Lyceum Northwestern University

College of Law
Dagupan City

*** courtesy of Atty. Jason R. Barlis, CPA***

Private Practitioner
Vice President for Administration, Saint Louis University
Former DEAN, School of Law, Saint Louis University
School of Law
Saint Louis University
Baguio City
(as modified)

OUTLINE IN TAXATION LAW II

READ: TRAIN LAW

Revenue Regulations in relation to TRAIN LAW

TRANSFER TAXATION

A. Transfer Taxation: Its general concepts

B. Kinds of transfer taxes
C. Kinds of transfers subject to transfer taxes

ESTATE TAXATION

A. Nature of estate tax

B. Reasons/doctrines supporting the imposition of estate tax
a. Benefits-received principle
b. Ability to pay principle
c. State partnership principle
d. Redistribution of wealth principle
e. “Back-tax” theory
C. The Gross Estate
a. What comprise the gross estate? (Section 85, NIRC)
b. Kinds of decedent for estate tax purposes
c. Inclusions in the gross estate
i. Decedent’s Interest
ii. Transfers in contemplation of death
iii. Revocable transfers
iv. Property passing under a general power of appointment
v. Proceeds of life insurance
vi. Prior interest
vii. Transfers for insufficient consideration
d. Exclusions in the gross estate
i. The merger of usufruct in the owner of the naked title
ii. The transmission or delivery of the inheritance or legacy by the fiduciary
heir or legatee to the fideicommissary
iii. The transmission from the first heir, legatee or donee in favor of another
beneficiary, in accordance with the desire of the predecessor
iv. Transfers to social welfare, cultural and charitable institutions
D. The Net Estate and the Deductions from the Gross Estate (Section 86)
a. Expenses, Losses, Indebtedness, Taxes
i. Funeral Expenses
ii. Judicial Expenses
1. CIR v. CA and Pajonar, GR No. 123206, 22 March 2000
iii. Claims against the estate
iv. Claims against insolvent persons
v. Unpaid mortgage indebtedness
1. Accommodated loans
b. Vanishing deductions
c. Transfers for public use
d. Family Home
e. Standard deduction
f. Medical expenses
g. Amount received by heirs under Republic Act No. 4917
h. Tax treatment of share in conjugal or community property
i. Tax credits
E. Valuation
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F. Administrative provisions
a. Filing of notice of death
b. Filing of estate tax return
c. Payment of tax
G. Provisions safeguarding the interest of the government in the collection of estate tax
(Sections 94-97)
a. Relevant cases:
i. Marcos II v. CA, G.R. No. 120880, June 5, 1997
ii. CIR v. Pineda, G.R. No. L-22734, September 15, 1967
iii. Lorenzo v. Posadas, G.R. No. 43082, June 18, 1937
iv. Dizon v. Court of Tax Appeals. G.R. No. 140944 dated May 6, 2008
v. Gabriel v. Court of Appeals, 11 October 2007
vi. Intestado de Don Valentin Descals vs. Administrator de Rentas
Internas, G.R. No. L-7253

GIFT TAXATION
H. Nature of gift tax
I. Concept of “gifts” subject to gift taxes (Section 98)
a. Direct gifts
b. Indirect gifts
i. Condonation of indebtedness
ii. Transfers for insufficient consideration
iii. Waivers
iv. Renunciation of Inheritance
J. Factors that affect liability for gift taxes
a. Relationship of the donor and the donee (Section 99)
K. Deductions/Exemptions from the gift tax (Section 101)
L. Tax treatment of properties transferred for less than full or adequate consideration
(Section 100)
a. In general
b. Real properties classified as capital asset
M. Tax treatment of political contributions
a. Case in point: Abello, et al. v. CIR, GR No. 120721, 23 February 2005
b. Rev. Regs 8-2009, 22 October 2009 re Creditable Withholding Tax
N. Valuation
O. Administrative provisions
a. Filing of notice of donation
b. Filing of donor’s tax return
c. Payment of tax

Additional cases:
i. The Philippine American Life and General Insurance Company vs. The
Secretary of Finance and the CIR, G.R. No. 210987, 24 November 2014
ii. CIR vs. B.F. Goodrich., Inc. (now SIME DIRBY INTERNATIONAL TIRE CO.,
INC.), G.R. No. 104171, 24 February 1999

VALUE ADDED TAXATION

P. Nature of Value Added Tax

a. Kapatiran v. Tan, G.R. No. L-81311, June 30, 1988
b. Tolentino v. Secretary of Finance, G.R. No. 115455, August 25, 1994 (Original
Decision) and G.R. No. 115455, October 30, 1995 (Motion for Reconsideration)
c. ABAKADA Guro Party List v. Ermita G.R. No. 168056, 1 September 2005
Q. VAT as an indirect tax
a. Distinctions between direct and indirect taxes
b. Specific characteristics of an indirect tax
i. Imposed on the seller/lessor/importer/service provider
1. CIR v. Magsaysay Lines, GR No. 146984, 28 July 2006
ii. Not a tax on the buyer/lessee/service availer
1. Cases in point:
a. Philippine Acetylene v. CIR, 17 August 1967
b. CIR v. American Rubber, 29 November 1966
c. CIR v. John Gotamco and Sons, 27 February 1987

R. Specific characteristics of Value Added Tax

a. Consumption based tax
i. Destination Principle
ii. Cross-border Doctrine
b. Tax Credit Mechanism
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i. Input Tax
ii. Output VAT
S. Transactions subject to VAT
T. Rates of VAT
a. Ordinary
b. Exempt Transactions
c. Zero-Rated Transactions
d. Effectively Zero-Rated Transactions
i. Cases in Point
1. Contex v. CIR, G.R. No. 151135, July 2, 2004
2. CIR v. Seagate Technology (Phils.), GR No. 153866, 11 February
2005
3. CIR v. Acesite Hotel Corporation, 16 February 2007
U. Transactions Deemed Sale
i. CIR v. Magsaysay Lines, GR No. 146984, 28 July 2006
V. Transitional Input Tax
 Fort Bonifacio Development Corporation v. Commissioner of Internal
Revenue, GR Nos. 158885 & 170680, dated April 2, 2009
W. Presumptive Input Tax
X. Compliance Requirements

Additional cases:
i. Tambunting vs. CIR, G.R. No. 179085, 21 January 2010
ii. Renato V. Diaz and Aurora Ma. F. Timbol vs. The Secretary of Finance and
the CIR, G.R. No. 193007, 19 July 2011
iii. KEPCO Philippines Corporation vs. CIR, G.R. No. 181858, 24 November 2010
iv. Fort Bonifacio Development Corporation vs. CIR, et. al., G.R. No. 173425, 22
January 2013
v. Misamis Oriental Association of Coco Traders, Inc. vs. Department of Finance
Secretary, et. al., G.R. No. 108524, 10 November 1994
vi. CIR vs. Mindanao II Geothermal Partnership, G.R. No. 191498, 15 January
2014
vii. Miramar Fish Company, Inc. vs. CIR, G.R. No. 185432, 4 June 2014
viii. CIR vs. Philippine Health Care Providers, Inc., G.R. No. 168129, 24 April
2007
ix. PAGCOR vs. BIR, et. al., G.R. No. 215427, 10 December 2014
x. Toshiba vs. CIR, G.R. No. 157594, 9 March 2010
xi. CIR vs. Sekisui Jushi Philippines, G.R. No. 149671, 21 July 2006
xii. CIR vs. Cebu Toyo Corporation, G.R. No. 149073, 16 February 2005
xiii. J.R.A. Philippines, Inc. vs. CIR, G.R. No. 171307, 28 August 2013
xiv. CIR vs. Team Sual Corp., G.R. No. 205055, 18 July 2014
xv. AT&T vs. CIR, G.R. No. 182364, 3 August 2010
xvi. Panasonic Communications vs. CIR, G.R. No. 178090, 8 February 2010
xvii. San Roque Power Corporation vs. CIR, G.R. No. 180345, 25 November
2009

INTERNAL REVENUE TAX ADMINISTRATION,

ENFORCEMENT & REMEDIES

D. Tax Administration: Its general concepts

E. Government agencies involved in tax administration
F. Extent of Congress’ Power re Tax Administration
a. ABAKADA Guro Party List v. Purisima, GR166715, 14 August 2008
b. British American Tobacco v. Camacho, GR163583, 20 August 2008
G. The Bureau of Internal Revenue
a. Composition and Functions (Section 3, NIRC)
b. Powers and Duties
i. In General (Section 2)
ii. Specific
1. Interpret tax laws and decide cases (Sec 4)
a. BIR Issuances and the rules relevant thereto
i. Section 246, NIRC
ii. CIR v. Burroughs, 19 June 1986
iii. CIR v. CA and Fortune, 29 August 1996
iv. PB Com v. CIR, 28 January 1999
b. Cases that may be decided by the CIR
i. CIR v. Leal, 18 November 2002
2. Examination of books of accounts, etc. (Sec 5)
a. Requirement of issuance of a letter of authority
 4

b. Third-party verification rule

c. Inquiry into bank deposits (Sec 6 F)
d. Summon persons, take testimony
i. Fitness by Design v. CIR, October 17, 2008
3. Power to assess and prescribe requirements for tax
administration
a. Power to examine returns (Sec 6A)
i. Amendment of returns
ii. Rule on confidentiality of tax returns and the
exceptions thereto (Sections 71 and 270)
1. BIR v. Ombudsman, 11 April 2002
b. Power to make a return (Sec 6B)
i. Best evidence obtainable rule
1. CIR v. Hantex Trading, GR No. 136975,
31 March 2005
2. CIR v. Embroidery and Garment
Industries, GR No. 96262, 22 March
1999
c. Power to conduct inventory taking, surveillance, and to
issue presumptive gross sales/receipts (Sec 6C)
d. Termination of tax period (Sec 6D)
e. Fixing of real property values (Sec 6E)
f. Accredit tax agents (Sec 6G)
g. Power to prescribe procedural/documentary
requirements
i. E.g. E-Filing, Substituted Filing
ii. Net Worth Method
h. Power to delegate (Sec 7)
i. Non-delegable powers in relation to Section 16
1. Republic v. Hizon, 13 December 1999
i. Enforcement of police powers (Sec 15)
j. Authority to Abate and Compromise Tax Liabilities (Sec
6F (2), 204 in relation to Rev. Regs. 30-2002 as
amended by RR No. 8-2004);
1. PNOC v. Court of Appeals, G.R. No.
109976, April 26, 2005*
2. People v. Tan, GR No. 152532, 16
August 2005
H. The rule on estoppel in relation to tax administration
a. Against the government
b. Against the taxpayer
I. Assessments and its governing principles
a. Definition
b. What constitutes an assessment
i. CIR v. Enron Subic Power Corporation, GR No. 166387, 19 January
2009
ii. CIR v. Pascor Realty, 29 June 1999
iii. CIR v. Reyes, G.R. No. 159694, January 27, 2006
c. Kinds of Assessment
d. Statute of Limitation on Assessment of Internal Revenue Taxes (Sections 203,
222, NIRC)
i. RMO 20-90, Philippine Journalists Inc., v. CIR, GR No. 162852, 16
December 2004
ii. CIR v. Kudos Metal Corporation, GR No. 178087, 5 May 2010
iii. CIR v. CA and Carnation, GR No. 115712, 25 February 1999, 303 SCRA
614
e. Instances where the running of the prescriptive period is suspended (Section
223)
i. Republic v. Hizon, 13 December 1999
ii. BPI v. CIR, GR No. 139736, 17 October 2005
iii. BPI v. CIR, G.R. No. 174942, 7 March 2008
f. The process of assessment (Section 228)
i. Estate of the Late Juliana Diez Vda. De Gabriel v. CIR, G.R. No. 155541,
January 27, 2004
ii. CIR v. Reyes, G.R. No. 159694, January 27, 2006
iii. PNOC v. Court of Appeals, G.R. No. 109976, April 26, 2005*
iv. CIR v. Menguito, GR No. 16750, 17 September 2008
g. Instances when pre-assessment is not required (Section 228)
h. Governing principles concerning assessment
 5

i. When do we reckon the period when assessment was made?

j. Is assessment necessary before a taxpayer could be prosecuted for violation of the
NIRC?
i. Ungab v. Cusi, May 30, 1980
ii. CIR v. CA, GR No. 119322, 4 June 1996
iii. CIR v. Pascor Realty, 29 June 1999
k. Are the procedures outlined in Section 228 of the NIRC retroactive?
i. CIR v. Reyes, G.R. No. 159694, January 27, 2006

Additional Cases:

i. The Philippine American Life and General Insurance vs. The Secretary of
Finance and the Commissioner of Internal Revenue, G.R. No. 210987, 24 November 2014

TAX REMEDIES PROPER

A. Tax Remedies: Its general concepts

a. Importance
b. Classification (Overview)
1. Remedies in favor of the taxpayer
2. Remedies available to the government
c. Applicability of the Doctrine of Exhaustion of Administrative Remedies

B. Remedies available to taxpayers

a. Before Payment
1. Protest (Section 228, NIRC)
a. Requirements of a valid protest—Rev. Regs. 12-85
b. Effect of a protest on the period to collect deficiency
taxes—Cases: CIR v. Wyeth Suaco Laboratories, GR No.
76281, 30 September 1991 and CIR v. Atlas Consolidated
Mining, GR Nos. 31230-32, 14 February 2000
c. Failure of the BIR to act within the 180-day period—See
the following: Lascona v. CIR, CTA Case 5777, 4
January 2000 vis-à-vis Section 7 (2), RA 9282 and the
Revised Rules of Procedure of the CTA, AM No. 05-11-
07-CTA
d. Administrative actions taken during the 180-day
period—Compare: CIR v. Union Shipping, GR No.
66160, 21 May 1990, 185 SCRA 548 and CIR v. Isabela
Cultural Corporation, GR No. 135210, 11 July 2001
e. Effect of a protest filed out of time—Protector’s Services
v. CA, GR No. 118176, 12 April 2000
f. Remedies from a denial of the protest
i. Appeal to the Court of Tax Appeals (RA 1125, as
amended by RA9282)
2. Compromise (See Part 1 for details)
b. After Payment
1. Refund (Section 229, NIRC)
a. Must be strictly construed against the taxpayer—Case:
Citibank, NA v. Court of Appeals, GR No. 107434, 10
October 1997, 280 SCRA 459; FEBTC v. CIR, GR No.
138919, 02 May 2006
b. Grounds for filing a claim for refund (See Section 229,
See also: Engtek Phils v. CIR, CTA Case No. 6644, 26
January 2005)
c. Procedure in filing a claim for refund
i. CIR v. Acosta, GR No. 154068, 3 August 2007
d. Period within which to file a claim for refund
i. General rule is two years from the date of
payment—Cases: ACCRA Investments
Corporation v. Court of Appeals, GR No. 96322,
20 December 1991; CIR v. TMX Sales, 15
January 1992; CIR v. PhilAm Life, 29 May
1995; CIR v. CA and BPI, GR No. 117254, 21
January 1999; CIR v. PNB, GR No. 161997, 25
October 2005 (exception to the 2-year period);
CIR v. Primetown Property Group, GR No.
162155, 28 August 2007).
ii. In case of amended returns
 6

iii. In case of taxpayers contemplating dissolution—

Case: BPI v. CIR, 28 August 2001; See also:
Sections 52(c) and 56(a)
e. Who has the personality to file a claim for refund?
Cases—CIR v. Procter and Gamble, GR No. 66838, 2
December 1991; CIR v. CA, 20 January 1999; Silkair v.
CIR, GR Nos. 171383 & 172379, 14 November 2008
f. Is setting-off of taxes against a pending claim for refund
allowed?—The doctrine of equitable recoupment--Case:
Philex Mining Corp. v. CIR, GR No. 125704, 28 August
1998
g. Is automatic application of excess tax credits allowed?
(Sec. 76)—Please see Calamba Steel v. CIR, GR No.
151857, 28 April 2005; Systra Philippines v. CIR, GR
No. 176290, 21 September 2007; CIR v. BPI, GR No.
178490, 07 July 2009 (Irrevocability Rule)***
h. Effect of existing tax liability on a pending claim for
refund—Case: CIR v. CA and Citytrust, GR No. 106611,
21 July 1994
i. Period of validity of a tax refund/credit (Sec. 230, NIRC)
i. Returns are not actionable documents for
purposes of the rules on civil procedure and
evidence (See: Aguilar v. CIR, CA Case dated
30 March 1990)
ii. Nature of a tax credit certificate (Pilipinas Shell
Petroleum Corporation v. CIR, GR No. 172598,
21 December 2007)
j. Refund and Protest are mutually exclusive remedies—
Case: Vda. De San Agustin v. CIR, 10 September 2001
k. Is the taxpayer entitled to claim interest on the refunded
tax? (Sec. 79 (c) 2, NIRC)
c. Other Remedies
1. Action to Contest Forfeiture of Chattel (Sec. 231)
2. Redemption of Property Sold (Sec. 214)

C. Remedies available to the government

a. No injunction to restrain collection of taxes (Sec. 218, NIRC)
b. Period within which the government could collect (Sections 203, 222, NIRC)
Case: Republic v. Hizon, GR No. 130430, 13 December 1999; CIR v. Javier Jr.,
GR No. 78953, 31 July 1991 (199 SCRA 825); PNOC v. CA, GR No. 109976, 26
April 2005; BPI v. CIR, GR No. 174942, 7 March 2008
c. Overview of Remedies (Section 205)
1. Tax Lien (Section 219, NIRC)
a. CIR v. NLRC, GR No. 74965, 9 November 1994
2. Compromise
3. Distraint and/or Levy
4. Civil Action
5. Criminal Action
6. Forfeiture
7. Suspension of business operations
8. Enforcement of administrative fines
d. Administrative Remedies in Detail (Sections 206-217, NIRC)
1. Distraint
a. Actual
b. Constructive
2. Levy
3. Garnishment
e. Judicial Remedies in Detail (Section 220, NIRC)
1. Period within which the action may be filed
a. Civil Cases (Sections 203, 222, NIRC)
b. Criminal Cases (See: Title X, NIRC; Section 281, NIRC)
2. Where should these cases be filed?
a. Criminal Cases (See the imposable penalty vis-à-vis the
jurisdiction of courts)
b. Civil Cases (Consider the amount of tax sought to be
collected vis-à-vis the jurisdiction of courts, together
with the provisions of RA9282)
3. Cases:
 7

a. Republic v. Hizon, GR No. 130430, 13 December 1999

(re approval of filing of civil and criminal action)
b. CIR v. La Suerte Cigar, G.R. No. 144942, 4 July 2002 (Re
participation of the Office of the Solicitor General)
c. PNOC v. Court of Appeals, G.R. No. 109976, April 26,
2005*
d. Lim v. CA, GR Nos. 48134-37, 18 October 1990, 190
SCRA 616 (re prescription of criminal actions, Section
281, NIRC)
e. Marcos II v. CA, GR No. 120880, 5 June 1997 (re
enforcement of tax liability during pendency of probate
proceedings)
f. Judy Anne Santos v. People, GR No. 173176, 26 August
2008
f. Effects of failure to pay the tax on time: Additions to the tax (Chapter I, Title X,
NIRC)
1. Surcharges
a. Ordinary (Section 248A, NIRC)
i. Failure to pay tax on time as required by the tax
code or the regulations
ii. Failure to pay the deficiency tax within the time
fixed in the notice
iii. Filing of the return with the wrong office
b. Fraud Penalty (Section 248B, NIRC)
i. CIR v. Javier Jr., GR No. 78953, 31 July 1991
(199 SCRA 825)
c. Cases:
i. Imposition of Surcharge is mandatory
2. Interest (Section 249, NIRC)
a. In General
b. Deficiency Interest
c. Delinquency Interest
d. On Extended Payments
3. Compromise Penalties
4. Effect of failure to file information returns (Section 250, NIRC)

Additional cases:

i. Visayas Geothermal Power Company vs. CIR, G.R. No. 197525, 4 June
2014
ii. Republic vs. Acebedo, G.R. No. L-20477, 29 March 1968
iii. Allied Banking Corporation vs. CIR, G.R. No. 175097, 5 February
2010
iv. CIR vs. Kudos Metal Corporation, G.R. No. 178087, 5 May 2010
v. RCBC vs. CIR, G.R. No. 170257, 7 September 2011
vi. CIR vs. United Salvage and Towage (Phils.) Inc., G.R. No. 197515, 2
July 2014
vii. CIR vs. BASF Coating + Inks Phils., Inc., G.R. No. 198677, 26
November 2014
viii. CIR vs. Metro Star Superama, Inc., G.R. No. 185371, 8 December
2010
ix. Samar-I Electric Cooperative vs. CIR, G.R. No. 193100, 10 December
2014

LOCAL TAXATION

A. Local Taxation : Its general concepts

a. Nature of the local taxing power
1. Constitutional provision (Section 5, Article X)
2. A delegated power?
a. City of San Pablo, Laguna v. Reyes, 25 March 1999
b. Meralco v. Province of Laguna, 5 May 1999
c. Mactan Cebu International Airport Authority v.
Marcos, 11 September 1996
d. NAPOCOR v. City of Cabanatuan, 9 April 2003
3. Extent of the power of Congress in local taxation
a. City Government of Quezon City v. Bayantel, G.R. No.
162015, March 6, 2006
4. Residual power to tax (Section 186, LGC)
 8

b. Fundamental principles on the exercise of the local taxing power (Section 130,
LGC)
c. Exercise of local taxing power

B. Common Limitations on the exercise of the local taxing power and the principle of
preemption/exclusionary rule (Section 133, LGC)
a. The principle of preemption
b. Cases:
1. Province of Bulacan v. Court of Appeals, 27 November 1998
2. First Philippine Industrial Corporation v. CA, G.R. No. 125948,
December 29, 1998 (Section 133j; Local Tax on Common
Carriers)
3. Palma Development Corporation v. Municipality of Malangas,
GR No. 152492, 16 October 2003 (Section 133e)
4. Batangas Power Corporation v. Batangas City, GR No. 152675,
28 April 2004 (Section 133g)
5. MIAA v. CA and Paranaque, GR No. 155650, 20 July 2006
(Section 133 o)
6. LTO v. City of Butuan, 20 January 2000 (re Section 133 (l))
7. Philreca v. DILG, 10 June 2003 (re Section 133 n)
8. Petron Corporation v. Tiangco, GR No. 158881, 16 April 2008
(Petroleum Products)

C. Specific Taxing Powers of Local Government Units

a. Provinces
1. Scope of the taxing power (Section 134 vis-à-vis Sections 142 and
186, LGC)
2. Taxes that may be levied by provinces (Sections 135-141, LGC)
3. Cases:
a. Province of Bulacan v. Court of Appeals, 27 November
1998
b. PBA v. CA, 8 August 2000
c. Lepanto Consolidated Mining Corp. v. Ambanloc, 29
June 2010
d. Smart v. City of Davao (2008)
e. ABS-CBN v. Quezon City (2008)
b. Municipalities
1. Scope of the taxing power (Section 142 vis-à-vis Sections 134 and
186, LGC)
2. Taxes that may be levied by municipalities (Sections 143-149,
LGC)
a. Yamane v. BA Lepanto Condominium Corporation, G.R.
No. 154993, 25 October 2005 re taxes on businesses
b. Ericson Telecommunications v. City of Pasig, GR No.
176667, 22 November 2007
3. Situs of the tax (Section 150, LGC)
c. Cities (Section 151, NIRC)
d. Barangays (Section 152, NIRC)
e. Common revenue raising powers
f. Community Tax

D. Remedies in Local Taxation

a. Remedies of the Government
i. Angeles City v. Angeles City Electric Corporation, GR No. 166134, 29
June 2010 (Prohibition re injunction on tax collection not applicable to
local taxes)
ii. Administrative
1. Local government’s lien
2. Assessment by local treasurer (Section 194, LGC)
3. Distraint (Section 175, LGC)
4. Levy (Section 176, LGC)
a. Properties exempt from distraint and levy
iii. Judicial
1. Period within which to collect (Section 194, LGC)
iv. Other Provisions
1. Accrual of the tax (Section 166, LGC)
2. Time of Payment (Section 167, LGC)
3. Surcharges, Interests and Penalties
b. Remedies of the Taxpayer
 9

i. Administrative
1. Appeal to the Secretary of Justice re newly enacted tax ordinance
(Section 187, LGC)
a. Drilon v. Lim, 4 August 1994
b. Jardine Davies v. Judge Aliposa, 27 February 2003
2. Protest of the Assessment (Section 195, LGC)
a. Yamane v. BA Lepanto Condominium Corporation, G.R.
No. 154993, 25 October 2005 re denial of protest
3. Claim for refund (Section 196, LGC)
4. Remedies from a denial of the protest and refund
ii. Judicial

E. Grant of tax exemption by local government units (Section 282 (b), IRR)
a. Tax Exemption v. Tax Incentive

REAL PROPERTY TAXATION

A. Governing Law
B. Nature of Real Property Taxes—National or Local?
C. Fundamental Principles (Section 198, LGC)
D. Properties Covered
a. Article 415, et seq, Civil Code
b. Caltex v. CBAA, 31 May 1982
E. Properties Exempt
a. Section 234, LGC
b. Section 238, LGC
c. Constitutional Exemptions
d. Cases
i. MIAA v. Paranaque, GR No. 155650, 20 July 2006; MIAA v. Pasay GR
No. 163072, April 2, 2009
ii. Lung Center of the Philippines v. QC, 29 June 2004
iii. LRTA v. CBAA, 12 October 2000
F. May LGUs grant exemption?
G. Who are liable for the Real Property Taxes
a. Ownership v. Use
b. Testate Estate of Concordia Lim v. Manila, 21 February 2000
H. Procedure in Real Property Taxation
a. Lopez v. City of Manila, 19 February 1999
b. Declaration of real properties—whose duty?
c. Valuation by Assessors
Callanta v. Ombudsman, 30 January 1998
d. Preparation of Schedule of Fair Market Values
e. Enactment of a Real Property Tax Ordinance
i. Levy annual ad valorem tax
1. Scope of the LGU’s taxing power (Sec. 232, LGC)
a. Provinces—1%; Cities, Municipalities in MM—2%
b. SEF—1%; Idle land tax—5%; Special Assessments
ii. Fix assessment levels
iii. Provide for appropriations
iv. Adopt Schedule of Fair Market Values
1. Fair Market Value and Assessed Value—What’s the difference?
I. Remedies in Local Taxation
a. Remedies of the Government
i. Administrative
1. Contents of Assessment
a. Meralco v. Barlis, 2 February 2002
2. Who is entitled to the notice of assessment?
a. Talusan v. Tayag, G.R. No. 133698, 4 April 2001
ii. Judicial
1. Period within which to collect
iii. Other Provisions
1. Accrual of the tax
2. Time of Payment
3. Surcharges, Interests and Penalties
b. Remedies of the Taxpayer
i. Administrative
1. Appeal to the Secretary of Justice re newly enacted tax ordinance
(Section 187, LGC)
a. Drilon v. Lim, 4 August 1994
 10

b. Reyes v. Court of Appeals, 1999

c. Hagonoy Market Vendors Association v. Municipality
of Hagonoy, Bulacan, G.R. No. 137621. February 6,
2002
d. Ty v. Trampe, 1 December 1995
2. Appeal to the Board of Assessment Appeals, (Section 226, 252,
LGC)
a. Systems Plus Computer College v. Caloocan City, G.R.
No. 146382, August 7, 2003
b. Olivares v. Marquez, G.R. No. 155591, September 22,
2004
3. Protest of the Assessment (Section 226, 252, LGC)
a. Cagayan Robina v. Court of Appeals, 12 October 2000
b. Meralco v. Barlis, 18 May 2001
c. Meralco v. Barlis, 2 February 2002
d. Meralco v. Barlis, 2004
4. Claim for refund (Section 253, LGC)
a. Period
5. Remedies from a denial of the protest and refund
6. Redemption of Property Sold (Section 261, LGC; City Mayor of
Quezon City v. RCBC, GR No. 171033, 3 August 2010)
ii. Judicial
1. Questioning tax sale: Aquino v. QC, GR No. 137534, 3 August
2006; NHA v. Iloilo City, GR No. 172267, 20 August 2008

TARIFF AND CUSTOMS LAWS

A. Scope of Tariff and Customs Laws

B. Meaning of Tariff and Customs Duties
C. Governing Laws
D. Agency tasked with enforcement of Tariff and Customs Laws
a. Powers and Functions of the Bureau of Customs
E. What may be the subject of customs duties
F. Concept & Relevance of Importation
a. When does importation begin
b. When does importation end
G. Classification of Goods for Importation Purposes
i. Dutiable v. Duty-Free
ii. Prohibited
iii. Conditionally Free
H. Kinds of Customs Duties
a. Regular
b. Special
I. Valuation of Goods
a. Home Consumption Value
b. Transaction Value
J. Flexible Tariff
K. Cases that may be decided by the Bureau of Customs
a. Customs Protest Cases
i. Procedure
ii. Case: Nestle Philippines v. Court of Appeals, G.R. No. 134114. July 6,
2001
iii. Concept of Automatic Review
b. Seizure and Forfeiture Cases
i. Proceeding In Rem
ii. Primary Jurisdiction
iii. Search of Dwelling House
iv. Some Illustrative Cases: Mison v. Natividad, GR No. 82526, 11
September 1992; Provident Tree Farms v. Batario, GR No. 92285, 28
March 1994; Zuno v. Cabredo, A.M. No. RTJ-03-1779. April 30, 2003

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