LIFEBLOOD THEORY FIRST LEPANTO TAISHO INSURANCE CORPORATION v. COMMISSIONER OF INTERNAL REVENUE G.R. No.

197117, April 10, 2013 Stipulations cannot defeat the right of the State to collect the correct taxes due on an individual or juridical person because taxes are the lifeblood of our nation so its collection should be actively pursued without unnecessary impediment. EXEMPTION FROM TAXATION PHILIPPINE AMUSEMENT AND GAMING CORPORATION (PAGCOR) v. THE BUREAU OF INTERNAL REVENUE (BIR), REPRESENTED HEREIN BY HON. JOSE MARIO BUAG, IN HIS OFFICIAL CAPACITY AS COMMISSIONER OF INTERNAL REVENUE, JOHN DOE AND JANE DOE, WHO ARE PERSONS ACTING FOR, IN BEHALF, OR UNDER THE AUTHORITY OF RESPONDENT. G.R. No. 172087, March 15, 2011 Taxation is the rule and exemption is the exception. The burden of proof rests upon the party claiming exemption to prove that it is, in fact, covered by the exemption so claimed. As a rule, tax exemptions are construed strongly against the claimant. Exemptions must be shown to exist clearly and categorically, and supported by clear legal provision. TAX AMNESTY ASIA INTERNATIONAL AUCTIONEERS, INC., v. COMMISSIONER OF INTERNAL REVENUE G.R. No. 179115, September 26, 2012 A tax amnesty is a general pardon or the intentional overlooking by the State of its authority to impose penalties on persons otherwise guilty of violating a tax law. It partakes of an absolute waiver by the government of its right to collect what is due it and to give tax evaders who wish to relent a chance to start with a clean slate. CONSTRUCTION AND INTERPRETATION OF TAX RULES AND REGULATIONS COMMISSIONER OF INTERNAL REVENUE v. JULIETA ARIETE G.R. No. 164152, January 21, 2010 It is well-settled that where the language of the law is clear and unequivocal, it must be given its literal application and applied without interpretation. The general rule of requiring adherence to the letter in construing statutes applies with particular strictness to tax laws and provisions of a taxing act are not to be extended by implication. A careful reading of the RMOs pertaining to the VAP shows

that the recording of the information in the Official Registry Book of the BIR is a mandatory requirement before a taxpayer may be excluded from the coverage of the VAP. It is evident from these RMOs that the CIR was consistent in using the word "and" and has even underscored the word in RMO No. 63-97. This denotes that in addition to the filing of the verified information, the same should also be duly recorded in the Official Registry Book of the BIR. The conjunctive word "and" is not without legal significance. It means "in addition to." The word "and," whether it is used to connect words, phrases or full sentences, must be accepted as binding together and as relating to one another."And" in statutory construction implies conjunction or union. It is sufficiently clear that for a person to be excluded from the coverage of the VAP, the verified information must not only be filed under Section 281 of the Tax Code, it must also be duly recorded in the Official Registry Book of the BIR before the date of availment under the VAP. UNIFORMITY AND EQUALITY OF TAXATION COMMISSIONER OF INTERNAL REVENUE v. FORTUNE TOBACCO CORPORATION G.R. No. 180006, September 28, 2011 The Constitution requires that taxation should be uniform and equitable. Uniformity in taxation requires that all subjects or objects of taxation, similarly situated, are to be treated alike both in privileges and liabilities. This requirement, however, is unwittingly violated when the proviso in Section 1 of RR 17-99 is applied in certain cases. Although the brands all belong to the same category, the proviso in Section 1, RR 17-99 authorized the imposition of different (and grossly disproportionate) tax rates (see column [D]). It effectively extended the qualification stated in the third paragraph of Section 145(c) of the 1997 Tax Code that was supposed to apply only during the transition period. In the process, the CIR also perpetuated the unequal tax treatment of similar goods that was supposed to be cured by the shift from ad valorem to specific taxes. PROHIBITION AGAINST TAXATION OF NON-STOCK, NON-PROFIT INSTITUTIONS COMMISSIONER OF INTERNAL REVENUE v. ST. LUKE'S MEDICAL CENTER, INC. G.R. No. 195909/G.R. No. 195960, September 26, 2012 Section 27(B) of the NIRC does not remove the income tax exemption of proprietary non-profit hospitals under Section 30(E) and (G). The effect of the introduction of Section 27(B) is to subject the taxable income of two specific institutions, namely, proprietary non-profit educational institutions and proprietary non-profit hospitals, among the institutions covered by Section 30, to the 10% preferential rate under Section 27(B) instead of the ordinary 30% corporate rate under the last paragraph of Section 30 in relation to Section 27(A)(1).

EXEMPTION FROM REAL PROPERTY TAXES ANGELES UNIVERSITY FOUNDATION v. CITY OF ANGELES, JULIET G. QUINSAAT, in her capacity as Treasurer of Angeles City and ENGR. DONATO N. DIZON, in his capacity as Acting Angeles City Building Official G.R. No. 189999, June 27, 2012 Since building permit fees are not charges on property, they are not impositions from which AUF is exempt. Only portions actually, directly and exclusively used for charitable purposes are exempt from real property taxes, while those portions leased to private entities and individuals are not exempt from such taxes. TAX VS. TOLL RENATO V. DIAZ AND AURORA MA. F. TIMBOL, v. THE SECRETARY OF FINANCE AND THE COMMISSIONER OF INTERNAL REVENUE G.R. No. 193007, July 19, 2011 Taxes may be imposed only by the government under its sovereign authority, toll fees may be demanded by either the government or private individuals or entities, as an attribute of ownership. VAT on tollway operations cannot be deemed a tax on tax due to the nature of VAT as an indirect tax. The seller remains directly and legally liable for payment of the VAT, but the buyer bears its burden since the amount of VAT paid by the former is added to the selling price. Once shifted, the VAT ceases to be a tax and simply becomes part of the cost that the buyer must pay in order to purchase the good, property or service.

INDIRECT TAXES ASIA INTERNATIONAL AUCTIONEERS, INC., v. COMMISSIONER OF INTERNAL REVENUE G.R. No. 179115, September 26, 2012 Indirect taxes, like VAT and excise tax, are different from withholding taxes. To distinguish, in indirect taxes, the incidence of taxation falls on one person but the burden thereof can be shifted or passed on to another person, such as when the tax is imposed upon goods before reaching the consumer who ultimately pays for it. On the other hand, in case of withholding taxes, the incidence and burden of taxation fall on the same entity, the statutory taxpayer. The burden of taxation is not shifted to the withholding agent who merely collects, by withholding, the tax due from income payments to entities arising from certain transactions and remits the same to the government. Due to this difference, the deficiency VAT and excise tax cannot be "deemed" as withholding taxes merely because they constitute indirect taxes.

INCOME TAX; COMPUTATION OF THE AMOUNT OF GAIN OR LOSS COMMISSIONER OF INTERNAL REVENUE v. FILINVEST DEVELOPMENT CORPORATION G.R. Nos. 163653 and 167689, July 19, 2011 The requisites for the non-recognition of gain or loss under the foregoing provision are as follows: (a) the transferee is a corporation; (b) the transferee exchanges its shares of stock for property/ies of the transferor; (c) the transfer is made by a person, acting alone or together with others, not exceeding four persons; and, (d) as a result of the exchange the transferor, alone or together with others, not exceeding four, gains control of the transferee. PASSIVE INVESTMENT INCOME; INTEREST INCOME DUMAGUETE CATHEDRAL CREDIT COOPERATIVE [DCCCO], REPRESENTED BY FELICIDAD L. RUIZ, ITS GENERAL MANAGER v. COMMISSIONER OF INTERNAL REVENUE G.R. No. 182722, January 22, 2010 Since interest from any Philippine currency bank deposit and yield or any other monetary benefit from deposit substitutes are paid by banks, cooperatives are not required to withhold the corresponding tax on the interest from savings and time deposits of their members. Moreover, the amendment in Article 61 of RA 9520, specifically providing that members of cooperatives are not subject to final taxes on their deposits, affirms the interpretation of the BIR that Section 24(B)(1) of the NIRC does not apply to cooperatives and confirms that such ruling carries out the legislative intent. TAX CREDIT VIS--VIS TAX DEDUCTION MERCURY DRUG CORPORATION v. COMMISSIONER OF INTERNAL REVENUE G.R. No. 164050, July 20, 2011 The cost of discount should be computed on the actual amount of the discount extended to senior citizens. Petitioner is therefore is entitled to a tax credit for the full 20% sales discounts it extended to qualified senior citizens. PASSIVE INCOME SUBJECT TO FINAL TAX; INTEREST INCOME CHINA BANKING CORPORATION v. COMMISSIONER OF INTERNAL REVENUE G.R. No. 175108, February 27, 2013 The 20% final tax withheld on a banks passive income should be included in the computation of the Gross Receipts Tax (GRT). MINIMUM CORPORATE INCOME TAX CHAMBER OF REAL ESTATE AND BUILDERS' ASSOCIATIONS, INC. v. THE HON. EXECUTIVE SECRETARY ALBERTO ROMULO, THE HON. ACTING

SECRETARY OF FINANCE JUANITA D. AMATONG, AND THE HON. COMMISSIONER OF INTERNAL REVENUE GUILLERMO PARAYNO, JR., G.R. No. 160756, March 09, 2010 The MCIT on domestic corporations is a new concept introduced by RA 8424 to the Philippine taxation system. It came about as a result of the perceived inadequacy of the self-assessment system in capturing the true income of corporations. It was devised as a relatively simple and effective revenue-raising instrument compared to the normal income tax which is more difficult to control and enforce. It is a means to ensure that everyone will make some minimum contribution to the support of the public sector. Congress intended to put a stop to the practice of corporations which, while having large turn-overs, report minimal or negative net income resulting in minimal or zero income taxes year in and year out, through under-declaration of income or over-deduction of expenses otherwise called tax shelters. The MCIT serves to put a cap on such tax shelters. As a tax on gross income, it prevents tax evasion and minimizes tax avoidance schemes achieved through sophisticated and artful manipulations of deductions and other stratagems. Since the tax base was broader, the tax rate was lowered. TAXATION OF RESIDENT FOREIGN CORPORATION SOUTH AFRICAN AIRWAYS v. COMMISSIONER OF INTERNAL REVENUE G.R. No. 180356, February 16, 2010 The general rule is that resident foreign corporations shall be liable for a 32% income tax on their income from within the Philippines, except for resident foreign corporations that are international carriers that derive income "from carriage of persons, excess baggage, cargo and mail originating from the Philippines" which shall be taxed at 2 1/2% of their Gross Philippine Billings. SAA, being an international carrier with no flights originating from the Philippines, does not fall under the exception. As such, SAA must fall under the general rule. VALUE ADDED TAX ON SALE OF SERVICE AND USE OR LEASE OF PROPERTIES COMMISSIONER OF INTERNAL REVENUE v. SONY PHILIPPINES, INC. G.R. No. 178697, November 17, 2010 There must be a sale, barter or exchange of goods or properties before any VAT may be levied. Sony did not render any service to SIS at all. The services rendered by the advertising companies, paid for by Sony using SIS dole-out, were for Sony and not SIS. SIS just gave assistance to Sony in the amount equivalent to the latters advertising expense but never received any goods, properties or service from Sony. ACCENTURE, INC. v. COMMISSIONER OF INTERNAL REVENUE G.R. No. 190102, July 11, 2012 The recipient of the service must be doing business outside the Philippines for the transaction to qualify for zero-rating under Section 108(B) of the Tax Code. To come within the purview of the provision, it is not enough that the recipient of

the service be proven to be a foreign corporation; rather, it must be specifically proven to be a nonresident foreign corporation. CAGAYAN ELECTRIC POWER AND LIGHT CO., INC. v. CITY OF CAGAYAN DE ORO G.R. No. 191761, November 14, 2012 Any person, who in the course of trade or business, leases goods or properties, shall be subject to the value added tax. The imposable tax rate should not exceed two percent of gross receipts of the lease of poles of the preceding calendar year. Section 143(h) states that on any business subject to x x x valueadded x x x tax under the National Internal Revenue Code, as amended, the rate of tax shall not exceed two percent (2%) of gross sales or receipts of the preceding calendar year from the lease of goods or properties. ZERO-RATED SALE AT&T COMMUNICATIONS SERVICES PHILIPPINES, INC. v. COMMISSIONER OF INTERNAL REVENUE G.R. No. 182364, August 03, 2010 Zero-rated transactions generally refer to the export sale of goods and supply of services. The tax rate is set at zero. When applied to the tax base, such rate obviously results in no tax chargeable against the purchaser. The seller of such transactions charges no output tax but can claim a refund or a tax credit certificate for the VAT previously charged by suppliers. VAT EXEMPT TRANSACTIONS COMMISSIONER OF INTERNAL REVENUE, v. EASTERN TELECOMMUNICATIONS PHILIPPINES, INC. G.R. No. 163835, July 07, 2010 In VAT-exempt sales, the taxpayer/seller shall not bill any output tax on his sales to his customers and, corollarily, is not allowed any credit or refund of the input taxes he paid on his purchases. This non-crediting of input taxes in exempt transactions is the underlying reason why the Tax Code adopted the rule on apportionment of tax credits under Section 104(A) whenever a VAT-registered taxpayer engages in both VAT taxable and non-VAT taxable sales. INPUT AND OUTPUT TAX FORT BONIFACIO DEVELOPMENT CORPORATION v. COMMISSIONER OF INTERNAL REVENUE, et al. G.R. No.173425, January 22, 2013 Prior payment of taxes is not necessary before a taxpayer could avail of the 8% transitional input tax credit. All that is required from the taxpayer is to file a beginning inventory with the Bureau of Internal Revenue (BIR).

A transitional input tax credit is not a tax refund per se but a tax credit. Section 112 of the Tax Code does not prohibit cash refund or tax credit of transitional input tax. The grant of a refund or issuance of tax credit certificate in this case would not contravene the above provision. The refund or tax credit would not be unconstitutional because it is precisely pursuant to Section 105 of the old NIRC which allows refund/tax credit. REFUND OR TAX CREDIT OF EXCESS INPUT TAX ATLAS CONSOLIDATED MINING AND DEVELOPMENT CORPORATION v. COMMISSIONER OF INTERNAL REVENUE G.R. No. 159471, January 26, 2011 When claiming tax refund/credit, the VAT-registered taxpayer must be able to establish that it does have refundable or creditable input VAT, and the same has not been applied against its output VAT liabilities - information which are supposed to be reflected in the taxpayer's VAT returns. Thus, an application for tax refund/credit must be accompanied by copies of the taxpayer's VAT return/s for the taxable quarter/s concerned. FORT BONIFACIO DEVELOPMENT CORPORATION v. COMMISSIONER OF INTERNAL REVENUE G.R. No. 173425, September 4, 2012 Prior payment of taxes is not required for a taxpayer to avail of the 8% transitional input tax credit. FORT BONIFACIO DEVELOPMENT CORPORATION vs. COMMISSIONER OF INTERNAL REVENUE, et al. G.R. No.173425, January 22, 2013 (Resolution) Prior payment of taxes is not necessary before a taxpayer could avail of the 8% transitional input tax credit. All that is required from the taxpayer is to file a beginning inventory with the Bureau of Internal Revenue (BIR). A transitional input tax credit is not a tax refund per se but a tax credit. Section 112 of the Tax Code does not prohibit cash refund or tax credit of transitional input tax. The grant of a refund or issuance of tax credit certificate in this case would not contravene the above provision. The refund or tax credit would not be unconstitutional because it is precisely pursuant to Section 105 of the old NIRC which allows refund/tax credit. WHO MAY CLAIM/APPLY EXXON MOBIL PETROLEUM AND CHEMICAL HOLDINGS, INC. - PHILIPPINE BRANCH v. COMMISSIONER OF INTERNAL REVENUE G.R. No. 180909, January 19, 2011 The proper party to question, or seek a refund of, an indirect tax is the statutory taxpayer, the person on whom the tax is imposed by law and who paid

the same even if he shifts the burden thereof to another because once shifted, it is no longer in the nature of a tax, but part of the purchase price or the cost of the goods or services sold. SILKAIR (SINGAPORE) PTE. LTD. v. COMMISSIONER OF INTERNAL REVENUE G.R. No. 166482, January 25, 2012 That for indirect taxes (such as valued-added tax or VAT), the proper party to question or seek a refund of the tax is the statutory taxpayer, the person on whom the tax is imposed by law and who paid the same even when he shifts the burden thereof to another. PERIOD TO FILE/CLAIM COMMISSIONER OF INTERNAL REVENUE v. AICHI FORGING COMPANY OF ASIA, INC. G.R. No. 184823, October 6, 2010 Section 112(D) of the NIRC clearly provides that the CIR has 120 days, from the date of the submission of the complete documents in support of the application [for tax refund/credit], within which to grant or deny the claim. In case of full or partial denial by the CIR, the taxpayers recourse is to file an appeal before the CTA within 30 days from receipt of the decision of the CIR. However, if after the 120-day period the CIR fails to act on the application for tax refund/credit, the remedy of the taxpayer is to appeal the inaction of the CIR to CTA within 30 days. In this case, the administrative and the judicial claims were simultaneously filed on September 30, 2004. Obviously, respondent did not wait for the decision of the CIR or the lapse of the 120-day period. For this reason, we find the filing of the judicial claim with the CTA premature. COMMISSIONER OF INTERNAL REVENUE v. SAN ROQUE POWER CORPORATION; TAGANITO MINING CORPORATION v. COMMISSIONER OF INTERNAL REVENUE; PHILEX MINING CORPORATION v. COMMISSIONER OF INTERNAL REVENUE G.R. Nos. 187485, 196113, 197156, February 12, 2013 In claiming a tax refund or tax credit over an excess input VAT, the 30-day period of appeal to the CTA need not necessarily fall within the two-year prescriptive period, as long as the administrative claim before the CIR is filed within the two-year prescriptive period. This is because Sec. 112 (D) of the 1997 Tax Code mandates that a taxpayer can file the judicial claim: (1) only within thirty days after the Commissioner partially or fully denies the claim within the 120-day period, or (2) only within thirty days from the expiration of the 120-day period if the Commissioner does not act within the 120-day period. MINDANAO II GEOTHERMAL PARTNERSHIP v. COMMISSIONER OF INTERNAL REVENUE G.R. No. 193301/194637, March 11, 2013

The Court summarized the rules on the determination of the prescriptive period for filing a tax refund or credit of unutilized input VAT as provided in Section 112 of the 1997 Tax Code, as follows: (1) An administrative claim must be filed with the CIR within two years after the close of the taxable quarter when the zero-rated or effectively zero-rated sales were made and (2) The CIR has 120 days from the date of submission of complete documents in support of the administrative claim within which to decide whether to grant a refund or issue a tax credit certificate. DESTINATION PRINCIPLE OR CROSS-BORDER DOCTRINE TOSHIBA INFORMATION EQUIPMENT (PHILS.), INC. v. COMMISSIONER OF INTERNAL REVENUE, G.R. No. 157594, March 09, 2010 The Philippine VAT system adheres to the Cross Border Doctrine, according to which, no VAT shall be imposed to form part of the cost of goods destined for consumption outside of the territorial border of the taxing authority. Hence, actual export of goods and services from the Philippines to a foreign country must be free of VAT; while, those destined for use or consumption within the Philippines shall be imposed with VAT. INVOICING REQUIREMENTS PANASONIC COMMUNICATIONS IMAGING CORPORATION OF THE PHILIPPINES (FORMERLY MATSUSHITA BUSINESS MACHINE CORPORATION OF THE PHILIPPINES) v. COMMISSIONER OF INTERNAL REVENUE G.R. No. 178090, February 8, 2010 The appearance of the word "zero-rated" on the face of invoices covering zero-rated sales prevents buyers from falsely claiming input VAT from their purchases when no VAT was actually paid. If, absent such word, a successful claim for input VAT is made, the government would be refunding money it did not collect. Further, the printing of the word "zero-rated" on the invoice helps segregate sales that are subject to 12% VAT from those sales that are zero-rated. Unable to submit the proper invoices, Panasonic has been unable to substantiate its claim for refund. J.R.A. PHILIPPINES, INC. v. COMMISSIONER OF INTERNAL REVENUE G.R. NO. 177127, October 11, 2010 That failure to print the word zero-rated in the invoices/receipts is fatal to a claim for credit/refund of input value-added tax (VAT) on zero-rated sales. HITACHI GLOBAL STORAGE TECHNOLOGIES PHILIPPINES CORP. (formerly HITACHI COMPUTER PRODUCTS (ASIA) CORPORATION) v. COMMISSIONER OF INTERNAL REVENUE G.R. No. 174212, October 20, 2010 Non-printing the word zero-rated on the sales invoices is a ground for the denial of a claim for VAT refund.

KEPCO PHILIPPINES CORPORATION v. COMMISSIONER OF INTERNAL REVENUE G.R. No. 181858, November 24, 2010 The appearance of the word "zero-rated" on the face of invoices covering zero-rated sales prevents buyers from falsely claiming input VAT from their purchases when no VAT was actually paid. If, absent such word, a successful claim for input VAT is made, the government would be refunding money it did not collect. Furthermore, although it is true that the CTA is not strictly governed by technical rules of evidence, the invoicing and substantiation requirements must, nevertheless, be followed because it is the only way to determine the veracity of Kepco's claims SILICON PHILIPPINES, INC., (FORMERLY INTEL PHILIPPINES MANUFACTURING, INC v. COMMISSIONER OF INTERNAL REVENUE G.R. No. 172378, January 17, 2011 The non-presentation of the ATP and the failure to indicate the word "zerorated" in the invoices or receipts are fatal to a claim for credit/refund of input VAT on zero-rated sales. The failure to indicate the ATP in the sales invoices or receipts, on the other hand, is not. As to the claim of refund for input VAT on capital goods, these must refer to goods or properties with estimated useful life greater that one year and which are treated as depreciable assets used directly or indirectly in the production or sale of taxable goods or services. KEPCO PHILIPPINES CORPORATION v. COMMISSIONER OF INTERNAL REVENUE G.R. No. 179961, January 31, 2011 It is the duty of the claimant to comply with the requirements, including the imprinting of the words "zero-rated" in its VAT official receipts and invoices in order for its sales of electricity to NPC to qualify for zero-rating, being a mandatory requirement. The denial of a claim for refund of input tax as a consequence for failure to imprint the words zero rated is not a harsh penalty but is reasonable and must be strictly complied with, as it is the only way to determine the veracity of its claim. MICROSOFT PHILIPPINES, INC. v. COMMISSIONER OF INTERNAL REVENUE G.R. No. 180173, April 6, 2011 A "VAT invoice" is an invoice that meets the requirements of Section 4.108-1 of RR 7-95. It expressly states that All purchases covered by invoices other than a VAT invoice shall not give rise to any input tax. Microsoft's invoice, lacking the word "zero-rated, is not a VAT invoice, and thus cannot give rise to any input tax. SOUTHERN PHILIPPINES POWER CORPORATION v. COMMISSIONER OF INTERNAL REVENUE

G.R. No. 179632, October 19, 2011 Actually, it is R.A. 9337 that in 2005 required the printing of the words "zerorated" on receipts. But, since the receipts and invoices in this case cover sales made from 1999 to 2000, what applies is Section 4.108.1 which requires the printing of the words "zero-rated" only on invoices, not on official receipts. WESTERN MINDANAO POWER CORPORATION v. COMMISSIONER OF INTERNAL REVENUE G. R. No. 181136, June 13, 2012 The mere fact that petitioners application for zero-rating has been approved by the CIR does not, by itself, justify the grant of a refund or tax credit. The taxpayer claiming the refund must further comply with the invoicing and accounting requirements mandated by the NIRC, as well as by revenue regulations implementing them. This Court has consistently held as fatal the failure to print the word zero-rated on the VAT invoices or official receipts in claims for a refund or credit of input VAT on zero-rated sales, even if the claims were made prior to the effectivity of R.A. 9337. EASTERN TELECOMMUNICATIONS PHILIPPINES, INC. v. THE COMMISSIONER OF INTERNAL REVENUE G.R. No. 168856, August 29, 2012 The failure of a taxpayer to print the word zero-rated on its invoices or receipts is fatal to its claim for tax refund or tax credit of input VAT on zero-rated sales. The reason for such requirement is that it prevents buyers from falsely claiming input VAT from their purchases when no VAT was actually paid. If, absent such word, a successful claim for input VAT is made, the government would be refunding money it did not collect. TAX REMEDIES UNDER THE NIRC SUSPENSION OF RUNNING OF STATUTE OF LIMITATIONS RIZAL COMMERCIAL BANKING CORPORATION v. COMMISSIONER OF INTERNAL REVENUE G.R. No. 170257, September 7, 2011 Estoppel is clearly applicable to the case at bench. RCBC, through its partial payment of the revised assessments issued within the extended period as provided for in the questioned waivers, impliedly admitted the validity of those waivers. It is indisputable that the withholding agent is merely a tax collector and not a taxpayer. The liability of the withholding agent is independent from that of the taxpayer.

ISSUANCE OF PRELIMINARY ASSESSMENT NOTICE COMMISSIONER OF INTERNAL REVENUE v. METRO STAR SUPERAMA, INC. G.R. No. 185371, December 8, 2010 The old requirement of merely notifying the taxpayer of the CIR's findings was changed in 1998 to informing the taxpayer of not only the law, but also of the facts on which an assessment would be made. Otherwise, the assessment itself would be invalid. Thus, the sending of a PAN to taxpayer to inform him of the assessment made is but part of the "due process requirement in the issuance of a deficiency tax assessment," the absence of which renders nugatory any assessment made by the tax authorities. Therefore, for its failure to send the PAN stating the facts and the law on which the assessment was made as required by Section 228 of R.A. No. 8424, the assessment made by the CIR is void. ISSUANCE OF FORMAL LETTER OF DEMAND AND ASSESSMENT NOTICE/FINAL ASSESSMENT NOTICE ALLIED BANKING CORPORATION v. COMMISSIONER OF INTERNAL REVENUE G.R. No. 175097, February 05, 2010 The Commissioner of Internal Revenue (CIR) as well as his duly authorized representative must indicate clearly and unequivocally to the taxpayer whether an action constitutes a final determination on a disputed assessment. Words must be carefully chosen in order to avoid any confusion that could adversely affect the rights and interest of the taxpayer. A careful reading of the Formal Letter of Demand with Assessment Notices leads us to agree with petitioner that the instant case is an exception to the rule on exhaustion of administrative remedies, i.e., estoppel on the part of the administrative agency concerned. INACTION BY COMMISSIONER LASCONA LAND CO., INC. v. COMMISSIONER OF INTERNAL REVENUE G.R. No. 171251, March 5, 2012 When the law provided for the remedy to appeal the inaction of the CIR, it did not intend to limit it to a single remedy of filing of an appeal after the lapse of the 180-day prescribed period. Precisely, when a taxpayer protested an assessment, he naturally expects the CIR to decide either positively or negatively. A taxpayer cannot be prejudiced if he chooses to wait for the final decision of the CIR on the protested assessment. More so, because the law and jurisprudence have always contemplated a scenario where the CIR will decide on the protested assessment. REMEDIES OF TAXPAYER IN CASE OF DENIAL OF PROTEST FISHWEALTH CANNING CORPORATION v. COMMISSIONER OF INTERNAL REVENUE G.R. No. 179343, January 21, 2010

A motion for reconsideration of the denial of the administrative protest does not toll the 30-day period to appeal to the CTA. COLLECTION PHILIPPINE BRITISH ASSURANCE COMPANY, INC. v. REPUBLIC OF THE PHILIPPINES, REPRESENTED BY THE BUREAU OF CUSTOMS (BOC) G.R. No. 185588, February 02, 2010 An action based upon a surety bond cannot be considered a tax collection case. Rather, such action would properly be a case based on a contract. Verily, the instant case is not a tax collection case; hence, the CA has jurisdiction over the case. REFUND; GROUNDS AND REQUISITES COMMISSIONER OF INTERNAL REVENUE v. FAR EAST BANK & TRUST COMPANY (NOW BANK OF THE PHILIPPINE ISLANDS) G.R. No. 173854, March 15, 2010 A taxpayer claiming for a tax credit or refund of creditable withholding tax must comply with the following requisites: 1) The claim must be filed with the CIR within the two-year period from the date of payment of the tax; 2) It must be shown on the return that the income received was declared as part of the gross income; and 3) The fact of withholding must be established by a copy of a statement duly issued by the payor to the payee showing the amount paid and the amount of the tax withheld. It is not the duty of the government to disprove a taxpayer's claim for refund. Rather, the burden of establishing the factual basis of a claim for a refund rests on the taxpayer NATURE OF ERRONEOUSLY PAID/ILLEGALLY ASSESSED COLLECTED COMMISSIONER OF INTERNAL REVENUE v. IRONCON BUILDERS AND DEVELOPMENT CORPORATION G.R. No. 180042, February 8, 2010 Even if the law does not expressly state that Ironcon's excess creditable VAT withheld is refundable, it may be the subject of a claim for refund as an erroneously collected tax under Sections 204(C) and 229. It should be clarified that this ruling only refers to creditable VAT withheld pursuant to Section 114 prior to its amendment. After its amendment by R.A. 9337, the amount withheld under Section 114 is now treated as a final VAT, no longer under the creditable withholding tax system. TAX REFUND VIS--VIS TAX CREDIT PETRON CORPORATION v. COMMISSIONER OF INTERNAL REVENUE

G.R. No. 180385, July 28, 2010 Given the nature of the TCC's immediate effectiveness and validity, however, said authority may only be exercised before the TCC has been fully utilized by a transferee which had no participation in the perpetration of fraud in the issuance, transfer and utilization thereof. Once accepted by the BIR and applied towards the satisfaction of such a tranferee's tax obligations, a TCC is effectively used up, debited and canceled such that there is nothing left to avoid or to cancel anew. Considering the protection afforded to transferees in good faith and for value, it was held that the remedy of the Government is to go after the grantees alleged to have perpetrated fraud in the procurement of the subject WHO MAY CLAIM/APPLY FOR TAX REFUND/CREDIT SILKAIR (SINGAPORE) PTE. LTD. v. COMMISSIONER OF INTERNAL REVENUE G.R. No. 184398, February 25, 2010 Silkair, as the purchaser and end-consumer, ultimately bears the tax burden, but this does not transform its status into a statutory taxpayer. The proper party to question, or claim a refund or tax credit of an indirect tax is the statutory taxpayer, which is Petron in this case, as it is the company on which the tax is imposed by law and which paid the same even if the burden thereof was shifted or passed on to another. It bears stressing that even if Petron shifted or passed on to petitioner the burden of the tax, the additional amount which Silkair paid is not a tax but a part of the purchase price which it had to pay to obtain the goods. MIGUEL J. OSSORIO PENSION FOUNDATION, INCORPORATED v. COURT OF APPEALS AND COMMISSIONER OF INTERNAL REVENUE G.R. No. 162175, June 28, 2010 The tax-exempt character of petitioner's Employees' Trust Fund is not at issue in this case. The tax-exempt character of the Employees' Trust Fund has long been settled. It is also settled that petitioner exists for the purpose of holding title to, and administering, the tax-exempt Employees' Trust Fund established for the benefit of VMC's employees. As such, petitioner has the personality to claim tax refunds due the Employees' Trust Fund. COMMISSIONER OF INTERNAL REVENUE v. SMART COMMUNICATION, INC. G.R. Nos. 179045-46, August 25, 2010 The right of a withholding agent to claim a refund of erroneously or illegally withheld taxes comes with the responsibility to return the same to the principal taxpayer. DIAGEO PHILIPPINES, INC. v. COMMISSIONER OF INTERNAL REVENUE G.R. No. 183553, November 12, 2012 The right to claim a refund or be credited with the excise taxes belongs to the statutory payer.

OTHER CONSIDERATIONS AFFECTING TAX REFUNDS ASIAWORLD PROPERTIES PHILIPPINE CORPORATION v. COMMISSIONER OF INTERNAL REVENUE G.R. No. 171766, July 29, 2010 Under the old provision, the option to carry-over the excess or overpaid income tax for a given taxable year is limited to the immediately succeeding taxable year only. In contrast, under Section 76 of the NIRC of 1997, the application of the option to carry-over the excess creditable tax is not limited only to the immediately following taxable year but extends to the next succeeding taxable years. The clear intent in the amendment under Section 76 is to make the option, once exercised, irrevocable for the "succeeding taxable years." COMMISSIONER OF INTERNAL REVENUE v. THE PHILIPPINE AMERICAN LIFE AND GENERAL INSURANCE COMPANY G.R. No. 175124, September 29, 2010 The exercise of the option to carry-over precludes a claim for a refund. COMMISSIONER OF INTERNAL REVENUE v. McGEORGE FOOD INDUSTRIES INC. G.R. No. 174157, October 20, 2010 Under Section 76, the exercise of an option is irrevocable and a decision to carry-over and apply tax overpayment continues until the overpayment has been fully applied to tax liabilities. BELLE CORPORATION v. COMMISSIONER OF INTERNAL REVENUE G.R. No. 181298, January 10, 2011 Under the new law, once the option to carry-over excess income tax payments to the succeeding years has been made, it becomes irrevocable. Thus, applications for refund of the unutilized excess income tax payments may no longer be allowed. COMMISSIONER OF INTERNAL REVENUE v. PL MANAGEMENT INTERNATIONAL PHILIPPINES, INC. G.R. No. 160949, April 4, 2011 Inasmuch as PLMIPI already opted to carry over its unutilized creditable withholding tax of P1,200,000.00 to taxable year 1998, the carry-over could no longer be converted into a claim for tax refund because of the irrevocability rule. However, in view of it irrevocable choice, PLIMIPI remained entitled to utilize that amount of P1,200,000.00 as tax credit in succeeding taxable years until fully exhausted. In this regard, prescription did not bar it from applying the amount as tax credit considering that there was no prescriptive period for the carrying over of the amount as tax credit in subsequent taxable years.

COMMISSIONER OF INTERNAL REVENUE v. PETRON CORPORATION G.R. No. 185568, March 21, 2012 A transferee in good faith and for value of a TCC who has relied on the Center's representation of the genuineness and validity of the TCC transferred to it may not be legally required to pay again the tax covered by the TCC which has been belatedly declared null and void, that is, after the TCCs have been fully utilized through settlement of internal revenue tax liabilities. Conversely, when the transferee is party to the fraud as when it did not obtain the TCC for value or was a party to or has knowledge of its fraudulent issuance, said transferee is liable for the taxes and for the fraud committed as provided for by law. UNITED INTERNATIONAL PICTURES AB v. COMMISSIONER OF INTERNAL REVENUE G.R. No. 168331, October 11, 2012 Having chosen to carry-over the excess quarterly income tax, the corporation cannot thereafter choose to apply for a cash refund or for the issuance of a tax credit certificate for the amount representing such overpayment. Hence, the controlling factor for the operation of the irrevocability rule is that the taxpayer chose an option; and once it had already done so, it could no longer make another one. Consequently, after the taxpayer opts to carry-over its excess tax credit to the following taxable period, the question of whether or not it actually gets to apply said tax credit is irrelevant. GOVERNMENT REMEDIES; COLLECTION OF TAX NON-AVAILABILITY OF INJUNCTION TO RESTRAIN

ANGELES CITY v. ANGELES CITY ELECTRIC CORPORATION G.R. No. 166134, June 29, 2010 Unlike the National Internal Revenue Code, the Local Tax Code does not contain any specific provision prohibiting courts from enjoining the collection of local taxes. Such statutory lapse or intent, however it may be viewed, may have allowed preliminary injunction where local taxes are involved. RULE MAKING AUTHORITY OF SECRETARY OF FINANCE COMMISSIONER OF INTERNAL REVENUE v. HON. RAUL M. GONZALEZ, Secretary of Justice, L. M. CAMUS ENGINEERING CORPORATION (represented by LUIS M. CAMUS and LINO D. MENDOZA) G.R. No. 177279, October 13, 2010 The substantial underdeclared income in the returns constitutes prima facie evidence of fraudulent return under Section 248(B) of the NIRC. Secretarys ruling that the filing of criminal complaint for violation of Sections 254 and 255 of the NIRC cannot prosper because of lack of prior determination of the existence of fraud, is bereft of factual basis and contradicted by the evidence on record. The power of the Secretary of Justice to review does not preclude this Court and the CA from intervening and exercising our own powers of review with respect to the DOJs findings, such as in the exceptional case in which grave abuse of discretion is

committed, as when a clear sufficiency or insufficiency of evidence to support a finding of probable cause is ignored. LOCAL GOVERNMENT CODE TAXING POWERS OF PROVINCES COMMISSIONER OF INTERNAL REVENUE v. SM PRIME HOLDINGS, INC. AND FIRST ASIA REALTY DEVELOPMENT CORPORATION G.R. No. 183505, February 26, 2010 Amendments to the VAT law have been consistent in exempting persons subject to amusement tax under the NIRC from the coverage of VAT. Only lessors or distributors of cinematographic films are included in the coverage of VAT. This reveals the legislative intent not to impose VAT on persons already covered by the amusement tax. This holds true even in the case of cinema/theater operators taxed under the LGC of 1991 precisely because the VAT law was intended to replace the percentage tax on certain services. LEPANTO CONSOLIDATED MINING COMPANY v. HON. MAURICIO B. AMBANLOC G.R. No. 180639, June 29, 2010 It is settled that provincial governments can levy excise taxes on quarry resources independently from the national government. PELIZLOY REALTY CORPORATION, represented herein by its President, GREGORY K. LOY v. THE PROVINCE OF BENGUET G.R. No. 183137, April 10, 2013 Thus, resorts, swimming pools, bath houses, hot springs and tourist spots do not belong to the same category or class as theaters, cinemas, concert halls, circuses, and boxing stadia. It follows that they cannot be considered as among the other places of amusement contemplated by Section 140 of the LGC and which may properly be subject to amusement taxes. TAXING POWERS OF CITIES CITY OF IRIGA v. CAMARINES SUR III ELECTRIC COOPERATIVE, INC. (CASURECO III) G.R. No. 192945, September 5, 2012 The tax privileges granted to electric cooperatives registered with NEA under PD 269 were validly withdrawn and only those registered with the CDA under RA 6938 may continue to enjoy the tax privileges under the Cooperative Code. Since franchise tax partakes of the nature of an excise tax, the situs of taxation is the place where the privilege is exercised. TAXPAYERS REMEDIES

TEAM PACIFIC CORPORATION v. JOSEPHINE DAZA IN HER CAPACITY AS MUNICIPAL TREASURER OF TAGUIG G.R. No. 167732, July 11, 2012 In assessing TPCs business tax and/or effectively denying its protest, the Municipal Treasurer of Taguig cannot be said to be performing a judicial or quasijudicial function. For this reason, her actions are not the proper subjects of a Rule 65 petition for certiorari. Moreover, R.A. No. 9282 has vested the Court of Tax Appeals (CTA) with the exclusive appellate jurisdiction over, among others, appeals from the judgments, resolutions or orders of the RTC in tax collection cases originally decided by them in their respective territorial jurisdiction which appeal should be perfected within thirty (30) days after receipt of the decision and shall be made by filing a petition for review under a procedure analogous to that provided for under Rule 42 of the 1997 Rules of Civil Procedure. REAL PROPERTY TAXATION; EXEMPTION PHILIPPINE FISHERIES DEVELOPMENT AUTHORITY (PFDA) v. CENTRAL BOARD OF ASSESSMENT APPEALS, LOCAL BOARD OF ASSESSMENT APPEALS OF LUCENA CITY, CITY OF LUCENA, LUCENA CITY ASSESSOR AND LUCENA CITY TREASURER G.R. No. 178030, December 15, 2010 Under Section 133(o) of the Local Government Code, local government units have no power to tax instrumentalities of the national government like the PFDA. Thus, PFDA is not liable to pay real property tax assessed by the Office of the City Treasurer of Lucena City on the Lucena Fishing Port Complex, except those portions which are leased to private persons or entities. Besides, the Lucena Fishing Port Complex is a property of public dominion intended for public use, and is therefore exempt from real property tax. See Angeles University; Exemption from Real Property Tax CITY OF PASIG, REPRESENTED BY THE CITY TREASURER AND THE CITY ASSESSOR, v. REPUBLIC OF THE PHILIPPINES, REPRESENTED BY THE PRESIDENTIAL COMMISSION ON GOOD GOVERNMENT G.R. No. 185023, August 24, 2011 Section 234(a) of Republic Act No. 7160 states that properties owned by the Republic of the Philippines are exempt from real property tax "except when the beneficial use thereof has been granted, for consideration or otherwise, to a taxable person." Thus, the portions of the properties not leased to taxable entities are exempt from real estate tax while the portions of the properties leased to taxable entities are subject to real estate tax. The law imposes the liability to pay real estate tax on the Republic of the Philippines for the portions of the properties leased to taxable entities. COLLECTION OF REAL PROPERTY TAX

STA. LUCIA REALTY & DEVELOPMENT, INC., v. CITY OF PASIG, MUNICIPALITY OF CAINTA, PROVINCE OF RIZAL G.R. No. 166838, June 15, 2011 Under Presidential Decree No. 464 or the "Real Property Tax Code," the authority to collect real property taxes is vested in the locality where the property is situated which requisite was reiterated in Republic Act No. 7160, also known as the 1991 the Local Government Code. The only import of these provisions is that, while a local government unit is authorized under several laws to collect real estate tax on properties falling under its territorial jurisdiction, it is imperative to first show that these properties are unquestionably within its geographical boundaries. The boundaries must be clear for they define the limits of the territorial jurisdiction of a local government unit. It can legitimately exercise powers of government only within the limits of its territorial jurisdiction. Beyond these limits, its acts are ultra vires. REFUND OR CREDIT OF REAL PROPERTY TAX NATIONAL POWER CORPORATION v. PROVINCE OF QUEZON AND MUNICIPALITY OF PAGBILAO G.R. No. 171586, January 25, 2010 For the Court to consider an entity assuming another person's tax liability by contract as a person having legal interest in the real property would extend to it the privileges and responsibilities enumerated above. The framers of the LGC certainly did not contemplate that the listing, valuation, and assessment of real property can be made in the name of such entity; nor did they intend to make the warrant of levy enforceable against it. Insofar as the provisions of the LGC are concerned, this entity is a party foreign to the operation of real property tax laws and could not be clothed with any legal interest over the property apart from its assumed liability for tax. Since Napocor was simply questioning the correctness of the assessment and not the questioning the very authority and power of the assessor, it should have first complied with Section 252, particularly the requirement of payment under protest. Napocor's failure to prove that this requirement has been complied with thus renders its administrative protest under Section 226 of the LGC without any effect. TARIFF AND CUSTOMS CODE SUBIC BAY METROPOLITAN AUTHORITY v. MERLINO E. RODRIGUEZ AND WIRA INTERNATIONAL TRADING CORP. G.R. No. 160270, April 23, 2010 It is well settled that the Collector of Customs has exclusive jurisdiction over seizure and forfeiture proceedings, and regular courts cannot interfere with his exercise thereof or stifle or put it at naught. The Collector of Customs sitting in seizure and forfeiture proceedings has exclusive jurisdiction to hear and determine all questions touching on the seizure and forfeiture of dutiable goods. Regional trial courts are devoid of any competence to pass upon the validity or regularity of

seizure and forfeiture proceedings conducted by the BOC and to enjoin or otherwise interfere with these proceedings. Regional trial courts are precluded from assuming cognizance over such matters even through petitions for certiorari, prohibition or mandamus. JUDICIAL REMEDIES COURT OF TAX APPEALS TFS, INCORPORATED v. COMMISSIONER OF INTERNAL REVENUE G.R. No. 166829, April 19, 2010 Although strict compliance with the rules for perfecting an appeal is indispensable for the prevention of needless delays and for the orderly and expeditious dispatch of judicial business, strong compelling reasons such as serving the ends of justice and preventing a grave miscarriage may nevertheless warrant the suspension of the rules. COMMISSIONER OF INTERNAL REVENUE v. HAMBRECHT & QUIST PHILIPPINES, INC. G.R. No. 169225, November 17, 2010 The appellate jurisdiction of the CTA is not limited to cases which involve decisions of the CIR on matters relating to assessments or refunds. The second part of the provision covers other cases that arise out of the National Internal Revenue Code (NIRC) or related laws administered by the Bureau of Internal Revenue (BIR). In the case at bar, the issue at hand is whether or not the BIR's right to collect taxes had already prescribed. the validity of the assessment itself is a separate and distinct issue from the issue of whether the right of the CIR to collect the validly assessed tax has prescribed. This issue of prescription, being a matter provided for by the NIRC, is well within the jurisdiction of the CTA to decide. The mere filing of a protest letter which is not granted does not operate to suspend the running of the period to collect tax. See Team Pacific Corp case; Taxpayers Remedies See City of Iriga Case; Tax Powers of Cities CASURECO III should have filed its appeal, not with the CA, but with the CTA Division in accordance with the applicable law and the rules of the CTA. Resort to the CA was, therefore, improper, rendering its decision null and void for want of jurisdiction over the subject matter. PETITION FOR REVIEW ON CERTIORARI TO THE SUPREME COURT COMMISSIONER OF INTERNAL REVENUE v. COURT OF TAX APPEALS and AYALA LAND, INC. G.R. No. 190680, September 13, 2012

The petition for relief should be filed within the 60-day reglementary period after the petitioner learns of the judgment under Rule 38.