TAX.3.1 Collector v.

Campos Rueda 42 SCRA 23

FACTS: In January 1955, Maria Cerdeira died in Tangier, Morocco (an international zone [foreign country] in North
Africa). At the time of her death, she was a Spanish citizen and was a resident of Tangier. She however left some personal
properties (shares of stocks and other intangibles) in the Philippines. The designated administrator of her estate here is
Antonio Campos Rueda. In the same year, the Collector of Internal Revenue (CIR) assessed the estate for deficiency tax
amounting to about P161k. Campos Rueda refused to pay the assessed tax as he claimed that the estate is exempt from the
payment of said taxes pursuant to section 122 of the Tax Code which provides: That no tax shall be collected under this
Title in respect of intangible personal property (a) if the decedent at the time of his death was a resident of a foreign
country which at the time of his death did not impose a transfer tax or death tax of any character in respect of intangible
person property of the Philippines not residing in that foreign country, or (b) if the laws of the foreign country of which
the decedent was a resident at the time of his death allow a similar exemption from transfer taxes or death taxes of every
character in respect of intangible personal property owned by citizens of the Philippines not residing in that foreign
country. Campos Rueda was able to prove that there is reciprocity between Tangier and the Philippines. However, the CIR
still denied any tax exemption in favor of the estate as it averred that Tangier is not a “state” as contemplated by Section
22 of the Tax Code and that the Philippines does not recognize Tangier as a foreign country.

ISSUE: Whether or not Tangier is a state.

HELD: Yes. For purposes of the Tax Code, Tangier is a foreign country. Reciprocity in exemption does not require the
foreign country to possess international personality in the traditional sense. Hence, since it was proven that Tangier
provides such exemption to personal properties of Filipinos found therein so must the Philippines honor the exemption as
provided for by our tax law with respect to the doctrine of reciprocity