You are on page 1of 8

SAN BEDA COLLEGE ALABANG

SCHOOL OF LAW
TAXATION I
ATTY. DEBORAH S. ACOSTA-CAJUSTIN
FIRST SEMESTER SY 2017-2018

Learning without thinking is useless


Thinking without learning is dangerous

Confucius

Suggested References:

Aban, Law of Basic Taxation in the Philippines, rev. ed.


Dimaampao, Tax Princoples and Remedies
De Leon, The National Internal Revenue Code Annotated

PART A: GENERAL PRINCIPLES OF TAXATION

I. TAXATION

A. Definition
a. Paseo Realty & Development Corporation v. Court of Appeals, GR No.
119286, October 13, 2004
B. Nature of Internal Revenue Law
a. Hilado v. CIR, 100 Phil. 288
C. Scope and Nature of Taxation
a. Sec. 28, Art. VI, 1987 Constitution
b. Sison v. Ancheta, 130 SCRA 654
c. CIR v. Pineda, 21 SCRA 105
d. Phil. Guaranty v. CIR, 13 SCRA 775
e. Collector v. Yuseco, 3 SCRA 313
f. CIR v. Algue, Inc. L-28896, Feb. 17, 1988
g. Mactan Cebu International Airport Authority v. Marcos, 261 SCRA 667 (1996)
h. Abakada Guro Party List v. Sec. Ermita, et al., GR No. 168056, September 1,
2005
D. Underlying Theory and Basis; Necessity Theory; Benefit-Received Principle
a. 71 AmJur 2nd 346-347
b. CIR v. Algue, 158 SCRA 9
c. NPC v. Cabanatuan, GR No. 149110, April 19, 2003
d. Lorenzo v. Posadas, 64 Phil 353
E. Purpose of Taxation
a. General/Fiscal/Revenue
i. CIR v. Algue, supra.
ii. PAL v. Edu, 164 SCRA 320
iii. Tolentino v. Sec. of Finance, 235 SCRA 630; 249 SCRA 628
b. Non-Revenue/Special or Regulatory
i. Osmena v. Orbos, 220 SCRA 703
ii. Caltex v. COA, 208 SCRA 755
F. Principles of a Sound Tax System
a. Chavez v. Ongpin, 186 SCRA 331
b. Diaz v. Secretary of Finance, GR No. 193007, July 19, 2011
G. Comparison with Police Power and Eminent Domain
a. Roxas v. CTA, 23 SCRA 276
b. Tanada v. Angara, GR No. 118295, May 2, 1997
c. LTO v. City of Butuan, GR No. 131512, January 20, 2000
d. Phil Match Co. v. Cebu, 81 SCRA 99
e. Matalin v. Mun. Council of Malabang, 143 SCRA 404
f. Lutz v. Araneta, 98 Phil. 48
g. NTC v. CA, 311 SCA 508

II. TAXES

A. Definition
a. 71 Am Jur 2nd 343-346
B. Essential Characteristics of Taxes
a. Tan v. Del Rosario, 237 SCRA 324
b. CIR v. Santos, GR No. 119252, August 18, 1997
c. Gerochi v. DOE, GR No. 159796, July 17, 2007
C. Taxes Distinguished from:
a. Debts
i. Caltex v. COA, 208 SCRA 726
ii. Francia v. IAC, 162 SCRA 735
iii. RP v. Ericta and Sampaguita Pictures, 172 SCRA 653
iv. Republic v. Mambulao Lumber Company, 4 SCRA 622
v. Philex Mining v. CIR, GR No. 125704, August 28, 1998
vi. Domingo v. Carlitos, 8 SCRA 443
b. License Fees
i. Progressive Dev. Corp. v. QC, 172 SCRA 629
ii. PAL v. Edu, 164 SCRA 320
iii. ESSO v. CIR, 175 SCRA 149
c. Special Assessments/Levies
i. Apostolic Prefect v. Treasurer of Baguio, 71 Phil 547
d. Toll
i. 71 AM Jur 351
ii. Diaz v. Secretary of Finance, GR No. 193007, July 19, 2011
e. Penalties
i. NDC v. CIR, 151 SCRA 472
f. Customs Duties
i. Collector of Customers v. Torres, GR No. L-22977, May 31, 1972
D. Tax Evasion; Tax Avoidance
a. Tax Code, Sec. 254
b. Republic v. Gonzales, 13 SCRA 633
c. Delpher Traders v. IAC, 157 SCRA 349
d. CIR v. Lincoln Life, GR No. 119176, March 19, 2002
e. CIR v. Toda, GR No. 147188, September 14, 2004

III. Sources of Tax Law

A. Constitution
B. Statutes
a. RA 8424, as amended
b. RA 9337
c. Tariff and Customs Code
d. Book II, Local Government Code
e. Special Laws
C. Administrative Issuances
a. Revenue Regulations 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 NIRC and related statutes.
i. Tax Code, Secs. 244-245
ii. Civil Code, Article 7
iii. Asturias Sugar Central v. Comm, 29 SCRA 617
iv. Tan v. Del Rosario, 237 SCRA 234
v. CIR v. Seagate Technology, GR No. 153866, February 11, 2005
vi. CIR v. Bicolandia Drug Corporation, GR No. 148083, July 21, 2006
vii. Medicard Philippines, Inc. v. CIR, GR No. 222743, April 5, 2017
b. Revenue Memorandum Orders 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.
c. Revenue Memorandum Circulars 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.
d. Revenue Administrative Orders issuances that cover subject matters
dealing strictly with permanent administrative set-up of the Bureau, more
specifically, the organizational structure, statements of functions and/or
responsibilities of BIR offices, definitions, delegations of authority and
personnel requirements and standards of performance.
e. Revenue Delegation of Authority Orders Refer to functions delegated by
the Commissioner to revenue officials in accordance with law.
f. BIR Revenue Administrative Order Nos. 1-2014, 2-2014, 3-2014
g. BIR Rulings
i. Tax Code, Secs. 4 and 246
ii. CIR v. Burroughs Ltd., GR No. 66653, June 19, 1986
iii. CIR v. Mega Gen. Merchandising, 166 SCRA 166
iv. PBCom v. CIR, 302 SCRA 241
v. BDO, et al. v. Republic of the Philippines, GR No. 198756, January 13,
2015
h. Tax/Revenue Ordinances
i. Tuazon v. CA, 212 SCRA 739
ii. Hagonoy Market Vendor v. Municipality of Hagonoy, GR No. 137621,
February 6, 2002
iii. Jardine Davies v. Aliposa, GR No. 118900, February 27, 2003
i. Tax Treaties
i. Tanada v. Angara, GR No. 118295, May 2, 1997
ii. Deutsche Bank AG Manila Branch v. CIR, GR No. 188550, August 19,
2013
j. Case Laws
k. Legislative Materials

IV. Limitations upon the Power of Taxation

INHERENT LIMITATIONS

A. Public Purposes
a. Lutz v. Araneta, 98 Phil. 48
b. Pascual v. Sec. of Public Works, 110 Phil. 331
B. Delegation of Taxation Power
a. Constitution, Art. X, Sec. 5
b. Constitution, Art. VI, Sec. 28(2)
c. Tariff and Customs Code, Sec. 401
d. Phil. Comm. Satellite Corp. v. Alcuaz, 180 SCRA 218
e. Meralco v. Prov. Of Laguna, 306 SCRA 750
f. Pepsi-Cola Co. v. City of Butuan, 24 SCRA 789
g. Smith Bell & Co. v. CIR, L-28271, July 25, 1975
h. City of Government of Quezon City v. Bayantel, GR 162015, March 6, 2006
i. Garcia v. Executive Secretary, 210 SCRA 219
j. Osmena v. ORbos, 220 SCRA 703
k. CIR v. CA, GR No. 119761, August 29, 1996
l. Mindanao Shopping Destination Corporation, et al. v. Duterte, GR No.
211093, June 6, 2017
C. Exemption of Government Agencies
a. Tax Code, Sec. 27(C) and 30(I)
b. Mactan Cebu Airport v. Marcos, supra.
c. Maceda v. Macaraig, supra.
D. Territoriality of Situs of Taxation
a. Manila Gas v. Collector, 62 Phil 895
b. Vegetable Oil Corp. v. Trinidad, 45 Phil. 822
c. Wells Fargo Bank v. Col, 70 Phil. 325
d. Iloilo Bottlers v. Iloilo City, 164 SCRA 607
e. CIR v. BOAC, 149 SCRA 395
f. Collector v. Lara, 102 Phil. 813
E. International Comity
a. Constitution, Art. 11, Sec. 2
b. Tanada v. Angara, GR No. 118295, May 2, 1997
c. Commissioner of Internal Revenue v. Mitsubishi Metal Corp., GR Nos. 54908,
80041, January 22, 1990
d. Commissioner of Internal Revenue v. Pilipinas Shell Petroleum Corporation,
GR No. 188497, April 25, 2012
F. Double Taxation
a. Procter & Gamble Co. v. Mun. of Jagna, 94 SCRA 894
b. Sanchez v. CIR, 97 Phil. 687
c. Punzalan v. Mun. Board of Manila, 95 Phil. 46
d. CIR v. SC Johnson & Sons, Inc., 309 SCRA 87
e. CIR v. Goodyear Philippines, Inc., GR No. 216130, August 3, 2016

CONSTITUTIONAL LIMITATIONS

A. Due Process Clause


a. Constitution, Art. III, Sec. 1
b. Com. Of Customs v. CTA & Campos Rueda Co., 152 SCRA 641
c. Phil. Bank of Comm v. CIR, 302 SCRA 241
d. Sison V. Ancheta, 130 SCRA 654
B. Equal Protection Clause
a. Constitution, Art. III, Sec. 1
b. Ormoc Sugar Co. v. Treasurer of Ormoc City, 22 SCRA 603
c. Shell Co. v. Vano, 94 Phil. 388
d. Tiu v. CA, 301 SCRA 279
e. Tan v. Del Rosario, 237 SCRA 324
f. Phil. Rural Electric v. Secretary, GR No. 143706, June 10, 2003
g. Southern Luzon Drug Corporation v. DSWD, GR No. 199669, April 25, 2017
C. Rule of Taxation shall be Uniform and Equitable
a. Constitution, Art. VI, Sec. 28(1)
b. Pepsi-Cola v. Butuan City, 24 SCRA 789
c. Manila Race Horse v. dela Fuente, 88 Phil. 69
d. Sison v. Ancheta 130 SCRA 654
e. Tolentino v. Sec. of Finance, 249 SCRA 628
D. Non-Impairment of Contracts
a. Constitution, Art. III, Sec. 10 and Art. XII, Sec. 11
b. CIR v. Lingayen Gulf Electric Co., 164 SCRA 67
c. Misamis Oriental v. CEPALCO, 181 SCRA 38
d. Phil. Rural Electric v. Secretary, supra.
E. Non-Imprisonment for Non-Payment of Poll Tax
a. Constitution, Art. III, Sec. 20
F. Prohibition Against Taxation of Religious and Charitable Institutions
a. Constitution, Art. VI, Sec. 28(3)
b. Lladoc v. CIR, 14 SCRA 292
c. Province of Abra v. Hernando, 107 SCRA 1021
d. Abra Valley College v. Aquino, 162 SCRA 106
G. Prohibition Against Taxation of Non-Stock Non-Profit Educational Institutions
a. Constitution, Art. XIV, Sec. 4(3)
b. Constitution, Art. VI, Sec. 28(3)
c. Tax Code, Secs. 27(B) and 30(H)
d. DOF Order 137-87
e. DOF Order 149-95
f. BIR RMC 76-2003
g. BIR RMC 45-95
h. BIR RR 13-98
i. CIR v. CA and YMCA, 298 SCRA 83
j. CIR v. De La Salle University, Inc., GR No. 196596, November 9, 2016
k. CIR v. St. Lukes Medical Center, Inc. GR No. 203514, February 13, 2017
H. Freedom of Religious Worship
a. Constitution, Art. III, Sec. 5
b. American Bible Society v. Manila, 101 Phil. 386
I. Passage of Tax Bills/Granting of Tax Exemption
a. Constitution, Art. VI, Sec. 24
b. Constitution, Art. VI, Sec. 28(4)
c. Tolentino v. Sec. of Finance, supra
J. Veto Power of the President
a. Constitution, Art. VI, Sec. 27(2)
K. Non-Impairment of SC Jurisdiction
a. Constitution, Art. VIII, Sec. 5(2)(b)

V. Construction of Tax Laws

A. General Rules of Construction of Tax Laws


a. Stevedoring v. Trinidad, 43 Phil. 803
b. Lorenzo v. Posada, 64 Phil. 353
c. Umali v. Estanislao, 209 SCRA 446
d. CIR v. Solidbank, GR No. 148191, Nov. 25, 2003
e. Collector v. La Tondena, 5 SCRA 665
B. Mandatory v. Directory Provisions
a. Serafica v. Treasurer of Ormoc City, 27 SCRA 110
b. Roxas v. Rafferty, 37 Phil. 958
c. Pecson v. CA, 222 SCRA 580
C. Application of Tax Laws,
a. Civil Code, Art. 2
b. CIR v. CA, GR No. 119761, August 29, 1996
c. CIR v. Telefunken, 249 SCRA 401
d. CIR v. Michel Lhuillier, GR No. 150947, July 25, 2003
e. CIR v. Benguet Corp., GR No. 134587, July 8, 2005

VI. Exemption from Taxation

A. In General
a. Greenfield v. Meer, 77 Phil. 394
b. Basco v. PAGCOR, 196 SCRA 52
c. CIR v. Botelho Shipping Corp., 20 SCRA 487
d. CIR v. CTA, GCL Retirement Plan, 207 SCRA 487
e. CIR v. Guerrero, 21 SCRA 180
f. Phil. Acetylene v. CIR, 20 SCRA 1056
g. Maceda v. Macaraig, Jr., 197 SCRA 771
h. Sea-Land Service v. CA, 357 SCRA 441
i. Davao Gulf v. CUR, GR No. 117359, July 23, 1998
j. PLDT v. Davao City, GR No. 143867, August 22, 2001
B. Compared with Other Terms
a. Tax Remission/Condonation
i. Surigao Con. Min. v. Collector, 9 SCRA 728
b. Tax Amnesty
i. CIR v. CA, 240 SCRA 368
ii. CIR v. Marubeni, GR No. 137377, December 18, 2001
c. Exclusion/Deduction
i. Tax Code, Sec. 32(B)
ii. Tax Code, Sec. 34
C. Construction of Tax Exemptions
a. E. Rodriguez v. Collector, 28 SCRA 119
b. Republic Flour Mills v. CIR, 31 SCRA 148
c. Wonder Mechanical Engineering v. CTA, 64 SCRA 555
d. Luzon Stevedoring Corp. v. CTA, 163 SCRA 647
e. Floro Cement v. Hen. Gorospe, 200 SCRA 480
f. CIR v. Ledesma, 31 SCRA 95
g. Resins, Inc. v. Auditor Gen., 25 SCRA 754
h. CIR v. CA & YMCA, supra
i. CIR v. CA, GR No. 124043, October 14, 1998
j. Misamis Oriental Ass. V. DOF, 238 SCRA 63
k. Nestle Philippines v. CA, GR No. 134114, July 6, 2001
l. Coconut Oil Refiners v. Torres, GR No. 132527, July 29, 2005
m. Maceda v. Macaraig, 196 SCRA 771
n. Maceda v. Macaraig, 223 SCRA 217
o. Soriano, et al. v. Secretary of Finance, GR No. 184450, January 24, 2017
p. Secretary of Finance v. Lazatin, GR No. 210588, November 29, 2016