University of the Philippines

College of Law

SYLLABUS FOR SPECIAL PROBLEMS IN TAXATION (Law 163)

[First Semester SY 2017-2018]
(Atty. Edwin R. Abella, CPA, LLB, LLM)

I. General Principles of Taxation

(For discussion on Aug. 9, 2017) Students will be evaluated based on graded recitation.

1.1. Definition and concept of taxation

1.2. Power of taxation compared with other inherent powers

Police Power
Power of Eminent Domain

1.3. Source of the Power to Tax

National government an inherent power of the sovereign government
Local Government Units constitutionally delegated power
NPC v. City of Cabanatuan, G.R. No. 149110, April 9, 2003

1.4. Basis of the Power To Tax

Necessity theory
- Philippine Guaranty, Co., Inc. v. CIR, L-22074, September 6, 1965
Benefits-protection theory (Symbiotic relationship)
- Commissioner v. Algue, L-28896, February 17, 1988

1.5. Purpose or Objective of Taxation

Revenue
Regulation
Caltex v. COA, G.R. No. 92585, May 8, 1992
Promotion of General Welfare
Lutz v. Araneta, 98 Phil. 148
Osmea v. Orbos, G.R. No. 99886, March 31, 1993
Reduction of Social Inequality
- Graduated/progressive income tax rates for individuals
- Graduated/progressive donors and estate tax rates
Encourage Economic Growth
- Tax reliefs
Protectionism
- Protective tariffs
1.6. Stages, Steps, Processes or Phases of Taxation (LAP)

1.7. Basic Principles of a sound tax system (FAT) What is the legal status of an
unsound tax system?
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 Fiscal adequacy
Administrative feasibility
Theoretical justice

1.8. Definition and Characteristics of Taxes

Taxes are the enforced proportional contributions from persons and property
levied by the law-making body of the State by virtue of its sovereignty for the
support of the government and for public needs (1 Cooley 62-63)
Characteristics: (1) Forced charge, (2) Generally payable in money, (3) levied
by the legislative body, (4) Assessed in accordance with some reasonable rule
of apportionment (observance of ability-to-pay principle), (5) It must be
imposed within the jurisdiction of the State, and (6) It is levied for public
purpose.

1.9. Tax vis-a-vis other forms of exactions

Tariff taxes on exports and imports
Toll
- Renato V. Diaz and Aurora Ma. F. Timbol v. The Secretary of Finance
and Commissioner of Internal Revenue, G.R. No. 193007, July 19,
2011
License fee
- Villegas v. Hiu Tsai, 86 SCRA 270
Special assessment
- Apostolic Prefect v. Treasurer of Baguio, 71 Phil 547
Debt
- Republic v. Mambulao Lumber Co., 6 SCRA 622
- Domingo v. Garlitos, 8 SCRA 443

1.10. Classification of Taxes (SBAPS-G)

Direct v. indirect taxes
Ad-valorem v. specific taxes

(For discussion on Aug. 16, 2017) Students will be evaluated based on graded recitation.

1.11. Limitations on the Power to Tax

A. Inherent Limitations:
1. Public purpose The tests of public purpose are: (1) Whether the object
to be furthered by the appropriation of public revenue is something
which is the duty of the Government to provide; and (2) Whether the
proceeds of the tax will directly promote the welfare of the community
in equal measure.
Pascual v. Secretary of Public Works, 110 Phil. 331
Lutz v. Araneta, 98 Phil. 148
2. Non-delegability of the power to tax
Principle of potestas delegata non potest delegare
Exceptions
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 3. Territoriality or situs of taxation
Multiplicity of tax situs
Problems and solutions
4. Exemption of the Government from Taxes
5. International comity
B. Constitutional Limitations:
1. Due process clause, whether it be substantive or procedural (Sec. 1,
Art. III);
Province of Abra vs. Hernando, G.R. No. L-49336. August 31,
1981
2. Equal protection of the laws (Sec. 1, Art. III);
Victorias Milling Co., Inc. vs. Municipality of Victoria, G.R. No. L-
21183. September 27, 1968
3. Freedom of speech and of the press (Sec. 4, Art. III);
4. Non-infringement of religious freedom and worship (Sec. 5, Art. III);
Tolentino vs. Sec. of Finance, et. al., G.R. No. 115455. October
30, 1995
5. Non-impairment of contracts (Sec. 10, Art. III);
Cagayan Electric Power & Light Co., Inc. vs. Commissioner, G.R.
No. L-60126. September 25, 1985
6. Non-imprisonment for debt or non-payment of poll tax (Sec. 20, Art.
III);
7. Rule requiring that appropriations, revenue and tariff bills shall originate
exclusively from the House of Representatives (Sec. 24, Art. VI);
ABAKADA Guro Partylist vs. Eduardo Ermita, G.R. No. 168056.
September 1, 2005
8. Uniformity, equitability and progressivity of taxation (Sec. 28[1], Art.
VI);
Commissioner vs. Lingayen Gulf Elec. Co., G.R. No. L-23771.
August 4, 1988

9. Limitations on the congressional power to delegate to the President the

authority to fix tariff rates, import and export quotas, etc. (Sec. 28[2],
Art. VI);
10. Tax exemption of properties actually, directly and exclusively used for
religious, charitable and educational purposes (Sec. 28[3], Art. VI);
Lung Center of the Phil. vs. Quezon City, G.R. No. 144104, June
29, 2004
11. Voting requirement in connection with the legislative grant of tax
exemption (Sec. 28[4], Art. VI);
12. Non-impairment of the jurisdiction of the Supreme Court in tax cases
(Secs. 2 and 5, Art. VIII); and
13. Exemption from taxes of the revenues and assets of educational
institutions, including grants, endowments, donations and contributions
(Sec. 4[3] and [4], Art. XIV).

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 1.12. Tax exemption It is a grant of immunity, express or implied, to particular persons
or corporations from the obligation to pay taxes (51 Am. Jur. 503).
Kinds of Tax Exemption: (1) Constitutional exemption, (2) Statutory
exemption, (3) Express exemption, (4) Implied exemption, (5) Unilateral
exemption, (6) Contractual exemption, (7) Partial exemption, and (8) Total
exemption.

1.13. Double Taxation

Direct duplicate taxation prohibitive double taxation for being violative of the
rule on uniformity
Indirect duplicate taxation permissive double taxation
Villanueva v. City of Iloilo, (L-26521, Dec. 28, 1968)
Procter & Gamble Co.v. Mun. of Jagna, 94 SCRA 894

1.14. Forms of Escape from Taxation: Tax Avoidance and Tax Evasion
CIR v. Javier, 199 SCRA 824
CIR v. Benigno P. Toda, Jr., 438 SCRA 290

1.15. Powers and duties of the Commissioner of Internal Revenue

Interpret provisions of this Code and other tax laws subject to review of the
Secretary of Finance (Section 4)
Decide tax cases (Section 4)
disputed assessments
refunds of internal revenue taxes, fees and charges
penalties imposed in relation thereto
other matters arising from the NIRC or other laws or portions thereof
administered by the BIR subject to the exclusive appellate jurisdiction of
the CTA.
Obtain information, and to summon/examine, and take testimony of persons
(Section 5)
Make assessments and prescribe additional requirements for tax
administration and enforcement supplements the self-assessment system
(Section 6)
Conduct inventory-taking, surveillance and to prescribe presumptive gross
sales and receipts
Prescribe real property values
Inquire into bank deposit accounts

(For discussion on Aug. 23, 2017) Students will be evaluated based on graded recitation.

II. National Internal Revenue Code of 1997, as amended (NIRC)

2.1 Income Taxation

Definition of Income and Capital

Fisher v. Trinidad, 43 Phil. 973
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 Doyle v. Mitchell, 247 US 179
Tests of Taxability of Income
Flow of Wealth Test gain derived from capital
Realization Test closed and completed transaction
Economic-Benefit Principle claim of right
Recognition principle all income are taxable unless there is a law
exempting or excluding the in come from taxation
Doctrines of Realization
Severance Test Eisner v. Macomber, Section 49 of Regs. No. 2-40
Claim of Right Doctrine U.S. v. Lewis; Commissioner v. Javier, 199
SCRA 824
Doctrine of Involuntary Conversion of Property Herder v. Helvering
Equivalent of cash doctrine
Measurement of gain or loss Section 40, NIRC. The concept of amount
realized in a sale or exchange. The basis of a property: Acquisition cost,
adjusted basis, stepped-up basis, carry-over basis, substituted basis.
Exchanges which does not result to recognition of gain
o Principle of Substance over Form
o Mergers or Consolidation
o Transfer to a controlled corporation
Classification of taxpayers Section 23, NIRC
Individuals
Citizens
- Resident citizens
- Non-resident citizens Section 22(E), NIRC
Aliens
- Resident aliens
- Non-Resident Aliens
Engaged in trade or business
Not Engaged in trade or business
Special classes of individual taxpayers Sections 60 66, NIRC
- Taxable Estate
- Taxable Trust
Corporations Section 22(B), NIRC
Domestic corporation
Foreign corporation
Resident foreign corporation
Non-resident foreign corporation
Partnerships, Joint Ventures and Consortiums
General Professional Partnerships Section 26, NIRC

(For discussion on Aug. 30, 2017) Students will be evaluated based on graded recitation.
Source of income taxable in the Philippines for the different classes of taxpayers
Section 23, NIRC.
Rules in determining the source of income Section 42, NIRC.
Gross income from sources within the Philippines
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 Gross income from sources without the Philippines
Income partly within or partly without the Philippines

Different classes of income for income tax purposes Sections 24, 25, 27 &
28, NIRC:
Returnable income compensation income, income from trade, business
or practice of profession
Fringe benefits for managerial and supervisory employees
Passive investment income
Capital gains either subject to schedular or global tax regime
Exempt income
Definition of Taxable Income Section 31, NIRC

What comprises gross income Section 32(A)

Compensation for services
Gross income from business
Gains derived from property dealings
Interest, rents and royalties
Dividends legal connotation of the term dividend for tax purposes
Annuities How must the annuitant report the income tax now or tax
later tax policy options?
Prizes and winnings
Pensions (if not exempt) paid out of either contributory or non-
contributory pension plans
Partners share in General Professional Partnership
Income from whatever source derived claim of right doctrine

Exclusions from gross income and the reasons for their exclusion Section
32(B), NIRC
Proceeds of life insurance policy
Return of premium to the insured
Value of property acquired by gift, bequest or devise
Amount received through accident or health insurance
Income exempt under tax treaty
Retirement benefits, pensions, gratuities, etc. RA No. 7641 amending
Article 287 of the Labor Code; RA No. 4917. Scope of exemption of an
employees trust Section 60, NIRC.
Benefits/separation pay received due to involuntary separation from
employment
Thirteenth month pay and other benefits treatment of excess over de
minimis benefits
Prizes and awards in recognition of specified achievements and those
received in sports competition
Exclusions intended to enhance the capital market

(For discussion on Sept. 06, 2017) Students will be evaluated based on graded
Page 6 of 16
 recitation.
Itemized deductions from gross income Section 34, NIRC
Ordinary and necessary expenses
- ESSO v. CIR, 175 SCRA 149
- CIR v. CTA & Smith Kline & French Overseas Co., 127 SCRA 9, G.R.
No. L-54108, January 17, 1984
- General Foods Corporation v. Commissioner, G.R. No. 143672, April
24, 2003

Interest
Tax Arbitrage Rule
Optional Treatment of interest incurred to acquire business property
Rule on a cash basis individual paying interest in advance
Related party interest payments (double taxed)
Financing petroleum explorations
Palanca v. Commissioner, 18 SCRA 496

Taxes
Taxes not allowed as deduction destroys the progressivity of income
tax; not business connected; may result to double benefit
Optional treatment of foreign income taxes paid

Losses
Casualty losses The tax side of disasters. (Read also RR No. 12-77 &
10-79)
Related party losses incurred in a transaction conducted for profit.
Capital loss deductible only from capital gain
- China Bank Corp. v. CIR & CTA, 336 SCRA 178
Net Operating Loss Carry-over (NOLCO)

Bad debts
- PRC v. Commissioner, 256 SCRA 667 (1995)

Depreciation
- Basilan Estates, Inc. v. Commissioner, 21 SCRA 17
- Fernandez Hermanos, Inc. v. Commissioner, 29 SCRA 552

Charitable and other contributions

Contributions to pension trusts

Premium Payments on Health and/or Hospitalization Insurance of an

Individual Taxpayer

Optional standard deduction, Section 34(L), as amended by RA No. 9504

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 Personal and additional exemptions Section 35, NIRC

Specific tax rules applicable to individual taxpayers

Those earning one type of returnable income
Those who earn mixed income compartmentalized approach in
determining taxable income.
Passive Income tax paid at source (FWT)
Interest, Royalties, Prizes and Other Winnings
Cash and/or Property Dividends

(For discussion on Sept. 13, 2017) Students will be evaluated based on graded recitation.

The purposive test in determining the existence of a taxable corporation

Gatchalian v. Collector, 67 Phil. 666
Obillos v. Commissioner, 1985
Pascual and Dragon v. Commissioner, 1988
Evangelista v. Collector, 102 Phil. 140
Oa v. Commissioner, 45 SCRA 74
Reyes v. Commissioner, 24 SCRA 198

Taxation of domestic corporations (Section 27, NIRC)

Income tax payable
Net income tax
Minimum corporate income tax (MCIT)
Determination of the tax base on returnable income Source of income,
deductions allowed (Section 23, Section 34, Section 27, NIRC)
Taxation of passive income
Taxation of capital gains
Taxation of proprietary educational institutions and hospitals Application
of the pre-dominance test
Taxation of government owned and controlled corporations, agencies or
instrumentalities What are the exempt GOCCs?

Taxation of resident foreign corporations (Section 28(A), NIRC)

Dual tax personality of a foreign corporation
- Marubeni Corporation v. Commissioner, G.R.No. 76573, 1989
Tax on income from sources within the Philippines
Minimum corporate income tax
Branch Profit Remittance Tax
- Congressional response to the case of Bank of America v. Court
of Appeals, 1994. Rationale for the new tax base.
Tax on certain income
Interest from deposits and yield or any other monetary benefit from
deposit substitutes, trust funds and similar arrangements and royalties
Income derived under the expanded foreign currency deposit system

Page 8 of 16
 Capital gain from sale of shares of stock not traded in the stock exchange
Intercorporate dividends

Taxation of non-resident foreign corporations (Section 28(B), NIRC)

Interest on foreign loans
Intercorporate dividends
- Tax Sparing rule
- CIR v. Procter & Gamble PMC, 160 SCRA 560, 204 SCRA 377
- CIR v. Wander Phils. Inc., 160 SCRA 573
- Marubeni Corporation v. Commissioner, 177 SCRA 500
Capital gain from sale of shares of stock not traded in the stock exchange

Improperly accumulated earnings of corporations Section 29, NIRC

Taxation of general professional partnerships Section 26, NIRC

- Concept of pass-through entity
Taxation of estates and trusts Sections 60 66, NIRC
- One-layer taxation regime Section 61, NIRC
Income tax rules applicable to capital gains and losses
What is a capital asset? Section 39, NIRC
Different kinds of capital assets and the specific income tax rules
applicable to each kind:
- Real property located in the Philippines
- Shares of stocks of a domestic corporation
- Other capital assets What types of assets would fall under this
category?

(For discussion on Sept. 20, 2017) Students will be evaluated based on graded recitation.
2.2 Transfer Taxes
Donation inter vivos v. donation mortis causa. What is being taxed?

Estate Tax (Sections 84 to 97, NIRC)

Definition and nature of Estate Tax
Composition of Gross Estate
Specific rules on inclusion and exclusion
Exempt transfers (Section 87, NIRC) Control test
Rules of valuation (Section 88, NIRC)
Deductions from Gross Estate
Pajaro vs. CIR, 328 SCRA 606 (2000)
De Guzman vs. De Guzman, G.R. No. L-29276, May 18, 1978
Lorenzo vs. Posadas, G.R. No. L-43082, June 18, 1937
CIR vs Josefina Pajonar, G.R. No. L-123206, March 22, 2000

Tax credit for estate taxes paid in a foreign country Whom and when
allowed and other limitations imposed by law
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 Administrative Provisions
Notice of death when required (Section 89, NIRC)
Filing of the estate tax return
Effects of non-payment of the estate tax

Donors Tax (Section 98 104, NIRC)

Smith vs. Shaughnessy, 318 U.S. 176
Perez vs. CIR, CTA Case No. 1707, Feb. 10, 1969
When does a gift occur?
Requisites of a valid donation Direct donation v. indirect donation
Transfers which may be constituted as donation (Section 100, NIRC)
Sale/exchange/transfer of property for insufficient consideration
Condonation/remission of debt
Determination, composition and valuation of gross gift
Tax credit for donors taxes paid in a foreign country
Exemption of gifts from donors tax (Section 101, NIRC)
Rates of donors tax between relatives and strangers (Section 99, NIRC)
Administrative Provisions
Filing of the donors tax return (Section 103, NIRC)
Cumulative determination of the tax liability for one calendar year
Gift splitting as tax avoidance scheme
Effect of non-payment of the donors tax

(For discussion on Sept. 27, 2017) Students will be evaluated based on graded recitation.

2.3 Value Added Tax (VAT)

Concept and Characteristics of the Philippine VAT
Taxable transactions (Sections 105, 106, 107 & 108, NIRC)
Tax Base Avoiding the cascading effect of indirect taxes
VAT on sale of goods or properties (Section 106, NIRC)
Transactions deemed sale recoupment rules
Zero-rated sales of goods or properties, and effectively zero-rated sales of
goods or properties providing total immunity from VAT
Change or cessation of status of a VAT-registered person
Sale of Services understanding the tax point
Zero-rated sale of services
When is refund of input taxes allowed? Other legal requirements (Section
112, NIRC)
o CIR v. Aichi Forging Company of Asia, Inc., G.R. No. 184823, October
6, 2010
Importation of goods taxable even if not in the course of trade (intended
to achieve protectionism)
VAT exempt transactions & zero-rated transactions, distinguished
Vat exempt transactions (Section 109, NIRC)
Input tax and output tax, differentiated
o Kapatiran ng Naglilingkod sa Pamahalaan ng Pilipinas vs. Tan, 163
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 SCRA 371
o Philippine Geothermal Inc. vs. CIR, G.R. No. L-154028 July 29, 2005
Important threshold amounts (See Revenue Regulations No. 16-2011):
o Sale of goods, properties or services P1,919,500.00
o Sale of residential lot P1,919,500.00
o Sale of residential house & lot P3,199,200.00
o Lease of residential units P12,800.00

(For discussion on Oct. 4, 2017) Students will be evaluated based on graded recitation.
2.4 Tax remedies under the NIRC
Methods of collection of internal revenue taxes self assessment and
withholding tax
Legal basis of audit (Section 6(A), NIRC)
Procedure in the conduct of audit by BIR
Presentation of Books of Accounts & sanctions for failure to present
them for examination (Section 266, NIRC)
Procedures for the assessment and collection of internal revenue taxes
(government enforcement)
What is an assessment?
- Alhambra Cigar v.Collector, 1959
- CIR v. Pascor Realty Corp.,1999
Requisites of a valid assessment Section 203; Section 228; CIR v. Azucena
Reyes -2006; Gabriel v. CIR -2004.
Period of limitation on assessment Section 203 & 222, NIRC
When is the assessment deemed made? Basilan Estates Inc.,v. CIR, 21 SCRA
17
Taxpayers remedies against an assessment
Remedy before payment Section 228, NIRC
- Request for re-investigation
- Request for reconsideration
Remedy after payment
- Claim for refund of erroneously paid taxes Section 204 & 229,
NIRC
- Legal requirements of a claim for refund
Taxpayers remedy against CIRs inaction on a protest alternative
remedies which are mutually exclusive
- RCBC v. CIR, G.R. No. 168498, April 24, 2007
Period of limitation on Collection
- Section 222, NIRC rules if there is an assessment made by the
BIR
- Evangelista v. Collector, October 15, 1957
- Ungab v. Cusi, 97 SCRA 887
Exceptions to the prescriptive periods on assessment and collection
Section 222, NIRC
Requisites of a valid waiver CIR v. Kudos Metal Corporation, G.R. No.
178087, May 5, 2010
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 Suspension of the prescriptive periods Section 223, NIRC
- Republic v. Kerr & Co., 25 SCRA 208
- BPI v. Commissioner, G.R. No. 139736, October 17, 2005
- Republic v. Salud Hizon, G.R. No. 130430, December 13, 1999
Authority of the Commissioner to compromise and abate taxes Section
204, NIRC
Government collection remedies
- Section 219; Section 207(A); Section 207(B); Section 205(b);
Section 224, NIRC
- Republic vs. Patanao, G.R. No. L-22356, July 21, 1967
- CIR vs. Suyoc Consolidated Mining Co., 104 Phil 819
- Republic vs. Acebedo, 22 SCRA 135
- CIR vs. Philippine Global Communications, Inc. G.R. No. L-167146,
October 31, 2006

(For discussion on Oct. 11, 2017) Students will be evaluated based on graded recitation.

III. Local Government Code of 1991, as amended

3.1 Local Government Taxation

Nature and source of taxing power Section 5, Article X, 1987 Constitution;
Mactan Cebu International Airport Authority v. Marcos, 1996
Local taxing authority City of San Pablo v. Reyes, 1999
Authority to provide penalties for tax violations limitation on the amount
of fine and term of imprisonment that the ordinance may provide Section
516, Local Government Code
Power to grant tax exemptions, incentives or reliefs Section 192, LGC
Authority to adjust local taxes Section 191, LGC
Residual taxing powers of LGUs Section 186, LGC
What are the limitations on LGUs residual powers?
The principle of preemption Bulacan v. CA, 1998
Fundamental principles of local taxing power
Procedures for the enactment of a local tax ordinance Section 187,188
&189, LGC
Common Limitations on the taxing power of the LGUs
Specific taxing powers of provinces Section 135, 136, 138, 140 & 141, LGC
Specific taxing powers of a municipality Section 143, LGC
Specific taxing powers of the barangay Section 152, LGC
Preemption among LGUs
Taxes levied by provinces cannot be levied by municipalities Section
142, LGC
Provinces and municipalities may not preempt cities on the imposition
of local taxes the city may levy the taxes, fees, and charges which
the province or municipality may impose - Section 151, LGC

(For discussion on Oct. 18, 2017) Students will be evaluated based on graded recitation.
Page 12 of 16
 Situs of local taxation
Principal office and branch operations Section 143, LGC
Manufacturers, assemblers, contractors, producers, and exporters
WITH factories, project offices, plants, and plantations
Common revenue raising powers Section 153-154, LGC
Community Tax Who can levy? Who are liable? Amount due? Who are
exempt?
Collection of Business Taxes Sections 165, 166, 167, 168, 169 and 170,
LGC
Prescription of assessment and collection Section 194, LGC
Taxpayers remedies
Protest against a newly enacted ordinance Section 187, LGC
Protest against an assessment
Claim for refund or tax credit
Civil remedies by the LGU for collection of taxes
Ilo-ilo Bottlers vs. Ilo-ilo City, G.R. No. L-52019, August 19, 1988
Arabay vs. CFI, 66 SCRA 617 (1975)
Allied Thread vs. City of Manila, G.R. No. L-40296, Nov. 21, 1984
Mobil Philippines Inc. vs. City Treasurer of Makati, G.R. No. L-154092, July
14, 2005
Hagonoy Market Vendor Association vs. Municipality of Hagonoy Bulacan,
G.R. No. L-137621, February 6, 2002

(For discussion on Oct. 25, 2017) Students will be evaluated based on graded recitation.

3.2 Real property taxation

Definition and Characteristics of real property tax
Types of real property tax
Basic RPT Section 233, LGC
Special Levies Section 235, 236 &240, LGC
Fundamental principles in real property taxation Section 199, LGC

Appraisal and assessment of real property tax

Army and Navy Club v. Trinidad, 44 Phil.383
Exemption from real property tax Section 234, LGC
Philippine Fisheries Development Authority v. CBAA, G.R. No.
178030, December 15, 2010
NPC v. CBAA, G.R. No. 171470, January 30, 2009
Declaration of real property Section 202, 222, LGC
Listing of the property in the Assessment Rolls, Person upon whom listed
Preparation of schedules of Fair Market Value (FMMV) and the procedure
for the amendment of FMV
Classes of real property for assessment purposes
The basis of assessment and the assessment levels Section 218, LGC
City Assessor of Pasay v. BAA of Pasay City and Marble Condominium
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 General revision of assessment and property classification Section 219,
LGC
Steps for the conduct of general revision of real property assessments
Lopez v. City of Manila, G.R.No. 127139, February 19, 1999
Valuation of real property when declared and listed for the first time, or
there is an on-going revision of classification and assessment, or upon
request by the owner Section 220, NIRC
Date of effectivity of assessment or reassessment
Assessment of property subject to back taxes Section 222, LGC
Collection of real property tax
Date of accrual of the tax Section 246, LGC
The collecting authority Section 247, LGC
Notice of time for collection Section 249, LGC
Period within which to collect RPT
Suspension of the period to collect
Special rules on payment of RPT
Condonation of RPT Section 276-277, LGC
Taxpayers remedies
Contesting an assessment of value of real property with LBAA
- Callanta v. Abellana, G.R. No. 115253-74, January 30, 1998
Appeal to the CBAA
Procedure for payment under protest
Government remedies
Other relevant cases in real property taxation
Province of Nueva Ecija vs. Imperial Mining Co., G.R. No. L-59463,
November 19, 1982
Mindanao Bus Co. vs. City Assessor of Cagayan de Oro City, G.R. No.
L-17870, September 29, 1962
Caltex Philippines, Inc. vs. CBAA, G.R. No. L-50466, May 31, 1982
City Assessor of Cebu City vs. Association of Benevola de Cebu, G.R.
No. L-152904, June 8, 2007
LRT vs. SEC, G.R. No. L-127316, October 12, 2000
Allied Banking Corporation vs. Quezon City Government, G.R. No. L-
154126, October 11, 2005
Hon. Secretary of Finance vs. Hon. Ricardo M. Ilarde, G.R. No. L-
121782, May 9, 2005
Manila International Airport Authority vs. CA, G.R. No. L-155650, July
20, 2006

(For discussion on Nov. 08, 2017) Students will be evaluated based on graded recitation.

IV. Tariff and Customs Code of 1978, as amended

Definition of Tariffs and Duties Nestle Phils. V. Court of Appeals, G.R. No. 134114,
July 6, 2001
General rule on duty imposition Section 101; Section 1205, TCC
Page 14 of 16
 Purpose of imposition of duties
The flexible tariff clause Section 401, TCC
Requirements of importation
Beginning and ending of importation
Obligations of the importer cargo manifest; import entry; declaration of correct
weight or value; liability for payment of duties; liquidation of duties; keeping of
records
Importation in violation of the TCC What constitutes smuggling?

Classification of goods: Taxable importation, prohibited importation, conditionally-free

importation
Classification of Duties Ordinary v. Special duties

Methods of valuation sequentially applied

o Transaction value
o Transaction value of identical goods
o Transaction value of similar goods
o Deductive value
o Computed value
o Fallback value

Drawbacks on re-exported merchandise allowance or refund

Taxpayers remedies: protest, abandonment, abatement and refund Section 1801,

TCC; Sections 1701-1708, TCC
Commissioner of Customs vs. Milwaukee Industrial Corporation, G.R. No. L-
135253, December 9, 2004
Auyong Hian vs. CTA, 59 SCRA 110 (1974)

Government remedies
o Administrative/extrajudicial
Tax lien applies only if importation is neither prohibited nor improperly
made - Section 1204, TCC
Administrative fines and forfeitures applies when importation is unlawful
or the importation is prohibited Section 2530 & 2531, TCC
- Llamado v. Com. of Customs, G.R. No. L-28809, May 16, 1983
Reduction of customs duties/compromise Secs. 709 and 2316, TCC
Seizure, search, arrest Secs. 2205, 2210 and 2211, TCC

o Judicial Remedies
Civil action Section 1204, TCC
Criminal action

(For discussion on Nov. 15, 2017) Students will be evaluated based on graded recitation.

V. Judicial Remedies (R.A. 1125, as amended by R.A. 9282, and implemented by

Page 15 of 16
the Revised Rules of the Court of Tax Appeals)

5.1 Jurisdiction of the Court of Tax Appeals

Exclusive APPELLATE jurisdiction over civil tax cases
Cases within the jurisdiction of CTA en banc Section 11, CTA Act, as
amended by RA 9282
Cases within the jurisdiction of CTA Divisions, in general Section 7(a),
CTA Act
Exclusive appellate jurisdiction in criminal cases Section 7(b)(2), CTA Act
Exclusive appellate jurisdiction in tax collection cases Section 7(c)(2),
CTA Act
Exclusive ORIGINAL jurisdiction over criminal cases (Section 7(b)(1), CTA Act)
the filing of criminal action carries with it the filing of the civil action
[reservation to file a separate civil action is not allowed]
Exclusive ORIGINAL jurisdiction over tax collection cases Section 7(c)(1),
CTA Act
5.2 Procedures for an appeal Section 11, CTA Act, as amended by RA 9282
Who may appeal
Mode of Appeal
Effect of Appeal
Time of appeal within 30 days from receipt of adverse decision by the
Commissioner or within 30 days from lapse of the period to act.
An appeal cognizable by a Division must be decided thereat. Adverse decision
will be the subject of MR or Motion for New Trial before the same Division
within 15 days from notice of the adverse decision. Any party adversely
affected by a resolution of a Division on a MR or Motion for New Trial, may
file a petition for review with the CTA en banc. (Section 11 and 18, CTA Act)

5.3 Suit impugning the validity of tax measures or acts of taxing authorities
Taxpayers suit
Citizens suit
Requisites for challenging the validity of tax measures or acts of taxing
authorities

5.4 Other Relevant Cases

Blaquera vs. Rodriguez, 103 Phil 267 (1958)
Raymundo vs. de Joya, 101 SCRA 495 (1980)
CIR vs. CA Atlas & Atlas Consolidated, 271 SCRA 605 (1997)

(Final Examination will be given to cover the topics in the Syllabus)

@@@@@ MAY THE FORCE BE WITH YOU @@@@@

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