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BIR ISSUANCES

APRIL-MAY 2010 VOLUME III, ISSUE No. 4


L C A L C A L C A
LINES LINES LINES
Inside this issue:
BIR issuances 2
Implementing
rules and reg-
ulations REIT
Act of 2009
7
A.M. No. 09-6-
8-SC: Rules
of Procedure
for Environ-
mental Cases
7
Jurisprudence 8




not prevent the use of
the indirect method of
proof. The Revenue Officer
can still look beyond the
self-serving declaration
in the taxpayers books
and records and use any
evidence available to con-
travene their accuracy. In
this connection, the provi-
sions of Revenue Adminis-
trative Memorandum Order
No. 1-2000 shall be fol-
lowed. The BIR shall rely
on Revenue Memorandum
Circular No. 23-2000 in
making deficiency tax as-
sessments based on the
Best Evidence Obtaina-
ble. Furthermore, Section
6 (c) of the National Inter-
nal Revenue Code allows
the BIR to prescribe the
minimum taxable base for
which internal revenue tax-
es shall be determined.

The National Investigation
Division (NID) shall verify
the existence of a taxpay-
ers high value assets and/
or conspicuous spending
by accessing the records of
appropriate government
and private entities, such
as but not limited to the
following:

a. Land Transportation Of-
fice
b. Bureau of Immigration
c. Airline and shipping
companies
d. Maritime Industry Au-
thority
e. Civil and Aeronautics
Board
f. Manila Electric Company
g. Land Registration Au-
thority
h. Registries of Deeds
i. Resorts, membership
clubs, or similar establish-
ments
j. Homeowners associa-
tions
k. Real estate development
companies
l. Credit card companies
m. Statement of Assets,
Liabilities, and Net worth
and/or Amnesty Returns
filed under Republic Act
9480

The Assistant Commis-
sioner, Enforcement Ser-
vice (ACIR, ES) shall
establish linkages with
various agencies for au-
thority to secure infor-
mation/documents on in-
dividual. He shall also ac-
cess the BIRs Integrated
Tax System (ITS) for infor-
mation on the taxpayer
such as:

a. Taxpayers Identification
Number
REVENUE MEMORAN-
DUM ORDER NO. 19-
2010

RMO 19-2010 prescribes
the policies and guidelines
in the conduct of investi-
gations relative to the
Taxpayers Lifestyle Check
System (TLCS) to properly
determine tax compliance of
individuals.

An individuals taxable
income may be estab-
lished by using direct
evidence, whenever availa-
ble. Indirect methods can
be used, however, when one
or more of the following
conditions, among others,
prevail:

a. The taxpayer maintains
no books and records.
b. The taxpayers books and
records are not available.
c. The taxpayers books and
records are inadequate.
d. The taxpayer withholds
books and records from in-
vestigation/verification by
authorized Revenue Offic-
ers.

The fact that the taxpay-
ers books and records
reflect the figures on the
income and business tax
returns, however, does
b. Registered address
c. Registered business/es
d. Returns filed;
e. Amount of taxes paid

The information gathered
from the said entities
shall then be evaluated
vis--vis the data ex-
tracted from the ITS. The
economic use/beneficial
ownership of properties
shall be considered in the
evaluation process. Thus,
all properties registered
under the name of his/
her child or, whether
emancipated or a minor,
or any other relative
shall be considered as
those of the taxpayer
when the property is not
proven to have been ac-
quired under any of the
means enumerated un-
der the New Civil Code of
the Philippines and the
tax thereon has been
properly paid, and/or the
child or relative has no
independent means suffi-
cient for the acquisition
of the properties.

If the taxpayers net
worth has increased in
a given year or he
has acquired substan-
tial assets and incurred
substantial spending dis-
proportionate to his de-
clared income, and was
verified from the ITS that
he has not filed an In-
come Tax Return for that
period, then such fact
constitutes a prima facie
evidence of fraud and/or
subst ant i al under -
declaration of taxes war-
ranting the issuance of a
Letter of Authority to
investigate the taxpayer.

BIR ISSUANCES
Page 2 L C A LINES
The ACIR, ES shall coordi-
nate with the Information
Systems Group for the
development of an Elec-
tronic Data Warehouse
wherein all information
gathered in the TLCS shall
be stored for reference
and use. The Special In-
vestigation Division of the
Regional Offices and other
BIR audit offices shall also
be authorized to imple-
ment the TLCS upon the
approval of the Commis-
sioner of Internal Reve-
nue.



REVENUE MEMORAN-
DUM ORDER NO. 20-
2010

RMO No. 20-2010
amends certain provisions
of Revenue Memorandum
Order (RMO) No. 15-2010
relative to the policies and
guidelines on appearances
o f B I R l a wy e r s /
prosecutors in court hear-
ings and preliminary in-
vestigations.

Pertinent portions of Sec-
tion II of the said RMO
No.15-2010 were amend-
ed to provide for the fol-
lowing policies and guide-
lines:

a. In the National Office,
the Inspection Service
(IS), thru the Internal
Security Division (ISD),
shall assign personnel to
check attendance and
time of appearance of BIR
lawyers/prosecutors and
their witnesses at the
Court of Tax Appeals,
Court of Appeals, Su-
preme Court and Depart-
ment of Justice when
there are scheduled
hearings or preliminary
investigations.
b. In the Regional Office,
the Office of the Regional
Director, thru the Special
Investigation Division
(SID), shall assign per-
sonnel to check attend-
ance and time of appear-
ance of BIR lawyers/
prosecutors and their
witnesses at the Metro-
politan Trial Courts, Re-
gional Trial Courts and
City Prosecutors Office
based in Metro Manila,
and shall furnish the In-
spection Service copy of
their report.
c. The Assistant Commis-
sioner (ACIR) - Legal
Service, and the Regional
Director shall submit a
report to the Assistant
Commissioner, Inspection
Service for the institution
of the necessary admin-
istrative disciplinary ac-
tion against the BIR law-
yers/prosecutors and
witnesses who have been
late or absent during the
scheduled hearings or
preliminary investiga-
tions.
d. The ACIR-Legal Ser-
vice shall regularly se-
cure the schedules of
court hearings from the
BIR lawyers/prosecutors
and/or the Clerks of
Court, and furnish the
Assistant Commissioner,
Inspection Service, copy
thereof, for reference in
the preparation of as-
signment of personnel
required to check their
attendance.
e. The BIR lawyers/
prosecutors and witness-
es must be adequately
prepared for the hear-
ings. They must exten-
sively review their as-
signed cases and pre-
pare/submit quality mo-
tions and pleadings on
time. They must also
coordinate with each oth-
er on the details for the
success of the case. Cor-
ollary to this, all Reve-
nue Officers/Employees
required to appear as
witnesses in court
hearings must give pri-
ority attention and time
for the cases.



REVENUE MEMORAN-
DUM ORDER NO. 23-
2010


RMO 23-2010 pre-
scribes the guidelines on
the issuance, replace-
ment or revalidation of
Certificates Authorizing
Registration (CARs).

Per Section 4 of Revenue
Regulations No. 23-2010,
the CAR, upon issuance,
shall have to be present-
ed to the Register of
Deeds within a maxi-
mum period of not
more than two (2)
years. Otherwise, the
CAR shall be deemed
permanently expired and
therefore of no effect.

The phrase upon issu-
ance refers to the
original date of issu-
ance as indicated in
the CAR. In this re-
gard, a taxpayer shall
have a maximum peri-
od of two (2) years
from the CARs original
CAR is a replacement
CAR.

A replacement CAR shall
be valid for one (1)
year from its date of
issuance as indicated in
the said CAR. Moreover,
the applicable infor-
mation pertaining to the
replacement CAR must
be properly annotated on
the reverse side of all
copies of the correspond-
ing document of transfer,
and reference to the re-
placement CAR shall be
indicated on the expired
CAR.



REVENUE MEMORAN-
DUM ORDER NO. 26-
2010

RMO No. 26-2010 pre-
scribes the policies and
procedures in the prep-
aration of the List of
Assets by the Revenue
Officer (RO) for cases
under i nvesti gati on/
verification and its incor-
poration in the Data
Warehouse.

In addition to the re-
porting requirements to
be prepared and/or
submitted in the audit/
verification of internal
revenue tax liabilities
under a Letter of Au-
thority (LA) or Tax Ver-
ification Notice (TVN),
the RO shall determine
all the assets of a
taxpayer being investi-
gated, such as type of
assets, location of the
assets, bank accounts
maintained, etc., and
secure pertinent infor-
mation thereof.

The List of Assets,
business and personal,
domestic and foreign,
prescribed under BIR
Form No. 0804 shall be
encoded b y the RO with-
in one (1) month from
the date of service of the
LA/TVN to the taxpayer
following the proce-
dures to be prescribed
by the Deputy Commis-
sioner-Information Sys-
tems Group (ISG). The
Deputy Commissioner-
ISG shall develop the
facility to allow the
viewing of information
on assets of taxpayers
for use in the collec-
tion enforcement pro-
ceedings, if warranted.




REVENUE MEMORAN-
DUM ORDER NO. 27-
2010

RMO No. 27-2010 pre-
scribes the enhanced
policies and guidelines to
re-invigorate the Run
After Tax Evaders (RATE)
Program.

The Bureau of Internal
Revenue (BIR), through
the National Investiga-
tion Division (NID)/
Special Investigation
Divisions (SIDs) shall
coordinate with the
concerned government
agencies, such as, but
not limited, to the De-
partment of Justice, Na-
tional Bureau of Investi-
gation, Criminal Investi-
gation and Detection
Group, and other enti-
Page 3 VOLUME III, ISSUE No. 4
BIR ISSUANCES
date of issuance within
which to present the CAR
to the concerned Regis-
ter of Deeds.

New returns and proof
of tax payments shall
be needed to produce
a new CAR. To replace
an expired CAR, the fol-
lowing documents are
required:

a. A written request for
the issuance of a new
CAR, to be filed with
the concerned Revenue
District Office (RDO) or
BIR office authorized
to issue CARs under
existing rules and regu-
lations;
b. The original and dupli-
cate copies of the ex-
pired CAR;
c. The original copy of
the document of sale,
exchange or transfer
(e.g. Deed of Sale,
Deed of Assignment,
Deed of Donation,
Deed of Extrajudicial
Settlement of Estate,
etc.); and
d. Photocopies of the
proof of tax payment(s)
previously made, or a
Certification issued by
the BIRs Revenue Ac-
counting Division indicat-
ing therein the type of
tax(es) paid, the date of
payment and the amount
paid.

The following information
shall be indicated on the
face of the replacement
CAR:
a. The serial number of
the expired CAR and its
original date of issuance;
and
b. A statement that the
Page 4 L C A LINES

ties, in the development,
investigation and prose-
cution of RATE cases,
and in preventing the
conceal ment/di sposal /
transfer of assets by
taxpayer being investi-
gated under the RATE
Program. The Taxpayer
Lifestyle Check System,
among others, shall be
used in the development
of RATE cases.

The Revenue District Of-
fices (RDOs), the Large
Taxpayers Service (LTS)
and its District Offices
and Divisions shall act
immediately in all re-
quests from the NID
or the SIDs for infor-
mation needed to vali-
date or develop RATE
cases. Failure of an
RDO/LTS District Office
or Division to provide
the requested infor-
mation within 15 work-
ing days from receipt
of a request for infor-
mation shall be consid-
ered as sufficient
grounds for the impo-
sition of administrative
di sci pl i nar y act i on
against the concerned
office.

In all RATE cases, a pre-
liminary investigation
must first be conducted
to establish prima facie
evidence of fraud or
tax evasion. Such
investigation shall in-
clude the verification
and determination of
the schemes employed
and the extent of
fraud perpetrated by
the subject taxpayer.

In the event that, fol-
lowing the conduct of
the required prelimi-
nary investigation, the
NID/SIDs should deter-
mine that there is pri-
ma facie evidence of
tax fraud, it shall sub-
mit the case, together
with a memorandum
justifying the issuance
of a Letter of Authority
(LA) to the Deputy
Commissioner Legal
and Inspection Group
(DCIR-LIG), through
the Assistant Commis-
sioner (Enforcement Ser-
vice)/concerned Region-
al Director, for evalua-
tion. If the DCIR-LIG
finds a request merito-
rious, the docket of the
case, together with the
memorandum-request
bearing the concur-
rence of the DCIR-LIG,
shall be forwarded to
the Commissioner of
Internal Revenue (CIR),
for final review and ap-
proval.

The DCIR-LIG shall
likewise conduct the
appropriate verification
with the Letter of Au-
thority Monitoring Sys-
tem (LAMS) to ascertain
whether an LA for a tax-
payer for a particular
taxable year has already
been issued to the con-
cerned taxpayer. In the
event that it is ascer-
tained that no LA has
been previously issued
against the concerned
taxpayer, a printout of
the LAMS search results
must be included in the
docket of the case to
support the issuance of
the requested LA.

If, however, it is dis-
closed that an LA was
previously issued to the
concerned taxpayer, and
that the corresponding
investigation has al-
ready been commenced
or concluded, the DCIR
-LIG shall include in
the request for issu-
ance of an LA to the
CIR a recommendation
and justification for the
re-assignment to, or re
-opening of the investi-
gation by the NID/
SID concerned.

In the event that the
CIR should rule in fa-
vor of the re-
assignment to/re-
opening of the tax in-
vestigation by the NID/
SID, the DCIR-LIG
shall inform the RDO/
LT District Office or
Division concerned,
thru the Regional Di-
rector/Assistant Com-
missioner LTS, of
the decision of the
Commissioner, and re-
quire the transmittal of
the docket of the case
to the NID/SID, as well
as the cancellation of
the existing LA. Should
the Commissioner ap-
prove a request for
issuance of an LA, such
approval will be commu-
nicated to the DCIR-LIG
for the preparation and
issuance of the request-
ed LA by the latter. All
LAs issued for RATE cas-
es shall be signed by
the DCIR-LIG.

The issuance of LAs
shall cover only the
taxable year(s) for which
prima facie evidence of
tax fraud, or of viola-
tions of the Tax Code,
was est abl i shed
through the appropriate
preliminary investiga-
tion, unless the inves-
tigation of prior or
subsequent years is
necessary in order to:

Determine or trace
continuing transactions
entered into in the
covered year and con-
cluded thereafter, or
those transactions con-
cluded in the covered
year that were com-
menced in prior years; or
Establish that the same
scheme was utilized for
prior or subsequent
years.

The formal investiga-
tion of a RATE case,
including the examina-
tion of the taxpayers
books of accounts, ac-
counting records and
third-party records
through the issuance
of LAs and/or access
letters (if warranted),
shall be commenced only
after prima facie evi-
dence of fraud or tax
evasion has been es-
tablished. In cases
where the quantum of
evidence gathered is
not sufficient to prove
guilt beyond reasonable
doubt, and as such does
not warrant the institu-
tion of criminal proceed-
ings against the con-
cerned taxpayer, but
there exists clear and
convincing evidence that
fraud has been com-
mitted, a 50% sur-
charge shall be im-
posed on the taxpayer,
together with the defi-
ciency tax assessment.

Following the conclusion
of the formal investiga-
tion, the NID/SID shall
refer the RATE case, to-
gether with the complete

Page 5 L C A LINES
21-2010

RMC No. 21-2010 reiter-
ates the applicable pen-
alties for employers
who fail to withhold
and remit taxes, do the
year-end adjustment and
refund employees of the
excess withholding taxes
on compensation, in-
cluding those who under
-withheld taxes and un-
der-remitted the total
amount of taxes with-
held from employees.

The applicable penalties
for non-compliance with
the existing tax laws
and regulations relative
to withholding are the
following:
a. Additions to the tax
in the form of penalties
or interest per Sec-
tions 248, 249, 251 and
252 under Title X, Chap-
ter I of the Tax Code, as
amended
b. Criminal liabilities in
the form of fine or im-
prisonment or both
per Sections 255, 256,
272 and 275 under Title
X, Chapter II, III & IV of
the Tax Code, as amend-
ed

In certain instances, as
provided under Revenue
Memorandum Order No.
19-2007, a compromise
penalty in lieu of criminal
liability may be imposed
and collected.


REVENUE MEMORAN-
DUM CIRCULAR NO.
22-2010

RMC 22-2010 publishes
the full text of Republic
Act No. 10001 entitled
An Act Reducing the
Taxes on Life Insur-
ance Policies, Amend-
ing for this Purpose
Sections 123 and 183
of the National Inter-
nal Revenue Code
(NIRC) of 1997, as
Amended.

Section 123 of the
NIRC of 1997, as
amended, is hereby
further amended to
read as follows:
Sec. 123. Tax on Life
Insurance Premiums.
There shall be collected
from every person,
company or corpora-
tion (except purely
cooperative companies
or associations) doing
life insurance business
of an y sort in the Phil-
ippines a tax of two
percent (2%) of the
total premium collect-
ed, whether such pre-
miums are paid in
money, notes, credits
or any substitute for
money; but premiums
refunded within six (6)
months after payment
on account of rejection
of risk or returned for
other reason to a per-
son insured shall not
be included in the tax-
able receipts; nor shall
any tax be paid upon
reinsurance by a com-
pany that has already
paid the tax; nor upon
premiums collected or
received by any
branch of a domestic
corporation, firm or
association doing busi-
ness outside the Philip-
pines on account of
any life insurance of the
insured who is a non-
resident, if any tax
report at least three
(3) cases per quarter
that have been submit-
ted by the concerned
Regional Legal Division
to the DCIR-LIG, for
prosecution.

The DCIR-LIG shall
forward all RATE cases
recommended for crim-
inal prosecution, togeth-
er with the corre-
sponding CAs and RLs
to the Office of the
Commissioner, for final
review, approval and
signature. The prosecu-
tion of RATE cases
developed and investi-
gated by the NID shall
be carried out by the NO
-RATE Team, while the
prosecution of RATE cas-
es from the SIDs shall be
accomplished by the
Legal Divisions. All crim-
inal prosecution pro-
ceedings for RATE cases
shall be executed in co-
ordination with the De-
partment of Justice.

The Commissioner or
any other authorized
officer shall issue the
Warrants of Distraint
and/or Levy/Warrants of
Garnishment in order to
protect the interest of
the government over the
tax liabilities of a taxpay-
er undergoing a RATE
prosecution.

All internal revenue tax-
es collected as a result of
a RATE investigation
shall be credited to the
RDO or LT District Of-
fice/Division having
regular jurisdiction over
the concerned taxpayer.
REVENUE MEMORAN-
DUM CIRCULAR NO.
set of supporting docu-
ments to the National
Office (NO) RATE Team/
Legal Division, for eval-
uation and appropriate
action. In the event that
the NO-RATE Team/
Legal Division should
determine that a par-
ticular RATE case is
insufficient in form and
substance, it shall re-
turn the case to the
NID/SID, for further
investigation, specifying
the points or aspects
that must be en-
hanced and/or the
additional supporting
documents and infor-
mation that is needed
to strengthen the case.

However, if a RATE
case is found to be
sufficient in form and
substance, the NO-
RATE Team shall pre-
pare the appropriate
Complaint Affidavit
(CA) and Referral Let-
ter (RL), and forward
the same, together
with the docket of
the case, to the DCIR
-LIG, through the En-
forcement Service, for
review and evaluation.
The Legal Division,
shall prepare the CA
and RL and transmit
the docket of the
case to the DCIR-LIG,
through the concerned
Regional Director, for
review and evaluation.

The NID must be able
to report at least two
(2) cases per month
that have been submit-
ted by the NO-RATE
Team to the DCIR-LIG,
for prosecution. Each
SID must be able to

Page 6 VOLUME III, ISSUE No. 4
on such premium is
imposed by the foreign
country where the
branch is established
nor upon premiums col-
lected or received on
account of any reinsur-
ance, if the insured, in
case of personal insur-
ance, resides outside
the Philippines, if any tax
on such premiums is im-
posed by the foreign
country where the origi-
nal insurance has been
issued or perfected;
nor upon that portion
of the premiums col-
lected or received b y
the insurance compa-
nies on variable con-
tracts, in excess of the
amounts necessary to
insure the lives of the
variable contract owners.

Cooperative companies
or associations are
such as are conducted
by the members there-
of with the money
collected from among
themselves and solely
for their own protection
and not for profit.

The new rate of two
percent (2%) shall ap-
ply only to insurance
policies that will be
issued after the effectivi-
ty of this Act: Provided,
however, That insur-
ance policies taken out
before the effectivity of
this Act but the premi-
ums are not yet fully
paid, the new rate of
two percent (2%) shall
be applied to the re-
maining balance and for
the remaining years.

Section 183 of the
NIRC of 1997, as
amended, now stipu-
lates that on all poli-
cies of insurance or
other instruments by
whatever name the
same may be called,
whereby any insurance
shall be made or re-
newed upon any life or
lives, there shall be col-
lected a one-time Docu-
mentary Stamp Tax at
the following rates:

If the amount of insur-
ance does not exceed
Php100,000.00 exempt

If the amount of insur-
a n c e e x c e e d s
Php100,000.00 but does
n o t e x c e e d
P h p 3 0 0 , 0 0 0 . 0 0
Php10.00

If the amount of insur-
a n c e e x c e e d s
Php300,000.00 but does
n o t e x c e e d
P h p 5 0 0 , 0 0 0 . 0 0
Php25.00

If the amount of insur-
a n c e e x c e e d s
Php500,000.00 but does
n o t e x c e e d
P h p 7 5 0 , 0 0 0 . 0 0
Php50.00

If the amount of insur-
a n c e e x c e e d s
Php750,000.00 but does
n o t e x c e e d
P h p 1 , 0 0 0 , 0 0 0 . 0 0
Php75.00

If the amount of insur-
a n c e e x c e e d s
P h p 1 , 0 0 0 , 0 0 0 . 0 0
Php100.00

Five (5) years after the
effectivity of this Code,
no tax on life insurance
premium shall be col-
lected: Provided, fur-
ther, That on the said
date, all policies of
insurance or other in-
struments by whatever
name the same shall be
called whereby an y in-
surance shall be made
upon any life or lives
shall be exempt from the
Documentary Stamp Tax.



REVENUE MEMORAN-
DUM CIRCULAR NO.
23-2010

RMC No. 23-2010 pub-
lishes the full text of Re-
public Act (RA) No. 9999
entitled An Act Provid-
ing a Mechanism for
Free Legal Assistance
and For Other Purposes.

The said RA guarantees
the provision of free le-
gal assistance to the
poor and ensures that
every person who can-
not afford the services
of a counsel is provid-
ed with a competent
and independent coun-
sel preferably of his/her
own choice, if upon
determination it appears
that the party cannot
afford the services of a
counsel, and that the
services of a counsel
are necessary to secure
the ends of justice and
protect the rights of the
party.

For purposes of availing
the benefits and services
under the RA, a lawyer
or professional partner-
ship shall secure a certi-
fication from the Public
Attorneys Office (PAO),
the Department of Jus-
tice (DOJ) or accredited
association of the Su-
preme Court indicating
that the said legal ser-
vices to be provided
are within the services
defined by the Supreme
Court, and that the
agencies cannot provide
the legal services to be
provided by the private
counsel.

In determining the num-
ber of hours actually
provided by the lawyer
and/or professional firm
in the provision of legal
services, the association
and/or organization duly
accredited by the Su-
preme Court shall issue
the necessary certifica-
tion that said legal ser-
vices were actually un-
dertaken, which shall be
submitted to the BIR for
purposes of availing tax
deductions.

A lawyer or professional
partnerships rendering
actual free legal ser-
vices, shall be entitled
to an allowable deduc-
tion from the gross
income, the amount
that could have been
collected for the actual
free legal services ren-
dered or up to 10% of
the gross income de-
rived from the actual
performance of the le-
gal profession, whichev-
er is lower: Provided,
That the actual free le-
gal service herein con-
templated shall be ex-
clusive of the minimum
60-hour mandatory legal
aid services rendered to
indigent litigants as re-
quired under the Rule
on Mandatory Legal Aid
Service for Practicing
Lawyers, under BAR
Matter No. 2012, issued
by the Supreme Court.


REVENUE MEMORAN-
DUM CIRCULAR NO.
24-2010

RMC No. 24-2010 defers
until June 30, 2010 the
implementation of Reve-
nue Regulations No. 7-
2009 relative to the Elec-
t roni c Document ar y
Stamp Tax (eDST) Sys-
Page 7
LCA LINES

ers who cannot as yet
comply with the require-
ments of said system are
advised to adopt the
Constructive Stamping/
Receipt System (CS/
RS) of Documentary
Stamp Tax provided
under Revenue Memo-
randum Circular No. 1-
2010.

tem.

After the said date, no
further request for de-
ferment on the manda-
tory use of the said
system shall be enter-
tained.

During the interim pe-
riod of suspension,
taxpayers who are al-
ready technically capa-
ble to use the eDST
System may voluntarily
avail of the same.
However, those taxpay-

IMPLEMENTING RULES
AND REGULATIONS OF
THE REAL ESTATE IN-
VESTMENT TRUST
(REIT) ACT OF 2009


FEATURES

The Implementing Rules
and Regulations of RA
9856 shall make way for
the full implementation of
the The Real Estate In-
vestment Trust (REIT) Act
of 2009 which seeks to
promote the development
of capital market and de-
mocratize wealth by
broadening the participa-
tion of Filipinos in the
ownership of real estate
companies in the Philip-
pines. The REIT law also
aims to use the capital
market as an instrument
to help finance and devel-
op infrastructure projects
and protect the investing
public.

With a minimum capitali-
zation of P300 million, a
REIT company may apply
for registration of its se-
curities with the SEC and
avail of incentives as
provided for by the law,
such as favorable tax
rates and lowered fees.
On the side of the inves-
tor, shareholders will be
assured of steady in-
come flow with the law
requiring REIT compa-
nies to declare annually
at least 90 percent of its
distributable income as
dividends to its share-
holders.

To see the full text,
please visit: h t t p : / /
www.sec.gov.ph/irr-reit-
a c t / R E I T %2 0 I R R %
2 0 c l e a n %2 0 d r a f t %
20as%20of%20Apri l %
2015%202010.pdf



A.M. No. 09-6-8-SC
RULES OF PROCEDURE
FOR ENVIRONMENTAL
CASES


FEATURES

The Supreme Court
promulgated the Rules of
Procedure for Environ-
mental Cases (Rules)
which will serve as a cat-
alyst in support of
sweeping and far-
reaching reforms in envi-
ronmental litigation and
protection. The Rules
are the first of its kind in
the world.

Highlights of the Rules
include provisions on:
(1) citizen suits, (2)
consent decree, (3)
environmental protec-
tion order, (4) writ of
kalikasan, (5) writ of
continuing mandamus,
(6)strategic lawsuits
against public partici-
pation (SLAPP) and (7)
the precautionary
principle.

To further encourage the
protection of the envi-
ronment, the Rules ena-
ble litigants enforcing
environmental rights to
file their cases as citizen
suits. As a procedural
device, citizen suits per-
mit deferred of payment
of filing fees until after
the judgment

Writ of Kalikasanit
is available to a natural
or juridical person, enti-
ty authorized by law,
peoples organization,
non-governmental or-
ganization, or any pub-
lic interest group ac-
credited by or regis-
tered with any govern-
ment agency, on behalf
of persons whose con-
stitutional right to a bal-
anced and healthful
ecology is violated, or
threatened with viola-
tion by an unlawful act
or omission of a public
official or employee, or
private individual or
entity, involving envi-
ronmental damage of
such magnitude as to
prejudice the life, health
or property of inhabit-
ants in two or more cit-
ies or provinces. The
petition for the issuance
of a writ of kalikasan
can be filed with the
Supreme Court or with
any of the stations of
Page 8 VOLUME III, ISSUE No. 4
the Court of Appeals.

Writ of Continuing
Mandamus integrates
the ruling in Concerned
Residents of Manila Bay
v. MMDA G.R. Nos.
171947-48, December
8, 2008) and the exist-
ing rule on the issuance
of the writ of manda-
mus. The writ of con-
tinuing Mandamus may
be availed of to compel
the performance of an
act specifically enjoined
by law. It permits the
court to retain jurisdiction
after judgment in order to
ensure the successful im-
plementation of the reliefs
mandated under the
court's decision. For this
purpose, the court may
compel the submission of
compliance reports from
the respondent govern-
ment agencies as well as
avail of other means to
monitor compliance with
its decision. Both peti-
tions for the issuance of
the writs of kalikasan and
mandamus are exempt
from the payment of
docket fees.

Another significant aspect
of the Rules is the Precau-
tionary Principleit finds
direct application in the
evaluation of evidence in
cases before the courts.
The precautionary princi-
ple bridges the gap in
cases where scientific cer-
tainty in factual findings
cannot be achieved. By
applying the precaution-
ary principle, the court
may construe a set of
facts as warranting either
judicial action or inaction,
with the goal of preserv-
ing and protecting the
environment.

To see the full text,
please visit: http://
s c . j udi c i a r y . go v . p h/
E n v i r o n m e n -
tal_Annotation.pdf
JURISPRUDENCE
PEOPLE OF THE PHIL-
IPPINES
vs.
TIRSO SACE y MON-
TOYA
G.R. No. 178063
April 5, 2010


FACTS: On 9 Septem-
ber 1999, at around
7:00 oclock in the
evening, in Marinduque,
Philippines, Tirso Sace y
Montoya (Sace) suc-
ceeded in having carnal
knowledge of AAA
against her will and
consent and thereafter,
Sace stabbed AAA with
a sharp bladed weapon,
inflicting upon her fatal
injuries causing her
death.
Sace admitted to the
barangay officials and
tanods that he was the
one (1) who committed
the crime. He admitted
that he raped and killed
AAA.

The Regional Trial Court
(RTC) found Sace guilty
beyond reasonable doubt
for the rape and killing of
AAA.
The Court of Appeals (CA)
upheld the decision of the
RTC.

ISSUE: Whether or not
the RTC erred in finding
Sace guilty beyond rea-
sonable doubt of the
crime of rape with homi-
cide.

RULING: Whether
or not the admission of
Sace in the commission of
the crime is considered
res gestae.
The admission of Sace in
the commission of the
crime is considered res
gestae.

The facts in this case
clearly show that Sace
admitted the commission
of the crime. According to
the testimonies of the
prosecution on record,
Sace admitted having
raped and killed AAA
these were not rebutted
by the defense. Saces
statements infront of the
prosecution witnesses are
admissible for being part
of the res gestae. Under
the Revised Rules on Evi-
dence, a declaration is
deemed part of the res
gestae and admissible in
evidence as an exception
to the hearsay rule when
the following requisites
concur: (1) the principal
act, the res gestae, is a
startling occurrence; (2)
the statements were
made before the declarant
had time to contrive or
devise; and (3) the state-
ments must concern the
occurrence in question
and its immediately at-
tending circumstances.
All these requisites are
present in this case. Sace
had just been through a
startling and gruesome
occurrence, AAAs
death. His admission was
made while he was still
under the influence of
said startling occurrence
and before he had an op-
portunity to concoct or
contrive a story. In addi-
tion, he was still under
the influence of alcohol at
that time, having engaged
in a drinking spree from
1:00 p.m. to 7:00 p.m.
that day. His confession
concerned the rape and
killing of AAA. Saces
spontaneous statements
made to private persons,
not agents of the State or
law enforcers, are not
covered by the constitu-
tional safeguards on cus-
todial investigation and,
as res gestae, admissible
in evidence against him.


SPO1 LEONITO
ACUZAR
vs.
APRONIANO JOROLAN
and HON. EDUARDO
APRESA, PEOPLES
LAW ENFORCEMENT
BOARD (PLEB) Chair-
man, New Corella, Da-
vao del Norte
G.R. No. 177878
April 7, 2010

FACTS: On May 2000,
Aproniano Jorolan
(Jorolan) filed an adminis-
trative case against SPO1
Leonito Acuzar (Acuzar)
before the Peoples Law
Enforcement Board
(PLEB) charging the latter
of Grave Misconduct for
allegedly having an illicit
relationship with Jorolans
minor daughter.
Jorolan also instituted a
criminal case against
Acuzar before the Munici-
pal Trial Court (MTC) for
Violation of Section 5 (b),
Article III of Republic Act
No. 7610, Child Abuse
Act.
Azucar filed a motion to
suspend the proceedings
before the PLEB pending
resolution of the criminal
case filed before the regu-
lar court. The PLEB de-
nied his motion for lack of
merit and a hearing of the
case was conducted. The
PLEB also denied Azucars
motion for reconsidera-
tion.
After due proceedings,
the PLEB issued a deci-
sion, finding Azucar guilty
of Grave Misconduct.
Upon receipt of the deci-
sion, Azucar filed a Peti-
tion for Certiorari with
Prayer for Preliminary
Mandatory Injunction and
Temporary Restraining
Order with the RTC.
Azucar was ordered dis-
missed from the Philippine
National Police (PNP).
The Regional Trial Court
(RTC) rendered a Decision
annulling the Decision of
the PLEB.
The Court of Appeals (CA)
rendered its Decision re-
versing and setting aside
the RTC decision.

ISSUE: Whether or not
Azucar was denied due
process by the PLEB.

RULING: A z u c a r
was not denied due pro-
cess by the PLEB.
In the instant case, Az-
ucar was notified by the
PLEB of the complaint
against him and in fact,
he had submitted his
counter-affidavit and the
affidavits of his witnesses.
He attended the hearings
together with his counsel
and even asked for sever-
al postponements. He
therefore cannot claim
that he had been denied
of due process.

Due process in an admin-
istrative context does not
require trial-type proceed-
ings similar to those in
courts of justice. Where
opportunity to be heard
either through oral ar-
guments or through
pleadings is accorded,
there is no denial of due
process. The require-
ments are satisfied
where the parties are
afforded fair and rea-
sonable opportunity to
explain their side of the
controversy. In other
words, it is not legally
objectionable for being
violative of due process
for an administrative
agency to resolve a
case based solely on
position papers, affida-
vits or documentary
evidence submitted by
the parties as affidavits
of witnesses may take
the place of direct testi-
mony. Here, we note
that Azucar had more
than enough opportuni-
ty to present his side
and adduce evidence in
support of his defense;
thus, he cannot claim
that his right to due
process has been violat-
ed.







L C A LINES
Page 9
TECHNOL EIGHT PHIL-
IPPINES CORPORA-
TION
vs.
NATIONAL LABOR RE-
LATIONS COMMISSION
AND DENNIS AMULAR
G.R. No. 187605
April 13, 2010

FACTS: Technol Eight Phil-
ippines Corporation
(Technol) hired Dennis
Amular (Amular) in March
1998 and assigned him to
Technols Shearing Line,
together with Clarence P.
Ducay (Ducay). Rafael
Mendoza (Mendoza) was
the lines team leader.

Sometime in April 2002,
Mendoza was confronted
by Amular and Ducay in
an internet shop who en-
gaged him in a heated
argument regarding their
work in the shearing line.
The heated argument re-
sulted in a fistfight that
required the intervention
of the barangay tanods in
the area.

Technols management
sent to Amular and Ducay
a notice of preventive
suspension/notice of dis-
charge advising them that
their fistfight with Mendo-
za violated Technols Hu-
man Resource Depart-
ment (HRD) Manual.
The two were given forty
-eight (48) hours to ex-
plain why no disciplinary
action should be taken
against them for the inci-
dent. They were placed
under preventive sus-
pension for thirty (30)
days. Amular submitted
a written statement on
May 20, 2002.

Thereafter, Amular re-
ceived a notice dated
informing him that Tech-
nol management will
conduct an administra-
tive hearing. However, a
day before the hearing
Amular filed a complaint
for illegal suspension/
constructive dismissal
with a prayer for separa-
tion pay, backwages and
several money claims,
against Technol. Amular
failed to attend the ad-
ministrative hearing.
Thereafter, Technol sent
him a notice of dismissal.

The Labor Arbiter ren-
dered a decision finding
Amulars preventive sus-
pension and subsequent
dismissal were illegal.

The National Labor Rela-
tions Commission (NLRC)
affirmed the labor arbi-
ters ruling. Technol
moved for reconsidera-
tion, but the NLRC de-
nied the motion.

The Court of Appeals
(CA) found no grave
abuse of discretion on
the part of the NLRC
when it affirmed the la-
bor arbiters ruling that
Amular was illegally dis-
missed. The CA denied
the motion for reconsid-
eration Technol subse-
quently filed.

ISSUE: Whether or not
Amular was illegally dis-
missed.

RULING: Amular
was not illegally dis-
missed.

Contrary to the CAs per-
ception, the Supreme
Court (SC) finds that the
assault on Mendoza was
work-related. The un-
derlying reason why Am-
ular and Ducay confront-
ed Mendoza was to ques-
tion him about his report
to De Leon Technols
PCD assistant supervisor
regarding the duos
questionable work behav-
ior. The motivation be-
hind the confrontation,
was rooted on workplace
dynamics as Mendoza,
Amular and Ducay inter-
acted with one another in
the performance of their
duties.

Amular undoubtedly com-
mitted a misconduct or
exhibited improper behav-
ior that constituted a valid
cause for his dismissal
under the law and juris-
prudential standards. The
circumstances of his mis-
deed, rendered him unfit
to continue working for
Technol.

Amular was not discrimi-
nated against because he
was not the only one pre-
ventively suspended. As
the CA itself acknowl-
edged, both Ducay and
Amular received their no-
tice of preventive suspen-
sion/notice of charge on
different dates. These no-
tices informed them that
they were being preven-
tively suspended for 30
days.

Amulars claim of denial of
procedural due process is
VOLUME III, ISSUE No. 4 Page 10

untenable. He chose not
to present his side at the
administrative hearing.
In fact, he avoided the
investigation into the
charges against him by
filing his illegal dismissal
complaint ahead of the
scheduled investigation.
Under these facts, he was
given the opportunity to
be heard. To belabor a
point the Court has re-
peatedly made in employ-
ee dismissal cases, the
essence of due process is
simply an opportunity to
be heard; it is the denial
of this opportunity that
constitutes violation of
due process of law.

Thus, Amular was not ille-
gally dismissed; he was
dismissed for cause.


TFS, INCORPORATED
vs.
COMMISSIONER OF IN-
TERNAL REVENUE
G.R. No. 166829
April 19, 2010


FACTS: TFS, Incorporated
(TFS) received a Preliminary
Assessment Notice (PAN) for
the taxable year 1998. In-
sisting that there was no
basis for the issuance of
PAN, it requested the Bu-
reau of Internal Revenue
(BIR) to withdraw and set
aside the assessments.

A Final Assessment Notice
(FAN) was later on issued
against TFS which the com-
pany protested.

There being no action taken
by the Commission of Inter-
nal Revenue (CIR), TRF filed
a Petition for Review with
the Court of Tax Appeals
(CTA).

The CTA rendered a Deci-
sion upholding the assess-
ment issued against TFS.
TFS moved for reconsidera-
tion but the same was de-
nied.

TFS filed a Petition for Re-
view with the Court of Ap-
peals (CA) but the same
was dismissed.

TFS filed a Petition for Re-
view with the CTA. The pe-
tition, however, was dis-
missed. TFS filed a Motion
for Reconsideration but the
same was denied.

ISSUE: Whether or not TFS
is subject to the 10% VAT.

RULING: TFS is not
subject to 10% VAT.
Since TFS is a non-bank
financial intermediary, it
is subject to 10% VAT for
the tax years 1996 to
2002; however, with the
levy, assessment and col-
lection of VAT from non-
bank financial intermedi-
aries being specifically
deferred by law, then TFS
is not liable for VAT dur-
ing these tax years. But
with the full implementa-
tion of the VAT system on
non-bank financial inter-
mediaries starting Janu-
ary 1, 2003, TFS is liable
for 10% VAT for said tax
year. And beginning
2004 up to the present,
by virtue of R.A. No.
9238, it is no longer liable
for VAT but it is subject to
percentage tax on gross
receipts from 0% to 5%,
as the case may be.
Since the imposition of
VAT on pawnshops, which
Page 11
L C A LINES
LUIS A. ASISTIO
vs.
HON. THELMA CAN-
LAS TRINIDAD-PE
AGUIRRE, Presiding
Judge,
Regional Trial Court,
Caloocan City, Branch
129; HON. ARTHUR O.
MALABAGUIO, Pre-
siding Judge, Metro-
politan Trial Court,
Caloocan City, Branch
52; ENRICO R.
ECHIVERRI,
Board of Election In-
spectors of Precinct
1811A,
Barangay 15,
Caloocan City; and
the CITY ELECTION
OFFICER,
Caloocan City
G.R. No. 191124 April
27, 2010

FACTS: Enrico R.
Echiverri (Echiverri)
filed against Luis A.
Asistio (Asistio) a Peti-
tion for Exclusion of
Voter from the Perma-
nent List of Voters of
Caloocan City (Petition
for Exclusion) before
the Metropolitan Trial
Court (MeTC) Branch 52
stating that Asistio is
not a resident of
Caloocan City. Judge
Arthur O. Malabaguio
(Judge Malabaguio) pre-
sides over MeTC Branch
52.
Echiverri, also a candi-
date for Mayor of
Caloocan City, was the


Page 12 VOLUME III, ISSUE No. 4
respondent in a Petition to
Deny Due Course and/or
Cancellation of the Certifi-
cate of Candidacy filed by
Asistio. According to
Echiverri, when he was
about to furnish Asistio a
copy of his Answer to the
latters petition, he found
out that Asistios address
is non-existent.

Judge Malabaguio ren-
dered a decision ordering
the Election Registration
Board to remove the
name of Asistio from the
list of the permanent vot-
ers of Caloocan City.

Meanwhile, Echiverri filed
with the COMELEC a Peti-
tion for Disqualification,
on the grounds that Asis-
tio is not a resident of
Caloocan City and that he
had been previously con-
victed of a crime involving
moral turpitude.

Asistio filed his Notice of
Appeal with the Regional
Trial Court (RTC) and paid
the required appeal fees
through postal money
orders.
Judge Thelma Aguirre
(Judge Aguirre) issued an
Order stating that the RTC
did not acquire jurisdic-
tion over the appeal due
to the non-payment of
docket fees.

ISSUES:
1. Whether or not the RTC
acquired jurisdiction over
the Notice of Appeal filed
by Asistio;
2. Whether or not Asistio
should be excluded from
the permanent list of vot-
ers of [Precinct 1811A] of
Caloocan City for failure
to comply with the resi-
dency required by law.

With regard to the first
issue, the RTC acquired
jurisdiction over the No-
tice of Appeal filed by
Asistio.

While Judge Aguirre de-
clares in her Order that
the appellate docket fees
were paid on February 11,
2010, she conveniently
omits to mention that the
postal money orders ob-
tained by Asistio for the
purpose were purchased
on February 10, 2010. It
is noteworthy that, as
early as February 4,
2010, Asistio already
manifested that he could
not properly file his mem-
orandum with the MeTC
due to the non-availability
of the TSNs. Obviously,
these TSNs were needed
in order to prepare an
intelligent appeal from the
questioned MeTC Order.
Asistio was able to get
copies of the TSNs only
on February 10, 2010, the
last day to file his appeal,
and, naturally, it would
take some time for him to
review and incorporate
them in his arguments on
appeal. Understandably,
Asistio filed his notice of
appeal and appeal, and
purchased the postal
money orders in payment
of the appeal fees on the
same day. Asistio, by pur-
chasing the postal money
orders for the purpose of
paying the appellate
docket fees on February
10, 2010, although they
were tendered to the
MeTC only on February
11, 2010, had already
substantially complied
with the procedural re-
quirements in filing his
appeal.

In this case, even if we
assume for the sake of
argument, that the appel-
late docket fees were not
filed on time, this incident
alone should not thwart
the proper determination
and resolution of the in-
stant case on substantial
grounds. Blind adherence
to a technicality, with the
inevitable result of frus-
trating and nullifying the
constitutionally guaran-
teed right of suffrage,
cannot be countenanced.

With regard to the second
issue, Asistio should not
be excluded from the per-
manent list of voters of
[Precinct 1811A] of
Caloocan City.

The residency require-
ment of a voter is at least
one (1) year residence in
the Philippines and at
least six (6) months in
the place where the per-
son proposes or intends
to vote. Residence, as
used in the law prescrib-
ing the qualifications for

suffrage and for elective
office, is doctrinally set-
tled to mean domicile,
importing not only an in-
tention to reside in a fixed
place but also personal
presence in that place,
coupled with conduct in-
dicative of such intention
inferable from a persons
acts, activities, and utter-
ances. Domicile denotes
a fixed permanent resi-
dence where, when ab-
sent for business or pleas-
ure, or for like reasons,
one intends to return. In
the consideration of cir-
cumstances obtaining in
each particular case,
three rules must be borne
in mind, namely: (1) that
a person must have a res-
idence or domicile some-
where; (2) once estab-
lished, it remains until a
new one is acquired; and
(3) that a person can
have but one residence or
domicile at a time.

Domicile is not easily lost.
To successfully effect a
transfer thereof, one must
demonstrate: (1) an actu-
al removal or change of
domicile; (2) a bona fide
intention of abandoning
the former place of resi-
dence and establishing a
new one; and (3) acts
which correspond with
that purpose. There must
be animus manendi cou-
pled with animus non re-
vertendi. The purpose to
remain in or at the domi-
cile of choice must be for
an indefinite period of
time; the change of resi-
dence must be voluntary;
and the residence at the
place chosen for the new
domicile must be actual.

Asistio has always been a
resident of Caloocan City
since his birth or for more
than 72 years. His family
is known to be among the
prominent political fami-
lies in Caloocan City. In
fact, Asistio served in
public office as Caloocan
City Second District rep-
resentative in the House
of Representatives, hav-
ing been elected as such
in the 1992, 1995, 1998,
and 2004 elections. In
2007, he also sought
election as City Mayor. In
all of these occasions,
Asistio cast his vote in the

L C A LINES
Page 13
same city. Taking these
circumstances into con-
sideration, gauged in the
light of the doctrines
above enunciated, it can-
not be denied that Asistio
has qualified, and contin-
ues to qualify, as a voter
of Caloocan City. There is
no showing that he has
established domicile else-
where, or that he had
consciously and voluntari-
ly abandoned his resi-
dence in Caloocan City.
He should, therefore, re-
main in the list of perma-
nent registered voters of
Precinct No. 1811A, Ba-
rangay 15, Caloocan City.


VOLUME III, ISSUE No. 4 Page 14
Volume III Issue 4
April-May 2010
LAGUNDI-CARONAN AND ASSOCIATES
J
L
s
C
O
R
N
E
R



BILLING

A doctor and a lawyer were talking at a party.
Their conversation was constantly interrupted by people describing their ail-
ments and asking the doctor for free medical advice.

After an hour of this, the exasperated doctor asked the lawyer, "What do
you do to stop people from asking you for legal advice when you're out of
the office?"

"I give it to them," replied the lawyer, "and then I send them a bill."

The doctor was shocked, but agreed to give it a try.

The next day, still feeling slightly guilty, the doctor prepared the bills.

When he went to place them in his mailbox, he found a bill from the lawyer.