FEU INSTITUTE OF LAW

CENTRALIZED BAR OPERATIONS

TAXATION LAW
 2023 SEPTEMBER BAR EXAMINATION
NEVER FEAR. NEVER FALTER. THE FEUTURE ISN'T FOR THE FAINT OF HEART.
IT IS FOR THE BOLD AND BRAVE. BE BRAVER THAN EVER

Thank you
TO OUR Sponsors

ABO FEU LAW ALUMNI’S ASSOCIATION

LAW FIRM
FEUL A A
REYES TACANDONG & CO.

AVENIDA & DIAZ LAW OFFICE BACANI & DIMAPILIS LAW OFFICE
CHAN ROBLES
LAW FIRM
ASIA BREWERY CORPORATION
 FAR EASTERN UNIVERSITY INSTITUTE OF LAW
CENTRALIZED BAR OPERATIONS

FAR
FAREASTERN
EASTERNUNIVERSITY
UNIVERSITY INSTITUTE OF LAW
INSTITUTE OF LAW

ATTY. JOSE MARLON PABITON

Dean

ATTY. EIRENE JHONE AGUILA

Associate Dean

FEU
FAR IL CENTRALIZED
EASTERN BAR
UNIVERSITY OPERATIONS
INSTITUTE OF LAW

MA. SAMANTHA RAMOS

Chairperson

KENNETH JEFFERSON JECINO JUANITO RAMIREZ

Vice Chairperson for Internals Vice Chairperson for Externals

KIM DELA TORRE ANGELIQUE MARIE DE JESUS

JEAN ANTHONY GEOFFREY ALVARADO Vice Chairperson for Creatives
Vice Chairpersons for Academics
CLOY AUBREY ESCAREZ
Vice Chairperson for Finance
DANI JHOCEL MANICAD-GRACILLA
Vice Chairperson for Logistics DANIELLE KYLE FALLAR
Council Secretary

FACULTY
FAR EASTERN ADVISERS
UNIVERSITY INSTITUTE OF LAW

ATTY. ROENTGEN BRONCE

Overall Adviser
ATTY. RAZNA MANO Academics Committee Adviser

ATTY. KEINTH HORARIO Internals Committee Adviser

ATTY. KEVIN GANCHERO Externals Committee Adviser

 FAR EASTERN UNIVERSITY INSTITUTE OF LAW
CENTRALIZED BAR OPERATIONS

ACADEMICS
FAR EASTERN COMMITTEE
UNIVERSITY 2023
INSTITUTE OF LAW

ATTY. RAZNA MANO

Overall Academics Committee Adviser

KIM DELA TORRE

JEAN ANTHONY GEOFFREY ALVARADO
Vice Chairpersons for Academics

POLITICAL LAW AND

FAR EASTERN PUBLIC INTERNATIONAL
UNIVERSITY LAW
INSTITUTE OF LAW

ATTY. KEVIN MICHAEL IPAPO

Adviser
DON KRISTIAN ZIPAGAN Subject Head
RALPH JERVIS BANGAN Assistant Head

CRIMINAL LAW
FAR EASTERN UNIVERSITY INSTITUTE OF LAW

ATTY. ALLAN CRISOSTOMO

Adviser
DENISE RICA MAGTABOG Subject Head
SAMANTHA PATRICIA BUENAFE Assistant Head

CIVIL LAWINSTITUTE OF LAW

FAR EASTERN UNIVERSITY

ATTY. TRANQUILINO MADARANG

Adviser
MARIA ANGELICA LUGE Subject Head
JASHEN TANGUNAN Assistant Head
KYLE DANIELLE FALLAR Assistant Head
KATCHELA MACAPULAY Assistant Head
 FAR EASTERN UNIVERSITY INSTITUTE OF LAW
CENTRALIZED BAR OPERATIONS

LABOR
FAR LAWUNIVERSITY
EASTERN AND SOCIAL LEGISLATION
INSTITUTE OF LAW

ATTY. AINGEL DOMINGO

Adviser
RAEYA BARSAGA Subject Head
KATCHELA MACAPULAY Assistant Head

COMMERCIAL
FAR EASTERN LAW
UNIVERSITY INSTITUTE OF LAW

ATTY. TRANQUILINO MADARANG

Adviser
GEM CLOSA Subject Head
CLOY AUBREY ESCAREZ Assistant Head

TAXATION LAW
FAR EASTERN UNIVERSITY INSTITUTE OF LAW

ATTY. ROBERT JHON SALAZAR

Adviser
GEM CLOSA Subject Head
CLOY AUBREY ESCAREZ Assistant Head

REMEDIAL LAW
FAR EASTERN UNIVERSITY INSTITUTE OF LAW

ATTY. ROCELLE TANGI

Adviser
BENICA VENTILACION Subject Head
CHARLAINE KATE BUSTAMANTE Assistant Head
ARMAND HERNANDEZ Assistant Head
HANNAH PATRICIA SIKAT Assistant Head
JOHN REY FERAREN Assistant Head
JAN PAULINE CARZA Assistant Head
ARJUNA ALMASE Assistant Head

LEGAL UNIVERSITY
FAR EASTERN AND JUDICIAL ETHICSOF LAW
INSTITUTE

ATTY. BELLATRIX LEGASPI FRANCISCO

Adviser
GINO ANGELO BENGERO Subject Head
 FAR EASTERN UNIVERSITY INSTITUTE OF LAW
CENTRALIZED BAR OPERATIONS

COPY RIGHT
FAR EASTERN UNIVERSITY INSTITUTE OF LAW

COPYRIGHT © 2023 FAR EASTERN UNIVERSITY INSTITUTE OF LAW AND

FEU IL CENTRALIZED BAR OPERATIONS. ALL RIGHTS RESERVED.

THIS MATERIAL IS OFFICIALLY PUBLISHED AND DISTRIBUTED BY THE FAR

EASTERN UNIVERSITY INSTITUTE OF LAW AND FEU IL CENTRALIZED BAR
OPERATIONS. THIS IS SOLELY INTENDED FOR TAMARAW BAR EXAMINEES.
ANY UNAUTHORIZED USE, REPRODUCTION, OR DISTRIBUTION OF THIS
MATERIAL OR ITS CONTENTS IS STRICTLY PROHIBITED.

THIS MATERIAL MAY NOT BE COPIED, MODIFIED, OR DISCLOSED TO ANY

THIRD PARTY WITHOUT THE EXPRESS WRITTEN CONSENT OF THE FAR
EASTERN UNIVERSITY INSTITUTE OF LAW AND FEU IL CENTRALIZED BAR
OPERATIONS.

BY READING, ACCESSING, OR USING THIS MATERIAL, THE RECIPIENTS

AGREE TO PROTECT THE CONFIDENTIALITY OF THE MATERIAL,
REFRAINING FROM ANY ACTION WHICH MAY LEAD TO POSSESSION,
DUPLICATION, OR USE BY THIRD PARTIES.

THANK YOU FOR RESPECTING THE INTELLECTUAL PROPERTY RIGHTS OF

THE FAR EASTERN UNIVERSITY INSTITUTE OF LAW AND THE FEU IL
CENTRALIZED BAR OPERATIONS.
 TAXATION LAW
___________________________
LAST MINUTE TIPS
Taxation Law
Q: What is double taxation? When is it
prohibited?
A: Double taxation means taxing the same
property twice when it should be taxed only once;
that is, “taxing the same person twice by the same
jurisdiction for the same thing.” It is obnoxious
when the taxpayer is taxed twice, when it should
be but once. Otherwise described as “direct
duplicate taxation,” the two taxes must be
imposed on the same subject matter, for the same
purpose, by the same taxing authority, within the
same jurisdiction, during the same taxing period;
and the taxes must be of the same kind or
character. (The City of Manila v. Coca-Cola
Bottlers Philippines, Inc.)
Q: What are the tests of exemption from real
property tax?
A: First, the entity is a charitable, religious, or
educational entity; and, second, its real properties
are actually, directly, and exclusively used for
charitable, religious, or education purposes. (Lung
Center v. QC)
The exemption extends to facilities which are
incidental to and reasonably necessary for the
accomplishment of the main purposes of the
organization. (Abra Valley College Inc. v. Aquino)
Q: A charitable hospital is engaged in
profit-oriented activities. Is the income derived
from such activities subject to income tax?
A: YES. Income from whatever kind and character
of a charitable institution from any of its activities
conducted for profit, regardless of disposition
made of such income, shall be subject to tax. (CIR
vs. St. Luke’s Medical Center, Inc.)
Q: A non-stock, non-profit educational
institution is engaged in profit-oriented
activities. The income derived are used to
improve the educational facilities of the
institution. Is the income derived from the said
profit-oriented activities exempt from income
tax, VAT, and Local Business Tax?
A: YES. To be granted exemption, it must be
proven with substantial evidence that it falls under
the classification of non-stock, non-profit
educational institution, and the income it seeks to
be exempted from taxation is used actually,
directly, and exclusively for education purposes.
(CIR VS. DLSU)
Q: Is tax amnesty still available if a Final
Decision on Disputed Assessment (FDDA) has
already been issued?
A: YES. Under RA 9480, taxpayers with tax cases
subject of final and executory judgment by the
courts are disqualified to avail of the tax amnesty
program. If the taxpayer was served by the CIR
with an FDDA which was appealed to the CTA, the
taxpayer is qualified to avail of the tax amnesty. An
FDDA is not a final and executory judgment by the
court. (CIR v. Phil. Aluminum Wheels, Inc.)
Q: The Court of Tax Appeals ordered the
taxpayer to pay the amount of P110m as excise
tax liability for the period from the 2nd quarter
of 1991 to the 2nd quarter of 1992 plus 20%
annual interest from August 6, 1994 until fully
paid. The taxpayer refused to pay and argued
that it had pending claims for VAT input
credit/refund for the taxes it paid for the years
1989-1991 in the amount of P120m plus interest
and therefore should be applied against the
said excise tax liabilities in a manner of a
set-off or legal compensation. Is the taxpayer’s
argument valid?
A: NO. Taxes could not be the subject of a set-off or
legal compensation for the simple reason that the
government and the taxpayer are not mutual
creditors and debtors of each other. Claims for
taxes are neither debts nor contracts. (CIR v.
Philex Mining Corp.)
 TAXATION LAW
___________________________
LAST MINUTE TIPS
Q: After protesting the FAN/FLD, a Final
Decision on Disputed Assessment (FDDA) was
sent by the CIR to the taxpayer declaring its
liability for DST deficiency. The taxpayer
objected to the tax imposed pursuant to
Section 184 of the NIRC as violative of the
constitutional limitations on taxation.
Taxpayer went to the RTC for injunction,
declaratory relief questioning the assessment
and collection, and for the judicial
determination of the constitutionality of
Section 108 and Section 184, NIRC with respect
to the taxes to be paid by non-life insurance
companies.
Is injunctive relief available as a remedy to
assail the collection of a tax?
A: NO. Section 218 of the NIRC expressly provides
that no court shall have the authority to grant an
injunction to restrain the collection of any national
internal revenue tax, fee or charge imposed by the
NIRC.
The remedy of a taxpayer upon receipt of the
FDDA on the deficiency tax for DST was not an
action for declaratory relief but an appeal taken in
due course to the CTA. (CIR v. Standard
Insurance)
Q: A taxpayer was subjected by the BIR to a
tax audit for taxable years 2020 and 2021, for
which a PAN was issued by the BIR for tax
period 2020 and 2021. The taxpayer was later
issued an FAN/FLD. The FAN/FLD did not
indicate the date or period within which tax
liabilities should be paid. Is the FAN/FLD valid?
A: NO. To be valid, the FAN/FLD should indicate
the specific date or period within which the tax
liabilities should be paid. (BIR vs. First Gas Power
Corp.)
Q: Singapore Air, a foreign corporation
organized and existing under the laws of
Singapore, was granted an authority to
operate as an offline carrier by the Civil
Aeronautics Board of the Philippines. It does
not have flights originating from or coming to
the Philippines and does not operate any
airplane in the Philippines. It engaged the
services of ABC Corporation as its general
sales agent in the Philippines which sells
passage documents in the Philippines.
A. For income tax purposes, is Singapore
Air a resident or a non-resident
foreign corporation ?
B. Is the sale of Singapore Air’s airline
tickets through ABC Corporation
subject to Philippine Income tax?
A:
A. Singapore Air is a resident foreign corporation
because it is a corporation organized, authorized,
or existing under the laws of any foreign country,
engaged in trade or business within the
Philippines. Here, ABC CORPORATION performs
acts or works or exercises functions that are
incidental and beneficial to the purpose of
Singapore AIR’S business. The activities of ABC
CORPORATION bring direct receipts or profits to
petitioner. Singapore Air is, therefore, a resident
foreign corporation.
B. YES. As a resident foreign corporation,
SINGAPORE Air is taxable on its income derived
from sources within the Philippines. The source of
an income is the property, activity or service that
produced the income; thus, the sale of tickets is
the activity that produces the income. Here,
SINGAPORE Air’s income from sale of airline
tickets, through ABC CORPORATION, is income
realized from the pursuit of its business activities
in the Philippines. Thus, SINGAPORE Air is subject
to the regular corporate income tax rate under
Section 28(A)(1) of the NIRC, subject to any
applicable tax treaty to which the Philippines is a
signatory.
 TAXATION LAW
___________________________
LAST MINUTE TIPS
Q: TICO was an insurance company that sold
life insurance until it was placed under
liquidation in 2002. TICO filed an Interpleader
with the RTC Makati to determine which
among Glowide, PMI, and BIR has a superior
right over Units 7A and 7B of the Trafalgar
Plaza Condominium.
Glowide and PMI anchor their right through a
court judgment and notice of levy annotated
on the titles of the condo units on December
22, 2000. The BIR based its claim on the
deficiency in taxes of TICO for the calendar
years 1996 and 1997 which remain unpaid. The
BIR annotated on the titles a notice of tax lien
on February 15, 2005. Who has superior right?
A: Glowide and PMI have a superior right over the
condominium units than the BIR. Under Sec. 219 of
NIRC, a tax lien shall not be valid against any
judgment creditor until notice of such lien is filed
with the Register of Deeds of the city, or province,
where the taxpayer's properties are located. BIR's
tax lien could only have been enforceable against
Glowide and PMI when it annotated its tax lien on
February 15, 2005, which was already after the
annotation of their levy on attachment and sale of
the condominium units in Glowide and PM's favor.
(BIR v. TICO Insurance Co., Inc.)
Q: Are withholding tax assessments covered
by the prescriptive period under Section 203 of
the NIRC?
A: YES. Withholding tax assessments such as EWT
and WTC contemplate deficiency internal revenue
taxes. Their aim is to collect unpaid income taxes
and not merely to impose a penalty on the
withholding agent for its failure to comply with its
statutory duty. (CIR vs. La Flor Dela Isabel, Inc.)
Q: What constitutes transactions done "in the
course of trade or business" for purposes of
applying VAT?
A: It is the regular conduct or pursuit of a
commercial or economic activity, including
transactions incidental thereto, by any person
regardless of whether or not the person engaged
therein is a non-stock, non-profit private
organization (irrespective of the disposition of its
net income and whether or not it sells exclusively
to members or their guests), or government entity.
Q: SMC filed its administrative claim on
January 10, 2003 and its judicial claim on
February 24, 2003. The claim covers alleged
excess excise taxes paid on January 11, 2001.
Will SMC’s claim prosper?
A: NO. Within two years from the date of payment
of tax, the claimant must first file an administrative
claim with the CIR before filing its judicial claim
with the courts of law. Both claims must be filed
within a two-year reglementary period. Timeliness
of the filing of the claim is mandatory and
jurisdictional, and thus the Court cannot take
cognizance of a judicial claim for refund filed
either prematurely or out of time. (CIR vs. San
Miguel Corporation)
Q: On April 3, 2009, PBCOM filed with the BIR
its letter requesting the issuance of a Tax
Credit Certificate (TCC) for the excess CWT
covering the year 2006. On April 15, 2009,
PBCOM filed a petition for review with the
CTA, praying for the issuance of a TCC,
representing its excess/unutilized CWT for the
year 2006. PBCOM also alleged that it was
filing the said petition with the CTA due to the
inaction of the CIR on the former's claim for a
TCC. On the other hand, the CIR essentially
argued that PBCOM's claim for the issuance of
a TCC is in the nature of a refund and is thus
subject to administrative examination by the
BIR, and that PBCOM failed to fully comply
with the requirements provided in Revenue
Regulations 6-86 and jurisprudence. Does
failure to submit the required documents to
support its claim for the issuance of a TCC
with the CIR will render its judicial claim with
the CTA as premature?
A: NO. The failure in proving an administrative
claim for a CWT refund/credit does not preclude
the judicial claim of the same. No evidentiary value
can be given the purchase invoices or receipts
 TAXATION LAW
___________________________
LAST MINUTE TIPS

submitted to the BIR as the rules on documentary

evidence require that these documents must be
formally offered before the CTA.
As applied in the instant case, since the claim
for tax refund/credit was litigated anew before the
CTA, the latter's decision should be solely based on
the evidence formally presented before it,
notwithstanding any pieces of evidence that may
have been submitted (or not submitted) to the
CIR. Thus, what is vital in the determination of a
judicial claim for a tax credit/refund of CWT is the
evidence presented before the CTA, regardless of
the body of evidence found in the administrative
claim. (CIR vs. Philippine Bank of
Communications)
Q: Period to decide by the CIR
A: The CIR has 90 days to decide from the date of
submission of complete documents in support of
the application.
Q: What is the remedy in case the refund is
denied or if there is inaction?
A: VAT taxpayer has 30 days from receipt of the
denial to appeal to the Court of Tax Appeals (CTA).
Denial should state the legal and factual basis.
If there is an inaction and no decision within 90
days, wait for the decision, without prejudice to the
sanction under Sec. 269 of NIRC on the BIR official.

Q: The BIR Commissioner, in his relentless

enforcement of the Run After Tax Evaders
(RATE) program, filed with the DOJ charges
against a movie and television celebrity. The
Commissioner alleged that the celebrity
earned around PhP 50 million in fees from
product endorsements in 2016 which she
failed to report in her income tax and VAT
returns for said year. The celebrity questioned
the proceeding before the DOJ on the ground
that she was denied due process since the BIR
never issued any Preliminary PAN or a FAN,
both of which are required under Section 228
of the NIRC whenever the Commissioner finds
that proper taxes should be assessed. Is the
celebrity's contention tenable? (Bar 2018)
A: NO. Assessment is not necessary before the
filing of a criminal complaint for tax evasion. When
fraudulent tax returns are involved, a proceeding
in court after the collection of such tax may be
begun without assessment. (Section 222, NIRC)

Q: When to file a claim for refund of input

taxes attributable to zero-rated sales?
A: Application for refund should be filed with the
CIR within two years after the close of the taxable
quarter when the zero-rated sales were made.