1

No, the imposition of MCIT on domestic corporation is not violative of due process.
The MCIT is not a tax on capital but rather a tax on gross income. Capital spent is
deducted from the sale of the goods. As such, capital is not taxed on the gross income and
MCIT is constitutional.

The approved tax law is constitutional. The Philippine Constitution only requires that
the tax bill originate from the House of Representatives. Such does not require that the tax
bill that originated from the House of Representatives be the one passed into law. In this
case, it is clear that the tax bill originated from the House of Representatives albeit it was
not adopted and instead the Senate decided to pass its own version of the bill. As such, it
is compliant with the requirements of the Constitution, hence, constitutional.

I would say that Atty. Braguda is wrong because the tax exemption provided by the
Constitution only covers real property taxes with regard to real property used directly and
exclusively for religious purposes. Such does not include income gathered from rental
payments. Hence, the income from rental payments is not tax exempt.

It is the CTA which has jurisdiction over the case. The Tax Code explicitly states
that it is the CTA which has jurisdiction on decisions, orders, or resolutions in local tax
cases of the Regional Trial Court in the exercise of its original jurisdiction. This case falls
under the abovestated category since it is a local tax case involving an interlocutory order
which was decided by the RTC in its original jurisdiction. Hence, the CTA has jurisdiction.

The underground tanks, which were not placed there by the owner of the land but
which were instead placed there by the lessee of the land, are considered real properties.
The definition of machinery of the Local Government Code is what is controlling herein,
and not the one provided by Article 415 of the Civil Code. According to the Local
Government Code, the rule is that if a machinery is not permanently attached, it is subject
to real property tax if it is essential to the industry. In this case, these underground tanks,
even through such is not permanently attached, are essential to the oil industry and
without which, the industry could not function. Since, these underground tanks fall under
the definition of machinery in the LGC, such is subject to real property tax.

No, the contentions are not legally tenable. First, the Tax Code does not distinguish
whether the sale is voluntary or involuntary in order to be subject to capital gains tax. What
the Tax code states is that should the buyer of the capital be the government, the taxpayer
has the choice to choose between paying the capital gains tax or the graduated income
tax. As regards the second argument of the lot owner, he or she is mistaken that the 6%
tax is the liability of the buyer. Jurisprudence has clarified that the 6% tax is the liability of
the seller. Hence, the lot owner’s contentions are not legally tenable.

7
 No, the BIR Commissioner should not agree to obtain such information from the
bank and provide the same to the IRS. Such is protected by the law on secrecy of bank
deposits and only obtainable through the consent of the depositor. Hence, without such
consent, the BIR should not agree to obtain such information from the bank and provide
the same to the IRS.

I would raise the fact that municipalities outside Metro Manila may not impose real
property taxes but only special levies. There should be a written notice given to the
taxpayers affected and a public hearing must be conducted before these special levies
should be valid.

No, Makati City may not require him to pay his professional tax as a lawyer.
According to the Tax Code, a professional has either the option to pay his professional tax
on his principal office or the place where he practices his profession. In this case, although
Mr. Fermin maintains his principal office in Makati, he practices his legal profession in
Pasig City. It is his option where to pay his professional tax. Hence, Makati City may not
require him to pay his professional tax as a lawyer.

10

The estate of X is not taxable. As a resident alien, X enjoys several deductions from
his gross estate. One of which is the family home which allows a deduction of the
decedent’s interest ot up to 10 million of the fair market value of such property, whichever
is lower. In this case, the fair market value of the property is 5,000,000, representing the
decedent’s interest. Hence, the estate of X is not taxable.

11

Yes, the BIR is correct. The law specifically requires that the words “zero-rated”
must be placed in the receipt. Otherwise, the consequence would be that the transaction
shall be subject to 12% VAT because of failure to follow the invoicing requirements. Here,
the MNO Corporation failed to substantiate that the transaction is zero-rated because of
the lack of the words “zero-rated” in its invoice. Hence, the BIR is correct.

12

Yes, the renunciation is subject to donor’s tax. The general rule is that general
renunciation of an heir of his or her share in the hereditary estate is not subject to donor’s
tax. However, the exception to this rule is that when the renunciation is specifically in favor
of heir/s to the exclusion of the other/s, then such will be subject to donor’s tax. In this
case, Dona Juana specifically renounced her share in favor of her favorite child, Miguel. As
such, the renunciation is subject to donor’s tax.

13

No, the contention of the BIR is not correct. The assessment is not yet final,
executory and demandable. The taxpayer has two options in case of inaction as regards
the assessment dispute. First, the taxpayer may opt to file an appeal within 30 days after
the lapse of the 180-day period. Second, the taxpayer may await the decision of the CIR
and then within 30 days, file an appeal. In this case, the second option is still available to
the taxpayer. Thus, when BIR denied the claim of the taxpayer on May 19, 2017, the
taxpayer still has 30 days from the denial to file an appeal. Hence, the assessment has not
yet attained finality yet.
 14

Yes, Mr. A may avail of the 8% income tax rate under the TRAIN Law. The rule is
that as regards mixed income earners, the compensation income shall be subjected to the
regular graduated rates. On the other hand, as regards business income, the taxpayer has
the option to choose either the graduated rates or the 8% income tax when his gross sales
do not exceed 3,000,000. In this case, since his gross annual sales is 2,400,000, which is
well within the range required by law, he may opt to avail the 8% income tax rate under the
TRAIN Law.

15

No, Cardo’s contention is not correct. To constitute as double taxation, it is required

that the tax should be of the same character. Here, the income tax is a regular tax while
the interest income tax is a final tax. These are not of the same character, hence, they do
not constitute double taxation. Hence, Cardo’s contention is not correct.

16

Yes, the compensation of Peter for the special project is subject to Philippine
income tax. The rule is that a resident citizen is taxable on his worldwide income. In this
case, Peter is a resident citizen because although he was assigned to Single for five
months, such period does not fulfill the required 183 days in order to be considered as a
nonresident citizen. As such, the worldwide income consisting 50% from Vacoli-Philippines
of Peter and 50% from Vacoli-Singapore will be subject to Philippine income tax.

17

No, Tyler is not correct. Such transaction cannot be considered a loan transaction.
There was a transfer of a total of 5 million Philippine Corporation from his account to
Lebron and Tyler failed to substantiate that such is a loan transaction. Hence, Tyler must
pay the corresponding 15% capital gains tax for the sale of shares of stock not traded
through the Philippine Stock Exchange.

18

The sale is not subject to value-added tax while it is subject to documentary stamp
tax. The sale is not subject to VAT because it was not done in the ordinary course of trade
or business. Such transaction, however, is subject to DST because there was a transfer of
ownership or property.

19

Yes, the claim was filed prematurely. Although the claim was filed well within the
two-year period after the close of taxable period, such was still filed prematurely because it
failed to follow the 90+30 days rule provided by the TRAIN Law whereby the taxpayer
should file the claim within the 30 days after the lapse of 90 days from filing the claim for
refund with the BIR. Both periods must concur. Since the 90+30 day period was violated,
such claim is filed prematurely.

20

ABC University is correct. BIR’s contention is wrong because such rule that income
is taxable regardless of how income is derived, used or disposed of applies when income
is derived by a non-stock corporation organized exclusively for religious and charitable
purposes. The rule is different with regard to educational institutions. Tax exemption for
educational institutions covers revenues and assets of non-stock, non-profit educational
institutions actually, directly and exclusively used for educational purposes.

-oOo-