CIR vs. Solidbank Corp., G.R. No. 148191, Nov.

25, 2003
Facts:
Solidbank filed its Quarterly Percentage Tax Returns reflecting gross
receipts amounting to P1,474,693.44. It alleged that the total included
P350,807,875.15 representing gross receipts from passive income
which was already subjected to 20%final withholding tax (FWT).
The Court of Tax Appeals (CTA) held in Asian Ban Corp. v
Commissioner, that the 20% FWT should not form part of its taxable
gross receipts for purposes of computing the tax.
Solidbank, relying on the strength of this decision, filed with the BIR a
letter-request for the refund or tax credit. It also filed a petition for
review with the CTA where the it ordered the refund.
The CA ruling, however, stated that the 20% FWT did not form part of
the taxable gross receipts because the FWT was not actually received
by the bank but was directly remitted to the government.
The Commissioner claims that although the FWT was not actually
received by Solidbank, the fact that the amount redounded to the
banks benefit makes it part of the taxable gross receipts in computing
the Gross Receipts Tax. Solidbank says the CA ruling is correct.
Issue:
Whether or not the FWT forms part of the gross receipts tax.
Held:
Yes. In a withholding tax system, the payee is the taxpayer, the person
on whom the tax is imposed. The payor, a separate entity, acts as no
more than an agent of the government for the collection of tax in order
to ensure its payment. This amount that is used to settle the tax
liability is sourced from the proceeds constitutive of the tax base.
These proceeds are either actual or constructive. Both parties agree
that there is no actual receipt by the bank. What needs to be
determined is if there is constructive receipt. Since the payee is the
real taxpayer, the rule on constructive receipt can be rationalized.
The Court applied provisions of the Civil Code on actual and
constructive possession. Article 531 of the Civil Code clearly provides
that the acquisition of the right of possession is through the proper
acts and legal formalities established. The withholding process is one
such act. There may not be actual receipt of the income withheld;
however, as provided for in Article 532, possession by any person

without any power shall be considered as acquired when ratified by the

person in whose name the act of possession is executed.
In our withholding tax system, possession is acquired by the payor as
the withholding agent of the government, because the taxpayer ratifies
the very act of possession for the government. There is thus
constructive receipt.
The processes of bookkeeping and accounting for interest on deposits
and yield on deposit substitutes that are subjected to FWT are
tantamount to delivery, receipt or remittance. Besides, Solidbank
admits that its income is subjected to a tax burden immediately upon
receipt, although it claims that it derives no pecuniary benefit or
advantage through the withholding process.
There being constructive receipt, part of which is withheld, that income
is included as part of the tax base on which the gross receipts tax is
imposed.

CIR vs. Bank of Commerce; G.R. no. 149636, June 8, 2005

FACTS:
In 1994 and 1995, the respondent Bank of Commerce
derived passive income in the form ofinterests or discounts from its
investments in government securities and private commercial
papers.On several occasions during that period, it paid 5% gross
receipts tax on its income. Included thereinwas the respondent banks
passive income from the said investments amounting to P
85,384,254.51,which had already been subjected to a final tax of 20%.
Meanwhile, the CTA rendered judgment in Asia Bank Corporation v.
Commissioner of InternalRevenue, holding that the 20% final
withholding tax on interest income from banks does not form partof
taxable gross receipts for Gross Receipts Tax (GRT) purposes. The CTA
relied on Section 4 (e) ofRevenue Regulations (Rev. Reg.) No. 12-80.
The respondent bank then filed an administrative claim for refund,
claimed that it had overpaid itsgross receipts tax for 1994 to 1995 by P
853,842.54.
ISSUES:
(1) Does the 20% final withholding tax on banks interest income form
part of the taxable grossreceipts in computing the 5% gross receipts
tax?
(2) Is there double taxation?HELD:

(1) Yes. In Far East Bank & Trust Co. v. Commissioner and Standard
Chartered Bank v.Commissioner, both promulgated on 16 November
2001, the tax court ruled that the final withholdingtax forms part of the
banks gross receipts in computing the gross receipts tax. The tax
court held thatSection 4(e) of Revenue Regulations No. 12-80 did not
prescribe the computation of the amount ofgross receipts but merely
authorized the determination of the amount of gross receipts on the
basis ofthe method of accounting being used by the taxpayer.
The
word gross must be used in its plain and ordinary meaning. It is
defined as whole, entire,total, without deduction.
(2) SC reversed the ruling of the CA that subjecting the Final
Withholding Tax (FWT) to the 5% ofgross receipts tax would result in
double taxation.
In CIR v. Solidbank Corporation, SC said that the
two taxes, subject of this litigation, are different from each other. The
basis of their imposition may be the same, but their natures are
different. NODOUBLE TAXATION
Double taxation means taxing the
same property twice when it should be taxed only once; that is,"xxx
taxing the same person twice by the same jurisdiction for the same
thing." It is obnoxious when the taxpayer is taxed twice, when it should
be but once. Otherwise described as "direct duplicate taxation," the
two taxes must be imposed on the same subject matter, for the same
purpose, by the same taxing authority, within the same jurisdiction,
during the same taxing period; and they must be of the same kind or
character.
CIR vs. BPI, G.R. No. 147375, June 26, 2006
Facts:This case arose from the assessment of DST made by the
former Banks Financing and Insurance Division of the BIR on the sale of
foreign exchange to the BSP under a SWAP arrangement. The
transaction starts with the offer of U.S. dollars (Spot sale) by BPI at a
the prevailing exchange rate to the BSP subject to the redemption at
maturity at an agreed exchange rate (forward). Upon acceptance of
the offer, BPI will cable its correspondent bank abroad to remit the
amount of U.S. dollars to the Federal Reserve Bank for credit to the
account of the BSP. As soon as BSP receives the credit advice from the
Federal Reserve Bank, it credits the account of BPI corresponding to
the peso equivalent of the foreign exchange sold.
Issue:Will the transaction give rise to the imposition of the DST?

Held: The SC ruled that the sale of foreign currency per se is not
subject to DST. However, the facility used in the transaction of the
business is the one that is subject to documentary stamp tax.
The SC observed that Section 195 (now Section 182) of the NIRC
covers foreign bills of exchange, letters of credit, and orders for the
payment of money, drawn in the Philippines but payable in a foreign
country. From this enumeration, two common elements need to be
present: (1) drawing the instrument or ordering a drawee, within the
Philippines; and (2) ordering the drawee to pay another person a
specified amount of money outside the Philippines. Clearly, what is
being taxed is the facility that allows a party to draw the draft or make
the order to pay within the Philippines and have the payment made in
another country.
It bears emphasis to mention at this point that while Section 195
(now Section 182) includes within its coverage orders for payment of
money by telegraph or otherwise drawn in but payable out of the
Philippines the documentary stamp tax regulations (RR No. 26) is
more explicit when it said:
Section 51: What may be regarded as telegraphic transfer. If a local
bank cables to a certain bank in a foreign country with which bank said
local bank has a credit, and directs that foreign bank to pay to another
bank or person in the same locality a certain sum of money, the
document for and in respect such transaction will be regarded as a
telegraphic transfer, taxable under the provisions of Section 1449(i) of
the Administrative Code.
This makes the sale of foreign exchange under a swap
arrangement a transaction subject to the DST because of the facility
used in its consummation. There is a cable instruction from the local
bank in the Philippines where payment of foreign currency has to take
place abroad. This is a taxable telegraphic transfer within the
contemplation of law.
CIR vs. City Trust Investment Phils./Asianbank Corp. vs. CIR, G.R. No.
139786, G.R. No. 140857, Sept. 27, 2006
Facts:
Citytrust reported its total gross receipts and paid the 5% GRT
corresponding to it. Citytrust claimed for tax refund, seeking to be
reimbursed of the 5% GRT it paid on the portion of 20% FWT
contending that the 20% final tax on the passive income was already
deducted and withheld by various withholding agents. Hence, the

actual or the exact amount received, as its passive income was less
the 20% final tax and to include the same would constitute double
taxation. SC held that the 20% FWT is included in computing the 5%
GRT and such does not amount to double taxation. The GRT is a
percentage tax, while the FWT is an income tax. The two concepts are
different from each other.
Issue:
WON the 20% FWT on a bank's interest income forms part of the
taxable gross receipts for the purpose of computing the 5% GRT?
Held:
NO
Numerous cases are unanimous in defining "gross receipts" as "the
entire receipts without any deduction. The Tax Code does not provide
a definition of the term "gross receipts". Accordingly, the term is
properly understood in its plain and ordinary meaning and must be
taken to comprise of the entire receipts without any deduction. The
word "gross" must be used in its plain and ordinary meaning. It is
defined as "whole, entire, total, without deduction." Gross is the
antithesis of net.
Republic of the Philippines vs. Sunlife Assurance Company of Canada,
G.R. No. 158085, Oct. 14, 2005
FACTS:
Sun Life Assurance Company of Canada (Sun Life) is a mutual life
insurance company organized and existing under the laws of Canada.
Sun Life is registered and authorized by the Securities and Exchange
Commission (SEC) and the Insurance Commission (IC) to engaged in
business in the Philippines as a mutual life insurance company. Sun Life
filed with the Commissioner of Internal Revenue (CIR) its insurance
premium tax return for the third quarter of 1997, and paid the
necessary premium taxes. Sun Life also filed with the CIR its
documentary stamp tax (DST) declaration returns and paid the total
amount there for the Court of Tax Appeals (CTA) held in one case that
mutual life insurance companies are purely cooperative companies and
are exempt from payment of premium tax and DST. Sun Life filed with
the CIR an administrative claim for tax credit of its alleged erroneously
paid premium tax and DST. CIR failed to act upon the claim for tax
credit

Issue:
Was Sun Life a purely cooperative company/association under Sec.
121, NIRC, organized and conducted solely by the members thereof for
the exclusive benefit of each member and not for profit, and thus
exempt from having to pay premium tax and DST?
Held:
YES. NIRC's definition of a "cooperative": association conducted by the
members thereof with the money collected from among themselves
and solely for their own protection and not for profit. Sun Life is a
cooperative engaged in a mutual life insurance business -- (1) it is
managed by its members, its management and affairs are conducted
by member-policyholders; (2) it is operated with money collected from
its members[-policyholders]; and (3) it is licensed for the mutual
protection of its members, not for the profit of anyone under the Tax
Code, although respondent is a cooperative, registration with the
Cooperative Development Authority (CDA) is not necessary in order for
it to be exempt from premium tax and DST.
Phil. Basketball Association vs. CTA, G.R. No. 119122, Aug. 8, 2000
FACTS:
The PBA received an assessment letter from the Commissioner of
Internal Revenue (CIR) for the payment of deficiency amusement tax.
The PBA contested the assessment by filing a protest with the CIR who
denied the same. The PBA then filed a petition for review with the
Court of Tax Appeals (CTA), in which they held against the PBA.
The PBA filed an appeal with the Court of Appeals which was also
denied.
ISSUES:
Whether the amusement tax on admission tickets to PBA games is a
national tax.
Whether the cession of advertising and streamer spaces to Vintage
Enterprises, Inc. subject to amusement tax.
Held:

YES. The Local Tax Code does not provide for professional basketball
games but rather in PD 1959. It is clear that the "proprietor, lessee or
operator of professional basketball games" is required to pay an
amusement tax of 15% of their gross receipts to the BIR, which
payment is a national tax.
YES. The definition of gross receipts is broad enough to embrace the
cession of advertising and streamer spaces as the same embraces all
the receipts of the proprietor, lessee or operator of the amusement
place. The law being clear, there is no need for an extended
interpretation.
British American Tobacco v Jose Camacho et al., G.R. No. 163583,
August 20, 2008; motion for reconsideration, April 15, 2009
Facts:
To implement RA 8240, the Bureau of Internal Revenue (BIR) issued
Revenue Regulations No. 1-97, 2 whichclassified the existing brands of
cigarettes as those duly registered or active brands prior to January 1,
1997. New brands,or those registered after January 1, 1997, shall be
initially assessed at their suggested retail price until such time that
theappropriate survey to determine their current net retail price is
conducted. In June 2001 British American Tobaccointroduced into the
market Lucky Strike Filter, Lucky Strike Lights and Lucky Strike Menthol
Lights cigarettes, with a suggested retail price of P9.90 per pack. 3
Pursuant to Sec. 145 (c) quoted above, the Lucky Strike brands were
initially assessed the excise tax at P8.96 per pack.On February 17,
2003, Revenue Regulations No. 9-2003, amended Revenue Regulations
No. 1-97 by providing, among others, a periodic review every two years
or earlier of the current net retail price of new brands and variants
thereof forthe purpose of establishing and updating their tax
classification. Pursuant thereto, Revenue Memorandum Order No. 62003 5 was issued on March 11, 2003, prescribing the guidelines and
procedures in establishing current net retail pricesof new brands of
cigarettes and alcohol products. Subsequently, Revenue Regulations
No. 22-2003 6 was issued on August 8, 2003 to implement the revised
tax classification of certain new brands introduced in the market after
January 1, 1997, based on the survey of their current net retail price.
The survey revealed that Lucky Strike Filter, Lucky StrikeLights, and
Lucky Strike Menthol Lights, are sold at the current net retail price of
P22.54, P22.61 and P21.23, per pack,respectively. Respondent
Commissioner of the Bureau of Internal Revenue thus recommended
the applicable tax rate of P13.44 per pack inasmuch as Lucky Strike's
average net retail price is above P10.00 per pack. Thus filed before

theRegional Trial Court (RTC) of Makati, Branch 61, a petition for

injunction with prayer for the issuance of a temporary restraining order
(TRO) and/or writ of preliminary injunction, docketed as Civil Case No.
03-1032. Said petition soughtto enjoin the implementation of Section
145 of the NIRC, Revenue Regulations Nos. 1-97, 9-2003, 22-2003 and
Revenue Memorandum Order No. 6-2003 on the ground that they
discriminate against new brands of cigarettes, in violation of the equal
protection and uniformity provisions of the Constitution. The trial court
rendered a decision upholding the constitutionality of Section 145 of
the NIRC, Revenue Regulations Nos. 1-97, 9-2003, 22-2003 and
Revenue Memorandum Order No. 6-2003
Issue:
W/N the classification freeze provision violates the equal protection
and uniformity of taxation clauses of the Constitution.
Held:
No. In the instant case, there is no question that the classification
freeze provision meets the geographical uniformity requirement
because the assailed law applies to all cigarette brands in the
Philippines. And, for reasons already advertedto in our August 20, 2008
Decision, the four-fold test has been met in the present case. As held in
the assailed Decision,the instant case neither involves a suspect
classification nor impinges on a fundamental right. Consequently, the
rationalbasis test was properly applied to gauge the constitutionality of
the assailed law in the face of an equal protectionchallenge. It has
been held that "in the areas of social and economic policy, a statutory
classification that neitherproceeds along suspect lines nor infringes
constitutional rights must be upheld against equal protection challenge
if thereis any reasonably conceivable state of facts that could provide a
rational basis for the classification."
Exxonmobil Petroleum and Chemical Holdings, Inc. Philippine Branch v
CIR, G.R. No. 180909, January 19, 2011
FACTS: Petitioner Exxon is a foreign corporation duly organized and
existing under the laws of the State of Delaware, United States of
America. It is authorized to do business in the Philippines through its
Philippine Branch, with principal at Ortigas Center, Pasig City.
Exxon is engaged in the business of selling petroleum products to
domestic and international carriers. In pursuit of its business, Exxon
purchased from Caltex Philippines, Inc. (Caltex) and Petron Corporation
(Petron) Jet A-1 fuel and other petroleum products, the excise taxes on
which were paid for and remitted by both Caltex and Petron. Said

taxes, however, were passed on to Exxon which ultimately shouldered

the excise taxes on the fuel and petroleum products.

ISSUE: Whether Exxon, as the distributor and vendor of petroleum

products to international carriers registered in foreign countries which
have existing bilateral agreements with the Philippines, is the proper
party to claim a tax refund for the excise taxes paid by the
manufacturers, Caltex and Petron, and passed on to it as part of the
purchase price.
Held:
The excise tax, when passed on to the purchaser, becomes part of the
purchase price.
Excise taxes are imposed under Title VI of the NIRC. They apply
to specific goods manufactured or produced in the Philippines for
domestic sale or consumption or for any other disposition, and to those
that are imported. In effect, these taxes are imposed when two
conditions concur: first, that the articles subject to tax belong to any of
the categories of goods enumerated in Title VI of the NIRC; and second,
that said articles are for domestic sale or consumption, excluding those
that are actually exported.
Commissioner of Internal Revenue v. Pilipinas Shell Petroleum
Corporation, G.R. No.188497. April 23, 2012
FACTS: Shell (Respondent) is engaged in the business of processing,
treating and refining petroleum for the purpose of producing
marketable products and the subsequent sale thereof.
On July 18, 2002, Shell filed with the Large Taxpayers Audit &
Investigation Division II of the Bureau of Internal Revenue (BIR) a
formal claim for refund or tax credit in the total amount of
P28,064,925.15, representing excise taxes it allegedly paid on sales
and deliveries of gas and fuel oils to various international carriers
during the period October to December 2001. Subsequently, on
October 21, 2002, a similar claim for refund or tax credit was filed by
Shell with the BIR covering the period January to March 2002 in the
amount of P41,614,827.99. Again, on July 3, 2003, Shell filed another
formal claim for refund or tax credit in the amount of P30,652,890.55
covering deliveries from April to June 2002.
Since no action was taken by CIRon its claims, Shell filed
petitions for review before the CTA
CTA (1st Division) ruled that Shell is entitled to the refund of
excise taxes in the reduced amount of P95,014,283.00. The CTA relied

on a previous ruling rendered by the CTA En Banc in the case of

Pilipinas Shell Petroleum Corporation v. Commissioner of Internal
Revenue (2006) where the CTA also granted Shells claim for refund
on the basis of excise tax exemption for petroleum products sold to
international carriers of foreign registry for their use or consumption
outside the Philippines.
CIR elevated the case to the CTA En Banc which upheld the ruling
of the First Division.
ISSUE: Whether Shell as manufacturer or producer of petroleum
products is exempt from the payment of excise tax on such petroleum
products it sold to international carriers.
Held:
No.
Excise taxes, as the term is used in the NIRC, refer to taxes applicable
to certain specified goods or articles manufactured or produced in the
Philippines for domestic sales or consumption or for any other
disposition and to things imported into the Philippines. These taxes are
imposed in addition to the value-added tax (VAT) (Sec 129, NIRC)
Phil. Geothermal, Inc. vs. CIR , G.R . No. 154028, July 29, 2005, 465
SCRA 308
FACTS: Petitioner is a resident foreign corporation licensed by the
Securities and Exchange Commission (SEC) to engage in the
exploration, development and exploitation of geothermal energy and
resources in the Philippines. Petitioner then entered into a service
contract with the National Power Corporation (NPC) to supply steam to
the latter.
Petitioner billed NPC, Value Added Tax (VAT) computed at ten percent
of the service fee charged on the supply of steam. NPC did not pay the
VAT. To avoid any possible tax deficiency, petitioner remitted VAT
equivalent to 1/11 of the fees received from NPC.
Petitioner filed an administrative claim for refund with the Bureau of
Internal Revenue. According to petitioner, the sale of steam to NPC is a
VAT-exempt transaction under the Tax Code. Petitioner claimed that
Fiscal Incentives Review Board (FIRB) Resolution No. 17-87, approved
by President Aquino pursuant to Executive Order No. 93,5 expressly
exempted NPC from VAT.

Since respondent failed to act on the claim, petitioner filed a petition to

toll the running of the two-year prescriptive period before the Court of
Tax Appeals.
ISSUE: whether petitioners supply of steam to NPC is a VAT-exempt
transaction.
Held:
Taxation; National Power Corporation (NPC); It has been the lawmakers
intention that the NPC is to be completely tax exempt from all forms of
taxesboth direct and indirect.In Maceda v. Macaraig, Jr., this Court
ruled that Republic Act No. 358 exempts the NPC from all taxes, duties,
fees, imposts, charges, and restrictions of the Republic of the
Philippines, and its provinces, cities and municipalities. This exemption
is broad enough to include both direct and indirect taxes the NPC may
be required to pay. To limit the exemption granted the NPC to direct
taxes, notwithstanding the general and broad language of the statute,
will be to thwart the legislative intention in giving exemption from all
forms of taxes and impositions, without distinguishing between those
that are direct and those that are not. A chronological review of the
NPC laws will show that it has been the lawmakers intention that the
NPC is to be completely tax exempt from all forms of taxesboth direct
and indirect.
SILKAIR (SINGAPORE) PTE, LTD. v. COMMISSIONER OF INTERNAL
REVENUE. G.R. No. 173594. February 6, 2008
FACTS:
Petitioner is a corporation organized under the laws of Singapore which
has a Philippine representative office, is an online international air
carrier.
Silkair filed with the Bureau of Internal Revenue (BIR) for the refund of
excise taxes for their purchase of jet fuel.
The CIR, in their reply, said that petitioner failed to prove that the sale
of the fuel was directly made from a domestic oil company to them.
The excise tax on petroleum products is the direct liability of the
manufacturer/producer, and when added to the cost of the goods sold
to the buyer, it is no longer a tax but part of the price which the buyer
has to pay to obtain the article.
The CTA denying Silkairs petition stated that as the excise tax was
imposed manufacturer of petroleum products, any claim for refund
should be filed by the latter; and where the burden of tax is shifted to

the purchaser, the amount passed on to it is no longer a tax but

becomes an added cost of the goods purchased.
ISSUE: Whether Silkair PTE. Ltd. can claim for tax credit.
RULING:
No.
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.
Thus, Petron Corporation, not Silkair, is the statutory taxpayer which is
entitled to claim a refund based on Section 135 of the NIRC of 1997.
Even if Petron Corporation passed on to Silkair the burden of the tax,
the additional amount billed to Silkair for jet fuel is not a tax but part of
the price which Silkair had to pay as a purchaser.
Apex Mining Co., Inc. vs. CIR, G.R. No. 122472, Oct. 20, 2005
Facts:
Apex Mining vs. CIRFacts: Apex mining is engaged in the in the
business of mining, milling, concentrating, converting, smelting,
manufacturing, buying, selling and otherwise producing and dealing in
all kinds ofores, metals and mineral, as well as the products and byproducts thereof. In 1988 Apex bought from small miners and from
these transactions the BIR assessed an ad valorem tax. Apex filed a
protest regarding the said ASSESSMENT of ad valorem tax. On 1990
Apex reiterated its protest for ad valorem taxes as applied to the
transactions with small miners. The application was denied and
coupled with demand to pay the taxes. CTA ruled that Apex should pay
the delinquency taxes plus surcharges and interest. The advalorem
taxes were cancelled due to lack of legal basis. CA reveres the ruling of
the CTA as regard the cancellation of the ad valorem taxes. The
decision was received thru counsel in Sept 11, 1995 and on the 22nd a
30 day extension of time to file a motion for reconsideration. The
motion for reconsideration was field on the 11th of October. The Court
in its resolution denied the reconsideration for being filed out of time.
Issue: Whether or not the motion for reconsideration should not be
dismissed for being filed out oftime?

Held: A judicious perusal of the records show that the decision of the
appellate court had becamefinal and executory due to the untimely
filing of the motion for reconsideration. Thus the ad valorem
ASSESSMEN T for the purchases to small miners stands.
Del Rosario vs. Hamoy, L-77154, June 30, 1987
Facts:
For want of a one-peso documentary stamp in a special power of
attorney for pre-trial purposes, in lieu of the personal appearance of
the plaintiff, the petitioner in this case, the respondent Judge declared
him non-suited and dismissed the complaint "for failure of the plaintiff
to appear for pre-trial conference. The respondent Judge manifestly
erred. He acted with indecent haste. He could have easily required the
counsel for the plaintiff to buy the required one-peso documentary
stamp outside the court room and affix the same to the special power
of attorney and that respite would not have taken ten minutes. Had he
been less technical and more sensible, the present proceedings and
the consequent waste of time of this Court and of his own would have
been avoided.

Issue:
WON the documentary stamp may be affixed at the time the taxable
document is presented in evidence?
Held:
Yes.
What the probate court should have done was to require the petitioner
or proponent to affix the requisite thirty-centavo documentary stamp
to the notarial acknowledgment of the will which is the taxable portion
of that document.
That procedure may be implied from the provision of section 238 that
the non-admissibility of the document, which does not bear the
requisite documentary stamp, subsists only "until the requisite stamp
or stamps shall have been affixed thereto and cancelled."
Thus, it was held that the documentary stamp may be affixed at the
time the taxable document is presented in evidence (Del Castillo vs.

Madrilena, 49 Phil. 749). If the promissory note does not bear a

documentary stamp, the court should have allowed plaintiff's tender of
a stamp of supply the deficiency.
CIR vs. Fireman's Fund, L-30644, March 9, 1987
Facts:
Fireman s Fund Insurance Company is a resident foreign insurance
corporatio n organized under the
laws of the United States, authorized and duly licensed to do business
in the Ph ilippines. It is a member of the
American Foreign Insurance Association, through which its business is
cleared. F rom January 1952 to
December 1958, Fireman s Fund entered into various insurance
contracts involving c asualty, fire and marine
risks, for which the corresponding insurance policies were issued. From
January 1952 to 1956, documentary
stamps were bought and affixed to the monthly statements of policies
issued; and
from 1957 to 1958
documentary stamps were bought and affixed to the corresponding
pages of the pol
icy register, instead of on
the insurance policies issued. On 3 July 1959, the company discovered
that its monthly statements of business
and policy register were lost.
Issue:
WONthetheinsurancepolicieswiththecorrespondingdocumentarystamptaxarethe
besttoprovepaymentofdocumentarytax.

Held:

Yes
Theinsurancepolicieswiththecorrespondingdocumentarystampsaffixedarethebest
evidencetoprovepaymentofsaiddocumentarystamptax.Thisrulehoweverdoesnot

precludetheadmissibilityofotherproofswhichareuncontradictedandofconsiderable
weight,suchas:copiesoftheapplicationsformanagerschecks,copiesofthemanagers
checkvouchersofthebankshowingthepurchasesofdocumentarystamps

CIR vs. Heald Lumber, 10 SCRA 376 G.R.No.L16340February29,1964

Facts:
That petitioner (respondent in this appealed case) is a corporation
organized and existing under the laws of the Philippines and has its
principal office in the City of Baguio, Philippines; that respondent
(petitioner in this appealed case) is the Commissioner of Internal
Revenue of the Republic of the Philippines. That at the time of the
original issuance by petitioner of the aforesaid 1,000 shares of stock
without par value, petitioner paid the documentary stamp tax based on
the actual consideration it had received from the subscribers
Issue:
WON the documentary stamp tax is collectible only from "every
original issue" of stock certificates?
Held:
Yes.
Petitioner's claim is untenable and unmeritorious. Under the
aforementioned Section 212 of the Tax Code, the documentary stamp
tax is collectible only from "every original issue" of stock certificates,
and that, as expressed in its proviso, "in the case of the original issue
of stock without par value the amount of the documentary stamp
tax ... shall be based upon the actual consideration received by the
association, company or corporation ... ." This must be construed in
relation with Section 210 of the same Code
Gabucan vs. Manta, 95 SCRA 752 January 28, 1980]
FACTS:
This case is about the dismissal of a petition for the probate of the
notarial will of the late Rogaciano Gabucan on the ground that it does
not bear a thirty-centavo documentary stamp. The probate court
refused to reconsider the dismissal in spite of petitioners
manifestation that he had already attached the documentary stamp to
the original of the will.

ISSUE:
W/N the probate correct was correct in dismissing the petition on the
ground of failure to affix the documentary stamp to the will
HELD:
The Court held that the lower court manifestly erred in declaring that,
because no documentary stamp was affixed to the will, there was no
will and testament to probate and, consequently, the alleged action
must of necessity be dismissed.
What the probate court should have done was to require the petitioner
or proponent to affix the requisite thirty-centavo documentary stamp
to the notarial acknowledgment of the will which is the taxable portion
of that document. The documentary stamp may be affixed at the time
the taxable document is presented in evidence.
Lincoln Phil. Life Insurance Company, Inc. (now Jardine-CMG Life
Insurance Com., Inc. vs. CA, G.R. No. 118043, July 23, 1998
FACTS:
Jardine-CMG Life Insurance Company, Inc., is a domestic corporation
engaged in the life insurance business. It issued 50,000 shares of stock
as stock dividends, with a par value of P100 or a total of P5 million.
Petitioner paid documentary stamp taxes on each certificate on the
basis of its par value.
The CIR decided that the book value of the shares should be used as a
basis for determining the amount of the documentary stamp tax. The
CIR issued a deficiency documentary stamp tax assessment of
P78,991.25 in excess of the par value of the stock dividends.
Petitioner appealed to the CTA which held that the amount of the
documentary stamp tax should be based on the par value stated on
each certificate of stock reversing the CIR's decision. The CIR appealed
with the CA and again held in favor of the CIR.
ISSUE: Whether the amount to be paid for stock dividends as
documentary stamp tax, is the par value or the book value of the
shares.

RULING:
The par value. The Court reaffirmed the CTA's decision.
Petitioner is correct in basing the assessment on the book value
thereof rejecting the principles enunciated in Commissioner of Internal
Revenue vs. Heald Lumber Co. as the said case refers to purchases of
no-par certificates of stocks and not to stock dividends.
The documentary stamp tax is not levied upon the shares of stock per
se but rather on the privilege of issuing certificates of stock.
It is clear that stock dividends are shares of stock and not certificates
of stock which merely represent them. There is no reason for
determining the actual value of such dividends for purposes of the
documentary stamp tax if the certificates representing them indicate a
par value.

INTERNATIONAL EXCHANGE BANK

vs.
COMMISSIONER OF INTERNAL REVENUE
G.R. No. 171266, April 4, 2007
Facts:
On January 12, 2000, the International Exchange Bank received a
FormalAssessment Notice (FAN) for deficiency DST on its Government
Securities Purchased-Reverse Repurchase Agreement (RRPA) and
Fixed-Savings Deposit (FSD), includingsurcharges, in the amounts of
P25,180,492.15 for 1996and P75,383,751.55 for 1997, and
anaccompanying demand letter requestingpayment thereof within 30
days.Acting on the FAN, petitioner filed onFebruary 11, 2000 a protest
letter allegingthat the assessments should be reconsideredbased on
grounds mainly predicated on analleged absence of a law imposing
DST onRRPA and FSD.
Issue:
Is a Fixed-Savings Deposit considereda Certificate of Deposit subject
toDST?
Held:
Yes, a Fixed Savings Deposit is within the meaning and contemplation
of law of a certificate of deposit and therefore subject to DST. The

applicable provision is Section 180 of the Tax Code (amended and

renumbered as Sec. 179 of the NIRC by R.A. 9243)
It bears emphasis that DST is levied on the exercise by persons of
certain privileges conferred by law for the creation, revision, or
termination of specific legal relationships through the execution of
specific instruments. It is an excise upon the privilege, opportunity or
facility offered at exchanges for the transaction of the business.
While tax avoidance schemes and arrangements are not prohibited,
tax laws cannot be circumvented in order to evade payment of just
taxes. To claim that time deposits evidenced by passbooks should not
be subject to DST is a clear evasion of the rule on equality and
uniformity in taxation that requires the imposition of DST on
documents evidencing transactions of the same kind, in this particular
case, on all certificates of deposits drawing interest.