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On April 2, 2004, after having served as Regional Trial Court Judge and Executive Judge of Mandaluyong

City, Japar B. Dimaampao took his oath of office as Associate Justice of the Court of Appeals before
President Gloria Macapagal-Arroyo.
At the age of 40, Mr. Justice Dimaampao now holds the distinction of being the youngest magistrate ever to
have been appointed to the Appellate Court.
His professional life, has been, for the most part, devoted to being an educator. Through perseverance and
diligence, he gradually gained recognition as Professor of Law. He teaches Taxation, Commercial Law and
Civil Law at the University of Santo Tomas, University of the East, Far Eastern University and Manuel L.
Quezon University. In addition, he conducts Bar Review classes in various law schools all over the country.
In 2003, Justice Dimaampao was a finalist for the Judicial Excellence Awards. He was accorded the Model
Law Professor Award by the Huwarang Pilipino Program of the Radyo ng Bayan, the privilege of being Chair
Holder of the Pedro Concepcion Professorial Chair for Commercial Law at the Far Eastern University Institute
of Law, and the honor of being distinguished as a Hall of famer of the University of the East College of Law.
In the recently-concluded 2006 Shari'a Bar Examinations, he was the Examiner in Wills and Succession.
Justice Dimaampao likewise carries the distinction of being the first and only muslim Senior State
Prosecutor, Bar Reviewer, Professor of Law of the University of Santo Tomas and Member of the University of
the Philippines Law Center, Committee on Bar Examinations in Commercial Law and Taxation. He has
published to his credit two books in taxation entitled, "Tax Principles and Remedies" and "Basic Approach to
Income Taxation".
His recent concurrent positions include, among others, being a Professorial Lecturer of the Department of
Shari'a Law and Jurisprudence of the Philippine Judicial Academy of the Supreme Court, Professor of Law at
the San Beda College Graduate School of Law and Business and Lecturer of the Mandatory Continuing Legal
Education (MCLE) in Taxation and Commercial Law.
He was educated at the University of the East where he obtained his BSBA degree in 1982 and LL.B degree
in 1987. A consistent honor student and university scholar all throughout his scholastic years, he passed the
CPA Board Examinations in 1983, at the age of 19. Too young to be given a CPA license, he took up Law
instead and passed the Bar in 1988. Having honored his Alma Mater with his admirable achievements, he
was recently honored, in return, by his selection as one of the 60 Outstanding UE Alumni in commemoration
of the University's Diamond Anniversary.
Japs, as he is fondly called by family and friends, draws strength and inspiration from his one and only
wife, Ma. Gina Perez Villapae of Mainit, Surigao del Norte.
Born on December 27, 1963 in Marawi City, Lanao del Sur, he is the 3rd son of Former Comelec
Commissioner Magdara B. Dimaampao and the late Hadja Faridah.

his research guide summarizes the sources of Philippine tax law.


Tax law in the Philippines covers national and local taxes. National taxes refer to
national internal revenue taxes imposed and collected by the national government
through the Bureau of Internal Revenue (BIR) and local taxes refer to those imposed
and collected by the local government. The Tax Code of 1997, Revenue Issuances and
BIR Rulings pertaining to national taxes are posted at the BIR website.

National Tax Law


I. 1987 Constitution
The 1987 Philippine Constitution sets limitations on the exercise of the power to tax.
The rule of taxation shall be uniform and equitable. The Congress shall evolve a
progressive system of taxation. (Article VI, Section 28, paragraph 1)
All money collected on any tax levied for a special purpose shall be treated as a special
fund and paid out for such purpose only. If the purpose for which a special fund was
created has been fulfilled or abandoned, the balance, if any, shall be transferred to the
general funds of the Government. (Article VI, Section 29, paragraph 3)
The Congress may, by law, authorize the President to fix within specified limits, and
subject to such limitations and restriction as it may impose, tariff rates, import and
export quotas, tonnage and wharfage dues, and other duties or imposts within the
framework of the national development program of the Government (Article VI, Section
28, paragraph 2) The President shall have the power to veto any particular item or items
in an appropriation, revenue or tariff bill, but the veto shall not affect the item or items to
which he does not object. (Article VI, Section 27, second paragraph)
The Supreme Court shall have the power to review, revise, reverse, modify or affirm on
appeal or certiorari, as the law or the Rules of Court may provide, final judgments and
orders of lower courts in x x x all cases involving the legality of any tax, impost,
assessment, or toll or any penalty imposed in relation thereto. (Article VIII, Section 5,
paragraph)
Tax exemptions are limited to those granted by law. However, no law granting any tax
exemption shall be passed without the concurrence of a majority of all the members of
the Congress. (Article VI, Section 28, par. 4). The Constitution expressly grants tax
exemption on certain entities/institutions such as (1) charitable institutions, churches,
parsonages or convents appurtenant thereto, mosques, and nonprofit cemeteries and
all lands, buildings and improvements actually, directly and exclusively used for

religious, charitable or educational purposes (Article VI, Section 28, paragraph 3); (2)
non-stock non-profit educational institutions used actually, directly and exclusively for
educational purposes. (Article XVI, Section 4(3))
In addition to national taxes, the Constitution provides for local government taxation.
(Article X, Section 5) (Article X, Section 6) Parenthetically, the Local Government Code
provides that all local government units are granted general tax powers, as well as other
revenue-raising powers like the imposition of service fees and charges, in addition to
those specifically granted to each of the local government units. But no such taxes, fees
and charges shall be imposed without a public hearing having been held prior to the
enactment of the ordinance. The levy must not be unjust excessive, oppressive,
confiscatory or contrary to a declared national economic policy (Section 186 and 187)
Further, there are common limitations to the grant of the power to tax to the local
government, such that taxes like income tax, documentary stamp tax, etc. cannot be
imposed by the local government.
II. Laws
The basic source of Philippine tax law is the National Internal Revenue Law, which
codifies all tax provisions, the latest of which is embodied in Republic Act No. 8424
(The Tax Reform Act of 1997). It amended previous national internal revenue codes,
which was approved on December 11, 1997. A copy of the Tax Reform Act of 1997,
which took effect on January 1, 1998, can be found here.
Local taxation is treated separately in this Guide. There are, however, special laws that
separately provide special tax treatment in certain situations. (See attached matrix on
special laws)
III. Treaties
The Philippines has entered into several tax treaties for the avoidance of double taxation
and prevention of fiscal evasion with respect to income taxes. At present, there are 31
Philippine Tax Treaties in force.

Copies are available at the BIR Library and the

International Tax Affairs Division of the BIR, which is under the Deputy Commissioner
for Legal and Inspection Group.
The Philippine Treaty Series, edited and annotated by Haydee Yorac and published by
Law Publishing House, University of the Philippines, is available in seven (7) volumes,
covering the years 1944 to 1978 . The Philippine Treaty Index, by Benjamin Domingo,
covers the years 1978 to 1982. A copy of the Philippine Treaty Index is available in the
Department of Foreign Affairs (DFA) Library. These publications contain treaties entered
into by the Philippines. Tax privileges and exemptions granted under treaties to which
the Philippines is a signatory are recognized under Philippine tax law. Copies of treaties
entered into by the Philippines with other countries and/or international organizations,
from 1983 up to the present, are available at the DFA Library.
IV.

Administrative Material

The Secretary of Finance, upon the recommendation of the Commissioner, promulgates


needful rules and regulations for the effective enforcement of the provisions of the Tax
Code (Section 244, Tax Code of 1997). The Commissioner of Internal Revenue,
however, has the exclusive and original power to interpret the provisions of the Tax
Code, but subject to review by the Secretary of Finance.
Administrative issuances which may be relied upon in interpreting the provisions of the
Tax Code, which are signed by the Secretary of Finance, or the Commissioner of
Internal Revenue, or his duly authorized representative, come in the form of Revenue
Regulations, Revenue Memorandum Orders, Revenue Memorandum Rulings, Revenue
Memorandum Circulars, Revenue Memorandum Rulings, and BIR Rulings.
Revenue Regulations (RRs) are issuances signed by the Secretary of Finance, upon
recommendation of the Commissioner of Internal Revenue, that specify, prescribe or
define rules and regulations for the effective enforcement of the provisions of the
National Internal Revenue Code (NIRC) and related statutes.
Revenue Memorandum Orders (RMOs) are issuances that provide directives or
instructions; prescribe guidelines; and outline processes, operations, activities,

workflows, methods and procedures necessary in the implementation of stated policies,


goals, objectives, plans and programs of the Bureau in all areas of operations, except
auditing.
Revenue Memorandum Rulings (RMRs) are rulings, opinions and interpretations of the
Commissioner of Internal Revenue with respect to the provisions of the Tax Code and
other tax laws, as applied to a specific set of facts, with or without established
precedents, and which the Commissioner may issue from time to time for the purpose of
providing taxpayers guidance on the tax consequences in specific situations. BIR
Rulings, therefore, cannot contravene duly issued RMRs; otherwise, the Rulings are null
and void ab initio.
Revenue Memorandum Circular (RMCs) are issuances that publish pertinent and
applicable portions, as well as amplifications, of laws, rules, regulations and precedents
issued by the BIR and other agencies/offices.
BIR Rulings are the official position of the Bureau to queries raised by taxpayers and
other stakeholders relative to clarification and interpretation of tax laws.
Revenue Regulations, Revenue Memorandum Orders, Revenue Memorandum Rulings,
Revenue Memorandum Circulars, Revenue Memorandum Rulings, and BIR Rulings are
found here.
V. Case Law
In the Philippines, Supreme Court decisions form part of the law of the land. As such,
decisions by the Supreme Court (sc.judiciary.gov.ph) in the exercise of its power to
review, revise, reverse, modify or affirm on appeal or certiorari, as the law or the Rules
of Court may provide, final judgments and orders of lower courts cases involving the
legality of any tax, impost, assessment, or toll or any penalty imposed in relation thereto
are adhered to and recognized as binding interpretations of Philippine tax law. Court of
Appeals and Court of Tax Appeals decisions which have become final and executory
are also recognized interpretations of Philippine tax law.

VI. Treatises and other books


There are no Philippine treatises exclusively devoted to Philippine Tax law but various
Philippine authors have come up with annotated versions of the Tax Code. These books
can be purchased from Rex Bookstore and Central Law Publishing, Inc.
VII. Periodicals
Periodicals on Philippine tax law are the:
(1) Philippine Revenue Service (copies available in the BIR Library), published by the
BIR from 1969-1980;
(2) Philippine Revenue Journal (copies available in the BIR Library) which was both
published by the Bureau of Internal Revenue from 1969 to 2000; and
(3) the Tax Monthly, published by the National Tax Research Center (NTRC) (copies
available in the BIR Library and the NTRC).
VIII. Local Government Tax Law
Local government taxation in the Philippines is based on the constitutional grant of the
power to tax to the local governments.
Local taxes may be imposed, as the Constitution grants, to each local government unit,
the power to create its own sources of revenues and to levy taxes, fees, and charges
which shall accrue to the local governments (Article X, Section 5). With respect to
national taxes, local Government units shall have a just share, as determined by law, in
the national taxes which shall be automatically released to them (Article X, Section 6).
However, certain taxes, such as the following, may not be imposed by local government
units: (Section 133, Local Government Code and Tax Law and Jurisprudence by Vitug &
Acosta, copyright 2000)
(1) Income tax, except when levied on banks and other financial institutions;

(2) Documentary stamp tax;


(3) Taxes on estates, inheritance, gifts, legacies and other acquisitions mortis causa,
except as otherwise provided in the Local Government Code (Code) (except taxes
levied on the transfer of real property ownership under Section 135, and Section 151 of
the Code);
(4) Customs duties, registration fees of vessels (except license fees imposed under
Section 149, and Section 151 of the Code), wharfage on wharves, tonnage dues and all
other kinds of customs fees, charges and dues except wharfage on wharves
constructed and maintained by the local government unit concerned;
(5) Taxes, fees, charges and other impositions upon goods carried into or out of, or
passing through, the territorial jurisdictions of local governments in the guise of charges
for wharfage, tolls for bridges or otherwise, or other taxes in any form whatever upon
such goods or merchandise;
(6) Taxes, fees or charges on agricultural and aquatic products when sold by marginal
farmers or fishermen;
(7) Taxes on business enterprises certified by the Board of Investments as pioneer or
non-pioneer for a period of six and four years, respectively, from the date of registration;
(8) Excise taxes on articles enumerated under the National Internal Revenue Code and
taxes, fees, or charges on petroleum products, but not a tax on the business of
importing, manufacturing or producing said products (Patron vs. Pililla, 198 SCRA 82);
(9) Percentage tax or value-added tax on sales, barters or exchanges of goods or
services or similar transactions thereon (but not fixed graduated taxes on gross sales or
on volume of production);
(10) Taxes on the gross receipts of transportation contractors and persons engaged in
the transportation of passengers or freight by hire and common carriers by air, land or
water except as provided by the Code;

(11) Taxes on premiums paid for reinsurance or retrocession;


(12) Taxes, fees or charges for the registration of motor vehicles and for the issuance of
all kinds of licenses or permits for the driving thereof, except tricycles;
(13) Taxes, fees, or other charges on Philippine products actually exported except as
provided by the Code (the prohibition applies to any local export tax, fee, or levy on
Philippine export products but not to any local tax, fee, or levy that may be imposed on
the business of exporting said products);
(14) Taxes, fees or charges on duly organized and registered Countryside and
Barangay Business Enterprises (R.A. No. 6810) and on cooperatives (R.A. No. 6938);
and
(15) Taxes, fees or charges of any kind on the National Government, its agencies and
instrumentalities, and local government units (Section 133, LGC)
The Local Government Code (www.comelec.gov.ph) or (www.dilg.gov.ph/) contains
provisions on the scope and limitation on the exercise of local government taxing power.
IX. National Tax Research Center (NTRC)
Constituted under Presidential Decree 74, the NTRC is mandated to conduct continuing
research in taxation to restructure the tax system and raise the level of tax
consciousness among the Filipinos, to achieve a faster rate of economic growth and to
bring about a more equitable distribution of wealth and income. Specifically, the NTRC
performs the following functions:
1. Undertake comprehensive studies on the need for additional revenue for accelerated
national development and the sources from which this might most equitably be derived;
2. Re-examine the existing tax system and tax policy structure;
3. Conduct researches on taxation for the purpose of improving the tax system and tax
policy;

4. Pass upon all tax measures and revenue proposal;


5. Recommend of such reforms and revisions as may be necessary to improve revenue
collection and to formulate sound tax policy and a more efficient tax structure.
What is Tax law? It covers the rules, policies and laws that oversee the tax process, which involves
charges on estates, transactions, property, income, licenses and more by the government. Taxation
also includes duties on imports from foreign countries and all compulsory levies imposed by the
government upon individuals for benefit of the state.
The intricate body of tax law covers payment of taxes to a minimum of four levels of government,
either directly or indirectly. Indirect taxes are assessed against products and services that are meant
to be consumed, but are paid to an intermediary. For example, when you buy coffee at a local corner
store, the retailer charges you tax on your coffee, which he/she subsequently pays to the
government. Direct taxes are those you pay directly to the government and are imposed against
things like land or real property, personal property, and income.
There is a seemingly endless list of entities that create and enforce tax laws and collect tax
revenues. They range from the local government level, such as cities and other municipalities,
townships, districts and counties to regional, state and federal levels. They include agencies, transit
districts, utility companies, and schools, just to name a few.
The area of tax law is exceedingly complex and in constant flux largely due to two reasons. The first
is that the tax code has been used increasingly more often for objectives other than raising revenue,
such as meeting political, economic and social agendas. The second reason is the manner in which
the tax code is amended.
The Federal tax law is administered primarily by the Internal Revenue Service, a bureau of the U.S.
Treasury. The U.S. tax code is known as the Internal Revenue Code of 1986 as amended (Title 26 of
the U.S. Code). Other federal tax laws are found in Title 26 of the Code of Federal Regulations;
proposed regulations issued by the Internal Revenue Service (IRS); temporary regulations issued by
the IRS; revenue rulings issued by the IRS; private letter rulings issued by the IRS; revenue
procedures, policy statements, and technical information releases issued by the IRS; and federal tax
court decisions. Tax law for state and local government is also contained in codes sections,
regulations, administrative codes, procedures and statements issued by the respective government
authorities, as well as state court decisions.
There is a special trial court which hears disputes between the IRS and taxpayers regarding federal
income, estate and gift tax underpayments - the U.S. Tax Court. This federal court is based out of
Washington, but its 19 presidentially appointed judges travel to preside over trials in courts located in
several designated major cities. The Tax Courts decisions may be appealed to the Federal District
Court of Appeals and final review is retained by the highest court in the land, the U.S. Supreme
Court.
Tax attorneys serve many important functions in the complicated arena of tax law. They may
represent you throughout the various stages of tax disputes, from an initial audit to IRS
administrative appeals, Tax Court and final review by the Court of Appeals, or even the U.S.
Supreme Court. They are also invaluable in helping you navigate the intricate and bewildering laws
in this area of practice.
Tax Law Definition

Taxation is a governmental assessment upon property value, transactions, estates of the deceased,
licenses granting a right and/or income, and duties on imports from foreign countries. It includes all
contributions imposed by the government upon individuals for the service of the state. Taxes are
usually divided into two main classes: direct and indirect. Generally speaking, direct taxes are those
assessed against income, land or real property, and personal property, which are paid directly to the
government; whereas indirect taxes are assessed against articles of consumption, such as products
or services, but collected by an intermediary, such as a retailer.
Copyright HG.org

Know Your Rights!

Found Money What Are My Legal Obligations?


Everyone has seen a few cents on the ground, likely dropped while someone pulled a ring of keys
from their pocket. While we would probably not think twice about picking up a penny, what if it was
a bank envelope full of $100 bills? It may seem like a dream come true, but there are certain legal
obligations when one finds misplaced money.

Is There Any Tax Liability for Giving a Gift?


Those who have dabbled with tax laws much at all are probably familiar with the general mantra
that any money received may be taxable income. They may also be familiar with the idea that
payments over a certain amount or in certain types of relationships (like employer/employee) often
require that the payer ensure taxes are taken out before the balance is given to the payee. But
what about gifts? Is there any tax liability for giving a gift?

Articles About Tax Law

Warning Signs that a Criminal Investigation Is Pending in IRS Cases


There are various signs that a criminal investigation is on the horizon. These are not the same as
civil inquiries. The Internal Revenue Service initiates these from the recommendation of the auditor
assigned to the person or company. Tax returns or fraudulent activity that includes illegal acts are
analyzed by the Criminal Investigation Division of the IRS.

Ways to Avoid Problems with the IRS


Because criminal investigations initiated by the Internal Revenue Service require resources and
time that may be better utilized elsewhere, starting a case for possible tax crimes is not sought
after by this agency. Audits are often routine for various reasons based on data collected during
and after tax season.

IRS Criminal Investigations


The Internal Revenue Service is called when both businesses and individuals are suspected of
illegal income, revenue and wage activity. Anyone may be subject to an audit, but these are
especially harmful when there are actual illegal processes occurring within the company.

Federal Tax Fraud Explained


Fraud comes in many shapes and sizes. The amount that is taken during fraud crimes is one factor
considered when charges are filed and when a case initiates. Tax fraud is different than these other
types as only the Internal Revenue Service is permitted to pursue suspected tax offenders.

FBAR and FATCA and their Involvement with the IRS


Foreign Bank and Financial Accounts Report (FBAR) and the Foreign Account Tax Compliance Act
(FATCA) are both important acronyms to know when dealing with potential issues with the Internal
Revenue Service.

FATCA Issues
The Foreign Account Tax Compliance Act was issued by the IRS in response to the Hiring
Incentives to Restore Employment Act signed by President Obama in 2010. This was implemented
to ensure foreign accounts with taxable income are reported and adherence to guidelines issues
was followed by individuals with income in accounts in overseas banks.

Extent that a Financial Institution Can Outsource AML Compliance


Anti-money laundering compliance is very important to banks and financial institutions per the
United States government. Without adherence to these regulations, a company is open to potential
prosecution for various internal activities.

Criminal Tax Problems


When persons work in the United States, it is illegal to not report income after a certain threshold
has been reached. This is especially important for businesses.

Criminal Tax Issues and Audits


Audits tend to occur when there is a suspected tax crime. It is important to ensure a civil
examination is accomplished with cooperation, a calm presence and peaceful actions. The revenue
agent provided for the investigation should not be misled or lied to. With all information disclosed
properly even after the examination initiates, a criminal investigation may not be the next process.

Criminal Consequences Associated with Failing to Report Foreign Bank Accounts


Reporting foreign accounts in banks is vital to ensure criminal consequences are not issued to
individuals filing taxes. Adherence to the Foreign Bank Accounts Reporting is vital to ensure
penalties that may be as little as $10,000 or 50 percent of all account income in offshore accounts
do not occur.

All Tax Law Articles

State Tax Agencies

Alabama

Alaska

Arizona

Arkansas

California

Colorado

Connecticut

Delaware

District of Columbia

Florida

Georgia

Hawaii

Idaho

Illinois

Indiana

Iowa

Kansas

Kentucky

Louisiana

Maine

Maryland

Massachusetts

Michigan

Minnesota

Mississippi

Missouri

Montana

Nebraska

Nevada

New Hampshire

New Jersey

New Mexico

New York

North Carolina

North Dakota

Ohio

Oklahoma

Oregon

Pennsylvania

Rhode Island

South Carolina

South Dakota

Tennessee

Texas

Utah

Vermont

Virginia

Washington

West Virginia

Wisconsin

Wyoming

Taxation Law - US

ABA - Section of Taxation


The American Bar Association Section of Taxation serves it's members by educating about taxes,
and by providing leadership to support the development of an equitable, efficient and workable tax
system.

Alcohol and Tobacco Tax and Trade Bureau


The Alcohol and Tobacco Tax and Trade Bureau develops regulations, conducts product analysis
and ensures tax and trade compliance with the Federal Alcohol Administration Act and the Internal
Revenue Code.

Internal Revenue Code


The Internal Revenue Code is the domestic portion of federal statutory tax law in the United States
implemented by the IRS.

IRS - Tax Exempt Bond Division


The mission of the Tax Exempt Bond function of TE/GE is to fairly administer the Federal tax laws
applicable to tax-exempt bonds and to provide our customers with top quality service by applying
the tax law with integrity and fairness.

IRS - Taxpayer Advocate Service


The Taxpayer Advocate Service's (TAS) job is to ensure that every taxpayer is treated fairly, and
that you know and understand your rights. We offer free help to guide you through the confusing
process of resolving your tax problems.

Taxpayer Bill of Rights


The Taxpayer Bill of Rights is to help you understand what legislative rights and protections are
available to you.

United States Excise Tax


Excise taxes are taxes on a specific good, such as gasoline, and are often included in the price of
the product.

United States Federal and State Corporate Tax Legislation


An analysis of the legal and taxation characteristics of legal forms for doing business in the USA.

United States International Trade Commission - Harmonized Tariff Schedule


The HTSA provides the applicable tariff rates and statistical categories for all merchandise
imported into the United States; it is based on the international Harmonized System, the global
system of nomenclature that is used to describe most world trade in goods.

United States Sales Tax


Sales taxes are taxes placed on the sale or lease of goods and services imposed by state and
local administrations.

United States Tax Court


Congress created the Tax Court to provide a judicial forum in which affected persons could dispute
tax deficiencies determined by the Commissioner of Internal Revenue prior to payment of the
disputed amounts.

US Department of the Treasury - Taxes


Collecting taxes in a fair and consistent manner is a core mission of the Treasury Department.
Treasury's priorities in tax administration are enforcing the nation's tax laws fairly and efficiently
while balancing taxpayer service and education to promote voluntary compliance and reduce
taxpayer burden.

US Internal Revenue Service


The IRS mission is to provide America's taxpayers top quality service by helping them understand
and meet their tax responsibilities and by applying the tax law with integrity and fairness to all.

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