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POWER MAX CONSULTING GROUP INC.

NATIONAL TAX CONGRESS
Crowne Plaza Galleria
Ortigas Center, Pasig City
Thursday, October 16, 2014
9:00-10:30 am

“LATEST DECISIONS OF THE COURT OF
TAX APPEALS AND SUPREME COURT”
JUANITO C. CASTAÑEDA, JR.
Associate Justice, Court of Tax Appeals
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INTRODUCTION
SUPREME COURT - FINAL ARBITER
• The Supreme Court by tradition and in
our system of judicial administration,
has the last word on what the law is; it
is the final arbiter of any justifiable
controversy. There is only one
Supreme Court from whose decisions
all other courts should take their
bearings. Commissioner of Internal Revenue
(CIR) v. Michel J. Lhuillier, G.R. No. 150947, July 15,
2003, 406 SCRA 178.
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INTRODUCTION
The CA and the CTA are now of the same level
pursuant to RA 9282. Decisions of the CA are thus no
longer superior to nor reversive of those of the CTA. xxx
all rulings of this Court on questions of law are
conclusive and binding on all courts including the CA.
All courts must take their bearings from the decisions of
this Court. Systra Philippines, Incorporated v. CIR, G.R. No. 176290, Res. Sept. 21,
2007, 533 SCRA 776.

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INTRODUCTION
Under the principle of stare decisis or rule of
binding precedent, the general rule is that decisions
of the Supreme Court have the force and effect of
law and are binding upon the courts. However, this is
not a hard and fast rule. There should be no blind
adherence to precedent. What is important is that
the court decision must be right. CIR v. PLDT, G.R. No.
140230, Dec. 15, 2005, 478 SCRA 61.

No doctrine or principle of law laid down by the
Supreme Court in a decision rendered en banc or in
division may be modified or reversed except by the
Supreme Court sitting en banc. Section 4 (3), Article VIII,
1987 Philippine Constitution

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INTRODUCTION
Supreme Court Minute Resolutions
constitute res judicata only with
respect to the same subject matter
and the same issues concerning the
same subject matter. They are not
binding precedent. Philippine Health Care
Providers, Inc. v. CIR, G.R. No. 167330, Sept. 18, 2009, 600 SCRA
413, Resolution reversing June 12, 2008 Decision.

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CTA HAS JURISDICTION OVER SPECIAL CIVIL ACTION FOR
CERTIORARI ASSAILING AN INTERLOCUTORY ORDER ISSUED
BY RTC IN LOCAL TAX CASE

The authority of the CTA to take cognizance of
petitions for certiorari questioning interlocutory
orders issued by the RTC in a local tax case is
included in the powers granted by the
Constitution as well as inherent in the exercise
of its appellate jurisdiction. The exercise by
two judicial bodies, CA and CTA, of jurisdiction
over the same subject matter will result to split
jurisdiction. The City of Manila, represented by Mayor Jose L. Atienza,
Jr., et al. v. Hon. Caridad H. Grecia-Cuerdo, in her capacity as Presiding
Judge of the RTC Br 112, Pasay City; et al., GR 175723, Feb. 4, 2014.
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. May 2. Represented by its President.CTA En Banc assumed jurisdiction on the special civil action of certiorari assailing CTA Division’s Resolution which denied the Motion for Judgment on the Pleading citing The City of Manila. Nonetheless. 4. 2014. Hon. et al. Dacudao Brothers. Dacudao v. 2nd Div. CTA EB 819. v. Res. Grecia-Cuerdo. not to its invalidity and defectiveness) to make judgment on pleadings proper. GR 175723.. Caridad H. 2014.. Feb.. 7 . et al. Antonio G. et al. Inc. no grave abuse of discretion by CTA Division in denying petitioner’s Motion for Judgment on the Pleading as no admissions made by respondent (only admission is to admit existence of FDDA. CTA.

INTERLOCUTORY ORDER IN CRIMINAL CASES ISSUED BY CTA DIVISION IS APPEALABLE TO SC VIA CERTIORARI UNDER RULE 65. Dr. Joel C. June 11. Amendments are formal when they do not charge another offense different from that charged in the original one. People. Mendez v. GR 179962.  The amendments sought by the prosecution are merely formal and not substantial. or do not alter the prosecution’s theory of the case & affect the form of defense accused has. AMENDMENT OF INFORMATION  The aggrieved party’s only remedy after failing to obtain reconsideration of an interlocutory order issued by CTA Division in a criminal case is to file a petition for certiorari under Rule 65 with the SC. 8 . 2014.

CTA’s LIMITED JURISDICTION. Batangas. the CTA correctly dismissed the petition for lack of jurisdiction. Municipality of Malvar.” Smart Communications. Inc. 9 . 18. Feb. 18 are not in the nature of local taxes. GR 204429. and Smart is questioning the constitutionality of the ordinance. “Considering that the fees in Ordinance No. v. 2014. TAXES vis-à-vis FEES CTA has no jurisdiction over cases involving validity of an Ordinance imposing fees and not taxes.

4. BIR Rulings & RMOs fall under the quasilegislative or rule-making powers in the 1st par. 1997 NIRC but do not fall under “other matters” over which CTA has jurisdiction. Camacho. CTA’s jurisdiction does not include cases where the constitutionality of a law or rule is challenged citing British American Tobacco v.A. 163583. G. 10 . 2014. Aug. Egis Project S. Sept. 20. CTA EB 1023. 2008. The Secretary of Finance & CIR. 16. 722010 & 1-2000 which was denied by the CIR in BIR Ruling ITAD 2013-11 & by Sec. of Sec.CTA’S JURISDICTION EXCLUDES THE POWER TO RULE ON THE CONSTITUTIONALITY OR VALIDITY OF A LAW/RULE/REGULATION CTA has no jurisdiction to try the petition assailing the constitutionality or validity of RMO Nos. v.R. of Finance.

CTA’S JURISDICTION ON OTHER MATTERS. 2014. Philippine Aluminum Wheels.. Inc. CIR v. Hambrecht & Quist Philippines. Nov. 2008 declaring the taxpayer’s availment of amnesty as invalid. 11 . GR 169225. 17. is appealable to CTA under “other matters” considering that Tax Amnesty is a collection matter citing CIR v. CIR’s Letter dated July 16. 2010. FINALITY OF ASSESSMENT DOES NOT BAR AVAILMENT OF AMNESTY PER RA 9480 Compliance with the amnesty requirements entitles the applicant to the benefits of the law even if the assessment is final and executory per Tax Amnesty Law of 2007 (RA 9480). May 19. Inc.. CTA EB 994.

07-117472). is not an entity subject to VAT but to percentage tax. CTA AC 111 (Civil Case No. 12 . City Financial Corporation. 2014 & Res. The City Treasurer of the City of Manila v. Money claim is merely incidental to the central issue of whether respondent is subject to tax imposed under Sec. Citifinancial Corp. 21 of the Manila Revenue Code which imposes tax on VAT entities. May 28. July 21.JURISDICTION OF RTC ON CASES INCAPABLE OF PECUNIARY ESTIMATION RTC has jurisdiction over cases incapable of pecuniary estimation. 2014.

2014. Sec. 07-117472). City Financial Corporation. 109 (aa) NIRC. May 28. The City Treasurer of the City Manila v. 21(A) of MRC subjects only VAT entities to tax. Sec. CTA AC 111 (Civil Case No. 13 .continuation It is expressly exempt from VAT under Sec. 19 already imposes 30% of 1% tax on gross receipts derived by banks and other financial institutions.

i. Assessment must still comply with test of reasonableness. must not be arbitrary & capricious. 2014. CTA 8315. 14 . et al.e. April 30. 2014 & Res.  Assessments based on findings from surveillance are deemed prima facie correct but will not apply if it lacks due process. CIR. Both notices were declared void for failure comply with RMO 003-09.e.. Elric Auxiliary Services Corporation/Sacred Heart Gas Station v. no factual basis of the surveillance.. no details of the findings of the investigating office & did not state particular provision violated. i.CTA’S JURISDICTION ON NULLIFICATION OF A 48HOUR NOTICE & 5-DAY VCN ISSUED BY THE CIR  The nullification CIR’s 48-hour notice and 5-day Vat Compliance Notice (VCN) is within CTA’s jurisdiction under “other matters”. Feb. 17.

2014 & Res. July 11. 103. Sept.. The acts sought to be enjoined are outside its territorial boundaries. 2014 15 .. CTA AC No.RTC’S JURISDICTION OVER LOCAL TAX CASES RTC Makati has no jurisdiction over action for Injunction assailing the decision of the City Treasurer of Tuguegarao City which denied the protest on assessment for deficiency local franchise tax. Jurisdiction lies with RTC of the 2nd Judicial Region where the City of Tuguegarao is part of. City of Tuguegarao. 30. PLDT v. et al.

July 28.. G. 16 . CA.SUPERVISION & REGULATION OF CUSTOMS BROKERAGE PROFESSION IS NOW WITH PROFESSIONAL REGULATORY BOARD FOR CUSTOMS BROKERS (PRBCB)  SC upheld the RTC ruling nullifying BOC’s CAO 3-2006 which requires the accreditation by the BOC of customs brokers who intend to practice before the BOC. Airlift Asia Customs Brokerage. et al.  The Customs Brokers Act of 2004 transferred the supervision and regulation of the customs brokerage profession from the Board of Examiners (of which COC is an ex-officio chairman) to the Professional Regulatory Board for Customs Broker (PRBCB). Inc. Benedicto v. 183664. 2014. No.R. and Allan G.  Certified customs brokers can practice their profession in any collection district without securing another license from BOC (Sec. 19 of RA 9280).

April 1. EVIDENCE  CTA’s jurisdiction .principal amount of taxes & fees. People.61). exclusive of charges & penalties is P1M or more (here P1.CTA’S CRIMINAL JURISDICTION. Roel Paquit Sayson v.779. 17 . 2014.770. Jurisdiction of a court over a criminal case is determined by the allegations in the complaint/information & not by the result of the evidence presented at the trial. nor more than 12 yrs imprisonment & fine of P8.  Accused-petitioner was sentenced to indeterminate penalty of not less than 8 yrs & 1 day.000 for smuggling of 15 units of Kia Sportage & Hyundai Galloper. CTA EB Crim 025.

Lyndon F.  Testimony of Atty. et al. Roel Paquit Sayson v. July 3. 18 . CTA. People. et al. GR No. April 1. Felix Capuno. although not formally offered but offered during hearing before the BOC. CTA EB Crim 025.continuation  Affidavit of Legal Disclaimer containing accused’s admission as the sole proprietor of Trex Eve. GR No.. 2014. v. a sole proprietorship. 1983. 2000) & was given evidentiary weight as a notarized document. L-55373. linking accused as the owner of Trex Eve is a positive declaration of a credible witness on affirmative matters which is given more weight than denials of the accused. citing Gliceria Carandang-Collantes. formed part of the records of the case (COC v.. July 25. & accused Sayson were treated one & the same. Trex Eve Auto Sales & Services. 132929. De los Santos.

Officemetro Philippines.770. CTA 8382.) v. Where the basic assessed tax exceeds P1M. 15. INC. Officemetro Philippines. INC. Res.40 plus interest & surcharge was upheld except assessment arising from condominium dues. CIR. 2014. prior approval of the National Evaluation Board is a condition sine qua non.754.) v. 2014 RMC 65-2012 issued on Aug. final withholding VAT & FWT in the modified amount of P18. CIR.CONDOMINIUM FEES ARE NOT SUBJECT TO INCOME & WITHHOLDING TAX Condominium dues are not subject to EWT. CTA 8382. Amount offered in compromise agreement was treated as initial payment on deficiency taxes. June 3. Assessment for 2005 deficiency EWT. Inc. 246 of 1997 NIRC on the non-retroactivity of rulings. Inc. Aug. 31. 19 . (formerly REGUS CENTRES. 2012 is NOT applicable for violation of Sec. (formerly REGUS CENTRES.

v.342. THUS NO LONGER SUBJECT TO ORDINARY INCOME TAX The assignment to GPAP-Singapore of the shares of stocks of GPAP-Phils subscribed by HSBC is a sale of capital asset. CTA Case No.“GOODWILL” AS PART OF THE TOTAL CONSIDERATION IN THE SALE OF ASSET IS SUBJECT TO THE SAME TAX AS THE SALE OF THE ASSET. 8428.378. Br. FAN was cancelled. The HongKong & Shanghai Banking Corporation Limited –Phil.921) in the Share Sale And Purchase Agreement between HSBC & GPAP-Singapore which carries with it the “Goodwill” connected to the business is subject to CGT. Hence. 20 . CIR. the total consideration (P899.821) is not treated separately. CGT. Oct. 2014. 13. The “Goodwill” as additional paid-in capital (P885.e. i.

FOREX GAIN ON HEDGING ACTIVITY NOT ATTRIBUTABLE TO REGISTERED ACTIVITY BY A PEZAREGISTERED ENTITY IS SUBJECT TO INCOME TAX CASE RULING Aegis PeopleSupport Inc. not covered by the ITH. Aug. [Formerly PeopleSupport (Philippines). 2014. CTA EB 996. Petitioner failed to prove that forex gain is entirely attributable to its registered activity.95 allegedly People Support (Philippines).087.] v. Inc. denied. CTA 8267. hence. 4. [Formerly The claim for refund of P66. The movement of Citibank dollar accounts shows other credits which can be part of hedging gain that is not directly attributable to BOI or PEZA-registered activity. Aegis PeopleSupport Inc. v. Inc. 21 . The forex gain on hedging activity is outside the registered activity as a contact center. CIR.830. 2014.48 was denied for failure to prove that forex gain arose from activities with income tax incentive. erroneous payment of income tax for 2007 was CIR.177.854. Refund of alleged 2008 excess income tax payment of P38. May 28.

organization or govt. Oct. nonprofit. CIR. GR 125355. 2014. 30(G) of 1997 NIRC & Sec. 1. June 20. 5 of RR 14-2007) Citing CIR v. entity is liable to VAT on sale of services for a fee. The waiver was invalid for lack of date of acceptance by respondent & no proof of receipt by petitioner. 2014 & Res. However. Inc. CTA 8336. CA & COMASERCO. Kabalikat Para Sa Maunlad Na Buhay. even a non-stock. 2000. Mar. v. 30.INCOME FROM MICRO-FINANCING ACTIVITY OF AN NGO IS TAXABLE A non-profit civic organization on its income from micro-finance activity & which is not a registered activity. (Sec. all assessments were cancelled due to prescription. is subject to income tax & VAT. 22 .

H. 23 . v.TAX DEDUCTIONS MUST BE SUBSTANTIATED  Assessment for 1997 deficiency IT of P4. 173373. 2013. & professional fees & rental expenses. mngt. Official receipts cannot be substituted by Withholding tax returns. GR No. CIR. July 29.536. cash vouchers. Inc.  On the alleged losses due to fire & theft. lessors certifications & contracts of lease in claiming security & janitorial expenses. Tambunting Pawnshop. submission of Sworn Declaration of Loss is mandated by RR 12-77.15 was upheld for failure to substantiate the deductions.87.

CIR. Mar. v.INTEREST EXPENSE CANNOT BE DEDUCTED IF NOT PROVEN TO BE RELATED TO BUSINESS Petitioner failed prove that the loan was a reasonable necessity to its trade or business. The financial statements did not indicate how the proceeds from loan were used. 12. 2014. Hence. Inc. Festo Holdings. CTA 8334. assessment for 2008 deficiency income tax arising from disallowance of interest expense on a loan obligation previously deducted from taxable income was UPHELD. June 2. 24 . 2014 & Res.

If the expense can be directly attributed in providing the PEZA-registered services. the test is the direct relation of the expense in the rendition of the PEZA-registered services. CTA 8179.DETERMINATION OF DIRECT COSTS FOR A PEZA-REGISTERED ENTITY  In determining the direct costs for purposes of computing the 5% GIT of a PEZA-registered entity. 25 . East Asia Utilities Corporation v.  RR 11-05 is not an all-inclusive list of expenses but merely enumerates the expense that can be considered as direct costs. then it should be treated as direct cost. CIR. Assessment for deficiency 2006 IT arising from disallowed items of COS was upheld with modification. 2014. May 21.

MATCHING PRINCIPLE Excess of income payments per alphalist over expense per ITR & FS is not equivalent to undeclared income. v.400. 8213. Feb. CIR. Shinko Electric Industries Co. 10. Assuming that there is unaccounted source of cash or undeclared income. 26 . CTA Case No.96 & compromise penalty were cancelled. Discrepancy of expenses per Alphalist & Financial Statements/ITR is a mere conjecture not valid to support the finding of taxable income. overclaimed representation & entertainment. Assessment with respect to 2006 deficiency income tax of P28. Res. Assessments were cancelled & withdrawn. 2014. there are also payments or expenses which were unreported. v.. Ltd. 8182. disallowed expenses for non-withholding & nonwithholding of dues were not considered income. Alleged unsupported expenses. East Asia Power Resources Corp. CTA Case No. CIR. Related expenses offset the undeclared income. April 14. No proof was presented to show that the difference brought about by the mathematical comparison was an actual source of taxable income.036. 2014.

260.123. CTA 8227.85 cannot be equated to “undeclared income”. A taxpayer is free to deduct from its gross income a lesser amount. 27 .193. Sept. or not claim any deduction at all. VAT & DST amounting to P152.107. Toyota Manila Bay Corporation v. What is prohibited is to claim a deduction beyond the amount authorized.UNDECLARED DISBURSEMENT IS NOT EQUIVALENT TO UNDECLARED INCOME SUBJECT TO TAX Assessment for 2004 deficiency income tax. 3. Imposition/Assessment of income tax is when the income was received or realized & not when there is an undeclared disbursement. The undeclared disbursements amounting to P206.890. CIR. 2014.38 (plus interest) to exclude assessment arising from alleged “undeclared disbursements”.752.76 was modified by CTA to P1.

2009. 2014 & Res.925. Metro Pacific Corporation [now NEO Oracle Holdings. NON-RETROACTIVITY OF RULING DOES NOT APPLY ON AN INVALID RULING Excess of BV over SP of BLC shares sold by petitioner is subject to deficiency donor’s tax & surcharge of P170. 2014. 28 . 7 NIRC. BIR Ruling DA [DT-065)717-2009. CIR for Legal Service is not binding since it is merely interpretative. June 11. Nov. Inc. 27. CIR. CTA 8318. Sept. signed by Asst.EXCESS OF FMV/BOOK VALUE OVER SELLING PRICE IS SUBJECT TO DONOR’S TAX. No intent to donate is necessary under Sec. 16.] v. Ruling of first impression can only be issued by CIR per Sec.229. 100 NIRC.14 plus deficiency & delinquency interest.

not per se controlling. Sept.] v.  U. jurisprudence merely persuasive. 29 . revoked BIR Ruling DA [DT-065)717-2009.S. Metro Pacific Corporation [now NEO Oracle Holdings. 2011.  RR 6-2008 – defines FMV of stocks not listed and traded as Book Value.  RR 6-13 new definition of FMV using Adjusted Net Asset Method. 2014. CIR. March 2. Inc. FMV excess over selling price deemed gift. 2014 & Res. CTA 8318. June 11.continuation  Non-retroactivity of ruling under Sec. 16. RMC 25-2011. 246 NIRC does not apply.

Maxicare Healthcare Corporation v.157. It was directed to pay 2008 VAT deficiency excluding prescribed portion in the amount of P157.754. 2014. CTA 8441.47 plus deficiency & delinquency interest.HMO IS VATABLE ON GROSS RECEIPTS WITHOUT DEDUCTIONS HMO is subject to VAT on its gross receipts including amount allegedly earmarked but not proven paid to unrelated third party or received as reimbursement for advance payment on behalf of another which does not redound to the benefit of the payor. April 21. 30 . CIR.

2014. April 21.continuation Sec. RR 4-2007 amended definition of gross receipts under Sec. CIR.108-4 of RR 162005 to include “xxx except those amounts earmarked for payment to unrelated third (3 rd) party or received as reimbursement for advance payment on behalf of another which do not redound to the benefit of the payor”. 10. RMC 039-10 in accordance with RR 16-2005. 4. 4.108-3 (k) of RR 16-2005 which specifically refers to HMOs. Maxicare Healthcare Corporation v. CTA 8441. BUT NOT Sec. 31 .

Sunlife Assurance Company of Canada. Old Cooperative Code (PD 175) & subsequent RA 6939 do not apply. 14. 2005. LAW PREVAILS OVER REGULATION A non-stock mutual life insurance company need not register with Cooperative Development Authority in order to be exempt from DST on insurance policies citing RP v.. 2014. Oct. PRINCIPLE OF STARE DECISIS. 199 of 1997 NIRC & under Insurance Code. 197192. GR No. CIR vs. There is no such requirement under Sec. Ltd. June 4.REGISTRATION WITH CDA IS NOT NECESSARY TO BE EXEMPT FROM DST UNDER SEC. GR No. 473 SCRA 129 as a binding precedent. 32 . 199 OF 1997 NIRC. The Insular Life Assurance Co. 158085.

Ltd. GR No. 48-91 requiring the submission of the Certificate of Registration with the CDA cannot prevail over the clear absence of an equivalent requirement under the Tax Code.continuation Section 8 of RMC No. The Insular Life Assurance Co.. Basic law prevails over an administrative ruling. 2014. CIR vs. June 4. 33 . 197192.

ELECTRONIC PAYMENT INSTRUCTION FROM
ABROAD BY A NON-RESIDENT INVESTOR TO A
LOCAL BANK IS NOT SUBJECT TO DST

The e-payment messages from abroad by nonresident investor clients of HSBC which contains
instructions to debit their local or foreign currency
account in the Philippines to pay recipients
residing in the Philippines is not subject to DST.
The e-messages are not negotiable instruments
under Sec. 181 of the 1997 NIRC,but mere
memoranda; it is parallel to an automatic bank
transfer of local funds from SA to CA in one bank.
Refund granted. The Hongkong and Shanghai Banking
Corporation Limited-Philippine Branches v. CIR, G.R. Nos. 166018 & 167728,
June 4, 2014.
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INTERCOMPANY BORROWINGS EVIDENCED BY
CASH RECEIPTS & DISBURSEMENT VOUCHERS
ARE SUBJECT TO DST
 Assessment for 2007 deficiency DST on intercompany debt
instruments was upheld while deficiency DST on lease
contract was cancelled upon proof of payment. Sec. 179 of
1997 NIRC imposes DST on all debt instruments including
Cash & Journal vouchers evidencing intercompany
loans/advances implemented by RR 13-04.
 A foreign corporation is not the same juridical entity as its
branch office in the Philippines for purposes of imposing
DST on intercompany borrowings citing Marubeni Corporation v.
CIR & CTA, GR No. 76573, Sept. 14, 1989. E.E. Black Ltd.-Phil. Br. v.
CIR, CTA 8526, April 10, 2014 & Res. June 25, 2014.

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DST ON SALE OF SHARES IS BASED
ON PAR VALUE
DST on sale of shares of stocks is computed
based on the total par value of the shares & not
on their gross purchase price. (Sec. 175 of the 1997
NIRC, as amended & Sec. 4 of RR 13-04) Refund of
erroneously paid 2009 DST of P3,066,823.75 on
sale of shares of stocks was granted. CIR v. Eco
Leisure and Hospitality Holding Company, Inc., CTA EB 1013, Jan. 14,
2014 & Res. July 17, 2014.

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37 . Nov.PURCHASE OF ASSET THAT DOES NOT RESULT TO MERGER IS NOT SUBEJCT TO DST Bank of Commerce was not held liable for the 1999 deficiency DST of Traders Royal Bank upon showing in the Purchase and Sale Agreement that there was no merger between the said banks. 180529. Bank of Commerce. 2013. CIR v. GR No. 13.

NEWLY CONSOLIDATED RURAL BANK IS NOT ENTITLED ANEW TO TAX EXEMPTION UNDER RA 7353 The claim for refund of erroneously paid 2012 GRT amounting to P152. July 7. 18 of RA 7353. Inc. 2014.35 was denied. It is covered by Sec. A newly consolidated rural bank is not entitled anew to tax exemption under Sec. 15 of RA 7353 or “The Rural Banks Act of 1992” when the constituent rural banks had previously availed the same tax exemption. 38 . CIR.511. incentives specifically for merged or consolidated entity which excluded tax exemption.746. April 11. (A Rural Bank) v. CTA 8640. 2014 & Res. One Network Bank.

306 erroneously paid advance VAT on refined sugar was granted.DULY REGISTERED COOPERATIVES TRANSACTING BUSINESS WITH MEMBERS ONLY ARE EXEMPT FROM VAT Petitioner’s claim of P9.. et. 109 (L) of the 1997 NIRC & Art. It faithfully complied with the requirements to be exempt: (1) Certificate of Registration with CDA. 10. 39 . Victorias Milling Company Farmers Multi-Purpose Cooperative v. CTA 8658.537. The claim was fully substantiated & was filed with the two-year prescriptive period under Sec. 60 of Philippine Cooperative Code of 2008 or RA 9520. (2) Certificate of Good Standing issued by CDA. It is a duly registered cooperative transacting business with members only. Sept. 2014. and (3) Certificate of Tax Exemption issued by BIR. CIR. 229. exempted from VAT under Sec. hence. al.

CIR & COC v. SPECIAL LAW PREVAILS OVER THE GENERAL LAW PAL’s charter. Aug.858 excise taxes on its 2007 importation of cigarettes and alcoholic drinks for its commissary supplies. Upon showing compliance with the conditions for exemption from excise tax. 212536-37.550. is a special law which has not been expressly revoked by the NIRC of 1997. G. as amended by Sec.. 40 . 2014. Inc. 27. No. PD 1590. 6 of RA 9334 which states that “the provisions of any special or general law to the contrary notwithstanding. 6 of RA 9334.” did not expressly repeal the exemptions granted under PAL’s franchise because it did not specifically identify PD 1590 as one of the acts intended to be repealed.EXEMPTION FROM EXCISE TAX. The phrase under Sec. PAL was granted a refund of P 4.R. Philippine Airlines.

2014. Inc. L-15290. CIR.R.BEST EVIDENCE OBTAINABLE RULE. 50% RULE OF APPROXIMATION Assessment for 2007 deficiency IT & EWT was affirmed with modifications. Collector of Internal Revenue. Aug. CTA 8375.  CTA upheld the use of Best Evidence Obtainable  50% Rule of approximation (Secs. 41 . 1. Village-Green Hog Farm. 6 (B) of 1997 NIRC) citing Mariano Zamora v.4(c) of RMC 23-2000.3 & 2. G. implementing Sec. 2. v. No. May 31. 1963.

GR No. 15. June 5. Inc.208. CTA 7948..173. 2014. Inc. The case of CIR v. 2010 does not apply. 17. no LOA was issued but a Letter Notice (LN). & Res.35 (basic tax & surcharge) plus deficiency & delinquency interest. Absence of LOA does not invalidate FAN. Nov. CIR. assessment issued outside the scope of LOA is void (“for the period 1997 and unverified years”) Here. In Sony case. Sept. HMO – GROSS RECEIPTS Assessment for 2006 deficiency VAT was affirmed with modifications requiring payment of P223. 178697. 42 . 2014.NON-ISSUANCE OF LOA DOES NOT INVALIDATE FAN. Medicard Philippines. (Medicard) v. Sony Philippines.

continuation

 Sec. 6 of 1997 NIRC authorizes assessments
other than by LOAs.
 RMO 30-2003 provided system-generated
issuance of LNs as a mode of informing
taxpayers of the discrepancies.
 RMO 42-2003 authorized “no-contact-auditapproach” assessment & issuance of LNs
without need of conducting examination of
taxpayer’s books. Medicard Philippines, Inc. (Medicard) v.
CIR, CTA 7948, June 5, 2014.
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continuation

 On payments to doctors & hospitals. The amount
earmarked for future payment to doctors & hospitals are
VATABLE for lack of proof that they are “money in trust”.
 On earnings from its clinic & laboratory facilities. It is
Vatable for lack of proof that the amount received was
“segregated” for medical & lab services at the time
premiums were received.
 Receipts from PEZA & BOI registered clients are zerorated; the others without certification are subject to VAT.
 Vouched Commission expense for broker and direct
salaries included in the Cost of Sales should not be
deducted from gross receipts. Medicard Philippines, Inc.
(Medicard) v. CIR, CTA 7948, June 5, 2014.

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ASSESSMENT ISSUED OUTSIDE THE SCOPE OF
LOA IS VOID; CASES BEFORE CTA ARE
LITIGATED DE NOVO
Assessment for 2006 deficiency DST, VAT, IT & EWT.
LOA covers only 2006 hence, 2005 DST Assessment is void while
2006 VAT Assessment has prescribed. 2006 DST assessment did
not prescribe as petitioner failed to submit or even prove
compliance with respect to time for filing & payment of DST [Sec.
200 (B) of 1997 NIRC]. Petitioner failed to present evidence to
disprove assessment on EWT & IT. CTA is a court of record, it is
required to conduct a formal trial to prove every minute aspect of
any claim. Cases before the CTA are litigated de novo. 2006 IT,
EWT & DST assessments were sustained. AFP General Insurance
Corporation v. CIR, CTA 8191, Mar. 13, 2014. In Amended Decision dtd
Sept. 1, 2014, VAT 2006 Assessment was upheld based on falsity
(30% rule) due to substantial underdeclaration of sales.
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BIR’s Letter Ruling dated March 10. An assessment that has become final & executory for failure to protest within the statutory period does not fall within “other matters”. .. 2009 became final for failure to protest within 30 days. 2014. Esmeralda M. June 3.FAILURE TO PROTEST. 2010 (after lapse of 30 days to file protest). Pagente v. CTA EB 1030. Adelardo K. Tabule. PAN REMAINED VALID EVEN IF ISSUED BY DE FACTO OFFICER  FLD/FAN received on April 14. On Nov. it filed a letter to the BIR captioned “Request for Ruling”. 8. et al.  PAN remained valid even if the one who issued it was considered to be a mere de facto officer. 46 . 2011 resolving the Request for Ruling does not fall within “other matters” clause as it arose from undisputed assessment. Hon.

18. 2013 & Res. 2014. Jan. CTA 8331. 2011. Assessment Notices were received on Dec. 28.. 2014 & Res. 3. The Preliminary Collection Letter amounting to P14. CIR. cancelled. SVI Information Services Corporation v. Feb. Mar. PAN was not delivered to petitioner. Mar. 28. It was not given opportunity to respond to PAN. CIR v. 21. 2007 without any PAN. Nov.44 was cancelled & withdrawn. Assessment for 2004 deficiency EWT was CTA EB 1011. Assessment for deficiency IAET for 2007 was cancelled for lack of due process.PAN IS PART OF DUE PROCESS CASES Yumex Philippines Corporation v.761. 2009. 28. 228 of the 1997 NIRC & RR 12-99) 47 . La Frutera. Two Formal Letters of Demand (FLD) & 2014. FAN & PAN were all received by the petitioner on the same day. 10. Aug. Inc.513. CIR. 4. (violation of Sec. PAN was received only on Aug. 2014 FINDINGS/RULING The FLD. CTA 8496.

3 of RR 12-99 mandates that PAN must be issued before issuance of FAN/FLD. 48 . Feb. 2014. 18-2013 amending Sec. 21.continuation  Even RR No. SVI Information Services Corporation v. 10. 2014 & Res. CIR. CTA 8496. Mar.

Direct Container Line Phils. EXCEPTION WHERE PAN IS NOT NECESSARY  Assessments for 2003 deficiency IT. 2014. Inc. 228 [b]. 1997 NIRC). CIR.  The Post Reporting Notice (Notice) showed mere computation without legal bases. thus. Manila instead of 15/F Sec. FWT. Magsaysay Center. cannot take the place of PAN. 4. CTA EB 1019. PAN was sent to taxpayer’s old address at 5/F R. POST REPORTING NOTICE IS NOT A SUBSTITUTE OF PAN. when tax withheld does not tally with the amount actually remitted (Sec.  Assessment for deficiency WTC was upheld as it falls in the exception where PAN is not required.. PAN was sent via ordinary mail in violation of RR 12-99 that it be issued at least by registered mail. 1680. Inc. VAT. 49 . Aug.) v. (Now Vanguard Logistics Services Phils..PAN IS PART OF DUE PROCESS. A Ramon Magsaysay CTR Roxas Blvd. FBT & DST were cancelled. Malate.

Inc. Inc. a Warehouse Asst. CTA 8257. No evidence that written report of 1043. 2014. FLD. a tenant at SM City Pampanga. a Receiving Officer. constructive service was made (RR 12-99). 50 . 2014. denied receipt of FAN. CTA 8286. Gallardo and Attempted service to unauthorized personnel. CIR.NO VALID SERVICE OF FAN CASES FINDINGS/RULINGS CIR v. July 7. Petitioner. 2014. June 10. at SM City Pampanga. Receipt by unauthorized person. No proof that Brian David. 2005 Assessment was cancelled. is authorized to receive letters on behalf of petitioner & he did not confirm petitioner’s receipt of the letter. South Entertainment Gallery. Final Notice Before Seizure & Warrant of Distraint for 2007 were cancelled. South Entertainment Gallery. WT Assessment was cancelled. refusal will not Associates. v. even though witnessed by 2 other revenue officers. CTA EB give rise to constructive service. CIR.e. i. v. Amended Dec. July 9.FAN.

old address despite notice to CIR of the change of 28. 2014 2006 Assessments were cancelled and set aside..VALID SERVICE & RECEIPT OF PAN & FAN NECESSARY CASES RULINGS Coolmate Corporation v. Disputable presumption that assessment notice was received in the regular course of mail will not lie if CIR failed to prove FAN was sent to petitioner’s proper address. Both CIR. Sept. PAN was received but not FAN. CTA 8394. CTA 8264. the Registry Return Receipt showed unauthenticated signatures. 51 . 2014 & Res. Both the amended PAN & FAN were sent via registered mail. PAN was personally received by a person not proven to be an employee and an authorized agent of petitioner. 2014. Manuel B. CIR. Aug. FAN for 2006 deficiency income tax was null & void. et al. Palaganas doing business under the name and Style STEMIKO COMMERCIAL v. PAN & FAN were mailed via registered mail to petitioner’s May 19. 17. address.

May 22. & Liquigaz Philippines Corp. CIR. the assessment shall be void” applies to FDDA. FDDA with respect to EWT & FBT were cancelled while assessment on WTC was sustained. 2014. 52 . otherwise. 228 of the 1997 NIRC & RR 1299 that “the taxpayer shall be informed in writing of the law and the facts on which the assessment is made. v. CIR v. The requirement under Sec.FINAL DECISION ON DISPUTED ASSESSMENT (FDDA) MUST BE BASED ON LAW AND FACTS  FDDA is void when it contains different amount than that of FAN without stating the factual basis of the new computation or details of assessment.  FDDA determines the final tax liability of the taxpayer appealable to CTA. CTA EB 989 & 990. Liquigaz Philippines Corp.

Final Notice was received on Jan. 3. 2014. 135210. G. 2001.R. Philippine Dream Company. 31.CIR’s FINAL DECISION APPEALABLE TO CTA The court considered the Final Notice Before Seizure (Final Notice) as the CIR’s final decision appealable to CTA within 30 days from receipt citing CIR v. Notice of Levy on Real Property & CIR’s correspondence were only taken by the CIR to further emphasize her final decision contained in the Final Notice appealable to the CTA. CTA EB 986. 53 . 4. July 11. The subsequent issuance of Warrant of Distraint and/or Levy. Isabela Cultural Corporation. but the petition was filed only on Oct. CIR. July 25. 2007. it has 30 days or until Feb. 2007 to appeal. Petition was filed out of time. v. Inc. 361 SCRA 71. No. 2007.

CESO V. BIR Letter of a Regional Director. Castalloy Technology Corp. Atty. WHEN BIR LETTER IS NOT A FINAL DECISION APPEALABLE TO CTA Petitioner immediately filed a Petition without protesting the FAN. 54 . CTA 8244. 2014 & Res. as RD. 2014. BIR Region No. Petition assailing the Formal Letter of Demand (FLD) & FAN on 2009 deficiency Donor’s Tax was prematurely filed.. with FLD & FAN. 30. 13. v. June 9.PREMATURE APPEAL. acting for & in behalf of the CIR. Cebu City. et al.. Jose Tan. indicating “that his office is left with no alternative but to issue Final Assessment Notice reiterating the demand for the payment of the deficiency donor’s tax shown therein to protect the interest of the government” is not a final decision appealable to the court. Jan.

55 . 2011. CTA 8401. 14 in 2010. Alocilja as RD of RR No. Albert B. Petitioner failed to protest the FAN within 30 days from receipt on Dec. 2014. validity of the assessment may no longer be questioned on appeal. 23. 25. v. FAILURE TO PROTEST CTA has no jurisdiction when assessment has not been disputed. 2010. Assessment attained finality when taxpayer failed to file a protest within the time allowed. hence. White Rose Merchandising. et al.PERIOD TO PROTEST HAS PRESCRIBED. May 2. Inc. The “Petition” with CIR was filed only on Oct..

(2) Notarized CTA EB 1011. 21. v. 1991 & CTA 8155. RMO 20-90. Sept.. June 6. CIR. & indicate date of acceptance.. 28. CIR v. v. Inc. (4) Type of tax due was not indicated. 21. 1993 were defective for failure of CIR to sign Res. La Frutera. 17. 1997 NIRC. Inc.WAIVER OF PRESCRIPTION CASES RULINGS/FINDINGS Dole Phils. 28. signatory were not secured by the CIR & were not CTA 8442. (2) No date of acceptance by CIR’s representative. 222. 1. 4. 2014 presented in court. 2014 & Feb.  WAIVERS must strictly comply with the provisions of law & implementing regulations. 2014. 2007. and (3) No fact of receipt by petitioner in the original copy of the waiver. (3) Nothing in waiver that shows petitioner was furnished a duly accepted waiver. on Dec. 1990. only on Dec. (1) No date of acceptance by the CIR. RDAO05-01) 56 . Mar. & (5) No evidence to show authority of the signatory. Aug. Inc. 2008 or a year after it was executed 2014. CIR. Transitions Optical (1) Written & notarized authorities of petitioner’s Philippines. June 9. The waivers dated Aug. (Sec.

10-YR PRESCRIPTIVE PERIOD TO ASSESS APPLIES WHEN THERE IS FALSITY There was falsity when petitioner failed to present documents to substantiate the unsupported excess input VAT & petitioner’s repeated failure to submit/present its books of accounts & acctg. Archipelago Motors Corp. The Waiver was valid. CIR. Revenue District Officer who signed it was authorized to sign & accept waivers for cases pending investigation/ verification/ reinvestigation in the RDOs per RDAO 05-01. 2005 was made within the 10-yr period. 57 . 2014. 2001 Assessment for deficiency VAT was upheld. FAN for 2001 received on July 28. CTA Case 8321. records placed the CIR at a disadvantage making the 10-yr period from time of discovery of falsity the applicable prescriptive period. Aug. v. 1.

from nonfiling of returns to false or fraudulent return. Assessment for deficiency EWT for Jan. 203 applies to EWT. cannot be given the benefit of 10-yr prescriptive period under Sec. CIR v. CIR based its argument on the allegation that Isuzu failed to file 2005 EWT returns which was ultimately disproved by the latter. 2014. The 3-yr period under Sec. CHANGE OF THEORY ON APPEAL IS NOT ALLOWED During trial. CTA EB 1005. On reconsideration.-Nov. without additional evidentiary support. CIR change its theory. 222 of the 1997 NIRC.PERIOD TO ASSESS. 58 . 2005 was cancelled & withdrawn due to prescription. Aug. CIR’s change of theory. Isuzu Philippines Corporation. 4.

9. from start of importation in July 2001. ROYALTY PAYMENTS FORM PART OF TRANSACTION VALUE IN COMPUTING IMPORT DUTIES  Assessment for deficiency VAT for July 1. Considering the compliance audit on June 2004 was within the 3-yr period. 31. The 3-yr prescriptive period applies as no waiver of prescription was executed. June 24. 2013. 59 . 2008 & Dec. Ajinomoto Philippines Corp. to wit: (1) existence of fraud. (3) compliance audit pursuant to TCCP. It was only on June 16. 2008. 2003 was cancelled due to prescription. CTA 7901. assessment has not prescribed.(2) a pending protest.  Assessment for deficiency customs duties was affirmed with modification. after the lapse of 7 yrs. COC. that assessments were issued. or (4) liquidation of import entry was merely tentative.PRESCRIBED ASSESSMENT. 1603 of the TCCP (as amended by RA 9135) & Customs Administrative Order (CAO) 5-2001 provide 4 exceptions to the 3-yr period of finality of liquidation. v. Sec. 2001 – Dec.

COC . can determine tax liability by estimation. 2013. using documents which may not be acceptable in a judicial proceeding. v. 2005. v. Nov.continuation  Sec. 15. Citing CIR v. 60 . Ajinomoto Philippines Corp. Hantex Trading Co. 2013. Mar.  The court upheld COC’s computation based on best evidence available (mere photocopy of Details of Importation & Import Entries). 31. Ajinomoto Philippines Corp. June 24. CTA 7901 Res. CTA 7901.. COC. 136975. the govt. Inc. 201 of RA 9135 & CAO 5-2001 provide that royalties & license fees related to the goods being valued may be added as part of the transaction value for purposes of computing customs duties. GR No.

2014. G. 2002. mailed or sent to the taxpayer. United Salvage and Towage (Phils.R.). CIR v. 1996. The three (3)-year* period to collect had lapsed. CIR. while FAN was issued on Jan. 139736.PERIOD OF COLLECTION UNDER 1997 NIRC The Preliminary Collection Letter for 1992 was issued on Feb. 473 SCRA 205] . Oct. No. 17 61 2005.. Inc. 21. 197515. 9. the three (3)-year period to collect runs from the date the assessment notice has been released.R. No. G. * [now 5 years under Sec. 222 (c) of the 1997 NIRC per BPI v. July 2. CIR’s right to collect the 1992 deficiency EWT has prescribed. When there is a valid assessment.

July 2. 1997 did not suspend the running of the statute of limitations. Assessment for 1998 deficiency EWT was sustained as it complied with Sec. CIR. G. 1958. CA. 1996.UNACTED REQUEST FOR REINVESTIGATION WILL NOT TOLL THE PERIOD TO COLLECT. 228 of the 1997 NIRC & RR 12-99. . No. 17. 473 SCRA 205 (citing Collector v. 22. 344 [1995] & Dizon v. 2005. Nov. FAN MUST CONTAIN LEGAL & FACTUAL BASES  The request for reinvestigation on March 14. 25. 320 Phil. 128 [2008]). RR 12-99 was applied retroactively. No. PAN was not formally offered (citing Vda. 62 . 104 Phil. 2014. 19. United Salvage and Towage (Phils. Oct. Cases before the CTA are litigated de novo. 2001 beyond the 3-yr period (now 5 yrs) reckoned from Jan. No. G. in order to effect suspension citing BPI v. The request should first be granted.R. Inc. L-11527.R. 110. CA. The assessment for 1994 issued on Jan. FAN lacked legal & factual bases. 819). 1998 should have complied with RR 12-99.). De Oñate v. CIR acted only on Jan.. CIR v. 9. Suyoc Consolidated. 139736. presentation of PAN is not mere procedural technicality. PAN MUST BE FORMALLY OFFERED.  Assessment for 1994 deficiency EWT was cancelled due to: 1. 2. 576 Phil. 197515.

63 . BIR’s right to collect has already prescribed. 4. no warrant of distraint or levy or any judicial proceeding was initiated against BPI properties. COURT MAY REVIEW MATTERS EVEN IF NOT RAISED AS ISSUES 1985 deficiency DST assessment was cancelled due to prescription even if prescription was never raised. 1989. 181836. 1999. July 9. 23. BPI v. CIR. The request for reconsideration/investigation did not toll the running of the period since the BIR only responded to BPI on Aug. several years beyond the 3-yr prescriptive period to collect. G. No. For three (3) years (prescriptive period to collect is now 5 years) since BPI received the assessment notice on June 16. The BIR’s earliest attempt to collect was when it filed its answer in the CTA on Feb.PERIOD TO COLLECT.R. 2014. 1998 or after nine years from the protest letter of BPI.

VT-01-000112 both dated Feb.011. 2004 when the Formal Letter of Demand and Audit Result/ Assessment Notice No. 5.492. 2014.PRESCRIPTIVE PERIOD TO COLLECT The Warrant of Distraint and Levy (WDL) issued by the CIR falls under “other matters arising under the NIRC or other laws administered by the BIR”. 18.. 2010 when the WDL was served on respondent. 22. The WDL was cancelled due to prescription. 64 . or after the lapse of the 5-yr prescriptive period. 2009 to enforce collection reckoned from April 26. CIR has five (5) years or until April 26.33 for 2001 deficiency VAT were issued & received by respondent. CTA EB 999. Abundance Providers and Entrepreneurs Corp. CIR v. It was only on Feb. Aug. 2004 in the amount of P155.

894. Spouses Emmanuel D. 65 . 2014 Resolution. G. Pacquiao v.772. Aug.53 as a condition to suspend the collection of deficiency IT & VAT assessments for 2008 & 2009. issued a TRO against the April 22. No. TRO was issued indefinitely and until further orders from the SC. 2014 & July 11. The CTA-First Division & The CIR. 2014 Resolutions issued by CTA First Division insofar as it require spouses Pacquiao to either deposit a cash bond of P3. 18.SUSPENSION OF COLLECTION SC.298.514. in Aug. Pacquiao and Jinky J.35 or post a surety bond of P4.341. 2014.947. 213394.R. 18. Res.

Jurado. v. issued a TRO.continuation SC en banc. enjoining RTC Br 11. effective immediately and continuing until further orders. Jr. et al. 2014 on seizing. & (3) private respondents Galang & Souza from undertaking any and all action on the subject rice shipments.. 24. Manila from (1) implementing lower court’s Orders & Writ of Preliminary Injunction dated Jan. Cicero D. Alcala. holding the rice shipments. 2014 66 . (2) proceeding with the case. Proceso J. Sec. 211375.. et al. G.R. No. March 18. Hon.

2003 stating that the lender is a foreign government-owned financing institution of Germany tax exempt under Sec. BIR Ruling No.926. 229 of the 1997 NIRC is mandatory regardless of any supervening cause that may arise after payment. Manila Electric Company (MERALCO). GR No. 67 . 181459. Solutio indebiti is not applicable when there is a binding relation between the parties. DA-342-2003 issued on Oct. 7. June 9. 2014. 32 (B)(7)(a) of the 1997 NIRC. CIR v.760. The two (2)-yr prescriptive period under Sec. The 2-yr prescriptive period is mandatory regardless of any supervening cause The claim for refund of P224. is NOT the operative act from which entitlement of refund is determined.65 representing 10% FWT on its interest payments for the period Jan 1999 to July 2002 was DENIED due to prescription.CONDITIONS FOR REFUND (1) The claim must be filed within the two-year period from date of payment of tax.

The claim of 2006 unutilized CWT amounting to P 45. 68 .271 was denied for failure to establish that the income payments related to the claimed CWT formed part of the income declared in the 2006 Annual ITR. CTA EB 979.CONDITIONS FOR REFUND (2) the return of the recipient must show the income payment received was declared as part of the gross income. United Coconut Planters Bank v. Petitioner failed to indicate in its Amended Annual ITR the breakdown of its components. Sept. 2014. 3.481. CIR.

June 15. entitled to refund. Corporation. GR No. It is not necessary to present the person who executed and prepared the Certificates of CWT to testify personally as to the authenticity of the certificates. Team [Philippines] Operations Corporation [formerly Mirant (Phils) Operations Corporation]. 16. 2011. GR Nos. Rule 13 of the RRCTA allows the presentation of the original CWT with the ICPA. hence. 76 of 1997 NIRC must be strictly observed. Team (Philippines) Operations Corporation [Formerly Mirant (Philippines) Operations Corporation]. Mirant (Philippines) Operations. 171742 &176165. CIR v. The taxpayer complied with all the conditions for the grant of refund. 76 of 1997 NIRC The concept of irrevocability under Sec. . CIR v. 2013. The claim for refund was granted. 179260. 2014. Oct. 185728.CONDITIONS FOR REFUND (3) fact of withholding is established by a copy of a statement duly issued by the payor to the payee. GR No. (4) Irrevocability under Sec. 69 April 2. Faithful reproductions of the original copies of CWT Certificates would suffice to establish the fact of withholding citing CIR v.

Doosan Heavy Industries & Construction Co. Ltd.. CTA 8626. 17. Sept. 70 . (Philippine Branch) v.continuation The claim for refund of 2010 unutilized CWT amounting to P9.325. CIR.323 was granted upon proof of compliance with all the conditions for refund. 2014.

179617. CIR v. 71 . No. 19. 2011. G.R. taxpayer established the fact of withholding through the withholding tax certificates (BIR Form 2307) duly issued by the payors.380..606 excess 2009 CWT was granted after full compliance with the requisites. (Philippine Branch). Here. CTA EB 1090. 4. Jan. 2014.. Doosan Heavy Industries & Construction Co. The withholding and remittance of tax is the responsibility of the payor and not the payee citing CIR v. The claim for refund of P38. Asian Transmission Corp. Aug. Ltd.PROOF OF ACTUAL REMITTANCE OF TAXES WITHHELD IS NOT INDISPENSABLE IN REFUND Proof of actual remittance to the BIR of the taxes withheld is not indispensable in a claim for refund of excess CWTs. It even presented the Certification of Remittances issued by the BIR Revenue Accounting Division (BIR RAD).

2. 2307 in a claim for refund. CIR. Judicial claims are litigated de novo. 72 .58 of RR 2-98 must be strictly observed.NON-SUBMISSION OF SUPPORTING DOCUMENTS. Refund of 2009 excess CWT was partially granted. CTA 8460. 2307 CANNOT BE SUBSTITUTED  Withholding Tax Remittance Returns (BIR Form No. April 24.3 (B) & 2. June 20. 1606) & Capital Gains Tax Return (BIR Form No. 1706) are NOT substitutes for the submission of BIR Form No. 2014.  Non-submission of supporting documents in the administrative level is not fatal to a claim for refund. Secs. BIR FORM NO.58. 2014 & Res. Philippine Bank of Communications v.

AXIA can only carry over to the succeeding taxable years MESC’s excess CWT. Axia Power Holdings Philippines Corporation v. 73 . hence. the claim for refund by the surviving entity (AXIA) of the excess CWT of the absorbed corporation (MESC) is denied because the latter chose to carry over its excess CWT. 2014. AXIA is bound by MESC’s previous choice. CIR. CTA 8092. Irrevocability rule applies. 2014 & Res. Feb. July 14. 25.SURVIVING ENTITY IRREVOCABILITY RULE IS BOUND BY In a merger.

346. Both Sec.. 2014. CTA EB 967. in addition. Inc. April 22. 4. 2013 & Res. 74 .70 representing 2006 income tax was denied. Nov. CE Casecnan Water & Energy Company. 3. CIR v. Rule III of the 2007 Revised Rules & Regulations in the Availment of Income Tax Holiday & the old rules require an application for ITH incentive.456.FAILURE TO PROVE COMPLIANCE WITH BOI REQUIREMENTS IS FATAL IN REFUND For failure of a BOI-registered entity to prove compliance with BOI requirements. Despite having Certificate of ITH entitlement by BOI. it needs to present to court a BOI-approved application within the required period. its claim for refund of P61.

205055. The 120-day period is reckoned from the time the administrative claim and supporting documents were filed on 21 December 2005. Checklist of documents mentioned in RMO 53-98 pertained to audit requirements not to refund cases.R. No. CIR v. G. Team Sual Corporation (formerly Mirant Sual Corporation). July 18.COMPLIANCE NEEDED WITH BIR CHECKLIST NOT The claim for refund of 2004 input VAT was partially granted upon showing that relevant supporting documents were submitted. Both administrative & judicial claims were timely filed. 2014. 75 .

is entitled to a refund of taxes it paid for petroleum products sold to international carriers.  Principle of pacta sunt servanda applies. 76 . Pilipinas Shell Petroleum Corporation. 19. GR No.00 was granted. 135 (a) of the NIRC. 188497. CIR v. 2014 Reversing Decision April 25.STATUTORY TAXPAYER IS THE PROPER PARTY TO CLAIM REFUND OF INDIRECT TAX  The claim for refund of the excise taxes paid on petroleum products sold to international carriers from October 2001 to June 2002 amounting to P95. Res. Feb. 2012. the latter being exempted from excise tax under Sec.014.283. The statutory taxpayer who is directly liable to pay the excise tax on its petroleum products.

188497. CTA amended its Decision dated December 5. Feb. June 5. 2014. 2013 and partially granted the claim for refund of P89. 1. 2014. 2014.49 representing excise taxes found to be fully substantiated applying the recent case of CIR v. Pilipinas Shell Petroleum Corporation. 77 . Sept.170. 2014. Amended Dec. 19. v.032. Res. & Res.On June 5. GR No. CIR. Pilipinas Shell Petroleum Corp. CTA 7871.

188260. Claimant must prove entitlement under the substantive law and compliance with the evidentiary substantiation before the administrative official or in the de novo litigation before the CTA Division. 78 . Luzon Hydro Corporation v. 2013. Nov. CIR. 13. GR No.VAT ORs & VAT RETURNS CANNOT BE SUBSTITUTED BY FINANCIAL STATEMENTS The claim for refund of unutilized input VAT was denied for failure of the taxpayer to prove the existence of zero-rated sales. VAT ORs & VAT returns cannot be substituted by financial statements.

CIR. CIR.OTHER GROUNDS FOR DISALLOWANCES OF REFUND CLAIMS CASES FINDINGS/RULINGS Phil. 2014. Feb. CTA 8301. Emerson Electric (Asia) Limited-ROHQ v. 79 Image taken from shutterstock. 25. 2014. 1. 8528 & 8576. 2014. 2008 after the period when the alleged zero-rated sales occurred (period of claim July-Dec 2007). Claim denied. Failure to prove that the buyer’s products were 100% exported. v. Petitioner’s ATP was issued only on July 22. 27. Claim denied.com . CIR. Consolidated cases of Filminera Resources Corp. CTA Case 8470. Oct. May 29. v. CTA Case Nos. Gold Processing and Refining Corp. Even BOI-registered entity needs to present VAT invoices & export documents. Sept. 2014 & Res. Claim denied.

Feb.72 The court took into consideration the output VAT declared per return: Output VAT P Less: Valid Input VAT Output VAT still due 119. 24.162.479.41 for FY 2010 was denied based on the court’s findings: Input VAT reported per VAT return P Less: Disallowances (not properly substantiated per Secs.207. 4.110-8 & 4. RR 16-2005) Valid Input VAT 218.25 P 21. Secs.37 21. v.778.485.72 P 98.753. 80 2014. Ltd. 110 (A) & 113 (A)(B) 1997 NIRC. 2014 & Res.369.485.110-1.162.65 Procter & Gamble Asia.081.97 197.422. CIR.263. Pte.916. CTA 8341.ALLEGED EXCESS INPUT VAT OUTPUT VAT IS LESS THAN Refund of alleged unutilized input VAT of P98. 4. July 2. .113-1.965.

INCOME TAX DUE IS MORE THAN THE ALLEGED EXCESS INCOME TAXES PAID Prior Year’s CWTs Substantiated CWTs for 2005 Less: Taxes Due 2005 & 2006 Taxes Still Due P6. CIR. 2014 & Res.501.636.00 13.854.451.23) Sumisetsu Philippines.662.411. CTA EB 993.36 12.767.982.06 P (5.654.70) Taxable Year 2007 Petitioner’s claimed CWTs for 2007 Less: Unsubstantiated CWT’s for 2007 Substantiated CWTs for 2007 Less: Income Tax Due for 2007 Amount to be refunded/issued P18. 81 . 2014. Sept. 22.20 6.315.80 P 5.269. v. March 4.645.872.050.018.43 (P1. Inc.857.

San Roque Power Corp. 12. 2013. affirmed with finality Res. 82 . 690 SCRA 336. GR 187485. EXCESS INPUT VAT IS NOT EXCESSIVELY COLLECTED TAX UNDER SECTION 229. 2013. Feb. EQUITABLE ESTOPPEL Consolidated cases of CIR v. 8.. 196113 & 197156.120-30 DAY PRESCRIPTIVE PERIOD UNDER SECTION 112 OF 1997 NIRC IS MANDATORY AND JURISDICTIONAL. Oct.

191498. General rule – Section 112 (A) and Mirant within 2 years from the close of the taxable quarter when the sales were made. No. June 4. No. 2014 83 . Mindanao II Geothermal Partnership. See also CIR v.R. Exception – Atlas within 2 years from the date of payment of the output VAT. b. 2008 (promulgation of Mirant) Visayas Geothermal Power Company v. 2007 (promulgation of Atlas) to September 12. Jan. G. 2014.Summary of rules on claims for refund/tax credit of unutilized input VAT: 1. When to file an administrative claim with the CIR: a. G.R. 197525.15. CIR. if the administrative claim was filed from June 8.

15. 2014. See also CIR vs Mindanao II Geothermal Partnership. Within 30 days from the expiration of the 120-day period provided to the CIR to decide on the claim. No. not Section 229 i. Jan. 1998 (effectivity of 1997 NIRC). 191498.R. When to file a judicial claim with the CTA: a. General rule – Section 112 (D). No. This is mandatory and jurisdictional beginning January 1. G. 2014 84 . 197525.2. June 4. Within 30 days from the full or partial denial of the administrative claim by the CIR. CIR. Visayas Geothermal Power Company v.R. or ii. G.

2003 (issuance of BIR Ruling No. [equitable estoppel and doctrine of operative fact] 85 . 2010 (promulgation of Aichi). if such was filed from December 10. DA-489-03) to October 6.Exception – BIR Ruling No. DA-489-03 The judicial claim need not await the expiration of the 120-day period.

86 . such “inaction shall be deemed a denial” of the application for tax refund or credit. final & unappealable. RMC 54-2014 –  If the claim for VAT refund or credit is not acted upon by the Commissioner within 120day period as required by law.  Failure to file judicial claim with CTA within 30 days from the expiration of the 120-day period rendered the CIR’s decision.B.N. or inaction “deemed a denial”.

CIR. DA 489-03 had not yet been issued. 87 . -same- mandatory periods were already in law & BIR Ruling No. v. No. Cases Rulings Nippon Express (Phils. Nov. Premature. The 120+30-day Applied Food Ingredients Company. -same- CIR v. Feb. 693 SCRA 456. G. 2013. 2013. No. v.) Corp. CIR. 184266. March 13.Recent SC & CTA cases applying San Roque ruling.R. 5. (formerly Mirant Sual Corp. GR 194105. 2014. Inc.R. did not fall within the period of exception. Team Sual Corp. 11.). G. 196907.

Cases Rulings Hedcor Sibulan. Inc. G. 2013. CTA 938. 6790 was denied due to prematurity while CTA Case No. CIR v. May 28. No. fell within the window period. 2. 88 . The claim for refund under CTA Case No. May 17. Philex Mining Corporation v. Inc. 2013.. CTA EB 839. Nov. 6838 was remanded to CTA for determination of refundable amount. Ltd. Procter and Gamble Asia Pte. The CIR v. 2013. 20. CIR. CTA EB 987. it was made after the issuance of BIR Ruling DA-489-03. Oct. CIR. San Roque Power Corp. Nov. CTA EB 787. CIR. 181276. 11. 7. 2013 & Res. 2013. i.R. v.e. from 10 December 2003 up to 6 October 2010. Visayas Geothermal Power Company. Res. Premature. 2013. Oct.. v. 2013 & Res. 1.. Oct.

CIR. 202071. Premature judicial claims but fell within the window period. 2014. G.R. Res. No. it is only entitled to partial refund of P537. No mention of invocation of BIR Ruling No.43 as originally granted. No. G. Taganito Mining Corporation v. Premature judicial claims but fell within the window period. G. June 18. CIR. DA 489-03.Cases Rulings Procter & Gamble Asia PTE LTD. January 13. 197591. No.R. v. 2014. 197760. Team Energy Corporation (formerly Mirant Pagbilao Corporation v.R. 2014. A party who does not appeal from a judgment can no longer seek modification or reversal of the same. February 19.645. 89 . CIR. Since Taganito did not appeal the CTA Division’s partial denial of its claim.

R. 191498. (formerly Intel Philippines Manufacturing.R.. May 7. 184360. Nos. 2014. CIR v.. G. Jan. CIR v. December 11. No. 15. CBK Power Company Limited v. CIR v. Mar. No. CIR v. 2013. 19872930. Filed beyond the 30-day period to appeal from the lapse of the 120day period. CIR.R. CTA EB 837. February 19. G. June 18. Inc. 184145. 2014. 184361 & 184384. 189440. 2014. 205543.Cases Rulings Chevron Holdings Inc. 12. Sept.[formerly CALTEX (ASIA) LIMITED] v. 169778. GR No. 2013. Consolidated cases of Silicon Philippines v. No. G. Mindanao II Geothermal Partnership. GR No. Inc. June 30. GR Nos. 90 . CIR. G. Inc. 2014. 2014. 2014. 15. v.R. 2013 & Res. San Roque Power Corp. CIR. 27. Mindanao II Geothermal Partnership. Silicon Philippines. CIR. Jan. Prescribed.). Dash Engineering Philippines.

Premature and prescribed.R.Case Ruling Republic of the Philippines. 190872. The 120day period is to be reckoned with the filing of the administrative claims when taxpayer was presumed to have attached the relevant supporting documents. No. Inc. 2013. 17. represented by the CIR v. GST Philippines. 91 . G. Oct.

G.Case Ruling Team Energy Corporation (formerly Mirant Pagbilao Corp. 190198. Premature judicial claim (third quarter of 2001) and did not fall within the window period. January 13. 2014. G. Refund was partially granted.R. Sept. No. Section 112 (A) and (C) of the NIRC of 1997 must be interpreted according to its clear. 92 . plain and unequivocal language. Judicial claim fell within the 120+30 day prescriptive period. 2014..R. 190928.) v. 2014. Not premature. G.R. CIR v. No. 183880. No. Refund was partially granted. Inc. Inc. CIR v. Toledo Power. Premature judicial claim (fourth quarter of 2001) but fell within the window period. CE Luzon Geothermal Power Company. 17. CIR. January 20.

Inc. 93 . G. 185432. v. although premature but within the window period.R. June 4. Prescribed and premature but fell within the window period. Claim for taxable year 2002 was denied due to prescription. was denied for failure of petitioner to comply with the mandatory invoicing requirements under Sec. 4.108-1 of RR 7-95.Case Ruling Miramar Fish Company. No. CIR. 113 of the 1997 NIRC & Sec. Claim for taxable year 2003. 2014.

March 31. GR No. SC revoked the CIR’s previously issued TCC of P6. CIR v. 2003.065.74 representing 2002 unutilized input VAT arising from zero-rated sales & set aside CTA’s ruling partially granting the refund. Administrative claim . 2004 or 155 days late.RECENT APPLICATION OF SAN ROQUE RULING Even if prescription was raised for the first time on appeal. 94 . June 18. 2014. Aichi & San Roque rulings were applied. Judicial claim .251. Mindanao II Geothermal Partnership. The judicial claim was filed out of time. 189440.May 30.

95 . (Sec. Its subsequent amendment by RR 2-2010 & RMC 016-10 will not be given retroactive effect as it will prejudice the taxpayer. CTA 8454. Inc. 2014 & Res.960. April 15.NON-RETROACTIVITY OF BIR RULING. 2014.245 representing erroneously paid 2009 income tax after choosing Optional Standard Deduction. RR 16-2008 applies to taxable year 2009. CIR. v. June 2. MAKING CHOICE OF DEDUCTION METHOD (OPTIONAL STANDARD DEDUCTION [OSD] OR ITEMIZED DEDUCTIONS) IN 1ST QUARTER MANDATORY FOR THE YEAR Petitioner is entitled to refund of P8. 246 of 1997 NIRC) COL Financial Group.

CS Garment. CIR. v. The portion of the RMC 19-2008 which excludes the taxpayers with pending tax cases from the amnesty availment was declared invalid. Mar. 12. The exception goes beyond the scope of the provisions of the amnesty law. GR No. LAW PREVAILS OVER REGULATIONS Taxpayers with pending tax cases are still qualified to avail of tax amnesty under 2007 Tax Amnesty Law. 182399. Inc.EFFECTS OF TAX AMNESTY. 2014. 96 .

TAX LIABILITY OF CORPORATE TAXPAYER & ITS RESPONSIBLE OFFICER 97 .

Inc. while accused Palad was acquitted for failure of the prosecution to prove his guilt beyond reasonable doubt. People v.. Efren O. 2014. 98 ..  Case was dismissed against accused Docena upon his death. Amended Decision. Case No. O-087. South Sea Surety & Insurance Co. March 12.TAX LIABILITY OF CORPORATE TAXPAYER & ITS RESPONSIBLE OFFICER  The civil liability to pay the deficiency assessment (DST & compromise penalty) remains the corporate obligation of the corporation absent fraud or unlawful act on the officers of the corporation. Criminal action is extinguished as there is no longer a defendant to stand as the accused. Palad. CTA Crim. Docena and Rolando E.

Bienvenido S. The accused was convicted not in his personal capacity for non-payment of his personal tax liability but in his capacity as the president of Pic N’ Pac Mart. Inc.TAX LIABILITY OF RESPONSIBLE OFFICER  Piercing the veil of corporate entity. The act of the individual is the act of the corporation. 2013. 18. People v. Inc. 2014. Not being impleaded. People v. Dec.  Civil liability of the accused was cancelled. Wong Yan Tak. The accused cannot be held liable for the obligation of Pic N’ Pac Mart. under the doctrine of separate juridical entity. July 2. the entity statutorily liable to pay the tax. CTA EB Crim 024 (CTA Crim Case O-090).. 99 .. 0-071 & 0-085. Dimson. CTA Crim Case Nos. corporation was not held criminally & civilly liable.

H. Feb. Manila.21 on its pawn tickets plus fine of P50. Tambunting Pawnshop. Edmundo T. The court did not give weight to the accused’s reliance on a BIR Ruling No.478. Inc.  The President was solidarily liable when he knowingly participated in not protesting the assessment & was sentenced to 1 – 2 years imprisonment with fine of P10.. Dela Fuente St. 2014 & Amended Dec. Ongsiako. was held liable for deficiency DST of P2. 2014. 822 M.000 under Sec. 325-88. Tambunting Pawnshop.000 for willful failure to pay DST. Jr.610. 100 . July 22. Inc. CTA Crim Case No. Corporate legal fiction was disregarded. 26.LIABILITIES OF A CORPORATE TAXPAYER & ITS RESPONSIBLE OFFICER  The corporate taxpayer H. Sampaloc. 256 of 1997 NIRC. O-196. People v..

The Hon. Oscar Garcia y Itchon. 101 . Plaintiff should have inspected the MWSS’ books and records to determine the accused civil liability. 2014. GR No..EVIDENCE. June 3. Motion for Partial Reconsideration (of the Civil aspect of the case) was denied. Res. 0-253. WHEN PRESENTING A CERTIFIED TRUE COPY OF A PUBLIC DOCUMENT. 2013. CTA Crim Nos. Aug.. 15. The primary basis of its assessment is the discredited COA Reports. CTA Crim Nos. Citing People v. 0-254. 0-255 & 0-256. No probative value was given to the COA Reports for being mere certified xerox copies of the receiving copies. COA Reports were not certified true copies of the originals nor duplicate copies of the originals. People v. & were not issued by the legal custodians. 11. Castañeda. People v. et al. IT MUST BE SHOWN THAT IT WAS CERTIFIED BY THE LEGAL CUSTODIAN Tax evasion & failure to file return against the accused were dismissed for insufficiency of evidence. Res. Jr. 208290. 0-254. 0-253. Juanito C. Oscar Garcia y Itchon. 0-255 & 0-256. Dec. 2014.

. 102 . 169234. 2013. Section 252 of LGC of 1991 (RA 7160) requires payment under protest as a condition sine qua non. GR No. Central Board of Assessment Appeals. A claim for tax exemption does not question the authority of local assessor to assess real property tax. but merely raises a question of the reasonableness or correctness of such assessment. Oct. 2. PAYMENT UNDER PROTEST IS MANDATORY The assessment case for deficiency RPT was remanded to LBAA for failure to pay under protest. et al.RPT ASSESSMENT. In questioning the reasonableness and correctness of RPT assessment. which requires payment under protest. Camp John Hay Development Corporation v.

70 of RA 9136) for its missionary electrification function. 2014. 228 of the 1997 NIRC. the amount of deficiency. June 18. Province of Quirino & Fe B. Mangaccat. interest & penalty without need of stating the legal & factual bases required under Sec. CTA AC 108. surcharge.FRANCHISE TAX ASSESSEMENT COMPLY WITH THE FACTUAL REQUIREMENTS NEED NOT & LEGAL Assessment issued by Province of Quirino against NPC for 2002-2006 deficiency franchise tax was upheld. 195 of the LGC of 1991 needs only to state the nature of the tax. 103 . 137 of LGC of 1991 (authority of LGU to impose franchise tax) in relation to EPIRA Law (Sec. NPC is still liable to pay franchise tax by virtue of Sec. Notice of assessment under Sec. fee or charge. National Power Corporation v.

Oct. et. 2014. 2010. v.60-DAY WAITING PERIOD WITHIN WHICH THE LOCAL TREASURER MAY ACT ON THE PROTEST IS MANDATORY Sec. NPC filed its Appeal with the RTC-Br 44 of Initao. NPC filed its protest on March 5. the treasurer shall decide the protest within 60 days from the time of filing. CTA AC No. Municipality of Laguindingan et. 10. 195 of the LGC requires that a taxpayer who questions the validity/legality of an assessment issued by the local treasurer. last day of the treasurer to resolve the protest.. National Power Corp. al. The 60-day mandatory period renders its appeal to RTC void & as such RTC decision was reversed & set aside. at. NPC prematurely filed its appeal with RTC. Thereafter. may within 60 days from receipt of the notice of assessment file a written protest with the local treasurer. Misamis Oriental on May 4. 104 . 2010 to resolve the protest. CTA acquired no jurisdiction. 106. 2010. Here. The treasurer had until May 4.

160 pieces of Anti-Virus Software. Jr. 11. 105 . People v. on alleged misdeclaration on the importation of 858 cartons of 17. The acquittal of the accused was warranted by the fact that the prosecution failed to present the certified true copies of documentary evidence issued by the public officer in custody of it.PROSECUTION OF CUSTOMS MISDECLARATION CTA did not commit grave abuse of discretion in the dismissal of the case against Garcia and Vestidas Jr. Castañeda... 2013. The Hon. Dec. & failed to identify the accused in court. Juanito C. 208290. et al. Investigation of the prosecution suggested. GR No. failed to competently and properly identify the misdeclared goods.

20% INTEREST/PENALTY CANNOT BE IMPOSED WHEN THERE IS NO SEIZURE PROCEEDING Warrant of Seizure and Detention (WSD) is a condition precedent. GR 163055. Shipment cannot be seized or forfeited for lack of WSD & lack of proof of fraud or bad faith. The COC & The District Collector of Customs for the Port of Iloilo v. 106 .WARRANT OF SEIZURE AND DETENTION IS A CONDITION PRECEDENT FOR SEIZURE PROCEEDING. the 20% penalty cannot be imposed. June 11. New Frontier Sugar Corporation. Sections 2301 & 2303 of the TCCP laid down the mandatory procedures in a seizure case. to wit: (1) issuance of WSD. before any seizure proceeding can be formally initiated. Absent a pending seizure proceeding legally initiated. 2014. and (2) service upon the owner or importer or his agent of the written notice of seizure.

060. No. a corporation having interlocking directors with URC. 107 . as the COC did not establish that Oilink had been set up to avoid the payment of taxes or duties.  Elements of “instrumentality” or “alter ego” are not present. From the outset. excise taxes and special duties amounting to P138. Oilink International Corporation. (2) control is used to commit fraud. The belated pursuit of Oilink was only an afterthought.PIERCING THE VEIL OF CORPORATE ENTITY  The doctrine of piercing the corporate veil cannot apply to Oilink.200. the COC sought collection from URC for deficiency taxes and duties on oil imports (deficiency VAT. COC v. G. 2014. to wit: (1) control/complete domination.R.49). 161759. July 2. and (3) control & breach of duty must proximately cause the injury or unjust loss complained of.

a M/V 7.k. (3) without payment of taxes in violation of Sec. 108 . Oct.107 Islands Cruise (a cruise ship) was forfeited upon proof that: (1) it did not pass through the customhouse (Sec. The article subject of importation was the vessel itself. 2014 & Res.  There was importation the moment the vessel entered the Port of Batangas. COMMENCEMENT OF IMPORTATION  M/V Coco Explorer a.ELEMENTS OF ILLEGAL IMPORTATION. Intent to import was shown in the MOA and series of event evidencing outright sale of the vessel including partial payment of the purchase price barely five days upon arrival of the vessel. 3. April 1. Department of Finance. 2530 (l)(1) of the TCCP. 7107 Islands Shipping Corp. 1201). v.  Title III of the TCCP pertains to “Vessels and Aircrafts in Foreign Trade” applies only to vessels engage in foreign trade or cargo ships but not to cruise ship. CTA EB 912. (2) without proper documentation. 2014.

 Forfeiture of seized goods in the BOC is a proceeding against the goods and not against the owner. Republic of Tuvalu. . (3) it failed to show certification from BOC of payment of taxes per Customs Memorandum Order (CMO) No. It is in rem proceeding. Polynesia showed a registration for a single delivery voyage which is usually for a sale of a vessel. et al. the property itself commits the violation and is treated the offender regardless of the character or conduct of the owner. 31. 2014. Cornelio Q. (2) the vessel surreptitiously entered in a seaport not considered port of entry. 25-1007. & (4) the Tuvalu Ship Registry. CTA 109 EB 919. Mar.FORFEITURE OF GOODS IN CUSTOMS IS IN REM  KANNY I tugboat and KANNY II dumblighter were forfeited for illegal importation. Instances that proved illegal importation: (1) There was no permit/license from MARINA for the use of the vessel per RA 9295. Casido v.. RP.

8. Par. represented by its Executive Vice President/General Manager. 7-72.. 2014. 105(m) of the TCCP]. Sept. CTA EB 1077. 11-74 Trully Natural Food Corp. 110 . holders & other similar receptacles of any materials are conditionallyfree importations & exempt from import duties upon compliance with the conditions [Sec. Importations of containers. as amended by CAO No. I (M) of CAO No.REQUIREMENTS FOR CONDITIONALLY FREE IMPORTATIONS Petitioner’s 2007 & 2008 importations of printed plastic rolls are subject to import duties for failure to comply with the requirements of conditionally-free importations. Sobong v. specifically the failure to submit the Affidavit of the Importer. Rodolfo C. DOF.

and a certificate of identification shall be issued. examined and appraised by the customs officials concerned. DOF. 8.. They are of such character as to be readily identifiable and/or reusable for shipment or transportation of goods. Sobong v. Rodolfo C. 2. Affidavit of importer stating the value of the container & that it shall be exclusively used for exportation abroad. except for kraft paper bags for cement. 3. They should be identified. CTA EB 1077. 4. Bond equal to 1 &1/2 times the duties. represented by its Executive Vice President/General Manager. conditioned for exportation or payment of duties. 111 . from date of acceptance of the import entry Trully Natural Food Corp. Sept. taxes & other charges. taxes & other charges within 6 months. 2014.continuation Conditions for free importations & exemptions from import duties: 1.

8. 2014. represented by its Executive Vice President/General Manager.. Sobong v. Trully Natural Food Corp.continuation “DOF Exemption” is not the document required for conditionally-free importation. 112 . Sept. DOF. Rodolfo C. CTA EB 1077.

Considering that petitioner failed to present evidence to overcome the prima facie evidence of fraud. Aug.360. v. CTA 8448.15). TCCP) There is prima facie evidence of fraud as shown by undervaluation of shipment having a difference of more than 30% between the declared value in the entry ($41. 113 . 2530 of the TCCP. Hewlett Packard Philippines Corp. 12.682.30 representing customs duties & penalty was refused. COC. 2307.59) and the actual value ($77. the imported computer parts were forfeited & petitioner’s settlement offer amounting to P1. such prima facie evidence suffices as proof of fraud penalized by forfeiture under Sec.540.779.SETTLEMENT OF CASE BY PAYMENT OF FINE OR REDEMPTION OF FORFEITED PROPERTY IS ALLOWED EXCEPT WHEN THERE IS FRAUD Since fraud was established. (Sec. 2014.

President of Rubills International Inc. July 30. Sugar Order No. 101 (k). People v.SMUGGLING For Crim Case O-128. et al. CTA Crim O-128 & O-129. 8 & Joint Memorandum Order 42002) of 510. 2014.000 kgs of Soya Beans.. accused Francisco Billones. TCCP.000 for unlawful importation (violation of Sec.000 kgs of Refined sugar initially declared as 306. was sentenced to indeterminate penalty of 8 yrs & 1 day to 9 yrs plus fine of P10. 114 . in relation to Sec. 3601.. Francisco Billones.

TCCP) Accused failed to substantiate his allegations of cessation of business & transfer of its ownership to Talaue Group. 2014. 3602. 2503 & 2530. et al.000 for various fraudulent practices (Sec.. accused was sentenced to indeterminate penalty of 8 yrs & 1 day to 9 yrs plus fine of P10. People v. Meanwhile. CTA Crim O-128 & O-129. Francisco Billones.continuation For Crim Case O-129. accused Mary Lucille Billones was acquitted for failure of prosecution to prove her guilty beyond reasonable doubt. 115 . July 30. in relation to Secs.

116 . 2014.continuation While she appeared an incorporator in the articles of incorporation. July 30.. People v. et al. she does not appear to be the treasurer of Rubills under both the articles of incorporation or the General Information Sheet. DOJ withdrew the Information against the other accused for lack of probable cause. CTA Crim O-128 & O-129. Francisco Billones.

upon payment of customs duties by Unimex. 2014.982. Payment by the COC of the value of the shipment was conditioned upon the payment of the necessary customs duties by Unimex. RP. 117 . Sept. COC was ordered to pay Unimex the commercial value of the goods in the amount of Euro 669.565 plus interest. 25.PAYMENT OF CUSTOMS DUTIES BEFORE PAYMENT OF THE VALUE OF THE LOST SHIPMENT For the lost shipment. Unimex Micro-Electronics GmBH v. CTA EB 984.

Clients used VAT ORs in claiming input VAT. 114 (D) Consequences of Issuing Erroneous VAT Invoice or VAT Official Receipts. 10. CTA 8203. v. Inc. CIR. Oct. 2014 See Sec. 1997 NIRC 118 . Lacson & Lacson Insurance Brokers.INSURANCE BROKER .VAT ON PREMIUMS COLLECTED Insurance Broker who issued VAT ORs on premiums collected instead of merely on commission is subject to VAT on total premiums.

Oct. other than the vouchers & journal entry.WHEN COMMISSION & PROFESSIONAL FEES ARE NOT ORDINARY & NECESSARY The commissions & professional fees were disallowed as deductions for calendar year 2007 as these are not ordinary & necessary in the conduct of petitioner’s business. 2014. There is no reason to employ agents to sell to a “customer” which happens to be its affiliate to whom it sold 97% of its products& which even shares the same office with petitioner. 10. Inc. no information was provided as to which sales these commissions & professional fees pertain. Also. v. CIR. Composite Materials. 119 . CTA Case 8306.

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