Taxation II (1) If a person dies without a will, or whether or not he left a will.

If he left a
Atty. Kym Buena, CPA
2nd Sem 2019 - 2020
Estate Taxation
I. Basic concepts
A. Succession – Article 774, Civil Code
Art. 774. Succession is a mode of ac-
quisition by virtue of which the prop-
erty, rights and obligations to the extent
of the value of the inheritance, of a per-
son are transmitted through his death to
another or others either by his will or
by operation of law. (n)
1. Testamentary – Art. 779, Civil
Code
Art. 779. Testamentary succession
is that which results from the des-
ignation of an heir, made in a will
executed in the form prescribed by
law. (n)
B. Decedent – Art. 775, Civil Code
2. Intestate – Art. 960, Civil Code
Art. 775. In this Title, "decedent" is the
general term applied to the person whose
Art. 960. Legal or intestate succession
property is transmitted through succession,
takes place:
with a void will, or one which has sub-
sequently lost its validity;
(2) When the will does not institute an
heir to, or dispose of all the property
belonging to the testator. In such case,
legal succession shall take place only
with respect to the property of which
the testator has not disposed;
(3) If the suspensive condition attached
to the institution of heir does not hap-
pen or is not fulfilled, or if the heir dies
before the testator, or repudiates the in-
heritance, there being no substitution,
and no right of accretion takes place;
(4) When the heir instituted is incapa-
ble of succeeding, except in cases pro-
vided in this Code. (912a)
3. Mixed – Art. 780, Civil Code
Art. 780. Mixed succession is that
effected partly by will and partly
by operation of law. (n)
will, he is also called the testator. (n)
C. Estate – Art. 776, Civil Code
Art. 776. The inheritance includes all the
property, rights and obligations of a person
which are not extinguished by his death.
(659)
D. Heir, Devisees and Legatees – Art.
782, Civil Code
Art. 782. An heir is a person called to the
succession either by the provision of a will
or by operation of law.
E. Definition of estate tax –
Lorenzo v. Posadas, G.R. No. 43082,
June 18, 1937
The accrual of the inheritance tax is dis-
tinct from the obligation to pay the same.
Section 1536 as amended, of the Adminis-
trative Code, imposes the tax upon "every
transmission by virtue of inheritance, de-
vise, bequest, gift mortis causa, or advance
in anticipation of inheritance, devise, or be-
quest." The tax therefore is upon trans-
mission or the transfer or devolution of
property of a decedent, made effective
by his death.

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II. Applicable Law – Sections 84-97, Na-
tional Internal Revenue Code of 1997, as
amended (NIRC)
-See Codal Provisions
III. Time and transfer of properties –
Sec. 85(A), NIRC;
SEC. 85. Gross Estate. - the value of the
gross estate of the decedent shall be deter-
mined by including the value at the time of
his death of all property, real or personal,
tangible or intangible, wherever situated:
Provided, however, that in the case of a
nonresident decedent who at the time of his
death was not a citizen of the Philippines,
only that part of the entire gross estate
which is situated in the Philippines shall be
included in his taxable estate.
(A) Decedent's Interest. - To the extent of
the interest therein of the decedent at the
time of his death;
xxx
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Art. 777, Civil Code; IV. Persons subject to estate tax
Art. 777. The rights to the succession are 1. Citizen
transmitted from the moment of the death
2. Resident alien
of the decedent. (657a)
3. Non-resident alien
Sec. 3, Revenue Regulations (RR) No. 2-
2003 - Definition of residence
SEC. 3. THE LAW THAT GOVERNS * Corre vs. Tan Corre, G.R. No. L-
THE IMPOSITION OF ESTATE TAX. – 10128, November 13, 1956
It is a well-settled rule that estate taxation
Indeed, residence as used in said rule is
is governed by the statute in force at the
synonymous with domicile. This is de-
time of death of the decedent. The estate
fine as “the permanent home, the place
tax accrues as of the death of the dece-
to which, whenever absent for business
dent and the accrual of the tax is dis-
or pleasure, one intends to return, and
tinct from the obligation to pay the same.
depends on facts and circumstances, in
Upon the death of the decedent, succes-
the sense that they disclose intent”
sion takes place and the right of the State
to tax the privilege to transmit the estate
vests instantly upon death.
The application of the rates herein pre-
scribed and the procedures in determining
the estate tax due shall apply to estate
taxes falling due or have accrued begin-
ning January 1, 1998, the effectivity date
of Republic Act No. 8424, otherwise
known as “The Tax Reform Act of 1997”
 * Collector vs. Lara, G.R. Nos.
L-9456 & L-9481, January 6,
1958
We agree with the Court of Tax Ap-
peals that at the time that The National
Internal Revenue Code was promul-
gated in 1939, the prevailing construc-
tion given by the courts to the "resi-
dence" was synonymous with domi-
cile. and that the two were used inter-
changeably.
Cases were cited in support of this
view, paricularly that of Velilla vs. Po-
sadas, 62 Phil. 624, wherein this Tri-
bunal used the terms "residence" and
"domicile" interchangeably and with-
out distinction, the case involving the
application of the term residence em-
ployed in the inheritance tax law at the
time (section 1536- 1548 of the Re-
vised Administrative Code), and that
consequently, it will be presumed that
in using the term residence or resident
in the meaning as construed and inter-
preted by the Court.
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* Vellila vs. Posadas, G.R. No.
43314, December 19, 1935
Our Civil Code (art. 40) defines the
domicile of natural persons as "the
place of their usual residence." The
record before us leaves no doubt in our
minds that the "usual residence" of
this unfortunate man, whom appellant
describes as a "fugitive" and "out-
cast", was in Manila where he had
lived and toiled for more than a quarter
of a century, rather than in any foreign
country he visited during his wander-
ings up to the date of his death in Cal-
cutta.
To effect the abandonment of one’s
domicile, there must be a deliberate
and provable choice of a new domi-
cile, coupled with actual residence in
the place chosen, with a declared or
provable intent that it should be one’s
fixed and permanent place of abode,
one’s home.
V. Gross estate subject to tax
A. Composition of gross estate of a resi-
dent decedent and a non-resident dece-
dent – Secs. 85 & 104, NIRC
- See codal Sec. 85
SEC. 104. Definitions. - For purposes of
this Title, the terms "gross estate" and
"gifts" include real and personal property,
whether tangible or intangible, or mixed,
wherever situated:
Provided, however, That where the dece-
dent or donor was a nonresident alien at the
time of his death or donation, as the case
may be, his real and personal property so
transferred but which are situated outside
the Philippines shall not be included as part
of his "gross estate" or "gross gift":
Provided, further, That franchise which
must be exercised in the Philippines;
shares, obligations or bonds issued by any
corporation or sociedad anonima organized
or constituted in the Philippines in accord-
ance with its laws; shares, obligations or
bonds by any foreign corporation eighty-
five percent (85%) of the business of
which is located in the Philippines; shares,
obligations or bonds issued by any foreign
corporation if such shares, obligations or
 bonds have acquired a business situs in the
Philippines; shares or rights in any partner-
ship, business or industry established in the
Philippines, shall be considered as situated
in the Philippines:
Provided, still further, that no tax shall be
collected under this Title in respect of in-
tangible personal property:
(a) if the decedent at the time of his death
or the donor at the time of the donation
was a citizen and resident of a foreign
country which at the time of his death or
donation did not impose a transfer tax of
any character, in respect of intangible per-
sonal property of citizens of the Philippines
not residing in that foreign country, or
(b) if the laws of the foreign country of
which the decedent or donor was a citizen
and resident at the time of his death or do-
nation allows a similar exemption from
transfer or death taxes of every character or
description in respect of intangible per-
sonal property owned by citizens of the
Philippines not residing in that foreign
country.
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The term "deficiency" means:
(a) the amount by which tax imposed by
this Chapter exceeds the amount shown as
the tax by the donor upon his return; but
the amount so shown on the return shall
first be increased by the amount previously
assessed (or collected without assessment)
as a deficiency, and decreased by the
amounts previously abated, refunded or
otherwise repaid in respect of such tax, or
(b) if no amount is shown as the tax by the
donor, then the amount by which the tax
exceeds the amounts previously assessed,
(or collected without assessment) as a defi-
ciency, but such amounts previously as-
sessed, or collected without assessment,
shall first be decreased by the amount pre-
viously abated, refunded or otherwise re-
paid in respect of such tax.
* Collector v. Fisher, G.R. Nos. L-
11622 & L-11668, January 28,
1961
TAXATION; ESTATE AND INHER-
ITANCE TAXES; EXEMPTION OF IN-
TANGIBLE PERSONAL PROPERTIES;
PROOF OF FOREIGN LAW GRANTING
EXEMPTION.
— Petitioner disputes the action of the Tax
Court in exempting the respondents from
paying inheritance tax on the personal intan-
gible property belonging to the estate in vir-
tue of the reciprocity proviso of Section 122
of the national Internal Revenue Code, in
relation to Section 13851 of the California
Revenue and Taxation Code.
To prove the pertinent California Law,
counsel for respondents testified that as an
active member of the California bar since
1931, he is familiar with the revenue and
taxation laws of the State of California.
When asked by the lower court to state the
pertinent California law as regards exemp-
tion of intangible personal properties, the
witnesses cited 4, section 13851 (a) and (b)
of the California Internal Revenue Code as
published in the Deering’s California Code.
And as part of his testimony, a full quota-
tion of the cited section was offered in evi-
dence by the respondents.
Held: Section 41, Rule 123 of the Rules of
Court prescribes the manner of proving for-
eign laws before Philippine courts. Alt-
hough it is desirable that foreign laws be
proved in accordance with said rule, this
Court held in the case Willamete Iron and
Steel Works v. Muzzal, 61 Phil., 471, that
"a reading of sections 300 and 301 of our
Code of Civil Procedure (now section 41,
Rule 123) will convince one that these sec-
tions do not exclude the presentation of
other competent evidence to prove the exist-
ence of a foreign law."
In that case, this Court considered the testi-
mony of an attorney-at-law of San Fran-
cisco, California, who quoted verbatim a
section of the California Civil Code and
who stated that the same was in force at the
time the obligations were contracted, as suf-
ficient evidence to establish the existence of
said law. In line with this view, the Tax
Court, therefore, did not err in considering
the pertinent California law as proved by re-
spondents’ witness.
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* Collector v. Campos-Rueda, G.R. * Collector v. Lara, G.R. Nos. L-9456
No. L-13250, October 29, 1971 & L-9481, January 6, 1958
The controlling legal provision as noted is a In determining the "gross estate" of a dece-
proviso in Section 122 of the National Inter- dent, under Section 122 in relation to section
nal Revenue Code. 88 of our Tax Code, it is first necessary to
decide whether the decedent was a resident
It reads thus: "That no tax shall be collected
or a non-resident of the Philippines at the
under this Title in respect of intangible per-
time of his death. xxxx
sonal property
"The incidence of estate and succession taxes
(a) if the decedent at the time of his death
has historically been determined by domicile
was a resident of a foreign country which at
and situs and not by the fact of actual resi-
the time of his death did not impose a trans-
dence." xxxx
fer tax or death tax of any character in re-
spect of intangible person property of the
Philippines not residing in that foreign coun-
try, 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 charac-
ter in respect of intangible personal property
owned by citizens of the Philippines not re-
siding in that foreign country."
 B. Decedent’s interest – Sec. 85(A),
NIRC
Sec. 85(A), NIRC;
SEC. 85. Gross Estate. - the value of the
gross estate of the decedent shall be deter-
mined by including the value at the time of
his death of all property, real or personal,
tangible or intangible, wherever situated:
Provided, however, that in the case of a
nonresident decedent who at the time of his
death was not a citizen of the Philippines,
only that part of the entire gross estate
which is situated in the Philippines shall be
included in his taxable estate.
(A) Decedent's Interest. - To the extent of
the interest therein of the decedent at the
time of his death;
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* US v. Wells, 283 U.S. 102, April 13,
1931
40 Stat. 1057, 1097. Section 402(c) pro-
vides: 'To the extent of any interest
therein of which the decedent has at any
time made a transfer, or with respect to
which he has at any time created a trust, in
contemplation of or intended to take effect
in possession or enjoyment at or after his
death (whether such transfer or trust is
made or created before or after the passage
of this Act), except in case of a bona fide
sale for a fair consideration in money or
money's worth.
Any transfer of a material part of his prop-
erty in the nature of a final disposition or
distribution thereof, made by the decedent
within two years prior to is death without
such a consideration, shall, unless shown to
the contrary, be deemed to have been made
in contemplation of death within the mean-
ing of this title
C. Transfers in contemplation of death –
Sec. 85(B), NIRC
(B) Transfer in Contemplation of Death.
- To the extent of any interest therein of
which the decedent has at any time made a
transfer, by trust or otherwise, in contem-
plation of or intended to take effect in pos-
session or enjoyment at or after death, or of
which he has at any time made a transfer,
by trust or otherwise, under which he has
retained for his life or for any period which
does not in fact end before his death
(1) the possession or enjoyment of, or the
right to the income from the property, or
(2) the right, either alone or in conjunction
with any person, to designate the person
who shall possess or enjoy the property or
the income therefrom; except in case of a
bonafide sale for an adequate and full con-
sideration in money or money's worth.
* Vidal de Roces v. Posadas, G.R. No.
34937, March 13, 1933
Said legal provision is not null and void on
the alleged ground that the subject matter
thereof is not embraced in the title of the
section under which it is enumerated. On
the contrary, its provisions are perfectly
summarized in the heading, "Tax on Inher-
itance, etc." which is the title of Article XI.
Furthermore, the constitutional provision
cited should not be strictly construed as to
make it necessary that the title contain a
full index to all the contents of the law. It
is sufficient if the language used therein is
expressed in such a way that in case of
doubt it would afford a means of determin-
ing the legislators intention.
xxx
The law considers such transmissions in
the form of gifts inter vivos, as advances
on inheritance and nothing therein violates
any constitutional provision, inasmuch as
said legislation is within the power of the
Legislature.
Property Subject to Inheritance Tax. —
The inheritance tax ordinarily applies to all
property within the power of the state to
reach passing by will or the laws regulating
intestate succession or by gift inter vivos in
the manner designated by statute, whether
such property be real or personal, tangible
or intangible, corporeal or incorporeal.
Page | 7 - EJC821
In the case of Tuason and Tuason vs. Posa-
das, supra, it was also held that section
1540 of the Administrative Code did not
violate the constitutional provision re-
garding uniformity of taxation. It cannot
be null and void on this ground because it
equally subjects to the same tax all of those
donees who later become heirs, legatees or
donees mortis causa by the will of the do-
nor. There would be a repugnant and arbi-
trary exception if the provisions of the law
were not applicable to all donees of the
same kind. In the case cited above, it was
said: "At any rate the argument adduced
against its constitutionality, which is the
lack of Uniformity, does not seem to be
well founded.
It was said that under such an interpreta-
tion, while a donee inter vivos who, after
the predecessor's death proved to be an
heir, a legatee, or a donee mortis causa,
would have to pay the tax, another do-
nee inter vivos who did not prove to he an
heir, a legatee, or a donee mortis causa of
the predecessor, would be exempt from
such a tax. But as these are two different
cases, the principle of uniformity is inap-
plicable to them."
xxx
The last question of a procedural nature
arising from the case at bar, which should
be passed upon, is whether the case, as it
now stands, can be decided on the merits
or should be remanded to the court a
quo for further proceedings. According to
our view of the case, it follows that, if the
gifts received by the appellants would
have the right to recover the sums of
money claimed by them. Hence the ne-
cessity of ascertaining whether the com-
plaint contains an allegation to that effect.
We have examined said complaint and
found nothing of that nature. On the con-
trary, it be may be inferred from the allega-
tions contained in paragraphs 2 and 7
thereof that said donations inter vi-
vos were made in consideration of the
donor's death.
We refer to the allegations that such trans-
missions were effected in the month of
March, 1925, that the donor died in Janu-
ary, 1926, and that the donees were insti-
tuted legatees in the donor's will which was
admitted to probate. It is from these allega-
tions, especially the last, that we infer a
presumption juris tantum that said dona-
tions were made mortis causa and, as such,
are subject to the payment of inheritance
tax.
 * Dison v. Posadas, G.R. No. 36770, No-
vember 4, 1932
INTERNAL REVENUE; INHERITANCE
TAX; GIFTS "INTER VIVOS." — Section
1540 of the Administrative Code subjects the
plaintiff and appellant to the payment of the
inheritance tax upon the gift inter vivos he re-
ceived from his father and which really was
an advancement upon the inheritance he
would be entitled to receive upon the death of
the donor.
Section 1540 of the Administrative Code does
not tax gifts per se, but only when those gifts
are made to those who shall prove to be the
heirs, devises, legatees or donees mortis causa
of the donor.
"HEIRS." — The expression in section 1540
of the Administrative Code "those who, after
his death, shall prove to be his heirs" includes
those who are given the status and rights of
heirs, regardless of the quantity of property
they may receive as such heirs.
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D. Revocable Transfers – Sec. 85(C),
NIRC
(C) Revocable Transfer. -
(1) To the extent of any interest therein, of
which the decedent has at any time made a
transfer (except in case of a bona fide sale
for an adequate and full consideration in
money or money's worth) by trust or other-
wise, where the enjoyment thereof was
subject at the date of his death to any
change through the exercise of a power (in
whatever capacity exercisable) by the de-
cedent alone or by the decedent in conjunc-
tion with any other person (without regard
to when or from what source the decedent
acquired such power), to alter, amend, re-
voke, or terminate, or where any such
power is relinquished in contemplation of
the decedent's death.
(2) For the purpose of this Subsection, the
power to alter, amend or revoke shall be
considered to exist on the date of the dece-
dent's death even though the exercise of the
power is subject to a precedent giving of
notice or even though the alteration,
amendment or revocation takes effect only
on the expiration of a stated period after
the exercise of the power, whether or not
on or before the date of the decedent's
death notice has been given or the power
has been exercised.
In such cases, proper adjustment shall be
made representing the interests which
would have been excluded from the power
if the decedent had lived, and for such pur-
pose if the notice has not been given or the
power has not been exercised on or before
the date of his
death, such notice shall be considered to
have been given, or the power exercised,
on the date of his death.
E. Property passing under general
power of appointment – Sec. 85(D),
NIRC
(D) Property Passing Under General Power
of Appointment.
- To the extent of any property passing un-
der a general power of appointment exer-
cised by the decedent:
(1) by will, or
(2) by deed executed in contemplation of,
or intended to take effect in possession or
enjoyment at, or after his death, or
(3) by deed under which he has retained for
his life or any period not ascertainable
without reference to his death or for any
period which does not in fact end before
his death
 (a) the possession or enjoyment of, or the
right to the income from, the property, or
(b) the right, either alone or in conjunction
with any person, to designate the persons
who shall possess or enjoy the property or
the income therefrom; except in case of a
bona fide sale for an adequate and full con-
sideration in money or money's worth.
F. Proceeds of life insurance – Sec.
85(E), NIRC
(E) Proceeds of Life Insurance. –
To the extent of the amount receivable by
the estate of the deceased, his executor, or
administrator, as insurance under policies
taken out by the decedent upon his own
life, irrespective of whether or not the in-
sured retained the power of revocation, or
to the extent of the amount receivable by
any beneficiary designated in the policy of
insurance, except when it is expressly stip-
ulated that the designation of the benefi-
ciary is irrevocable.
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* BPI v. Posadas, G.R. No. 34583, Octo-
ber 22, 1931
Ruling: SC ruled that:
(1) The proceeds of a life-insurance policy
payable to the insured's estate, on which
the premiums were paid by the conjugal
partnership, constitute community prop-
erty, and belong one-half to the husband
and the other half to the wife, exclusively;
(2) If the premiums were paid partly with
paraphernal and partly conjugal funds, the
proceeds are likewise in like proportion
paraphernal in part and conjugal in part;
and
(3) The proceeds of a life-insurance policy
payable to the insured's estate as the bene-
ficiary, if delivered to the testamentary ad-
ministrator of the former as part of the as-
sets of said estate under probate admin-
istration, are subject to the inheritance tax
according to the law on the matter, if they
belong to the assured exclusively, and it is
immaterial that the insured was domiciled
in these Islands or outside.
Hence, the defendant was ordered to return
to the plaintiff one-half of the tax collected
upon the amount of P20,150, being the
proceeds of the insurance policy on the life
of the late Adolphe Oscar Schuetze, after
deducting the proportional part correspond-
ing to the first premium.
* Del Val v. Del Val, G.R. No. 9374, Feb-
ruary 16, 1915
The contract of life insurance is a special
contract and the destination of the proceeds
thereof is determined by special laws
which deal exclusively with that subject.
The Civil Code has no provisions which
relate directly and specifically to life- in-
surance contracts or to the destination of
life insurance proceeds.
That subject is regulated exclusively by the
Code of Commerce which provides for the
terms of the contract, the relations of the
parties and the destination of the proceeds
of the policy.
G. Prior interest – Sec. 85(F), NIRC
(F) Prior Interests.
- Except as otherwise specifically provided
therein, Subsections (B), (C) and (E) of
this Section shall apply to the transfers,
trusts, estates, interests, rights, powers and
relinquishment of powers, as severally enu-
merated and described therein, whether
made, created, arising, existing, exercised
or relinquished before or after the effectiv-
ity of this Code.
H. Transfers for insufficient considera-
tion – Sec. 85(G), NIRC
(G) Transfers of Insufficient Considera-
tion.
- If any one of the transfers, trusts, inter-
ests, rights or powers enumerated and de-
scribed in Subsections (B), (C) and (D) of
this Section is made, created, exercised or
relinquished for a consideration in money
or money's worth, but is not a bona fide
sale for an adequate and full consideration
in money or money's worth, there shall be
included in the gross estate only the excess
of the fair market value, at the time of
death, of the property otherwise to be in-
cluded on account of such transaction, over
the value of the consideration received
therefor by the decedent.
I. Capital of the surviving spouse – Sec.
85(H), NIRC
(H) Capital of the Surviving Spouse.
- The capital of the surviving spouse of a
decedent shall not, for the purpose of this
Chapter, be deemed a part of his or her
gross estate.
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> Property relationship between
spouses
i. Absolute community – Arts. 91-
93, Family Code
Art. 91. Unless otherwise provided
in this Chapter or in the marriage set-
tlements, the community property
shall consist of all the property
owned by the spouses at the time of
the celebration of the marriage or ac-
quired thereafter.
Art. 92. The following shall be ex-
cluded from the community prop-
erty:
(1) Property acquired during the
marriage by gratuitous title by either
spouse, and the fruits as well as the
income thereof, if any, unless it is
expressly provided by the donor, tes-
tator or grantor that they shall form
part of the community property;
(2) Property for personal and exclu-
sive use of either spouse. However,
jewelry shall form part of the com-
munity property;
(3) Property acquired before the mar-
riage by either spouse who has legiti-
mate descendants by a former mar-
riage, and the fruits as well as the in-
come, if any, of such property.
(201a)
Art. 93. Property acquired during the
marriage is presumed to belong to
the community, unless it is proved
that it is one of those excluded there-
from.
ii. Conjugal property of gains –
Arts. 106-120, Family Code
Art. 106. Under the regime of conju-
gal partnership of gains, the husband
and wife place in a common fund the
proceeds, products, fruits and income
from their separate properties and
those acquired by either or both
spouses through their efforts or by
chance, and, upon dissolution of the
marriage or of the partnership, the
net gains or benefits obtained by ei-
ther or both spouses shall be divided
equally between them, unless other-
wise agreed in the marriage settle-
ments.
 iii. Complete separation of prop-
erty – Arts. 143-146, Civil Code
Art. 143. Should the future spouses agree
in the marriage settlements that their prop-
erty relations during marriage shall be gov-
erned by the regime of separation of prop-
erty, the provisions of this Chapter shall be
suppletory. (212a)
Art. 144. Separation of property may refer
to present or future property or both. It
may be total or partial. In the latter case,
the property not agreed upon as separate
shall pertain to the absolute community.
(213a)
Art. 145. Each spouse shall own, dispose
of, possess, administer and enjoy his or her
own separate estate, without need of the
consent of the other. To each spouse shall
belong all earnings from his or her profes-
sion, business or industry and all fruits,
natural, industrial or civil, due or received
during the marriage from his or her sepa-
rate property. (214a)
Art. 146. Both spouses shall bear the fam-
ily expenses in proportion to their income,
or, in case of insufficiency or default
thereof, to the current market value of their
separate properties.chan robles virtual law
library
Page | 11 - EJC821
The liabilities of the spouses to creditors
for family expenses shall, however, be soli-
dary.
iv. Marriage settlement
v. Property regime of unions with-
out marriages – Arts. 147-148,
Civil Code
* Collector v. Fisher, G.R. No. L-11622,
January 28, 1961
The lower court applied a well-known doc-
trine in our civil law that in the absence of
any ante-nuptial agreement, the contracting
parties are presumed to have adopted the
system of conjugal partnership as to the
properties acquired during their marriage.
xxx
If we adopt the view of Manresa, the law
determinative of the property relation of
the Stevensons, married in 1909, would be
the English law even if the marriage was
celebrated in the Philippines, both of them
being foreigners. But, as correctly ob-
served by the Tax Court, the pertinent Eng-
lish law that allegedly vests in the decedent
husband full ownership of the properties
acquired during the marriage has not been
proven by petitioner.
Except for a mere allegation in his answer,
which is not sufficient, the record is bereft
of any evidence as to what English law
says on the matter. In the absence of proof,
the Court is justified, therefore, in indulg-
ing in what Wharton calls "processual pre-
sumption," in presuming that the law of
England on this matter is the same as our
law.
VI. Deductions
A. Citizen or resident – Sec. 86(A), NIRC
SEC. 86. Computation of Net Estate. - For
the purpose of the tax imposed in this
Chapter, the value of the net estate shall be
determined:
(A) Deductions Allowed to the Estate of
Citizen or a Resident. - In the case of a citi-
zen or resident of the Philippines, by de-
ducting from the value of the gross estate -
xxx
1. Standard deduction – Sec. 86(A)(1),
NIRC
(1) Expenses, Losses, Indebtedness, and
taxes. - Such amounts:
(a) For actual funeral expenses or in an
amount equal to five percent (5%) of the
gross estate, whichever is lower, but in no
case to exceed Two hundred thousand pe-
sos (P200,000);
(b) For judicial expenses of the testamen-
tary or intestate proceedings;
TRAIN: 5M Standard Deduction
2. Claims against the estate – Sec.
86(A)(c), NIRC
(c) For claims against the estate: Provided,
That at the time the indebtedness was in-
curred the debt instrument was duly nota-
rized and, if the loan was contracted within
three (3) years before the death of the dece-
dent, the administrator or executor shall
submit a statement showing the disposition
of the proceeds of the loan;
* Dizon v. CTA & CIR, G.R. No.
140944, April 30, 2008
"Claims against the estate," as allowable
deductions from the gross estate under
Section 79 of the Tax Code, are basically
Page | 12 - EJC821
a reproduction of the deductions allowed
under Section 89 (a) (1) (C) and (E) of
Commonwealth Act No. 466 (CA 466),
otherwise known as the National Internal
Revenue Code of 1939, and which was
the first codification of Philippine tax
laws. Philippine tax laws were, in turn,
based on the federal tax laws of the
United States. Thus, pursuant to estab-
lished rules of statutory construction, the
decisions of American courts construing
the federal tax code are entitled to great
weight in the interpretation of our own
tax laws.
xxx
Therefore, the claims existing at the time
of death are significant to, and should be
made the basis of, the determination of
allowable deductions.
3. Claims of deceased against insolvent
persons – Sec. 86(A)(d), NIRC
(d) For claims of the deceased against in-
solvent persons where the value of dece-
dent's interest therein is included in the
value of the gross estate; and
4. Unpaid mortgages, taxes, casualty
losses – Sec. 86(A)(e), NIRC
(e) For unpaid mortgages upon, or any in-
debtedness in respect to, property where
the value of decedent's interest therein, un-
diminished by such mortgage or indebted-
ness, is included in the value of the gross
estate, but not including any income tax
upon income received after the death of the
decedent, or property taxes not accrued be-
fore his death, or any estate tax.
The deduction herein allowed in the case
of claims against the estate, unpaid mort-
gages or any indebtedness shall, when
founded upon a promise or agreement, be
limited to the extent that they were con-
tracted bona fide and for an adequate and
full consideration in money or money's
worth.
There shall also be deducted losses in-
curred during the settlement of the estate
arising from fires, storms, shipwreck, or
other casualties, or from robbery, theft or
embezzlement, when such losses are not
compensated for by insurance or otherwise,
and if at the time of the filing of the return
such losses have not been claimed as a de-
duction for the income tax purposes in an
income tax return, and provided that such
losses were incurred not later than the last
day for the payment of the estate tax as
prescribed in Subsection (A) of Section 91.
5. Property previously taxed – Sec.
86(A)(5), NIRC
(2) Property Previously Taxed. - An amount
equal to the value specified below of any
property forming a part of the gross estate
situated in the Philippines of any person
who died within five (5) years prior to the
death of the decedent, or transferred to the
decedent by gift within five (5) years prior
to his death, where such property can be
identified as having been received by the
decedent from the donor by gift, or from
such prior decedent by gift, bequest, devise
or inheritance, or which can be identified as
having been acquired in exchange for prop-
erty so received:
One hundred percent (100%) of the value, if
the prior decedent died within one (1) year
prior to the death of the decedent, or if the
property was transferred to him by gift
within the same period prior to his death;
Eighty percent (80%) of the value, if the
prior decedent died more than one (1) year
but not more than two (2) years prior to the
death of the decedent, or if the property was
transferred to him by gift within the same
period prior to his death;
Page | 13 - EJC821
Sixty percent (60%) of the value, if the prior
decedent died more than two (2) years but
not more than three (3) years prior to the
death of the decedent, or if the property was
transferred to him by gift within the same
period prior to his death;
Forty percent (40%) of the value, if the prior
decedent died more than three (3) years but
not more than four (4) years prior to the
death of the decedent, or if the property was
transferred to him by gift within the same
period prior to his death;
Twenty percent (20%) of the value, if the
prior decedent died more than four (4) years
but not more than five (5) years prior to the
death of the decedent, or if the property was
transferred to him by gift within the same
period prior to his death;
These deductions shall be allowed only
where a donor's tax or estate tax imposed
under this Title was finally determined and
paid by or on behalf of such donor, or the
estate of such prior decedent, as the case
may be, and only in the amount finally
determined as the value of such property in
determining the value of the gift, or the
gross estate of such prior decedent, and only
to the extent that the value of such property
is included in the decedent's gross estate,
and only if in determining the value of the
estate of the prior decedent, no deduction
was allowable under paragraph (2) in re-
spect of the property or properties given in
exchange therefor. Where a deduction was
allowed of any mortgage or other lien in de-
termining the donor's tax, or the estate tax
of the prior decedent, which was paid in
whole or in part prior to the decedent's
death, then the deduction allowable under
said Subsection shall be reduced by the
amount so paid. Such deduction allowable
shall be reduced by an amount which bears
the same ratio to the amounts allowed as de-
ductions under paragraphs (1) and (3) of this
Subsection as the amount otherwise deduct-
ible under said paragraph (2) bears to the
value of the decedent's estate. Where the
property referred to consists of two or more
items, the aggregate value of such items
shall be used for the purpose of computing
the deduction.
* Estate of Fidel F. Reyes & Estate
of Teresita R. Reyes v. CIR, CTA
Case No. 6747, January 16, 2006
Issue: whether or not there was an over-
statement of vanishing deductions in the
estate of Teresita R. Reyes
Held: Vanishing deduction is a deduction
allowed from the gross estate of citizens,
resident
aliens and non-resident estates for proper-
ties which were previously subject to do-
nor's or estate taxes. The deduction al-
lowed diminishes for a period of five (5)
years. Section 86(A)(2) of the 1997 NIRC
provides for the computation of property
previously taxed. The correct initial basis
should be the inherited property previously
taxed.
6. Transfers for public use – Sec.
86(A)(6), NIRC
(3) Transfers for Public Use. - The amount
of all the bequests, legacies, devises or
transfers to or for the use of the Govern-
ment of the Republic of the Philippines, or
any political subdivision thereof, for exclu-
sively public purposes
7. Family home – Sec. 86(A)(7), NIRC;
Arts. 152 & 153, 156, 161 Family Code
(4) The Family Home. - An amount equiv-
alent to the current fair market value of the
decedent's family home: Provided, how-
ever, That if the said current fair market
value exceeds One million pesos
(P1,000,000), the excess shall be subject to
estate tax. As a sine qua non condition for
Page | 14 - EJC821
the exemption or deduction, said family Nevertheless, property that is the subject of
home must have been the decedent's family a conditional sale on installments where
home as certified by the barangay captain ownership is reserved by the vendor only
of the locality. to guarantee payment of the purchase price
may be constituted as a family home.
TRAIN: Up to 10M + removes condi-
tions. Art. 161. For purposes of availing of the
benefits of a family home as provided for
Art. 152. The family home, constituted in this Chapter, a person may constitute, or
jointly by the husband and the wife or by be the beneficiary of, only one family
an unmarried head of a family, is the home.
dwelling house where they and their family
reside, and the land on which it is situated.
(223a)
Art. 153. The family home is deemed con-
8. Amount received by heirs under RA
stituted on a house and lot from the time it
4917 – Sec. 86(A)(7), NIRC
is occupied as a family residence. From the
(7) Amount Received by Heirs Under Re-
time of its constitution and so long as any
public Act No. 4917. - Any amount re-
of its beneficiaries actually resides therein,
ceived by the heirs from the decedent - em-
the family home continues to be such and
ployee as a consequence of the death of the
is exempt from execution, forced sale or at-
decedent-employee in accordance with Re-
tachment except as hereinafter provided
public Act No. 4917: Provided, That such
and to the extent of the value allowed by
amount is included in the gross estate of
law. (223a)
the decedent.
Art. 156. The family home must be part of
B. Non-Resident – Secs. 86(B) & (D),
the properties of the absolute community
NIRC
or the conjugal partnership, or of the exclu-
sive properties of either spouse with the (B) Deductions Allowed to Nonresident
latter's consent. It may also be constituted Estates. - In the case of a nonresident not a
by an unmarried head of a family on his or citizen of the Philippines, by deducting
her own property.
from the value of that part of his gross es-
tate which at the time of his death is situ-
ated in the Philippines:
xxx
TRAIN – Removes the deductions for
Non-resident estates pertaining to ex-
pensens, losses, indebtedness and taxes.
(D) Miscellaneous Provisions. - No deduc-
tion shall be allowed in the case of a non-
resident not a citizen of the Philippines, un-
less the executor, administrator, or anyone
of the heirs, as the case may be, includes in
the return required to be filed under Sec-
tion 90 the value at the time of his death of
that part of the gross estate of the nonresi-
dent not situated in the Philippines.
TRAIN – REMOVES the provision that
requires executor, administrator or any-
one of the heirs to include in the estate
tax return that part of the nonresident
alien's gross estate not situated in the
Philippines to be able to claim deduc-
tions.
Page | 15 - EJC821
1. Standard deduction – Sec. 86(B)(1),
NIRC
TRAIN – P500,000 standard deduction
2. Claims proportion to PH property –
Sec. 86(B)(2), NIRC
(2) Property Previously Taxed. - An
amount equal to the value specified below
of any property forming part of the gross
estate situated in the Philippines of any
person who died within five (5) years prior
to the death of the decedent, or transferred
to the decedent by gift within five (5) years
prior to his death, where such property can
be identified as having been received by
the decedent from the donor by gift, or
from such prior decedent by gift, bequest,
devise or inheritance, or which can be
identified as having been acquired in ex-
change for property so received
3. Property previously taxed – Sec.
86(B)(3), NIRC
(2) Property Previously Taxed. - An
amount equal to the value specified below
of any property forming part of the gross
estate situated in the Philippines of any
person who died within five (5) years prior
to the death of the decedent, or transferred
to the decedent by gift within five (5) years
prior to his death, where such property can
be identified as having been received by
the decedent from the donor by gift, or
from such prior decedent by gift, bequest,
devise or inheritance, or which can be
identified as having been acquired in ex-
change for property so received:
One hundred percent (100%) of the value
if the prior decedent died within one (1)
year prior to the death of the decedent, or if
the property was transferred to him by gift,
within the same period prior to his death;
Eighty percent (80%) of the value, if the
prior decedent died more than one (1) year
but not more than two (2) years prior to the
death of the decedent, or if the property
was transferred to him by gift within the
same period prior to his death;
Sixty percent (60%) of the value, if the
prior decedent died more than two (2)
years but not more than three (3) years
prior to the death of the decedent, or if the
property was transferred to him by gift
within the same period prior to his death;
Forty percent (40%) of the value, if the
prior decedent died more than three (3)
years but not more than four (4) years prior
 to the death of the decedent, or if the prop-
erty was transferred to him by gift within
the same period prior to his death; and
Twenty percent (20%) of the value, if the
prior decedent died more than four (4)
years but not more than five (5) years prior
to the death of the decedent, or if the prop-
erty was transferred to him by gift within
the same period prior to his death.
These deductions shall be allowed only
where a donor's tax, or estate tax imposed
under this Title is finally determined and
paid by or on behalf of such donor, or the
estate of such prior decedent, as the case
may be, and only in the amount finally de-
termined as the value of such property in
determining the value of the gift, or the
gross estate of such prior decedent, and
only to the extent that the value of such
property is included in that part of the de-
cedent's gross estate which at the time of
his death is situated in the Philippines; and
only if, in determining the value of the net
estate of the prior decedent, no deduction is
allowable under paragraph (2) of Subsec-
tion (B) of this Section, in respect of the
property or properties given in exchange
therefore. Where a deduction was allowed
of any mortgage or other lien in determin-
ing the donor's tax, or the estate tax of the
prior decedent, which was paid in whole or
Page | 16 - EJC821
in part prior to the decedent's death, then
the deduction allowable under said para-
graph shall be reduced by the amount so
paid. Such deduction allowable shall be re-
duced by an amount which bears the same
ratio to the amounts allowed as deductions
under paragraphs (1) and (3) of this Sub-
section as the amount otherwise deductible
under paragraph (2) bears to the value of
that part of the decedent's gross estate
which at the time of his death is situated in
the Philippines. Where the property re-
ferred to consists of two (2) or more items,
the aggregate value of such items shall be
used for the purpose of computing the de-
duction.
4. Transfers for public use – Sec.
86(B)(4), NIRC
(3) Transfers for Public Use. - The amount
of all bequests, legacies, devises or trans-
fers to or for the use of the Government of
the Republic of the Philippines or any po-
litical subdivision thereof, for exclusively
public purposes.
C. Share in the conjugal partnership –
Sec. 86(C), NIRC
(C) Share in the Conjugal Property. - the
net share of the surviving spouse in the
conjugal partnership property as dimin-
ished by the obligations properly chargea-
ble to such property shall, for the purpose
of this Section, be deducted from the net
estate of the decedent.
D. Tax credit for estate taxes paid to for-
eign country – Sec. 86(E), NIRC
(E) Tax Credit for Estate Taxes paid to a
Foreign Country. -
(1) In General. - The tax imposed by this
Title shall be credited with the amounts of
any estate tax imposed by the authority of a
foreign country.
(2) Limitations on Credit. - The amount of
the credit taken under this Section shall be
subject to each of the following limitations:
(a) The amount of the credit in respect to
the tax paid to any country shall not exceed
the same proportion of the tax against
which such credit is taken, which the dece-
dent's net estate situated within such coun-
try taxable under this Title bears to his en-
tire net estate; and
(b) The total amount of the credit shall not
exceed the same proportion of the tax
against which such credit is taken, which
the decedent's net estate situated outside
the Philippines taxable under this Title
bears to his entire net estate.
VII. Valuation – Sec. 88, NIRC
SEC. 88. Determination of the Value of the
Estate. -
(A) Usufruct. - To determine the value of
the right of usufruct, use or habitation, as
well as that of annuity, there shall be taken
into account the probable life of the benefi-
ciary in accordance with the latest Basic
Standard Mortality Table, to be approved
by the Secretary of Finance, upon recom-
mendation of the Insurance Commissioner.
(B) Properties. - The estate shall be ap-
praised at its fair market value as of the
time of death. However, the appraised
value of real property as of the time of
death shall be, whichever is higher of:
(1) The fair market value as determined by
the Commissioner, or
(2) The fair market value as shown in the
schedule of values fixed by the Provincial
and City Assessors.
Page | 17 - EJC821
* Lorenzo v. Posadas, G.R. No.
43082, June 18, 1937
Measure of, by value of estate. — If
death is the generating source from which
the power of the state to impose inher-
itance taxes takes its being and if, upon
the death of the decedent, succession
takes place and the right of the state to tax
vests instantly, the tax should be meas-
ured by the value of the estate as it stood
at the time of the decedent’s death, re-
gardless of any subsequent contingency
affecting value of any subsequent increase
or decrease in value.
* Manila Railroad Co. v. Velasquez,
G.R. No. 10278, November 23, 1915
ESTIMATE OF VALUE CONFINED TO
EVIDENCE OF RECORD. — Notwith-
standing the respect due the report of the
commissioners, their valuation of the prop-
erty must be supported by competent evi-
dence of record, and in those cases where
the evidence as to value and damages is
conflicting, they should always set forth in
full their reasons for accepting certain evi-
dence, especially in those cases where a
view of the premises has been made.
REPORT OF COMMISSIONERS;
POWER OF COURT TO SUBSTITUTE
ITS OWN ESTIMATE OF VALUE. — A
Court of First Instance or, on appeal under
sections 496 and 497 of the Code of Civil
Procedure, the Supreme Court may substi-
tute its own estimate of value as gathered
from the record submitted to it, in cases
where the only error of the commissioners
is that they have applied illegal principles
to the evidence submitted to them; or that
they have disregarded a clear preponder-
ance of the evidence; or that they have
used an improper rule of assessment in ar-
riving at the amount of the award; provided
always that the evidence be clear and con-
vincing and the amount allowed by the
commissioners is grossly inadequate or ex-
cessive.
MARKET VALUE. — The market value
of the condemned land is all that the owner
is entitled to. Evidence that the locality
may become a business or choice residen-
tial district, when its history over a period
of years shows that there are large tracts of
agricultural land in the vicinity, including
the condemned land, which have never
been appropriated for any of those pur-
poses, does not justify appraising such land
at figures which it would be worth if such
development were an actual fact. Such evi-
dence amounts to a mere expectancy, the
market value of which is comparatively in-
significant.
VIII. Exemption of certain acquisitions
and transmissions – Sec. 87, NIRC
SEC. 87. Exemption of Certain Acquisi-
tions and Transmissions. - The following
shall not be taxed:
(A) The merger of usufruct in the owner of of which insures to the benefit of any indi-
the naked title; vidual: Provided, however, That not more
(B) The transmission or delivery of the in- than thirty percent (30%) of the said be-
heritance or legacy by the fiduciary heir or quests, devises, legacies or transfers shall
legatee to the fideicommissary; be used by such institutions for administra-
tion purposes.
(C) The transmission from the first heir,
legatee or donee in favor of another benefi-
ciary, in accordance with the desire of the
predecessor; and
(D) All bequests, devises, legacies or trans-
fers to social welfare, cultural and charita-
ble institutions, no part of the net income

IX. Administrative requirements

A. Computation of tax – Sec. 84, NIRC

SEC. 84. Rates of Estate Tax. - There shall be levied, assessed, collected and paid upon the transfer of the net estate as determined in accordance
with Sections 85 and 86 of every decedent, whether resident or nonresident of the Philippines, a tax based on the value of such net estate, as computed
in accordance with the following schedule:
If the net estate is:chanroblesvirtuallawlibrary
OVER BUT NOT OVER THE TAX SHALL BE PLUS OF THE EXCESS
OVER
P 200,000 Exempt
P 200,000 550,000 0 5% P 200,000
500,000 2,000,000 P 15,000 8% 500,000
2,000,000 5,000,000 135,000 11% 2,000,000
5,000,000 10,000,000 465,000 15% 5,000,000
10,000,000 And Over 1,215,000 20% 10,000,000

Page | 18 - EJC821

TRAIN Rate: 6%
Base: Value of Net Estate
Estate Tax - Instead of having a compli-
cated tax schedule with different rates,
TRAIN reduces and restructures the estate
tax to a low and single tax rate of 6% based
on the net value of the estate with a stand-
ard deduction of P5 million and exemption
for the first P10 million for the family
home.
B. Filing of estate tax return – Sec. 90,
NIRC
1. BIR Form No. 1801 Estate Tax Return
(A) Requirements. - In all cases of trans-
fers subject to the tax imposed herein, or
where, though exempt from tax, the
gross value of the estate exceeds Two
hundred thousand pesos (P200,000),
or regardless of the gross value of the es-
tate, where the said estate consists of reg-
istered or registrable property such as
real property, motor vehicle, shares of
stock or other similar property for which
a clearance from the Bureau of Internal
Revenue is required as a condition prece-
dent for the transfer of ownership thereof
Page | 19 - EJC821
in the name of the transferee, the execu- (b) Itemized deductions from gross estate
tor, or the administrator, or any of the le- allowed in Section 86; and
gal heirs, as the case may be, shall file a
(c) The amount of tax due whether paid
return under oath in duplicate, setting
or still due and outstanding.
forth:
(1) The value of the gross estate of the TRAIN - Increases the amount of
decedent at the time of his death, or in gross value of estate provided in the
case of a nonresident, not a citizen of the estate tax returns that requires to be
Philippines, of that part of his gross es- supported with a statement duly certi-
tate situated in the Philippines; fied by a CPA from P2M to P5M.
(2) The deductions allowed from gross
estate in determining the estate as de- 2. Time of filing and payment – Secs.
fined in Section 86; and 90(B) & 91(A), NIRC
(3) Such part of such information as may
(B) Time for Filing. - For the purpose of
at the time be ascertainable and such sup- determining the estate tax provided for in
plemental data as may be necessary to Section 84 of this Code, the estate tax re-
establish the correct taxes. turn required under the preceding Sub-
section (A) shall be filed within six (6)
Provided, however, That estate tax re-
turns showing a gross value exceeding months 1 year from the decedent's death.
Two million pesos (P2,000,000) Five
A certified copy of the schedule of parti-
Million Pesos (P5,000,000) shall be sup- tion and the order of the court approving
ported with a statement duly certified to the same shall be furnished the Commis-
by a Certified Public Accountant con- sioner within thirty (30) after the promul-
taining the following: gation of such order.
(a) Itemized assets of the decedent with
TRAIN - Extends the period within
their corresponding gross value at the
which the estate tax return should be
time of his death, or in the case of a non-
file, from 6 months to 1 year from the
resident, not a citizen of the Philippines,
decedent's death.
of that part of his gross estate situated in
the Philippines;
 SEC. 91. Payment of Tax. -
(A) Time of Payment. - The estate tax
imposed by Section 84 shall be paid
at
(B) the time the return is filed by the ex-
ecutor, administrator or the heirs.
TRAIN - Repeals the provision requir-
ing the filing of notice of death of the
decedent by his/her executor, admin-
istratior or any of the legal heirs
within two (2) months after the dece-
dent's death.
3. Extension of time for filing & pay-
ment – Secs. 90(C) & 91(B), NIRC
90 (C) Extension of Time. - The Com-
missioner shall have authority to grant, in
meritorious cases, a reasonable extension
not exceeding thirty (30) days for filing
the return.
91 (B) Extension of Time. - When the
Commissioner finds that the payment on
the due date of the estate tax or of any
part thereof would impose undue hard-
ship upon the estate or any of the heirs,
he may extend the time for payment of
such tax or any part thereof not to exceed
Page | 20 - EJC821
five (5) years, in case the estate is settled
through the courts, or two (2) years in
case the estate is settled extrajudicially.
In such case, the amount in respect of
which the extension is granted shall be
paid on or before the date of the expira-
tion of the period of the extension, and
the running of the Statute of Limitations
for assessment as provided in Section
203 of this Code shall be suspended for
the period of any such extension.cralaw
Where the taxes are assessed by reason
of negligence, intentional disregard of
rules and regulations, or fraud on the part
of the taxpayer, no extension will be
granted by the Commissioner.cralaw
If an extension is granted, the Commis-
sioner may require the executor, or ad-
ministrator, or beneficiary, as the case
may be, to furnish a bond in such
amount, not exceeding double the
amount of the tax and with such sureties
as the Commissioner deems necessary,
conditioned upon the payment of the said
tax in accordance with the terms of the
extension.
4. Payment by installment – Sec.
91(C), NIRC
TRAIN - Provides for the payment by
installment basis in case available cash
is insufficient to pay the estate tax due.
Payment shall be allowed within 2
years from the statutory date for its
payments without civil penalty and in-
terest.
Revenue Regulation No. 12-2018
In case of insufficiency of cash for the
immediate payment of the total Estate
Tax due the estate may be allowed to pay
the Estate Tax through cash installment
and partial disposition of estate and ap-
plication of its proceeds to the Estate Tax
due.
The Request for the extension of time to
file the return, extension of time to pay
Estate Tax and payment by installment
shall be filed with the Revenue District
Officer where the estate is required to se-
cure its TIN and file the Estate Tax re-
turn. This request shall be approved by
the CIR or his duly authorized repre-
sentative.
 5. Place of filing – Sec. 90(D), NIRC
(D) Place of Filing. - Except in cases
where the Commissioner otherwise per-
mits, the return required under Subsection
(A) shall be filed with an authorized agent
bank, or Revenue District Officer, Collec-
tion Officer, or duly authorized Treasurer
of the city or municipality in which the de-
cedent was domiciled at the time of his
death or if there be no legal residence in
the Philippines, with the Office of the
Commissioner.
C. Liability for payment of tax – Sec.
91(D), NIRC
(C) Liability for Payment.- The estate tax
imposed by Section 84 shall be paid by the
executor or administrator before delivery
to any beneficiary of his distributive share
of the estate. Such beneficiary shall to the
extent of his distributive share of the estate,
be subsidiarily liable for the payment of
such portion of the estate tax as his distrib-
utive share bears to the value of the total
net estate.
For the purpose of this Chapter, the term
"executor" or "administrator" means the
Page | 21 - EJC821
executor or administrator of the decedent,
or if there is no executor or administrator
appointed, qualified, and acting within the
Philippines, then any person in actual or
constructive possession of any property of
the decedent.
* CIR v. Gonzales, G.R. No. L-19495,
November 24, 1966
At any rate, estate and inheritance taxes are
satisfied from the estate and are to be paid
by the executor or administrator. Where
there are two or more executors, all of
them are severally liable for the payment
of the estate tax. The inheritance tax, alt-
hough charged against the account of each
beneficiary, should be paid by the executor
or administrator. Failure to pay the estate
and inheritance taxes before distribution of
the estate would subject the executor or ad-
ministrator to criminal liability under Sec-
tion 107(c) of the Tax Code.
It is immaterial therefore that Lilia Yusay
Gonzales administers only one-third of the
estate and will receive as her share only
said portion, for her right to the estate
comes after taxes. As an administratrix, she
is liable for the entire estate tax. As an heir,
she is liable for the entire inheritance tax
although her liability would not exceed the
amount of her share in the estate.
* CIR v. Pineda, G.R. No. L-22734, Sep-
tember 15, 1967
Pineda is liable for the assessment as an
heir and as a holder-transferee of property
belonging to the estate/taxpayer. As an heir
he is individually answerable for the part
of the tax proportionate to the share he re-
ceived from the inheritance. His liability,
however, cannot exceed the amount of his
share.
As a holder of property belonging to the
estate, Pineda is liable for he tax up to the
amount of the property in his possession.
The reason is that the Government has a
lien on the P2,500.00 received by him from
the estate as his share in the inheritance,
for unpaid income taxes for which said es-
tate is liable, pursuant to the last paragraph
of Section 315 of the Tax Code.
* Gonzales v. CTA & CIR, G.R. No. L-
28821, December 19, 1980
For Us now to rule that the proper proce-
dure would be for the decision of this
Court in G.R. No. L-19495 to be filed in
Special Proceedings No. 459 of the Court
of First Instance of Iloilo as a money claim
is not only too late, but also impractical
circuitous, and a cumbersome procedure
that would lead to further delay in the en-
forcement of the judgment in this case
which is for tax liability. We cannot ignore
that there has been a delay of about 29
years in the payment of these taxes.
X. Inhibitions, responsibilities, obliga-
tions in the enforcement of estate tax –
Secs. 92, 94-97, NIRC
SEC. 92. Discharge of Executor or Admin-
istrator from Personal Liability. - If the ex-
ecutor or administrator makes a written
application to the Commissioner for deter-
mination of the amount of the estate tax
and discharge from personal liability
therefore, the Commissioner (as soon as
possible, and in any event within one (1)
year after the making of such application,
or if the application is made before the re-
turn is filed, then within one (1) year after
the return is filed, but not after the expira-
tion of the period prescribed for the assess-
ment of the tax in Section 203 shall not no-
tify the executor or administrator of the
amount of the tax. The executor or admin-
istrator, upon payment of the amount of
which he is notified, shall be discharged
from personal liability for any deficiency
in the tax thereafter found to be due and
Page | 22 - EJC821
shall be entitled to a receipt or writing
showing such discharge.
SEC. 94. Payment Before Delivery by Ex-
ecutor or Administrator. - No judge shall
authorize the executor or judicial adminis-
trator to deliver a distributive share to any
party interested in the estate unless a certi-
fication from the Commissioner that the es-
tate tax has been paid is shown.
SEC. 95. Duties of Certain Officers and
Debtors.
- Registers of Deeds shall not register in
the Registry of Property any document
transferring real property or real rights
therein or any chattel mortgage, by way of
gifts inter vivos or mortis causa, legacy or
inheritance, unless a certification from the
Commissioner that the tax fixed in this Ti-
tle and actually due thereon had been paid
is show, and they shall immediately notify
the Commissioner, Regional Director, Rev-
enue District Officer, or Revenue Collec-
tion Officer or Treasurer of the city or mu-
nicipality where their offices are located,
of the nonpayment of the tax discovered by
them.
Any lawyer, notary public, or any govern-
ment officer who, by reason of his official
duties, intervenes in the preparation or ac-
knowledgment of documents regarding
partition or disposal of donation inter vivos
or mortis causa, legacy or inheritance, shall
have the duty of furnishing the Commis-
sioner, Regional Director, Revenue District
Officer or Revenue Collection Officer of
the place where he may have his principal
office, with copies of such documents and
any information whatsoever which may fa-
cilitate the collection of the aforemen-
tioned tax. Neither shall a debtor of the de-
ceased pay his debts to the heirs, legatee,
executor or administrator of his creditor,
unless the certification of the Commis-
sioner that the tax fixed in this Chapter
had been paid is shown; but he may pay
the executor or judicial administrator with-
out said certification if the credit is in-
cluded in the inventory of the estate of the
deceased.
SEC. 96. Restitution of Tax Upon Satisfac-
tion of Outstanding Obligations.
- If after the payment of the estate tax, new
obligations of the decedent shall appear,
and the persons interested shall have satis-
fied them by order of the court, they shall
have a right to the restitution of the propor-
tional part of the tax paid.
SEC. 97. Payment of Tax Antecedent to
the Transfer of Shares, Bonds or Rights.
- There shall not be transferred to any new
owner in the books of any corporation, so-
ciedad anonima, partnership, business, or
industry organized or established in the
Philippines any share, obligation, bond or
right by way of gift inter vivos or mortis
causa, legacy or inheritance, unless a certi-
fication from the Commissioner that the
taxes fixed in this Title and due thereon
have been paid is shown.
If a bank has knowledge of the death of a
person, who maintained a bank deposit ac-
count alone, or jointly with another, it shall
not allow any withdrawal from the said de-
posit account, unless the Commissioner has
certified that the taxes imposed thereon by
this Title have been paid: Provided, how-
ever, That the administrator of the estate or
any one (1) of the heirs of the decedent
may, upon authorization by the Commis-
sioner, withdraw an amount not exceeding
Twenty thousand pesos (P20,000) without
the said certification. For this purpose, all
withdrawal slips shall contain a statement
to the effect that all of the joint depositors
are still living at the time of withdrawal by
any one of the joint depositors and such
statement shall be under oath by the said
depositors.
Page | 23 - EJC821
TRAIN - Removes the P20,000 limit that
may be withdrawn from the bank ac-
count of the decedent without certifica-
tion from the BIR and allows for the
withdrawal of any amount but subject to
a final withholding tax of 6%.
* Pastor v. CTA, G.R. No. L-56340, June
24, 1983
3. Propriety of certiorari —
Private respondent challenges the propriety
of certiorari as a means to assail the valid-
ity of the disputed Order of execution. He
contends that the error, if any, is one of
judgment, not jurisdiction, and properly
correctible only by appeal, not certiorari.
Under the circumstances of the case at bar,
the challenge must be rejected. Grave
abuse of discretion amounting to lack of
jurisdiction is much too evident in the actu-
ations of the probate court to be over-
looked or condoned.
xxx
(c) Neither has the estate tax been paid on
the estate of PASTOR, SR. Payment there-
fore of the legacy to QUEMADA would
collide with the provision of the National
Internal Revenue Code requiring payment
of estate tax before delivery to any benefi-
ciary of his distributive share of the estate
(Section 107 [c])
* Polido v. CA & Gasat, G.R. No.
170632, July 10, 2007
13. With respect to the allegations of said
paragraph 14, to wit –
Unless an injunction be issued against the
defendant restraining him from claiming in
the bank account, the plaintiff would suffer
irreparable damage. The plaintiff is willing
to post a bond in an amount to be fixed by
the Honorable Court.
this allegation is UNFOUNDED AND
BASELESS and the court cannot use [it] as
a ground for the issuance of any restraining
order. Even assuming that the court will is-
sue an Order restraining defendant from
claiming the bank account, the plaintiff
still cannot withdraw any amount thereof,
because it is a part of the ESTATE of
Jacinto Polido, and as provided for by laws
before the bank allows any withdrawal, the
plaintiff has to follow certain procedures
 required by other laws governing estate
settlement, that is, - (a) Payment of Estate
Tax, if any; (b) BIR Tax Clearance; (c)
Present a duly published Extrajudicial Par-
tition executed by the heirs adjudicating
said amount to such heir, unless a compe-
tent Court issues an Order allowing the
plaintiff to withdraw [from] said ac-
count. (Underscoring supplied)

It bears noting that petitioner and her de-

ceased husband Polido were childless;
hence, Gasat, who is a son of Polido’s sis-
ter Petra P. Gasat, could inherit from
Polido.

Page | 24 - EJC821

Donor’s Tax
I. Basic concepts Donation – Art. 725,
Civil Code 1. Donation mortis causa –
Art. 728, Civil Code 2. Donation inter vi-
vos – Arts. 729, 730, 731, Civil Code *
Lladoc v. CIR, G.R. No. L-19201, June 16,
1965
Page | 25 - EJC821
II. Applicable law – Secs. 98-104, NIRC
III. Persons liable – Sec. 98, NIRC a. Tax
payable – Sec. 99, NIRC b. Election cam-
paign contributions – Sec. 99(B), NIRC;
RA 7166
IV. Taxable gifts – Sec. 104, NIRC a. Val-
uation – Sec. 102, NIRC
V. Transfer for inadequate consideration –
Sec. 100, NIRC A. Bona fide transactions
B. Sales of shares of stock for inadequate
consideration – Sec. 7(c.1.4), RR No. 06-
2008 * CIR v. B.F. Goodrich Phils., Inc.
& CA, G.R. No. 104171, February 24,
1999 * Metro Pacific Corporation (now
Neo Oracle Holdings, Inc.) v. CIR, CTA
Case No. 8318, June 11, 2014 * Dizon v.
CTA, G.R. No. 140944, April 30, 2008
VI. Exemption of certain gifts A. In case
of residents – Sec. 101(A), NIRC B. In
case of non-residents – Sec. 101(B), NIRC
VII. Repudiation of inheritance: Tax con-
sequence – Arts. 1015-1023, Civil Code *
BIR Ruling No. 455-93 dated November
19, 1993
VIII. Filing of returns and payment of tax
A. Imposition of tax – Sec. 98, NIRC B.
Tax rate – Sec. 99, NIRC C. Tax credit for
donor’s tax paid to a foreign country – Sec.
101(c), NIRC D. Filing and payment –
Sec. 103, NIRC E. BIR Form 1800 Do-
nor’s Tax Return
Value Added Tax
I. Nature, characteristic and constitutional-
ity of VAT * CIR v. Benguet Corp., G.R.
Nos. 134587 & 134588, August 8, 2005 *
Tolentino v. Secretary of Finance, G.R.
No. 115455, October 30, 1995 * Abakada
Guro Party List (Formerly AASJAS) et al.
v. Ermita, et al., G.R. No. 168056, Septem-
ber 1, 2005 * CS Garment, Inc. v. CIR,
G.R. No. 182399, March 12, 2014 * CIR v.
CA and Commonwealth Management and
Services Corp., G.R. No. 125355, March
30, 2000
II. Applicable laws 1. Secs. 105-115,
NIRC 2. Executive Order No. 273 – origi-
nal VAT Law (1988)
4 monwealth Management and Services Cor-
3. Republic Act No. (RA) 7643 (1992) 4.
RA 7716 – Expanded VAT Law (1996) 5.
RA 8241 – Improved VAT Law (1997) 6.
RA 8424 – Tax Reform Act (1998) 7. RA
8761 (2000) 8. RA 9010 (2001) 9. RA
9238 (2004) 10. RA 9337 (2005) 11. RA
9361 (2006) 12. RA 10378 (2013) 13. RA
10963 (2018) 14. Revenue Memorandum
Circular (RMC) No. 07-2006 – increasing
VAT rate to 12% 15. RR No. 16-2005 16.
RR No. 16-2011 17. RA 9994 18. RA
10754 19. RR No. 13-2018 20. RR No.
15-2018 21. RR No. 19-2018 22. RR. No.
25-2018 23. RR No. 26-2018 24. RMC
No. 55-2014 25. RMC No. 39-2018 26.
RMC No. 2-2019 27. RMC No. 4-2019
III. Persons liable A. Who are liable? –
Sec. 105, NIRC * Sec. 4.105-1, RR No.
16-2005 * RR No. 16-2011
B. “in the course of trade or business” vs.
“isolated transaction” vs. “incidental to the
main line of business” * CIR v. Magsaysay
Lines, Inc. et al., G.R. No. 146984, July
Page | 26 - EJC821
28, 2006 * Mindanao II Geothermal Part-
nership v. CIR, G.R. No. 193301, March
11, 2013 C. Output tax on sale of goods
or properties 1. Tax rate and tax base –
Sec. 106(A), NIRC; RMC No. 07-06 dated
January 31, 2006 2. Definition of gross
selling price – Sec. 106(A)(1), NIRC 3.
Meaning of goods or properties – Sec.
106(A)(1), NIRC 4. Special rules on sale
of real property (cash sales or installment
sales) – RR No. 16-05 5. Zero-rated sale of
goods or properties – Sec. 106(A)(2),
NIRC * Contex Corporation v. CIR, G.R.
No. 151135, July 2, 2004 * CIR v. Seagate
Technology, G.R. No. 153866, February
11, 2005 6. Transactions deemed sales –
Sec. 106(B), NIRC 7. Changes in or cessa-
tion of status of a VAT-registered person –
Sec. 106(C), NIRC 8. Sales return, allow-
ances, and sales discounts – Sec. 106(D),
NIRC 9. Authority of CIR to determine ap-
propriate tax base – Sec. 106(E), NIRC
D. VAT on importation 1. In general –
Sec. 107(A), NIRC 2. Transfer by VAT
exempt persons – Sec. 107(B), NIRC
E. Output tax on sale of services 1. Tax
rate and tax base – Sec. 108(A), NIRC 2.
Definition of gross receipts – Sec. 108(A),
NIRC
3. Meaning of “sale or exchange of ser-
vices” – Sec. 108(A), NIRC * CIR v. Com-
poration, G.R. No. 125355, March 30,
2000 * CIR v. SM Prime Holdings, Inc.
and First Asia Realty Development Corp.
G.R. No. 183505, February 26, 2010 *
Diaz and Timbol v. Secretary of Finance
and CIR, G.R. No. 193007, July 19, 2011
4. Transmission by NGPC and electric co-
operatives 5. Zero-rated sale of services –
Sec. 108(B), NIRC
F. Exempt transactions 1. Meaning of ex-
empt sales 2. Exempt vs. zero-rated sales
* CIR v. Cebu Toyo Corporation, G.R. No.
149073, February 17, 2005 * Toshiba In-
formation Equipment (Phils) Inc. v. CIR,
G.R. No. 157594, March 9, 2010 3. Ex-
empt transactions a. Sale or importation of
agricultural and marine food products in
their original state * Misamis Oriental
Coco Traders v. Secretary of Finance, G.R.
No. 108524, November 10, 1994, 238
SCRA 63 b. Sale or importation of fertiliz-
ers, seeds, seedlings and fingerlings *
RMC No. 55-2014 c. Importation of per-
sonal and household effects d. Importation
of professional instruments and imple-
ments e. Services subject to percentage tax
under Title V f. Agricultural contract
growers and milling for others of palay
into rice, corn into grits and sugar cane into
raw sugar g. Medical, dental, hospital and
veterinary services * Hermano (San) Mi-
guel Febres Cordero Medical Education
Foundation (De La Salle – Health Science
Institute), Inc. v. CIR, CTA Case No.
8194, May 15, 2012 * CIR v. Philippine
Health Care Providers, Inc., G.R. No.
168129, April 24, 2007 h. Educational ser-
vices i. Services rendered by individuals
pursuant to employer-employee relation-
ship j. Services rendered by regional or
area headquarters k. Transactions that are
exempt under international agreements or
special law l. Sale by agricultural coopera-
tives m. Gross receipts from lending activi-
ties by credit or multipurpose cooperative
n. Sales by non-agricultural, non-electric
and non-credit cooperatives o. Export sales
by persons who are not VAT-registered p.
Real properties not primarily held for sale
or lease, socialized housing q. Lease of res-
idential units with a monthly rental income
not exceeding Php 15,000 r. Sale, importa-
tion, printing or publication of books,
newspapers and magazines s. Transport of
passengers by international carriers t. Sale,
importation or lease of passenger vessels or
cargo vessels and aircrafts including en-
gine, equipment and spare parts thereof for
domestic or internal transport operations u.
Importation of fuel, goods and supplies by
persons engaged in international shipping
Page | 27 - EJC821
or air transport operations v. Services of
banks and finance companies w. Senior cit-
izens and PWDs x. Sec. 40(C)(2), NIRC y.
Association dues, membership fees, and
other assessments and charges collected by
homeowners associations and condomin-
ium corporations z. Sale of gold to the BSP
aa. Sale of drugs and medicines prescribed
for diabetes, high cholasterol and hyperten-
sion * RR No. 25-2018 * RMC No. 4-
2019 bb. Sale or lease of goods, properties
or services other than the transactions men-
tioned in the preceding paragraphs, the
gross sales or receipts do not exceed Php
3,000,000.
G. Input taxes on purchases of goods or
services and importation 1. Credits for in-
put tax – Sec. 110(A) a. Purchase or im-
portation of goods – Sec. 110(A)(1)(a),
NIRC b. Purchase of capital equipment –
Sec. 110(A)(2), NIRC c. Purchase of ser-
vices – Sec. 110(A)(1)(b), NIRC d. VAT
taxpayer with mixed transactions – Sec.
110(A)(3), NIRC 2. Transitional input tax
– Sec. 111(A), NIRC * Fort Bonifacio De-
velopment Corp. v. CIR, et al., G.R. Nos.
158885 & 170680, April 2, 2009 3. Pre-
sumptive input tax – Sec. 111(B), NIRC 4.
Withholding of VAT i. Creditable with-
holding VAT on non-resident lessors of
properties or property rights – Sec. 114(C),
NIRC ii. Final withholding VAT by gov-
ernment – Sec. 114(C), NIRC
H. Computation of VAT payable – Sec.
110(B), NIRC * CIR v. American Express
International, G.R. No. 152609, June 29,
2005 * Atlas Consolidated Mining & Dev.
Corp. v. CIR, G.R. No. 145526, March 16,
2007
I. Refunds or tax credit of input tax – Secs.
112, 106, 108, NIRC 1. Nature * CIR v.
Tokyo Shipping, G.R. No. 68252, May 26,
1995 1. When allowed a. Zero-rated or ef-
fectively zero-rated sales – Sec. 112(A),
NIRC * Eastern Telecommunications Phil-
ippines, Inc. v. CIR, G.R. No. 168856, Au-
gust 29, 2012 b. Cancellation of VAT
registration – Sec. 112(B), NIRC 2. Period
within which to file claim for refund or tax
credit * RMC No. 17-2018 * RMC No.
54-2014 3. Requisites of tax refund or tax
credit * CIR v. Aichi Forging Company of
Asia, Inc., G.R. No. 184823, October 6,
2010 * CIR v. San Roque Power Corpora-
tion, G.R. No. 187485, February 12, 2013
* Nippon Express (Philippines) Corpora-
tion v. CIR, G.R. No. 196907, March 13,
2013 * CIR v. Team Sual Corporation,
G.R. No. 205055, July 18, 2014 * Pilipi-
nas Total Gas, Inc. v. CIR, G.R. No.
207112, December 8, 2015 * RR No. 1-
2017 dated January 18, 2017 4. Sec. Form 2550M Monthly VAT Declaration b) V. Overseas communication tax – Sec.
269(j), NIRC 5. Burden of proof * United BIR Form 2550Q Quarterly VAT Return 120, NIRC
Airlines, Inc v. CIR, GR No. 178788, Sept. 6. Withholding VAT a) Creditable and Fi-
29, 2010 nal – Sec. 114(C), NIRC b) Government
Money Payments c) ODA funded projects VI. Banks and non-bank financial interme-
d) BIR Form 1600 Monthly Remittance diaries performing quasi-banking functions
J. Compliance requirements 1. Registra- Return of VAT and Other Percentages – Sec. 121, NIRC
tion Withheld e) BIR Form 2306 Certificate of
Final Tax Withheld at Source 7. Summary
Taxation II Outline | Kriska Marna A. List of Sales and Purchases VII. Other non-bank financial intermediar-
Buena 7
ies – Sec. 122, NIRC

K. Power of the Commissioner to Suspend

a. Persons commencing business – Sec. Business Operations – Sec. 115, NIRC VIII. Tax on life insurance premiums –
236(G)(1), NIRC b. Failure to register –
Sec. 236(G)(2), NIRC c. Optional regis- Sec. 123, NIRC
tration – Secs. 236(H) & 109(2), NIRC d.
Cancellation of registration – Sec. 236(F),
NIRC 2. Invoicing and accounting re- Other Percentage Taxes I. Applicable law IX. Tax on agents of foreign insurance
quirements a. In general – Sec. 237, – Secs. 116-128, NIRC companies – Sec. 124, NIRC
NIRC b. VAT invoicing requirements for
goods and services – Sec. 113(A), NIRC
c. Information in the VAT invoice and offi- II. Tax on Persons Exempt from VAT – X. Amusement taxes – Sec. 125, NIRC
cial receipt – Sec. 113(B), NIRC * Pana- Sec. 116, NIRC
sonic Communications Imaging Corp. v.
CIR, G.R. No. 178090, February 8, 2010 * XI. Tax on winnings – Sec. 126, NIRC
Microsoft Philippines, Inc. v. CIR, G.R. III. Common carriers tax A. Domestic –
No. 180173, April 6, 2011 * Western Min- 8
Sec. 117, NIRC B. International – Sec.
danao Power Corporation v. CIR, G.R. No. 118, NIRC C. RMC No. 46-2008
181136, June 13, 2012 3. Accounting re-
quirements – Sec. 113(C), NIRC 4. Issu-
ance of erroneous VAT invoice or official
IV. Tax on franchises – Sec. 119, NIRC XII. Stock Transaction tax and tax on IPOs
receipt – Sec. 113(D), NIRC 5. Return and
– Sec. 127, NIRC; RR No. 9-2018
payment of VAT – Sec. 114, NIRC a) BIR

Page | 28 - EJC821

XIII. Return and Payment of Percentage
Tax – Sec. 128, NIRC
Excise Taxes I. Applicable law – Secs.
129-172, NIRC
II. Goods subject to excise tax – Sec. 129,
NIRC
III. Alcohol products – Secs. 141-143,
NIRC
IV. Tobacco products – Secs. 144-147,
NIRC; RR No. 3-2018
V. Petroleum products – Sec. 148, NIRC;
RR No. 2-2018 a. Fuel markers – Sec.
148-A, NIRC
VI. Automobile – Sec. 149, NIRC; RR No.
5-2018; RR No. 24-2018
Page | 29 - EJC821
VII. Non-essentials – Sec. 150, NIRC a.
On cosmetic procedures – Sec. 150-A,
NIRC b. On sweetened beverages – Sec.
150-B, NIRC; RR No. 20-2018
VIII. Mineral products – Sec. 151, NIRC;
RR No. 1-2018; RMC No. 105-2018
IX. General provisions – Sec. 129-140,
NIRC
X. Administrative Provisions – Secs. 152-
172 (Secs. 155 & 171), NIRC
Documentary Stamp Taxes I. Applicable
laws – Secs. 173-201, NIRC; RR No. 4-
2018 RA 9243 RA 9648 RA 10963
Tax Remedies under the NIRC
I. Rights and remedies of the government
under the NIRC A. Power of the BIR to
obtain information and make an assess-
ment – Secs. 5-6, NIRC 1. Investigative
Authority a. Administrative summons to
taxpayer b. Third party summons c. In-
former’s reward – Sec. 282, NIRC *
Meralco Securities Corp. v. Savellano,
G.R. No. L-36181, October 23, 1982 *
CIR v. Fitness by Design, Inc., G.R. No.
215957, November 9, 2016 2. Power to
make assessment a. Examination of re-
turns b. Failure to submit required returns,
statements, reports and other documents *
Sy Po v. CTA & CIR, G.R. No. 81446,
August 18, 1988 c. Inventory-taking, sur-
veillance
Taxation II Outline | Kriska Marna A.
Buena 9
d. Termination of taxable period e. Pre-
scribe zonal values * CIR v. Aquafresh
Seafoods, Inc., G.R. No. 170389, October
20, 2010 f. Inquiry into bank deposits g.
Accreditation of tax agents 3. Power to
suspend business operations of taxpayer –
Sec. 115, NIRC
B. Protesting of an assessment – Sec. 228,
NIRC; RR No. 12-99 as amended by RR
No. 18-2013 a. Procedure for informing
taxpayer of tax deficiency b. Exceptions
to issuance of Preliminary Assessment No-
tice (PAN) c. Procedure for disputing as-
sessment * FBDC v. CIR, G.R. No.
173425, September 4, 2012 * CIR v.
Pascor Realty, G.R. No. 128315, June 29,
1999 d. Presumption of correctness of as-
sessment * Sy Po v. CTA & CIR, G.R.
No. 81446, August 18, 1988 * Portilo v.
CIR, 932 F.2d 1128 (5th Cir. 1991), June
11, 1991 * CIR v. Hantex Trading Co.,
Inc., G.R. No. 136975, March 31, 2005 e.
Assessment must be based on actual facts
* CIR v. Benipayo, G.R. No. L-13656,
January 31, 1962 f. Assessment issued
outside scope of LOA * CIR v. Sony
Philippines, Inc., G.R. No. 178697, No-
vember 17, 2010
C. Collection of unpaid taxes a. Distraint,
garnishment, levy & seizure – Secs. 205-
215 & 217, NIRC i. Actual vs. construc-
tive distraint ii. Procedure b. Forfeiture to
the government for want of bidder – Secs.
268, 262 & 224-226, NIRC; RR No. 22-
2002 c. Civil action – Sec. 220, NIRC *
Republic v. Lim Tian Teng Sons & Co.,
G.R. No. L-21731, March 31, 1966 * San
Juan v. Vasquez, G.R. No. L-16814, Sep-
tember 19, 1961 * Yabes v. Flojo, G.R.
No. L-46954, July 20, 1982 d. Criminal ac-
tion – Secs. 222, 248(B), 253-255, 257-
269, 274-278, 281-282, NIRC * CIR v.
Pascor Realty, G.R. No. 128315, June 29,
1999 * Republic v. Patanao, G.R. No. L-
22356, July 21, 1967 * Ungab v. Cusi,
G.R. Nos. L-41919-24, May 30, 1980 *
Page | 30 - EJC821
People v. Kintanar, CTA EB Crim. No.
006, December 3, 2010 * Judy Anne San-
tos v. People of the Philippines & BIR,
G.R. No. 173176, August 26, 2008 * Aznar
v. CTA, G.R. No. L-20569, August 23,
1974 e. Anti-injunction rule – Sec. 218,
NIRC; Sec. 11, RA 9282 * General rule
and exception * Churchill v. Rafferty,
G.R. No. 10572, December 21, 1915 * CIR
v. Cebu Portland Cement Co., G.R. No. L-
29059, December 15, 1987 f. Nature and
extent of tax lien – Sec. 219, NIRC * BPI
v. Trinidad, G.R. No. 16014, October 4,
1921 g. Compromise and abatement –
Sec. 204, NIRC * CIR v. Reyes, G.R.
Nos. 159694 & 163581, January 27, 2006
* Asiatrust Development Bank, Inc. v.
CIR, G.R. No. 201530, April 19, 2017
10
D. Imposition of surcharge, interest &
compromise penalty a. Civil penalties –
Sec. 248, NIRC * CIR v. Javier & CTA,
G.R. No. 78953, July 31, 1991 * CIR v.
Japan Airlines & CTA, G.R. No. 60714,
October 4, 1991 * PICOP v. CIR, G.R.
Nos. 106949-50, December 1, 1995 b. In-
terest – Sec. 249, NIRC; Sec. 3, RR No.
18-2013 * Cagayan Electric v. CIR &
CTA, G.R. No. 60126, September 25, 1985
* Republic v. Heras, G.R. No. L-26742,
April 30, 1970 * First Lepanto Taisho In-
surance Corp. v. CIR, G.R. No. 197117,
April 10, 2013 c. Compromise penalty –
Sec. 6, RR No. 12-99 * CIR v. Lianga Bay
Logging Co., Inc. & CTA, G.R. No. L-
35266, January 21, 1991
II. Rights and remedies of taxpayers under
the NIRC A. Amend return – Sec. 6(A),
NIRC * Rohm Apollo Semiconductor
Phil. v. CIR, G.R. No. 168950, January 14,
2015
B. Protest Assessment – Sec. 228, NIRC
a. Procedure for protesting an assessment *
Pier 8 Arrastre and Stevedoring Services v.
CIR, G.R. No. 173849, September 28,
2007 * CIR v. Menguito, G.R. No.
167560, September 17, 2008 * CIR v.
Metro Star Superama, G.R. No. 185371,
December 8, 2010 b. Requirement to in-
form taxpayer of factual and legal basis of
assessment * CIR v. Reyes, G.R. No.
159694, January 27, 2006 * Australasia
Cylinder Corp. v. CIR, CTA Case No.
6269, June 16, 2003 * PNZ Marketing, Inc.
v. CIR, CTA Case No. 5726, December 14,
2001 * Phil. Mining Service Corp. v.
CIR, CTA Case No. 5725, July 25, 2002 *
Oceanic Wireless Network v. CIR, G.R.
No. 143380, December 9, 2005 * CIR v.
Enron Subic Power Corp., G.R. No.
166387, January 19, 2009 c. Submission
of supporting documents * H. Tambunting
Pawnshop, Inc. v. CIR, G.R. No. 173373,
July 29, 2013 * CIR v. First Express
Pawnshop, G.R. Nos. 172045-46, June 16,
2009 * Dayrit, et al. v. Cruz & Vera v.
G.R. No. L-39910, September 26, 1988
C. In case of denial of protest or inaction,
appeal to CTA – Sec. 4(2), NIRC; Sec. 11,
RA 9282; RR No. 18-2013 * Advertising
Associates, Inc. v. CA & CIR, G.R. No. L-
59758, December 26, 1984 a. Scope of ju-
risdiction of CTA * CIR v. Villa & CTA,
G.R. No. L-23988, January 2, 1968 b. Ap-
plication of the 180-day rule – Secs. 11 &
18-19, RA 1125 as amended by RA 9282;
Sec. 3(a)(2), Rule 4; Sec. 3(a), Rule 8,
Rules of the CTA * Lascona Land v. CIR,
G.R. No. 171251, March 5, 2012 * RCBC
v. CIR, G.R. No. 170257, September 7,
2011 c. What constitutes denial of protest
or decision on disputed assessment? *
CIR v. Isabela Cultural Corp., G.R. No.
172231, February 12, 2007 * CIR v. Ayala
Securities Corp. & CTA, G.R. No. L-
29485, November 21, 1980 * Surigao Elec-
tric Co. Inc. v. CTA & CIR, G.R. No. L-
25289, June 28, 1974 * CIR v. Union
Shipping Corp. & CTA, G.R. No. 66160,
May 21, 1990
Page | 31 - EJC821
Taxation II Outline | Kriska Marna A.
Buena 11
* CIR v. Algue, Inc. & CTA, G.R. No. L-
28896, February 17, 1988 * Central Ce-
ment Corp. v. CIR, CTA Case No. 4312,
September 1, 1993 * Advertising Associ-
ates, Inc. v. CA & CIR, G.R. No. L-59758,
December 26, 1984 * Avon Products Mfg.,
Inc. v. CIR, G.R. Nos. 201398-99, October
3, 2018 d. Appeals to CTA and Supreme
Court – Secs. 11, 18 & 19, RA 9282 *
Basa v. Republic & Villasor, G.R. No. L-
45277, August 5, 1985 * Mambulao
Lumber Co. v. CIR, G.R. No. L-37061,
September 5, 1984 D. Refund and/or tax
credit of erroneously paid tax – Sec. 229 &
204(c), NIRC * Bermejo v. Collector,
G.R. No. L-3029, July 25, 1950 * Central
Azucarera Don Pedro v. CTA & CIR, G.R.
Nos. L-23236 & L-23254, May 31, 1967
* CIR v Meralco, G.R. No. 181459, June 9,
2014 * CIR v. Cebu Portland Cement &
CTA, G.R. No. L-29059, December 15,
1987 * FNCB Finance v. CIR, CTA Case
No. 3717, May 10, 1993 * Francia v. IAC,
G.R. No. 67649, June 28, 1988
E. Liability of government for interest, at-
torney’s fees, etc. * Philex Mining Corp.
v. CIR, CA & CTA, G.R. No. 125704, Au-
gust 28, 1998 F. Appeal in case of denial
of refund or tax credit claim – same as as-
sessment
G. Decision on “other matters” – Sec. 4,
NIRC; Sec. 7(a)(1), RA 9282 * Rodriguez
v. Blaquera, G.R. No. L-13941, September
30, 1960 * PNOC v. CA, G.R. No.
109976, April 26, 2005 * Phil. Journal-
ists, Inc. v. CIR, G.R. No. 162852, Decem-
ber 16, 2004 * CIR v. Leal, G.R. No.
113459, November 18, 2002 * Asia Inter-
national Auctioneers v. Parayno, G.R. No.
163445, December 18, 2007 * British
American Tobacco v. Camacho, G.R. No.
163583, April 15, 2009 * Republic v Sun-
life Assurance Company of Canada, G.R.
No. 158085, October 14, 2005 * Gorospe
v. Vinzons-Chato, G.R. No. 132228, Janu-
ary 21, 2003 * Philamlife v. Sec. of Fi-
nance & CIR, G.R. No. 210987, November
24, 2014 * Banco de Oro, et al. v. Republic
of the Philippines, et al., G.R. No. 198756,
August 16, 2016 * CIR v CTA & Petron,
G.R. No. 207843, February 14, 2018
H. Statute of Limitations – Secs. 203 &
222-223, NIRC a. Period to assess * Ba-
silan Estates, Inc. v. CIR & CTA, G.R. No.
L-22492, September 5, 1967 * CIR v.
Phoenix Assurance Co., Ltd., G.R. Nos. L-
19727 & 19903, May 20, 1965 * Butuan
Sawmill, Inc. v. CTA, G.R. No. L-20601,
February 28, 1966 * CIR v. Primetown
Property Group, Inc., G.R. No. 162155,
August 28, 2007 * Taligaman Lumber
Co. v. CIR, G.R. No. L-15716, March 31,
1962 * Aznar v. CTA, G.R. No. L-
20569, August 23, 1974 * CIR v. BF
Goodrich, G.R. No. 104171, February 24,
1999 * Telesat, Inc. v. CIR, CTA Case
No. 6812, January 2, 2006 * Estate of
Reyes and Estate of Reyes v. CIR, CTA
EB No. 189, March 21, 2007
12
b. Waiver of prescriptive period * Repub-
lic v. Acebedo, G.R. No. L-20477, March
29, 1968 * CIR v. CA, Citytrust Banking
Corporation & CA, G.R. No. 106611, July
21, 1994 * Phil. Journalists, Inc. v. CIR,
G.R. No. 162852, December 16, 2004 *
CIR v. Kudos Metal Corporation, G.R. No.
178087, May 5, 2010 * CIR v. Next Mo-
bile, Inc., G.R. No. 212825, December 7,
2015 * CIR v. Phil. Daily Inquirer, G.R.
No. 213943, March 22, 2017 * RCBC v.
CIR, G.R. No. 170257, September 7, 2011
* RMO No. 20-90 c. Suspension of pre-
scriptive period * Continental Micronesia,
Inc. – Philippine Branch v. CIR, CTA Case
No. 6191, March 22, 2006 * CIR v. Phil.
Global Communication, G.R. No. 167146,
October 31, 2006 d. Period to collect *
Republic v. Ablaza, G.R. No. L-14519,
Page | 32 - EJC821
July 26, 1960 * CIR v. Palanca, G.R. No.
L-16626, October 29, 1966 * Republic v.
Ker, G.R. No. L-21609, September 29,
1966 * Republic v. Hizon, G.R. No.
130430, December 13, 1999 * CIR v. Wy-
eth Suaco Laboratories & CTA, G.R. No.
76281, September 30, 1991 * BPI v. CIR,
G.R. No. 139736, October 17, 2005 * CIR
v Hambrecht & Quist Philippines, Inc.,
G.R. No. 169225, November 17, 2010 e.
Period to file protest * Pantranco v.
Blaquera, G.R. No. L-13101, April 29,
1960 f. Period to file refund claim * Col-
lector v. Sweeney, et al., G.R. No. L-
12178, August 21, 1959 * Gibbs & Gibbs
v. CIR & CTA, G.R. No. L-17406, No-
vember 29, 1965 * CIR v. CA, Citytrust
Banking Corporation & CA, G.R. No.
106611, July 21, 1994 * ACCRA Invest-
ments Corp. v. CA, CIR & CTA, G.R. No.
96322, December 20, 1991 * CIR v. TMX
Sales, Inc. & CA, G.R. No. 83736, January
15, 1992 g. Period to prosecute violations
of any provisions of the NIRC – Sec. 281,
NIRC
I. Non-retroactivity of rulings or regula-
tions – Sec. 246, NIRC * CIR v. Bur-
roughs, Ltd. & CTA, G.R. No. 66653, June
19, 1986 * PBCom v. CIR, G.R. No.
194065, June 20, 2016 * Accenture, Inc.
v. CIR, G.R. No. 190102, July 11, 2012
Local Government Taxation
I. Fundamental principles – Secs. 128, 130
& 132, 55(a) & (b), and 187-188, Local
Government Code (LGC) * Pepsi-Cola
Bottling Co. v. City of Cabanatuan, 24
SCRA 789 * City of Baguio v. De Leon,
25 SCRA 938 * Association of Customs
Brokers v. Municipal Board, 93 Phil 107,
1053 * Ormoc Sugar Company v. Ormoc
City, 22 SCRA 603 * Gaston v. Republic
Planters Bank, 158 SCRA 626 * Progres-
sive Development Corp. v. Quezon City,
172 SCRA 629 * Ancheta v. Sison, 130
SCRA 654
Taxation II Outline | Kriska Marna A.
Buena 13
* Matalin Coconut Company v. Malabang,
143 SCRA 404 * Villanueva v. City of
Iloilo, 26 SCRA 578 * Ericsson Telecom-
munications v. City of Pasig, 538 SCRA
99 * Ormoc Sugar Company, Inc. v. Mu-
nicipality Board of Ormoc, 20 SCRA 739
* Bagatsing v. Ramirez, 74 SCRA 306 *
Asiatic Integrated Corporation v. Alikpala,
67 SCRA 60 * Smart Communications,
Inc. v. Municipality of Malvar, Batangas,
G.R. No. 204429, February 18, 2014 *
Procter & Gamble Trading Co. v. Munici-
pality of Medina, 43 SCRA 130
II. Legal basis – Secs. 128-196, LGC; Sec.
5, Art. X, 1987 Constitution * Philippine
Petroleum v. Municipality of Pililia, 198
SCRA 82 * Petron v. Tiangco, G.R. No.
158881, April 16, 2008 * City Treasurer of
Batangas City v. Pilipinas Shell Petroleum
Corporation, G.R. No. 187631, July 8,
2015
III. Power to create sources of fund – Sec.
129, 168, 191-193, 186, and 132 LGC *
Mandanas v. Ochoa, G.R. No. 199802,
July 3, 2018 * MCIAA v. Marcos, 261
SCRA 667 * NPC v. City of Cabanatuan,
401 SCRA 259 * City of San Pablo v.
Reyes, 305 SCRA 353 * Iloilo Bottlers,
Inc. v. City of Iloilo, 164 SCRA 607
IV. Common limitations – Sec. 133, LGC
* Progressive Development Corporation v.
Quezon City, G.R. No. 36081, April 24,
1989, 172 SCRA 629 * Ferrer v. Bautista,
G.R. No. 210551, June 30, 2015 * Philip-
pine Petroleum Corporation v. Municipal-
ity of Pililia, 198 SCRA 82 * Pepsi-Cola
Page | 33 - EJC821
Bottling Company v. Municipality of Ta-
nauan, 69 SCRA 460 * Ormoc Sugar Co.,
Inc. v. Municipal Board of Ormoc City, 20
SCRA 739 * Matalin Coconut Co., Inc. v.
Municipal Council of Malabang, Lanao del
Sur, 143 SCRA 404 * People v. Nazario,
165 SCRA 186 * First Philippine Industrial
Corporation v. Court of Appeals, 300
SCRA 661 * Land Transportation Office v.
City of Butuan, 322 SCRA 805 * Mactan
Cebu International Airport Authority v.
Marcos, 261 SCRA 667 * Manila Interna-
tional Airport Authority v. Court of Ap-
peals and City of Paranaque, 495 SCRA
591 * Province of Bulacan, et al. v. CA,
299 SCRA 442 * The San Miguel Corpora-
tion v. The Municipal Council, 52 SCRA
43 * Arabay, Inc. v. Court of First Instance
of Zamboanga, 66 SCRA 617 * Pelizloy
Realty Corporation v. Province of Benguet,
G.R. No. 183137, April 10, 2013
V. Levy of tax; tax ordinance – Secs. 186-
193, LGC 1. Procedure for approval *
Drilon v. Lim, G.R. No. 112497, August 4,
1994 * Reyes v. Court of Appeals, G.R.
No. 118233, December 10, 1999 * Aala
v. Uy, G.R. No. 202781, January 10, 2017
2. Publication and furnishing of copies *
Figuerres v. Court of Appeals, G.R. No.
119172, March 25, 1999, 305 SCRA 206
3. Scope of taxing power – Secs. 134, 142,
& 151-155, LGC
VI. Local taxing authorities and scope of
taxing power A. Provinces – Secs. 135-
141 & 153-155, LGC a. Real property
transfer tax – Sec. 135, LGC
14
b. Tax on printing and publication – Sec.
136, LGC c. Franchise tax – Sec. 137,
LGC * Province of Misamis Oriental v.
Cagayan Electric Power and Light Com-
pany, Inc., 181 SCRA 38 * National Power
Corporation v. City of Cabanatuan, 401
SCRA 259 * City Government of San
Pablo, Laguna v. Reyes, 305 SCRA 353 *
Manila Electric Company v. Province of
Laguna, 306 SCRA 750 * PLDT v. City of
Davao, 363 SCRA 522 * Palma Develop-
ment v. Municipality of Malangas, G.R.
No. 152492, October 16, 2003 * PLDT v.
Province of Laguna, G.R. No. 151899, Au-
gust 16, 2005 * Smart Communications v.
City of Makati, October 13, 2004 * NPC v.
Province of Isabela, G.R. No. 165827, June
16, 2006 * NGCP v. Oliva, G.R. No.
213157, August 10, 2016 d. Tax on
quarry resources – Sec. 138, LGC e. Pro-
fessional tax – Sec. 139, LGC f. Amuse-
ment tax – Sec. 140, LGC; Sec. 125, NIRC
* Philippine Basketball Association v.
Court of Appeals, 337 SCRA 358 *
Pelizloy Realty Corporation v. Province of
Benguet, G.R. No. 183137, April 10, 2013
* Alta Vista Golf and Country Club v. City
of Cebu, G.R. No. 180235, January 20,
2016 * Film Development Council of the
Philippines v. Colon Heritage Realty Cor-
poration, G.R. No. 203754, June 16, 2015
g. Tax on delivery trucks – Sec. 141, LGC
B. Municipalities – Secs. 143-144, 147-
149, 153-155, & 156-161, LGC a. Taxes,
fees, and charges not otherwise levied by
provinces – Sec. 142, LGC b. Local busi-
ness taxes – Secs. 143-146, LGC * Stand-
ard-Vacuum Oil. Co. v. Antigua, 96 Phil.
909 * Smith, Bell & Co. v. Municipality of
Zamboanga, 55 Phil. 466 * Opon v. Caltex
(Phil.), Inc., 22 SCRA 755 * Luz Yamane
v. BA Lepanto Condominium Corporation,
G.R. No. 154993, October 25, 2005 *
Petron v. Mayor Tiangco, G.R. No.
158881, April 16, 2008 * Iloilo Bottlers,
Inc. v. Iloilo City, 164 SCRA 607 * Manila
Trading & Supply Co. v. City of Manila,
105 Phil 581 * Central Azucarera Don
Pedro v. City of Manila, 97 Phil 627 * Cal-
tex Philippines, Inc. v. City of Manila, 28
SCRA 840 * City of Manila v. Manila
Remnant Co., Inc., 100 Phil 796 * Ericsson
Telecommunications, Inc. vs. City of
Pasig, 538 SCRA 99 * Mindanao Shopping
Destination Corporation v. Duterte, G.R.
No. 211093, June 6, 2017 c. Fees and
Page | 34 - EJC821
charges – Sec. 147, LGC * Procter & Gam-
ble Philippine Manufacturing Corp. v. Mu-
nicipality of Jagna, 94 SCRA 894 * Punsa-
lan, et al. v. Municipal Board of Manila, et
al, 95 Phil. 46 d. Fees for sealing and li-
censing of weights and measures – Sec.
148, LGC e. Fishery rentals, fees and
charges – Sec. 149, LGC f. Tax situs –
Sec. 150, LGC * Philippine Match Co. v.
City of Cebu, 81 SCRA 99
C. Cities – Secs. 136-141, 143-149, 151,
153-155, & 156-161, LGC a. Scope of
taxing powers – Sec. 151, LGC * Estani-
slao v. Costales, 196 SCRA 853
Taxation II Outline | Kriska Marna A.
Buena 15
D. Barangays – Secs. 152 & 153-155,
LGC a. Scope of taxing powers – Sec. 152,
LGC
E. Common revenue-raising powers –
Secs. 153-155, LGC a. Service fees and
charges b. Public utility charges c. Toll
fees and charges d. Fees and charges for
regulation & licensing – Secs. 147, 139, &
149, NIRC
VII. Community tax 1. Persons liable –
Secs. 157-158, LGC 2. Exemptions –
Secs. 159 & 162, LGC 3. Payment and
penalties – Secs. 160-161, 163, LGC
VIII. Tax exemption privileges 1. Grant
* Quezon City v. ABS-CBN, G.R. No.
166408, October 6, 2008 * PLDT v. City
of Davao, 363 SCRA 522 * NAPOCOR
v. City of Cabanatuan, 401 SCRA 259 *
PLDT v. Province of Laguna, 467 SCRA
93 2. Withdrawal * Mactan Cebu Inter-
national Airport Authority v. Marcos, 261
SCRA 667 * City Government of San
Pablo, Laguna v. Reyes, 305 SCRA 353 *
Manila Electric Company v. Province of
Laguna, 306 SCRA 750 * Smart Commu-
nications v. City of Davao, G.R. No.
155491, July 21, 2009
IX. Collection of local taxes 1. Tax period
and manner of payment 2. Accrual – Secs.
165-171, LGC * Mobil Philippines v.
City Treasurer of Makati, G.R. No.
154092, July 14, 2005 3. Situs of tax col-
lected – Sec. 150, LGC * Allied Thread
Co., Inc. v. City Mayor of Manila (1984) *
Shell Co., Inc. v. Municipality of Sipocot,
Camarines Sur (1959) 3. Collection of lo-
cal taxes – Secs. 172-185, LGC a. Assess-
ment b. Payment c. Reduction/Discount
4. Surcharges and penalties * NPC v. City
of Cabanatuan, G.R. No. 177332, October
1, 2014 5. Interest 6. Examination of
books of accounts 7. Government reme-
dies – Secs. 172-185, 254-270, LGC a.
Lien * Hongkong & Shanghai Banking
Corporation v. Rafferty, 39 Phil 145 b.
Administrative actions; distraint and levy
* Spouses Federico Serfino v. Court of Ap-
peals, 154 SCRA 19 * Estate of the Late
Mercedes Jacob v. Court of Appeals, 283
SCRA 474 c. Judicial action 8. Tax-
payer’s Remedies – Secs. 194-196, LGC
a. Assessment * Valley Trading Co. v. CFI
of Isabela (1989) * Angeles City v. Ange-
les City Electric Corporation (2010) b.
Collection c. Interruption d. Protest
16
* Manila Electric Company v. Barlis,
433 SCRA 11 * Yamane v. BA Lepanto
Condominium Corporation, 474 SCRA
258 * City of Manila v. Cosmos Bottling
Corp., G.R. No. 196681, June 27, 2018 *
Lopez v. City of Manila, 303 SCRA 448
e. Tax refund and tax credit * City of
Manila v. Grecia-Cuerdo, G.R. No.
175723, February 4, 2014 * Metro Manila
Shopping Mecca Corp. v. Toledo, G.R. No.
190818, June 5, 2013 f. Challenging tax
Page | 35 - EJC821
ordinance – Sec. 187, LGC * Pelizloy Re-
alty Corporation v. Province of Benguet,
G.R. No. 183137, April 10, 2013
Real Property Taxation
I. Definition and nature – Secs. 199, 201,
197, 224-225, 257, LGC * Province of
Nueva Ecija v. Imperial Mining Co., Inc.,
118 SCRA 632 * Meralco v. CBAA, 144
SCRA 273 * Meralco Securities v. CBAA,
114 SCRA 260 * Caltex v. CBAP, 114
SCRA 296 * RCPI v. Provincial Assessor
of South Cotabato, 456 SCRA 1 * Caltex
(Phil.) Inc. v. Central Board of Assessment
Appeals, 114 SCRA 296 * Fels Energy,
Inc. v. Province of Batangas, 516 SCRA
186 * Board of Assessment Appeals v.
Manila Electric Company, 119 Phil. 328 *
Mindanao Bus Co. v. City Assessor, 116
Phil. 501 * Capitol Wireless v. Provincial
Treasurer of Batangas, G.R. No. 180110,
May 30, 2016
II. Power to levy real property tax – Sec.
232-241, LGC 1. Taxing authorities – Sec.
232, LGC a. Provinces b. Cities c. Mu-
nicipalities in Metro Manila * De Pedro v.
Romasan Development Corporation, 452
SCRA 564 * Sta. Lucia Realty & Develop-
ment, Inc. v. City of Pasig, G.R. No.
166838, June 15, 2011 2. Tax rates – Sec.
233, LGC 3. Special education fund 4.
Idle land tax – Sec. 235, LGC 5. Special
levy – Sec. 240, LGC
III. Exempt properties – Sec. 234, LGC *
MIAA v. CA, G.R. No. 155650, July 20,
2006 * MIAA v City of Pasay, 583 SCRA
234 * Bangko Sentral ng Pilipinas v.
CBAA, CTA EB Case No. 1438, October
1, 2018 * NPC v. CBAA, G.R. No.
171470, January 30, 2009 * NPC v. Prov-
ince of Quezon, G.R. No. 171586, July 15,
2009 * NPC v. Province of Quezon, 611
SCRA 71 * Mactan Cebu International
Airport Authority v. Marcos, G.R. No.
120082, September 11, 1996 * Mactan
Cebu International Airport Authority v.
City of Lapu-Lapu, G.R. No. 181756, June
15, 2015 * Herarc Realty Corp. v. Provin-
cial Treasurer of Batangas, G.R. No.
210736, September 5, 2018 * Quimpo v.
Mendoza, 107 SCRA 73
Taxation II Outline | Kriska Marna A.
Buena 17
* Abra Valley v. Aquino, 162 SCRA 665 *
BLGF Opinion dated June 20, 2012 ad-
dressed to Emmanuel Angeles * CIR v.
YMCA, 358 Phil. 562 (1998) * Angeles
University Foundation v. City of Angeles,
G.R. No. 189999, June 27, 2012 * CIR v.
St. Luke’s Medical Center, Inc., G.R. No.
203514, February 13, 2017 * City of Pasig
v. Republic, 656 SCRA 271 * Lung Center
of the Philippines, Quezon City, G.R. No.
144104, June 29, 2004 * CIR v. De La
Salle University, G.R. No. 196896, No-
vember 9, 2016 * NPC v. Presiding Judge,
190 SCRA 477 * City Government of Que-
zon City v. Bayan Telecommunications,
G.R. No. 162015, March 6, 2006 * City of
Davao v. RTC and GSIS, G.R. No.
127383, August 18, 2005 * Provincial As-
sessor of Marinduque v. CA (GR No.
170532, April 30, 2009) * Philippine Ports
Authority v. City of Iloilo (GR No.
109791, July 14, 2003) * Digital Telecom-
munications Philippines, Inc. v. Cantos,
G.R. No. 180200, November 25, 2013 *
Board of Assessment Appeals, Province of
Laguna v. Court of Tax Appeals and
NWSA, 118 Phil. 227 * National Develop-
ment Company v. Cebu City, G.R. No.
51593, November 5, 1992 * City Govern-
ment of San Pablo, Laguna v. Reyes, et al.,
G.R. No. 127708, March 25, 1999 * Philip-
pine Fisheries Development Authority v.
Court of Appeals, 528 SCRA 706 * GSIS
v. City Assessor of Iloilo City, 493 SCRA
Page | 36 - EJC821
169 * GSIS v. City Treasurer of the City of
Manila, 609 SCRA 330 * Republic v. City
of Kidapawan, 477 SCRA 324
IV. Administration of real property tax –
Secs. 198-231, LGC 1. Declaration of real
property – Secs. 202-203, 208, LGC 2.
Listing of real property in the assessment
rolls – Sec. 205, LGC 3. Appraisal and val-
uation of real property – Secs. 212-213,
216, & 224-225, LGC * Reyes v. Alman-
zor, 196 SCRA 322 * Patalinhug v. CA,
229 SCRA 554 * Sesbreno v. CBAA,
G.R. No. 106588, March 24, 1997 * Allied
Banking Corporation v. Quezon City Gov-
ernment, G.R. No. 154126, October 11,
2005 2. Classification of real property –
Secs. 215-217 & 199, LGC 3. Assessment
a. Assessment levels – Secs. 199 (e, f, g,
h), 218-223, LGC * Cenido v. Apacio-
nado, et al., 318 SCRA 688 * Lopez v.
City of Manila, G.R. 127139, February 19,
1999 * City Assessor of Cebu City v. As-
sociation of Benevola de Cebu, G.R. No.
152904, June 8, 2007 4. Collection and
payment – Secs. 246-251 & 270 LGC a.
Time of payment b. Discounts * Salva
v. Magpile, G.R. No. 220440, November 8,
2017 c. Special rules on payment – Secs.
250, 255, & 276-277, LGC
V. Disposition of proceeds – Secs. 271-
274, LGC
VI. Government remedies – Secs. 254-270,
LGC A. Administrative 1. Local govern-
ment’s lien – Sec. 257, LGC 2. Levy –
Secs. 258-259, LGC * City of Davao v. In-
testate Estate of Amada Dalisay, G.R. No.
207791, July 15, 2015
18
* Onstott v. Upper Tagpos Neighborhood
Association, G.R. No. 221047, September
14, 2016 * Gamilla v. Burgundy Realty
Corporation, G.R. No. 212246, June 22,
2015 * Tan v. Bantegui, 473 SCRA 663 *
Vizarra v. Rodriguez, 509 SCRA 504 * Pu-
zon v. Abellera, 169 SCRA 789 * Meralco
Securities Industrial Corporation v. CBAA,
et al., 114 SCRA 260 * De Asis v. IAC,
169 SCRA 314 * Cagayan Electric Power
and Light Co., Inc. v. City of Cagayan de
Oro, G.R. No. 191761, November 14, 2012
* Moday v. CA, 268 SCRA 586 * Val-
bueco, Inc. v. Province of Bataan, G.R. No.
173829, June 10, 2013 * Aquino v. Quezon
City, 497 SCRA 497 3. Purchase by LGU
for want of bidder B. Judicial – Secs. 266
& 270, LGC
VII. Taxpayer’s Remedies A. Administra-
tive 1. Protest a. Appeal to the Local
Board of Assessment Appeals (LBAA) –
Secs. 226 & 229, LGC * Fels Energy v.
Province of Batangas (GR No. 168557,
Feb. 16, 2007) * Victorias Milling v.
CTA (GR No. L-24213, March 13, 1968)
* Callanta v. Office of the Ombudsman,
285 SCRA 648 * NPC v. Province of
Quezon, supra b. Appeal to the Central
Board of Assessment Appeals (CBAA) –
Sec. 229, LGC c. Effect of payment of tax
– Sec. 231, LGC; Sec. 252, LGC * Camp
John Hay Development Corporation v.
Central Board of Assessment Appeals,
G.R. No. 169234, October 2, 2013 * City
of Pasig v. Republic, supra * City Govern-
ment of Quezon City v. Bayan Telecom-
munications, supra * Quimpo v. Men-
doza, 107 SCRA 73 * Talento v. Esca-
lada, Jr. 556 SCRA 491 * Republic v.
City of Kidapawan, supra
2. Payment of real property under protest
a. File protest with local treasurer *
Meralco v. Nelia Barlis (GR No. 114231,
May 18, 2001) b. Appeal to the LBAA –
Secs. 226 & 229, LGC c. Appeal to the
CBAA – Sec. 229, LGC d. Appeal to the
CTA En Banc – Sec. 11, NIRC e. Appeal
to the SC – Rule 45, Rules of Court * NPC
v. Provincial Treasurer of Benguet, G.R.
No. 209303, November 14, 2016 *
Page | 37 - EJC821
Meralco v. City Assessor of Lucena City,
G.R. No. 166102, August 5, 2015 * NPC v.
Municipal Government of Navotas, G.R.
No. 192300, November 24, 2014 * Oliva-
rez v. Marquez, 438 SCRA 679 f. Interest
on unpaid realty tax – Sec. 250 & 255,
LGC * Quimpo v. Mendoza, 107 SCRA
73
3. Tax refund and tax credit – Sec. 253,
LGC
Taxation II Outline | Kriska Marna A.
Buena 19
* Allied Banking Corporation v. Quezon
City Government, 502 SCRA 113 * Tes-
tate Estate of Concordia T. Lim v. City of
Manila, 182 SCRA 483
B. Judicial 1. Question on the legality of a
tax ordinance – Sec. 187, LGC * Ty v.
Judge Trampe, 250 SCRA 500 * Jardine
Davies Insurance Brokers, Inc. v. Aliposa,
et al., G.R. No. 118900, February 27, 2002
* Lopez v. City of Manila, G.R. No.
127139, February 19, 1999 2. Assailing the
validity of a tax sale – Sec. 267, LGC
VIII. Prescription – Sec. 270, LGC
Customs
1. When duty and tax are due on imported
goods – Sec. 104, Customs Modernization
and Tariffs Act (CMTA) 2. Types of im-
portation – Secs. 115-118, CMTA 3. Lia-
bility of importer for duties and taxes –
Sec. 405, CMTA 4. Release of goods –
Secs. 431-436, CMTA 5. Valuation – Secs.
700-707, CMTA 6. Government’s right of
compulsory acquisition – Sec. 709, CMTA
7. Marking of imported goods and contain-
ers – Sec. 710, CMTA 8. Special duties a.
Anti-dumping duty – RA 8752 b. Safe-
guard duty – RA 8800 c. Countervailing
duty – RA 8751 9. Conditionally tax and/or
duty-exempt importation – Sec. 800,
CMTA 10. Free zones – Secs. 814-816,
CMTA 11. Remedies of taxpayer a. Draw-
backs – Secs. 900-902, CMTA b. Refund
and abatement – Secs. 903-913, CMTA c.
Advance ruling – Secs. 1100-1103, CMTA
d. Administrative and judicial appeals –
Sec. 1104, CMTA e. Protest – Secs. 1106-
1110, CMTA f. Appeal in protest and for-
feiture cases – Secs. 1126-1128, CMTA
12. Remedies of government a. Post clear-
ance audit – Secs. 1000-1005, CMTA b.
Alert Orders – Secs. 1111-1112, CMTA c.
Seizure and forfeiture – Secs. 1113-1119,
1124, CMTA d. Civil remedies – Secs.
1132-1134, CMTA e. Judicial remedies –
Secs. 1135-1138, CMTA 13. Abandon-
ment – Secs. 1129-1130, CMTA

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