Taxation I

AY 2009 2010
First Semester
Atty. Deborah S. Acosta
Textbook: La o! "asic Taxation in the #hi$i%%ines &'e(ise) *)ition+,
"en-amin ". Aban
I. General Principles
Aban, pp. 1 -168
A. Definition of Taxation
Cases:
Commissioner of Internal Revenue v. Algue, Inc., G.R. No. L-2886, 1! "ebr#ar$
188
%. Nat#re of t&e Po'er of Taxation
1. Attrib#te of so(erei)nt$
2. Le)islati(e in c&aracter
a. *cope of t&e le)islati(e taxin) po'er
i. A#t&orit$ to +eter,ine t&e nat#re, ob-ect, extent, co(era)e,
apportion,ent of t&e tax, sit#s of t&e i,position, an+ ,et&o+
of collection
ii. A#t&orit$ to )rant tax exe,ptions or con+onations
iii. A#t&orit$ to specif$ or pro(i+e for t&e a+,inistrati(e as 'ell
as -#+icial re,e+ies
.. Not +ele)ate+ to exec#ti(e or -#+icial +epart,ent
a. /xceptions
i. Local )o(ern,ents 0*ec. 1, Article 2, 3onstit#tion4
ii. 5&en allo'e+ b$ t&e 3onstit#tion 0*ec. 28024, Art. 6I,
3onstit#tion4
iii. 5&en +ele)ation ,erel$ relates to a+,inistrati(e
i,ple,entation or i,plie+ fro, t&e polic$ an+ p#rpose of t&e
Act
7. *#b-ect to in&erent an+ constit#tional li,itations
Cases:
Mactan Cebu International Airport Authority v. Marcos, 261 *3RA 66! 0164
Planters Products, Inc. v. Fertiphil Corp., G.R. No. 166886, 17 9arc& 2888
Maceda v. Macaraig, 1! *3RA !!1
Petron v. Pililla, 18 *3RA 82
PepsiCola !ottling Company of the Phil. v. Mun. of "anauan, #eyte, 6 *3RA
768
F$#% $nergy, Inc. v. "he Province of !atangas, G.R. No. 16811!, 16 "ebr#ar$
288!
Petron v. "iangco, G.R. No. 118881, 16 April 2888
City &overnment of 'ue(on City v. !ayantel, Inc., G.R. No. 162811, 6 9arc&
2886
3. Aspects of Taxation
1. Le($
2. Assess,ent
.. 3ollection
D. T&eor$ or :n+erl$in) %asis of Taxation
1. Lifebloo+ T&eor$ ; Necessit$ T&eor$
2. %enefits-Protection T&eor$
Cases:
Commissioner of Internal Revenue v. Algue, supra.
Phil. &uaranty Co., Inc. v. CIR, G.R. No. L-228!7, 6 *epte,ber 161
F$#% $nergy, Inc. v. "he Province of !atangas, supra.
/. P#rposes an+ <b-ecti(es of Taxation
1. Re(en#e
2. Re)#lator$ ; *#,pt#ar$
.. Pro,otion of General 5elfare
7. Re+#ction of *ocial Ine=#alit$
1. /nco#ra)e,ent of /cono,ic Gro't&
6. Protectionis,
Cases:
%outhern Cross Cement Corp. v. Cement Manufacturers Association of the Phil.,
et al., G.R. No. 118178, . A#)#st 2881
Calte) Phils. v. C*A, G.R. No. 2181, 8 9a$ 12
&erochi v. +*$, G.R. No. 11!6, 1! >#l$ 288!
". Taxation Distin)#is&e+ fro, Police Po'er an+ /,inent Do,ain
1. Taxation (. Police Po'er
2. Taxation (. /,inent Do,ain
Cases:
Commissioner of Internal Revenue v. Central #u(on +rug Corp., G.R. No.
1167!, 11 April 2881
#ut( v. Araneta, 8 P&il 178
Planters Products v. Fertiphil, Inc., supra.
&erochi v. +*$, supra.
G. %asic Principles of a *o#n+ Tax *$ste,
1. "iscal A+e=#ac$
2. T&eoretical >#stice
.. A+,inistrati(e "easibilit$
Cases:
Chave( v. *ngpin, G.R. No. !6!!8, 6 >#ne 18
"olentino v. %ecretary of Finance, G.R. No. 111711, 21 A#)#st 17
?. Taxes
1. Definition
2. Attrib#tes or c&aracteristics
a. "orce+ c&ar)e, i,position or contrib#tion
b. Assesse+ in accor+ance 'it& so,e reasonable r#le of
apportion,ent 0*ec. 280a4, Art. 6I, 3onstit#tion4
c. Pec#niar$ b#r+en pa$able in ,one$
+. I,pose+ b$ t&e *tate on persons, propert$ or ser(ices or excises
'it&in its -#ris+iction 0Principle of Territorialit$4
e. Le(ie+ b$ t&e le)islati(e bo+$ of t&e *tate
f. Le(ie+ for a p#blic p#rpose
). Personal to t&e taxpa$er
Cases:
!or,a v. &ella, 8 *3RA 682
-era v. Fernande(, 8 *3RA 1
Republic v. Patanao, 28 *3RA !12
%unio v. .#RC, 12! *3RA .8
"an "iong !io v. CIR, G.R. No. L-11!!8, 2. April 162
.. Distin)#is&e+ fro, ot&er i,positions
a. Tax (. +ebt
i. *et-off or co,pensation
ii. /ffect of non-pa$,ent
b. Tax (. toll
c. Tax (. license fee
+. Tax (. special assess,ent
e. Tax (. penalt$
Cases:
Francia v. IAC, G.R. No. !6!7, 8 >#ne 188
"erminal Facilities and %ervices Corp v. Philippine Ports Authority, .!8 *3RA
82 028824
Cuun,ieng v. Patstone, 72 P&il. 818
Philippine Airlines, Inc. v. $du, G.R. No. L-71.8., 11 A#)#st 188
Apostolic Prefect of the Mountain Province v. City "reasurer of !aguio, !1 P&il
17!
$sso %tandard $astern, Inc. v. CIR, G.R. Nos. L-28188-8, ! >#l$ 18
Calte) Phils. v. C*A, supra.
+omingo v. &arlitos, 8 *3RA 77.
Phile) Mining Corp v. CIR, G.R. No. 121!87, 28 A#)#st 18
7. 3lassification
a. Personal tax
b. Propert$ tax
c. Direct tax
+. In+irect tax
e. /xcise tax
f. General tax
). *pecial tax
&. *pecific tax
i. A+ (alore, tax
-. 3#sto,s +#ties
@. National tax
l. Local tax
,. Pro)ressi(e tax
n. Re)ressi(e tax
o. Proportional tax
Cases:
%il/air 0%ingapore1 P"$, #td. v. CIR, G.R. No. 1!.17, 6 "ebr#ar$ 2888
Aba/ada &uro Party #ist v. $rmita, G.R. No. 168816, 1 *epte,ber 2881
Commissioner of Internal Revenue v. P#+", G.R. No. 1782.8, 11 Dece,ber
2881
I. Li,itations on t&e Po'er of Taxation
1. General R#leA Po'er to tax is #nli,ite+
BPo'er to tax incl#+es t&e po'er to +estro$.C
BPo'er to tax is not t&e po'er to +estro$ '&ile t&is co#rt sits.C
Cases:
"io v. -ideogram Regulatory !oard, et al., 111 *3RA 21.
Commissioner of Internal Revenue v. "o/yo %hipping Co. #td., 277 *3RA ..2
2. In&erent Li,itations
1. T&e$ le($ ,#st be for a p#blic p#rpose
2. Non-+ele)ation of t&e le)islati(e po'er to tax
.. /xe,ption fro, taxation of )o(ern,ent entities
7. International co,it$
1. Territorial -#ris+iction
Cases:
Planters Products, Inc. v. Fertiphil Corp., supra.
CIR v. Fortune "obacco Corp., G.R. Nos. 16!2!7-!1, 21 >#l$ 2888
Commissioner v. !ritish *verseas Air2ays Corporation, 17 *3RA .1
%antos 3 Co. v. Municipality of Meycauayan, et al., 7 P&il 187!
.. 3onstit#tional Li,itations
a. *ec. 10a4, Art. III, 3onstit#tion
b. *ec. 10b4, Art. III, 3onstit#tion
c. *ec. 28014, Art. 6I, 3onstit#tion
+. *ec. 18, Art. III, 3onstit#tion
e. *ec. 1, Art. III, 3onstit#tion
f. *ec. 7, Art. III, 3onstit#tion
). *ec. 280.4, Art. III, 3onstit#tion
&. *ec. 27, Art. 6I, 3onstit#tion
i. *ec. 28074, Art. 6I, 3onstit#tion
-. *ec. 26014, Art. I6, 3onstit#tion
@. *ec. 28, Art. III, 3onstit#tion
Cases:
4.!.#. Reyes v. Alman(or, G.R. Nos. 78.876, 26 April 11
CIR v. #ingayen &ulf $lectric Po2er Co., Inc., ?.R. No. L-2.!!1, 7 A#)#st
188
Philippine Press Institute, et al. v. Chato, G.R. No. 111!17, 21 A#)#st 17
#ung Center of the Philippines v. 'ue(on City, 7.. *3RA 11 028874
"olentino v. %ecretary of Finance, supra.
"olentino v. %ecretary of Finance, G.R. No. 111711, .8 <ctober 11
4ohn 5ay Peoples Alternative Coalition, et al. v. #im, G.R. No. 11!!1, 27
<ctober 288.
Philippine Airlines v. %ecretary of Finance, G.R. No. 1118!., 21 A#)#st 17
Commissioner v. Court of Appeals, G.R. No. 11!61, .8 A#)#st 16
!ritish American "obacco v. Camacho, G.R. No. 16.18., 28 A#)#st 2888
People of the Philippines v. %andiganbayan, G.R. No. 1121.2, 16 A#)#st 2881
>. Taxpa$ersD *#it
Cases:
4umamil v. Cafe, et al., G.R. No. 1771!8, 21 *epte,ber 2881
+avid, et al. v. MacapagalArroyo, G.R. No. 1!1.6, . 9a$ 2886
E. Do#ble Taxation
A. Definition ; Principle
%. Ein+s
1. Direct +#plicate taxation
2. In+irect +#plicate taxation
3. 9et&o+s of A(oi+in) <cc#rrence of Do#ble Taxation
1. Allo'ance of reciprocal exe,ption eit&er b$ la' or b$ treat$F
2. Allo'ance of tax cre+it for forei)n taxes pai+F
%ee *ec. .70.4 an+ 074, Tax 3o+e
*ec. 860/4, Tax 3o+e
.. Allo'ance of +e+#ction of forei)n taxes pai+F an+
7. Re+#ction of t&e P&ilippine tax rate.
Cases:
-illanueva v. City of Iloilo, 26 *3RA 1!8 01684
Commissioner v. !an/ of Commerce, G.R. No. 176.6, 8 >#ne 2881
Commissioner v. 5a2aiianPhilippine Co., 11 *3RA 216
Commissioner v. %.C. 4ohnson 3 %on, Inc., G.R. No. 12!181, 21 >#ne 1
Commissioner v. Citytrust Investment Phils., Inc., G.R. No. 1.!86, 2!
*epte,ber 2886
E. /xe,ption fro, Taxation
*ec. 28074, Article 6I, 3onstit#tion
*ec. 7, Article 2, 3onstit#tion
*ec. 28024, Article 6I, 3onstit#tion
Cases:
#ung Center of the Phil. v. 'ue(on City, G.R. No. 177187, 2 >#ne 2887
Compagnie Financiere %ucres $t +enrees v. CIR, G.R. No. 1..8.7, 28 A#)#st
2886
CIR v. P.4. 6iener Co., #td., et al., G.R. No. L-27!17, 18 >#l$ 1!1
Maceda v. Macaraig, supra.
!ibiano -. !anas, 4r. v. Court of Appeals, G.R. No. 1826!, 18 "ebr#ar$ 2888
%urigao Consolidated Mining Co., Inc. v. Collector of Customs, *3RA !28
P#+" v. City of +avao, G.R. No. 17.86!, 21 9arc& 288.
City of Iloilo v. %mart Communications, Inc., G.R. No. 16!268, 2! "ebr#ar$
288
L. Tax La's
A. Nat#re
%. *o#rces
3. 3onstr#ction
D. Po'er of t&e 3o,,issioner to Interpret Tax La's 0*ec.7, Tax 3o+e4
/. Prospecti(e Application as a General R#le
". P#blication Re=#ire,ent
G. *pecial La's (s. General La's
Cases:
Commissioner v. Acesite 5otel Corporation, G.R. No. L-17!21, 16 "ebr#ar$ 288!
CIR v. Marubeni Corp., G.R. No. 1.!.!!, 18 Dece,ber 2881
CIR v. Acosta, G.R. No. 117868, . A#)#st 288!
Misamis *riental Association of Coco "raders, Inc. v. +ept of Finance %ecretary, et
al., G.R. No. 188127, 18 No(e,ber 17
!egosa v. Philippine -eterans Administration, G.R. No. L-2116, .8 April 1!8
A!%C!. !roadcasting Corporation v. Court of "a) Appeals and Commissioner, 188
*3RA 172
+i(on v. Court of "a) Appeals, G.R. No. 17877, .8 April 2888
9. Tax /(asionF Tax A(oi+ance
Cases:
Commissioner v. "oda, 4r., G.R. No. 17!188, 17 *epte,ber 2887
International $)change !an/ v. Commissioner, G.R. No. 1!1266, 7 April 288!