpose of defraying
regulation.
I . PL AN TER S PR OD UCT S, I NC. V S. FE RT IP HI L
C OR PO RAT IO N, G. R. N O. 6 600 6, 1 4 M AR CH
3. It is not the law , but the revenue bill which must originate
2 00 8
from the HREP. The bill originating from the house may
An LOI was issued providing the imposition of a capital undergo changes in the Senate, and the senate may even
recovery component of domestic sale. Fertiphil was forced propose amendment thereto
to increase its prices, arguing the same is a violation of due
process enacted for the benefit of private entity. The court 4. The Constitution merely provides that the progressive
ruled that the imposition is a tax, as the purpose is for system of taxation in direct taxes, it does not prohibit
revenue, however it is not valid because it is an exaction in indirect tax which is regressive.
favor of a private entity. ( PPI is a private entity). If it is the
duty of the state to provide and for the general welfare it In comparison with American Bible: The court ruled that
is to be considered as a public purpose. If the proceeds is the price asked for the Bible and other religious
for a particular industry, and such industry is for a public pamphlet was in some instances higher and a little bit
purpose , it is an industry for public interest.. higher than the actual cost of the same but this does not
mean that the appellant was engaged in the business or
occupation of selling merchandise for profit. Therefore,
I I. A BAK AD A G UR O PA RTY L IS T V S. E RM ITA , GR the City Ordinance cannot tax the petitioner for it would
N O. 1 68 056 , 1 SE PTE MB ER 20 05 impair the exercise and enjoyment of religious profession
and worship and its rights of dissemination of religious
ABAKADA questioned the VAT reform authorizing the SOF belief ( license fee)
to raise the VAT to 12% subject to certain standards. The In the case of Tolentino, the court ruled that VAT is a
SC ruled that there is uniformity because the taxes are different issue , It is not a license tax. It is not a tax on
taxed at the same rate.It is also equitable as there is a the exercise of a privilege much less than a constitutiona
threshold margin in the type of industry and though it is right. It is imposed o the sale, barter or lease or
regressive, the constitution only calls for imposition of exchange of goods or properties or sale or exchange of
progressive direct tax which VAT is not. This is a matter of services and lease of properties that are purely for
revenue purpose. To subject the press to the payment is
tax enforceability. Further it is only the President is not not to burden the exercise of its right any more than to
really given the right to create a law, it merely implements. make the press pay income tax subject to its general
regulation is not to violate the freedom under the
I II . GE ROC HI VS . DE PAR TM ENT O F ENE RG Y, G .R. constitution.
N O. 1 59 796 , 17 JU LY 2 007

Delegation of Legislative Power to Tax: ( Valid ra 3019)

giving the ERC the right to regulate energy. The Universal V . PAG CO R V S. BI R, GR N O. 17 208 7, 15 MA RC H
Charge of the said law can be implemented by the ERC 2 01 1
because it is a regulatory fee and not a tax. The purpose of Initially exempted from paying taxes including Franchise
a regulatory fee is regulation and revenue is incidental, as and Customs tax, the NIRC later took effect and mandated
seen in this case that the fees were collected to curb

Tabuzo, Tax Remedies Self Notes

GOCC to pay corporate income tax removing PAGCOR be used for educational purpose. Therefore, if DLSU can
from the GOCC exempt from CIT.The petitioner argues that prove that its income is used for educational purpose the
removing the CIT exemption is a violation of the non- same can be exempt from income tax.
impairment clause since the investor will consider the tax
exemption and use it as a consideration in its transaction, V II I. LA SA LL IAN ED UC ATI ON AL IN NOV AT OR S
and its withdrawal has an effect of changing the F OU ND. V S. C IR, GR N O. 20 27 92 , 27 FE B 201 9
consideration of the contract.The court ruled that the
exemption only extends to VAT because RA 9339 only The issue here is whether DLSU is exempt form income tax.
removes from the exemption Corporate Income Tax. In the The court ruled that Yes, the administrative expense is
impairment of contracts, the court ruled that there is an actually, directly used for educational purpose. Under the
impairment of contract when a tax exemption is revoked Constitution, it must be proven that 1. Non- stock non -profit
by the later statute when the taxing authority is a party to educational institution 2. The income used is actually ,directly
the question. This does not apply to franchises, as seen in and exclusively used for educational purpose therefore,
this case as franchises are subject to amendment, alteration exempt
when public interest requires.
I X. A BR A V AL LEY C OL LEG E IN C. VS . AQU IN O, G R
V I. C IR VS . CA, YM CA GR N O. 1 230 43 N O. L -3 908 6, J UNE 1 5, 1 988 ;

Summary: Income Tax( Non educational) The issue is whether Abra is subject to real estate tax, there
is an argument that the same is not used for educational
YMCA a non stock non profit institution leased out portions purpose because there is a commercial establishment in the
of its premises to small shop owner like restaurant and first floor and the president resides in one of the rooms. The
parking fees. CIR issued an assessment to recover court ruled that in order to be entitled to RPT exemption 1.
deficiency tax on rentals. The court ruled that the income to Charitable religious 2. Directly used for religious purpose
be exempted under the constitution must be proven that 1.
Charitable , religious educational entity 2. Its real property Q: DLSU rents of the establishment to Starbucks is this
are actually, directly and exclusively used for religious exempt from Real Property Tax.
purpose and the exemption extends to those incidental
A: Liability of RPT .The commercial use is not incidental or
thereto which this case does not fall. reasonably necessary for the accomplishment of the
purpose which is to educate student.
To be granted the exemption, it must be proven with
substantial evidence that 1. It falls under the classified non-
stock non-profit educational institution 2. The income it seeks
X . LU NG C EN TE R OF T HE PH IL IP PI NE S VS . QC ,
to be exempted from taxation is used as actually directly,
G .R . NO . 1 44 10 4. JU NE 2 9, 20 04
and exclusively for educational purpose.
Lung Center admits paying customers leased a space on the
V II . CIR V S. D LSU , GR N O,1 96 59 6, 9 NO V 201 6 ground floor to private parties, canteen and medical
practitioners. The court ruled that the petitioner is exempt
Summary: Income Tax Educational from Real Property Tax, as the property is actually ,
directly and exclusively used for charitable purpose since it
DLSU received a letter from the BIR for deficiency income was organized for the welfare of the poor. As to the
tax on rental earnings form the a. Restaurant 2. Bookstore
income, whatever kind and character of charitable institution
operating within the campus 3. VAT on business income 4. from any of its activities conducted for profit regardless of
DST on loans and leased contract . DST protested on the
disposition is subject to tax.
ground that it is a non-stock non-profit educational institution
and is exempt from tax. As it provides that All Revenue, and
X I. MAN DA NA S, E T AL . V. E XE CUT IV E SE CRE TA RY ,
assets of non-stock non profit educational institution are
E T AL ., G R N OS . 19 98 02 A ND 2 08 488 , 3 J UL Y
actually , directly and exclusively for educational purpose are
2 01 8;M R: 1 0 AP RIL 2 01 9
exempt from tax. Here, the income is taxed The court ruled
that in this case, DLSU is exempt from income tax. Under the What is the difference between Revenue tax and National
Constitution, it provides that all revenues, asset of non-stock Internal Revenue Tax. The petitioner argues that certain
non profit educational institution actually, directly and collection of the NIR by BOC specially excise tax are not
exclusively used for educational purpose are exempt from included in the Internal Revenue Allocation for the purpose
tax. of computing the National Internal Revenue Tax to be
allocated to local government unit.
Therefore, in order for a non-profit educational institution to
be exempt from income tax 1. There must be a non-stock The petitioner argues that Section 6 of the Constitution
non-profit educational institution 2. The income must actually provides Local Government with a just share in national

Tabuzo, Tax Remedies Self Notes

taxes and automatic release. The court ruled that the H . DEF IN IT IO N, NA TU RE AN D CHA RA CTE RI ST ICS
computation is not proper as national taxes are different O F TAX ES
form national internal revenue taxes. The term national
Internal revenue tax (NIRT) is more restrictive than the term 1. Enforced Contributions
national taxes.( because national taxes includes all the 2. Generally payable in money
internal revenue tax and not only the NIRT) Also, there is no
3. Proportion in character, it is based on one’s ability to pay
need for General appropriation act to allocate the same to
them because the release is automatic. 4. Levied on persons , property or exercise of a right or
privilege
• Motion for reconsideration. 5. levied by the state having jurisdiction
- Denied 6. Levied by the legislature
Section 6 of Article X of the Constitution expressly states 7. For a public purpose
that National taxes constitute the base amount from which
8. Paid at regular periods of intervals
just share is to be computed, without the constitution itself
excluding such national taxes from computation the rule is I . RE QUI SI TE S O F A VAL ID TA X
that the same is included. Under Section 6, it states that Elements :
National Taxes shall constitute the base amount from 1. It is an enforced proportional contribution from person
which the just share is to be computed, but what and properties
happened her is that they limited it to internal revenue 2. It is imposed by the state by virtue of its sovereign and
taxes. The constitution did not enable the congress to c. It is levied for the support of the government
determine just share and base amount other than national
Requisites:
taxes.
1. It must be for a public purpose
2. It must be uniform and equitable
3. The person or property taxed must be within the
C HA RIT AB LE OR N ON - ST OCK , N ON -
jurisdiction of the taxing authority
R EL IG IOU S EN TIT IE S P RO FI T E DU CAT IO N 4. It must comply with the due process of law
E NT IE S 5. It must not violative the inherent and constitutional
1. RP that are ADE used 1. Real property tax are limitation on the power to tax.
for charitable or religious actually, directly , J . TA X V S. O THE R FO RMS O F E XA CTI ON S
purposes are exempt from exclusively used for
real property educational purpose are If generating revenue is the primary purpose ad regulation
exempt from RPT
is merely incidental, the imposition is a tax, but if the
2. Income received by 2. Income received by regulation is the primary purpose and that revenue is
them as such is exempt them such is exempt from incidentally obtained it does not make it a tax.
from income tax income tax
3. Income from properties 3. Revenue from 1. Tariff
or activities conducted for properties or activities 2. Toll
profit are taxable conducted for profit that
regardless of disposition are actually directly, 3. License fee
exclusively purpose are 4. Special assesment
tax exempt.
5. Debt
G . ST AGE S OR AS PE CT S O F TA XAT IO N
1. Tariff: A tax embraces tariff, it is just that tariff is a more
Three Stages of Taxation specific kind of tax imposed on articles which are traded
internationally.
1. Levy: It refers to the imposition of taxes through 2. Toll
enactment of tax laws or statute which is essentially Taxes Toll: Different from a tax,
legislative in nature. therefore this is not an
imposition of a tax on a
2. Assessment and Collection: It is the act of administration tax.
and implementation of tax law by the executive branch 1. Enforced proportional 1. Enforced For the use
through its administrative agencies. to the contribution from a something in consideration
person and property which is paid for the use
3. Payment: This is the act of compliance by the taxpayer of a property that is
including whatever remedies the law provides him. public in nature
2. No limit as to the 2. Amount of toll depend
amount to be taxed upon the cost of

Tabuzo, Tax Remedies Self Notes

 construction or improvement benefits the land and
maintenance of the public increases its value
improvement used
Support of the government Contribution to the cost of
3. May be imposed by the 2. May be imposed by public improvement
government private individuals as an
Necessity Benefits obtained.
attribute of authority
4. Effect of Non-payment: 4.prohibits use of facility 5. Debt: Based on a contact or judgment. There is no
Business may be continued imprisonment for the failure to pay the debt. The
but the state may impose prescriptive period is the Civil Code.
penalty
6. Penalty: Sanction imposed as punishment for violation
of a law acts deemed injurious violation of tax laws may
3. L ICE NS E FEE give rise to the imposition of penalties

If generation of revenue is the primary purpose and 7. Subsidy: A grant of revenue to aid public enterprise
regulation is merely incidental, the imposition is a tax but if deemed to promote a public welfare. It is not a tax
the regulation is the primary purpose the fact that revenue although it may necessary to raise money to pay the
itself is incidental does not make the same a tax. subsidy by means of tax.

How to check?
I . CHE VR ON P HIL IP PI NE S, I NC. V S. B CDA , G. R.
N O. 1 73 863 , 15 S EPT EM BE R 2 01 0
1. The amount may be so large as to itself show that the
purpose was to raise revenue and not to regulate. The Royalty fees on sale of fuel inside the CSEZ
was imposed primarily for regulatory purpose and not for
A. Useful and beneficial : Amount determines the
the generation of income and profit. The questioned
purpose
royalty fees form a part of the regulatory framework to
b. Inimical and dangerous of Public health, moral ensure the safety, security and good condition of the
or safety the fee may be very large without petroleum fuel industry within the CSEZ. If the imposition in
necessarily being a tax.
question relates to an occupation or activity that is engaged
Tax License fee in public interest, health or morals as to require the
1. The purpose is revenue 1.The purpose is protection or promotion of public interest, the imposition
regulation must bear a reasonable relation to the probable expense
of regulation.
2. Imposed under power 2. Imposed under the
of taxation police power must pertain
to an activity that engages In this case the oil industry is imbued with public interest it
the public interest in affects the general welfare . In addition, fuel is a highly
health, morals and safety combustible product if left unchecked poses a threat to the
and development as to life and property. There is reasonable relation between the
require the regulation for Royalty imposed per litter and the regulation sought to be
the protection and attained which is the higher volume of fuel that enters the
promotion of public
interest. CSEZ the greater extent of supervision.

3. No limit as to the 3. Amount of license fee

I I. A NGE LE S UN IVE RS IT Y F OU NDA TI ON VS .
amount that can be collected is
limited to the cost of A NG ELE S CI TY, G .R . NO . 1 89 99 9, 27 J UN E 2 01 2
license and the expenses
of police surveillance Regulatory fee: a charge of a fixed sum which bears no
relation at all to the cost of inspection and regulation may
be held to be a tax rather than an exercise of the police
power. In this case, Angeles was arguing that the building
4 .Special Assessment: An enforced proportional permits were being collected based on Article 244 of the
contribution from owners of lands especially or peculiarly LGC. The AUF argus that it is a non-stock non-profit
benefited by public improvement
institution that is exempt form tax. In this case, the court
ruled that the fees imposed against AUF are not taxes but
Tax Special Assessment regulatory fees. The building permit is a regulatory
Imposed on persons, Only on land imposition since the processing of an application for a
properties and etc building permit, the building official sees to it that the
applicant conforms with the approved standard of zoning,
Regardless of public Public improvement
land use, lines and grades structural design , sanitary

Tabuzo, Tax Remedies Self Notes

sewage .These permit fees are not charges on the property c. Proportionate
they are not imposition from which the petitioner is exempt. - Tax rate is fixed.
If the purpose is for regulation, even though the
7. As to purpose
revenue is merely incidental , it is deemed a tax.
a. General b. Special tax
K . KI ND S O F TAX ES L. CONS TRUC TI ON AND I NTERPRET AT ION
1. As to Object
I . C IR VS . P UR EG OLD DU TY FRE E, IN C. G. R. NO .
a. Personal, capitation, poll tax 2 02 78 9, JU NE 2 2, 20 15
- Taxes imposed on person without regard to
Here, even prior to the coconut oil case, Puregold enjoyed
their property. ( Income tax)
duty free importation and is exempt from local and national
Q: Can a person be imprisoned for non payment of tax? taxes. The court ruled that the ruling of the coconut oil case
A: Yes, but not for non payment of poll tax. cannot be applied retroactively. Tax exemptions are strictly
construed against the taxpayer and liberally in favor of the
b. Property tax
government. Therefore, NIRC to be exception to general
- Taxes imposed on the property within the amnesty grant it could have provided for as exception
taxing authority.( Real Estate tax) under the law. The principle of expression unio est exclusio
alterius not being expressly stated under RA 9339.
c. Privilege tax
- Taxes laid on the manufacture, sale or M . DOC TR IN ES I N T AX ATI ON
consumption of commodities within the country, upon licenses 1. Prospectively of tax laws
to pursue certain occupation. ( VAT) 2. Imprescriptibly
2. As to burden or incidence 3. Double Taxation
4. Escape from taxation
a. Direct 5. Exemption from taxation
- When the impact and incident fall on one person 6. Compensation and set-off
7. Compromise
b. Indirect 8. Tax Amnesty
- When the impact falls on one person but the 9. Construction and Interpretation
burden falls on the other.( The taxpayer can shift Prospectively of tax laws:
the burden but not liability)
General Rule: Laws shall be prospective in application.
3. As to tax rate
Exception:
a. specific
Note: No retroactive application if they are prejudicial to
- Tax imposes a specific sum by the head or a the taxpayer
number or by some standard of weight or measurement
require no assessment beyond the listing and classification Exceptions :
of the subject to be taxed. ( Excise) 1. Taxpayer deliberately misstates or omits a material fact.
b. Ad valorem 2. Facts subsequently gathered by the BIR are materially
- Excise tax which is based on selling price or different from the facts which the ruling is based or
other specified value of good and articles ( RPT, VAT) 3. Taxpayer acted in bad faith
c. Mixed Imprescriptible:
4. As to purpose General Rule: Taxes are imprescriptible
a. General – ( Income tax) Exception: The law may provide for otherwise. The NIRC
b. Special ( customs) and LGC provides for prescriptive period for assessment
and collection of taxes.
5. As to scope or authority
Ratio:Prescriptive period is both beneficial to the
a. National government and the taxpayer. It is beneficial to the
b. Local government as the personnel would be obliged to act
promptly in making the assessment and on the part of the
6. As to graudation citize n, they would have some sort of feeling of security
a. progressive against unscrupulous tax agents.
- Tax rate increase tax base increase – Income tax NB: A. The BIR has the period of three years within which to
assess the taxpayer for deficiency tax. Within the said
b. Regressive three years, the FAN must be sent to the taxpayer.
- Tax rate decreases as the tax base increase

Tabuzo, Tax Remedies Self Notes

However, if the ground is fraud, falsity or omission , the constituted as double taxation because the salary is
period can be exended for a period of ten years. already subjected to withholding tax
Construction: No. Double taxation means the taxing of the same tax
period the same thing or activity twice when it should be
The law on prescription being a remedial measure is
taxed but once for the same purpose and with the same
liberally construed to afford protection. Exception are to be
kind of character of tax. The 20% final tax imposed on
strictly construed against the taxpayer and liberally
the interest income while the tax earlier withheld is on the
construed in favor of the government.
salary or compensation income. Thus both pertain to
3. Double Taxation income tax, they do not pertain to the same thing or
activity and consequently no double taxation exist.
Definition: Taxing the same property twice when it should
be taxed once. It is defined as taxing the same person Q: Caruso , a resident Filipino citizen received
twice by the same jurisdiction over the same thing. dividend income from the US based corporation which
owns a Filipino restaurant in the west coast USA. The
dividend remitted to Caruso is subject to US
Types of Double Taxation Withholding tax with respect to non-resident alien like
Caruso.
1. Strict Sense:
A. What will be your advice to Caruso to lessen the
Test: In order to constitute a direct duplicate taxation which
impact of double taxation?
is objectionable or prohibited the same property must be
taxed twice when it must be taxed once, both taxes must be A: Caruso has the option either to claim the amount of
imposed on the same property, or subject -matter for the income tax withheld in the US as deduction from his gross
same purpose by the same state, government or taxing income in the Philippines or to claim it as a tax credit.
authority within the same jurisdiction or taxing district during
Q: Mr . Alas sells shoes in Makati through a retail
the same taxing period, and they must be of the same kind
store. He pays VAT on his gross sale to the BIR and
and character of tax.
municipal license tax based on his gross sale in Citiy
of Manila. Is there double taxation.
Q: Mr Allas Sells shoes in Makati through a retail a. There is no double taxation( Vat the subject matter is
store. He pays VAT on his gross sales to the BIR and gross sale, the municipal license tax is the privilege to
the municipal license tax based on the same gross conduct business)
sales to the City of Makati. He cones to your advice b. VAT is imposed by the national government while
regarding double taxation license tax is imposed by the municipal government.
A: There is double taxation, when one tax is imposed by
the national government and the other is imposed by the
local government . The Supreme Court declared that
double taxation does not violate the uniformity rule nor
2. Indirect Sense: Some of the elements of double taxation
does not infringe the equal protection guarantee just
are not present.
because one tax is imposed by the National government
and the other is local government unit.
Q: City X amended its revenue code to include a new The usual methods of avoiding the occurrence of double
provision imposing a tax on every sale of taxation:
merchandise by a wholesaler based on total selling
price of the goods inclusive of value added tax . ABC 1. Allowing reciprocal exemption either by law or by
treaty: Both parties will no longer tax the same.
corporation , a wholesaler operating witinh the city X
challenged the new provision based on the ff 1. The Tax treaties are entered into to reconcile the national
new provision is a form of double taxation because it fiscal legislation of the contracting parties and in turn
amounts to City XI imposing VAT which was already help the taxpayer avoid simultaneous taxation in two
being levied by the National Government different jurisdiction
A: No .There is no double taxation. ABC Corporation is International Double Taxation is the imposition of
incorrect. Under the NIRC, direct double taxation exist comparable taxes in two or more states o the same
when there are two taxes on the same subject matter, taxpayer in resect to the same subject matter and for
same purpose, same taxing authority , same jurisdiction , identical parties .
same taxing period , the taxes must be of the same kind
of character. In this case, the taxing authorities are
different. One is the local government and one is the Methods to Eliminate Double Taxation
national government
1. It sets out respective rights to tax of the state of source
Q: Upon retirement, Alfredo transferred his savings and of the state of residence with regard to certain class of
derived from his salary as marketing assistance to a income or capital
time deposit with AAB Bank. The bank regularly
deducted 20% of the final withholding tax on the 2. State of source is given the full or limited right to tax
interest income from time deposit . Alfredo contends together with the state of residence but the state of
that the 2-% final tax on the interest income residence shall allow relief if

Tabuzo, Tax Remedies Self Notes

 a. Exemption method : The income or capital which b. Tax Avoidance
is taxable in the state of source is exempted in the
Tax saving device within the means sanctioned by law, this
state of residence .
method should be used by the taxpayer is in good faith and
b. Credit Method: The tax paid in the state of at arms length , otherwise known as arms length rule
source is credited against the tax levied in the
c. Tax evasion
state of residence.
Deliberate adoption of illegal means to defeat or lessen the
payment of tax. It is a scheme used outside of those lawful
Q: Jennifer is the only daughter of Janina who was a means and when availed of . it usually subjects the
resident of United States. Janina died in the US taxpayer to further or additional civil or criminal liabilities
leaving Jennifer one million shares of Sunlife a otherwise known as dodging.
corporation organized here in the Philippines. The said Tax Evasion: Connotes three factors
shares were held in trust for Janina.The Internal
revenue service taxed the shares on the ground that 1. The end to be achieved ( payment of less than known by
Janina was domiciled in the US at the time of death . the taxpayer to be legally due or the non-payment of tax
when it shown that the tax is due )
Q: Can CIR tax the same ?
2. An accompanying state of mind which is described as
Q: Explain double taxation being evil, bad faith, willful or deliberate
A. Yes. The property being located in the Philippines is 3. The cause of action or failure is unl
subject to Philippine estate tax, irrespective of citizenship
or residence of the decedent. However, if Janina is a Enumerate the ways of shifting the tax burden and define
non-resident alien at the time of her death, the each
transmission of the share can only be applied on the 1. Forward Shifting: When the burden of the ax is
principle of reciprocity.
transferred from the factor of production through the factor
B. Double taxation is prohibited when it is a imposition of of distribution until it settles to the purchaser .
taxes on the same subject matter, for the same purpose
2. Backward: When the burden of tax is transferred from
for the same taxing authority within the same jurisdiction the consumer or purchaser through the factors of distribution
and during the same taxing period with the same kind of to factors of production
tax. It is permissible if the taxes are of different nature
or character and is imposed by two different taxing 3. Onward shifting: When the tax is shifted two or more
authorities. times either backward or forward.
NB: Only indirect tax can be shifted. TO determine when
one is an indirect tax , the test is when the impact or the tax
Upon his retirement , Alfredo transferred his saving liability for the payment of the tax falls on one person but
derived from his salary as marketing assistant to a the incidence can be shifted or passed to another.
time deposit with AAB Bank. The bank regularly
deducted 20% of final withholding tax on the interest
income from the time deposit. Alfredo contends that
Caruso, a resident Filipino citizen received dividend
the 20% final tax on the interest income constitutes as income from the US based corporation, which owns a
double taxation because the salary is already subject chain of Filipino restaurants in the west coast USA.
to withholding tax The dividend remitted to Caruso is subject to the US
A: No. Double taxation means the taxing for the same withholding tax with respect to non-resident like
tax period the same thing or activity when it should be Caruso
taxed but once for the same purpose, wth the same kind What will be your advice to Caruso to lessen the
of character of tax. The 20% final tax is imposed on
impacy of double taxation?
interest income, while the tax earlier withheld is on the
salary or compensation income . Thus both pertain to He can claim the amount of tax withheld in the US as a
income tax ,they do not pertain to the same or activity deduction from his gross income in the Philippines or to
and consequently no double taxation exist. claim it as a tax credit

4. Escape from Taxes Proper Party :

a. Shifting of the tax burden The proper party to file a refund is the statutory taxpayer,
the person on whim the tax is imposed y law and who pays
Shifting of tax burden: When the burden of tax is the same despite shift.
transferred from the statutory taxpayer ( impact)to one
whom the tax was assessed or imposed to another without Exemption: The case is not applicable when a party to
the violation of the law ( incidence). whom economic burden is shifted provides an exemption
a. Impact of taxation: Point on which tax is from both direct and indirect taxes . In such case he or she
originally imposed must be allowed to claim refund.
b. Incidence of taxation: A point on which the tax
burden finally rest or settles down Example

Tabuzo, Tax Remedies Self Notes

 The elements of the offense willful failure to
ABC Petroleum sold XYZ Airline Petroleum Fuel. ABC
passed on the new related excise tax to XYZ Airlines. supply correct and accurate information are as
Now XYZ Airlines sought to refud the said excise tax follows:
on the basis of tax exemption. CIR argues that XYZ 1. That a person is required to supply correct and
has no personality to file the subject tax refund claim accurate information;
because it is not the statutory taxpayer. Does XYZ 2. That there is failure to supply correct and
have personality to file ? information at the time/s required by law or
Ruling: Yes. If the party to which the economic burden if rules and regulations; and
shifted provides an exemption from both direct and 3. That such failure to supply correct and accurate
indirect tax, the proper party to question or seek refund information is done willfully.
of an indirect tax is the statutory taxpayer the person on
whom the tax is imposed by law and paid the same even Tax Exemption:
if he shifts the burden to another.
Definition: A grant of immunity, express or implied to a
person or corporation from the obligation to pay taxes.
Tax Avoidance: Is the tax saving device within the means
sanctioned by law this method should be used by the ✓ General Rule:
taxpayer in good faith and at arms length, otherwise known
Tax exemption can only be granted by the
as tax minimization or tax loophole.
Legislature
The following are the offenses:
1. Willful failure to pay taxes ✓ Exemption:
2. Willful failure to make a return 1. Can be granted to the President Tariff
Clause;
3. Willful failure to keep any record 2. Local Government Code delegated
4. Willful failure to supply correct and adequate power for the local government to grant
information exemption; and
Willful Blindness Doctrine: A taxpayer can no longer raise 3. Tax treaty by the president.
the defense that the errors on their tax returns are not their 4.
responsibility or that it is the fault of the accountant that
they hired. Hence, the only thing that needs to e proven is Tax Exemption cannot exist by implication? No. Whether the
that the taxpayer was aware of his obligation to file a tax undertaking signed by the Secretary of Finance in the
return, but he nevertheless knowingly intentionally failed to promissory note can be considered as an exception on the
file the same. taxes on the interest remitted . The Supreme Court ruled in
What is the willful act? negative and opined that tax exemption is not merely
implied but must e expressed ( NDR v CIR).
1. Aware of his or her obligation to file annual ITR
or submit accurate information, but that he or Any claim for tax exemption must be able to point to some
she or his or her supposed agent, nevertheless positive and specific provision of the law creating such right.
voluntarily, knowingly and intentionally failed to It cannot be allowed to exist on a mere vague
file the required returns or submit accurate interpretation.
information.
2. Bad faith on intent to defraud need not be
Nature of Tax Exemptions:
shown.
1. Mere personal privilege to the grantees

In order to prove that there was failure to file a return, 2. Generally revocable by the government unless founded
on contract which is protected by the non-impairment clause
there is a need to prove the following elements:
3. Implies a waiver on the part of the government of its
right to collect what otherwise would be due.
1. That the accused was a person required to
make a file a return; 4. Not necessarily discriminatory as long as the exemption
2. That the accused failed to make or file a return has basis.
at time required by law; and
3. That the failure to make or file a return was Grounds for Tax Exemption:
willful.
1. Contract
PE OPLE V J UDY ANNE S ANT OS Y L UMAGUI ,
CT A CRI M CAS E NO. O-012, J ANUARY 16, 2012 2. Some ground of public policy

Tabuzo, Tax Remedies Self Notes

3. Treaty created on grounds of reciprocity or to lessen the 1. Amount to be paid by a taxpayer to settle a criminal
rigors double taxation. liability for violation of the tax code in lieu of criminal
prosecution.
2. Compromise penalties cannot be imposed in the absence
Revocation of Tax
of showing that the taxpayer consented thereto.
1. Exemption granted to private parties based on material
b. Compromise of Taxes
consideration of a mutual nature is covered by a non-
impairment clause of the Constitution . 1. There is a doubtful validity of the claim against the
taxpayer .
2. Exemption granted by the Constitution may be revoked
through the Constitutional amendment 2. Financial incapacity of the taxpayer.
3. Special law is not repealed by the latter statute which is Tax Amensty: Absolute waiver by a sovereign of its right
in its general terms provision and application unless there is to collect taxes and the power to impose penalties on
a manifestation to repeal or alter special law. person or entities guilty of violating a tax law. It aims to
granta general reprieve to tax evaders who whish to come
claim by giving them the opportunity to straighten their
Equitable Recoupment record
1. Allows the taxpayer whose claim for refund was
prescribed to offset tax liabilities with his claim for
Tax Amensty Tax Exemption
overpayment.
2. It is not convinced of the wisdown or proprietary thereof , 1. Immunity form all criminal 1. Immunity form civil
and hat it may work to tempt both the collecting agency civil and administrative liability only
and the taxpayer to delay and neglect their respective liabilities and non payment
pursuits of the legal action with period set by law. of taxes
1. Applies only to past tax 2. Has prospective
application
Compensation :
As a rule, taxes cannot be the subject of compensation
because the government and the taxpayers are not Construction:
mutually creditors and debtors of each other. A claim of
taxes is not such a debt, demand or contract where there General Rule: There is no need for statutory construction if
can be set off the law on tax is clear.
Exemption: There can be set off between taxes and debts
when both are due, demandable as well as fully Exception: If there is ambiguity in the law, statutory
liquidated compensation takes place by law ( Domingo construction is but proper and tax laws shall be liberally
vs CA) .It must be noted that offsetting is not allowed when interpreted in favor of the taxpayer and strictly against the
the period to assess deficiency taxes in excess of the taxing authority.
amount claimed for refund has already prescribed.
Solutio Indebiti: The principle of Solutio Indebiti applies at - Ratio: Tax statute are strictly construed
the case at bar since the government had to restore to the against the taxing authority because
petitioner the erroneous payment of taxes. taxation is a destructive power which
Off -setting of Tax refund with tax deficiency interferes with personal property of the
people
General Rule: With respect to the offsetting of tax refund
with tax deficiency the same is unavailing under Article Exception to the Exception: The tax exemption must be
1279 of the Civil Code strictly construed against the one claiming the exception
Exception: If the determination of the taxpayer liability is because it is contrary to the life blood doctrine
intertwined with the resolution of the claim for tax refund of
erroneously or illegally collected taxes under Section 229 Tax Exemption:
of the NIRC.
General Rule: Strictissimi juris against the taxpayer and
The SC allowed the offsetting and did not grant the liberally against the taxing authority .
prayer for refund because the correctness of the return
Exception:
filed by the petitioner is put in doubt due to the finding
1. Statute provides for the liberal construction
of the CTA that the petitioner although not liable under
2. The special taxes relating to special cases and
the NIRC is liable under Section 28 NIRC.
effecting only special classes
3. Exemption refer to public property
4. Exemption granted to religious charitable and
Compromise: educational institution
a. Compromise Penalty: 5. Exemption in favor of the government its
political subdivision or instrumentalities .

Tabuzo, Tax Remedies Self Notes

Situs of Taxation: The situs of taxation is the place or
authority that has the right to impose or collect taxes. 2. Donors Same rule
a. Based on the symbiotic relationship
b. Jurisdiction, state or political units that gives
protection has the right to demand and support. Situs on Business Taxes
1. Real Property The situs of sales of a real
Factors to be Considered: property is where the real
1. Domiciliary Theory property is located
2. Nationality Theory
3. Source theory 2. Personal Property The situs of the sale of
NB: These are to depend on the type of income involved. personal property is the
place where the sales are
a. From Sources within the Philippines perfected or consummated.
b. From sources without the Philippines 3. VAT Where the transaction is
c. Income partly within and partly without made is either where the
property is sold and
consumed or where the
1. From sources within the All kinds of taxpayer are service is to be performed
Philippines subject to income tax on
income derived from
sources within the
Philippines I . CI R VS. S OL ID BAN K CO RPO RA TI ON, G R NO .
1 48 19 1, 25 N OV . 2 00 3;
2. From sources without the Only resident citizen and
Philippines domestic corporation are Doctrine: Solidbank alleged double taxation exist as it was
liable for income tax already taxed 20% on its final withholding tax on
derived from source without
passive income at the same time the bank is subject to
the Philippines
5% Gross Receipt tax. The issue here is whether double
3. Partly within and partly 1. Taxable income taxation exist. There is double taxation when tax is
without attributable to sources within imposed twice on the same object when it must only be
the Philippines may be
taxed once 1. Taxed on the same subject matter, 2. By the
determined by the process
or formulas of general same taxing authority 3. Within the same taxing period 4.
apportionmet. For the same taxing purpose.

In this case , the tax is imposed on different subject matter,

B. Property tax : FWT is a passive income generated on deposit yielding
If the property is tangible Where the property Is substitute, GRT is imposed on the privilege of enjoying
physically located although business. Second, the taxing period is different as FWT is
the owner resides in another withheld as soon as the income is earned. GRT is neither
jurisdiction deducted nor withheld. FWT is subject to withholding , GRT
If the property is intangible General Rule: Domicile of is a percentage tax.
the owner
Exception: I I. S WE DI SH MAT CH P HIL IP PI NE S, I NC. V S. CI TY
O F MAN IL A, G R N O. 1 81 277 , 3 JUL Y 20 13
a. Where the intangible
personal property has
acquired a business situs in
another jurisdiction
• Section 14: A tax on manufacturers , assemblers
b. Where the law provides and other process
for a situs of the tax.
• Section 21: Applies to business subject to
excise, value-added or percentage tax.
C. Situs of excise tax There is double taxation .Taxed on the same subject matter,
1. Estate Where the transaction was the same authority the same taxing period the same
performed it is the place purpose. In this case, it is imposed on the same subject
where the business or matter, privilege of doing business, second it is imposed for
occupation is beong the same purpose ( conduct business) 3. Same taxing
conducted. It is so because authority ( city of manila) 4. Same period ( calendar year )
that is the place which gives
protection to the business or 5. Same character ( local business tax). Therefore, the
occupation petitioner should not have been subject to tax.

Tabuzo, Tax Remedies Self Notes

I II . NU RS ERY C AR E C OR PO RAT IO N ET A L VS. In this case, the state of source is the Philippines
because royalites are paid. The US is the residence since the
A CE VED O, G. R. N O. 18 06 51 , JUL Y 30 , 2 01 4
taxpayer is based there. Under the treaty, the state of
residence and the state of source are both permitted to
The City of Manila assessed taxes from petitioner pursuant
tax the royalties with restrain on tax that is collected by
to Section 15 ( Tax on wholesale) and Section 17 ( Tax on the state of source.
Retail). At the same time Section 21 ( Tax on business
subject to excise, VAT and NIRC) as condition for Further, the RP Germany treaty allows the
crediting of German income and corporation tax of 20% of
renewal of license. In this case, there is double taxation as the gross amount of royalites, while Article 23 of the RP Us
the same property is taxed twice when it must only be treaty does not, therefore, it cannot fall under the most
taxed once by the same person by the same jurisdiction ad favored clause as for the latter to apply there must be
the same thing. Same person ( Section 21 imposed a tax on similarity in condition.
person who sold goods in the course of trade or business) .
V . D EUT SC HE BA NK AG M AN IL A B RA NCH VS . C IR ,
Section 15 and 17 imposed tax on person who sold goods
and service in the trade or business. Same taxing authority G R NO . 188 55 0, 1 9 A UG 20 13
( city of Manila). Same purpose ( to contribute to city Doctrine: The petitioner withheld and remitted to the
revenue). Same nature ( Local government tax) respondent 15% of its branch profit remittance tax. The
petitioner filed a claim pursuant to the RP Germany treaty
I V. C IR V. S .C . J OH NS ON AN D SO N, I NC. , GR of a preferential rate of 10%. The CTA ruled that the
N O. 1 27 105 , 25 JU NE 2 00 9 petitioner is not entitled to the preferential tax rate
because it failed to file prior application for the claim of
Doctrine ; Method to Eliminate Double Taxation
refund within 15 days from the time of transaction The
court ruled that the petitioner is entitled to a refund since
1. It sets out the respective right to tax of the state of source
and of the state of residence with regard to certain income tax treaties are entered to minimize the harshness of
or capital. double taxation. Under the said treaty, there is nothing
2. State of source is given a full or limited right to tax provided that an application must be made within the
together with the state of residence, but the state of fifteen day period to claim a refund. In this case, the
residence must be allowed to relief. obligation to comply with a tax treaty takes precedence
A. Exemption Method: Income or capital which is with RMO’s objective.
taxable in the state of source is exempted in the
state of residence.
b. Credit Method: The tax paid in the state of V I. C BK POW ER C OM PA NY L IMI TE D VS . CI R, G .R .
source is credited against the tax levied in the N OS . 19 338 3- 84 , JAN UA RY 14 , 20 15;
state of residence.
Doctrine: CBK obtained a loan from foreign banks.
The RP US treaty is one of the Bilateral treaties According to CBK, relevant tax treaties between the PH and
that the PH entered into to avoid double taxation. Double other countries provide that interest income is subject to
taxation takes place when a person is a resident of 10% preferential tax rate. CTA e banc argued that the
contracting state and derives income form or owns capital in availment of a tax treaty relief is preceded by the
the other contracting state. In this case, the state of source is application Of BIR ruling to the ITAD 15 days before the
the Ph, because royalties are in the PH. The US is the state transaction. The court ruled that the BIR cannot add
of residence. Under the treaty, the state of residence and
the state of source are permitted to tax the royalties with additional requirement, the obligation to comply with a tax
a restraint on the tax that may be collected at the state of treaty precedes over the objectives of the RMO. Court ruled
source. that the application of a tax treaty relief from the BIR must
operate to conform the entitlement of taxpayer to
Under the treaty, one of the method that is
imposed is that double taxation sets out respective rights to relief.The application for tax relief must only operate to
tax of the state of source or situs and the state of residence conform the entitlement of the taxpayer to the relief sought.
with regard to certain income. The second method , applies
whenever the state of source is given the full or limited right V II . C IR VS . E STA TE OF T OD A, GR NO. 14 71 88 ,
to tax. In this case, the treaties make it incumbent upon the 1 4 SE PT 20 04
state of residence to allow relief in order to avoid double
taxation. There are two reliefs, the exemption method and Doctrine: Tax Evasion
the credit method, In the exemption method, the income or
capital which is taxable in the state of source is exempted in
the state of residence. In the credit method, although the CIC-→ Altonga-→ RMI here CIC was taxed of 5% CGT
income is taxed at the state of source it is still taxable in the instead of 35% Corporate Income tax because dinaan nya
state of residence, the tax paid in the former is credited sa individual kaya lower tax rate
against the tax levied against the latter.
( CIC)Toda sold the Cibeles Building to Altonaga
who sold the same to RMI. Altonaga sold the same to RMI

Tabuzo, Tax Remedies Self Notes

paying a CGT of 10M. Toda on the same day transferred petitioner is doing business or engaged in the business in the
his share to Le Hun Choa ( on the same day). BIR sent an Philippines performing act directly for its principal. The
assessment notice stating that the scheme was fraudulent . activities of Aerotel bring direct receipts or profits to
The Commissioner argued that the scheme was fraudulent petitioner. Further, petitioner was issued by the Civil
since Alotnga was neither the buyer and the sller of the Aeronautics Board an authority to operate as an offline
property from CIC or the seller to RMI. In this case, CIC was carrier in the Philippines for a period of five years.
taxed only CGT of 5% instead of 35% Corporate income Petitioner is, therefore, a resident foreign corporation that is
tax. The court ruled that there is tax evasion based on the ff taxable on its income derived from sources within the
factors 1. The end to be achieved, 2. The accompanying Philippines
state of mind which is willful and deliberate 3. The
course of action is unlawful. Tax evasion exist in this case, X . CS G ARM EN T, I NC. , VS . CIR , G. R. N O. 18 23 99 .
prior to the sale of property CIC already received the M AR CH 12 , 20 14:
purchase price from RMI and not from Altonaga.The same
was likewise debited in the part of RMI. Therefore,, the CS Garment is a domestic corporation that is registered
court ruled that fraud is present as the scheme resorted to with PEZA engaged in the manufacture of garment. It
received a LOA from the respondent requiring it to pay
make it look like there is two sale was made to reduce the
VAT deficiency. While the case was pending before the
amount of tax. CTA the petitioner filed a manifestation stating that it
availed of the tax amnesty. The OSG argues that tax
V II I. DO MI NGO V S. CA RL IT OS 8 SC RA 4 43 amnesty is not automatic and that it cannot be granted to
the petitioner since a judgment was already rendered in
In the proceeding , the CFI of Leyte ordered thep payment favor of the BIR. The court ruled that CS Garment is immune
of estate and inheritance taxes, charges and penalties. form the payment of deficiency tax. Tax amnesty pertain
The fiscal filed an execution of judgment but this was to a general relief to tax evaders who wanted to straighten
their record. The tax amnesty provides that taxpayers that
denied on the ground that the government was indebted to
are entitled enjoy privilege as as soon as they fulfill the
the estate. The issue here is whether taxes can be substantive condition therein.
compensated with the debt of the government. Court
Tax Amensty Conditions The immunities of tax amnesty
ruled that Yes, in this case both the claim or inheritance tax
shall not apply where the person failed to file a SALN and
and the claim for instate service was already due and the tax amnesty return or where the amount of net worth
demandable and liquidated. Under the CC, compensation is proven to be understated y 30%. It is also required that
takes place by operation of law which is present at the case 1. Notice of Availment. 2. Tax Amnesty return form 3.
at bar. SALN and 4. Tax amnesty payment form must first be
filed. The petitioner complied with all of this and 1. Its net
worth is not understated by 30% , it filed a SALN. While
I X. AI R CA NA DA V S. CI R, JAN UA RY 11, 20 16 , tax amnesty, similar to a tax exemption, must be construed
G .R . NO . 1 69 50 7 strictly against the taxpayer and liberally in favor of the
taxing authority, the IRR cannot expand the lamentinging
The petitioner argues that the CTA must not have denied law.30
its claim for refund of gross billings tax on the ground that
the same is subject to income tax 1. It had not assessed by N . TA XPA YE R’ S SU IT
the BIR any income tax liability 2. Internal revenue taxes is
. A taxpayer is allowed to sue where there is a
not subject to compensation. The court ruled that the issue
for the claim of refund is intertwined with the issue of
1. claim of public funds that are illegally disbursed or that
proper taxes that are due to the petitioner. Upon the filing
of the tax refund, there is a presumption that the returns 2. The petitioner is directly affected by the act.
filed were correct. In this case, the court ruled that it must
first determine the proper tax due before ruling on the EX( Where the disposition is of alleged public property lie
refund claim. The imposition of the 32% regular income tax paintings and silverware of the Marcoses) and not public
is made to ascertain the petitioner’s entitlement to tax funds, a taxpayer’s suit is not proper ( Joya v. PCGG).
refund and not the imposition of deficiency tax.
The taxpayer suit must yield to transcendental importance.
The petitioner is an international air carrier with no landing
rights in the Philippines as a resident, foreign corporation
I . RE MUL LA V S M AL IK SI, G .R . NO. 1 71 63 3, SE PT .
engaged in business in the Philippines through its local sales 1 8, 2 01 3
agent that sold and issued tickets for the airline company.
An offline carrier is any foreign air carrier not certified by Doctrine:De Villa, ceded a donation in favor of province of
the CAB but maintains an office or appointed agent or Cavite where the government facilities are located. The
employees in the Philippines who sells or offers any air province of Cavite filed a complaint before the RTC
transportation in behalf of the foreign air carrier or holds seeking to expropriate the subject property. De Villa
itself out for solicitation , advertisement etc. Therefore, the

Tabuzo, Tax Remedies Self Notes

opposed the proceeding arguing that the donated portion in which their lists and records of taxable persons and
has yet to be developed. De Vila then sold the property in taxable objects shall be made and kept;
favor of Goldenrod. A compromise agreement was entered
into by Maliksi which GoldeRod sold it to Mathay and (b) The forms of labels, brands or marks to be required
Pascual .Remulla filed a petition arguing that the on goods subject to an excise tax, and the manner in
compromise agreement is disadvantageous to the which the labelling, branding or marking shall be
government since the price was excessive, and Maliksi effected;
entered into compromise without authority of law. Court
ruled that he has standing 1. There is a claim of public (c) The conditions under which and the manner in which
goods intended for export, which if not exported would
funds 2. Public money illegally disbursed. The funds of
be subject to an excise tax, shall be labelled, branded
province of cavite are to be expended to enforce the or marked;
compromise judgment. Therefore as long as taxes are
involved people have the right to enter into compromise
(d) The conditions to be observed by revenue officers
judgment respecting the institutions and conduct of legal actions
and proceedings;
I I. S OF , E T AL V. L AZA TI N AND E CO ZON E PL AST IC
E NT ER PR ISE S CO RP ORA TI ON , G .R . NO . 210 58 8, (e) The conditions under which goods intended for
N OV EM BER 2 9, 2 016 storage in bonded warehouses shall be conveyed thither,
their manner of storage and the method of keeping the
Doctrine entries and records in connection therewith, also the
books to be kept by Revenue Inspectors and the reports
The Secretary of Finance signed RR 2-2012. The RR to be made by them in connection with their supervision
requires the payment of VAT and excise tax on petroleum of such houses;
products on petroleum products directly abroad into the
PH. It allows a tax refund if the taxpayer proves that the (f) The conditions under which denatured alcohol may be
petroleum brought in has been sold to a duly registered removed and dealt in, the character and quantity of the
economic zone. Pampanga first district representative filed denaturing material to be used, the manner in which the
process of denaturing shall be effected, so as to render
an injunction against the petitioner to annul the RR, Eocozone the alcohol suitably denatured and unfit for oral intake,
sought to intervene. As to Lazatin, he has the legal the bonds to be given, the books and records to be kept,
standing to question that act of usurpation of legislative the entries to be made therein, the reports to be made to
power of the congress. As to EPEC it has legal standing the Commissioner, and the signs to be displayed in the
as Clark FEZ locator. The Revenue Regulation relates to the business or by the person for whom such denaturing is
imposition of VAT and applies to all petroleum products done or by whom, such alcohol is dealt in;
imported abroad to the PH including FEZ.In this case, since
EPEC is an enterprise located in the Clark Fez it has (g) The manner in which revenue shall be collected and
standing paid, the instrument, document or object to which revenue
stamps shall be affixed, the mode of cancellation of the
same, the manner in which the proper books, records,
B. OR GANIZ ATI ON AND F UNCTI ONS OF THE invoices and other papers shall be kept and entries
B URE AU OF INTER NAL RE VE NUE therein made by the person subject to the tax, as well as
the manner in which licenses and stamps shall be
1. POWER OF THE BIR
gathered up and returned after serving their purposes;
1. Has assess and collect all taxes, fees, and charges
2. To enforce all forfeiture, penalties , and fines in (h) The conditions to be observed by revenue officers
connection therewith respecting the enforcement of Title III imposing a tax on
3. This include execution of judgment in all cases decided in estate of a decedent, and other transfers mortis causa,
its favor. as well as on gifts and such other rules and regulations
which the Commissioner may consider suitable for the
enforcement of the said Title III;
I I. S PE CIF IC P ROV IS IO NS TO B E CO NTA IN ED IN
R UL ES A ND RE GUL AT IO NS (i) The manner in which tax returns, information and
SEC. 245. Specific Provisions to be Contained in Rules and reports shall be prepared and reported and the tax
Regulations. - The rules and regulations of the Bureau of collected and paid, as well as the conditions under which
Internal Revenue shall, among other things, contain evidence of payment shall be furnished the taxpayer,
provisions specifying, prescribing or defining: and the preparation and publication of tax statistics;

(a) The time and manner in which Revenue Regional (j) The manner in which internal revenue taxes, such as
Directors shall canvass their respective Revenue Regions income tax, including withholding tax, estate and donor's
for the purpose of discovering persons and property taxes, value-added tax, other percentage taxes, excise
liable to national internal revenue taxes, and the manner taxes and documentary stamp taxes shall be paid

Tabuzo, Tax Remedies Self Notes

through the collection officers of the Bureau of Internal Power to interpret tax laws and decide tax cases
Revenue or through duly authorized agent banks which
are hereby deputized to receive payments of such taxes 1.Commissioner of internal Revenue :
and the returns, papers and statements that may be filed
by the taxpayers in connection with the payment of the a. Quasi-Legislative: ( Appeal to SOF). This pertains to the
tax: Provided, however, That notwithstanding the other power to interpret the provision of the tax code and other
provisions of this Code prescribing the place of filing of
returns and payment of taxes, the Commissioner may, by tax laws shall be under the exclusive and original
rules and regulations, require that the tax returns, papers jurisdiction of the CIR subject to review by the SOF.
and statements that may be filed by the taxpayers in
connection with the payment of the tax. Provided, The determination of validity of administrative issuances (
however, That notwithstanding the other provisions of this revenue orders , revenue memorandum circulars or rulings,
Code prescribing the place of filing of returns and and the tax rulings clearly falls within the appellate
payment of taxes, the Commissioner may, by rules and jurisdiction of the CTA subject to prior review of the SOF)
regulations require that the tax returns, papers and
statements and taxes of large taxpayers be filed and
b. Decide : QUASI JUDICAL
paid, respectively, through collection officers or through
duly authorized agent banks: Provided, further, That the The power to decide disputed assessment , refund or
Commissioner can exercise this power within six (6) years internal revenue taxes, fees or other charges penalties
from the approval of Republic Act No. 7646 or the imposed in relation thereto or other matters arising under
completion of its comprehensive computerization the Tax Code or other laws or portion thereof administered
program, whichever comes earlier: Provided, finally, That by the BIR vested in the CIR subject to the exclusive
separate venues for the Luzon, Visayas and Mindanao appellate jurisdiction.
areas may be designated for the filing of tax returns 1. Disputed assessment
and payment of taxes by said large taxpayers. 2. Refunds
3. Other matters arising form the NIRC subject to
For the purpose of this Section, 'large taxpayer' means a review by the CTA.
taxpayer who satisfies any of the following criteria:
The determination of the validity of administrative
issuance and tax rulings clearly falls within the exclusive
(1) Value-Added Tax (VAT) - Business establishment with
jurisdiction of the CTA under RA 1125 as amended subject
VAT paid or payable of at least One hundred thousand
pesos (P100, 000) for any quarter of the preceding to prior review by the SOF as required under the NIRC.
taxable year;
c. Power to obtain information and summon ,examine and
(2) Excise tax - Business establishment with excise tax take the testimony of the person
paid or payable of at least One million pesos (P1,
000,000) for the preceding taxable year; Failure to obey the summons ( Section 266)

1. A person is duly summoned to appear , testify or to

(3) Corporate Income Tax - Business establishment with
annual income tax paid or payable of at least One appear, and produce books of accounts records,
million pesos (P1,000,000) for the preceding taxable memoranda or other papers or furnish information and
year; and
2. The person neglected to appear or produce such books
(4) Withholding tax - Business establishment with of accounts or records memoranda or other purpose or to
withholding tax payment or remittance of at least One furnish such information
million pesos (P1,000,000) for the preceding taxable
year. d. power to make assessment and prescribe additional
requirement for tax administration and enforcement
Provided, however, That the Secretary of Finance, upon
recommendation of the Commissioner, may modify or There must be a grant of authority from the CIR
add to the above criteria for determining a large before any revenue officer can conduct examination or
taxpayer after considering such factors as inflation, assessment. Equally important is that the revenue officer so
volume of business, wage and employment levels, and authorized must not go beyond the authority given. In the
similar economic factors. absence of such authority the assessment or examination is
nullity.
The penalties prescribed under Section 248 of this Code
shall be imposed on any violation of the rules and The Commissioner of internal revenue has the power to
regulations issued by the Secretary of Finance, upon
interpret tax laws, this is codified in two ways
recommendation of the Commissioner, prescribing the
place of filing of returns and payments of taxes by
large taxpayers. 1. Revenue memorandum circular (RMC)- apply to all
taxpayers. ( the cir makes an interpretation and
provides for a guideline how a provision in the

Tabuzo, Tax Remedies Self Notes

 tax code apply to a particular circumstances) * The review of decision by the SOF must be made to the
2. BIR rulings- international tax affairs division CTA and not to the CA as erroneously made by the
rulings( IATAD)( In a ruling a particular taxpayer, taxpayer. “ This pertains to other matters”Expanded
goes to the BIR to ask the BIR to answer the Jurisdiction of the CTA: With the transfer of the appellate
interpretation of the taxpayer is correct) jurisdiction to the CTA to rule on the propriety of assessment
comes with the certiorari jurisdiction of the CTA to rule on
The IATAD ruling – if the taxpayer wants to avail
the validity of revenue memorandum to which it was made.
of the tax exemption by virtue of a IATAD ruling.
In refund cases, the CTA has jurisdiction to rule on all tax
The ruling only applies to the taxpayer who
problems therefore it can take cognizance of a case
requested this ruling no other taxpayer can invoke
challenging the constitutionality, regulation of administrative
this BIR ruling. –( persuasive)
issuance
3. Internal revenue order. – this is merely directed to
the internal officer. Of the BIR. (Revenue I I. C LAR K IN VE STO RS A ND LO CAT OR S
Memorandum Order) A SS OC IAT IO N, I NC. V S SOF , G. R. NO . 20 06 70,
J UL Y 06, 2 01 5
• Ceritorari cannot prosper if the revenue
regulation was enacted pursuant to quasi
Note: The expanded Jurisdiction of the CTA: legislative and not quasi judicial. ( SOF ung ng
This is not limited to cases that involves the decision or issue). Certiorari can only be had in quasi judicial
inaction of the BIR on disputed assessment but also all
matters arising to the BIR or the tax code. In tax refund , Doctrine: RA 7227 provides that all business within the SEZ
the CTA has exclusive jurisdiction all tax problem . must provide preferential gross income of 5% and are
Hence, it can take cognizance of a case challenging its exempt from payment of import duties in raw materials. RR
constitutionality, regulation and admin issuance, since the 2-2012 was issued reversing the exemption by imposing
resolution is necessary to determine whether the VAT and excise tax on petroleum.The petitioner filed for
assessment is valid.
the petition for certiorari. The court ruled that the petition
for certiorari cannot prosper as the respondent (SOF)acted
not in a quasi judicial but quasi legislative when it
impelemented RMO. Here the RR was issued pursuant to
I I. P OW ER OF T HE CI R TO IN TE RP RET T AX LA WS
the quasi legislative and not quasi judicial and was
A ND DE CI DE TA X CAS ES
issued pursuant to the Secretary’s power to promulgate
c. Cases: rules and regulation.
I . PH ILA ML IFE V S. DO F, G .R . NO. 2 10 987 , Hierarchy of courts needs to be respected. A direct
N OV EM BER 2 4, 2 014 invocation to the SC original jurisdiction to issue this
The petitioner was informed that it needs to apply for a BIR writs must only be allowed when there are special and
ruling to determine the potential donors tax in the sales of important reason specifically set out in the petition. In the
stock. A BIR ruling was obtained but denied by the case, at bar the petitioner did not state exceptional and
Commissioner. The petitioner field a disputed assessment compelling reason to justify the same. Hence, the resort to
with the CA, but the CA dismissed the case as it must be the special action of certiorari is not proper.
CTA who can interpret tax laws. The court ruled that it is the
CTA who has jurisdiction to rule on appeals pertaining to Q: The City of Liwlia assssed local business taxes
disputed assessment. against Talin claiming that there is double taxation.
Talin Company filed a complaint for recovery of
In line with the expanded jurisdiction, CTA has the power of erroneously collected Local Business tax prohibition
with prayer to issue TRO and writ of preliminary
certiorari within its appellate jurisdiction. The CTA has
injunction with the RTC. The RTC denied the
certiorari powers to determine whether there has been application for writ of preliminary injunction. Since its
grave abuse of discretion on the part of the RTC when it motion for reconsideration was denied .Talin
issued interlocutory order. Therefore,, in lined with the CTA, Company filed several special civil action for certiorari
can rule on the assessment and validity of revenue with the CA. The government lawyer representing the
regulation order. Therefore in lined with this the CTA can City of Liwila prayed for the dismissal of the petition
rule in assessment and validity of revenue regulation order. on the ground that the same must be file with the CTA.
Talin countered that the CTA cannot entertain a
The fact that the petitioner not only contested the
petition for certiorari since it is not one of its powers
applicability of sales transaction but the validity of the and authorities under existing rules and laws.
memorandum does not divest the CTA of its jurisdiction
A: The petition filed with the CA must be dismissed since
the petition have been filed with the CTA. The CTA has
the power to determine whether there has been grave

Tabuzo, Tax Remedies Self Notes

abuse of discretion amounting to lack of excess
jurisdiction on the part of the RTC in issuing interlocutory
orders in cases falling within the CTA exclusive
jurisdiction. The CTA therefore has jurisdiction to issue
writs of certiorari in such cases. Furthermore, its authority
to entertain petition for certiorari questioning
interlocutory orders issued by the RTC is included in the
power granted by the constitution inherent in the exercise
of appellate jurisdictino

I II . BA NCO D E O RO V S. R P, 20 15

Doctrine ( CIR ng issue)

Certiorari petition to the SC ( no need to go thru SOF and

CTA)The CIR issued BIR ruling declaring that PEACE bonds
are subject to 20% FWT.Because of this the Secretary of
finance directed the BOT to withhold 20% final witholding
tax of peace bond upon maturity.The petitioner filed a
certiorari with the SC. The respondent argue that there is a
violation of hierarchy of laws. In this case, there is no
violation, the rulings are reviewable by the SOF. Pursuant to
its interpretative powers the CIR has the power to interpret
a provision of the tax law.

As a rule, the decision of the CIR must first be appealed to

the SOF. Thus, resort to administrative remedies must first
be had before resort to court can be made. However, the
doctrine of exhaustion of administrative remedies has
exemption 1. When the issue is purely legal 2. When the
circumstance indicates urgency of judicial intervention. In this
case, the exemption applies. The question involved here is
purely legal as it pertains to the interpretation of the 20
lender rule and whether the imposition of 20% Final
Withholding tax on the PEACe bond violate the
constitutional prohibition of non-impairment of contract. In
this case the petitioner need not appeal to the SOF because
it was with the request of the SOF that the ruling is to be
issued. Generally, the case must be filed with the CTA but
due to its compelling nature and circumstance resort to the
SC is warranted.

Tabuzo, Tax Remedies Self Notes

TAX REMEDIES informed of the law and the facts to which the assessment was
made. A preliminary letter and audit working paper does not suffice
F. REMEDIES UNDER THE NIRC
2. CIR vs. United Salvage And Towage, G.R. No. 197515, 2 Jul
a. Tax Assessment 2014

FAN deficiency income tax show that other than the alleged
Kinds of Assessment deficiency tax, no further detail regarding the assessment was
1. Self-Assessment: When a taxpayer computes his own provided for by the petitioner and it was only the resulting interest,
liabilities, files his return and pays his tax based on his surcharge and penalty which was anchored with legal basis. The
computation. court ruled that the petitioner should have attached a notice of
2. Deficiency assessment: This occurs upon discovery of the BIR discrepancy and explained as to why the deficiency is collectible
that the self-assessment was ether deficient or when there is no against the respondent and how the amount was arrived at.
return was made by the taxpayer.
3. Samar-I Electric Cooperative vs. CIR, G.R. No. 193100, 10
December 2014
For there to be a valid formal assessment, the following must
concur: (a) it must be addressed to the taxpayers; (b) there must Doctrine : Note the particularity of the case because of the
be demand made on the taxpayers to pay the tax liability, or a peculiarities of this case the taxpayer is provided with audit
period for payment set therein; (c) the letter must be mailed or sent findings, audit working paper, PAN and this contain the facts and
to the taxpayers by the Commissioner. the law to which it is based. Considering the exchange of
correspondence and document between the parties the requirement
It must be addressed to the taxpayer -> demand must be made to of Section 228 was substantially complied with. In this case ,the
the taxpayer to pay → the letter must be ailed or sent to the factual and legal bases of the deficiency tax assessment enabling
taxpayer by the Commissioner. the latter to file an effective protest thus the taxpayer right to due
process is not violated.
i. Requisites of a valid assessment
SUBSTANTIAL COMPLIANCE:
a. The Final Assessment Notice ( FAN) must indicate the umber of
tax to be paid and after due date of the payment, without the 1. The petitioner was duly furnished with a copy of the summary of
definite amount or the date when the tax must be paid, t is not a the report submitted by the Revenue Officer containing the
valid demand. explanation f the findings and investigation that state the legal and
factual bases of the assessment.
b. The assessment must be made in writing and must inform the
taxpayer of the law and the facts on which the assessment is made. 2. When the petitioner requested for copies of working papers, the
respondent replied and furnished him with the same.
i. The legal and factual bases of assessment must be
stated in the formal letter of demand and assessment notice, not in Hence the court ruled that the respondent was able to substantially
any other document or paper issued by the CIR. inform the petitioner of the law and the facts of the tax assessment.
Therefore the court ruled that substantial compliance as to the legal
NB: Substantial Compliance: When the legal and factual bases can bases of the deficiency enabled it to file an effective protest.
be found in a series of correspondence between the BIR and the
taxpayer ( this is not indicated in the FAN) 4. Pilmico-Mauri Foods Corp., v. CIR, G.R. No. 175651,
September 14, 2016
Issuing Authority
In a petition for review filed before the CA it is the burden on the
1. The power to issue an assessment is with the CIR. However, he part of the taxpayer to properly invoke the legal provision to
can authorize any revenue officer to conduct an examination or reduce its tax liability. The CTA is not bound to rule solely on the
assessment through a letter of authority. basis of the law cited by the CIR Were it otherwise the tax court’s
appellate power of review is rendered useless. An absurd situation
arises leaving the CTA with two option 1. Affirm the legal finding or
2. Altogether absolve the taxpayer from liability of the CIR relied
1. CIR vs. Eron Subic Power Corporation, GR No. 166387, 19 on misplaced provision
January 2009
5. CIR v. Fitness by Design, Inc., G.R. No. 215957, November 9,
Doctrine: The taxpayer must be informed of the factual and legal 2016
bases to which assessment is made → This does not include letter
notices. There must be demand: Here, the tax due still shows that it is still
subject to modification. The complete details covering the
#1 Assessment must inform the taxpayer of the law and the aforementioned discrepancies established during the investigation of
facts to which it is made. The court held that tax deficiency failed this case are shown in the accompanying annex 1 of the Noitce. The
to inform the taxpayer of the law and the facts which is made. The 50% surcharge and the 20% interest have ben imposed pursuant to
court ruled that the tax deficiency and the five day notices are not the NIRC . Please note however that the interest and the total amount
valid substitutes for mandatory notice in writing. A preliminary
letter during pre-assessment does not mean that Enron was

Tabuzo, Tax Remedies Self Notes

due will have to be adjusted if paid prior or beyond April 15 → This b. From the last day of the filing the return
shows that the demand is not yet final * Which ever is later ( April 15)
Return:

6. Adamson v. Court of Appeals, GR No. 120935, 21 May 2009 - Whenever there is an amended return which it must be
substantially complete as to include the needed details on which the
In this case the recommendation of the commissioner to the DOJ that assessments were made. The period to assess is counted from the
proper assessment must be filed against the taxpayer is not a valid time of the filing of amended return and not original return. ( CIR v.
demand. An assessment is a written notice and demand made by Phoenix)
the BIR on the taxpayer for the settlement of tax liability which is
set and fixed. Therefore, a recommendation letter of the 3. If the taxpayer filed a wrong return , it is as though he filed not
commissioner is not considered to be a formal assessment because return at all. In situation like this, the ten year period applies.
1. It is not addressed to the taxpayer 2. There was a demand
made to the taxpayer but the letter was not sent to the taxpayer 4. It is incumbent upon the taxpayer who wants to avail the defense
by the CommissionerLastly, there is no need for the assessment of prescription to prove that he or she indeed filed a return.
before criminal prosecution applies. A crime is consummated when
the violator knowingly and willfilly filed a fraudulent return Exceptions:

7. Estate of Julina Diez vda. De Gabriel vs. CIR, GR No. 155541, 1. False or fraudulent return with intent to evade the taxes within
01 Jan 2004 ten years from the discovery of falsity or fraud.

3rd Requisite: The assessment must be served to the taxpayer, to 2. Failure or omission to file a return within ten years after the
enable the taxpayer to determine his remedies due process discovery of failure or omission to file a return
requires that it must be served and received by the taxpayer. In
this case the assessment was sent to Philtrust a third person not 3. Waiver of the statute of limitation in writing which must e made
related to Juliana the taxpayer. before the expiration of the three year period of assessment.

8. CIR vs. E shuttle Service GR 240729 FRAUD, FALISTY AND IMPOSITION OF 10 YEAR PERIOD

In this case, there was no demand, and that the assessment was not 1, Fraud : Is a question of fact and circumstances this must be
served to the taxpayer. There was no proof of mailing. There was alleged and proven in court. It is not lightly to be presumed
no demand because the formal letter of demand and assessment because it is a serious charge. Hence, if fraud is not proven the
provides that there is nothing on record that reveals that CIR issued government cannot use the 10 year period to make an assessment.
a final demand that contains a definite period of payment. .
Further, the CTA en banc observed that the alleged notice attached 2. False Return: implies deviation from the truth. It is usually due to
to the FAN did not prescribe a definite period for the respondent mistake, carelessness and ignorance.
to pay deficiency taxes. Therefore, the same is not valid.
3. Fraudulent return: Implies intentional or deceitful entry with an
9. CIR vs. Spouses Magaan May 23 ,2021 intent to evade the taxes due.

In assessment the taxpayer must be informed of the factual and Q: Why is there a need to distinguish when the
legal bases to which the assessment is made. Tabular summaries of prescriptive period is the same?
the alleged underdeclared income of the respondent only
mentioned payment received but no other explanation left to A: The importance is the application of penalty surcharge. In Aznar,
enable the taxpayer to make a protest there s a surcharge of 50% penalty surcharge. For the surcharge to
apply, it must be intentional fraud, consisting of deception willfully
Also, demand was not made to the spouses. As stated in the formal and deliberately done or resorted to in order to induce another to
letter of demand, the CIR considered IMELIC as the same entity as give up some legal right.
that of the spouses. The court ruled that Imilec is a partnership that
has a separate and juridical existence from its partners and that Q: Does the 30% threshold proves that fraud exist?
there is no clear and convincing proof that the corporation was
created to commit fraud. Therefore the separate juridical A: No it does not. It only pertains to a presumption of fraud, which
personality applies and that notice to IMELIC is not considered to in the end must be proven by the government.
be notice to the spouses
Suspension Of the Running of the Statute of limitation
ii. Prescriptive Period
1. CIR is prohibited form the making the assessment or beginning ,
distraint or levy or a proceeding in court and sixty days thereafter
General Rule The right to assess must be exercised within three
years from 2. When the taxpayer requested for reinvestigation and it is
granted by the CIR
a. The day the return was actually filed

Tabuzo, Tax Remedies Self Notes

3. The taxpayer cannot be located in the address unless there Is a that the waiver is invalid and the period to assess had prescribed it
notice would not have paid the same.
4. When warrant of distraint or levy is duly served and no
property may be located. NB: If the taxpayer impugned the validity o f the waiver
and made partial payments of the assessed deficiency tax. The
5. When the taxpayer is out of the Philippines
court ruled that the taxpayer is not estopped as it did not waive
Waiver: the defense of prescription as regard to tax deficiencies and
continued to raise the defense of prescription.
The taxpayer and the government may extend by mutual
agreement in writing the prescriptive period for the assessment and 1. CIR vs. Asalus Corporation, G.R. No. 221590, 22 Feb 2017
collection of taxes.
There is a prima facie evidence of a false return if there is
Mandatory Requirement for a valid waiver: substantial under -declaration of taxable sales, receipt or income.
The failure to report sales, receipt or other income in an amount
1. The waiver must be executed before the expiration of the period exceeding 30% what is declared in the returns constitutes as
to assess or collect taxes. substantial under declaration. When there is a showing that a
2. The date of execution must be specifically indicated in the taxpayer has substantially under declared its sales, receipt or
waiver. income there is a presumption that it filed a false return.
3. The waiver must be signed by the taxpayer or his duly
authorized representative. For corporation, it must be duly signed As a general rule, the period to assess is three years from the time
by its responsible officials. of the filing of the return or at the last day of filing of the return
4. The expiry date of the period agreed upon to assess or collect whichever comes later. An exception in case of false return the
after the regular three-year period must be indicated. period is ten years. Also note that the mere showing that the tax is
undeclared to the amount of 30% shows that the tax filed was false
5. It is mandator that the waiver is in writing, the same need not be notwithstanding the intent to defraud sufficient to warrant the
notarized.
application of the ten year period
6. The taxpayer has the duty to submit the duly executed waiver
to the relevant BIR officer 2. CIR vs. Philippine Daily Inquirer, Inc., G.R. No. 213943, 22
A. The BIR officer indicates acceptance of the waiver by signing the March 2017
same.
b. Both the execution of the waiver and the acceptance must be Doctrine:false Return : NO intent to evade In this case, the entry of
done prior to the expiration of the period to assess or collect. a wrong information due to carelessness without the intent to evade
taxes does not constitute a false return, it also does not provide as
enough evidence to prove falsity or fraud on the part of the PDI. In
Prescriptive Period this case, the three year period applies as there was not enough
evidence to prove fraud or intentional falsity on the part of PDI.
1. In determining if prescription to assess has indeed set in , the
important date to remember is when the demand letter , or notice is 3. CIR vs. La Flor Dela Isabela, Inc., G.R. No. 211289. January
released or mailed or sent to the CIR to the taxpayer. (At the time 14, 2019, J. Reyes
of release and not at the time of Receipt)
DOCTRINE
CIR’s part
Withholding taxes do not cease to become income tax just because
A. If the release was effected before the prescription sets in : The it is collected and paid by the withholding agent. It was never
assessment is deemed to be made on time, even if the taxpayer meant to mean that withholding tax do not fall within the term of
receives the same after prescription period internal revenue tax considering that the income taxes are the one
withheld by the withholding agent.Section 203 of the NIRC provides
B. However, the fact that the assessment notice was mailed before that all internal revenue taxes shall be assessed within three years
the prescriptive period sets in must be proven by substantial from the last day prescribed by law for the filing of the tax.
evidence by the CIR
4. BIR vs. GMCC United Dev’t Corp., GR No. 191856, 7
Taxpayer’s Part December 2016

A. If the taxpayer makes a direct denial of the receipt of a mailed Doctrine: For the ten year period under Section 222(a) to apply it is
demand letter, such denial shifts the burden to the government to not enough that fraud is alleged in complaint fraud must be
prove that such letter was indeed received by the taxpayer. established by clear and convincing evidence

Estoppel: In this case the error of GMCC stemmed from the wrongful
application of the law and not an intention to evade payment if
In cases when the taxpayer still paid within the there is an intent to evade payment GMCC should not have paid
extended period provided in the waiver. The court rueld that the the tax albeit in a wrong year.
taxpayer is estopped from the questioning of the waiver as it
impliedly admitted to the validity of the waiver. Had it believed Section 203 prohibits two acts after the expiration of the three
year period. 1. An assessment for the collection of taxes in the

Tabuzo, Tax Remedies Self Notes

return 2. Initiating a court proceeding on the basis of such return. The doctrine of estoppel was recognized and the waiver was only
The state prosecutor was correct in dismissing the complaint for tax upheld when both the taxpayer and the BIR were in pari delicto.
evasion since it was clear that the return cannot be used as basis for The act of the taxpayer in impugning the validity of the waiver and
the case. benefiting from it constituted as bad faith.

. The application of estoppel is necessary to prevent undue injury

that the government would suffer because of the cancellation of the
5. CIR vs. Systems Technology, Inc. vs. CIR, G.R. No. 220835, petitioner’s tax liabilities
July 26, 2017,
9. Asian Transmission Corp. vs. CIR,2018, G.R. No. 230861, 19
Compare this case with RCBC v. Cir : Partial payments of the Sept 2018,
revised assessment issued within the extended period as provided
in a waiver is an implied admission as to the validity of the waiver. Here, the taxpayer executed two defective waivers. In this case the
Vs. This case . Here, there is no partial payments made hence it is defects noted on the waivers of ATC weren’t solely attributable to
not an implied admission of the validity of the waiver the CIR. A careful reading of the RDAO indicates that the proper
preparation of the waiver is the responsibility of the taxpayer.
The estoppel upheld in the RCBC case arose from the taxpayer’s
act of payment and not to the reduction in the amount of assessed The princi0ple of estoppel was applicable. The execution of the
taxes. RCBCs partial pamynet of the revised assessment effectively waiver was to the advantage of ATC because the waiver would
belied its insistence that the waivers are invalid and the assessments provide ATC the sufficient time together and produce voluminous
were issued beyond the prescriptive period. Here, there is no such record for audit. Therefore, it would be unfair were ATC be
payment by the STI the mere reduction of the amount of the permitted to assail the waiver only after the assessment proves to
assessment because of a request for reinvestigation must not bar it be adverse
from raising the defense of prescription.

6. CIR vs. Avon Products Manufacturing, Inc/Avon Products

Manufacturing, Inc. Vs. TheCommission of Internal Revenue, CIR vs Transaction Optical
G.R. Nos. 201398-99/G.R. Nos. 201418-19. October 3,
1. TP never raised the invalidity of the waivers at the earliest
The Estoppel upheld by the RCBC arose from 1. The benefit opportunity either in its protest to the PAN. Protest to the Fan or
obtained by the taxpayer from its execution of waiver in the form supplemental protest to the FAN; in fact TPs protest to the FAN
of drastic reduction of deficiency taxes 2. The taxpayer’s payment recognized the validity of th waiver.
of a portion of reduced taxes.
2. TP repeatedly failed to comply with audit notices and ignored
In this case, Avon did not actually receive any benefit from the the request for informal conference to discuss discrepancies in the
waiver. There was even a drastic increase in the assessed partial document submitted.
deficiency taxes when the CIR increased the alleged sales
discrepancy. Under this circumstance, Avon payment of an 10. CIR vs. Basf Coating + Inks Phils., Inc., G.R. No. 198677, 26
insignificant portion of the assessment is not an admission as to the Nov 2014
validity of the waiver.
Doctrine : The failure of the respondent to inform the BIR of its
7. CIR vs. Standard Chartered Bank, G.R. No. 192173, July 29, change of address does not warrant the non suspension of the
2015 prescriptive period because BIR knew of the change of address. ( ie
: Return to sender )
Doctrine
In this case, even if there is an absence of formal written notice of
Although the respondent paid the deficiency WTC and FWT respondent change of address , the fact remains that the petitioner
assessment it did not waive the defense of prescription as regard to became aware of the respondent’s new address as shown by the
the remaining tax deficiencies it being on record that the document. Therefore, the running of the three year period to assess
respondent continued to raise the issues of prescription in its pre - the respondent was not suspended and had prescribed.
trial brief , joint stipulation of facts, issues and direct testimonies of
the witness and memorandum. ( Exception to the RCBC case) Prescription in the assessment and the collection of taxes is
provided by the legislature for the benefit of both the government
and the taxpayer , for the government for the purpose of
expediting the collection of taxes, so that the agency charged with
8. CIR vs. Next Mobile, G.R. No. 212825, December 07, 2015, the assessment and collection may not tarry to long to prejudice the
interest of the government.
The waiver is upheld despite invalidity due to estoppel In this case ,
the respondent executed five waivers an delivered them to the 11. AFP General Insurance vs CIR, GR 222133
petitioner one after the other .It allowed the petitioner to reply on
the said waiver and did not raise any objection as to its validity In this case AGIC, argues that the letter or authority is invalid
until the time the petitioner assessed the tax and penalties . The because the assigned revenue officer 1. Failed to render an
court ruled that the taxpayer cannot invoke the doctrine of investigation report 2. Submit the letter of authority for
estoppel. revalidation. As provided under the law. A revenue officer assigned

Tabuzo, Tax Remedies Self Notes

to an audit is duty bouond to render an investigation report within In contrast, a criminal charge is directly filed wih the DOJ.
120 days from the issuance of the LOA. Failure to revalidate the Thereafter, the taxpayer is notified that a criminal charge against
letter of authority does not make the said LOA void ab initio since him and not that the commissioner issued an assessment
the loa merely becomes unenforceable inasmuch as the revenue
officer must first seek ratification of his expired authority to audit or
continue beyond the 120 days.If however the revenue officer does
not get revalidated during the 120 day period as to when she 4. BIR vs.CA, Spouses Manly, G.R. No. 197590. November 24,
rendered her investigation. He or she may instead render a report 2014
based on the initial assessment that was issued prior to the
expiration of the LOA. Doctrine

Corollary an assessment of tax deficiency is not required in a

criminal prosecution for tax evasion. However, in CIR vs CA , the
iii. Is Assessment Necessary Before Prosecution? court clarified that although a deficiency assessment is not
necessary, the fact that a tax is due must be proven before one is
An assessment of deficiency is not necessary to a criminal prosecuted for evasion. Here the BIR enough to prove through the
prosecution for willful attempt to defeat and evade the income tax. summary that there is a gross disparity
There is no requirement for a precise computation and assessment
of the tax before there can be a criminal prosecution under the tax By looking at the table presented by the petitioner CIR there is a
code. The crime is complete when the violator has knowingly and showing that the spouses underdeclared their income. There is a
willfully filed a fraudulent return with intent to evade and defeat huge disparity of the reported income and acquisition within the
apart or all of the tax . past years.Therefore, the court ruled that even without assessment
CIR was able to convince it that there is probable cause to indict the
1. Ungab vs. Cusi, 97 SCRA 877, 30 May 1980 respondent spouses for tax evasion as the petitioner was able to
show that a tax was due form them.
DOCTRINE: While there can be no civil action to collect before the
assessment procedure provided in the code, there is no requirement
for the precise computation and assessment of tax before a criminal
prosecution may exist. Hence, in a criminal case all the prosecution b. Assessment Process and Reglementary Periods
has to do is to identify the elements of the crime, therefore there is
no need for an assessment Assessment: General Rule: The right to assess must be exercised
within three years from :
2. CIR vs. CA (Fortune Case) GR No.119322, 4 June 1996
* From the failure to file a return
For a criminal prosecution to proceed before the assessment there
must be a prima facie showing of a willful attempt to evade tax. a. The date the return was actually filed
The registered wholesale price of the goods approved by the BIR is b. The last day of the filing of the return whichever is
presumed to be the actual price therefore it is not fraudulent and later
unless and until the BIR has a final determination as to what the
correct tax are the taxpayer is not to be placed in a criminal
prosecution if tax evasion Exception: ( Suspension of Running of Statute Limitation)

-vs- Ungab vs Kusi 1. 10 Years:

In the case of Ungab, there is willful attempt because the taxpayer a. False Return ( Bad Faith)
failed to declare in his income tax return his income derived from b. Fraudulent: Contemplated by law must not be actual
Banana Sippings. In the present case, it is different since the it must be intentional
registered wholesale price of the goods as approved by the BIR is
c. Failure to file a return
presumed to be actual wholesale price therefore, there is no
fraudulent return and unless and until the BIR had made
determination of correct taxes, the taxpayer must not be placed 2. Suspension: Prohibited form making assessment, distraint or levy
under criminal prosecution or a proceeding in court and 60 days thereafter

3. Adamson vs. CA/CIR vs. CA, GR Nos. 120935 & 124557, 21 If there is a pending case in court.
May 2009
3. When the taxpayer cannot be located unless there is a notice of
Issuance of the assessment is different from the filing of the change of address.
complaint. Before the assessment is issued there is a practice of pre -
assessment notice sent to the taxpayer. The taxpayer is given the 4. When the BIR executes a valid waiver.
chance to submit position papers to prove that the assessment is
unwarranted. If the commissioner is not satisfied, an assessment is to Requisite:
be sent to the taxpayer.

Tabuzo, Tax Remedies Self Notes

1. Both the Commissioner an the taxpayer agrees in writing to its
assessment after such time the tax assessed within the period Choices
agreed within such time. a. Reinvestigation: Protest within 30 days plus additional 60
2. The taxpayer may be assessed within the period agreed upon days to submit additional document ( last day of the 30 days +
60 days to submit). Based on newly discovered evidence
3. May be extended but it must be prior to the period agreed
upon b. Reconsideration: Submission 30 days from the issuance of
the FAN. Based on existing records without the introduction of
5. When the taxpayer request for reinvestigation which is granted new evidence
by the CIR.
6. When the taxpayer is out of the Philippines
Denial of the Protest
1. If the protest is accepted : A motion fo reconsideration is
1. letter of authority filed to the superior officer.
Must be served within 30 days from the time it is issued. It
covers the ff : 1. Taxes covered . 2. Period covered 3.
Authorized examiner 4. Authorized signatory Appeal to the Ca
1. 30 days from the denial of the CIR or his duly authorized
representative
2. Audit: An audit is conducted 120 days from the issuance of
2. 30 days from the lapse of inaction of the BIR
the LOA
A. Non Deficiency : Assessment period ends
a. Reinvestigation: File 180 day from the time of submission of
B. Deficiency : The RO informs the taxpayer through a report.
The revenue officer states the facts in his report of investigation document with protest or Wait for the decision and then go
and submit the same to the Regional Director or Special beyond the 30 days
Investigation division ( indorse)
3. Notice of discrepancy: The RDO and special investigation b.Reconsideration: 1. 180 days form the time of protest or 30
division informs the taxpayer in writing in case the discrepancy days from the time decision
in the taxpayer is payment
4. Reply: The taxpayer is given three days to file a reply but
the resolution is thirty days CTA decides within 30 days from the time it is submitted

a. Yes: There will be a notice of informal conference

b. No. The default case is endorsed to the assessment division Appeal the CTA en banc within 15 days receipt f the resolution.
This remedy is jurisdictional , failure to file the same
5. PAN : A preliminary assessment notice ad endorsement to the
RDO, the assessment division to the CIR. The PAN is issued APPEAL RULE 45
showing facts of the law and rules ad regulation n which the
assessment is based
Exception to PAN
1. When the deficiency is a result of a mathematical error.
2. When the discrepancy has been determined between and i. Medicard Philippines vs. CIR, GR. No. 222743, 5 April 2017
withheld and tax actually remitted to the BIR
3. When the taxpayer who opted to claim a refund or tax Prior to the issuance of the PAN and the FAN there must be an
credit or excess who fund carry over the subsequent year of issuance by the revenue officer of a letter authority. In the case at
credit of exercise was found to carry over the subseqneut year bar since there is only letter notices it cannot substitute a defective
4. Excise tax is not paid letter of authority because a letter notice is not a letter authority

5. When an acitvitiy locally purchased or imported is sold or

transferred to a non exempt personk Letter Notice Letter of authority
6. Taxpayer responds: The taxpayer must respond within 1. This is only required for the 1. A LOA is required prior to
fifteen days from the issuance of the preliminary assessment purpose of notifying the the examination of a taxpayer
notice stating the factual and legal grounds taxpayer that a discrepancy is
found based on BIR relief
- by disregarding the 15 day period provided by law, the CIR
system
utterly deprived the tax payer of the opportunity to contest the
PAN and present evidence in support thereto before the FAN was 2. A letter of notice has no time 2. A letter of authority must be
issued. Clearly due process requires that the taxpayer receives the limit served within 30 days
PAN and that he is given the opportunity to respond thereto
3. There is no time limit 3. The revenue officer has 120
7. Final Assessment Ntoice : days from the receipt of the
CIR or his duly authorized representative issues a formal letter LOA to conduct the examination
of demand objected via protest made within 30 days from the – Need to revalidate if not
receipt rescissible

8. protest : The taxpayer protest within thirty days from the

receipt of the formal letter of demand . The protest must be
done within 30 days

Tabuzo, Tax Remedies Self Notes

ii. CIR vs. Lancaster Philippines, Inc., G.R. No. 183408, July 12, The law provides that there must be a 30 day expiration for
2017 service of LOA. Upon expiration of the LOA, it becomes
unenforceable as it cannot be served without revalidation upon the
In this case the Letter of authority shows that the period for taxpayer who has the right to refuse the same. Failure to comply
examination is taxable year 1998, as seen in the LOA the bearer is with the 12- day rule does not render the LOA void. The expiration
authorized to examine the books of account and other record for of the LOA merely rendered it unenforceable inasmuch revenue
the year 1998. In the case at bar, since the subject LOA specified officer must first seek ratification of his expired authority to validly
the examination should be only for the taxable year 1998 but the continue its investigation beyond the 120 days. If the revenue
subsequent assessment issued against Landcaster is for the fiscal officer is unable to revalidate his LOA, it does not invalidate the
year 1999, hence outside the scope of the LOA therefore the same assessment already performed within the 120 day period. Instead,
is void. the Revenue officer may render a report based on the result of the
initial investigation.
iii. CIR vs. Metro Star Superama, GR No. 185371, 8 December
2010

In cases the taxpayer denies receiving the assessment from the CIR c. Civil Penalties
it is incumbent upon the latter to prove by competent evidence that
such notice was received by the addressee. While a mailed letter i. Revenue Regulations No. 21-2018
is deemed received, such is merely a disputable presumption Rate of Interest
subject to denial thereof and shifts the burden to the party to prove
that the mail letter was indeed received. In this case, the BIR failed 1. Loans of Forbearance: 6% in the absence of any stipulation.
to prove the fact of mailing , hence it is presumed that assessment 2. No Loans of foreberance: 12% the rate of legal interest
was never sent,
3. Deficiency Interest: Interest imposed on any deficiency tax due ,
which interest shall be assessed and collected from the date
iv. CIR vs. Mcdonald’s Philippines Realty Corporation, GR No. prescribed for its payment until 1. Full payment 2. Issuance of the
242670, 10 May 2021 notice of demand of the commissioner whichever comes first.
12% : Double the interest of loans of forbearance of money.
There is a requirement for the issuance of a new letter of authority
if the revenue officers are 1. Reassigned 2. Transferred 3. Section 56(b) The amount a determined by the CIR exceed the
Revalidation of the expired Letter of authority. Here, there is no amount of taxpayer in return
issuance of the LOA when there is a transfer of authority from one If there is no amount as shown in the taxpayer return, the amount as
CIR authority to another. Therefore, the LOA is invalid. determined by the CIR
4. Delinquency Interest: Interest imposed on the failure to pay:
The use of memorandum of assignment, and other equivalent 1.The amount of tax due on any of the return file 2. The amount of
document directing the continuation of audit or investigation by tax due for which no return is required or 3. The deficiency tax or
unauthorized revenue officer usurps the function of the LOA. In this any surcharge or interest thereon on the due date appearing in the
case the memorandum of assignment is not proof of existence of notice and demand of the commissioner until the full amount is paid
which interest forms a part of tax.
authority of substitute or replacement revenue officer
NB: Upon the effectivity of the train law, no case shall the
deficiency and delinquency interest prescribed therein be imposed
simultaneously
Hence, the act of reassigning revenue officer who are the original
authorized officer named in the LOA and substituting them with the
Delinquency Tax Deficiency tax
new revenue officer who do not have a separate LOA issued in
their name is in effect a usurpation of the statutory power of the 1. To pay the amount of tax 1. Amount by which tax are
CIR or his duly authorized representative. due on any return required to imposed by law as
be filed , a return but did not determined by the CIR or his
pay the entire amount written representative exceeds the
in the return or amount show in the tax by the
taxpayer in his return
v. CIR vs. Transitions Optical Philippines, Inc., G.R. No. 227544, 2. TO pay the deficiency tax
22 Nov 2017 on the date appearing in the
demand of he CIR
2. If no amount is shown by
In the case at bar, there is an invalid waiver as the waiver was not i. Delinquent taxes can be the taxpayer or if no return is
accompanied by a notarized written authority from the respondent collected administratively via made then the amount which
distraint or levy or judicial the tax as determined by the
authorizing the representative to act on his behalf. However, the
action CIR or his representative
court ruled that estoppel has set in. The act of the respondent shows exceeds the amount
that it impliedly accepted the validity of thee waiver . 1. It never previously assessed or
raised the invalidity of the waiver at the earliest opportunity , collected as defcieicny
either in the protest to the PAN and the FAN 2. The respondent also
Deficiency tax must be
benefited from the waiver. assessed before collection

vi. CIR vs. Avon Products Manufacturing, Inc/Avon Products Failure of the taxpayer to There is already a payment
Manufacturing, Inc. Vs. CIR, pay tax due on the date but an amount is still due and
fixed y law or indicated in th collectible form the taxpayer
assesment notice or letter of upon audit.

Tabuzo, Tax Remedies Self Notes

demand a. Criminal Action
b. Civil Action
1. Filing of the complaint by court of
A civil and administrative sanction not a criminal penalty competent jurisdiction
2. Where the assessment is appealed to the
A penalty of 25% A penalty of 50% CTA by the filing of an answer to the
taxpayer petition for review where payment
1. Failure to file any return 1. Willful neglect to file a of tax is paid for
AND pay the taxes due return within the period
prescribed by law *Unlike summary administrative remedies the government power to
2. Filing a return with an enforce the collection through judicial action is not conditioned upon
internal revenue officer other 2. False or fraudulent return is the previous valid assessment.
than those with whom the willfully made
return is required to be filed
a. There is a prima facie
3. Failure to file a deficiency evidence of a false return Prescriptive Period :
ta within the time prescribed when there is substantial 1. If there is an assessment
in the notice of assessment under declaration f 30% for
the taxable income or - Within five years from the date of assessment
4 . Failure to pay in full or deduction.
part of the amount of tax 2. In case of false, fraudulent return with an intent to evade tax or
stated in the return failure to file a return
NB; There is no 25% - Within 10 years after the discovery of falsity, fraud or
surcharge when you file on omission without the need of an assessment
time , pay the full amount - Within five years from the assessment if it was made
stated in the return but within the ten year period
subsequently find out that the
return filed is erroneous. 3. Waiver of the statute of limitation

Notes on Willful Neglect i. China Banking Corporation v. CIR, GR. No. 172509, February
04, 2015
1. If the taxpayer files a return only after prior notice in writing
from the BIR, then the 50% surcharge shall be imposed for late BIR issued an assessment on April 19 1989, when the applicable
filing and late payment of tax rule is that the assessment be made within the three year period.
Here, there is no record to show that the assessment notice was
a. If no demand on the BIR and the taxpayer pay then mailed, assuming that it was mailed on April 19 1989, BIR has three
the payment is 25%. ( With demand 50% without demand 25%). years to collect the DST from the said date, which BIR still failed to
b. The 25% surcharge is not imposable where the non enforce.
payment was due to a legitimate dispute on whether an article is
subject or not to sales tax. The argument of BIR that request for reinvestigation suspended the
c. If the imposition of tax is controversial the taxpayer statute of limitation cannot propser. The request for reinvestigation
may not be held liable for surcharge and interest. It is only liable alone will not suspend the statute of limitation. For there to be
for tax proper and must not be held liable for surcharge or interest. suspension, the request for reinvestigation must have been granted
by the CIR before it can suspend the three year period.
d. Willful neglect to file the required tax return or
fraudulent intent to evade tax cannot be presumed
ii. Angeles City vs. Angeles City Electric Coop., GR No. 166134,
i. The fraud must be actual and not constructive. It must be 29 June 2010
intentional fraud
Local government tax : Injunction In cases of local taxes, there is no
express provision in the Local government code prohibiting courts
from issuing an injunction to restrain local governments from
Collection collecting taxes. Two requisites must exist to warrant the issuance of
Requisite for collectability: injunction 1. The existence of a clear and unmistakable right to be
1. There is already a final assessment made for the determination protected 2. Urgent paramount necessity for the writ to prevent
of the tax due. serious damage

2. Self-assessed tax as shown in the return not paid in the due date
iii. CIR vs. Pilipinas Shell, GR Nos. 197945 & 204119-20, 9 Jul
prescribed by law.
2018

Two Types of Remedies to enforce the collection of Unpaid taxes The Congress delegated the assessment and collection of all
National internal revenue taxes and fees to the BIR. The CIR has the
1. Summary administrative remedies power to make assessment and prescribe additional requirement
* BIR may summarily enforce collection only when it has accorded for tax administration and protest. The tax code provides that there
the taxpayer administrative due process which vitally includes the are two governmental remedies in the collection of taxes 1.
issuance of a valid assessment Summary administrative remedies 2. Judicial remedies such as the
2. Judicial action filing of the criminal and Civil action.

Tabuzo, Tax Remedies Self Notes

In an assessment process, the BIR must first make an assessment then merely a reconsideration therefore it did not toll the prescriptive
enforce the collection of the amounts so assessed. An assessment is period
not an action for the collection of taxes. The BIR can only enforce
the collection when it accorded the taxpayer administrative due
Request for reconsideration Request for reinvestigation
process which includes the issuance of valid assessment
Refers to a plea for re- Refers to a plea for
In the case at bar, the collection letters issued by the BIR shows that evaluation of assessment based reevaluation of an assessment
it intended to pursue through said collection letters summary on existing records without the on the basis of newly
reception of additional discovered evidence that the
administrative remedies for the collection of the respondent’s evidence taxpayer intended to present in
alleged excise tax deficiency, In this case, the collection letter was the reinvestigation
followed by a warrant of garnishment, distraint or levy and that the
BIR proceeded with the collection of the respondent’s unpaid taxes
without a previous valid assessment.
e. Taxpayer’s Remedies
Absent a previous assessment that supports a collection letter, the
attempt of BIR to collect through the collection letter followed by 1. Administrative protest
subsequent warrants of garnishment and distraint or levy are void 2. Judicial protest
and ineffectual. An invalid assessment bears no fruit.

1. Protest or dispute the assessment or

2. Refund or recover of erroneously or illegally collected taxes .
iv. CIR vs. BPI, GR NO. 224327, 11 June 2018
3. The granting of the taxpayer other certain remedies such as
applying for compromise or an abatement releasing property from
CIR argues that the CTA did not acquire jurisdiction over the case as a public sale or redeeming it and availing tax amnesty.
the respondent failed to contest the assessment made against it by
the BIR within the prescribed period provided by law. The
petitioner also argues that estoppel is present
i. Protesting an Assessment
An assessment becomes final and unappealable within thirty days
from the receipt of the assessment if the taxpayer fails to file a
The taxpayer files a letter of protest within thirty days form the
protest requesting for reconsideration and reinvestigation. In this
date of the receipt of the FAN. If the taxpayer fails to do so, then
case the petitioner insist that the respondent failed to elevate the
the assessment becomes final , executory and demandable. The
tax assessment against it to the CTA within the prescribed period,
protest comes in the form of either a written request for
the taxpayer on other hand argues that there was no final
reinvestigation or reconsideration
assessment notice received which denied the same in whole or in
part.
Contents of the Protest
In this case, BIR failed to prove that it sent a notice of assessment
and that it was received by the respondent, Therefore the notice 1. State the nature of the protest ( reconsideration , reinvestigation)
dated May 6 1991 is deemed to be the notice. While a mailed 2. Date of the FAN
letter is deemed as received by the addressee this is merely a
disputable presumption, BPI denies receiving the assessment notice 3. Applicable rules, law and etc: If the protest lack any of these
and the CIR is unable to present substantial evidence tat such notice then it shall be considered to be void and without force and effect.
was indeed sent to the BIR before the latter’s right to assess 4. Reconsideration: The taxpayer has 60 days to submit all the
prescribed. relevant and supporting documents form the date of the filing of
the letter of protest. The 60 day period to submit relevant
Hence, since the court reconned the period to collect from May 6 supporting document does not apply to request for reconsideration
1991the same had already prescribed, hence the issuance of the
warrant of distraint and levy wad made beyond the prescriptive
period.
a. “ Relevant supporting documents” : Must be understood as those
v. BPI vs. CIR, G.R. No. 181836, July 09, 2014
documents that are necessary to support the legal basis in disputing
the tax assessment as determined by the taxpayer.
Any internal revenue tax which has been assessed within the period
of limitation may be collected by distraint or levy and or court b. The BIR can only inform the taxpayer to submit additional
proceeding five years from the time the PAN was issued.
documents. The BIR cannot demand what type of supporting
documents must be submitted. Otherwise the taxpayer will be at the
Note the difference between request for reinvestigation and
mercy of the BIR which may require the production of document that
request for reconsideration. In reinvestigation, this entails the
a taxpayer cannot submit.
reception and evaluation of additional evidence that takes more
time than a reconsideration which is limited to the evidence on hand.
c. The legal implication of this is that the taxpayer must allege when
This justifies why reinvestigation can suspend the statute of limitation
the supporting ducents were submitted in order to reckon the 180
while the latter cannot. In the case at bar, what was requested was
day period . If not the CTA may dismiss the case because it was
filed still within the 180 day period and thus prematurely filed.

Tabuzo, Tax Remedies Self Notes

Denial of the Protest 2. CIR VS. Liquigas Phils. Corp., GR Nos. 215534 & 215557, 18
Apr 2016
1. The CIR or his representative denies it
If the protest is denied in whole or in part by the CIR representative In this case, the petitioner sought to invalidate the FDDA on the
, the taxpayer has two options : ground that it did not provide the facts and the law to which the
assessment was based. The respondent argues that since the FDDA
1. Appeal to the CTA division within 30 days from date of receipt
did not state the laws and the fact to which the assessment is based
of the decision VIA petition for review under RULE 42.
the assessment is considered as null and void.
2. Request for reconsideration with the CIR within 30 days from the
date of receipt of the decision ( administrative remedies) The court ruled that the FDDA must state the law and the facts to
a. If the protest or request for reconsideration is still denied by the which the assessment was made in this case it merely contained a
CIR appeal to the CTA within 30 days from the date of receipt of table of liquigaz supposed tax liabilities without going into specific
said decision. transaction that gave rise to tax deficiency. The FDDA fails to
inform the taxpayer of the facts and the law to which the
assessment was made.
b. A motion for reconsideration MR of the CIR denial will not toll the
thirty day period to appeal to the CTA.
A void FDDA does not void the assessment. An assessment becomes
dispyted after the taxpayer files a protest in the administrative
2. Does nothing with it. ( Inaction) level. The CIR either issues a decision o the disputed assessment or
fails to act on it. The taxpayer appeals the decision or inaction of
the CIR. The FDDA is not the only means where the final tax liability
If the CIR representative does not act within 180 das counted from of the taxpayer may be appealed, an assessment differs from the
1. The date of filing of protest in case of request for FDDA hence the invalidity of one does not result I the invalidity of
reconsideration or the other.
2. The date of submission of the required relevant supporting
document ( within 60 days from the date of filing of the protest for 3. Lascona Land Co., Inc. vs. CIR, GR No. 171251, 5 March 2012
a request for reinvestigation)
In the event that the taxpayer failed to act on the disputed
The taxpayer may either :
assessment within 180 days from the period of submission of
1. Appeal to the CTA within 30 days from the expiration o the 180 document the taxpayer has two remedies 1. File a petition for
day period or review within the CTA within 30 days from the expiration of the
2. Wait for the final decision of the CIR representative. 180 day period 2. Wait for the decision of the Commissioner in
such disputed assessment and appeal the same within thirty
* Appeal or wait option in inaction cases are mutually exclusively
days.Therefore, the court ruled that the argument of the BIR that the
resort to one parts the application of the other. The option is
granted to the taxpayer, hence the CIR cannot state that the assessment has become final and executory after the lapse of thirty
appeal to the CTA is late if the taxpayer chooses to wait for the day period from the 180 days. A taxpayer cannot be prejudiced
final decision even if it is beyond the 180 day period. if he choses wait for the final decision of the CIR on the protested
assessment. In the case at bar, Lascona chose to wait for the
* The taxpayer does not have the option to appeal to the CIR in
case the CIR representative does not act on his protest . The decision of the CIR, before appealing the same even though
taxpayer must choose between the two options. beyond the 180 day period is a proper remedy .
FDDA:
4. RCBC vs. CIR, GR No. 168498, 24 April 2007
Assuming that the CIR or his representative acts on the protest the
In this case the Commissioner failed to act on the disputed
FDDA must state that : The fact the applicable law, rules, and
assessment within 180 day period from the date of the submission
regulation or jurisprudence on which the decision is based. That the
of the taxpayer 1. Either file a petition for review with the CTA
decision is the final decision.
within 30 days after the expiration of the 180 day period or 2.
Wait for the final decision of the Commissioner on the disputed
A void FDDA does not invalidate the underlying assessment because assessment and appeal the same within 30 days after the receipt
an assessment and a FDD are different . If the FDDA is void, it is as of the same. The option of the are mutually exclusive and the resort
if there was no decision by the CIR tantamount to a denial by
of one bars the other.
inaction by the CIR which may be appealed to the CTA
In this case, the Commissioner failed to at on the assessment within
180 days. The petitioner opted to file a petition for review with the
CTA without waiting for the decision of the CTA. This was filed out
1. CIR vs. First Express Pawnshop Co., GR No. 172045, 16 June
of time as it was filed more than 30 days after the lapse of the
2009
180 day period. Therefore, the petitioner cannot dispute that the
assailed decision is not final, after availing the first option, the
In the case at bar CIR argues that since the respondent failed to
petitioner cannot resort to he second option which is awaiting the
submit supporting documents in the request for reinvestigation within
final decision of the Commissioner and appealing the same with the
sixty days from the filing of the protest for deposit. The tax code
CTA on the pretext that there is no final decision on disputed
provides that the BIR can only inform the taxpayer to submit the
assessment since the choice of one remedy precludes the other.
documents but it cannot demand what type of document the
taxpayer must submit otherwise, they will be under the mercy of the
taxpayer.

Tabuzo, Tax Remedies Self Notes

 The court ruled that there is a violation of the doctrine of exhaustion
of administrative remedies. Before a party is allowed to seek the
intervention of the court he or she must first availed himself or
5. PAGCOR vs. BIR, G.R. No. 208731, January 27, 2016 herself of all the means of administrative process afforded to him
or her. In this case, before resorting to judicial remedies, they must
There are three options given to taxpayer when the protest is first appealed the same in the administrative remedies. ( Wala
denied. pang FDDA)

1. If the protest is denied wholly or partially by the CIR : The 7. CIR vs. SOJ and Metropolitan Cebu Water District, GR No.
taxpayer may appeal with the CTA within thirty days from the 209289, 9 July 2018
receipt of the whole and partial denial of the protest.
Where the disputing parties are all public entities ( between the
2. If the protest is wholly or partially denied by the AUTHORIZED government agencies and other government agencies) the dispute
REPRESETATIVE: The taxpayer appeals to the CIR within thirty shall be administratively settled and adjudicated by the SOJ, the
days from the receipt of the whole or partial denial of the protest. solicitor general or the government corporate counsel depending on
the issues an government agencies involved. For cases involving only
3. The CIR and his authorized representative fails to act within 180 question of law it is the SOJ which has jurisdiction. It is clear in this
days from the submission of the required document, the taxpayer case that the dispute of the CIR and the respondent a local water
appeals to the CTA within 30 days from the lapse of the 180 day district which the GOCC clearly the SOJ has jurisdiction to decide
period. If the failure to act appeal with the CTA. the case.

In the case at bar , PAGCOR did not wait for the Regional Director The SOJ jurisdiction over tax dispute between the government and
or CIR decision on its protest. It made separate and successive filing the government owned and controlled corporation is settled. Under
before the RD and the CIR before it filed a petition with the CTA. PD 242 it is mandatory that disputes and claims solely between
the government agencies and offices including government
1st Option: Not applicable: There was no decision on the RD’s part owned or controlled corporation involving only questions of law
therefore PAGCOR is unable to make use of the first option to be submitted and settled or adjudicated by the Secretary of
justify an appeal with the CTA. justice. The law is clear that is covers all disputes claims and
controversies solely between or among the department, bureau
2nd option: PAGCOR rendered the second option moot when it offices agencies and instrumentalities of the National Government
formulated its own rule and chose to ignore the clear test of the law including the constitutional offices or agencies arising form the
when PAGCOR elevated an appeal to the CIR on August 13 2008 interpretation and application of statute, contract or agreement.
without any decision from the regional director then filed a petition Since this case as a dispute between CIR and the respondent a local
before the CTA on March 11 2009 . water district which the GOCC pursuant to PD 198 also known as
Provincial Water Utilities Act clearly the SOJ has no jurisdiction to
3rd option: Not applicable , PAGCOR filed an appeal with the CIR decide the case
and not the CTA even before the lapse of the 180 day period. This
remedy is utilized when the CIR failed to act on the appeal within ii. Compromise and Abatement rr 21-2018
the 180 day period since the RD still has util December 27 2008 to
issue a decision.
Under Section 204: The Commissioner of Internal Revenue has
the sole authority to compromise and abatement of taxes the
When PAGCOR filed its petition before the CTA it is clear that it power shall not be delegated.
failed to make use of any of the three options. A petition before
the CTA may only be made after a whole or partial denial of the
protest by the CIR or its authorized representative. Hence, when
PAGCOR field its petition before the CTA on March 11 2009, there Grounds for Compromise
was still no denial of its protest either by the RD or the CIR.
Therefore, PAGCOR clearly failed to comply with the requisite in Assessment issued by the regional office involving basic deficiency
disputing the assessment as provided under Section 228 taxes of Five hundred thousand pesos or less and minor criminal
violation may be compromised by the regional evaluation board.
6. CIR vs. VY Domingo Jewellers, GR No. 221780, 25 March The offer of compromise must be accepted by the parties this
2019 requirement is not required in case of abatement.

In this case, upon the receipt of the assessment VY Domingo sent a 1. Doubtful Validity : If there is a reasonable doubt as to the
letter to the BIR requesting for the certified true copies oof validity of the claim against the taxpayer the percentage is 40%
assessment. It then filed with the CTA division to have the notices of basic tax.
declared as null and void being issued beyond the prescriptive
period. CIR filed a motion to dismiss for lack of jurisdiction arguing 2. Financial Incapacity: 10% of the basic assessed tax. Here there
that it is neither the assessment nor the formal letter of demand that must be a waiver of the bank confidentiality
is appealable to the CTA but the decision of the CIR on disputed
assessment ( CIR argues that the taxpayer must first dispute the Minimum Compromise Payment
assessment first) The issue here is whether there is a violation of
exhaustion of administrative remedies. 1. For cases of financial incapacity the minimum compromise rate
is 10% of the basis assessed tax .

Tabuzo, Tax Remedies Self Notes

2. For other cases ( including doubtful validity) the minimum e. Failure to file a tax return and pay the correct tax on
compromise rate is 40%> of the assessed tax. time due to circumstance beyond control
f. Lte payment due to meritorious circumstance
If the compromise offer of the taxpayer is lower than the
2. The administration and collection cost do not justify the
prescribe rate, there must be an evaluation by the National
collection of the amount due.
evaluation board. The evaluation board must also approve the
compromise if the basic tax exceeds P1 Million.
A. Abatement of penalties on assessment confirmed
ased

A VOID assessment cannot be used as a basis for compromise. The

Subject to compromise Not subject to compromise assessment that is void cannot turn be used as a basis for the
1. Delinquent accounts 1. Withholding tax cases unless perfection of a tax compromise.
the applicant invokes the
- ng file Ka ng return pero di ka Can Criminal Violation of tax code be compromised
provision of law that cast doubt
ng bayad. on the taxpayer’s obligation to
withhold Yes, except those already filed in court or those involving fraud
2. Cases under administrative - it is not a tax, merely withhold
protest after the issuance of the income in favor of the VS. Abatement: a compromise is marked by mutual concession
FAN to the taxpayer which are government. whereas an abatement or cancellation there is no mutual concession
still pending in the RO, egal between the taxpayer and the CIR are made.
office , large taxpayer service,
collection service, enforcement 2. Criminal tax fraud cases
1. Asiatrust Dev’t Bank, Inc., vs. CIR, G.R. No. 201530, April 19,
service and other officers of the confirmed as such by the CIR or
National Office his duly authorized 2017
representative
Doctrine :
3. Delinquent account with duly
approved schedule of
installment payment The application for tax abatement is considered approved only
3. Civil tax cases being
disputed before the courts upon the issuance of the termination letter. Section 204 B of the
4. Cases where the final reports NIRC empowers the CIR to abate or cancel a tax liability.The
4. Collection cases filed in of reinvestigation or
application for tax abatement is considered as approved only
courts reconsideration have been
issued resulting to reduction in upon the issuance of the termination letter since NIRC empowers the
5. Criminal violation other than the original assessment and the CIR to abatement or cancel a tax liability. Based on the guidelines
those already filed in court or taxpayer is agreeable to such the last step I the tax abatement process is issuance of a
those involving tax fraud. decision by signing the required termination. The presentation of the termination letter is essential as
agreement form for the it proves that the taxpayer application for tax abatement had
purpose. On the other hand, been approved without the termination letter a tax assessment
other protest cases shall be
cannot be considered as closed and terminated
handled by the Regional
Evaluation board or the national
evaluation board on a case to
case basis .
5. Cases which become final
and executory after final
judgment a court where a
compromise is requested on the
ground of financial incapacity
of the taxpayer.

iii. Recovery of Tax Erroneously or Illegally Collected

Grounds for abatement: ( A total cancellation of tax liability-
penalties) The following are instances when a claim of refund may be availed of:

1. When the tax or any portion thereof appears to be unjustly or 1. Erroneously or illegally assessed or collected internal revenue
taxes( 204 c- Administrative 209 of tax code- Judicial)
excessively assessed.
2. Penalties imposed without authority
3. Any sum alleged to have been excessive or in any manner
a. Filing of the return or payment wrong venue wrongfully collected.
b, Mistake in payment of tax is due to erroneous written 4. Refund of the BIR stamps when returned in good condition by the
official advice of revenue officer purchaser
5. Redemption or change of unused stamps rendered unfit for use
c. Failure to file a return and pay tax on time due to and refund of their value
substantial losses from prolonged labor dispute , force
majure and business reverses. ( This covers only
surcharge and compromise penalty)
There is a distinction between tax refund and tax credit
d. Assessment is based on non-compliance with the law
due to difficult interpretation of law

Tabuzo, Tax Remedies Self Notes

 Tax Refund Tax Credit
1. There is actual 1. A tax certificate or a tax
reimbursement credit memo is issued to the
taxpayer and this can be
applied against any sum that Two Venues for REFUND
may be due and collectible
1. administrative
form the taxpayer except
withholding taxes. 2. Judicial
- Tax credit certificate can no
longer be transferred or
assigned to another person
On Written Claim to the BIR

1.A written claim for credit or refund is a condition precedent or

Statutory Requirement: mandatory requirement for a claim of refund or tax credit to
prosper.
1. A written claim for credit or refund filed with the CIR( A return
filed showing overpayment shall be considered as a written claim) On Refunding overpaid creditable Withholding tax
whether or not the tax has been paid under protest.
1. The filing within the two year period
This serves as a notice on the government that the tax is questioned
and to estimate tax expenditures. This is also a warning on the part of 2. Establishing the fact of withholding with copies of the CWT
the CIR that court action will follow. certificate

Section 229: This written claim is not necessary when on the face of 3. Showing that the income received was declared as a part of
the return such payment is erroneously paid. gross income

2. The claim for refund must be categorical demand for

reimbursement
On Two year prescriptive Period
3. The claim must be filed or the suit or proceeding the reform
must be commenced in the court within two years from the date
This refers to both the administrative and judicial claim
of payment of tax or penalty regardless of any supervening
cause. 1. From the date of payment, the date of payment is when the tax
liability falls due.
Note: It is the two year period that applies to refund and not 2. The filing of the final adjustment return in case of income tax
solution indebiti under the Civil Code return filed a quarterly basis
3. From the date of final payment in case of tax paid in installment
Documents :
4. Withholding tax.
1. A claim for a refund or credit partakes the nature of an
exemption and is strictly construed against the claimant. Therefore,
The Final Withholding tax are considered as full ad final payment
he needs to establish basis for refund. of the income tax due and thus are not subject to any adjustment .
Thus the two year period commences to run from the time the
3. The claim must e filed with the CIR, even if the different refund is ascertained and the date such tax was paid and not the
government agency has the responsibility of collecting the taxes end of the FAN.
where the taxpayer filed a refund claim for forrest charge with the
DENR which the SC held was wrong as forrest charges were taxes.
Creditable Withholding Tax: The tax withheld is oly an
approximation of the income tax due, the taxpayer is still required
Proper Party to file to include such income as a part of gross income. – End of the
taxable year
a. Statutory Taxpayer
b. Withholding tax= Withholding agent is entitled to claim for tax
refund but with the obligation to remit the tax to the principal 1. The taxpayer need not wait for the final resolution of its
taxpayer administrative claim for refund it is only required that an
c. Indirect tax= The statutory taxpayer even if he shifts the burden administrative claim be first filed before a judicial claim is filed
to another.
2. For as long as administrative claim and the judicial claim are
4. Excise tax exemption
filed within the two year prescriptive period then there is
General Rule: The statutory taxpayer ( manufacturer, producer or exhaustion of administrative remedies
importer) and not the party who only bears the economic burden
Exception: The party who bears the economic burden of the tax is 3. Mandatory regardless of any supervening cause that may arise
allowed to file the claim if the law grants such party an exception after payment
from both direct and indirect tax.

Tabuzo, Tax Remedies Self Notes

 Bar: On April 16 ,2012, the corporation filed its annual corporate
income tax return for 2011 showing an overpayment of income
tax of P1,000,000 which is to be carried over to the succeeding
On Choosing between a refund and a credit for corporation
:Remedies of the Corporation entitled to a tax credit or refund years. On May 15 2012 the corporation sought advice form you
in excess estimated quarterly income tax and said that it contemplates to file an amended refund for 2011
which shows that instead of carry over of the excess income tax
1. To carry over excess credit payment the same shall bec considered as a claim for tax refund
2.To apply for the issuance of TCC or to claim a cash refund and small box show “ refund” in the return will be filed up,
Within a year, the corporation will file a request for refund for
the excess payment would you recommend the ff?
If you choose the carry over option, it is considered
irrevocable for that taxable period, and no application for tax 1. Will you recommend to the corporation such cause of action (
refund or issuance of a tax credit certificate shall be allowed.
changing form carry over to refund)
Once the taxpayer opts to carry-over the excess income tax
against the taxes due for the succeeding taxable years, such 2. Should the PFR be field with the CTA on the basis of the
option is irrevocable for the whole amount of the excess income amended tax return to be denied by the BIR and the CTA could the
tax, thus prohibiting the taxpayer from applying for a refund
corporation still carry over such excess payment of income tax in
for the same excess income tax in the next succeeding taxable
year. the succeeding years.

Answer
Except: When the corporation had already ceased to operate
1. Once the option to carry over and apply the excess quarterly
income tax against income tax against tax due for taxable
The unutilized excess tax credit will remain in the taxpayer quarters of the succeeding taxable years had been made such
account and will be carried over and applied against the
option shall be considered as irrevocable for the taxable period
taxpayer income tax liabilities in the succeeding taxable years
until fully utilized. and no application for tax refund or issuance of tax credit
certificate shall be allowed therefore

In other words, if you choose to carry over the utilized taxes in 2. Yes. The carry over of excess income tax payment is no longer
2010 , you have to keep carrying these taxes over until they limited to the succeeding txalbe year. Unutilized excess income tax
are fully exhausted. ( Belle Corp vs Cir) payment may now be carried over to the succeeding taxable year
until fully utilized. In addition, the option to carry over excess
income tax payment is now irrevocable. Hence, unutilized excess
The controlling factor for the operation of the irrevocability rule
income tax payment may no longer be refunded,
is that the taxpayer choses an option and once he had already
done so it could no longer make another one. Hence, once the
taxpayer opts to carry over its excess tax credit to the ff
period the question of whether it gets to apply tax credit is
irrelevant. ( rhombus v cir) 1. CIR vs. Pilipinas Shell, GR No. 180402, Feb 10, 2016
Does the irrevocability Rule apply exclusively to carry over
option?
1. Yes. This is only limited to the carry over option such that a PARTIES WHO CAN CLAIM REFUND: Exemption
taxpayer is free to change its choice after electing a refund of
its excess credit As a rule, it is the statutory taxpayer who has the burden to
seek a refund of indirect tax even if the tax is shifted to
2. But once it opts to carry over such excess creditable tax, another. However the general rule cannot apply if the economic
after electing a refund or issuance of tax credit certificate, the burden of tax is shifted provides for an exception from both
carry over option becomes irrevocable. Accordingly the direct and indirect tax. In which case, the party to whom the
previous choice of tax refund even if subsequently pursued may taxes are shifted is allowed to claim for a tax refund.
no longer be graned

Here, Petron ( International carrier) passed the excise tax to

shell.Philipinas Shell filed a claim for refund for excess tax. CIR
objected on the claim on the ground that excise tax is levied on
Carry Over Option the manufacturer regardless of its purchaser or buyer. In this
case, the court allowed shell to claim the tax refund.
1. If the option to carry over the excessive credit is exercised the
same shall be irrevocable for that taxable period ( It can no longer
Under Section 135(a), fuels which are sold to international
be revoked) . This the taxpayer can no longer seek refund of the
carriers are exempt from tax since the law granted the
unutilized excess income tax payment. economic burden shifted exempt from both direct and indirect
tax. Hence, shell is the property party to claim the refund since
2. The taxpayer may however apply the unutilized excess income the law provides for an exemption both from direct and indirect
tax payment as a tax credit to the succeeding taxable years until tax.
such has been fully paid pursuant to Section 76 of the NIRC

2. CIR vs. PASAR, GR No. 186223, Oct 1, 2014

Tabuzo, Tax Remedies Self Notes

PROPER PARTY TO FILE ( EXEMPTION APPLIED→ BECAUSE Issue
EPSA EXEMPTED DIRECT AND INDIRECT): Petron passed to
1. Whether the judicial claim of the respondent must be
PASAR excise tax. Here, PASAR is exempted from the
dismissed for non-exhaustion of administrative remedies
payment of excise tax being a EPZA registered entity.PASAR
filed a claim for refund , this claim was granted on the Held: There is no dismissal due to exhaustion of administrative
ground that PASAR is a tax exempt entity enjoying tax remedies. Section 229 merely requires that the judicial claim for
exemption privilege under PD No 66. CIR appeals refund must be filed within two years from the date of payment
of tax and the same cannot be maintained until a claim for tax
The court ruled that PASAR is the proper party to file a claim
remedy had been made in the BIR.Here, the filing of an
for refund.EPZA law provides that supplies are not subject to
administrative claim is merely to serve as a warning to CIR that
excise tax. As a rule, it is the statutory taxpayer who has the
a court action follows if it fails to act on the same, it does not
legal personality to file a claim for refund. This does not apply
mean that the taxpayer must wait for the final resolution of
to the case at bar , since the law confers an exemption from
administrative claim for refund as doing so violate due process.
both direct or indirect tax. Hence, if the exemption is only as to
There there is no requirement that the collector of internal
the direct tax, the statutory taxpayer is the onlpy arty who can
revenue must first act on the claim before the taxpayer can file
file the same. Hence, PD 66 exempts Petroleum product whether
to the CTA what is required is that both administrative claim
used directly or indirectly from payment of excise tax which
must be filed within the two year period.If the respondent
was passed by PASAR by Petron. Therefore, PASAR is the
waited for the action of the petitioner knowing fully well that
proper party.
the period was about to lapse. It would have forfeited its
right to seek a judicial review of its claim thereby suffering
irreparable damage

3. Chevron vs. CIR, GR No. 210836, 1 Sept 2015

PARTIES WHO CAN FILE ( EXCEPTION DOES NOT APPLY 5. Metropolitan vs. CIR, GR No. 182582, 17 Apr 2017,
BECAUSE STATUTORY TAXPAYER DID NOT PASS THE TAX):
Chevron sold and deliver petroleum products to CDC, Chevron Doctrine
did not pass to CDC the excise tax it paid for the year 2007.
Petron ( Petron ) filed a claim for refund based on the fact
that CSC is exempt from payment of tax. The issue here is The Final Withholding tax are considered as full ad final
whether Chevron is entitled to tax refund or tax credit for the payment of the income tax due and thus are not subject to any
excise tax paid on the importation of products. adjustment . Thus the two year period commences to run from
the time the refund is ascertained and the date such tax was
paid and not the end of the FAN.
The court ruled that Yes, Petroleum products that are sold to
entities that are exempt from excise tax. CDC was created as
an implementing arm of BCDA exempt from the payment of Point of Contention: Reckoning date of the two year prescriptive
both direct or indirect tax. period date of payment April 2001, the end of the 2 year
period is April 21 2005. ( If the reckoning date is the end of
taxable year the two year period end on December 31 2003)-
the Court has also made clear that this rule does not apply - > Here the monthly remittance return is denied for insufficiency
where the law grants the party to whom the economic burden of of evidence.
the tax is shifted by virtue of an exemption from both direct *administrative claim “December 27 2002-- > if you reckoned
and indirect taxes. In which case, such party must be allowed to it from the date of payment file out of time na but if at the end
claim the tax refund or tax credit even if it is not considered as of the taxable period it is not out of time.--> At the time of
the statutory taxpayer under the law. The general rule applies payment and not at the end of taxable period ( FAN).
here because Chevron did not pass on to CDC the excise
taxes paid on the importation of the petroleum products, the
latter being exempt from indirect taxes by virtue of Section The Final withholding tax here is already payment of full tax
24 of Republic due 10% withholding tax cu

Metrobank filed a claim for refund on the ground that it

mistakenly remitted the amounts to the BIR which the latter
4. CIR vs. Goodyear Philippines, Inc. GR No. 216130, 3 August included in its final tax withheld. Metro bank filed a letter to the
2016 BIR requesting for a refund, since the BIR did not act on the
claim it filed a petition for review with the CTA.

Issue: Whether the Claim for refund has prescribed

There is no need to wait for the decision of the CIR before filing
the case to the CTA all the law requires is that both the judicial Held: Yes. NIRC provides that no credit or refund of taxes or
and administrative claim is filed within the two year period from penalties must be allowed unless the taxpayer files in writing a
payment.. Goodyear filed a claim for tax refund before the claim for credit or refund within two years from the payment of
CIR . On November 3, 2010 without waiting for the resolution it the tax. It is also required that a claim of refund must first be
filed a claim by way of petition for review with the CTA. CIR filed with the petitioner
argued that the claim must be denied because of 1. Failure to
exhaust administrative remedies 2. Failed to submit complete
supporting document before the BIR. CIR argued that by filing a Quarterly income tax are treated as mere advance of payment
claim of administrative and judicial claim fifteen days apart cover more than the said corporate taxpayer entire tax
there is a violation of failure to exhaust administrative remedy.

Tabuzo, Tax Remedies Self Notes

liability. It is only logical to reckon the two year period from
the time of the FAN or annual income tax return since it is
from that time it is possible to determine whether corporate
taxpayer paid the amount exceeding annual tax liability. PAL VS. CIR
1. Proof of actual remittance is not a condition to claim a refund
of unutilized tax credit. The payor and withholding agent and not
In this case, Metrobank Final Withholding tax liability was the payee- refund claimant who is vested with the responsibility of
remitted to the BIR on April 25 2001, it only had until April 25 withholding and remitting income taxes.
2003 to file its administrative and judicial claim for refund.
Moreover, while the administrative claim was filed on December 2. It is only required to prove that taxes were withheld. The taxes
27 2003, its corresponding judicial claim as only filed on withheld are deemed to be the full and final payment of the
September 10 2003. Therefore, the refund has prescribed. income tax due from the income earner or payee
3. The certificate of creditable tax withheld at source is competent
proof to establish the fact that taxes are withheld. It is not
Solutio Indebiti necessary that the person who executed the said certificate testify
. There is solutio indebiti where: (1) payment is made when there to prove its authenticity.
exists no binding relation between the payor, who has no duty
to pay, and the person who received the payment; and (2) the
payment is made through mistake, and not through liberality or
some other cause. Irrevocability Rule

1. A corporation entitled to a tax credit or refund of the excess

1. First Requisite: Not present , there is a relation between the estimated quarterly income tax has two options
taxpayer Meralco as withholding agent and the government
2. This does not apply as a tax code a special law provides for a. Carry over the excess credit
a period for claiming a refund of taxes erroneously paid.
* If the option to carry over the excess credit, the same
shall be irrevocable for the taxable period. The tax
payer cannot longer revoke his choice

6. PBCOM vs. CIR, GR No. 194065, 20 June 2016 * The taxpayer may apply the unutilized excess income
tax payment as tax credit to the succeeding taxable
year until such has been fully paid and applied pursuant
The rule is that the date of payment is when the tax liability
falls due. For DS metering machine users, the payment of the to Section 76 of NIRC.
DST upon loading and reloading is merely an advance
payement of DST falls due only upon the occurrence of taxable b. To apply for the issuance of tax credit certificate or a
transaction. ( loading and unloading + occurrence of taxable cash refund.
transaction)
7. Mitsubishi Corp.–Manila Br. vs. CIR, G.R. No. 175772, 5 Jun
2017,
The DST fell due when the petitioner fell into repurchase
agreement with the BSP and corresponding documentary stamp
were imprinted on the confirmation letter, Thus the prescriptive CIR argues that Mitsubishi Corp being a foreign Japanese entity
period for the filing of a claim for a refund or tax credut must must have filed the claim for refund with the NPC and not the
be reckoned from the date when the documentary stamp were CIR based on a RMC. The court ruled that the RMC is not valid.
imprinted on the Confirmation letters. NIRC vest the CIR the SOLE authority to refund or claim taxes
that are erroneously claimed by the taxpayer. Therefore, an
administrative issuance directing the petitioner to claim a refund
In this case, to determine DST for the purpose of counting the from the NPC cannot prevail over the NIRC.
two year period is from the time of payment. As provided
under Section 229 of the Tax Code, the refund of erroneously
paid tax must be made within two years from the date of
payment. The date of payment must be read in relation to 8. CIR vs. Manila Electric Company, G.R. No. 181459. June 9,
Section 200 which shows that the date of payment may be done 2014
by imprinting the stamps of taxable document through DS
Metering Machine. The date of payment of the DST commences
to run from the time of last payment for purpose of claiming a The two year prescriptive period is mandatory regardless of
refund , it is the actual payment made upon loading or any supervening cause that arises after payment. It must be
reloading in the DS Metering machine therefore, the date of pointed out that the two year prescriptive period runs from the
imprinting is the date of payment ( Printing * a mode of time refund is ascertained. Here, the issuance of the BIR ruling is
payment) not the operative act to determine the amount of refund snice
BIR is tasked only to confirm whether one is entitled to file a
refund.
The DST fell due when the petitioner entered into repurchase
agreement with the BSP and corresponding documentary stamp
were imprinted on the Confirmation letter. Thus , the
prescriptive period for filing of the claim for refund or tax 9. Republic vs. Team Energy Corp., G.R. No. 188016, 14 Jan
credit is reckoned from the date when the documentary 2015
stamp is imprinted in the letter.

Tabuzo, Tax Remedies Self Notes

QUARTERLY TAX RETURN IS NOT A PREREQUISITE TO Held
SHOW THAT TAXPAYER DID NOT CARRY OVER : Yes. 1. The claim must be filed with the CIR within two year
period from the date of payment of the tax. Here, the
Mirant is engaged in the business of developing and respondent filed its income tax return for the taxable year
maintaining gas power plant. The respondent filed an annual 2001 on April 15, 2002. Counting from the said date, it had
tax return for the years 2002 and 2003 indicating its option to until April 14 2004 to file a claim for refund both judicially and
refund of tax overpayment. The respondent filed a claim for administratively. Here, the petitioner administrative claim and
refund or issuance of tax credit with the BIR representing petition for review filed on March 2003 fell within the
overpaid income tax or excess creditable tax. Due to BIR’s prescriptive period.
inaction, the respondent filed a petition for review with the CTA.
The CTA rendered a decision granting tax exemption which the
CTA en banc affirmed. Republic alleged that it is necessary that
2. It must be shown in the return that the recipient that
quarterly return must be established in order to prove
entitlement to refund pursuant to Section 76 of the NIRC. income payment was declared to be a part of gross income
3. The fact of withholding is established by a copy of a
statement duly issued by the payor to the payee showing the
Issue: Whether the respondent is entitled to refund amount paid and the amount of tax withheld.
Held Here, the certificate of refund presented need not be verified in
court by the withholding agent. Here, the court ruled that the
There are three remedies that a corporate taxpayer opts to certificate presented were duly signed and prepared under
exercise 1. Pay the balance 2. Carry over 3. Be credited or penalties of perjury.To claim tax refund, there is no need to
refunded with the excess tax paid. The two option are establish that actual withholding was made , what is merely
alternative in nature the choice of one precludes the other. required is to establish a fact of withholding
Hence, the corporation must choose whether it request for tax
refund or carry over by marking the option. The intent of the
irrevocability rule is to prevent the taxpayer from flip -flopping
on its option and avoid confusion and complication as regard to 11. CIR vs. PNB, G.R. No. 180290, September 29, 2014
the tax payer excess credit. The interpretation of the CA that
the carry over rule only applies to “ taxable period” is not
within the intent of law A certificate of creditable tax withheld at source is a proof to
establish that facts are withheld hence, it is not necessary that a
person who executed a certificate personally testify as to its
Requirement for refund authenticity. PNB filed its tentative income tax return in 2000 which
“1. That the claim for refund was filed within the two year was amended in July 25 2001. In its amended return, the
respondent claimed overpayment on the tax credit to the
prescriptive period
succeeding quarter. PNB filed a claim for the issuance of tax credit
2. When it is shown on the ITR that income received is a part of with the BIR and subsequently with the CTA. The CTA ordered the
gross income refund of tax credit certificate, the BIR questioned the validity of
the certificate of tax as the original certificate was only
3. When the fact of withholding is established showing the presented before the CTA and not at the first instance when it
amount paid and income tax withheld from the amount filed a claim for refund before the BIR.
the figures appearing in the withholding tax certificates can be
taken at face value since these documents were executed under the
Here, there is evidence that the income was indeed received as penalties of perjury, pursuant to Section 267 of the 1997 National
a part of the gross income. The testimonies of the petitioner Internal Revenue Code.
employee also substantiate the claim that income was indeed
incurred. As to the fact of withholding, the respondent presented
certificate of tax withheld. There is no need for the submission
of quarterly returns of the respondent to show that it did not
carry over the excess withholding tax to succeeding
quarter→ as the respondent ws able to establish prima facie
right to refund through object and testimonial evidence 12. PNB v. CIR, G.R. No. 206019, March 18, 2015,

Cir argues that the taxpayer in order to claim refund must comply
10. CIR Vs. Team [Phils] Corp. GR No. 179260, 2 Apr 2014 with BIR Form 2307 ( Certificate of creditable withheld at source).
The fact of witholding. In this case, PNB was able to establish that
GOTESCO did not carry over the withholding tax to settle its
WHAT IS NEEDED TO BE PROVEN IS THE FACT OF liability 1. Gotestco Audited financial statement that included the
WITHHOLDING ACTUAL REMITTANCE IS NOT NECESSARY . mortgaged property in the asset account 2. 2003 ITR which the CTA
Team Phils entered into an operating and management first division required to show the excess creditable withhold tax
agreement with Mirant to provide the latter operation and was not used by GOTESCO. Lastly, the testimony of the former
maintenance service with the thermal power station in accountant . Hence, the evidence sufficiently proves that the
Pangasinan. Respondent filed its income tax return for creditable withholding tax was withheld remitted to the BIR that
overpayment from unutilized creditable tax withheld.The such withholding was erroneous
respondent then field a request with the BIR to withhold tax for
the year 2001, and file a petition with the CTA to toll the
running of prescriptive period. CIR argued that there is a need
to present the proof of actual remittance of the withheld tax
before a taxpayer is entitled to tax credit certificate
13. CIR vs. PNB, GR No. 212699, 13 March 2019
Issue: Whether the respondent establish the claim for refund or
tax credit
PRESENTAITON OF QUARTERLY INCOME TAX RETUNR IS NO

Tabuzo, Tax Remedies Self Notes

LONGER NECESSARY AS THE ANNUAL INCOME TAX RETURN
SUFFICES since the annual ITR already contain quarterly income
payment . In this case, PNB offered its annual ITR containing the The court granted the refund here, it must be differentiated from
total taxable income earned for the four quarters as well as the the UPSI case.( Sir Prefers Rhombus)
deduction and tax credit it previously carried over in the quarterly
ITR. All that is needed to be proven is whether carry over to So ano mag prevail ito or UPSI? Rhombus
subsequent quarter was made.

Also note that PNB attempted to file its quarterly income tax return 16. CIR vs. SMC, GR Nos. 180740 & 180910, 11 Nov 2019
through a motion to reopen which was granted by the CTA. Since
PNB relied on the case of Philam ,it decided that it is no longer SMC filed on January 10 ,2003 a letter with the BIR claiming for a
necessary, hence withdrew the same. refund or credit of the alleged taxes it paid on the red horse bear.
Without waiting for CIR to act on the administrative claim , SMC
filed a petition for review before the CTA challenging Section 1 of
17-99. Both the CTA division and En banc affirmed the claim for
14. University Physician Services, Inc.- Mg’t, Inc. vs. CIR, 7 Mar
overpayment was barred by prescription as SMC failed to prove
2018 1. Exact amount paid the tribunal has no basis to apportion the
amount of excise tax payment corresponding the said period vs.
Total amount of excise tax as it only showed monthly removal
Tax credit certificate-→ carry over → Refund report.

UPSI-MI filed its annual income tax return for the year December EXCISE TAX: For excise tax on domestic product, the re turn is filed
31 2006 with the BIR reflecting overpayment. Subsequently it filed and the excise tax is paid before the removal of the products from
a annual ITR reflecting an overpayment from prior year credit ( the place of production. ( date of payment depends on the date of
carry over) on the same date, reflecting prior year excess credit. actual removal)
The petitioner then filed a claim for issuance of tax credit certificate
representing alleged unutilized tax. The petitioner filed a claim with
the CIR since the CIR did not act on the same a case was filed with
Here SMC filed its administrative claim on January 10 2003,
the CTA
through a letter to the BIR and its judicial claim through a petition
for review with the CTA on February 24 2003. Counting back from
February 24 2003, the CTA first division determined that the
Issue: Whether the Irrevocability Rule applies reckoning date for the two year prescriptive period was on
Held:Yes. The irrevocability rule is limited only to the option of February 24 2001 hence the claim has prescribed.
carry over such that the taxpayer is still free to change its choice
when it elects the claim of refund , but once it opts the carry over
option after irrevocability rule it becomes irrevocable. Therefore, Solutio Indebit is not applicable
the law does not prevent a taxpayer who originally opted for a
There is a difference between tax refund and tax exemption. Tax
refund or tax credit certificate from shifting to the carry over of the
excess creditable taxes to the taxable quarter of the succeeding refund is based based on the statutes granting tax refund it does
taxable year. not depend on legislative grace hence equity cannot apply

Here, UPSI-MI is barred from recovering its excess creditable tax

through refund of TCC. It is undisputed that despite the initial option
to refund its 2006 taxes tax. UPSI-Mi then indicated in its 2007
that it carried over the excess creditable tax in 2006 excess
creditable tax and applies the same in 2007 income tax due. The
choice of carry over is irrevocable and forbade the latter to go
back to its original choice. 17. CIR vs. Univation Motors Phils., Inc. GR No. 231581, 10 Apr
2019

15. Rhombus Energy, Inc. vs. CIR, GR No. 206362, August 1, 2018\ Income tax return filed in quarterly basis : RECON THE TWO
YEAR PERIOD FROM THE TIME OF THE FILING IOF THE FINAL
ADJUSTED RETURNAs long as the judicial claim and administrative
The controlling factor for the operation of irrevocability rule is that claim was filed within the two year period there is exhaustion of
the taxpayer chose an option and once it had already done so it administrative remedy.
can no longer make another one. Consequently, after the taxpayer
The CIR argued that the respondent prematurely filed its judicial
opts to carry over its excess credit to the following taxable period
the question of whether or not it actually gets to apply said tax claim with the CTA depriving it the opportunity to act on the
administrative claim violating the doctrine of exhaustion of
credit is not relevant
administrative remedies. Jurisprudence had provided that the two
year prescriptive period is counted from the date of payment of
tax , jurisprudence however clarified that the two year prescriptive
Does the Irrevocability rule apply exclusively to carry over? No . The period to claim a refund actually commences to run at the earliest
controlling factor is the taxpayer chose an option. on the date of the filing of final adjusted tax return because this wis
2005 ITR= Excess Credit income tax ( refund) where the figures of gross receipt and deduction have been
audited and adjusted.
2006 : Excess ( Prior year excess credit—quarterly ITR) When it
filed its annual year excess year is 0 he is now filing a claim for
refund on annual. Here, the two year period to claim a refund is reckoned from April

Tabuzo, Tax Remedies Self Notes

15 ,2011, the date of the filing of Final Adjustment Return. Since against income tax due in the succeeding year. The SC ordered
the respondent filed its administrative return on March 12 2012 the BIR to issue a FAN on the taxpayer for using its unsubstantiated
and judicial claim on April 12 2013 therefore it is within the excess credits as payment for its income tax due on the current
prescriptive period and was filed on time. Under the circumstance, year
the respondent need not wait for the decision of the CIR as the two
year period will lapse effectively resulting to the loss of the
respondent right to seek judicial recourse and worse its right to
recover
The law only requires that administrative claim be priorly filed. That to 20. PAL vs. CIR, CIR vs. PAL, January 17, 2018, G.R. Nos. 206079-
give the BIR at the administrative level an opportunity to act o the 80
said claim. In other words for as long as the administrative claim and
the judicial claim was field within the two year period there is
exhaustion of administrative remedies 1. Proof of actual remittance is not a condition to claim for a refund
of unutilized tax credit, Under the law it is the payor withholding
agent and not the payee refunding the claimant who is vested with
2. There must be a distinction between administrative case the responsibility of withholding and remitting income taxes
appealed due to inaction and those dismissed due to failure to 2. It is only required to prove that taxes are withheld the taxes
submit supporting document. If the administrative claim was withheld are deemed to be full an final payment of the income tax
dismissed by the CIR due to failure to submit document, the claim is due from income earner or payee
dismissible not for lack of jurisdiction but for failure to substantiate
the claim in administrative level. 3.The certificate of creditable tax withheld at source is the
competent proof to establish the fact that taxes are withheld. It is
. not necessary for the person who executed and prepared the
certificate to prove its authenticity.
Jurisprudence laid down the basic requirements in order for a
taxpayer to claim tax credit or refund of creditable withholding
tax, thus: (1) The claim must be filed with the CIR within the two-
year period from the date of payment of the tax, as prescribed Section 204 Section 112 © Section 228: THIS
under Section 229 of the NIRC of 1997; (2) The fact of IS TO PROTEST
withholding is established by a copy of a statement duly issued THE
by the payor to the payee showing the amount paid and the ASSESSMMNET
amount of tax withheld; and (3) It must be shown on the return AND NOT REFUND
of the recipient that the income received was declared as part :D
of the gross income
1. Recovery of tax 1. Refund of 1. Administrative
erroneously or unutilized input Vat protest on
illegally collected from 0% rated assessment
transaction

18. CIR vs. Semirara Mining Corp., GR No. 202534, 8 December 2. 2 year 2. Applies only to - 30 DAYS
2018 prescriptive period AC from the close Reglementary
of the taxable period reckoned
- Applies to both quarter where from the FAN and
AC and JC
THERE IS NO PREMATURE EXHAUSTION WHEN BOTH THE relevant sales are FLD
ADMINISTRATIVE CLAIM AND THE JDUICAL CLAIM WAS FILED - From the date of made
WITHIN A PERIOD OF TWO YEARS.SMC entered into an operative payment
contract with the PDIC through the energy development board. The
3. CIR has no 3. CIR period to 3. CIR period to
respondent argued that the NIRC exempted it from the payment of period to resolve resolve 90 days resolve 180 days
VAT on the sale and importation of coal. NPC then started to
withhold 5% VAT on the coal billings of the respondent SMC. NPC 4. Appeal to the 4. Appeal to the 4. Appeal to the
remitted to the BIR final VAT withheld from the respondent SMC on CTA Cta Cta
the sale of coal. NPC asked whether the sale is still exempt from
VAT , which BIR confirmed through a ruling.SMC then filed an 1. Within 2 years 1. 30 days from 1. 30 DAYS from
application ofr tax credit. CTA ruled that the refund must be receipt of denia; the decision or
2. AC be filed first
granted 2. No deemed 2. 30 days from the
Issue: Whether the refund is granted since SMC is exempt from VAT denial inaction or await
then approval
Held: There is still no premature recourse to the court since both the Even if the 90 day within 30 days
administeratitve and juducla claim is still within the two years. period had alpased
administrative claim
can still be
protected by BIR
19. CIR vs. Cebu Holdings, Inc., GR No. 189792, 20 June 2018

The taxpayer filed a claim for refund of excess creditable VAT ZERO RATED : INPUT VAT
withholding tax . The taxpayer used its prior years excess credit to
pay for its current year income ta due. The SC disallowed the same 1. a VAT registered person whose sales of goods, properties or
because the prior year excess credit was unsubstantiated. Further services are zero rated or effectively zero rated may apply for the
when the taxpayer opted to carry over to the succeeding year its issuance of a tax credit certificate refund of input tax attributable
prior year excess credit and creditable taxes that is subject of the
to such sales
refund, the SC went on to explain that only substantiated tax can
be caried over to the succeeding year and may be applied

Tabuzo, Tax Remedies Self Notes

2. A vat registered person whose registration has bene cancelled - Can the taxpayer still file an appeal within the lapse of the 90
due to retirement from or cessation of business or due to the day period? ( Sir’s view) : YesOtherwise the taxpayer is at the
changes in our cessation of status under Section 106 © of the tax mercy of the BIR as to denial of the protest.
code may within two years from the date of cancellation apply for
issuance of tax credit or refund if he has no internal revenue tax b. File the judicial claim within thirty days from the
liabilities against which the tax credit certificate may be utilized. expiration of the 90 day period if the CIR does not act
within the 90 day period.
Old Rule Train Law
NB: The thirty day period is both mandatory and jurisdictional ( If
1. The two year period applies The two year period applies you do not follow the 3- day period ) the claim is to be dismissed
only to the administrative claim ony to administrative claim by the CTA
reckoned from the close of the reckoned from the close of the
taxable quarter taxable quarter
Exception: Premature Judicial filing between December
120 days for the CIR to resolve 90 days for the CIR to resolve 10 2003 and October 5 2010
state the factual and legal
bases in the case of denial Note: The filing of the two year prescriptive period only applies to
subject to penalty under the filing of the administrative claim. The filing of the judicial claim
Sectuon 269
follows the 90+ 30 period
Judicial claim: ( 120+30) Judicial Claim:
1. Within 30 days after CIR 1. Within 30 days after CIR
denial within the 120 day denial within the 90 day period
period
2. Deemed denial is no longer How to Apply 112
2. Within 30 days from the applicable
expiration of the 120 day Bar: KKI is a corporation engaged in the manufacturing and
period if the CIR does not act processing of steel and its by products. It is both registered with
within the 120 day period the board of Investment with a pioneer status and with the BIR
as a VAT entity. On October 10 ,2010 it filed a claim for refund
and credit input VAT for the period January 1 to March 31 2009
befor the CIR. On February 1 ,2011, as the CIR had not yet made
a. Two year prescriptive period: any ruling on its claim for refund or credit. KKI fearful that the
period to appeal to the courts might prescribe filed an appeal
with the CTA.
1. It is only the administrative claim that must be filed within two year
prescriptive period. The proper reckoning date for the two year A. Can the court of tax appeals act on KKI appeal
prescriptive period is the close of the taxable quarter when the b. Will the answer be the same if KKI filed the appeal on March
relevant sales were made. 20 2011 and CIR had yet to act on the claim?
Administrative Claim: Yes. It is filed on time the reconning period
Except: For the period of June 8 2007 to September 12 is March 31 2009 , two years from March 31 2009 is March 30
2008. The reckoning date is the filing of the VAT return 2011, the claim here was filed on time.
and the payment of tax.
2. The filing is improper under the old rule CIR has 120 days from
the submission of relevant supporting document, 120 days from
Compare: In 204c and 229 both apply to both administrative and October 10 2010 is February 7 2011, Here it was filed on
judicial claim February 1, 2011 hence premature.

“ Close of the taxable Quarter:”::1. March 31 2. June 30 3.

September 30 4. December 31 b. Judicial Claim: No. Under the old rule ( since this case is prior to
train) : CIR has 30 days from the lapse of the 120 days ( deemed
2. The CIR has a period of 90 days from the pre -train of the 120 denial). Here 120 days from October 10 2010 + 30 days =
March 9. Here, the period had already lapsed as the March 20
days.
appeal was over the March 9 deadline
3. If the BIR does not act on the application within 90 days, then the
relevant officer, agent, or employee is liable for Section 269

Judicial Claim f. Government Remedies

1. The taxpayer can appeal in two ways 1. Tax Lien : The claim of the government predicated on tax lien is
superior to the claim of the litigant in the judgment. The tax lien
a. File judicial claim within 30 days after the CIR denies attaches not only from the service of warrant of distraint and
the claim within the 90 day period or personal property but from the time the tax because due and
payable.
* deemed denial is no longer applicable: If the CIR failed to act
within the 90 day period the claim for refund is not yet denied, but 2 Actual Distraint of Personal Property
the BIR is only liable for Section 269
This is effected by leaving a list of distrained property or by a
service of a warrant of distraint or garnishment

Tabuzo, Tax Remedies Self Notes

3. Constructive Distraint of Personal Property Steps in appealing a decision to the CTA and Beyond

1. Delinquent 1. Appeal within 30 days from the receipt of decision or a period

2. Retiring from any business subject to tax inaction of the CIR, COC , Secretary of finance, secretary of trade
and Industry.
3. Intending to leave the Philippines or to remove his property
therefrom
General Rule: Appeal to the CTA Division by a petition for review
4. performs any act tending to obstruct the proceeding for under Rule 42 within 30 days
collection of any tax due.
Exception: In case the decision of the CBBAA or the RTC in the
exercise of its appellate jurisdiction appeal to EN Banc by the
4. Levy on Real Property
petition for review under Rule 43.
a. Effected by writing upon the certificate warrant a description of
the property upon which the levy is made. In criminal cases ,appeal from the decision of the RTC decided in
b. At the same time , written notice of levy shall be mailed to or the exercise of its original jurisdiction is via a notice of appeal filed
served upon the register of deeds and upon the delinquent within fifteen days from the receipt of decision
taxpayer , his agent or the manager of the business or to the
occupant of the property in question . If RTC acted in the exercise of its appellate jurisdiction
appeal to the EN Banc by the petition for review under Rule 43.
5. Forfeiture of real property
2. If the decision of the division is adverse
a. No bidder for real property exposed for sale or
b. If the highest bid is for an amount insufficient to pay the taxes File a motion for reconsideration or motion for new trial within
and penalties and cost the same division within fifteen days from the receipt of the
decision.

6. Suspension of Business Operation -Note that the MR and the MNT is a condition precedent
- For duration of not less than five days for the following before bringing the case to the CTA en banc. Before the CTA en
banc can take cognizance of the petition for review the litigant must
a. In case of VAT registered person
first show that it sought prior reconsideration or moved for new trial
i. Failure to issue receipt or invoices with the division
ii, Failure to file VAT return and
3. In case the resolution of the division on the MR is still adverse:
iii, Understatement
b. Failure of any person to register with the BIR File a petition for review with the CTA en banc under Rule 43 within
15 days from the receipt of the decision. Same rule applies for
criminal cases
i. Administrative Remedies
a. a Denial of the motion to quash is an interlocutory
ii. Judicial Remedies order which is not proper subject of an appeal or
petition for review to the CTA en banc.
1. Civil Action
b. The proper remedy of an interlocutory order issued
A. By the filing of the civil case for collection of sum of money with by the CTA division is rule 65 to the SC
the proper regular court
b. By the filing of an answer to the taxpayer petition for review 4,In case the decision of the CTA en banc is still adverse
with the CTA
I. CIR issued assessment and TP appealed the same to the CTA a. File a review on certiorari with the SC rule 45 within
15 days from the receipt of the decision .
II. CIR filed an answer praying for the payment of tax within five
years after the issuance of the assessment
b. If you want to appeal from the decision of the local
III. At the time of filing , jurisdiction over judicial action for the assessment, go first with the CBAA. The decision of the
collection of internal revenue taxes was vested in the CTA not in CBAA is appealable to CTA en banc under Rule 43
the regular courts.
Institution of criminal action and inclusion of a civil action
2. Criminal Action
A petition for review questioning a FDDA is not deemed instituted in
1. The judgment in the criminal cases shall not only impose the a criminal case for tax evasion. Hence the taxpayer must still apy
penalty but shall also order the payment of taxes .
the filing fees for the petition for review even if the tax evasion
2. The subsequent satisfaction of civil liability by payment or case covers the same taxable years as the FDDA.
prescription does not extinguish the taxpayer’s criminal liability
3. Acquittal of the taxpayer in a criminal proceeding does not What is deemed to be instituted with the criminal action is only the
entail exoneration form liability to paytaxes. government’s recovery of taxes and peanlties relative to the

Tabuzo, Tax Remedies Self Notes

criminal case. The remedy of the taxpayer to appeal the disputed G. LOCAL GOVERNMENT CODE
assessment is not deemed as instituted with the criminal case. a. Local Government Taxation

While a tax evasion case is pending , the BIR is not precluded from
issuing an assessment or FDDA against the taxpayer. The taxpayer Nature: The taxing power of the LGU is directly conferred by the
must go through the assessment process to question the assessment Constitution by hiving them authority to create their own sources of
to prevent it from becoming final, executory and demandable. revenue. LGU do not exercise the power to tax as an inherent
power or by a valid delegation of power by the Congress but
pursuant to a direct authority conferred by the Constitution.
Prescriptive Period for Violation of tax code
1. Five years from Each of the LGU has the power to
a. The day of the commission of the violation of the law 1. Create its own sources of revenue
b. If the same is not known at the time from the discovery of the 2. To levy taxes fess and charges
commission and the institution of judicial proceeding for its
investigation and punishment - Subject to the Local Government Code provision and is
consistent with the basis policy of local autonomy.
c. Prescription shall be interrupted when the proceeding are
instituted against the guilty person and shall be begin to run again
if the proceeding are dismissed for reason not constituting jeopardy
i. Fundamental principles
d. Prescription shall not run when the offender is absent from the
Philippines 1. Uniformity in LGU
2. The taxes, fees and charges and other imposition shall
a. Be equitable and based on the taxpayer’s ability to
BAR: Gerry was being prosecuted by the BIR for failure to pay pay
his income taxability for Calendar year 1999 depsite several b. Be levied and collected based on the taxpayer
demands by the BIR in 2002, The information was filed with the ability to pay
RTC only last June 2006. Gerry field a motion to quash the c. not be unjust, excessive, oppressive or confiscatory
information on the ground of prescription the information having
been filed beyond the five year period, if you were the judge d. Not be contrary to law, public policy , national
will you dismiss the information. economy policy or in restraint of trade
3. Collection shall not be let to any private person
Answer: No trial court can exercise jurisdiction. Prescription of 4. The revenue collected shall inure solely to the benefit of the LGU
criminal action begins to run on the day that there is a commission levying the tax ,e etc unless specifically provided in the LGC
of the violation of the law. The criminal violation was committed
5. Each LGU shall evolve a progressive system of taxation.
when Gerry willfully refused to pay despite repeated demands in
2002. Since the information was filed in June 2006, the criminal
case was instituted within the five-year period required by law ( B: The City of Manila enacted Ordinance No 55-66 which
Tupaz vs ULEP) imposes a municipal occupation tax on person practicing various
profession in the city . Among those subjected to the occupation
Criminal Complaint for non -payment of tax tax were lawyers. Atty Mariano Batas who has a law office in
Manila, pays the ordinance imposed occupation tax under the
1, In a violation could only be committed after service of the notice protest. He goes to court to assail the validity of ordinance for
being discriminatory: Decide with reason?
and demand for payment of deficiency taxes upon the taxpayer .
This is so because prior to the finality of the assessment the
taxpayer has not committed any violation for nonpayment of tax A: The ordinance is valid the tax imposed by the ordinance is a
professional tax which is authorized by the law to be imposed by
2. The offense is deemed to have been committed only after the cities. The ordinance is not discriminatory because the City
finality of the assessment coupled with the taxpayer willful Government Council has the power to select the subjects of taxation
refusal to pay the tax within the allotted period. and impose the same tax on those belonging to the same class. The
authority given by law to cities is to impose professional tax only on
person engaged in the practice of their profession requiring
Filing of Fraudulent Tax Return with Intent to Evade a tax
government examination and lawyers are included

1. Section 281 of the tax code speaks only not only of discovery of
the fraud but also institution of judicial proceeding. Thus in addition
to the fact of discovery, there must be a judicial proceeding for the
investigation and punishment of the tax offense before the five
year period begins to run
Principle of Pre-emption
A criminal tax case for filing fraudulent tax return with intent to
evade tax is practically imprescriptible for as long as the period Where the National Government elects a tax a particular area, it
impliedly withholds from local government the delegated power to
from the discovery and institution of judicial proceeding for its
tax the same field . This doctrine principally rest on the intention of
investigation and punishment up to the filing of the information in the Congress. Conversely should Congress allow municipal
the court does not exceed five years. corporation to cover fields of taxation it already occupies then the

Tabuzo, Tax Remedies Self Notes

doctrine of prevention will not apply ( Victroas Mining vs. the city. Said city ordinance was duly published on February 15
Municiaplity of Vibctorias) 2014 with effectivity date on March 1, 2014. Is there a ground to
oppose the ordinance
]
Residual Power to Tax
Yes. The taxing powers of the local government such as M City
1. Local government units may exercise the power to levy taxes, cannot extend to the levy of taxes fee, and charges already
fees or charges on any bases or subject not otherwise specifically
imposed by the national government and this includes customs duties
enumerated herein or taxed under the provision of the NIRC as under the tariff code.
amended or other applicable laws subject to the ff:
a. Constitutional Limitation
5. Taxes, fees and charges and other imposition upon goods or
b. Common Limitation
merchandise , carried into or out of or passing through the
c. Limitation under Section 186 LGC must not territorial jurisdiction ( Imposition on the guise of wharfage fee)of
be unjust, excessive oppressive confiscatory or contrary the local government units in the guise of charges for wharfage,
to national policy . And not enacted without prior tolls for bridges or otherwise or other taxes fees in any form
hearing conducted for such purpose. whatsoever upon such goods or merchandise. ( Palma vs Malangas)

I. Fundamental Principles of local and real property taxation It is therefore irrelevant that the fees imposed are actually for
police surveillance on the goods because any other form of
Local Taxing Authority: imposition on the goods passing through the territorial jurisdiction of
1. The power to tax in the local government is vested in and the municipality is prohibited Section 133 (e)
exercised by the Sanggunian
2. Every tax imposed must be levied pursuant to valid ordinance

6. Taxes, fees or charges or agricultural products or aquatic

The reference of Local Taxation is local ordinance products when sold by marginal farmer or fisherman
1. These ordinance usually add to the minimum requirement of the - This provision prevents LG from providing inspection
LGC fees.
2. LGU may exercise the power to levy taxes, fees or charges on
any bases or subject not otherwise specifically enumerated in the 7. Taxes on business enterprise certified to by the Board of
LGC or the taxed under the NIRC or other applicable law. Investment as pioneer or non pioneer for a period of six years
and four years respectively from the date of registration .
II. Common Limitations on the taxing powers of LGUs - The starting point is the date of registration is not date
commercial operation.
- The reckoning date of the commercial operation refers
Instances when the LGU cannot impose a tax to income taxes imposed by the national government on
1. Income tax BOI registered firms

- Except when levied on bank and other financial 8. Section 133 (h) covers two distinct limitation
institution. ( or when the fee is an regulatory fee) - Excise tax on articles enumerated under the NIRC(
Bar Question: Pheleco as a private generation and distribution advalorem ). This is levied n the specific article rather
company operating mainly form the City of Taguig . It owns electric than one upon the performance carrying on or the
poles which it also rents out to other companies that uses poles such exercise of an activity.
as telephone and cable companies. Taguig passed an ordinance
imposing a fee equivalent to 1% of the annual rental for these
poles. Pheleco questioned the legality of the ordinance on the
ground that it imposes an income tax which LGU are prohibited - Taxes, fees or charges of Petroleum: The distinction
from imposing . between the tax on business and tax on article is
immaterial ( Petron vs , Tiangco). Not only on excise tax
but all tax including business tax.
A: I would argue that the same is a regulatory fee therefore it is a
valid imposition by the LGU. XYZ Petroleum Corporation operates an oil refinery and depot in
Batangas City which manufacturers and produces petroleum
products that are distributed nationwide. The City Treasurer of
2. Documentary Stamp tax Batangas issued a notice of assessment to XYZ Petroleum
Corporation that demands the payment of business tax for its
3. Taxes on Estate, inheritance, legacies and other acquisition. ( manufacture and distribution of petroleum product. XYZ Petroleum
Transfer taxes) contended that Batangas City has no authority to impose business
taxes based on the sale of Petroleum Products. The City Treasurer
4. Customs, duties, registration of vessel and wharfage on of Batangas insisted that the prohibition under Section 133 (h) of
wharves, tonnage due, and all other kinds of customs fee the Local government is limited to the imposition of direct and
charges and dues ( Customs duties tariff and customs code)
indirect or excise tax on petroleum product and not business tax Is
Note: Municipalities may impose license fees for the the City treasurer correct?
operation of fishing vessels of three tons or less
Bar : In 2014, M City approved an ordinance levying customs No: Although the power to tax is inherent in the state the same is
duties and fees on goods coming into the territorial jurisdiction of not true for the LGU because although the mandate to impose taxes

Tabuzo, Tax Remedies Self Notes

granted to the LGU is categorical under the constitution it is not all provide that the transportation of passenger or goods by motor
encompassing as it must be exercised within the guidelines and vehicle
limitation that the Congress may provide.

2. A local ordinance which imposes local business tax n the gross

Among the Common limitation on taxing power of the LGU is that it receipt of person who transport passenger or freight for hire and
cannot exercise its taxing power in excise taxes on articles, common carrier was held invalid.
enumerated under the NIRC as amended and taxes, fees or
charges on Petroleum Products. Section 133 (h) specifies two kinds Q: BAS is a foreign corporation organized and existing under the
of taxes that cannot be imposed by the LGU 1. Excise taxes on laws of Indonesia. It is licensed to engaged in the airline business in
the Philippines that involves the transportation of passenger and
articles enumerated under the NIRC as amended 2. Taxes fees or
charges on Petroleum Products. The prohibition under Section 133 ( cargo for hire. Its principal office and place of Business in the
Philippines is located in the City of Manila. As BAS was renewing its
h) of the LGC makes it clear that the prohibition with respect to
Petroleum Product extends not only to the excise tax thereon but to business permit, it was assessed by the City Treasuer of Manila for
all taxes, fees or charges. This means that there is a specific local business tax at the rate of 50% of one percent of the gross
receipt of transportation contractor, persons who transport
prohibition imposed barring the levying of any other types of taxes
with respect to petroleum taxes passenger or freight for hire, and common carrier by land, air or
water pursuant to the newly enacted ordinance. Can the City
treasurer of Manila legally impose the said local business tax”?
business engaged in the production, manufacture, refining distribution
or sale of oil, gasoline and other petroleum products shall not be
subject to any local tax. No. LGC clearly and unambiguously proscribes LGU from imposing
any tax on the gross receipt of transportation contractor persons
engaged in the transportation of passengers or freight by hire, and
common carrier by land , air and water.
9. Percentage Tax or VAT on sales, barters or exchange or
similar transaction on goods or services

Bar: Batas law is a general professional partnership operating in 11. Taxes on premiums paid by way of reinsurance or
the City of Valenzuela, it regularly pays value added tax on its retrocession. And not insurance premium
services all the lawyers have individually paid the required
12. Taxes fees or charges for registration of motor vehicle and
professional tax for the year 2017. However as a condition for the
for the issuance of all kinds of license or permits for the driving
renewal of its business permit for the year 2017, the City of
treasurer assessed BATAS law for payment of percentage business thereof except tricycles.
tax on its gross receipt for the year 2016 in accordance with the
Revenue Tax Code of Valenzuela
This provision only pertains to the grant of franchise
excluding trycles. Other matters pertaining to the LGU remains with
the LTO.
A: No batas law is not entitled to pay the assessed percentage
business tax , Under Section 133 of the Local Government Code
local government units cannot levy percentage or value added tax
on sale of service. Here, Batas law income comes directly from its 13. Taxes fees or other charges on the Philippine products
services which no percentage tax can be imposed. actually exported except otherwise provided therein

Pelizloy questioned the imposition of the province on gross 12. Taxes, fees or charges in the countryside and barangay
business enterprises and cooperative duly registered und
receipt from the admission fees of resorts, swimming pools and
bath houses. The province argues that resort, swimming pools
and hot springs are encompassed under the term amusement. Is
the province correct? 13. Taxes, fees or charges of any kind of the National
Government its agencies and instrumentalities and LGU
No. The LGC states that it may levy an amusement tax to be
collected from the proprietors, lesses or operators of theaters , -This is not absolute there is an exception to the exemption clause
cinema, concert halls circuses, boxing stadia and other place of which taxes the national government when the beneficial use of its
amusement. In this case, resort, swimming pools, bath houses and real property is given to the taxable entity.
tourist spots are not among those the amusement place mentioned in
the LGC as subject to amusement tax. Amusement places include
theaters, cinema, and concert halls circuses and other places of a. Palma Dev’t Corp v. Mun. of Malangas, GR No. 152492, 16
amusement where one seek admission to entertain oneself by seeing Oct 2003
or viewing the show or performance Doctrine: A municipal ordinance imposing fees on goods that pass
through the issuing municipality territory is null and void. The
imposition of service fee in the guise of wharfage dues are void for
violating the prohibition under RA 7160.
10, Taxes on the gross receipts of transportation contractors, and Wharfage and all other kinds of customs fee , charges and des
persons engaged in the transportation of passenger or freight by except wharfage on wharves constructed and maintained by the
hire and commo carrier by land, air and water except otherwise LGU.Under RA 7160, wharfage is defined as a fee assessed
provided against the cargo of the vessel engaged in foreign and domestic
trade based on quantity weight or measure received and or
discharged by the vessel. Here, it is a wharfage
1. Common carriers makes no distinction as to the means of
transporting as long as it is by land, water and air. Nor does it
LGU may not levy taxes that are not provided under the Local

Tabuzo, Tax Remedies Self Notes

government Code. A municipal revenue Code was approved by the
Sangguniang Panlalawigan imposing a service fee for the use of
municipal road and streets leading to the wharf . The petitioner Facts
argued that the local government code does not have the authority
to tax the goods transported to the vehicle. The issue here is Petron was assessed tax relative to the sale of diesel by Navotas .
whether the Municipal government is taxable Petitioner opposed this protest pursuant to Section 195 of the
code.It argued that it is exempt from payment of local business tax
Held: in view of Article 232 of the Code. The issue is whether the local
No. The local government code prescribe toll fees or charges for government code is empowered to tax Petron over the sale of
the use of public road, pier and wharf constructed by them. diesel by Navatos.
However the local government code prohibits the imposition of The court ruled that the local government unit is not entitled to
wharfage fees and other tax on goods and merchandise. impose excise tax based on Section 133. Though the local
Wharfage fee pertains to a fee assessed against the cargo of the government has the power to create its own source of revenue and
vessel engaged in foreign and domestic trade based on quantity to levy taxes and charges it is subject to the guidelines which the
, weight or measure received and or discharged by the vessel. congress provides in this case is Section 133 of the Tax Code.
Here, what is imposed are fees in the guise of wharfage fee.

The excise tax on articles enumerated under the NIRC, the court
defined excise tax as that levied on specific article rather than one
upon the performance carrying or the exercise of an activity. In
b. Batangas City vs. Pilipinas Shell, GR No. 187631, 8 July 2015
order words,when the LGC talks about excise tax, it refers to those
Doctrine : A municipal corporation , does not have inherent powers enumated in the NIRC which is subject to ad valorem tax.
of taxation. The charter or statute must plainly show an intent to
confer that power of municipality , hence it cannot be assumed.
Hence, the power of province to tax is limited to the extent that
such power is delegated to it either by the Constitution or by the
statute. d. PBA vs. CA, GR No. 119122, 8August 2000
PBA was assessed for the deficiency amusement tax. The
protested this assessment, contending that local tax code
The power to tax is inherent in the state, the same is not true in transferred the power and authority to sell from the national
cases of LGU, the power of LGU is conferred by the Constitution or government to the local government. The court ruled that Amusement
by the statute. The LGU has the power to tax business tax butit tax is a national tax. Province can only impose tax on admission from
cannot tax any charges on petroleum products Batangas sent a the proprietors, lesses or operator of theaters , cinematograph
letter of assessment to the respondent demanding the latter to pay concert hall or place of amusement. To determine the phrase other
business tax and mayor permit fee for the manufacturer or place of amusement one must refer to the enumeration of
petroleum product pursuant to Section 134 of the LGC and Section theater, cinematograph concert hall, and cirucses→ Here,
23 of the Batangas City Code. Batangas argued that based on professional basketball game do not fall within the said category
Section 143( h) of the LGC is so broad that it covers any business of as theater, cinematograph and other form of entertainment.
Sangunian concerned.
Issue: Whether the LGU is empowered to impose business tax on
person entities, engaged in the business of manufacturing and
distribution of petroleum product
Held: No. The power of the LGU to tax must be conferred by law. e. Manila Vs. Hon. Angel Valera Colet, GR No. 120051, Dec 10,
A municipal corporation does not have inherent power to tax, the 2014
charter or statute must show the intent to tax, hence the power must
be delegated by the Constitution or by the statute. Taxes on the gross receipt of transportation contractors and person
engaged in the transportation of passengers or freight by hire and
In this case, though the LGU has the power to impose business taxes,
common carrier by air, land or water. A local ordinance which
the same is subject to explicit limitation which prohibits the LGU
imposes local business tax on the gross receipt of person who
from imposition of taxes, fees or charges of petroleum product. transport passenger or freight for hire and common carrier was
Therefore, the specific prohibition prevails over the general held invalid.
provision

Section 21: There is an argument that Section 21 (b) of the LGC

contravenes the Constitution as Section 123 provides that taxing
c. Petron vs.Tiangco, (2008) power of the LGU does not extend to transport business. The court
ruled that Section 21 is void as LGU is prohibited from taxing the
gross receipt of transportation contractor, person, engaged in
Section 133 (h) Covers two limitation transportation of passenger or freight by hire and common carrier
by land, air and water.
1. Excise tax on articles enumerated under the NIRC
- The court defined excise tax on articles as that levied for a In the case at bar, the sanggunian of the municipality or city cannot
specific article rather than one upon the performance carrying on enact an ordinance imposing business tax on the gross receipts of
or the exercise of an activity. ( Ad valorem) transportation contractors, persons engaged in the transportation of
passengers or freight by hire, and common carriers by air, land, or
2. Taxes, fees and charge on petroleum products
water, when said sanggunian was already specifically prohibited
Here, the law does not qualify the kind of taxes, fees or charges from doing so. Any exception to the express prohibition under
that could withstand the absolute prohibition impoed by the Section 133(j) of the LGC should be just as specific and
provision. Since the law does not distinguish, the LGU is not unambiguous. Second, the construction adopted by the Court gives
prohibited from imposing not only excise tax but all kinds of effect to both Sections 133(j) and 143(h) of the LGC. In construing
product. a law, care should be taken that every part thereof be given effect

Tabuzo, Tax Remedies Self Notes

and a construction that could render a provision inoperative should 3. Publication for three consecutive days in a newspaper of local
be avoided, and inconsistent provisions should be reconciled circulation or posting in at least two conspicuous places and publicly
whenever possible as parts of a harmonious whole. accessible places.
4. Copies shall be furnished to the respective local treasurer for
public dissemination

Ongsuco vs. Malones

f. Manila Electric Company Vs. City of Muntinlupa and Nelia A. 1. A public hearing must be held prior to the enactment of an
Barlis, G.R. No. 198529.February 9, 2021 ordinance levying taxes, fees or charges and that such public
hearing be conducted as provided under Section 277 of the IRR of
FRACHISE TAX : SECTION 142 only vest the province and cities the the LGC
power to levy franchise tax, the Muntinlupa is not a province or city
therefore the existing statute is void for being ultra vires. 2. Under Article 277 (b) (3) of the IRR of the local government
code, public hearing must be held no less than ten days from the
time notices were sent out, published or posted.
Barlis sent a letter to Meralco demanding the payment of franchise
tax pursuant to Section 25 of MO 93-35. Meralco argued that the
City of Muntinlupa did not have the power to collect a franchise tax
under the local government code.

VI. Tax Remedies under the Local Government Code of 1991

There are two test to determine the validity of the ordinance 1.
a. Taxpayer’s remedies in local taxation
Formal test and 2. Substantive test. The formal test requires the
determination of whether the ordinance was enacted within the
corporate powers of the LGU . Substantive test primarily assess the
reasonableness and fairness of the ordinance and significantly its Prescriptive period
compliance with the Constitution. Assessment Collection
1. Five years from the date 1. Within five years from the
The LGU cannot impose the payment of Franchise tax they become due date of assessment by
administrative or juridical action
For an ordinance to be valid it must be 1, Not Contary to the
constitution or any statute 2. Not unfair or oppressive 3. Not partial 2. Within a period of ten years
or discriminatory 4. Not prohibit but regulate trade 5. General in case of fraud or intent to
consistent with public policy 6. Not unreasonable evade the payment of taxes
from the time of discovery
Based on the substance test, Section 25 of MO 93-35 was passed
beyond the powers of the municipality in a clear contravention of Suspension
RA 7160. MO 93-35 was passed by the Sangguiniang Bayan of
Muntinlupa on January 1, 1994, this is ultra vires considering the 1. When the treasurer is legally prevented from making the
power of Section 142 of RA 7160 vesting provinces and cities assessment or collection of the tax.
the power to impose , levy and collect a franchise tax. The
Muntinlupa being a municipality definitely had no power to enact 2. When the taxpayer request for reinvestigation and executes a
waiver in writing prior to the expiration of the period
the subject franchise tax ordinance. A void ordinance which is
incompatible with any existing law or statute is ultra vires hence null
and void. Therefore, the city of Manila cannot legally impose a
local business tax based on a void ordinance. 3. When the taxpayer is out of the country or otherwise cannot be
located

REMEDIES
III. Requirements for a valid tax ordinance
1. Question the newly enacted ordinance
1. Not contrary to the Constitution or any statute
2. Protest against the assessment
2. Not unfair or oppressive
3. Claim for refund or tax credit
3. Not partial or discriminatory
4. Not prohibit but regulate trade
5. General consistent with public policy
QUESTION THE CONSTITUTIONALITY OF TAX ORDINACE
7, Not unreasonable

1, Any question on the Constitutionality or revenue measure may be

IV. Procedure for approval and effectivity of tax ordinances raised on appeal within 30 days from the effectivity thereo f to the
SOJ.
1. Satisfaction of the procedures applicable to local ordinance in
general -Do not that this only pertains to those tax ordinance or
revenue measures. Hence if the ordinance pertain to
2. Public Hearing Shall be conducted for the purpose prior to the
regulatory fee it must be brought with the RTC
enactment thereof
Procedure

Tabuzo, Tax Remedies Self Notes

 a. Petition for review with the CTA Division under Rule
42( If the RTC acts in original jurisdiction)
1, Appeal within thirty days from the effectivity of the ordinance to
the Secretary of Justice. b. Petition for review to the CTA En banc under Rule
4323 ( If the RTC acts in appellate jurisdiction)
*Only review the Constitutionality of the tax ordinance.
* Competent Jurisdiction
1. appeal with the MTC: 2,000,000 and below
2. Secretary must render a decision within sixty days from the
receipt of the appeal 2. Appeal with the RTC:
*Appeal to the Court of Tax Appeals
3. Within 30 days from the lapse of the 60 days without any action
from the SOJ or within 30 days from the receipt of the decision, the
taxpayer goes to court. A written protest is mandatory when protesting an assessment,
Corollary to assailing the validity of the ordinance no appeal to the
The appeal is mandatory if not appeal to the DOJ was DOJ is necessary when protesting against the assessment.
made the RTC dismiss the case
* Note: The failure to comply with the Procedure makes the same as
null and void Note However that one can still pay it under protest if you file a
refund when you appeal the denial or inaction in court.

The Secretary of justice can only review the Constitutionality or

legality of the tax ordinance and if warranted revoke it on either Question: On mAY 15 ,2009, La Manga Trading Corporation
of these grounds. received a deficiency business tax assessment of P1,500,000.00
from Pasay City Treasuer. On June 30 2009, the Corporation
contested the assessment by filing a written protest with the City
4. After the decision of the DOJ, the next step is to question the Treasurer. On October 10 2009, the Corporation received a
decision under court of competent jurisdiction. collection letter from the City of Treasurer drawing it to file on
October 25 2009, an appeal against the assessment before the
RTC
A taxpayer may file a complaint assailing the validity of the
ordinance and praying for a refund of its perceived payment
without filing a protest to the payment of taxes due under the A. The Protest was filed on time
ordinance.
As provided under 195, upon the issuance of the assessment , the
taxpayer files a protest with the local treasurer within 60 days
Protest of Assessment from the notice of assessment

Protest: This pertains to notice of assessment contemplated by The appeal with the RTC was not filed on time
Section 195 as these any amount of deficiency, surcharge interest When the assessment is protested the treasurer has a period of 60
and penalties due from the taxpayer. Therefore, municipal license days within which to decide, the taxpayer has 30 days from the
receipts, mayor’s permit, business tax and other charges all of receipt of the denial of the protest or from the lapse of the 60 day
which are required to renew a business permit under the LGU are period to file a case with the proper competent court which ever
not considered as assessment that can be protest. date comes first. In this case, since there was no decision on the
protest was made the taxpayer should have appealed with the
RTC within 30 days from the lapse of the period to decide the
PRESCRIPTVE PERIOD: 5 YEARS FROM THE TIME THEY BECOME protest
DUE
Except 10 Years in case there Is fraud
On January 17 2017, XYZ corporation received a tax assessment
1. Treasurer to issue an assessment for local business tax from the City Treasurer of Manila. XYZ
2. Taxpayer to file a written protest with the local treasurer Corporation paid the taxes and charges in the tax assessment on
within 60 days form the receipt of the notice of assessment February 13 2018 and filed with the City Treasurer Office a letter
otherwise it shall be considered as final and executory dated June 2 2018 asking for refund of the taxes and charges
paid and protesting the validity of the assessment. On August 8
“ Payment under Protest”: Is not necessary the rules are 2018, or within the two year prescriptive period for the filing of
different under the real property assessment judicial claim for refund. XYZ Corporation bought a judicial action
before the RTC. Will Judicial claim for the refund prosper.

3. The treasurer has to decide within sixty days from the time of its
filing. If the treasurer finds the protest meritorious he will cancel the A: No. The Judicial claim will not prosper. Upon the receipt of the
assessment if not he will deny the protest. assessment, the petitioner may pay the same under protest and
administratively assail it within 60 days before the local treasurer
whether in a letter protest or refund. In the case at bar, the
4. Taxpayer has 30 days from the receipt of the denial or thirty taxpayer receives an assessment and opts to pay, Section 195 must
days from the lapse of the sixty day period within which to appeal still apply. In the subsequent court action, the taxpayer may at the
to the proper court of competent jurisdiction otherwise the same time question the validity and the correctness of the
assessment becomes final assessment and seek a refund of a taxes it paid.
1. January 17 2017→ received assessment
5. Go to the CTA within 30 days via

Tabuzo, Tax Remedies Self Notes

2. Paid Feb 13 2018→ refund
i. City of Cagayan de Oro vs. CEPALCO, G.R. No. 224825, Oct
3. August 8 20 17, 2018
The Administrative Procedure under the local government code
which provides than an appeal must first me made with the SOJ is
REQUIREMENT OF TAX CREDIT RO REFUND CASES
not warranted or not applicable when the ordinance is a regulatory
measure.City of Cagayan enacted an ordinance which imposed an
annual Mayor Permit fee of P500 on every electric
1. Written claim filed with the local treasurer telecommunication. The respondent would have to pay a permit fee
2. Filed within two years from of P8,500,000 . CEPALCO filed a declaratory relief assailing the
validity of the ordinance contending that the imposition of police
a. Date of payment power is unlawful and confiscatory. The issue here is whether
CEPALCO should have exhausted administrative remedy
b. Date when taxpayer is entitled to a refund or credit
Held:
No, The requirement to file a case with the DOJ, ( SOJ). There is no
As compared to NATIONAL Tax. The local taxation supervening need to appeal the tax ordinance to the SOJ within thirty days
causes are allowed as reckoning points for prescriptive period from the effectivity of the ordinance since the provision outlining the
purpose ( National Taxes, supervening causes re not considered) procedure partisans only to those ordinance permitting revenue
measures
2. If the taxpayer wins a case against an LGU regarding local
taxes already paid what must the taxpayer do? The taxpayer must The Purpose of the imposition determine the imposition determine
just request from the LGU the implementation of the tax refund or
whether tax or regulatory fee. This is a regulatory fee as stated in
credit. the whereas clause in the ordinance.

What happened if there is an assessment?

1. Protest the assessment
ii. Manila vs. Cosmos Bottling Corp., GR No. 196681, 27 Jun
a. Do not pay the tax and appeal the assessment ` 2018
in court under Section 195
After receiving an assesment, the taxpayer can pay it amd appeal
Bring an action in court within 30 days fron the decision or inaction the same in court and at the same time seek a refund.
by the local treasurer whether such action is denominated as an
If you choose this option, the taxpayer must bring the action in court
appeal and to claim for refund erroneously or illegally collected.
within thirty days from the decision or inaction of the treasurer, the
two year period under Section 196 does not apply to refund cases
because assessment triggers the application of Section 195.
b. Pay it under protest and administratively assail within
60 days the assessment before the local treasure Manila assessed COSMOS local business tax and regulatory fee.
whether in a letter protest or in a claim for refund COSMOS protested on the assessment arguing that the ordinance
amending the revenue code of Manila must be declared as null and
void. Cosmos later tendered the correct computation of local
If this mode is chosen you have to bring an action in business this payment was refused by the Cit treasurer. Cosmos
court either to appeal from the assessment and or claim for refund filed a complaint before the RTC praying for a complaint fo r
within thirty days from the decision or inaction of the treasurer. Even refund of tax credit certificate. The RTC enjoined the respondent
if it is a refund , you cannot just use the two year period to claim from the imposition of business tax under the Revenue Code. The
the refund under Action 196. You still have to follow the period to CTA ruled that direct resort to the CTA EN BANC violated Section
protest the assessment because the a assessment triggers thew 18
application of Section 195 . If you don’t protest the assessment the
assessment becomes conclusive and unappealable
The Direct resort to CTA en banc violated administrative remedy
Yes. There must first be a filing for a motion for reconsideration or
Section 195 And Section 196 motion of new trial before the CTA division before filing an
1. Where an assessment is to be protested and disputed the appeal with the CTA en banc.
taxpayer may proceed a. Without payment b. With payment of Whether the assessment becomes final and executory when it
the assessed tax abandoned its protest and sued for refund
2. If the taxpayer receives an assessment and does not pay the tax No.In case one receives an assessment there is two remedies
its remedy is strictly confoned with Section 195
1. Protest and appeal the assessment in court under Section 195
3. If the taxpayer receivesthe assessment and opts to pay Section and assail within sixty days the assessment before the local
195 must still apply. In the subsequent court action, the taxpayer treasurer.
may at the same time question the validity of the correctness of the
assessment and seek a refund of the taxes. 2. Pay it: The taxpayer must administratively question the validity
and the correctness of the assessment n the letter claim within sixty
4. If no assessment notice is issued by the local treasurer and days from the receipt of notice of assessment and thereafter bring
taxpayer claims that it erroneously paid a tax or that the tax had the suit in court 30 days from either decision or inaction of the local
been illegally collected from him then Section 196 applies treasurer. Therefore, the period is not the period to file a refund
but still within the period of protest ( because protest triggers
195)

Tabuzo, Tax Remedies Self Notes

 jurisdiction since the petition for review was filed beyond the
In this case, after Cosmos received the assessment on January 15, reglementary period allowed under Section 195 of the LGC
2007, it protested the assessment on January 18/ Cosmos received
a letter from Toledo denying its protest on March 8 2007 or
exactly 30 days from the receipt of denial . Here Cosmos was fully
CBC insisted on the invalidity of the City Treasurer’s assessment, this
justified in asking for the refund of the assailed taxes protested the
sme before local treasurer. time, claiming that its petition for review filed with
the RTC was timely filed. It explained that the 60-day period
within which the City Treasurer should have acted on the protest,
and the consequent 30-day period within which it had to appeal
the inaction of the City Treasurer should have been reckoned not from
January 15, 2007, when it filed its letter questioning the imposition
and paid the assessed amount, but from March 27, 2007, the day it
iii. Alta Vista vs. Cebu, GR No. 180235, 20 Jan 2016 filed the letter reiterating its objection to the City Treasurer imposition
Doctrine: The Procedure under Section 187 can be set aside in of P154,398.50 and demanding the return of the said amount. With
cases of pure questions of law the reckoning point being March 27, 2007, CBC argued that the
petition for review was filed well within the reglementary period
because it had until June 25, 2007 to file the said appeal.
Appeal with the SOJ: Need not be made if the question is purely Issue: Whether the reconning period to file the case must be from
legal. ( Purely Legal: There is no need for the presentation of the time it filed its letter questioning the assessed amount or
evidence: Can they impose playing tax on playing golf? ). from March 27 the day it field a letter reiterating its objection to
The Sangguniang Panlungsod of Cebu City imposeda tax ordinance the imposition of the City treasurer demanding the return of the
imposing an amusement tax of 30% on the golf course and 20% on amount
entrance fee. In the assessment , the petitioner was originally Held
assessed with deficiency busiensstax and other charges. The January 15 2007, is the reckoning period from the time it filed a
petitioner refused to pay arguing that under the local
protest against the City treasurer questioning the imposition while
government code. Amusement can only be imposed on theaters, paying the assessed amount. As provided under the law, the
concert halls or places where there is a variety of show and taxpayer has thirty days from the receipt of the denial of protest is
performance. The petitioner then wrote a letter proposing to first thirty days from the receipt of denial of the protest or from the
settle other assessment in the assessment sheet while the legality of lapse of the sixty day period to appeal with the court of competent
the amusement tax is in question. Therespondent treated this as a jurisdiction. Herem the period had already lapsed. From January
protest and rendered a decision that denied the protest. A closure was 15 2007, CBC had sixty days or until March 16 2007, or 30 days
then instituted Alta Vista then filed a petition with the RTC for from MARCH 16 2007 TO appeal with the City Treasurer since
petition for injunction ,prohibition and mandamus arguing that there is no action on its part. Hence, when the petitioner filed its
Section 42 of the Cebu City tax ordinance with prayer of TRO is petition for review it was already a day late/
unconstitutional for beign summarily issued. The issue here is that the
taxpayer failed to comply with Section 187
Issue: The RTC does not have jurisdiction, the RTC only has original
jurisidciton over local treasury cases. Ra 9282 provides that CTA
1. Whether the power of Judicial review over the validity of a local
exercises exclusive appellate jurisdiction to review on appeal
tax ordinance has been restricted by Section 187 of the Local decision, of the RTC in local tax cases resolved by them in exercise
Government Code of their appellate or origianl

No. The case at bar is an exemption from the doctrine of V, International Container Terminal Service vs City of Manila
exhaustion of administrative remedies. The tax code provides that it
is in compliance with Section 187 is mandatory. An exception is in Doctrine :
cases of purely legal question within the competence of the
jurisdiction of the court and not administrative agency constitute an Here, the City Treasurer filed a motion to dismiss since there was no
exception. Resolving question of the law is the function of the court protest to the treasurer. Section 196: File a written claim with the
and such lower court may establish. Here, there is no need to protest local treasurer within two years from the date of payment 2. Date
before the DOJ because it raises purely question of law when the taxpayer is entitled to refund the credit. While the
petitioner paid these claim and filed a refund the subsequent
denial of these claims must have prompted the resort with the
remedy under SECTION 196 specifically the filing of the judicial
case for recover of tax allegally collected within two year period
Iv. China Bank vs Treas of Manila , GR 204117
Issue: Whether the issue of non exhaustion of administrative remedy
Doctrine is present
The Reconning point of the 60 day period is from the time the No. Section 195 is different from 196. In 195, it is the written
taxpayer files his protest.On the basis of the income of the protest with the local treasurer that constitutes as administrative
petitioner was assessed by City Treasurer of Manila consisting of remedy. In Section 196 it is a written claim for refund filed within
local business taxes and other taxable fee. The petitioner paid the the said office that constitutes as the administrative protest.
same and protested the imposition of business tax as it constitutes
as double taxation. The petitioner acknowledged the receipt of
CBC payment under protest but will wait for further protest. CBC
wrote al etter that a protest was already made and that it had
until March 16 2007 to decide on the protest considering that the In this case, since there is no notice of assessment received by the
letter was received on February 8 2007 but after four days the LGC article 195 cannot apply. While the petitioner paid these
deadline still did not decide on the protest, hence the respondent claim and filed a refund the subsequent denial of these claims must
demanded for a refund. CBC filed a petition with the RTC, the RTC have prompted the resort with the remedy under SECTION 196
grated the decision of the CBC and ordered the refund. The CTA specifically the filing of the judicial case for recover of tax
division and en banc reversed the decision as RTC does not have allegally collected within two year period

Tabuzo, Tax Remedies Self Notes

 2. Judicial Action
The Collection of delinquent taxes, fees , charges or other revenues
by civil action in any court of competent jurisdiction shall be filed
vi. Treasurer of Manila vs. Philippine Berverage Partners, Inc., by the local treasurer no criminal action.
substituted by Coca-Cola Bottlers Philippines, G.R. No. 233556,
11 Sept 2019
3. Enforcement of local government lien
Doctrine;
Where an assessment is issued the taxpayer cannot choose to pay the
assessment and thereafter seek a refund at any tme within the full i. Lanao Norte Electric Cooperative, Inc. vs. Provincial
period of two years from the date of payment. Government of Lanao Del
City Treasurer of Manila issued a statement of account to the Norte, GR No. 185420, 29 August 2017
respondent Philippine Beverage Partners showing that the RA 9136 prohibits electric cooperatives from transferring its
respondent is liable to pay local business tax and regulatory fee properties within a period of rehabilitation. Regardless of the lien
for the first quarter of 2007. Th respondent protested this constituted on LANECO properties these cannot defeat the right of
assessment on the ground that it constitutes double taxation and the PGLN to make those properties answerable for delinquent real
tax ordinance amending the Revenue Code of Manila was property tax since the local government servies as superior lien
declared as null and void. over the properties subject to tax. Section 257 , the basic real
The protest was denied and was received with the petitioner on property tax and other tax levied under this title constitutes as a
February 6 2007/. The respondent paid the total amount and filed lien on the property subject to tax superior to all lien and charges
a claim for refund for tax illegally collected, it also filed for or encumbrances o any person . As a result , PGLN is well within the
revision of the SOA and refund of local business taxes. The right to assess LANECO with real property tax and to exercise its
petitioner argues that the respondent should have appealed the remedies under Section 256 of LGC for the collection including
protest instead of instituting the action for refund . administrative action through levy of real property.

Issue: Whether the taxpayer who protested the assessment may The provision of the law cited do not prohibited the local
institute a judicial action for refund government from resorting to administrative remedy of levy on real
property. Nothing in the said provision withdrew the remedy of tax
Held: collection by administrative action from the LGU. Instead, these
Yes. When an assessment is to be protested or disputed the provision merely ascribe limitation on and lay down the
taxpayer can either 1. Without payment 2. With payment of tax. consequences of any voluntary transfer and disposition of asset by
There must be a protest within sixty days from the time the assessment the electric cooperative themselves. They do not limit the LGU
was reached with the loca trasurer remedies against electric cooperatives to judicial action in collecting
real property tax.

If no payment was made , the taxpayer may appel the case with
the court of competent jurisdiction. If there is a payment the action
may be brought t court questioning the assessment and seeking
refund. In this case, after the respondent received the assessment on
January 17 2007, it protested theassessment on January 19 2007 .
After payment, it wrote to the petitioner another letter asking for a
refund and reiterating the ground raised in the protest. The
rspodnent received the denial on February 6 2007.On March 8 (30
days after the receipt of denial the respondent brought the case
before the RTC, the respondent is justified in the filing of the claim
after protesting and paying the assessment)

b. Civil remedies of LGUs

1. Remedies

1. Administrative Action

a. Distraint of goods, chattel or effects and other personal property

of whatever charter including stock and other securities debt , credit
bank account and interest in the rights to personal property , sale
at public auction in a manner provided for by law

2. Levy upon real property and interest in or rights to real property

shall be sold at the public auction subject to a redemption period of
one year from the date of sale

Tabuzo, Tax Remedies Self Notes

 REAL PROPERTY TAX machineries are not permanently attached as long as it actually ,
directly and exclusively used to meet the needs of a particular
industry.
V. Imposition and exemptions from real property taxes meet the needs of the particular industry and by their very nature
Only the following LGU can impose real property tax and purpose necessary for business purposes.
1. Provinces
2.Cities In this case, even though the electric facilities are not annexed to
the land but it was actually and directly used for industrial purpose
3. Municipalities within Metro Manila it is subject to real property tax.
Real Property and Machinery
1. The list of immovables under Article 415 of the Civil Code

b. FELS Energy, Inc. vs. Prov. of Batangas, GR No. 168557, 16

Section 199: Machineries which are actually , directly and Feb 2007
exclusively used to meet the needs of the particular industry DOCKS / STRUCTURE FLOATING: Docks, and structure which
business or activity are liable for real property tax. though floating are intended by their nature and object to remain
-If the Machinery is only used for general purpose it is fixed in the river are considered as immovable property.If the
not subject to real property tax. essential and principal emenet of an industry, work or activity
without which such cannot function subject to real property tax. The
power barges are considered immovable by destination that tends
Rules on Machinery to meet industry of work→ Hence subject to real property tax.
1. As long as permanently attached to land and
buildings c. Capitol Wireless, Inc., vs. Prov. Treas. of Batangas, et al, 30
If not permanently attached May 2016
a. If essential and principal element of an industry, work Submarine or undersea communication cables are akin to electric
activity without which such cannot function transmission lines that are no longer exempted from the real
property tax under the LGC . Both electric lines and communication
cables are in the strictest sense are not directly adhered to the soil
Note: Machinery- of non stock non profit educational institution but pass through post, relays or landing station but both may be
which are used actually, directly and exclusively used for classified as machinery as real property under the Article 415(5) of
educational purpose are not subject to real property tax. the Civil Code for the simple reason that such pieces of equipment
serves the owner business or tend to meet his industry or works that
are on real estate.
Between the Civil Code and the Local government Code the latter
shall prevail the LGC is a special law granting the LGU power to
impose Real property tax Here, the pieces of equipment serve the owner of the business which
tend to meet the need of his industry or work that are on real
estate. Here the argument that the cable system is within
Exception from real property tax international water, the court applied the rule on UNCLOS 12
nautical miles.
1. Real Property owned by the Republic of the Philippines or any of
its political subdivisions except when the beneficial use is granted to
taxable person.
2. Land, buildings and improvement that is actually , directly and d. LRTA vs. CBAA, G.R. No. 127316. October 12, 2000
exclusively used for religious charitable and educational purpose
Whether carriageway, passenger terminal station is subject to real
3. Machineries and equipment that are actually, directly and property tax, the petitioner argues that it should not be subject to
exclusively used by local water district and GOCC engaged in the tax because it is created for public use
supply and distribution of water and or generation and transmission
of electric power Under the Real Property Tax Code, real property "owned by the
Republic of the Philippines or any of its political subdivisions and
4. RP owned by registered cooperatives any government-owned or controlled corporation so exempt by its
5. Machineries and equipment used for pollution control and charter, provided, however, that this exemption shall not apply to
environmental protection. real property of the abovenamed entities the beneficial use of
which has been granted, for consideration or otherwise, to a
taxable person. Therefore, the petitioner is not exempt from real
property tax since the beneficial use was granted to a taxable
person. LRT is accessible only to those who pay the required fare. It
a. MERACLO vs. Lucena, G.R. No. 166102, August 05, 2015 is thus apparent that the petitioner does not exist solely for public
service and that the LRT carriage way and terminal station are not
exclusively for public use.
Meralco argued that the transformers are not subject to real
property tax since under the civil code 1. It must be placed in the
tenement by the owner 2. Destined for use in industry or work of
tenement. Issue is whether electric post, transmission line are exempt
from Real Property Tax? No. The Transformer is entitled to real
property tax because the LGC withdrew the exemption under the e. City of Pasig vs. Republic, 24 August 2011
law.The court ruled that real property tax can be imposed even if
WHETHER PASIG city can assess real property tax from the

Tabuzo, Tax Remedies Self Notes

lessees of his property? It depends Under Section 234 (a) of RA of their income to members. Here ,PRA is not a stock corporation
7160 states that properties owned by the Republic of Philippines because it is not authorized to distribute dividends to stockholder.
are exempt from real property tax except when the beneficial use PRA cannot constitute a non stock corporation because it does not
thereof is granted for consideration or otherwise to a taxable have members organized for the purpose of 1. Common Good 2.
portion. Hence the portion of the properties not leased to taxable Economic Viability
entities are exempt from real estate tax while the portion of the
PRA IS EXEMPT FROM REAL PROPERTY TAX
properties leased to taxable entities are subject to real estate tax.
Section 234 provides that real property tax owned by
the republic of the Philippines or any of its political subdivision
In the case at bar, the parcel of land are not properties of public except when the beneficial use thereof has been granted for
dominion because they are not intended for public use such as road, consideration or otherwise to
canals , river torrents, port and bridges constructed by the state.
There is no showing that PRA leased the subject reclaimed property
Neither are they intended for some public service or the
development of national wealth. MPLDC leases portion of its to private taxable entity. This exemption must be read in relation to
properties to different business establishment , thus the portion of Section 133 (o) which prohibits local government from imposing
taxes, fees and charges of any kind on the National Government,
the properties leased to taxable entities are not only subject to real
estate tax they can also be sold to public auction for tax deficiency agencies and its instrumentalities.

h. UP vs. City Treasurer of Quezon City, GR No. 214044, 19

f. NPC vs. Province of Quezon and Mun. of Pagbilao, 15 July June 2019
2009
. To claim exemption the claimant must prove that 1. The Doctrine :
machineries are actually , directly and exclusively used by the
local water district and government owned and controlled
corporation 2. The local water district and the government RA 9500 Section 25 ( a) : All Revenue and assets o the
owned and controlled corporation claimed exemption must be University of the Philippines used for educational purpose or in
engaged in the supply and distribution and generation of electric
support thereof are exempt form all taxes and duties. UP was
power. Neither NPC or Mirant satisfies both requirement although
assessed real property tax on the property leased to Ayala land.
the Plant’s machineries are devoted for the generation of electric
The issue is whether UP is liable to pay RPT on the land leased to
power by the NPC own admission as pointed out , Mirant a private Ayala Land. The court ruled that no UP is exempt.
corporation is the one who uses and operates them. That Mirant
operates the machineries solely in compliance with the will of the
NPC only underscores the fact that NPC does not actually directly
and exclusively use them. As a rule, Section 205 and Section 234 of the LGC provides for the
removal of exemption of government instrumentality when the
Real Property owned by the RP or any of its political subdivision beneficial use of real property owned by the Government is
and government owned and controlled corporation so exempt by granted to a taxable person, But this does not apply in the case of
its charter provided that the exemption does not apply to real UP, Under RA 9500, (UP’s charter) , there is no longer a need to
property of above mentioned entities the beneficial use of which has distinguish the tax status of the possessor of the beneficial owner to
been granted to a taxable person. Therefore, if the beneficial ascertain whether UP is exempt from tax. Therefore the point of
ownership is granted to the taxable person ( Mirant) it is not exempt contention in exemption is whether the revenue and assets of the
from paying RPT/ University of the Philippines used for educational purpose or in
support thereof shall be exempt from taxes and duties – UP charter

i. National Grid Corporation of the Philippines VS. Ofeliam

g. Republic vs. City of Paranaque, GR NO. 191109, 8 July 2012 Oliva, G.R. No. 213157, August 10,
Doctrine 2016
The issue here is whether NGCP is exempt for the payment of
Note: Differentiate a GOCC with a government instrumentality : A real property tax.
GOVERNMENT INSTRUMENALITY IS EXEMPT FROM PAYMENT
OF REAL PROPERTY TAXThe Petitioner argues that it is an
Government instrumentality and hence it is exempted to pay real It depends:
property tax under the Local Government Code. The LGU argues
that PRA is a GOCC and not an instrumentality when it entered into 1. Properties used in Connection with the Franchise: Are exempt
several contracts representing itself to be a GOCC hence taxable from tax. In accordance with the NGCP
under Section 193 of the LGC. The issue is whether PRA is exempt 2. Properties that are not used in connection with NGCP franchise
from the payment of real property tax. are subject to tax

Yes. Since PRA is not a GOCC. To be a GOCC it must either be a

non stock corporation or a stock corporation. For it to be a stock
corporation 1, It has capital stock divided into shares 2. It is
authorized to distribute dividends and surplus profit. As for non
stock corporation it must have members and must not distribute part

Tabuzo, Tax Remedies Self Notes

 1. A claim of tax exemption raises a question of correctness, hence
payment under protest is required. This does not question the
authority of the local assessor to assess real property tax
c. Taxpayer’s remedies in real property taxation
Period to Collect
However: If the taxpayer questions the legality of validity of an
The period to collect by the government is five years from the date assessment: the resort to the local court is allowed m where what is
the real property taxes are due.
questioned was the authority of the assessor to impose the
Exception: assessment and the authority of the treasurer to collect real
property tax, The issue involved is a question of law.
1. If there is fraud, or intent to evade payment of taxes the period
is ten years

Interruption: Illegal Assessment

a. The treasurer is legally prevented to collect This is resorted to if you want to question an act of the assessor
as to when the assessor makes an appraisal on the real property
b. The taxpayer request for a reinvestigation and executes a , classifies the property according to actual use, fixes the
written waiver before the expiration of the prescriptive period assessed value of property and gives a notice of assessment to
c. Taxpayer is out of the country or otherwise cannot be located. the owner.
1. The taxpayer may directly resort to judicial action without
paying under the protest assessed tax and filing of an appeal with
Remedies in Real Property assessment the LBAA
1. Erroneous Real Property assessment: Presupposes that the 2. File a complaint for injunction before the RTC to enjoin the local
taxpayer is subject to the tax but is disputing the correctness of the government unit from collecting real property taxes the party
amount assessed; the taxpayer claims that the local assessor erred unsatisfied with the decision of the RTC shall file an appeal not a
in determining any of the items before computing the real property petition for certiorari before the CTA the complaint being a local
tax. The value of the real property or the portion thereof subject to tax case decided by the RTC
tax and the proper assessment levels.
3. In case the LGU has issued a notice of delinquency the taxpayer
may file a complaint for injunction to enjoin the impeding sale of the
real property at a public auction
2. Illegal Real Property assessment : An assessment is illegal if it is
made without authority under the law. 4. In case the LGU has already sold the property in auction the
taxpayer must first deposit with the court the amount for which the
real property was sold together with the interest of 2% per month
from the date of sale to the time of the institution of action and then
file a complaint to assail the validity of public auction
Erroneous Assessment :
3. The decision of the RTC in this cases are to be appealed before
This is resorted to when the taxpayer questions the the CA.
excessiveness of the amount imposed to him.
1. Pay the deficiency Real Property under Protest
IV: Claim for refund
- NB: The posting of the surety bond before the filing of an appeal
of the assessment with the LBAA is substantial compliance of the 1. The taxpayer files a claim within two years from the date the
requirement of payment under protest. taxpayer is entitled to such reduction or assessment .
2. File a written protest within 30 days from the payment of the 2. The provincial or city treasurer decides the claim of tax refund or
tax to the local treasurer who shall decide the protest within 60 credit within 60 days from receipt thereof
days from the receipt. 3. In case of claim for tax refund or credit, is denied the taxpayer
may avail of the remedies provided in Chapter 3 title II book III of
this code.
In case of denial or lapse of 60 days
i. Manila Electric Company, vs. Nelia A. Barlis, May 18, 2001
a. Appeal to the LBAA within 60 days from the receipt
of notice of assessment. LBAA has 120 days to decide. Doctrine
b. Appeal to the CBAA within 30 days Payment under protest is required only when there has bee na tax
assessment the validity of which is being questioned. Concomitantly
c. Appeal to the CTA en banc within 30 days the doctrine of exhaustion of administrative remedies finds no
application when no assessment was issued or made
Capitol Wireless: The general rule of a prerequisite recourse to A notice of assessment must inform the taxpayer of the value of
administrative remedies applies when the question of fact are specific property or the proportion thereof subject to tax , including
raised but exception of direct court action is allowed when purely the discovery, listing classification and appraisal.
question of law are involved as to whether or not an indefeasible
right over the submarine capable that lies in the international water
is subject to RPT
1. This Pertains to Erroneous Assessment : Therefore, there is a
need for payment under Protest
The protest here is needed when there is a question on the
reasonableness or correctness of the amount assessed: It pertains to
a question of fact The Municipal Assessor of Muntinlupa assessed real properties of

Tabuzo, Tax Remedies Self Notes

Meralco for tax purpose. Several notices for Meralco were issued. property is declared shall claim exemption from the payment of
Meralco did not pay and that the Municipality warns that ordering real property tax imposed must file with the Municipal city
the attachment of bank deposit of Meralco with the PDIC. Meralco provincial assessor sufficient document to support the claim.The
filed a case with the RTC prohibition and mandatory injunction burden of proving exemption from local taxation is upon the subject
seeking to enjoin the treasurer from garnishment. The trial court real property is declared. If the property being taxed has not been
issued an order allowing the garnishment, on appeal the CA dismissed dropped from the assessment roll taxes must be paid under protest
the case since Meralco did not exhaust administrative remedies. if the exemption is insisted upon. Therefore, NPC failure to comply
Meralco alleged that it need not avail the administrative with the mandatory requirement of payment under protest is fatal
remedies since the petition merely seek to assail the validity of to its appeal;
the issuance of warrant of garnishment.
-Compare this case with the City of Lapu Lapu case where it is a
illegal assessment
Issue: Whether there is a need for payment under protest
Held
Yes. There is a need. Section 64 of the RPTC prohibits the court
from declaring any tax invalid by reason of irregularities in the iv. Davao Vs. Estate of Amado S. Dalisay, GR No. 207791, 15
proceeding of officers charged with the assessment or collection of Jul 2015
taxes except upon the condition that the taxpayer must first pay thee better theory is that the forfeiture of tax delinquent properties
the amount of tax determined by the court pending proceeding.. transpired no later than the purchase made by the City due to lack
Here, since the petitioner failed to make a protest payment of tax, of bidder from the public . This happens on the date of the salea
any argument regarding notice is futile. and not on the date of issuance of declaration of forfeiture The
Estate of Dalisay owned four properties all situated in Davao.
These properties are all advertised for public auction for non
ii. Ty vs. Trampe, G.R. No. 117577. December 1, 1995 payment of real estate taxes. The public auction was scheduled no
bidders appeared in the date of public auction thus the properties
Illegal Assessment: The petitioner are questioning the very
were acquired by the City Government of Davao pursuant to
authority and the power of the assessor acting solely and Section 263 of the LGC.
independently to impose the assessment and of the treasurer to
collect the tax. These are not question merely as to the amount but Section 263 provides that within one year from the date of
attacks on the validity of any increase. Therefore, in cases of illegal forfeiture the taxpayer or any of his representative may redeem
assessment, the exhaustion of administrative remedies need not be the property by paying to the local treasurer the full amount of the
exhausted . real property tax and related in terest and the cost of sale if the
property is not redeemd the ownership shall be vested with the
LGU concerned. More than a year after,
The Petitioner filed a Petition for review with the court raising
question of law as to the authority of the assessor and treasurer to
collect the tax. The CIR argues that there must first be exhaustion of The RTC ruled in favor of the Estate finding the latter’s evidence as
administrative remedies. acceptable in establishing the right of redemption. Aggrieved , the
City appealed the RTC decision to the CA arguing that one year
period must be reckoned froom the date of forfeiture that s when
In this case there is no factual issues involved the petitioner is the properties were purchased by the City for want of a bidder
questioning the very authority of the power of the assessor to during a public auction. The CA affirmed the decision of the RTC
impose the assessment and the treasurer to collect tax. These are and observed that the City had been remiss in its duty to
not question of facts and it does not merely question the amount of immediately issue a declaration of forfeiture within two days from
the increase but the validity of any increase. the purchase of the property as required under Section 263 of the
LGC

iii. NPC vs. Prov. Treas. of Benguet, et al, G.R. No. 209303, Nov
14, 2016 Issue : Whether the one year redemption period for forfeited tax
delinquent properties purchased by the local government for
Erroneous: A claim for the exemption from payment of real want of a bidder is reckoned from the date of auction sale or the
property tax does not actually question the assessor’s authority to date of declaration of forfeiture.
asses and collect such taxes but pertain to the reasonableness or
correctness of the assessment by the local accessor qa question of
fact which must be resolved at the very first instance by LBAA. Within a year of forfeiture
Section 263 of the LGC takes effect because of one vital factor the
In this case. NPC challenged before the LBAA legality of the absence of a bidder in a public auction for tax delinquent
assessment. LBAA deferred. An appeal was filed by NPC before properties. Therefore, thee better theory is that the forfeiture of
the CBAA claiming that the payment under protest is not required tax delinquent properties transpired no later than the purchase
before it can challenge the authority of the respondent to assess made by the City due to lack of bidder from the public . This
tax on tax exempt properties before the LBAA. happens on the date of the salea and not on the date of issuance
of declaration of forfeiture. To rule otherwise would be similar to
saying that prior to the accrual of the local government right as
Issue: Whether payment under protest is required before one can purchaser another additional requirement such as declaration of
forfeiture is necessary not only is this duty unfounded but is also
challenge the authority of the respondent to assess tax on tax
exempt properties with the LBAA. places the local government in a vacuum from the time of auction up
to the time it issues a document. The period to redeem the property
Held: had expired and since then the forfeiture of the properties had
already become absolute the failure of the Estate to exercise its
Yes, The claim for exemption from the payment of real property
right of redemption within the statutory period consolidates
does not question the assessor authority to assess and collect but ownership over the property
pertain to the correctness of the assessment by the local assessor
which is a question of fact. Therefore, every person by whom real

Tabuzo, Tax Remedies Self Notes

 b. ABC must file with the LBAA. Under the LGC, the next step is to
appeal the same with the LBAA within 6- days from dismissal of the
v. City of Lapu-Lapu Vs. PEZA, G.R. No. 184203, November 26, petitioner
2014

Illegal Assessment ( They should have filed an injunction with

the RTC and not the declaratory relief ) : PEZA filed a declaratory
relief with the RTC praying that the trial court declare it exempt
from the payment of real Property tax. The RTC granted the relief
and City appealed with the CA dismissed the petition for being a
question of law. In this case the City raised pure question of law the
issue is whether the RTC had jurisdiction over the PEZA petition for
declaratory relief is a matter that is a question of law. The issue as
to whether the government instrumentality is exempt from payment
of real property tax is likewise a question of law requiring the
examination of the PEZA charter
Note: A question of fact exist when there is a doubt as to the falsity
of the alleged fact, there is a question of law when the appellant
raises doubt as to the applicable law based on the certain state of
fact. Incase of illegal assessment where the assessment was
issued without any authority, exhaustion of administrative
remedies is not necessary and the taxpayer may directly resort to
judicial action without paying under protest the assessed tax and
filing of an appeal with the LCBAA. In this case the assessment s
illegal as it was issued without the authority of the Municipal assessor
reconciling provision of the real property tax code and the Local
Government Code this court held that the schedule of market values
must be jointly prepared by the provincial , city and municipal assessor.
The taxpayer shall filed a complaint for injunction before the
RTC to enjoin the LGU from collecting property taxes. The
property unsatisfied with the decision of the RTC shall file an
appeal and not a petition for certiorari with the CTA. The appeal is
to be fileed within 15 days from th notice of trial court decision. The
CTA decision may be appealed to the SC through Rule 45 raising
pure question of law.

In this case, when the issue pertains to a question of law, exhaustion

of administrative remedies are no longer allowed, In the present
case ,PEZA did not avail any of the remedies against a notice of
assessment, a peititon for declaratory relief is not proper remedy
once a notice of assessment is issued. Peza must have directly
resorted to a judicial action by filing of an injunction to enjoin the
city from enforcing its demand and collecting the assessed taxes
from PEZA. Therefore the RTC has no authority

PEZA filed a petition for injunction with prayer of issuance there is

failure to comply with the publciaiton requirement as provided
under the local government code.PEZA then file a petition for
certiorari with the CA praying for the CA. This is not a proper
remedy as Rule 65 is not a substitute for lost appeal.

ABC Inc owns a 950 square meter lot in Quezon City. It received a
notice of assessment from the City Assessor subjecting the property
to real property tax. Believing that the assessment is erroneous,
ABC filled a protest with the City treasurer, but however due to the
failing to file the correct RPT the City treasurer dismissed the
protest. A. Was the City Treasurer correct in dismissing the protest
b/ Assuming that ABC decides to appeal where must it be filed?
A: The City treasurer is correct. Under the LGC, no protest shall be
entertained until the taxpayer first pay the real property tax. Here,
ABC did not pay the RPT in protest. Hence the City Treasurer is
correct

Tabuzo, Tax Remedies Self Notes

H . J U DI C IA L RE MED IES [ R A 1125 , AS AME NDE D , and that the available remedy is to appeal the same with the CTA (
Allied Banking)
A N D THE RE VI SED R ULES O F T HE CT A]

The decisions under RA 9282 has been interpreted to mean the

1. The CTA has exclusive appellate jurisdiction to review by decisions of the CIR on protest of the taxpayer against the
appeal ( CTA division) assessment. Definitely, said word does not signify the assessment
itself. Where a taxpayer questions an assessment and ask the CIR
- Rule 42 : Petition for review 30 days to reconsider or cancel the same because he believes that he is no t
1. BIR: Decisions, and inaction and disputed assessment , refund and liable therefore, the assessment becomes a disputed assessment
other matters. that the collection must decide and the taxpayer must appeal to the
CTA only upon the receipt of the receipt of the decision of the CIR
2. RTC: Local tax case on disputed assessment.
Appellate Jurisdiction: CTA en banc
Original Jurisdiction : CTA Division b. Indirect denial of administrative protest
3. BOC: Customs, duties and seizure, detention and other matters a. Filing of a civil action for collection during the pendency of the
4. SOF: Automatic Review of Customs case protest

5. DTI and DA: Dumping and Counterveiling Duties b. Final notice before seizure issued by the BIR

6. CBAA: Appellate Jurisdiciton for Real Property case c. Demand letter reiterating the tax deficiency and requested for
payment failure to do so would result to the issuance of a WDL to
CTA Division -→ MR / MNT (15 Days) → CTA En Banc enforce its collection without further notice.

Jurisdiction over cases involving Criminal Offense The Collection letter constitutes as the final decision of the CIR
appealable to the CTA. The collection letter demanded from AVON
1. Exclusive Original Jurisdiction: All criminal offense arising form
the payment of the deficiency tax assessment with a warning that
the violation of the NIRC or Tariff and customs code and other laws
should it fail to do so within the required period summary
administered by the BIR or BOC where the principal amount of tax
administrative remedies are to be instituted without further notice. It
claimed is worth P1,000,000 or more
demonstrated a character of finality such that there can be no
CTA division ( exclusive jurisdiction) → PFR 43→ CTA En Banc ( doubt that the CIR had already made a conclusion to deny Avon
exclusive appellate jurisdiction) → SC rule 45 request and she had a clear resolve to collect the taxes.
If less than P1,000,000 or more or no specified amount
it exercises appellate jurisdiction c. CIR Jurisdiction for Other matters
The appellate jurisdiction of the CTA Is not limited to cases that
2. Exclusive Appellate Jurisdiction involve decision of the CIR on matters relating to assessment or
refund, The second part of the provision covers other cases that
a. Appeals from the RTC in tax cases originally decided by them. arises out of the NIRC or related laws administered by the BIR
b. Petition for review from the RTC in exercise of their appellate
jurisdiction over tax cases originally declared by the MTC.
CTA Jurisdiction on Other matters
1. The issue of prescription being a matter provided by the NIRC is
Jurisdiction over tax collection cases well within the jurisdiction of the CTA to decide
2. CIR decision to enter into a compromise agreement
1. Exclusive Original Jurisdiction in tax collection cases involving 3. CIR refusal to enter into abatement
final and executory assessment for tax fees, where the amount
claimed is P1,000,000 4. The adverse ruling of the SOF in the exercise of its power to
review under Section 4 is appealable to the CTA as other matters
- If less than P1M or no specified amount claimed it arising under the NIRC or other laws administered by the BIR.
exercises exclusive appellate jurisdiction.
2. Exclusive Appellate Jurisdiction
- Appeals from the RTC in tax cases originally decided
by them, Is the question on the authority of revenue officers to examine the
books and records of any person cognizable by the CTA?
- Petition for review from the RTC in the exercise of their
appellate jurisdiction over tax cases originally decided 1. The assessment of internal revenue taxes is one of the duties of
by the MTC the BIR under Section 2 of the NIRC. In connection therewith the CIR
may authorize the examination of any taxpayer and
correspondingly make an assessment whenever necessary. Thus the
I. CTA Jurisdiction on Decision or Inactions of the CIR: authority to make an examination or an assessment being a matter
provided for by the NIRC is well within the exclusive and appellate
jurisdiction of the CTA.
a. The CTA can review the decision of the CIR on protest against
an assessment but not the assessment itself
II. CTA jurisdiction on decision of the RTC in Local Tax Cases
- The words used, specifically the words final decision
and appeal taken together led the petition to believe that a Final 1. The CTA has jurisdiction to review by appeal decision, resolution
Letter of Demand is the final decision of the CIR on the letter protest ruling and resolution of the RTC over local tax cases which includes
real property tax.

Tabuzo, Tax Remedies Self Notes

 VI: Petition for Annulment
Herac Realty vs. Provincial Treasurer of Benguet The Revised Rules of the CTA provides no instance in which the en
banc may reverse, annul or void a final decision of a division. The
1. The appellate jurisdiction of the CTA over decision, order or silence of the Rules may be attirubted to the principles that there
resolution of the RTC becomes operative when the latter has ruled can be no hierarchy within a collegial court between its division and
on the local tax cases ie: one which is in the nature of a tax case or the en banc and that a court’s judgment once final becomes
which primarily involves a tax issue immutable.
2. Local tax cases include those involving RPT , Among the possible
issues are the legality or validity of the RPT assessment, protest of
assessment disputed assessment surcharge or penalties or legality V: Incidental power of CTA to determine the proper category of
of a tax ordinance, claims for tax refund credit ,claims for tax tax
exemption action to collect the tax due and even prescription.
In an action for refund of taxes allegedly erroneously paid the CTA
may determine whether there are taxes that should have been paid
in lieu if the taxes paid, This determination as to proper category
Ignacio vs QC: The jurisdiction of the CTA over the decision of the of tax should have been paid is not an assessment , It is incidental
RTC only becomes operative when the RTC has ruled on a local tax to determining whether there should be a refund.
case. Thus before the case is raised on appeal to the CTA the action
must be filed before the RTC in the nature of the tax case or one
which involves a tax issue.
VI: Whether evidence not presented I the administrative claim for
refund in the BIR can be presented with the CTA
Napocor vs Provincial Government of Bataan: Although the 1. CTA is a court of record : cases filed before it are litigated de
complaint filed with the Trial court is a petition for declaration of novo. As such parties are expected to litigate and prove every
nullity of a foreclosure sale with prayer for injunction, a reading of aspect of their case anew and formally offer all their evidence. No
the petition show that it essentially assails the correctness of a local value is given to the documentary evidence submitted in the BIR
franchise tax assessment by the provincial government of bataan. unless it is formally offered in the CTA.

III. CTA decision on the Decision of the Commisisoner of 2. The power of the CTA to exercise appellate jurisdiction does not
Customs preclude it from considering evidence that was not presented in the
administrative claim in the BIR. The claimant mayp resent new and
A. The immediate resort to judicial action was proper because the additional evidence to the CTA as to support the case for tax
COC already decided to deny the protest by Oilink and stressed
refund.
that the demand to pay was already final. The exhaustion of
administrative remedies would have been an exercise in futility
because it was already the COC who was demanding payment of
the deficiency taxes and duties.
a. CIR vs. CTA and Petron Corp., G.R. No. 207843, 15 Jul 2015;
MR dated 14 Feb 2018
IV: CTA jurisdiction over constitutionality of law or rule
Decision of the CIR involving disputed assessment refund or other
Except for local tax cases action directly challenging the matters arising under the NIRC or other laws administered hence
constitutionality or validity of a tax law or regulation or CTA has jurisdiction to resolve all tax issues which includes whether
administrative issuance may be validly filed before the CTA. the interpretation of the CIR of Revenue Memorandum Orders . The
issue in the case at bar is whether the Constitutionality of RRS ,
RMO pertaining to the importation of Alkylate is within the
Except for local tax cases: Appeals from the decision of quasi jurisdiction of the CTA. The Court ruled that No. The word other
judicial agencies on tax related issues are to be brought to the matters pertains to cases which are subject to the appellate
CTA. jurisdiction of the CTA over which it has quasi-judicial power to
decide. In this case it pertains to the power of the CIR to exercise
quasi Legislative function to determine whether specific rules issued
The CTA was granted the exclusive appellate jurisdiction to review by the administrative agency contravenes the law or the constitution
by appeal all cases involving disputed assessment of internal which is within the jurisdiction of the regular court.
revenue taxes, customs duties and real property tax. In general it
has jurisdiction over cases involving liability for payment of money
to the government or the administration of laws on the National MR: REVERSE: CTA jurisdiction to resolve all taxes which includes
Internal Revenue Customs and Real property. the validity of CIR interpretation and consequent imposition of
excise tax

V: Rule 65 Petition to the CTA

b. Philam Life vs. SOF and CIR, GR No.210987, 24 Nov 2014
The authority of the CTA to take cognizance of the petition for
certiorari questioning the interlocutory orders issued by the RTC in a The CTA can issue writs of certiorari as it exercises appellate
local tax case is included in the powers granted by the Constitution jurisdiction over the RTC on local tax cases. The issue here is
which provides that the judicial power is vested by the Supreme whether the decision of the Secretary of Finance in the exercise of
Court and in such lower court as may be established by law as well its power to review under Rule 43 is appealable to the CTA or to
as inherent in the exercise of its appellate jurisdiction. the CA. The court ruled that the same is appealable to the CTA. The
CTA has the power to determine whether there has been grave
abuse of discretion on the RTC’s part in the issuance of interlocutory
The CTA has jurisdiction over a petition for certiorari assailing the order . This means that the transfer of jurisdiction from the CA to the
DOJ resolution in a preliminary investigation involving tax and CTA transfers the power to issue certiorari as well to the CTA.
tariff offenses,

Tabuzo, Tax Remedies Self Notes

c. Smart Communications, Inc. vs, Malvar, Batangas, G.R. No.
204429. Feb 18, 2014
e. Ce Casecnan Water & Energy, vs. Nueva Ecija, GR No.
196278, 17 Jun 2015
CTA EN BANC DOES NOT HAVE JRUISDICTION when the
assessment is NOT a tax but a regulatory fee. In this case,
CTA is given the jurisdiction to issue writs of certiorari or to
SMART received an assessment letter from the licensing office with
a schedule of payment. Smart challenged the protest alleging lack determine whether there is grave abuse of discretion amounting
of due process, and in the same time challenged the validity of to lack of excess jurisdiction on the part of the RTC in issuing an
interlocutory order in cases falling within the CTA exclusive
the ordinance in which assessment is based. The issue in the case
at bar is whether the CTA has jurisdiction over the local tax case. appellate jurisdiction. ( Rule 65 petition) The petitioners entered
into a build operation transfer agreement for the construction and
development of Cascenan Multi Purpose Irrigation and power plant.
The petitioner received assessment of Real Property Tax, the
The court ruled that no. The CTA has jurisdiction over decision, order petitioner assailed the same with the LBAA it was later appealed to
or resolution of the RTC in local tax cases resolved by them in the the CBA. During pendency of the case with the CBA,the
exercise of its original or appellate jurisdiction BUT this does not respondent collected from the respondent RPT due on the
apply when the ordinance is not a tax . In this case, the primary assessment. The petitioner filed a complaint with the RTC for
purpose of the ordinance is to regulate placing, stringing attaching, injunction and damages with the application of the TRO and
installing repair and construction of all gas mains , electric telegraph. preliminary injunction to restrain the collection of tax assessment on
Since the purpose of the oridnace is related to the constriction and the ground that it is the NIA who is liable to pay for RPT. The RTC
maintenance of various structure it is a regulatory fee outside the dismissed the case. The petitioner appealed with the CA . a petition
jurisdiction of the CTA. for certiorari under Rule 65 to set aside the order of the RTC. The
CA dismissed the petition for certiorari on the ground that it is the
CTA and not the CA who has jurisdiction over the case at bar
Issue Whether it is the CA or the CTA that has jurisdiction to rule
d. NAPOCOR Vs. Navotas, et al, G.R. No. 192300. November on a petition for certiorari assailing an interlocutory order of the
24, 2014 RTC that relates to a local tax case.
Doctrine: Held: The CTA is given the expanded jurisdiction including its
Decision orders or resolution of the RTC on local tax cases originally exclusive appellate jurisdiction to review on appeal decision, orders
decided or resolved by them ( This includes real property taxes). or resolution of the RTC in local tax cases originally resolved by the
The CTA en banc ruling that real properties have always been RTC . Likewise, CTA is given the jurisdiction to issue writs of
treated by law separately from local taxes cannot prosper. certiorari or to determine whether there is grave abuse of
discretion amounting to lack of excess jurisdiction on the part of
the RTC in issuing an interlocutory order in cases falling within
the CTA exclusive appellate jurisdiction. Therefore, CTA has the
The petitioner entered into a build operate transfer project power to determine whether there is a grave abuse of discretion
agreement with Mirant formerly known as Hope.The petitioner paid amounting to lack of excess jurisdiction on the part of the RTC in the
respondent municipality real property taxes, in a letter dated issuance of interlocutory order in cases that fall within the appellate
March 30 the petitioner informed the municipal assessor sent a jurisdiction of the tax court
notice of tax deficiency, The petitioner reiterated their position that
the subject properties are exempt from payment of real property
tax. A warrant of levy was received from the respondent and also
they received two notice of sale of delinquent real property
scheduling public auction of the property. The petitioner filed
before the RTC a petition for declaratory relief, annulment and
delinquency and TRO. The TRO was denied by the RTC. The RTC f. BDO VS. CIR, G.R. No. 198756, 13 January 2015; MR: 16
ruled that the petitioner should have appealed the decision with August 2016
the local board of assessment appeals within 60 days from the The CA may take cognizance of the case and may directly take
receipt of assessment if it is not satisfied with the LBAA it must challenge the constitutionality and validity of tax laws, or
appeal with CHAA.On appeal with the CTA it reversed the regulations In the earlier case the respondent questioned the
decision of the RTC and ruled that the CTA as jurisdiction over the
propriety of the petitioner’s direct resort to this court. They argued
subject matter. that the petitioner must have challenged first the 2011 BIR ruling
Issue: Whether the CTA has jurisdiction to review ,decision and before the SEC of finance consistent with the doctrine of exhaustion
orderso f the RTC when it comes to real property tax. of admin remedies. In the main decision, the court ruled that the
Interpetative ruling of the BIR are reviewable by the SOF. However
Yes. The CTA sitting as division has the power to review by appeal due to the special circumstance “” Purely legal” the urgency of
the decision, ruling and resolution of the RTC over local tax judicial intervention given the impeding maturity of peace bond
cases which includes the payment of real property tax. This is and futility in the appeal with the SOJ there is no need to exhaust
evident from LGC which includes the matter of real property tax as all remedies.
one of its main chapter. And the power vested I the local
government to create their own revenue sources within the limitation The MR merely clarified the earlier ruling
as set forth by law. With the enactment of Asia International, auctioneers the court of
Therefore, the conclusion of the CTA en banc that real properties tax appeals has exclusive jurisdiction to determine tax laiws, rules
have always been treated differently from local taxes cannot and jurisdiction to determine the constitutionality or vaaldity of tax
prosper. Local taxes includes real property tax. In this case, what is laws and other laws, rule and regulation. With RA 9282, it
questioned is the legality of the appeals in question and not the elevated the jurisdiction of the CTA and elevated its rank to the
reasonableness or correctness of the appeals to the LBAA. level of a collegiate court with special jurisdiction . Section 1
specially provides that the CTA is of the same level as the Court of
appeals and posses all inherent power of the Court of
Justice.Therefore the CA may likewise take cognizance of the cases

Tabuzo, Tax Remedies Self Notes

that directly challenge the constitutionality or validity of tax law, or
regulation or administrative issuance
The authority of the courts to issue injunctive writs to restrain the
collection of tax and dispense with the deposit of the amount
claimed or the filing of the required bond is not confined to cases
where prescription sets in but whenvever it is determined by the
g. Steel Corporation vs. BOC and BIR, GR No. 220502, 12 courts that the method employed by the CIR is not sanctioned by
February 2018 law the bond requirement must be dispensed with.

The CTA has ample authority to issue injunctive writs to restrain the
collection of tax and even dispense with the deposit of the amount
claimed for the filing of the required bond whenever the method
employed by the CIR in collection of tax jeopardizes the interest of
h. PSALM Corporation vs. CIR, G.R. No. 198146, August 8, 2017
taxpayer for being patently in violation of law.
PD 242: This is an exception to the rule that the appeals must be
made to the CTA BIR alleged that DOJ has no jurisdiction over the
SteelCorp maintains that CA erred when it sustained the trial court’s case at bar since the dispute involves tax laws administered by the
act of giving due course to the OSG and BIR motion that were set in BIR and that the sale of the subject power plants by PSALM to
hearing. Likewise it insist that the present controversy does not private entities is in the course of trade or business as contemplated
assail its liability to pay customs duties, taxes or other charges on under Section 105 NIRC which covers incidental transaction falls
importation of raw materials, rather the issue is whether a with the jurisdiction of the CTA.
corporation can avail the benefits of Section 19 of RA 10142 which
issue is cognizable by the RTC and whose decision may be
appealed to the CA or the Supreme Court and not to any other Issue: Whether the dispute between government agencies and
court like the CTA. Steelcorp stressed that it is not raising any issue offices are governed by the CTA or DOJ
as to the amount of collectability of the taxes and duties on its
importation but is only seeking compliance under Section 19. Held
DOJ. As stated under PD 242, all disputes and claims solely
between the government agencies and offices including
government owned or controlled corporation shall be
Issue : Whether the CTA has jurisdiction over the case at bar
administratively settled or adjudicated by the Secretary of
Justice, the Solicitor General and the Government Corporate
Counsel depending on the issues and government agencies involved.
Held: The law is clear all disputes claims and controversies solely between
YES. The CTA has exclusive jurisdiction to determine the or among the departments , bureau offices and agencies and
constitutionality and validity of tax laws, rules and regulation and instrumentalities of the National Government including constitutional
other administrative issuances. RA 1125 transferred to the CTA offices, or agencies arising from the interpretation and application
jurisdiction over all matters involving assessment that were of statutes, contracts or agreements. When the law states all
previously cognizable by the RTC.When RA 9282 was enacted, it disputes, claims and controversies the law means all without
expanded the jurisdiction of the CTA and elevated its rank to the exception. PD 242 applies only when the dispute is solely between
level of the collegiate court with special jurisdiction. Section 1 PSLAM, NPC both government owned and controlled corporation
specifically provides that the CTA is on the same level of the court and since the BIR a national government office PD 442 applies in
of appeals and possess all powers of court of justice . this case.

RA 1125 stated that except for local taxes, appeals form the It sis only proper that intra-government disputes are settled
decisions of the quasi judicial agency in tax related problems must administratively since the opposing government offices, agencies
be brought exclusively with the CTA.The law intends the Court of and instrumentalities are all under the control of the President which
Appeals to have exclusive jurisdiction to resolve all tax problems. states that the President shall have full control over the executive
The petition for writs of certiorari against the acts and omission of department bureau and offices.This constitutional power of control
the quasi judicial agencies must be field with the CTA. by the president cannot be diminished by the CTA. Thus if two
executive officers or agencies cannot agree it is only proper and
logical that the president as the sole executive authority take
Dispense with the filing of the required bond cognizance of the case.

Appeal to the CTA will not suspend payment, levy or distraint and
or sale of any property of the taxpayer for the satisfaction of his The second paragraph of Section 4 of the 1997 of NIR providing
tax liability as provided by existing law. Nonethelsss when in the for exclusive appellate jurisdiction of the CTA as to CIR decision on
opinion of the CTA the collection jeopardize the interest of the matters involving disputed assessment refunds in internal revenue
government and or taxpayer, it may suspend the said collection and taxes or other charges ,penalties imposed in relation thereto or
require the taxpayer either to deposit the amount claimed or to file a other matters arising under the NIRC is in conflict with PD 242.
surety bond for not more than double the amount, Yet the filing of
the surety bond can be dispensed with. Whenever the method
employed by the CIR in collection of tax 1.Jeopardizes the interest To harmonize
of the taxpayer for being patently in violation of the law 2. Such
authority emantes from the jurisdiction conferred to it not only by 1. Private entities and BIR: The power to decide disputed
Section 11 but also by Section7 which states that assessment , refund or internal revenue taxes, fees or other charges
penalties in relation thereto or other matters arising under the NIRC
or other laws administered by the BIR is vested with the CIR subject
CTA : Has appellate jurisdiction on decision of the CIR in revenue , to the exclusive appellate jurisdiction of the CTA
refunds or internal revenue taxes fees or other charges penalties 2. All public entities: Between the government entities the case is
imposed in relation thereto or other matters arising under the NIR or governed by PD 242. ( this is considered as an exception to the rule
other laws administered by the BIR

Tabuzo, Tax Remedies Self Notes

of NIRC )→ covered by DOJ
Injunctions:
i. City of Manila vs. Grecia-Cuerdo, G.R. No. 175723, February Suspension of Collection of Taxes
4, 2014 1. No appeal taken to the CTA suspend the payment, levy and
In exercise of its appellate jurisdiction it has the power to grant the distraint or sale of any property of the taxpayer for the
certiorari, prohibition and mandamus. City of Manila assessed the satisfaction of the tax liability.
respondent taxes for the taxable period from January to
December 2022 against the respondent. The respondent filed with
the RTC a complaint instituted as one for refund or recovery of CTA may suspend the collection of taxes subject to the ff :
illegally and erroneously collected local and business tax with prayer
1. The collection may jeopardize the interest of the government and
to issue a TRO. The RTC granted the TRO , the petitioner filed an
or taxpayer
MR but the RTC denied it. Petitioner filed an SCA with the CA. The
CA ruled that it is the CTA that has appellate jurisdiction of the 2. The CTA requires the taxpayer either to deposit the amount
decision of RTC. claimed or file a surety bond for not more than double the amount
with the court.
Issue: Whether the CTA has jurisdiction over SCA for certiorari
assailing interlocutory order issued by the RTC in local tax case 3. The Case is pending with the CTA.
Held:
Yes. The CTA has excusive appellate jurisdiciton over decision, May CTA dispense with the posting of the required bond under
order or resolution f the RTC in local tax cases decided by them in Section 1125? Yes. The authority of the courts to issue injunctive
their original or appellate jurisdiction. There is no statement under writs to restrain the collection of tax and to dispense with the
RA 1125 which provides that CTA has jurisdiction over the petition deposit of the amount claimed or filing of the required bond is not
for certiorari assailing interlocutory order. Notwithstanding the fact simply confined to cases where the prescription has set in.
that there is no express grant of the power to issue writ of Whenever it is determined by the court that the method employed
certiorari, prohibition and mandamus with respect to the CTA by the by the CIR in the collection of taxes is not sanctioned by law, the
Constitution the constitution likewise provide that the judicial power bond requirement is dispensed with.
shall be vested in one Supreme Court and in such lower court as
may be provided by law. ( CA transfer to CTA-> HENCE CTA
also posses this judicial power) The judicial power includes not
only the duty of the court to settle actual case and controversy but
to determine whether there is GADALEJ on any branch or k. Tridharma Marketing Corporation Vs. CTA & CIR, GR No.
instrumentality. 215950, 20 June 2016
If the amount of the surety bond is too high that it will practically
deny the taxpayer the meaningful opportunity to contest the validity
of assessment and would likely impoverish the taxpayer as to force it
j. CIR vs. Kepco Ilijan Corporation, GR No. 199422, 21 June out of its business then the amount of surety bond is to be void and
2016 must be lowered even if it still double the amount as as provided by
law. BIR assessed the petitioner with various tax deficiencies , a
Rule 47: Em Banc ( must be higher court)THERE IS NO protest was field where the petitioner paid the assessment and
ANNULMENT OF JUDGMENTOF A CO -EQUAL COURT, THERE IS reiterated its interest to compromise the income tax and vat
NO ANNULMENTO F JUDGMENT AS TO EN BANC AND deficiencies. The petitioner appealed the decision of the CIR to the
DIVISION LIKEWISE THERE IS NO ANNULMENT OF JUDGMENT CIR second division and moved for the suspension of tax collection
WITH THE CA and SC. . KEPCO filed its return with the BIR, the BIR against it. However the CTA required the taxpayer to post a bond
did not act on the return therefore a petition for review was filed . equivalent to 150%of the assessed value within 15 days from
The CTA division rendered a decision in favor of the respondent the notice
petitioner filed a notice of annulment with the CTA en banc. In
response the the respondent filed a motion to deny due course Issue: Whether the issuance of the bond bythe CTA is proper
arguing that the petitioner is not lawfully entitled to annul the Held:
judgment on the ground that the CTA en banc does not have
jurisdiction to hear or entertain annulment of judgment of the No. The CTA gravely abused its discretion in the issuance of the
division. bond. Although the CTA is given the power to suspend tax collection
by requiring either 1. Deposit of the tax claimed 2. Surety bond for
Issue: Whether the CTA en banc has jurisdiction to hear and not more than double the amount . The taxpayer was able to show
decide annulment of judgment that it would not be able to produce the bond higher that its net
Held: No . The CTA en banc can annul a final judgment of its own worth.
division. There is no hierarchy within a collegial court between its
division and the en banc and the court’s judgment once final is
immutable. There is also no direct petition for annulment of The bond requirement is not properly issued: The requirement of the
judgment to the CTA to the SC. RA No. 9282, Section 1 puts the bond as a condition precedent to suspension of the collection
CTA on the same level as the Court of Appeals, so that if the applies only in cases where the process by which the collection
latter’s final judgments may not be annulled before the Supreme sought to be made by means thereof are carried out in consonance
Court, then the CTA’s own decisions similarly may not be so with the law and not when the process is in plain violation of the
annulled. And more importantly, it has been previously discussed law that they have to be suspended in jeopardizing the interest of
that annulment of judgment is an original action, yet, it is not among the taxpayer.Therefore, since the method employed by the CIR in
the cases enumerated in the Constitution, Article VIII, Section 5, over its assessment jeopardized the interest of the taxpayer it is in
which the Supreme Court exercises original jurisdiction. Annulment violation of the law and requires the reception of evidence
of judgment also often requires an adjudication of facts, a task therefore the court is not in the position to rule on the correctness of
that the Court loathes to perform, as it is not a trier of facts. ( deficiency assessment.
Available remedy is rule 65)

Tabuzo, Tax Remedies Self Notes

 may jeopardize the interest of the taxpayer in which the CTA at
any stage of the proceeding may suspend the said collection and
l. Spouses Pacquiao Vs. CIR, GR No. 213394, 06 Apr 2016
require the taxpayer to either deposit the amount claimed or to
file a surety bond for not more than double the amount. Here,
the RTC not only grossly erred n giving due course to the petition
The CTA can issue injunctive writs to retain the collection of taxes for declaratory relief and in ultimately deciding to permanently
and to even dispense with the deposit of the amount claimed or the enjoin the enforcement of the specific provision of the nIRC against
bond whenever the method employed by the CIR in collection of the the respondent.
tax jeopardizes the interest of the taxpayer for being patently in
violation pof the law.
The authority of the courts to issue injunctive writs to restrain the
collection of tax and to dispense with the deposit of amount
claimed or filing of the required bond is not simply confined to
cases where prescription has set in . Whenever it is determined by Bar: In a criminal case where the CTA has exclusive original
the jurisdiction may the right to file a separate civil action for the
recovery of taxes be reserved?
*mere reliance on the estimates based on best possible sources casted
doubt on the presumption of regularity consequently CTA was ordered
to determine whether the sources are substantial to merit regularity of
the FLD against spouses pacquiao An: No. The criminal action and the corresponding civil action for
the recovery of liability for taxes and penalties shall at all times be
Spouses Pacquiaos filed a motion to lift the warrants of distraint, simultaneously instituted with and jointly determined in the same
levy and garnishment issued by the CIR in connection with their proceeding by the CTA. The filing of the criminal action is deemed
deficiency income tax and VAT assessment. The CTA issued a to necessarily carry with it the filing of the civil action and no right
resolution granting the urgent motion ordering the CIR to desist form to reserve the filing of such civil action separately from the criminal
the collection of deficiency tax assessment against the petitioner. action is recognized.
Issue:
1. Whether the CTA may issue injunctive writ to restrain collection of
tax
n. Macario Gaw vs. CIR, G.R. No. 222837, July 23, 2018
Held:
Yes. The CIR has the power to issue injunctive writs to restrain the
collection of tax and to even dispense with the required bond 1. The taxpayer’’s obligation to pay the tax is an obligation that is
whenever the method employed by the CIR in the collection of tax created by law and does not arise from the offenses of tax
is patently in violation of the law. Such authority emanates from evaision as such the same is not deemed to be instituted with the
the power to f the CTA appellate jurisdiction to review on appeal criminal case
other matters arising under the jurisdiction of the NIRC and other 2. What is deemed instituted in the criminal case is only the right of
laws. the government to recover taxes and penalties relative to the
criminal case. The remedy of the taxpayer to appeal the disputed
assessment s not deemed to be instituted with the criminal case
3. The tax evasion case filed by the government against the erring
m. CIR vs. Standard Insurance Co., INc. GR No. 219340, 7 Nov taxpayer has for purpose the imposition of criminal liability of the
2018 latter. While the peititon for review filed by the petitioner was
aimed to question the FDDA and to prevent it from becoming final.
RTC cannot issue an injunctive relief to collect tax neither can the As such the PFR Ad Cautelam is not deemed instituted with the
CAThe respondent received a demand for payment of deficiency criminal case for tax evasion
income tax VAT and premium DST expanded withholding tax. The
respondent commenced with the RTC the issuance of the TRO with
the writ of preliminary injunction of Section 108 and Section 184.
The RTC issued the TRO enjoining the BIR form implementing the o. CIR vs. CTA and Wintelcom, Inc., GR No. 203403, 14
provision of the NIRC and enjoining its agent and representatives November 2018
from implementing the provision of the NIRC in relation to the FDDA An appeal with the CTA en banc can be made with the division:
for the respondent taxable year 2011 and to pending assessment Wintlecom received a final assessment on March 10 it filed a
for taxable year 2012 and2013. protest on April 6 2004 which was denied by CIR. Wintelcom filed
a petition for review against the petitioner with the CTA in division.
A series of motion for extension to file an answer was filed the
Issue CTA granted the same provided that it is the last final extension.
Notwitstanding this, CIR still failed to file motion for reconsideration.
1. Whether an injunctive relief is available as a remedy to assail
The CTA then ruled in favor of the taxpayer.
the collection of tax
Petitioner moved for reconsideration of the resolution , the CTA
denied the MR and set the case for ex parte presentation of
Ruling Wintlecom evidence.CIR questioned this through a petition with the
CA but the same was dismissed. The CTA rendered a decision in
1. No. Section 218 of the NIRC provides that no court shall have favor of the peititoner. The petitioner questioned the decision of
the authority to grant an injunction to restrain the collection of the CTA division in ordering an ex parte presentation of
any national internal revenue tax or fees charged by the evidence for Witnthlecom without any motion from the later to
NIRC.Section 11 of RA 1125 likewise provides that rulings of the declare her in default and without hearing. The CTA en banc
Commissioner of Internal Revenue among others assessing any tax, granted the petitioner petition for review, it annulled the CTA
or levying or distraining or selling any property of the taxpayer for resolution and admitted the answer of the petitioner. The CIR
the satisfaction of their tax liabilities are immediately executory argues that it has the power to assess the proper tax based on
and their enforcement is not to be suspended by any appeals the best evidence obtainable. Both parties were ordered to file
thereof to the CTA unless in the opinion of the CTA the collection their respective memoranda within 30 days, again CIR failed to file

Tabuzo, Tax Remedies Self Notes

their memoranda therefore, the CTA division allowed the taxpayer the CBAA. There is no dispute that this Central Board of Assessment
to present his evidence. CIR appealed and requested that it be appeals decision constitutes as one of the cases covered by the CTA
allowed to present evidence for justice to prevail, the was denied exclusive jurisdiction.The supervisiory power or jurisdiction of the CTA
hence Rule 65 petition with the SC. to issue a writ of certiorari in aid of its appellate jurisdiction must co-
exist with and be a complement to its appellate jurisidciton to review,
( from Division in appeal agad sa Sc) by appeal final orders, and decision of the RTC in order to have
Issue: Whether the CTA third division abused its discretion when it complete supervision over the acts of the latter.
denied the partial reconsideration to re-open the case
No. The resort to Rule 65 is not proper, the proper remedy is to file
an appeal before the CTA en banc under Rule 43. An appeal from
the decision o resolution of the court in division on motion for q. BIR vs. Acosta, et al, GR No. 195320, 23 April 2018
reconsideration and new trial shall be taken to the court through
Rule 43. ( They should have appealed with the en banc ) Here, the Chevron filed an administrative claim or credit with the BIR. The BIR
resolution was received on August 1, the petitioner has until did not act on the claim of Chevron , it then filed with the CTA
fifteen days or until August 16 2012 to file an appeal before the division. The Division partially granted the petition. The BIR did not
CTA en banc, Instead the petitioner field a petition for certiorari elevate the case with the CTA en banc hence the decision became
under Rule 65 of the Rules of Court only on October 1 2012. The final and executory. Chevron movef for the issuance of the CTA
decision dated December 7 2012 become final and executory on decision. BIR filed a motion before the CTA first division on the
August 19 2012 without any appeal taken thereon.Certiorari is ground that it wanted to exhaust administrative remedies by
not a remedy for a lost appeal, one of the requisite for certiorari filing with the SC rule 65 petition.
is that there is no appeal plain and speedy and adequate Issue: Whether RULE 65 is the proper remedy
remedy when appeal is available the certiorari will not prosper.
Held:
No . A rule 65 peittion is a SCA for certiorari limited as a last
CTA denied the partial reconsideration to open the case resort remedy. A writ of certiorari is not a substitute for lost appeal,
In this case, the petitioner submitted that there is no intent to waive when appeal is available certiorari will not propser. In this case, the
the right to present evidence as the delay was due to a limited pool remedy against a final judgment or order of the CTA division is
of lawyers. As stated under the law, the ff are grounds for motion appealabe to the CTA en banc.
for new trial 1. FAME 2. Newly discovered evidence. In the case at
bar, the failure of the petitioner to appear during the scheduled
hearing for presentation of evidence despite two postponement this case, the main issue was the entitlement of Chevron to
was not due to 1. FAME 2. Newly discovered evidence. The CTA refund or credit because of its overpayment of excise taxes on
found that the excuse of a heavy workload is not a valid imported fuels. The CTA division found sufficient basis for the claim
justification to disregard procedural rules. The court likewise argued of Chevron and partially granted the petition. The CTA division
with the CTA that the repeated failure of the petitioner to present clearly disposed the case in its entirety and no other issues where
his evidence is tantamount to inexcusable neglect. left to rule pon hence the remedy is an appeal and not certiorari.

The writ of certiorari wll not propser. The abuse of discretion must
be so patent and gross as to amount to an evasion of positive duty
p. Philippine Ports Authority vs. Davao, GR No. 190324, 6 June or to a virtual regfusal to perform a duty. In this case BIR was not
2018 able to show that the decision of the CTA division were patent
(5) Decisions of the Central Board of Assessment Appeals in the and gross as to warrant the striking down through certiorari.
exercise of its appellate jurisdiction over cases involving the
assessment and taxation of real property originally decided by the
provincial or city board of assessment appeals[.] -- > this includes
interlocutory r. Ignacio vs. Treasurer of Quezon City, GR No. 221620, 11
PPA received a letter from City Assessor of Davao for the collection September 2017
of real property taxes against administered properties located in * The CTA has no jurisdiction as this case pertain to a due
Sasa Port. It appealed the assessment with the LBAA through the process issue compare this case with the case of Alcantara
Office of City Treasurer. The office of City treasurer received an
appeal and forwarded it to the Chairman of Local board of CTA does not have jurisdiction over the decision, order of the RTC if
assessment appeals who received it on September 6 2004. While the nature of the case does not pertain to tax.
the case was pending City Davao posted a notice of sale of
*The CTA has exclusive appellate jurisdiction only if the RTC must
delinquent properties. The local board of assessment appeals
rule on a local tax case on one that primarily involves a tax issue.-
dismissed the PPA appeal for having been filed out of time and for
this is one for the recovery of property and not pertain to the tax
lack of jurisdiction. The PPA appealed with the CTA this wass
denied. PPA filed a petition for certiorari with the CA arguing that assessmnetin in the property as it only claimed the lack fo sue
process. In other words the decision before the RTC cannot be
City Davao taxation of its properties and subsequent auction and
sale to satisfy tax liabilities are issued without any basis. The CA charac
dismissed the petition and held that the case should have bene filed
with the cta.
.( Here it is not the assessment which was questioned) A Complaint
ISSUE: Whether the CA has jurisdiction to issue injunctive relief was filed by Teresa before the RTC for annulment of warrant and
prayed for the petitioner PPA levy against the Office of the City Treasurer. She prayed that there
Held: be an annulment of judgment ordering the cancellation of
warrant of distraint and levy 2. Allow her to pay real estate tax
No, The CTA has jurisdiction over the CBAA the exercise of its period stated in statement of tax liability.
appellate jurisdiction over cases that involve assessment of
Issue: Whether the case must be filed with the CA or the CTA
properties that is originally decided by provincial city assessment
appeals. . The CBA assessment appealed by the petitioner before Held:
the CA was rendered in the exercise of the appellate jurisdiction of

Tabuzo, Tax Remedies Self Notes

 t. NAPOCOR vs. Provincial Government of Bataan, GR No.
CA. before the CTA can have jurisdiction over the decision , order
of the RTC must be in the nature of tax case or one primarily 180654, 6 March 2017
involving a tax issue. The CTA sitting as a division has the
jurisdiction to review by appeal decision , ruling and resolution A warrant of levy on real properties was issued by Provincial
of the RTC over local tax cases that includes real property tax/ government of Bataan on properties of the NPC as a result of the
franchise tax deliquency. The properties were sold in a public
auction with the province as the winning bidder. Napcor received
1. Here the allegation was that the respondent sent a notice of copies of Certificate of Sale of real properties covering the auction
delinquency to the wrong address properties. NAPOCOR then field with the RTC a petition to declare
2. They knew her address as early as March 2007 or the nullity of the foreclosure sale alleging that it has no legal basis
before they sent notice of warrangt since RA 7160 authorized the collection of local tax has been
modified by the EPIRA which provides that power generaltion is not a
3. A willful violation of the right to notice and levy and public utility subject to franchise tax.NAPOCOR asked the RTC to
auction deprived her of the right to take necessary steps to prevent issue a preliminary injunction enjoining the transfer of title and
the sale of property. foreclosed land to Bataan and after trial to make the injunction
permanent and declare NAPCOR exempt from local franchise tax.
The RTC dismissed the petition of NAPOCOR stating that the
In the case at bar, the annulment of the complainant allegation do franchise tax was not based on ownership of property but of the
not contest the tax assessment on the property as Teresa only privilege to do business. NAPOCOR appealed with the CA but
argues the lack of due process that deprived her the opportunity to province moved to dismiss the case for lack of jurisdiction alleging
participate in the delqiency sale proceeding. As such the RTC ruling that the declaration of nullity of a foreclosure sale is a local tax
could not be characterized as a local tax case over which the CTA case that questioned the validity of province imposition of local
must have jurisdiction. franchise tax that must be appealed with the CTA.

s. Alcantara vs. Republic, GR No. 192536, 15 March 2017 Issue: Whether the CTA has jurisdiction over the declaration of
nullity of a foreclosure sale of a local tax case.
Although NAPCORO denominated its suit before the RTC as one for
declaration of nullity of foreclosure sale it is essentially a local tax Held: Yes. RA 9282 expanded the scope of the cases the CTA was
case questioning the validity of the imposition f local tax. In this case, asked to her and adjudicate. Under Section 7, the CTA is vested
the complaint concerned the validity and eventual collection of the with the exclusive appellate jurisdiction over among
taxes by the BIR, The declaration of nullity is found on the validity of others,appeals from the decision, orders or resolution of the
the assessment, hence the main relief is to declare the assessment as Regional Trial Court in local tax cases originally decided or
null and void: CTA IT IS A TAX CASE Demetrio filed his income tax resolved by them in the exercise of their original or appellate
return . The BIR informed him that he has deficiency income tax , jurisdiction.
surcharge and interest and he was invited to a notice of informal
conference. Two demand letters were issued by BIR with respect to
the income assessment notice. There was no response, hence CIR In this case, the dispute arose between NAPOCOR and the CIR over
issue a notice of warrant of distraint or levy against the properties the former’s tax deficiency of NAPOCOR. Although the complaint
of the defendant. The appellant wanted to recover the properties filed with the court if a petition for injunction of a foreclosure sale,
hence a case was filed with the RTC alleging that the TCT was a further erading shows that they are assailing the correctness of
cancelled without due process and the BIR committed unlawful the local franchise tax assessment by the Province of Bataan since
act affecting the sale. The RTC dismissed the complaint holding that one of the prayers is to declare NAPOCOR as exempt from the
BIR cannot be faulted for Alcantara failure to receive the payment of local franchise tax. In order for the trial court to resolve
assessment, on appeal CA dismissed the case on the ground that the complaint it must look issues as to tax assessment and collection
RTC has no jurisdiction over the case as it must be administratively must be dealt with. Hence since the issue of the validity and legality
protested with the CIR before the RTC which it did not do so, and of the foreclosure sale is related to the issue and demandability of
assuming RTC does have jurisdiction the case must be filed with the the local franchise tax it is within the jurisdiction of the CTA. Hence
CTA and not Ca. the dismissal of NAPOCOR appeal with the CA was in order.

Issue: Whether the case must first be appealed before the CIR
before RTC
CIR. The challenge in the assessment nand collection of taxes made
against him for being in violation f the right to due process. The
complaint concerned the validity and the collection of taxes by
the BIR. Therefore, the declaration of nullity was founded on the
validity of the assessment by the BIR. The main relief sought in this
case is to declare the assessment as null and void. Hence, since it is
a protest on the assessment it must first be protested
administratively by filing a request for reconsideration or
reinvestigation with the CIR before the RTC.

It is the CTA which has jurisdiction:The decision of the CIR in cases of

disputed assesmsnet, refund orinternal revenue taxes fee and
charges airisng form the NIRC must be appealed with the CTA.

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Tabuzo, Tax Remedies Self Notes