Sie sind auf Seite 1von 8

TAXATION

TRANSFER TAXES
BUSINESS TAXES
TAX REMEDIES
LOCAL AND REAL PROPERTY TAXES
CUSTOMS DUTIES

TRANSFER TAXES
Imposed upon the privilege granted by the State to the taxpayer so that hey
may transfer his property to another. As popularly understood in taxation,
refers to estate and donors tax.
ESTATE TAX. Graduated tax imposed on the privilege of the decedent to
transmit his property at death. Based on the entire net estate, regardless of
the number of heirs or their relation to the decedent
Where filed:

Resident. District office of residence

Nonresident. District office where national office located (Br. 39)


Residence refers to the domicile. The place which whenever absent, one
intends to return. It depends on facts and circumstances that disclose the
intent. It is not necessarily the actual place of residence
When filed:

Notice of death should be given within 2m from death

Estate tax return must be filed within 6m from death


Special rules:

The law in force at the time of death applies

Approval of probate court is not required to collect estate tax.


There is nothing in the NIRC that requires such. Basis: lifeblood

Valuation of real property. Fair market value as determined by the


CIR, or provincial or city assessors, whichever is higher.
Justifications:

Benefit-received theory

Privilege theory. Succession to the property is not a fundamental


right. Hence legislature can burden such with a tax.

Ability to pay theory. Those with more properties to transfer


should pay more taxes.
Gross estate. All properties and interests of the decedent at the time of his
death. Consists of:

Filipino. All property within and without

Alien
o
Resident. All property within and without
o
Nonresident. All property within (intangible property is
subject to the rule of reciprocity)
Mobilia sequuntur personam. Intangible property generally follows the
residence or domicile of the owner.
Instances when it does not apply:

When inconsistent with the provisions of a statute

Justice demands that it should not be applied


Transfers inter vivos which still for part of the gross estate: (TIGR)

Transfers in contemplation of death. Motive for the transfer is the


thought of death, regardless if imminent. Except: transfers made
in a bona fide sale for full and adequate consideration

Transfers for insufficient consideration. Not a bona fide sale for a


full and adequate consideration. Difference between
consideration and fair market value forms part of gross estate

Property passing under general power of appointment. See power


of appointment.

Revocable transfers. Transferor reserves his right to alter, amend


or revoke the transfer. In the absence of an express provision to
the contrary, a transfer is presumed revoked during the life of the
donor. Hence, subject to estate tax
Power of appointment. Right to designate a person who shall possess the
property from a prior decedent:

General. Any person he pleases. Donee holds the property in the


concept of an owner. Hence, subject to estate tax

Special. Only to a restricted class of persons other than donee.


Donee holds the property in the concept of a trustee. Hence, not
subject to estate tax
Exclusions from gross estate:

Proceeds of irrevocable life insurance payable to a beneficiary


other than the estate.

Benefits received under GSIS and SSS by reason of death

Transfers made in bona fide sale for full and adequate consideration

Retirement benefits from BIR-approved private pension plans

Donations mortis causa to charitable organizations

Amounts received from Philippine and US governments for


damages suffered during last war

Amounts received from US Veterans Administration

Transfers NIRC expressly declares as exempt:


o
Merger of the usufruct in the owner of the naked title
o
Transmission of the inheritance by the fiduciary heir to
the fideicommissary
o
Transmission of the first heir in favor of another, in
accordance to the desires of the decedent
o
Transfers to charitable institutions, no part of the net
income inures to the benefit of an individual. Provided,
not more than 30% is used for administrative purposes
o
Separate property of surviving spouse
Deductions from gross estate:

Funeral expenses. Not to include expenses made after burial or


paid for by other persons. Whichever is lower:
o
Actual amount, not to exceed 200,000
o
5% gross estate, not to exceed 200,000

Medical expenses. Requirements:


o
Incurred 1y prior to death
o
Substantiated by receipts
o
Not to exceed 500,000

Judicial expenses for testate or intestate proceedings

Losses. Requisites:
o
Not compensated for by insurance
o
Not claimed as deductions in ITR
o
Incurred within 6m from death

Claims against the estate at the time of death. Obligations of the


decedent. Requisites:
o
Contracted in good faith
o
Existing against the estate
o
Enforced by claimants
o
Reasonably certain in amount
o
Notarized instrument
o
Loan contracted within 3y before death, administrator
shall submit a statement showing the disposition of
the proceeds of the loan

Claims of decedent against insolvent persons. Requirements:


o
Amount of claim initially included as part of the estate
o
Incapacity of the debtor is proven, not merely alleged

Unpaid mortgage. Decedents interest in the property must be


included in the gross estate

Unpaid taxes:
o
Income tax on income received before death
o
Real property tax accrued before death

Family home. Dwelling house, including land, where head of the


family and its members actually reside. Requisites:
o
Actual residence, as certified by Barangay Captain
o
Initially included in the gross estate
o
Amount equivalent to the fair market value, not to
exceed 1,000,000

Standard deduction. 1,000,000, without need of substantiation

Gifts in favor of the national government used for public purpose


Vanishing deduction. Eases harshness of successive taxation on same
property within 5y, occasioned by untimely death of the transferee after the
first decedent. Requisites:

Death of transferee within 5y from death or gift of prior decedent

Identity of property

Inclusion of property as part of gross estate or taxable gift of the


first decedent

Previous taxation of the property

No previous vanishing deduction on the property

DONORS TAX. Graduated tax imposed on the privilege of the donor to


transfer property during his lifetime without any consideration.
Tax base is dependent on the accumulated value of the donations made
within one calendar year by a particular donor (taxpayer)
Purpose: To complement estate tax by preventing tax-free depletion of the
estate during the lifetime of the decedent
Where filed: same as estate tax
When filed: 30d from date of gift, reckoned from date of notarization
Requisites for taxable gift:

Capacity of the donor to donate the property

Donative intent. Except: transfers of ordinary assets for less than


a full and adequate consideration. Reason: transfer of capital
assets is subject to capital gains tax on presumed gain

Acceptance by the donee

Delivery of the gift


Tax rates:

Relatives. Schedular rate. First 100,000 exempt


o
Brother and sister, whether full or half blood
o
Ancestor
o
Descendant
o
Relative by consanguinity in the collateral line within
the 4th degree (first cousin)
o
Spouse

Strangers. 30%
o
Persons who are not relatives
Gross gift. All property given to the donee by way of gift. Condonation of a
debt constitutes donation. Donations of common property, considered
separate donors to the extent of interest in such. Consequently, each files
separate donors tax return.
Transfers for less than adequate consideration. Difference between market
value and actual selling price are included in gross gift. If property qualifies as
capital asset, there is always presumed gain. Transfer is subject to capital
gains tax, not donors tax
Exemptions from gross gift: Even if exempted, donor must still file a return

Dowry. Gifts by reason of marriage. 10,000, each parent.


Requisites:
o
Given on account of marriage
o
Before celebration or 1 year after
o
Donor is the parent
o
Donee is legitimate, recognized natural or legally
adopted child

Gifts in favor of the national government

Gifts in favor of charitable organizations

Contributions for election campaign. Governed by Election Code


Splitting of donations. Practice of dividing donations into different taxable
periods so as to take advantage of tax exemptions

BUSINESS TAXES
VALUE-ADDED TAX. Tax imposed on the gross selling price of goods,
properties and services, or lease of properties in the course of business

Output tax. VAT on the sale or lease

Input tax. VAT on the purchase or lease. Categories:


o
Input tax credit
o
Transitional input tax. 8%
o
Presumptive input tax. Applicable to special types of
business. 1.5%
o
Creditable withholding tax. Applicable only to the
government. 5%

VAT payable. Difference between output and input tax


Characteristics of VAT:

Tax on value added of a taxpayer

Collected through tax credit method

Transparent form of sales tax

Broad-based tax on the consumption of goods, properties or


services within the Philippines

Indirect tax shifted to the purchaser or lessee

Tax inclusion rule. Unless otherwise indicated on the receipt, VAT


is presumed included in the purchase price

There is no cascading in the VAT system. No tax pyramiding.


Instances where VAT is imposed without an actual sale or lease: (IDI)

Importation of goods. VAT imposed on the importer-buyer

Issuance of VAT receipt for exempt sales. Sale of goods should


normally be evidenced by non-VAT receipts. However, issuance of
VAT receipt makes the seller liable for VAT on the otherwise
exempt transaction.

Deemed sales. Situation where the seller is effectively the final


consumer. Purpose: recapture VAT that was claimed as input tax.
o
Consumption of goods originally intended for sale,
which are not in the course of business
o
Transfer of goods to shareholders as dividends or
creditors as payment of debt
o
Consignment of goods, if actual sale is not made within 60d
o
Cessation of business with respect to inventory of
taxable goods
Cross border doctrine. Otherwise known as the destination principle.
Destination of goods determines the transactions taxability. Exports are
zero-rated, while imports are subject to VAT.
In the case of services, follow the situs-of-service principle. Place of
consumption is the place of performance.
Zero-rated transactions. Taxable transactions that do not result in output
tax. However, the input tax may be claimed as a tax refund or credit. Ex:
Types of zero-rated transactions:

Actual. Taxpayer sells to foreign buyers. No need for approval


from BIR. Ex: export sales by VAT-registered person

Constructive. Taxpayer sells to foreign territories which are


actually within the Philippines. Territories are exempt by virtue of
special laws. Needs approval from BIR. Ex: sales to companies
within PEZA and MEPZ
Prescriptive period for VAT refund or credit: 2y after close of taxable quarter
Exempt transactions. Not subject to output tax nor allowed tax credit or
refund. Input tax is considered part of acquisition cost or business expense
VAT taxable person: Failure to register does not exculpate him from liability.

Taxpayer who:
o
Undertakes taxable transactions in goods, properties
or services destined for consumption in the Philippines
o
Such transactions are entered into in the course of business
o
Amount of gross sales are over the threshold. If less
than the threshold, taxpayer has the option to use
percentage tax of 3% instead of VAT

Importer of taxable goods. Regardless if importation is in the


course of business

Elements of a VAT taxable transaction:


Sale of goods:

Actual or deemed sale

In the course of business

Goods are for consumption in the Philippines

Not exempt by law


Sale of real property:

Seller executes a deed of conveyance

Property is within the Philippines

Seller is engaged in the real estate business

Real property is held primarily for sale or lease

Not exempt by law


Sale of services:

Performed in the course of business in the Philippines

For a valuable consideration received

Not exempt by law


Transitional input tax. Person may claim transitional input tax on his
beginning inventories if he:

Becomes liable for VAT for the first time. Ex: new legislation
makes him liable or he exceeds the threshold

Registers as VAT-registered

Already VAT-registered, deals with VAT exempt goods or


properties that have become taxable under new legislation
OTHER BUSINESS TAXES. Ex:

Percentage tax

Franchise tax

Oversees communication tax

Tax on banks and financial intermediaries

Tax on finance companies

Tax on life insurance premiums

Amusement tax
TAX REMEDIES
ASSESSMENT. To impose a tax and determine the correct amount to be paid.
Legal and factual bases of the assessment must be stated. Otherwise
assessment is void
CIR cannot be compelled by mandamus to issue an assessment
Self-assessment. First step of the assement process. Done by the taxpayer
via filing of tax return and payment of the entire tax due as shown thereon.
Amendment of return. Taxpayer may amend return within 3y from filing.
Except: when notice for audit or investigation has been served
BIR may amend the assessment if done within the 3y from filing
False return. Involves only deviations of truth
Fraudulent return. Involves intentional wrongdoing to avoid tax
Best evidence obtainable rule. When taxpayer fails to file tax return within
the time fixed by law or when there is reason to believe that such report is
false, CIR may assess proper tax based on the best evidence obtainable.
Prima facie correct. Reason: public policy, regularity and lifeblood
Taxpayer must be subpoenaed before best evidence obtainable rule is used
Burden of proof on the taxpayer contesting the assessment. Prove not only
that the CIR is wrong, but also that the taxpayer is right
The government is never estopped by the errors of its agents from collecting
the correct amount of taxes
Net worth method. Assessment is based on the increase in taxpayers net
worth plus a reasonable allowance for living expenses and plus or minus
adjustments for other items within period.
Prescriptive period. Return is filed:

Before last day of filing, considered on last day of filing. 3y from


last day of filing

Beyond last day of filing. 3y from the date of actual filing


In case of failure to file, or filing of false or fraudulent return, 10y after
discovery of fraud or omission. Failure to prove fraud can be fatal to the
assessment, if such is made beyond the regular 3y prescriptive period
If there is a substantial amendment to the return, prescriptive period for
assessment shall start to run from the date of filing of amended return

Taxpayer files self-assessed tax return

BIR issues PAN*

Taxpayer reply. 15d


from receipt PAN

BIR issues FAN and letter of demand

Taxpayer files protest. 30d from receipt

Nature of protest:
Motion for
Reconsideration

Nature of protest:
Motion for
Reinvestigation

Submit additional
documents. 60d
from filing

Protest denied. Appeal CIR. 30d from receipt

Final decision of CIR within 180d


or inaction for the same period
Appeal CTA division. 30d from
receipt of final decision or expiry
of 180d period of inaction

Final decision.
Appeal Secretary
of Finance. Does
not suspend 30d
period of appeal
to CTA

Decision CTA division. Motion for reconsideration en banc.


15 days from receipt

Decision CTA en banc. Appeal SC. 15 days from receipt


* Although taxpayer may choose not to reply to the PAN, non-issuance of PAN violates due process
Remedies are mutually exclusive. Choice of one bars the choice of the other (RCBC v. CIR [2007])

Reconsideration. Re-evaluation of assessment without need of additional evidence


Reinvestigation. Re-evaluation of assessment on the basis of newly
discovered evidence
Delinquent tax. Failure to pay assessed tax on the date prescribed by law. To
be considered delinquent, requires a final and executory decision
Deficient tax. Insufficient payment of assessed tax. To be considered
deficient, does not require a final and executory decision
Jeopardy assessment. Delinquency tax assessment without the benefit of a
complete and preliminary audit by an authorized revenue officer who has
reason to believe that the assessment and collection of a deficiency tax will
be jeopardized by delay because of the taxpayers failure to comply with the
audit and investigation requirements.
Assessment based on best evidence obtainable.
Prima facie correct. Reason: public policy, regularity and lifeblood.
Tax agent. Demand on tax agent is deemed demand on taxpayer if:

Agent is equipped with SPA executed by taxpayer

Agent is duly accredited


Instances of implied denial of protest:

Inaction of CIR

Referral of CIR of motion for reinvestigation to SolGen

Reiterating demand for payment

Preliminary collection letter

Filing of civil action for collection

ADMINISTRATIVE REMEDIES OF GOVERNMENT


Distraint, levy and garnishment proceedings may be validly commenced by
the issuance of the warrant and service thereof to taxpayer.
Tax lien. Legal claim or charge on taxpayers property as security for payment
of tax. Resorted to when taxpayer neglects or refuses to pay after demand.
Tax liens are given preference over any other claim. Lifeblood
Distraint. The collection is enforced on personal property of the taxpayer.

Actual. Resorted to when taxpayer fails to pay his delinquent


obligation. Actual seizure of personal property

Constructive. Resorted to when there is no actual delinquency.


Taxpayer signs a receipt of property subject to distraint. Requires:
o
Taxpayer retiring from taxable business
o
Intends to leave the Philippines
o
Removes his property from the Philippines or performs
other act tending to obstruct collection of tax due
Levy. The collection is enforced on real property of the taxpayer.
Garnishment. The collection is enforced on bank account of the taxpayer.
CIR authorized to issue warrant of garnishment pending protest with the BIR,
but not pending appeal with CTA. Reason: NIRC does not require CIR to rule
first on protest before he can collect assessed tax.
Sale of property. Public auction of assets collected via warrant of distraint.
Any excess is returned to the taxpayer. Failure to issue notice, voids auction
Forfeiture. Resorted to in case there is no bidder at public auction or if the
highest bid is insufficient to pay the obligation
Right to redeem property: within 1y from the forfeiture, exercised by
taxpayer or any other person for him
Compromise. CIR may lessen tax liability when:

Reasonable doubt as to validity of the claim. Minimum


compromise rate 40% basic tax

Financial position of taxpayer shows clear inability to pay.


Minimum compromise rate 10% basic tax
Taxpayers offer to compromise requires him to waive his bank secrecy right
Cases which cannot be compromised:

Payment of withholding tax. Withholding tax is not a tax, but a


mere method of collecting tax

Cases involving fraud

Criminal violations already filed in court

Cases involving accounts with approved schedule of installments


Abatement. CIR may cancel the tax liability when:

Unjust or excessive assessment

Costs do not justify collection of the amount due


Tax amnesty. Removes all liability for nonpayment of taxes
Tax exemption. Removes only civil liability for nonpayment of taxes
CIR authority to compromise or abate is not absolute. CTA may inquire into
allegations of abuse of such power
Penalties and fines. Compromise penalty is the amount paid to compromise
a tax violation, which may be subject to criminal prosecution. Compromise is
the amount paid to settle taxpayers civil liability for tax. Both require mutual
agreement between CIR and taxpayer.
Suspension of business operations

JUDICIAL REMEDIES OF GOVERNMENT


No injunction rule. Only the CTA may grant an injunction for collection of
taxes (218 NIRC). Rule only applies to collection of NIRC taxes. Hence, lower
courts can issue injunction for collection of local and real property taxes, as
well as customs duties
Civil action. Initiated by the government only the liability becomes
delinquent and collectible
Prescriptive period. 5y from date of assessment.
Collection enforced by:

Filing a civil case for collection of sum of money in proper court

Filing answer to petition for review filed by taxpayer with CTA


Delinquency arises when:

Self-assessed tax is not paid within the date prescribed by law

Final assessment is not timely protested

Non-compliance with conditions for approval of protest

Failure to file timely appeal with CTA


Civil penalties. Generic term referring to surcharges, penalties, deficiency
and delinquency interests, and compromise penalties
Surcharge. 25%. Following instances:

Late return. Failure to file return on the date prescribed

Wrong venue. Filing of return in the wrong district office

Delinquency. Failure to pay deficiency tax on date prescribed

Deficiency. Failure to pay tax in the amount shown in the return


Fraud penalty. 50%. Prima facie fraudulent when difference exceeds 30%
A return may not necessarily be fraudulent where it appears that it was not
prepared by the taxpayer but his accountant
Delinquency interest. Interest due on amount not paid before date
Deficiency interest. Interest due for failure to pay:

Amount due on any return required to be filed

Amount due for which no return is required

Civil penalty thereon on due date appearing in the notice and


demand of the CIR
Compromise penalty. Amount paid to compromise a criminal violation
Criminal action. Crimes punishable by NIRC:

Tax evasion

Failure to file a return or filing of a fraudulent return, failure to


pay tax, withhold and remit tax, or refund excess tax withheld
Important principles on criminal action:

No criminal action without approval of CIR

Criminal cases are brought in the name of the government

Grant of motion to dismiss is based on judges personal conviction

Acquittal does not necessarily result in exoneration of civil liability

Judgment shall not only impose penalty, but also order payment

Assessment is not necessary before criminal action can be filed.


Ex: if based on failure to file a return

Criminal action may be filed during pendency of protest. Requires:


o
Violator knowingly and willfully filed fraudulent return
o
Intent to evade tax
o
Final determination of tax due

REMEDIES OF TAXPAYERS
Determination of tax liability
General: NIRC taxes are self-assessing and require no further assessment by
the government to impose tax liability
Except:

Tax period of taxpayer is terminated

Deficiency liability resulting from tax audit

Tax lien

Dissolving corporation
Substantive remedies

Question constitutionality of tax statute

Non-retroactivity of BIR rulings. Rulings may be modified,


reversed or revoked by the CIR at any time. However, such
subsequent ruling shall not be given retroactive effect. Except:
o
Facts subsequently gathered are materially different
from the facts on which the subsequent ruling is based
o
Taxpayer files fraudulent return
o
Taxpayer in bad faith

Void assessment. Ex: fail to state legal and factual basis for assessment

Taxpayer assessed more than once per year

Non-publication of revenue memorandum orders or circulars


imposing a tax
Administrative and judicial remedies
Before payment:

Protest. Must state the:


o
Nature of the protest:

Reinvestigation

Reconsideration
o
Date of assessment
o
Legal and factual basis
Failure to state results in void protest.

Appeal. Filing of an appeal with CTA does not stop the collection
process. Taxpayer must file an injunction
See previous flowchart for details
After payment:

Claim for tax credit

Claim for tax refund


CIR may, even without a written claim, credit or refund any tax. Provided
that, on the face of the return, payment appears to be erroneous
Appeal to the CTA gives the court exclusive jurisdiction over the case. Hence,
cases filed in the lower courts should be dismissed
Prescription must be raised at the administrative level
Waiver of prescription is strictly construed against the government.
Prescriptive period for assessment. 3y from filing of return
If there is a substantial amendment to the return, prescriptive period for
assessment shall start to run from the date of filing of amended return
Prescriptive period for collection. 5y from date of assessment
Extension of prescriptive period. Taxpayer and CIR may execute written
waiver extending period for assessment and collection

Waiver is ineffective if executed beyond prescriptive period

Filing of bond is tantamount to written waiver

Waivers may extend the prescriptive period, but not reduce

Waivers must be signed by taxpayer and CIR or his duly


authorized representative

The following must be indicated:


o
Amount of tax
o
Kind of tax
o
Date of acceptance by BIR
o
Date of receipt by taxpayer
Interruption of prescriptive period. Running of period is only suspended if:

CIR is prohibited from making assessment or beginning distraint


and levy proceedings. Ex: pendency of appeal with CTA

Motion for reinvestigation is granted

Taxpayer cannot be located

Warrant of distraint and levy is served, but no property could be


located

Taxpayer is out of the Philippines

Tax credit. Takes place upon issuance of tax credit certificate, which is
applied to any sum due and collected from taxpayer based on the NIRC,
except withholding tax
Tax refund. Takes place when there is actual reimbursement. Withholding
tax agent may claim refund. Reason: agent is also personally liable for
withholding tax, he is a party-in-interest
An action for refund or credit may be maintained whether or not taxpayer
has paid under protest
Choice of either tax credit or refund is irrevocable for the taxable period
Requirements for a tax credit or refund:

Written claim by the taxpayer

Categorical demand for reimbursement

Filed with CIR or proper court within prescriptive period


Tax credit v. tax deduction. Former is subtracted directly from taxpayers tax
liability, while latter is subtracted from income prior to application of tax rate
Prescriptive period for tax credit or refund. 2y from payment, regardless of
supervening cause. Applies to administrative and judicial levels. Therefore, if
the 2y prescriptive period is about to lapse while appeal is pending with the
CIR, taxpayer should file an appeal with the CTA before lapse of the period
In case of corporate income tax, period is counted from date of filing of final
adjustment return, not from the quarterly return
In case of VAT, 2y after close of taxable quarter when transactions made
In case of withholding, 2y after filing of final withholding tax return and
payment thereof
Exhaustion of administrative remedies. Taxpayer may not resort to courts of
justice without first exhausting available administrative remedies. Except:

Question is purely legal

Act is patently illegal

Grave abuse of discretion

Respondent is department secretary. Acts as alter ego of the


president bear implied approval of the latter

Circumstances require urgent judicial intervention


Jurisdiction of the CTA. Not exceeding 1,000,000 RTC orig, CTA app
LOCAL GOVERNMENT CODE
LOCAL BUSINESS TAXES
Each local government has the power to create its own sources of revenue
and levy taxes subject to limitations Congress may provide. Such taxes accrue
exclusively to the LGU. Article X, 1987 Constitution
Power vested with local legislative bodies (Sanggunian)
Local taxes must not be unjust, excessive, oppressive, confiscatory or
contrary to declared national economic policy. Cannot be imposed without a
public hearing prior to the enactment of the ordinance
Limitations:

Constitutional

Inherent

Congressional
Common limitations:

Income tax, except on financial institutions

Documentary stamp tax

Taxes on acquisitions provided in NIRC

Customs duties provided in Customs Code

Impositions on goods passing through jurisdiction LGU

Tax on agricultural and aquatic products sold by marginal farmers


or fishermen

Tax on business enterprises certified by Board of Investment

Excuse taxes on articles enumerated under NIRC and on


petroleum products

Percentage tax or VAT

Common carriers tax

Taxes on premiums for reinsurance

Taxes for issuance of driving licenses or permits, except tricycles

Taxes on exported local products

Taxes on Countryside, BMBE and cooperatives

Taxes on the national government and its instrumentalities

Taxes by province:

Tax on transfer of real property

Tax on printing and publication

Franchise tax

Tax on quarry resources

Professional tax

Amusement tax

Tax for delivery truck or van


Taxes by municipalities and cities:

Manufacturers and other processors of articles of commerce

Dealers in articles of commerce

Exporters, manufacturers and processors of essential


commodities

Retailers

Contractors

Banks and financial institutions

Peddlers

Any business not otherwise specified


Taxes by barangays

Tax on stores with fixed establishments, gross sales 50,000 or less


in cities, 30,000 in municipalities

Fees and charges on:


o
Use of barangay-owned properties
o
Commercial breeding of fighting cocks, cockfights and
cockpits
o
Admission fee for places of recreation
o
Outdoor advertisements
o
Barangay clearance
Accrual: on January 1. Except: may be paid in quarterly installments.
Surcharges and interest may apply
Review of tax ordinances:

Within 3d after approval. City Sanggunian >> Provincial

Within 10d after enactment. Barangay >> City


Receiving Sanggunian review within 30d of receipt. Inaction = approval
Steps to challenge validity of tax ordinance:

Taxpayer appeals to Secretary of Justice within 30d from effectivity

Decision of SoJ within 60d from receipt or inaction

Appeal to court of competent jurisdiction within 30d from receipt


of decision or lapse of 60d period of inaction
Assessment procedure. Follow this procedure if protest is based on
assessment. If based on validity of ordinance, resort to regular courts

Local treasurer assess taxes within periods provided

Local treasurer issues notice of assessment

Taxpayer pays under protest. No protest shall be entertained


unless the tax is first paid.

Taxpayer files protest within 60d from receipt of notice

Local treasurer decides within 60d from protest

Taxpayer appeals to court of competent jurisdiction within 30d


from receipt of the decision or lapse of 60d period of inaction
Remedies of LGU:

Distraint

Levy

Judicial action
Prescriptive periods:

Assessment. 5y from due date

Fraud. 10y from discovery

Collection. 5y from assessment

REAL PROPERTY TAX


National, not local tax. However, proceeds accrue to the LGU where property
is situated.
Accrual: on January 1. Transfer to an exempt person does not retroact to the
date of accrual. Hence, original owner still liable.
For assessment purposes, actual use refers to the principal utilization of
the property by the person in possession. Thus, even if user is not the owner,
he may be subject to real property tax
Components:

Annual ad valorem tax. 1% province. 2% Metro Manila

Special levies:
o
Special education fund. 1%
o
Tax on idle lands. 5%
o
Special levy or assessment. Owner contributes to the
cost of local improvements shouldered by the
government but inure to his benefit. Not to exceed
60% of the cost of the improvement
Properties exempt from real property tax:

Government-owned properties

Properties used ADE-RCE

Machineries and equipment used by energy and water GOCCs

Cooperative-owned properties

Machineries and equipment for environmental protection


Assessment of land value:

Local assessor makes appraisal based on fair market value

Local assessor classifies property based on actual use

Local assessor fixes assessed value

Local assessor gives notice of assessment to owner

Taxpayer files protest with Local Board of Assessment Appeals


(LBAA) within 60d from receipt of notice

LBAA decision within 120d from protest

Taxpayer appeals to Central Board of Assessment Appeals (CBAA)


within 30d from receipt of decision

Taxpayer appeals to CTA within 15d from receipt

Taxpayer appeals to SC within 15d from receipt


Assessment/collection of real property tax:

Local assessor submits assessment roll to local treasurer

Local treasurer informs public of due date

Local treasurer assesses and collects

Taxpayer pays under protest

Taxpayer files written protest with local treasurer

Local treasurer decision within 60d from protest

Taxpayer appeals to LBAA 60d from receipt of decision or lapse of


the 60d period of inaction

LBAA decides within 120d

Taxpayer appeals to CBAA within 30d from receipt of decision

Taxpayer appeals to CTA within 15d from receipt

Taxpayer appeals to SC within 15d from receipt


General: where the assessment is merely erroneous, taxpayer who pays
under protest must observe exhaustion of administrative remedies
Except: where the assessment is illegal and void, taxpayer who pays under
protest may sue for a refund in the proper RTC (Victorias Milling v. CTA)

TARIFF AND CUSTOMS CODE


Customs duties. Taxes on the import and export of commodities
Types of duties:

Regular. Ad valorem duties

Special. Cannot be imposed without regular duties:


o
Dumping. Price of imported goods is deliberately fixed
at less than fair market value, which would likely cause
injury to local industries
o
Countervailing. Imposed to offset an excise tax
imposed on the same class of goods manufactured
locally; or to offset subsidies to foreign manufacturers
from their respective governments
o
Marking duties. Imposed on articles improperly
marked to prevent possible deception of the public
o
Discriminatory. Imposed against goods of a foreign
country which discriminates against Philippine goods.
Jurisdiction: exclusive jurisdiction over seizure and forfeiture of goods is
vested in the Collector of Customs (CoC). Appealable to Commissioner of
Customs, then CTA, then SC
Rules:

Final assessment made by the CoC is called a liquidation

Basis for duties is the transaction value of the goods (ad valorem)

Payment under protest is necessary to claim a refund

Government is liable for duties. Except: if able to present


certification that goods are to be used for government function

Goods may be subject to import duties even if previously


exported if there is an increase in value

Failure to claim seized goods within 15d is considered


abandonment of gods in favor of the government. Notice of such
seizure is generally sent to owner. However, it may also be published

CoC may release the seized goods, for a legitimate purpose, upon
the posting of a bond
Importation begins from the time the carrying vessel enters Philippine
jurisdiction with intention to unload
Importation ends when the goods are withdrawn from the customs house
upon payment of customs duties and with permit to withdraw
Flexible tariff clause. Authority given to the president to adjust tariff rates
under the TCC and constitution
Automatic review. Decisions of the CoC in favor of the taxpayer is
automatically reviewed by the Commissioner of Customs and Secretary of
Finance. Purpose: to protect the interest of the government in the collection
of taxes
Doctrine of drawback. When imported goods are subject to duties but are
later re-exported, taxpayer may be entitled to a refund. Ex: when imported
goods were used to manufacture exported products. Provided that, such
exportation was made 3y after importation
Search and seizure. CoC may conduct a warrantless search in any building
Except: dwelling houses. Garage/warehouse is not a dwelling house even if
someone resides therein. If there is a separation between garage,
warehouse, etc from dwelling house, only dwelling house is exempted from
warrantless search
Seizure of vehicles. Vehicles used for unlawfully importation of smuggled
goods may be seized and forfeited. Except: if owner had no knowledge of the
unlawful act. However, owner is presumed to have knowledge if he is not in
the business of transporting goods, i.e. not a common carrier