Kapatiran ng mga Naglilingkod sa Pamahalaan v Tan GR No 81311

June 30, 1988

FACTS:
EO 372 was issued by the President of the Philippines which
amended the Revenue Code, adopting the value-added tax (VAT)
effective January 1, 1988. Four petitions assailed the validity of the
VAT Law from being beyond the President to enact; for being
oppressive, discriminatory, regressive and violative of the due
process and equal protection clauses, among others, of the
Constitution. The Integrated Customs Brokers Association
particularly contend that it unduly discriminate against customs
brokers (Section 103r) as the amended provision of the Tax Code
provides that service performed in the exercise of profession or
calling (except custom brokers) subject to occupational tax under
the Local Tax Code and professional services performed by
registered general professional partnerships are exempt from VAT.
ISSUE:
Whether the E-VAT law is void for being discriminatory against
customs brokers
RULING:
No. The phrase except custom brokers is not meant to
discriminate against custom brokers but to avert a potential conflict
between Sections 102 and 103 of the Tax Code, as amended. The
distinction of the customs brokers from the other professionals who
are subject to occupation tax under the Local Tax Code is based on
material differences, in that the activities of customs partake more
of a business, rather than a profession and were thus subjected to
the percentage tax under Section 174 of the Tax Code prior to its
amendment by EO 273. EO 273 abolished the percentage tax and
replaced it with the VAT. If the Association did not protest the
classification of customs brokers then, there is no reason why it
should protest now.
FORT BONIFACIO DEVELOPMENT CORPORATION vs. COMMISSIONER
OF INTERNAL REVENUE- Transitional Input Value Added Tax
FACTS
Petitioner was a real estate developer that bought from the national
government a parcel of land that used to be the Fort Bonifacio
military reservation. At the time of the said sale there was as yet no
VAT imposed so Petitioner did not pay any VAT on its purchase.
Subsequently, Petitioner sold two parcels of land to Metro Pacific
Corp. In reporting the said sale for VAT purposes (because the VAT

had already been imposed in the interim), Petitioner claimed

transitional input VAT corresponding to its inventory of land. The
BIR disallowed the claim of presumptive input VAT and thereby
assessed Petitioner for deficiency VAT.
ISSUE
Is Petitioner entitled to claim the transitional input VAT on its sale of
real properties given its nature as a real estate dealer and if so (i) is
the transitional input VAT applied only to the improvements on the
real property or is it applied on the value of the entire real property
and (ii) should there have been a previous tax payment for the
transitional input VAT to be creditable?
HELD
YES. Petitioner is entitled to claim transitional input VAT based on
the value of not only the improvements but on the value of the
entire real property and regardless of whether there was in fact
actual payment on the purchase of the real property or not.
The amendments to the VAT law do not show any intention to make
those in the real estate business subject to a different treatment
from those engaged in the sale of other goods or properties or in
any other commercial trade or business. On the scope of the basis
for determining the available transitional input VAT, the CIR has no
power to limit the meaning and coverage of the term "goods" in
Section 105 of the Tax Code without statutory authority or basis.
The transitional input tax credit operates to benefit newly VATregistered persons, whether or not they previously paid taxes in the
acquisition of their beginning inventory of goods, materials and
supplies.
CS Garment, Inc. v CIR, G.R. No. 182399, March 12, 2014
CS Garment, Inc. v CIR, G.R. No. 182399, March 12, 2014

I.
The Tax Amnesty Law intended the immediate
enjoyment of the immunities and privileges after the requirements
are fulfilled by the taxpayer.

The OSG has already confirmed26 to this Court that CS Garment

has complied with all of the documentary requirements of the law.
Consequently, and contrary to the assertion of the OSG, no further

assessment by the BIR is necessary. CS Garment is now entitled to

invoke the immunities and privileges under Section 6 of the law.

fraud investigation in order to collect all taxes due and to criminally

prosecute those found to have willfully evaded lawful taxes due.

Similarly, we reject the contention of OSG that the BIR was given a
one-year period to contest the correctness of the SALN filed by CS
Garment, thus making petitioners motion premature. Neither the
2007 Tax Amnesty Law nor Department of Finance (DOF) Order No.
29-07 (Tax Amnesty Law IRR) imposes a waiting period of one year
before the applicant can enjoy the benefits of the Tax Amnesty Law.
It can be surmised from the cited provisions that the law intended
the immediate enjoyment of the immunities and privileges of tax
amnesty upon fulfilment of the requirements. Further, a reading of
Sections 4 and 6 of the 2007 Tax Amnesty Law shows that Congress
has adopted a no questions asked policy, so long as all the
requirements of the law and the rules are satisfied. The one-year
period referred to in the law should thus be considered only as a
prescriptive period within whichthird parties, meaning parties
other than the BIR or its agents, can question the SALN not as a
waiting period during which the BIR may contest the SALN and the
taxpayer prevented from enjoying the immunities and privileges
under the law.

II.
Only a final and executory decision will preclude the
availment of the benefits of the Tax Amnesty Law.

This clarification, however, does not mean that the amnesty

taxpayers would go scot-free in case they substantially understate
the amounts of their net worth in their SALN. The 2007 Tax
Amnesty Law imposes a resolutory condition insofar as the
enjoyment of immunities and privileges under the law is concerned.
Pursuant to Section 4 of the law, third parties may initiate
proceedings contesting the declared amount of net worth of the
amnesty taxpayer within one year following the date of the filing of
the tax amnesty return and the SALN. Section 6 then states that
All these immunities and privileges shall not apply x x x where the
amount of networth as of December 31, 2005 is proven to be
understated to the extent of thirty percent (30%) or more, in
accordance with the provisions of Section 3 hereof.

Accordingly, Section 10 provides that amnesty taxpayers who

willfully understate their net worth shall be (a) liable for perjury
under the Revised Penal Code; and (b) subject to immediate tax

Commissioner of Internal Revenue v. Seagate Technology

G.R. No. 153866. February 11, 2005
FACTS:
Respondent is a resident foreign corporation duly registered with
the Securities and Exchange Commission to do business in the
Philippines and is registered with the Philippine Export Zone
Authority (PEZA). The respondent is Value Added Tax-registered
entity and filed for the VAT returns. An administrative claim for
refund of VAT input taxes in the amount of P28,369,226.38 with
supporting documents (inclusive of the P12,267,981.04 VAT input
taxes subject of this Petition for Review), was filed on 4 October
1999 and no final action has been received by the respondent from
the petitioner on the claim for VAT refund. Hence, petitioner is sued
in his official capacity. The Tax Court rendered a decision granting
the claim for refund and CTA affirmed the decision. Hence, the
present petition for certiorari.
ISSUE:
Whether or not respondent is entitled to the refund or issuance of
Tax Credit Certificate in the amount of P12,122,922.66 representing
alleged unutilized input VAT paid on capital goods purchased for the
period April 1, 1998 to June 30, 1999
HELD:
The Petition is unmeritorious. As a PEZA-registered enterprise
within a special economic zone, respondent is entitled to the fiscal
incentives and benefit provided for in either PD 66 or EO 226. It
shall, moreover, enjoy all privileges, benefits, advantages or
exemptions under both Republic Act Nos. (RA) 7227 and 7844.
Respondent as an entity is exempt from internal revenue laws and
regulations. This exemption covers both direct and indirect taxes,
stemming from the very nature of the VAT as a tax on consumption,
for which the direct liability is imposed on one person but the
indirectburden is passed on to another. Respondent, as an exempt
entity, can neither be directly charged for the VAT on its sales nor
indirectly made to bear, as added cost to such sales, the equivalent

VAT on its purchases. The exemption is both express and

pervasive, among other reasons, since RA 7916 states that no
taxes, local and national, shall be imposed on business
establishments operating within the ecozone. Even though the VAT
is not imposed on the entity but on the transaction, it may still be
passed on and, therefore, indirectly imposed on the same entity -- a
patent circumvention of the law. That no VAT shall be imposed
directly upon business establishments operating within the ecozone
under RA 7916 also means that no VAT may be passed on and
imposed indirectly. Quando aliquid prohibetur ex directo prohibetur

et per obliquum. When anything is prohibited directly, it is also

prohibited indirectly. Special laws expressly grant preferential tax
treatment to business establishments registered and operating
within an ecozone, which by law is considered as a separate
customs territory. As such, respondent is exempt from all internal
revenue taxes, including the VAT, and regulations pertaining
thereto. Thus, the petition is denied and the decision of lower
courts affirmed.