Taxation I 21. McCulloch v. Maryland, US 4 Wheat. 316 47. Ortigas & Co., Limited Partnership v.

Feati
22. Roxas v. Court of Tax Appeals, 23 SCRA 276 Bank and Trust Co., 94 SCRA 593 (1979)
PART I. (1968) 48. Sangalang v. Intermediate Appellate Court,
GENERAL PRINCIPLES AND LIMITATIONS ON THE POWER OF TAXATION G.R. No. 71169, December 22, 1988 – par. 3
Definition of Taxes 49. Balacuit v. CFI of Agusan del Norte, 163 SCRA
CHAPTER I 23. Republic v. Philippine Rabbit Bus Lines, Inc., 182 (1998)
GENERAL PRINCIPLES 32 SCRA 211 (1970) 50. Sangalang v. Intermediate Appellate
Court, G.R. No. 71169, December 22, 1988 – par. 5
Definition of Taxation Attributes or Characteristics of Taxes JALALUDDIN
1. Paseo Realty & Development Corporation v. CA, G.R. No. 24. Panay Electric Co. v. Collector of Internal 51. Betoy v. National Power Corporation, G.R.
119286, October 13, 2004 Revenue, G.R. No. L-10574, May 28, 1958 Nos. 156556-57, October 4, 2011
25. Borja v. Gella, 8 SCRA 602 (1963) 52. Francia v. Intermediate Appellate Court, G.R.
Nature of the Power of Taxation 26. Air Canada v. CIR, 778 SCRA 131 (2016) No. 76749, June 28, 1988
2. Mactan Cebu International Airport Authority v. Marcos, 27. Vera v. Fernandez, 89 SCRA 199 (1979)
261 SCRA 667 (1996) 28. Republic v. Patanao, 20 SCRA 712 (1967) B. Tax v. Debt
3. Pepsi-Cola Bottling Company of the Phil. v. Mun. of 29. Sunio v. NLRC, 127 SCRA 399 (1984) – p. 13
Tanauan, Leyte, 69 SCRA 460 (1976) – p. 2 30. Republic v. COCOFED et al., G.R. Nos. 147062- C. Tax v. Toll
4. Philippine Petroleum Corporation v. Mun. of Pililla, 198 64, December 14, 2001 53. Diaz v. Secretary of Finance, G.R. No. 193007,
SCRA 82 (1991) 31. Sunio v. NLRC, 127 SCRA 399 (1984) – p. July 19 2011
5. Pepsi-Cola Bottling Company of the Phil. v. Mun. of 14 ECHEM
Tanauan, Leyte, 69 SCRA 460 (1976) – p. 3 ABISANA 32. Tan Tiong Bio v. CIR, 4 SCRA 986 (1962) D. Tax v. License Fee
6. Camarines Norte Electric Cooperative v. Torres, G.R. No. 33. Maceda v. Macaraig, 222 SCRA 217 (1991) 54. Bentley Gray Drug Goods Co. v. City of Tampa,
127249, February 27, 1998 137 Gla. 641, 188 SO. 758
7. Hon. Exec. Secretary v. Southwing Heavy Industries, et Characteristics of a Sound Tax System 55. Victorias Milling Co. v. Mun. of Victorias, Prov.
al., G.R. No. 164171, February 20, 2006 34. Chavez v. Ongpin, G.R. No. 76778, June 6, of Negros Occidental, G.R. No. L-21183, September 27,
8. Cervantes v. Auditor General, 91 Phil. 359 (1952) 1990 1968
9. Maceda v. Macaraig, 197 SCRA 771 (1991) 56. Progressive Development Corp. v. Quezon
10. Abakada Guro Party List v. Ermita, G.R. No. 168056, Purposes and Objectives of Taxation City, G.R. No. L-36081, April 24, 1989
September 1, 2005 35. Caltex Philippines, Inc. v. Commission on 57. Land Transportation Office v. City of Butuan,
11. Soriano v. Secretary of Finance, G.R. No. 184450, Audit, 208 SCRA 726 (1992) G.R. No. 131512, January 20, 2000
January 24, 2017 36. Balacuit v. CFI of Agusan del Norte, 163 SCRA 58. Planters Products v. Fertiphil Corporation
12. Pepsi-Cola Bottling Company of the Phil. v. Mun. of 182 (1988) G.R. No. 166006, March 14, 2008
Tanauan, Leyte, 69 SCRA 460 (1976) – p. 5 BAUTE 37. Philippine Airlines, Inc. v. Edu, G.R. No. L-
13. NPC v. Albay, 186 SCRA 198 (1990) 41383, August 15, 1988 E. Tax v. Penalty
38. Morcoin Co. Ltd. v. City of Manila, et al., G.R.
Aspects of Taxation No. L-15351, January 28, 1961 Double Taxation
14. Abakada Guro Party List v. Ermita, G.R. No. 168056, 39. Manila Memorial Park, Inc. v. Department of 59. Villanueva v. City of Iloilo, 26 SCRA 578
September 1, 2005 Social Welfare and Development, 711 SCRA 302 (2013) (1968) – p. 26
40. Lutz v. Araneta, 98 Phil. 148 (1966) 60. Serafica v. City Treasurer of Ormoc, G.R. No.
Theory or Underlying Basis of Taxation L-24813, April 28, 1968
15. CIR v. Algue, Inc., 158 SCRA 9 (1988) Taxes Distinguished from Other Impositions 61. CIR v. Hawaiian-Philippine Co., 11 SCRA 256
16. CIR v. Bank of the Philippine Islands, 521 SCRA 373 A. Taxation Distinguished from Eminent Domain and Police (1964)
(2007) Power 62. Compañ ia General de Tabacos de Filipinas v.
17. Valley Trading Co. v. Court of First Instance, G.R. No. L- 41. Edu v. Ericta, 35 SCRA 481 (1970) City of Manila, 8 SCRA 367 (1963) – p. 26
49529, March 31, 1989 42. Lim v. Pacquing, 240 SCRA 649 (1995) 63. San Miguel Brewery, Inc. v. City of Cebu, 43
18. CIR v. Algue, 158 SCRA 9 – p. 9 par. 1 43. Lutz v. Araneta, 98 Phil. 148 (1966) SCRA 275 (1972)
19. CIR v. Algue, 158 SCRA 9 – p. 9 par. 3 BRIONES 44. Philippine Airlines, Inc. v. Edu, G.R. No. L- 64. CIR v. Bank of Commerce, G.R. No. 149636,
20. CIR v. Algue, 158 SCRA 9 – p. 9 par. 4 CASUMPANG 41383, August 15, 1988 June 8, 2005 – p. 27
45. Quezon City v. Ericta, 122 SCRA 759 (1983) 65. Acebedo Optical Company v. CA et al., G.R. No.
The Power to Tax Involves the Power to Destroy 46. Velasco v. Villegas, 120 SCRA 568 (1983) 100152, March 31, 2000

1
 66. White Light Corp et al. v. City of Manila, G.R. 88. Tañ ada v. Tuvera, G.R. No. L-63915, April 24, 106. La Suerte Cigar & Cigarette Factory v. CIR,
NO. 122846, January 20, 2009 1985 G.R. No. L-36131, January 17, 1985
67. CIR v. Citytrust Investment Phils., G.R. No. 107. Tañ ada v. Tuvera, 136 SCRA 27 (1985)
139786, 140857, September 27, 2006 D. When the Supreme Court decides a case, it does not pass a
68. Villanueva v. City of Iloilo, 26 SCRA 578 new law, but merely interprets a pre-existing one Special laws prevail over general laws
(1968) – p. 30 LIM 89. Accenture v. CIR, G.R. No. 190102, July 11, 108. Guagua Electric Light Plant Co v. Collector of
69. CIR v. Solidbank Corp., 436 SCRA 416 (2003) 2012 Internal Revenue, 19 SCRA 790 (1967)
70. CIR v. Bank of Commerce, G.R. No. 149636,
June 8, 2005 – p. 31 NAPII E. Principle of legislative approval by re-enactment Tax Evasion v. Tax Avoidance
71. Compañia General de Tabacos de Filipinas 90. Saguiguit v. People, cited in Gulf Air Company 109. CIR v. Estate of Benigdo P. Toda, Jr., 438 SCRA 290
v. City of Manila, 8 SCRA 367 (1963) – p. 31 OMAR Phil Branch v. CIR, G.R. No. 182045, September 19, 2012 (2004)
72. Pepsi-Cola Bottling Company of the Phil. v. 91. CIR v. Burroughs Limited, 142 SCRA 324 110. Philip Manufacturing Corp v. CIR, G.R. No. L-197737,
Mun. of Tanauan, Leyte, 69 SCRA 460 (1976) (1986) – p. 39 August 26, 1968
73. Villanueva v. City of Iloilo, 26 SCRA 578 92. City of Baguio v. de Leon, 25 SCRA 938 (1968)
(1968) – p. 32 TAGAYAN 93. CIR v. Burroughs Limited, 142 SCRA 324 (1986) – p. Taxpayer’s Suit
40 TINAE 111. Pascual v. Secretary of Public Works, 110
Exemption from Taxation Phil. 331 (1960)
74. Greenfield v. Meer, 77 Phil. 394 (1946) Regulations
75. Lung Center of the Phil. v. Quezon City, G.R. 94. Olsen v. Aldanese, 43 Phil. 64 (1922) Set-off or Compensation Taxes
No. 144104, June 23, 2004 95. Public Schools District Supervisors 112. Caltex Philippines Inc. v. COA, G.R. No. 92585,
76. Philippine Petroleum Corporation v. Pililla, Association v. Hon. Edilberto de Jesus, G.R. No. 157299, May 9, 1992
198 SCRA 82 (1991) June 19, 2006 113. Philex Mining Corporation v. CIR, 294 SCRA
77. Floro Cement v. Gorospe, 200 SCRA 480 96. Commissioner of Customs v. Hypermix Feeds 687 (1998)
(1991) Corporation, G.R. No. 179579, February 1, 2012 114. Francia v. Intermediate Appellate Court, G.R.
78. Manila Electric Company v. Vera, 67 SCRA 97. Negros Consolidated Farmers Association No. L-67649, June 28, 1988 – p. 49
351 (1975) Multi-Purpose Cooperative v. CIR, CTA Case No. 7994, 115. Republic v. Mambulao Lumber Company, 4
79. CIR v. Guerrero, 21 SCRA 180 (1967) February 17, 2012 SCRA 622 (1962)
80. Meralco v. Vera, 67 SCRA 351 (1975) 98. Lupangco v. CA, 160 SCRA 848 (1988) 116. Domingo v. Garlitos, 8 SCRA 443 (1963) –
81. Marli Plywood & Veneer Corporation v. 99. Tañ ada v. Tuvera, 146 SCRA 446 (1986) par. 2
Arañ as, 109 Phil. 664 (1960) 100. People v. Maceren, 79 SCRA 450 (1977) 117. Francia v. Intermediate Appellate Court,
82. Rodriguez v. Collector, G.R. No. L-23041, July G.R. No. L-67649, June 28, 1988 – p. 50 TINGKAHAN
31, 1969 Classification of Regulations 118. Domingo v. Garlitos, 8 SCRA 443 (1963) –
83. City Government of San Pablo v. Reyes, G.R. A. Rules in the nature of subordinate legislation par. 5 ABISANA
No. 127708, March 25, 1999 101. CIR v. CA, G.R. No. 119761, August 29, 1996,
84. Manila Electric Company v. Prov. of Laguna, 261 SCRA 236
306 SCRA 750 (1999) CHAPTER II
85. Asiatic Petroleum Co., Ltd. v. Llanes, 49 Phil. B. Interpretative rules INHERENT AND CONSTITUTIONAL LIMITATIONS
466 (1926) 102. Gonzales v. Land Bank of the Philippines, 183
SCRA 520 (1990) 119. Hongkong & Shanghai Banking Corporation v. Rafferty,
Tax Laws 103. Manila Jockey Club v. CA, G.R. No. 103533, 39 Phil. 145 (1918)
A. Statutes levying taxes are construed against the government December 15, 1998 120. Roxas v. CTA, 23 SCRA 276 (1968)
86. CIR v. Fireman’s Fund Insurance Co., 148
SCRA 315 (1987) Necessity for Notice and Hearing Inherent Limitations
104. Corona v. United Harbor Pilots Association of A. The levy must be for a public purpose
B. Construction of statute by predecessors is not binding on the the Phil., G.R. No. 111953, December 12, 1997 121. Planters Products Inc., v. Fertiphil Corp., G.R.
successors 105. Review Center Association v. Exec. Secretary, No. 166006, March 14, 2008
87. Hilado v. Collector, 100 Phil. 288 (1956) G.R. No. 180046, April 2, 2009 122. Citizens Savings and Loan Association of
Cleveland, Ohio v. Topeka City, 20 Wall. 655, 22 L. Ed.
C. Retroactive application Publication 455
123. Lutz v. Araneta, 98 Phil. 148 (1966)

2
 124. Bagatsing v. Ramirez, 74 SCRA 306 (1976)
Taxpayer’s suit
125. Tolentino v. Comelec, 41 SCRA 702 (1971)
126. Sanidad v. Comelec, 73 SCRA 333 (1976)
127. Chavez v. Public Estates Authority, G.R. No.
133250, July 9, 2002
128. Tatad v. Garcia, 243 SCRA 436 (1995)
129. Information Technology Foundation v.
Comelec, G.R. No. 159139, January 13, 2004
130. Jumamil v. Café , G.R. No. 144570, September
21, 2005
131. Pascual v. Secretary of Public Works, 110
Phil. 331 (1960)
132. White Plains Homeowners Association, Inc. v.
CA, 297 SCRA 547 (1998)
133. Albon v. Fernando, G.R. No. 148357, June 30,
2006
134. Gaston v. Republic Planters Bank, 158 SCRA 626, 1988
B. Non-delegation of the legislative power to tax
C. Exemption from taxation of government entities
D. International comity
135. Deutsche Bank AG Manila Branch v. CIR, G.R. No.
188550, August 19, 2013 – p. 56
136. CIR v. Mitsubishi Metal Corporation 181 SCRA 82
(1990)
137. CIR v. Pilipinas Shell Petroleum Corporation, G.R. No.
188497, April 25, 2012
138. Deutsche Bank AG Manila Branch v. CIR,
G.R. No. 188550, August 19, 2013 – p. 59 BAUTE
E. Territorial jurisdiction
139. Manila Electric Company v. Yatco, 69 Phil. 89 (1939)
140. Philippine Guaranty Co v. CIR, 15 SCRA 1 (1965)
141. CIR v. British Overseas Airways Corporation, 149 SCRA
395 (1987)
Constitutional Limitations
A. No person shall be deprived of life, liberty, or property
without due process of law (Sec. 1, Art. III, 1987 Constitution)
142. Sison v. Ancheta, 130 SCRA 654 (1984) – p. 61
143. Sison v. Ancheta, 130 SCRA 654 (1984) – p.
62 BRIONES
144. Villegas v. Hiu Chiong Tsai Pao Ho, 86 SCRA 270 (1978)
145. Province of Abra v. Hernando, 107 SCRA 104 (1981)
B. Nor shall any person be denied the equal protection of the
laws (Sec. 1, Art. III, 1987 Constitution)
146. Commissioner of Customs v. Hypermix Feeds
Corporation, G.R. No. 179579, February 1, 2012
147. Kapatiran ng mga Naglilingkod sa Pamahalaan ng
Pilipinas, Inc. et al. v. Tan, G.R. No. 91311, June 30, 1988
148. Eastern Theatrical Co., Inc. v. Alfonso, 83 Phil. 852
(1949)
149. British American Tobacco v. Jose Isidro N. Camacho, G.R.
No. 163583, August 20, 2008, 562 SCRA 511
150. Rufino R. Tan v. Ramon R. Del Rosario, Jr., G.R. Nos.
109289 and 109446, October 13, 1994, 237 SCRA 324, 331
151. Tiu v. CA, 301 SCRA 278 (1999)
152. Parayno v. Jovellanos, G.R. No. 148408, July 14, 2006
C. The rule on taxation shall be uniform and equitable. The
Congress shall evolve a progressive system of taxation (Sec. 28
(1), Art. III, 1987 Constitution)
153. Pepsi-Cola Bottling Co. of the Philippines, Inc. v. City of
Butuan, 24 SCRA 789 (1968)
154. J.M. Tuason & Co., Inc. v. Land Tenure Administration,
31 SCRA 413 (1970)
155. Churchill & Tait v. Concepcion, 34 Phil. 969 (1916)
156. The Shell Co. of P.I., Ltd. v. Vañ o, 94 Phil. 389 (1954)
157. Punsalan v. Mun. Board of Manila, 95 Phil. 46 (1954)
158. Manila Race Horse Trainers Association v. Dela Fuente,
88 Phil. 60 (1951)
159. Association of Customs Brokers, Inc. v. Mun. Board of
Manila, 93 Phil. 107 (1953)
D. No law impairing the obligation of contracts shall be passed
(Sec. 10, Art III, 1987 Constitution)
160. Mactan Cebu International Airport Authority v. Marcos,
261 SCRA 667 (1996)
161. Cagayan Electric Power & Light Co., Inc. v. CIR, G.R. No.
L-60126, September 25, 1985
162. Philippine Power & Development Co., Inc. v. CIR, CTA
Case No. 1152, October 31, 1965
163. Christ Church v. Philadelphia, 24 How. 300 (1860)
164. Casanova v. Hord, 8 Phil. 125 (1907)
165. Manila Railroad Company v. Insular Collector of
Customs, 12 Phil. 146 (1915)
E. The free exercise and enjoyment of religious profession and
worship, without discrimination or preference, shall forever be
allowed (Sec. 5, Art. III, 1987 Constitution)
166. American Bible Society v. City of Manila, 101 Phil. 386
(1957)
F. Freedom of the press
G. Tax exemption of properties for religious, charitable, and
educational purposes (Sec. 28 [3], Art. VI, 1987 Constitution)
167. CIR v. St. Luke’s Medical Center, Inc., G.R. Nos. 195909
and 195960, September 26, 2012
168. Lung Center of the Philippines v. Quezon City, G.R. No.
144104, June 29, 2004 – p. 81
169. CIR v. St. Luke’s Medical Center, Inc., G.R. No. 203514,
February 13, 2017
170. Lladoc v. CIR, 14 SCRA 292 (1965) – p. 82
171. Hospital de San Juan de Dios v. Pasay City, 16 SCRA 226
(1966)
172. Praire Du Chian Sanitarium Co. v. City of Praire Du
Chian, 242 Wis. 262, 7 NW (2d) 832, 144 ALR 1480
173. Herrera v. QC Board of Assessment Appeals, 3 SCRA 186
(1961)
174. CIR v. CA, G.R. No. L-124043, October 14, 1998
175. Lung Center of the Philippines v. Quezon
City, 433 SCRA 119 (2004) – p. 84 CASUMPANG
176. Lladoc v. CIR, 14 SCRA 292 (1965) – p. 84
ECHEM
H. All appropriation, revenue, or tariff bills shall originate from
the House of Representatives, but the Senate may propose or
concur with amendments (Sec. 24, Art. VI, 1987 Constitution
177. Tolentino v. Secretary of Finance, G.R. No. 115455,
October 30, 1995
I. No law granting any tax exemption shall be passed without
the concurrence of a majority of all the members of the
Congress (Sec. 28 [4], Art. VI, 1987 Constitution)
178. John Hay Peoples Alternative Coalition, et al. v. Lim, G.R.
No. 119775, October 24, 2003
J. Every bill passed by Congress shall embrace only one subject,
which shall be expressed in the title thereof (Sec 26 [1], Art. IV,
1987 Constitution)
K. Congress shall evolve a progressive system of taxation.
L. Supremacy of the national government over local
governments in taxation
179. Manila International Airport Authority v. CA,
G.R. NO. 155650, July 20, 2006
180. Basco v. PAGCOR, 197 SCRA 52 (1991)
3
PART II. 188. Ona v. CIR, 45 SCRA 74 (1972) CHAPTER V
INCOME AND WITHHOLDING TAXES 189. Lorenzo Oña et al. v. CIR, 45 SCRA 74 GROSS INCOME
(1972) JALALUDDIN
CHAPTER III 203. Madrigal v. Rafferty, 38 Phil. 414 (1918)
INTRODUCTION Isolated transactions of unimproved properties
190. Pascual v. CIR, 166 SCRA 560 (1988) To Whom Income Is Taxable
Income Tax Systems 204. Moore v. Commissioner, 124 F (2d) 991
1. Global Tax System Transfer of property from father to children 205. Mercy’s, Inc. v. CIR, CTA Case No. 895m May 11, 1982
181. Mercury Drug Corporation v. CIR, G.R. No. 191. Obillos, Jr. v. CIR, 139 SCRA 436, 1985
164050, July 20, 2011 192. Pascual v CIR, Court of Tax Appeals GR No. Final tax on interest income from loans to resident borrowers is
78133, October 18, 1988 LIM a direct liability of FCDU
2. Schedular Tax System 206. RCBC v. CIR, G.R. No. 170257, September 7, 2011
General Professional Partnership (GPP) 207. ING Bank N.V.—Manila Branch v. CIR, CTA EB Case No.
3. Semi-Schedular or Semi-Global Tax System A. GPP is not a taxable entity for income tax purposes 450, March 25, 2009
193. Tan v. Del Rosario, 237 SCRA 324 (1994) – p. 129 208. ING Bank N.V. Manila Branch v. CIR CTA EB Case No. 52,
Features of the Income Tax Law April 5, 2005
182. CIR v. Tours Specialists, Inc., 183 SCRA 402 B. Share of partners in partnership profit is deemed distributed
(1990) to the partners in the year profit is earned Where legal title over the Fund is transferred to the trustee, the
income of the Fund shall accrue to the trustee, not the trustor
Direct Tax distinguished from Indirect Tax 194. Tan v. del Rosario, G.R. No. 109289, 209. DBP v. COA, G.R. No. 144516, February 11. 2004
183. CIR v. Philippine Long Distance Telephone October 3, 1994 – p. 133 NAPII
Company, 178 SCRA 61 (2005) Source Rules
184. Maceda v. Macaraig, 197 SCRA 771 (1991) Domestic Corporations and Foreign Corporations A non-resident alien is taxed only on her commission income for
services rendered in the Philippines
Criteria in Imposing Income Tax Doing Business 210. CIR v. Baier-Nickel, G.R. No. 156305, February 17, 2003
1. Citizenship Principle 195. CIR v. British Overseas Airways Corporation, 149 SCRA 211. Commissioner v. Baier-Nickel, G.R. No. 153793, August
2. Residence Principle 395 (1987) 29, 2006
3. Source Principle
Partnerships Income from turnkey contract with onshore and offshore
When is income tax taxable portions
Joint Ventures 212. CIR v. Marubeni Corporation, G.R. No. 137377,
CHAPTER IV December 18, 2001
KINDS OF TAXPAYERS Taxable Joint Ventures
196. Collector v. Batangas Transportation Co., 102 Phil. 822 International air carrier
Citizens (1958) 213. CIR v. British Overseas Airways Corporation, 149 SCRA
185. Calderon v. CIR, CTA Case No. 9090, March 197. Evangelista v. Collector, 102 Phil. 140 (1957) 395 (1987)
27, 2018 198. Reyes v CIR, 24 SCRA 198 (1968)
199. AFISCO Insurance Corporation v. CA, G.R. No. L-112675, Enumeration of source rules above is not exclusive; reinsurance
Aliens January 25, 1999 premiums paid to a foreigner corporation is income from
186. Garrison v. CA and Republic, 187 SCRA 525 sources within the Philippines
(1990) Resident Foreign Corporation 214. Alexander Howden & Co., Ltd. v. Collector, G.R. No. L-
200. Marubeni Corporation v. CIR, G.R. No. 76573, September 19392, April 14, 1965
Estates and Trusts 14, 1989
187. CIR v. Visayan Electric Co., 233 SCRA 715 (1968) 201. CIR v. Marubeni Corporation, G.R. No. 137377, Definition of Income
December 18, 2001 215. Conwi v. CTA and CIR, 213 SCRA 83 (1992)
Co-ownership 216. Madrigal v. Rafferty, 38 Phil. 414 (1918)
Non-resident Foreign Corporation OMAR
Co-ownership Due to Death of a Decedent 202. The Philippine Guaranty Co., Inc. v. CIR, G.R. No. L- 217. Fisher v. Trinidad, 43 Phil. 973 (1922)
1. Before partition of property 22074, April 30, 1965 218. James v. U.S., 366 U.S. 213
2. After partition of property

4
 219. Philippines v. Salem Investment Corporation, et al., G.R.
No. 137569, June 23, 2000 Backwages, Allowances, and Benefits Awarded in Labor 250. CIR v. Estate of Benigno P. Toda, Jr., 438 SCRA 290 (2004)
220. Capitol Steel Corporation v. Phividec Industrial Dispute
Authority, G.R. No. 169453, December 6, 2006 Items Not Included as Compensation Income Other capital assets
221. Capitol Steel Corporation v. CIR, CTA Case No. 9240,
October 26, 2017 Passive investment income
237. Nitafan et al v. CIR, 152 SCRA 284 (1987) 251. CIR v. CA and GCL Retirement Plan, 207 SCRA 487
Recognition of revenue when offsetting concurrent (1992)
obligations Fringe Benefits
Dividend Income
222. Madrigal v. Rafferty, G.R. No. L-12287, De minimis Benefits 252. Fisher v. Trinidad, 43 Phil. 973 (1922) – p. 218
August 7, 1918 TAGAYAN 238. Collector v. Henderson, 1 SCRA 649 (1961)
Distinctions between Cash Dividend and Stock Dividend
Distinctions between Capital and Income Stock Option Plans 253. Fisher v. Trinidad, 43 Phil. 973 (1922) – p.
223. Madrigal v. Rafferty, 38 Phil. 414 (1918) 239. Commissioner v. Smith, 324 U.S. 177 219 CASUMPANG
TINAE ABISANA 254. Hyatt v. Alen, 56 N.Y. 553

Tests in determining income 240. Collector v. Henderson, 1 SCRA 649 (1961) Stock dividends
224. Eisner v. Macomber, 252 U.S. 189 BAUTE 255. CIR v. CA, CTA and A. Soriano Corporation, 301 SCRA
225. Fisher v. Trinidad, 43 Phil. 973 (1922) 152 (1999)
TINGKAHAN Trade or Business Income or Professional Income
226. Spouses Araneta v. CIR, CTA Case NO. 1699, November 241. CIR v. British Overseas Airways Rules on Taxation of Dividends
6, 1970 Corporation, 149 SCRA 395 (1987) BRIONES
227. Commissioner v. Wilcox, 286 U.S. 417, 424 242. Luzon Stevedoring Co. v. Trinidad, 43 Phil. 803 (1922) Recipient is a domestic corporation or a resident foreign
228. CIR v. Javier, 199 SCRA 824 (1991) 243. CIR v. Engineering Equipment and Supply Co., 64 SCRA corporation
229. Gutierrez v. CTA and Collector, 101 Phil. 713 (1957) 597 (1975) 256. Filipinas Life Assurance Co. v. CTA and CIR, 21 SCRA
230. BDO v Republic, GR No. 198756, January 13, 2015 244. Advertising Associates v. Court of Appeals, 133 SCRA 622 (1967)
231. Commissioner v. Smith, 324 US 177 (1984) 257. CIR v. Procter & Gamble PMC, 204 SCRA 377 (1991)
258. CIR v. Wander Philippines, Inc., 160 SCRA 573 (1988)
Significance of Knowing the Type or Character of Income Sales or exchanges of real property
245. Capitol Steel Corporation v. CIR, CTA Case No. 9240, Royalty Income
Compensation Income October 26, 2017 259. CIR v. S.C. Johnson & Sons, G.R. No. 127105, June 25,
232. Brotherhood Labor Unity Movement of the Philippines 246. Association of Small Landowners in the Phil., Inc., et al. 1999
v. Zamora, G.R. No. L-48645, January 7, 1987 v. Secretary of Agrarian Reform, G.R. No. 78742, July 14, 260. Wrigley Philippines v. CIR, CTA Case No. 7138, July 26,
233. David v. Macasio, G.R. No. 1954661, July 2, 2014 1989 2007

Who is an employee Professional Income Rental Income

234. First Lepanto Taisho Insurance Corporation v. CIR, G.R.
No. 197117, April 10, 2013 Capital Assets Other Income
247.Del Rosario v CIR, CTA Case No. 4796, December 1, 1994 261. Gutierrez v. CTA and Collector, 101 Phil. 713 (1957)
Compensation income of Philippine Nationals and Aliens 248. Compagnie Financiere Sucres et Denrees v. CIR, G.R. No. 262. Commissioner v. Smith, 324 U.S. 177
Employed by Foreign Governments and International 133834, August 28, 2006 ECHEM
Organizations in the Philippines 249. China Banking Corporation v. CA, G.R. No. 125508, July 263. Fernandez Hermanos Inc. v. CIR, CTA Case 787, June 10,
19, 2000 1963
Foreign Embassies and Diplomatic Missions
Deed of Exchange Prizes and Awards
Statutory Minimum Wage Rules on non-redemption of property sold during involuntary
235. Soriano v. Secretary of Finance, G.R. No.184450, January sales
24, 2017 Real property located outside the Philippines 264. James v. US, 366 US 213, 1961
236. Escareal v. CIR, CTA Case No. 5194, September 2, 1996 265. Commissioner v. Duberstein, 363 U.S. 278

5
266. CIR v. YMCA, G.R. No. 124043, October 14, 1998 For any cause beyond the control of the said official or 297. Collector v. V.G. Sinco Educational Corporation, 100 Phil.
267. CIR v. St. Luke’s Medical Center, Inc., G.R. Nos. 195909 and employee 127 (1956)
195960, September 26, 2012 281. CIR v. CA, Castaneda, 203 SCRA 72 (1991) – p. 266 298. CIR v. De La Salle University, Inc., G.R. Nos.
268. Fisher v. Trinidad, 43 Phil. 73 (1922) 282. CIR v. CA, Castaneda, G.R. No. 96016, 196596, 198841, 198941, November 9, 2016 – 9. 288
October 17, 1991 – p. 268 JALALUDDIN NAPII
283. CIR v. CA, G.R. No. 96016, October 17, 1991
CHAPTER VI LIM Charitable Organizations
EXCLUSION FROM GROSS INCOME 284. Stanton v. U.S., 186 F. Supp. 393 299. CIR v. YMCA, G.R. No. 124043, October 14, 1998

269. Greenfield v. Meer, 77 Phil. 394 (1946) Miscellaneous items Clubs for Pleasure, Recreation, and Other Non-Profit Purposes
270. CIR v. Mistubishi Metal Corp., 181 SCRA 214 (1990) Income of foreign governments 300. CIR v. COMASERCO, G.R. No. 125355, March 30, 2000
285. Philippine Long-Distance
Categories of Exclusions from Gross Income Telephone Co. v. CIR, CTA Case No. 4375, Non-Stock, Non-Profit Hospital
271. Dumaguete Cathedral Credit Cooperative v. CIR, G.R. No. January 7, 1992 301. CIR v. St. Luke’s Medical Center, Inc., G.R. Nos. 195909
182722, January 22, 2010 and 195960, September 26, 2012 – p. 291
Loan agreement without stipulation that foreign 302. City Assessor of Cebu City v. Association of Benevola de
Under the 2005 Tax Code creditors act for Eximbank Cebu, Inc., 524 SCRA 128 (2007)
286. Asia Transmission Corporation v. 303. CIR v. St. Luke’s Medical Center, Inc., G.R.
CIR, CTA Case No. 3380, July 27, 1988 Nos. 195909 and 195960, September 26, 2012 – p. 292
Exclusions from Gross Income
OMAR
A. Proceeds of life insurance policies
Loan and sales contract without reference to Eximbank
B. Amounts received under life insurance,
287. CIR v. Mitsubishi Metal Requirement for revalidation of tax exemption for non-stock.
endowment, or annuity contracts
Corporation, 181 SCRA 82 (1990) non-profit corporations and associations
272. El Oriente Fabrica de Tabacos Inc.
304. CIR v. St. Paul College of Makati, G.R. No. 215383, March
v. Posadas, 56 Phil. 147 (1931)
8, 2017
288. Government of Singapore Investment Corp v. CIR, CTA 305. Congregracion de la Mission de San Vicente de Paul v.
C. Value of property acquired by gift, bequest, devise
Case Nos. 6745, June 6, 2008 and 7726, April 29, 2010 Collector, CTA Case No. 1468, October 14, 1968
or descent
306. CIR v. CA and YMCA, 298 SCRA 83 (1998) – p. 295 par. 1
273. Pirovano v. CIR, 14 SCRA 832
Gains cannot include interest 307. CIR v. CA and YMCA, 298 SCRA 83 (1998) –
(1965)
289. Nippon Life Insurance Company v. p. 295 par. 2 TAGAYAN
CIR, CTA Case No. 642, February 4, 2002
D. Amounts received through accident or health
290. Malayan Zurich Insurance Co., Inc. CHAPTER VII
insurance
v. CIR, CA-GR SP No. 77070, March 28, 2005 RETURN OF CAPITAL AND DEDUCTIONS
274. B.F. Metal v. Spouses Lomotan, G.R.
No. 170813, April 16, 2008
Exempt Corporations Return of Capital
275. Sulpicio Lines v. Curso, G.R. No.
Deductions are construed strictly against the taxpayer claiming
157009, March 17, 2010
Non-Profit, Inurement Prohibition it
276. Kierulf v. CA, G.R. No. 99301,
291. Collector v. Club Filipino, Inc. de Cebu 308. Western Minolco Corporation v. CIR, 124 SCRA 212
March 13, 1997
292. Lung Center of the Philippines v. Quezon City (1983)
277. Francisco v. Ferrer, G.R. No.
293. CIR v. St. Luke’s Medical Center, Inc., G.R. Nos. 195909 309. Commissioner of Customs v. Philippine Acetylene Co.,
142029, February 28, 2001
and 195960, September 26, 2012 39 SCRA 70 (1971)
278. ABS-CBN Broadcasting
310. CIR v. Arnoldus Carpentry Shop, Inc., 159 SCRA 199
Corporation v. CA, 301 SCRA 575 (1999)
Educational Institutions (1988)
E. Income exempt under treaty
294. CIR v. De La Salle University, Inc., G.R. Nos. 196596,
279. National Development Company v.
198841, 198941, November 9, 2016 – p. 285 Deductions from Gross Income
CIR, G.R. No. L-53961, June 30, 1987
295. Southeast Asian Regional Center for Graduate Study and
F. Retirement benefits, pensions, gratuities, etc.
Research in Agriculture v. CIR, CTA Case No. 4982, October Business Expenses
280. CIR v. GCL Retirement Plan, G.R.
6, 1995 311. General Electric (P.I.), Inc. v. Collector, CTA Case 1117,
No. 95022, March 23, 1992
296. Xavier School, Inc. v. CIR, CTA Case No. 1682, October 8, July 14, 1963
1969

6
 312. CIR v. General Foods (Phils.) Inc., G.R. No. 143672, April 330. PRC v. CA, 256 SCRA 667 (1996)
24, 2003 Domestic Corporations
313. CIR v. General Foods (Phils.) Inc., G.R. No. Bad Debts 343. Manila Banking Corporation v. CIR, CA-GR SP No. 77177,
143672, April 24, 2003 TINAE 331. Collector v. Goodrich International Rubber Co., 21 SCRA May 11, 2005
1336 (1967) 344. John Hay Peoples Alternative Coalition v. Lim, G.R. No.
Professional expenses are deductible in the year the 119775, October 24, 2003
professional services are rendered, not in the year they are Tax Benefit Rule
billed 332. Philippine Fiber Procession Co. v. CIR, CTA Case No. Resident Foreign Corporations that are Subject to Preferential Tax
314. CIR v. Isabela Cultural Corporation, G.R. No. 172231, 1407, December 29, 1966 Rates
February 12, 2007 345. CIR v. American Airline Inc., 180 SCRA 274 (1989)
Depreciation
Additional requirements for deductibility of certain payments Branch Profit Remittance Tax on Philippine branch of Foreign
315. C.M. Hoskins & Co., Inc. v. CIR, 30 SCRA 434 (1969) Rules on Depreciation of Vehicles Corporations
316. Consolidated Mines, Inc. v. CTA and CIR, 58 SCRA 618 333. Basilan Estates, Inc. v. CIR, 21 SCRA 17 (1967) 346. Bank of America NT and SA v. CA, 234 SCRA 302 (1994)
(1974) 347. Bank of America NT and SA v. CA, 234
317. 3M Philippines, Inc. v. CIR, G.R. NO. 82833, September Conditions for Deductibility of Depreciation SCRA 302 (1994) ABISANA
26, 1988
318. Rutkin v. U.S., 343 U.S. 130 Charitable contributions Income of Non-resident Foreign Corporation Subject to Preferential Tax
319. Zamora v. Collector, 8 SCRA 163 (1963) 334. Philippine Stock Exchange v. CIR, CTA Case No. 5995, Rates
320. Roxas v. CTA and CIR, 23 SCRA 276 (1968) October 15, 2002 348. CIR v. Wander Philippines, Inc., 160 SCRA 573 (1988)

Optional treatment of interest expense on capital expenditure Optional Standard Deduction Failure to strictly comply with Revenue Memorandum Order No. 1-2000
321. Paper Industries Corporation of the Philippines v. CIR, 335. Madrigal v. Rafferty, 38 Phil. 414 (1918) which requires the taxpayer to secure prior tax treaty relief from the
250 SCRA 434 (1995) BIR will not deprive taxpayers of the benefit of a tax treaty
Basic Personal Exemptions and Deduction 349. Mirant (Phils) Operations Corporation v CIR, CTA EB
Definition of Indebtedness No. 40, June 7, 2005
322. CIR v. Prieto, G.R. No. L-13912, September 30, 1960 Status-at-the-end-of-the-year rule 350. Philippine Health Care Providers v. CIR
351. CIR v. S.C. Johnson and Son, G.R. No. 127105, June 25,
Non-Deductible Expenses 1999
323. CIR v. Palanca, 18 SCRA 496 (1966) 336. Deputy v. Du Pont, 308 US 488 (1940) 352. Deutsche Bank AG Manila Branch v. CIR, G.R. No.
324. CIR v. Prieto, G.R. No. L-13912, September 30, 1960 – 188550, August 19, 2013
p. 316 TINGKAHAN Tax Credit 353. CBK Power Company Limited v. CIR, G.R. Nos. 193383-
325. Basilan Estates, Inc. v. CIR, 21 SCRA 17 (1967) 337. CIR v. Central Luzon Drug Corporation, G.R. No. 159647, 34, January 14, 2015
April 15, 2005
Taxes 338. Manila Memorial Park, Inc. v. Department of Social Definition of Paid-up Capital
Welfare and Development, 711 SCRA 302 (2013) 354. Cebu Air, Inc. v. CIR, CTA Case NO. 9106, January 11,
Losses 2018
Irrevocability Rule
Bad Debt Theory 339. Philippine Bank of Communications v. CIR, 361 Phil. 916 Transfer for inadequate consideration
326. Talisay-Silay Milling Co. v. CIR, CTA Case No. 1399, (1999) 355. Commissioner v. B.F. Goodrich Philippines (G.R. No.
December 29, 1965 340. Systra Philippines, Inc. v. CIR, G.R. No. 176290, 104171, February 24, 1999)
September 21, 2007
Losses must be evidenced by closed and completed 341. Rhombus Energy, Inc. v. CIR, G.R. No. 206362, August
transaction 01, 2018 CHAPTER IX
327. Plaridel Surety & Insurance Co. v. CIR, 21 SCRA 1187 342. Asiaworld Properties Philippine Corporation v. CIR, G.R. ORDINARY ASSETS AND CAPITAL ASSETS
(1967) No. 171766, July 29, 2010
328. Alhambra Cigar & Cigarette Mfg. Co. v. Collector, CTA Sale or Exchange
Case No. 143, July 31, 1956 356. Helvering v. Hammel, 311 U.S. 504
329. Collector v. Goodrich International Rubber Co., 21 SCRA CHAPTER VIII 357. Helvering v. Chester N. Weaver Co., 305 U.S. 293
1336 (1967) TAX BASES AND RATES 358. U.S. Industrial Alcohol Co. v. Helvering, 137 F. [2d] 511

7
 359. Kieselback v. Commissioner, 317 U.S. 399, 87 L. ed. 358, Remittance of Withheld Taxes Is the Responsibility of The Withholding
63, S. Ct. 303 Agent-Payor of Income Distinction Between Donation Inter Vivos and Donation Mortis Causa
360. Filinvest Credit Corporation v. Philippine Acetylene Co., 371. CIR v. Asian Transmission Corporation, G.R. No. 179617, January 373. Balaqui v. Dongso, 53 Phil. 673 (1929)
Inc. 111 SCRA 421 (1982) 19, 2011 374. Puig v. Penaflorida, 16 SCRA 136 (1966)
361. Supreme Transliner Inc. v. BPI Family Savings Bank, G.R. 375. Bonsato v. Court of Appeals, 95 Phil. 481 (1954)
No. 165617, February 25, 2011 Final Withholding Tax
Estate Tax
Capital Assets Creditable Withholding Tax
362. Calasanz v. CIR, G.R. No. L-26284, October 9, 1986 Nature and Object of Estate Tax
Expanded Withholding Tax 376. Gregg v. Commissioner, 315 Mass. 704
CHAPTER X
TAX-FREE EXCHANGES Persons Exempt from Withholding Tax Rates of Estate tax

Tax-free Exchanges The income is fixed or determinable at the time of the payment Justification of Estate Tax
363. CIR v. Filinvest Development Corporation, G.R. Nos. 377. Stebbins v. Rilly, 268 US 137
163653 and 167689, July 19, 2011 The income payment is listed in the regulations as subject to
364. Parity Packaging Corp. v. CIR, CTA Case No. 8825, withholding Reasons for Taxability of Transfers of Property
September 19, 2017 378. U.S. v. Wells, 283 U.S. 102
365. CIR v. Filinvest Development Corporation and Filinvest The recipient of income is a resident of the Philippines 379. Burnet v. Guggehein, 288 U.S. 280
Alabang Inc., CA-GR SP No. 74510, January 26, 2005
The payor-withholding agent is a resident of the Philippines Death is Generating Source of Power
CHAPTER XI 380. Lorenzo v. Posadas, 64 Phil. 353 (1937)
ACCOUNTING METHODS AND PERIODS Withholding Agent
Law and Market Value at the time of the Death is Applied
Income is recognized when earning process is complete and exchange Time to Withhold and Remit Tax 381. Lorenzo v. Posadas, 64 Phil. 353 (1937) BRIONES
has taken place
366. Manila Mandarin Hotels v. CCIR, CTA Case No. 5046, Time to Credit Expanded Withholding Tax from Income Tax Residence
March 24, 1997 382. Corre v. Tan Corre 100 Phil. 321 (1956)
Consequences of Non-Withholding of Tax by the Payor of Income
“All Events Test” is followed for expenses Gross Estate
367. Spencer, White & Prentis v. Commissioner, 144 F.2d 45, Consequences of Non-Remittance of Tax Withheld by the Withholding 383. Crooks v Hasselson, 286 U.S. 55
2d Cir. 1944 Agent with respect to the Payee
372. CIR v. Asian Transmission Corporation, G.R. No. 179617, Citizen and non-resident alien decedent
Crop method (RAM No. 2-95) January 19, 2011 BAUTE
368. CIR v. Lancaster Philippines Inc., G.R. No. 183408, July Non-resident alien decedent
12, 2017 Bases of Withholding Tax 384. Nazareno v Court of Appeals, 343 SCRA 637 (2000)
Withholding Tax based on gross income
Individual deriving purely trade, business or professional income, or Settlement of Estate
mixed income Withholding tax based on gross selling price or fair market 385. Villocino v Doyon, 65 SCRA 460 (1975)
369. Garrison v. CA and Republic, 187 SCRA 525 (1990) value, whichever is higher
Partition and Distribution of Estate
Withholding Tax Rates 386. Confessor v Pelayo, 1 SCRA 817 (1961)
CHAPTER XII 387. Cabuyao v Caagbay, 95 Phil. 614 (1954)
WITHHOLDING TAXES Venue for Filing Withholding Tax Returns and Time for payment of tax
Decedent’s Gross Estate
Importance of Withholding Taxes PART III. Kinds of Property Embraced Under Decedent’s Interest
370. Bank of America and SA v. Court of Appeals and CIR, 234 SCRA 302 TRANSFER TAXES Exclusions from Decedent’s Gross Estate
(1994) CHAPTER XIII
ESTATE TAX Exempt Acquisitions and Transfers from Estate Tax
Transfer Taxes

8
Intangible personal property 410. Intestado de Don Valentin Descals v. Administrator de Rentals
388. Collector v. Fisher, 1 SCRA 93 (1961) Internas, 98 Phil 694 (1956)
389. Burnet v. Brooks, 288 US 378
Losses
Reciprocal exemption as to intangible personal property
390. CIR v. Norton, 103 Phil. 1558 (1964) Family home
391. Collector v. Campos Rueda, 42 SCRA 23 (1971) Conditions for the allowance of family home as deduction from
392. Collector v. De Lara, 102 Phil. 813 (1958) the gross estate

Transfer in contemplation of death Standard deduction

393. US v. Wells, 283 US 102
394. Basket v. Hassel, 107 US 602 Medical expenses

Circumstances taken into account include: Property previously-taxed (or vanishing deduction)
395. Dison v. Posadas, 57 Phil 465 (1932) Requisites
396. Estate of Mary Aushman, 40 BTA 948 Limitations as to amount of deduction allowed
397. De Roces v. Posadas, 58 Phil. 108 (1933)
398. De Roces v. Posadas, 58 Phil. 108 (1933) CASUMPANG Assunta

Revocable transfers (Transfer with retention of reservation of certain Valuation of property

rights) 411. Manila Railroad Co v. Velasquez, 32 Phil 286, (1915)
399. Puig v. Penaflorida 412. Worcester Country Trust Co v. Commissioner, 134 F. 2nd 578

Transfer of property under the general power of appointment Estate tax returns
400. Morgan v. Commissioner, 309 US 78
401. Graves v. Schmidlapp, 36 US 657 Time of filing

Proceeds of life insurance Payment of Estate Tax

402. Del Val v. Del Val, 29 Phil. 534 (1915) Payment by installment
Payment by partial disposition
Exclusive property
403. CIR v. Pineda Bank withdrawal limit

Deductions
Citizen and resident alien decedent
Non-resident alien decedent

Funeral expenses
404. De Guzman v. De Guzman, 83 SCRA 256 (1978)

Claims against the estate

405. Bocanegra v. Collector, CTA Case No. 420, Oct. 12, 1959
406. Dela Vina v. Collector, 65 Phil. 6200 (1939)
407. Domingo v. Garlitos, 8 SCRA 443 (1963)

Claims against insolvent persons

408. Monserrat v. Collector, CTA Case No 11, Dec. 28, 1955

Unpaid mortgages and taxes

409. Parrot v. Commissioner, 279 US 870