Prof.

&

U.Salvador,

Jr.

August

2 0 11

SYLLABUS
TRANSFER TAXES & TAXPAYER'S REMEDIES
TAX II
ESTATE TAX (Sec. 84-97, Sec. 104, NIRC, Revenue Regulations No. 17-93, Estate Tax
Regulations, as amended by RR 2-2003 dated December 16,2002)
GROSS ESTATE - Rule for Imposition
L Resident, non-resident alien
ii. Reciprocity of exemption (Collector v. Fisher, 1SCRA 93)
fax Valuation of gross estate
a. Decedent's interest
b. Transfers in contemplatiori of death
c. Revocable transfers
d. Property passing under general appointment
e. Proceeds of life insurance
f. Prior interest
g. Transfer for insufficient consideration
Rev. Regs. 2-82: Taxation of shares of stock, as amended by RR 6-2008, April 22,2008
1. Exclusion from gross estate: capital of surviving spouse
2. Deduction from gross estate
a. Funeral expenses
b. Judicial expenses
c Claim v. the estate
d. Claims v. insolvent persons

e. Unpaid mortgages and losses

f. Property previously taxed - vanishing deduction
g. Transfer for public purpose
h. Family house
i. Share in the conjugal property
j. Standard deduction
3. Tax credit for estate taxes
4. Exemption of certain acquisitions
5. Tax returns
L Time to file and notice
ii. Payment of tax
6. Obligations of executor, administrator, officers, others
DONOR'S TAX (Sec. 98-103)
1. Imposition of gift tax
2. Transfer of inadequate consideration
3. Exemption from gift tax
4. Tax credit
5. Tax return (time and filing and payment)
6. Political contributions: tax treatment (Abello v. CIR, GR No. 120721, February
- 23; 2005) [See Sec-13,'Oinhibus"Election"Code (Treatment of political
contributions to candidates and political parties)]
Rev. Regs. No. 7-2011 (Feb. 18, 2011): Tax treatment of campaign contributions and
expenditures
Rev. Regs. 8-2009 (Oct 22, 2009): Withholding tax on all political contributions and
campaign expenditures of candidates ranning for public office.

VALUE-ADDED TAX
1. Sec. 105-115, NIRC as amended by RA 8424 & RA 9238, February 5,2004 and RA
9337 effective July 1,2005, implemented by RR 16-2005 (November 1, 2005) & RR
No. 4-2007 (February 7,2007)
2. Rev. Regs. 2-88, Rev. memo Order No. 22-92
3. Tolentino v. Guingona, GR115455, August 25,1994 - legality of EVAT Motion
for Reconsideration - GR L-11455, October 30,1995
Abakada Guro Party List et al v. Hon. E. Ermita, GR 168056, September 1,2005
4. Rev. Regs. 7-95
5. RMO 39-95
6. RMC1-96 up to 7-96
7. Philamlife,CAGRSP 31283, April 25,1995 (definition of royalty)
8. Are reimbursements subject to VAT? (Commonwealth Mgt & Services Corp.
(Comaresco) v. CIR & CTA, CA SP 34032, May 28,1996)
^See also RMC 9-2006, January 25,2006; clarifying amount subject to VAT of
brokers; RMC No. 39-2007, January 22,2007
9. Opinion 40, April 22,1996 - effectivity of VAT on other taxpayers
10. Improved VAT (IVAT) - RA 8241, December 20,1996 (effectivity date - January
1,1997 (Rev. Regs. 6-97, January 2,1997)
11. RR 8-99, April 26,1999 - penalties for indicating separately VAT in sales invoice
or O.R. on sale of goods or services
12. RR 1-2005, December 28,2004 amends RR 7-95 & RR 8-2002 re: VAT exemption
on real estate sales arid rentals
13. RR13-97.
14. RR 7-99 -Submission of diskettesfof~sunimary Iist'of sales'and purchases within
the following month at the close of each calendar quarter
15. RMC 74-99, October 15,1999 - tax treatment of sales of goods and services made
by suppliers from western territory to a PEZA registered enterprise and sale
transactions made by PEZA registered enterprises within and without the zone.
(Destination or Cross Border Principle first adopted November 5, 1998, BIR
Ruling 032-98, Shimizu Philippines)

l&{
American
Express
v. Commissioner,
CA GR
SP 62727, February 28, 2002 (zero
X rated
sale of
service),
SCGR152609, June
29,2005
17. CIR v. Burmeister and Wain, GR No. 153205, January 22,2007
18. CIR v. Magsaysay Lines, GR No. 146984, July 28,2006 (No VAT on sale not made
in trade or business)
19. Rev. Regs. 6-2001, July 31,2001 (payment of VAT within 10 days after end of the
month), as amended by RR 8-2002 (filing of VAT returns, June 13,2002)
. 20. RR 17-2003, VAT on refined sugar as amended by RR 2-2004 (March 1,2004) and
RR 16-2005, as amended by RR 13-2008 (Sept 19,2008)
2L RA No. 9361 (December 13,2006) Repeal of 70% input VAT Cap as implemented
by RR No. 2-2007 (December 29,2006)
22. OR v. Seagate Technology Phils., GR No. 153811, Jjebruary 11,2005 (effectively
zero-rated transactions with PEZA)
23. RMC 77-2008 (Dec. 9, 2008) revokes RMC 34-2008 (April 2008) re: VAT on
Directors' Fees
24. RMC No. 31-2008 & No. 46-2008 (Feb. 1,2008), Clarifications concerning common
carriers by Sea and Air as to vatability.
25 Period to file claim for refund or credit of input VAT for zero-rated sales. Sec. 112
i) CIR vs. Mirant Pagbilao Corporation,\565 SCRA154
ii) CIR vs. Aichi Forging Co., Inc., G.R. No. 184823; October 6,2010
26. RR 27-2011 (July 1,2011); Transfer of real estate used in business or held to lease
subject to VAT (Amending RR 6-2006 and RR 4-2007) Also, exemption from VAT
of transfer from real estate dealer to another real estate dealer is deleted.
27. RR No. 16-2011, October 27,2011; Adjusted thresholds of VAT effective January
1,2012
- OTHER PERCENTAGE TAXES
Sec 116 Tax on persons exempt from VAT
Sec 117-118 Carriers tax as amended by RA 9337 (July 1,2005)
RR 11-2011 (July 20, 2011) (Amending RR 15-2002) (Definition of gross receipt for common
carriers
Sec 119 Tax on franchises

Sec 120 Overseas communications tax

Sec 121 Tax on banks and financial intermediaries as amended by RA 7716 & RA 9238
(China Banking Corp. v. CTA, SC GR 146749, #rteTlu>2003 (base of 5% GRT on
interest income), RA 9238 as implemented by RR 9-2004 (GRT on banks), RA
9337, effective July 1,2005 on increase of GRT to 7% on other income of banks)
Sec 122 Tax on finance companies (BIR Ruling, August 16,1990 on credit card companies
as amended by RA 9238)
Sec 123 Tax on Insurance premiums, as amended by RA 8424
Sec 124 Tax on agents of foreign insurance companies
Sec 25 Amusement taxes (RMC 8-88, February 19,1888, p. 785, Nolledo)
Sec 26 Tax on winnings
Sec 27 Percentage tax on EPOs
Sec 28 Payment of percentage taxes
Rev. Regs. 6-2001, July 31,2001
CIR v. Lhuiller, SC GR 15094; July 15,2003 (pawnshop are not lending investors)
RR 10-2004,5% GRT on pawnshops (rjeginning January 2004); also Money Shops or Forex Shops
(RR 4-2007)
EXCISE TAXES ON CERTAIN GOODS
Chapters land 2
Sec 129 to Sec 140, NTRC, as amended by RA 9334 (January 1,2005), implemented by
RR 12-2004 and RR 3-2006, implementing guidelines on revised tax rates on alcohol, etc
(January 3,2006)
Chapter 3 - Excise tax on alcohol products
RA 9334, implemented by RR 12-2004
Chapter 4 - Excise tax on tobacco products
Secl44-147,NIRC
RA 7654 - revised excise tax on cigars and cigarettes

RR 22 - 2003 - cigarettes
RR 9334 implemented by RR 12-2004
Chapter 5 and 6 - Excise tax on petroleum products and miscellaneous articles
Sec 148 -150, NIRC as amended by RA 9337 effective July 1,2005 (deleting excise tax on
certain petroleum products)
RR 4-2003, January 29, 2003, Revised Regulations on Excise Tax of Automobiles
amending RR 14-99, October 13,1999 (before Amendment by RA No. 9224)
Chapter 7 - Excise tax on mineral products
Sec. 151, NIRC as amended by RA 7729, June 2,1994
RA 8240, revision of excise taxes on cigarettes and alcoholic beverages
Revenue Regulations 1-97, December 13,1996, method of computing specific tax on
cigars and cigarettes
Excise tax on cars, RA 9224, October 2003
RR 25-2003, new rules implementing RA 9224
Revenue Regulations 2-97, Specific tax on beer and alcoholic drinks
RR 9-2003, February 17, 2003, amending RR 1-97 and RR 2-97, excise tax on alcohol
products, cigars and cigarettes

DOCUMENTARY STAMP TAX

Sec 173 - 201, NIRC, as amended by RA 8424 & RA 9243 (February 7,2004) & RR 13-2004
RA 7660, December 23,1993, effective January 14,1994.
"Rev: REgs. 9-94, March 8,1994, New DST Regulations - Rev. Regs. 6-2001, July 31, 2001 (Payment of DST within 5 days), As amended by RR 15-2001
(October 16,2001)
Exemption from DST of shares listed and traded in Stock Exchange for 5 years from 2004 (RA
9243) and tax free exchanges (RA 9243) and RR 13-2004 (Expired March 2009) extended further
March 20,2009 byJtA 9648

Banco de Oro v. CIR, CTA E.B. No. 165 (August 15,2006), SSA subject to DST as time deposit
certificate
RA NO. 9648 (Exemption from DST stocks traded through Stock Exchange) June 30, 2009
(retroactive to March 20,2009)
RR No. 7-2009 (Electronic DST (EDST) System (June 29,2009) As clarified by RMC 51-2010; June
15,2010
REMEDIES
1. Sec 4, NIRC, Power of Secretary of Finance to review rulings of CIR as implemented by
RMC 44-2001, October 11,2001 and DOF Order 702, May 7,2002
2. Sec 6-Sec 17, NIRC
3. Sec 2002 - Sec 282, NIRC
4. Rev. Regs. 12-99 implementing the provisions of the NIRC on rules of assessment, civil
penalties and interest and extra-judicial settlement of taxpayer's criminal violation
under RMO1-90
5. RR No. 11-2006/June 15,2006 (Accreditation of Tax Practitioners to Practice before BIR)
6. Cases:
a. RP v. CTA & Nielson & Co., GR L-38540,149 SCRA 351
Demand letter/follow-up letter for payment of taxes considered notice of
assessment
' Notice ofv.Assessment
deemed
made when
notice is
^Collector
Bautista, L-12250,
L-12259,
May 27,1959

released, mailed and does

not require that notice be received within 3 year period
Republic v. Ricarte, GR L-46893, November 12,1985 (action to assess prescribed
since there was no proof that notice was sent)
i) Advertismg Associates v:'CTA7l33-SCRA765,"p: 939, Nblledo
Reviewable decision of CIR where he directs taxpayers to appeal to CTA
not mere issuances of warrants of distraint and levy
ii) OR v. Union Shipping, GR 6160, May 21,1990
Demand to pay deficiency tax considered final decision of CIR
iii) Surigao Electric v. CTA, 57 SCRA 523

CIR should categorically state whether order is final determination so

that it can be appealed to the CTA
e. i) CIR v. Isabel Cultural Corporation, GR 135210, July 11,2001
Final demand letter from BIR is tantamount to denial of request for
reconsideration which is therefore appealable to CTA
ii) Oceanic Wireless Network v. CIR, GR 148380, December 9,2005
Final demand letter from Accounts Receivable Division Head was final
decision of the CIR and constituted appealable decision to CTA
f. Gibbs v. Commissioner, L-17406, November 29,1965 (period to file refund claim)
and Gibbs v. Collector, GR No. L-13453, February 29, 1960 (2-year period is
absolute)
(If income of taxpayer is withheld at source he is deemed to have paid his tax
liability at the end of the tax year. It is from this date that the 2-year period will
run.)
g. CIR v. TMX Sales & CTA, GR 83736, January 16,1992 (when to count 2-year
period if on installment basis). If TP pays income tax on quarterly basis, the 2year period is counted from the time of filing final adjustment return.
Cornmissioner v. Philamlife Insurance Co., GR 105208, May 29,1995. Obiter by
Justice Vituge referring the 10-year period on taxes not erroneously / illegally
paid. Likewisel, the claim must be filed within 2 years regardless of supervening
cause.
Also, this case, Pacific Pro., Ltd. Case (GR 68013, November 12,1984) counting of
two-year prescriptive period for filing claim for refund of overpaid corporate
income tax starts from time final adjustment return is filed.
h. CIR v. Wyeth, GR 76281, September 30,1991
(Sec 222 & 223 request for reinvestigation suspends the 5-year period for
collection of tax)
L ABS-CBN Broadcasting Corp. v. CTA, 108 SCRA 143 (non-retroactivity of
rulings) requiring 3 years back taxes after previous circular violated Sec. 246
j. Commissioner v. Court of Appeals, Lucio Tan, et al, gr 119322, June 4,1996
L Commissioner v. Court of Tax Appeals and Fortune Tobacco, GR 119761, August
29,1996

m. Cm v. Pascor Realty & Development Corp., GR 128315, June 29,1999

Assessment not necessary before filing criminal complaint for tax evasion based
on Sec. 222 itself; See also Lucas Adamson vs. CA & CIR, G.R. No. 120935, May
21,2009
n. Lascona v. Comm., CTA 5777, January 4,2000
Allied Banking Corporation vs. Parayno, CTA 6565, November 3,2004
When to elevate assessment to CTA
o. San Agustin v. CIR, GR 138485, September 10,2001. TP can appeal a disputed
assessment despite payment of deficiency tax. Filing of refund not necessary for
this purpose.
p. Philippine Journalists, Inc. v. CIR, GR 162852, December 16,2004
Waiver of prescription must be executed properly per RMO 20-90, otherwise,
invalid
q. Cm v. Phil. Global Communications, GR No. 167146, October 31, 2006,
Prescriptive period to collect taxes assessed by Cm
r. RCBC v. OR, GR No. 168498, April 24, 2007, Options for disputing tax
assessment mutually exclusive under Section 228
s. BPI v. Cm, GR No. 174942, Suspension of collection requires request for
reinvestigation to be granted
t Cm vs. Enron Subic Power Corp., G.R. No. 116387, Jan.19,2009 (FAN must state
legal and factual basis of assessments to be valid)
7. Regulations
Revenue Regulations 12-85, November 27,1985 (Nolledo, p. 947)
Revenue Regulations 2-90, May 25,1990 (Nolledo, p. 999)
- . RR 12-99 implementing.the provisions of the NJRC, Sec 6,7,204,228,247,248 and 24?
on assessments of taxes and civil penalties and interest and extrajudicial settlement of
taxpayers criminal violation under RMO 1-90 """ ~"~s"" Revenue Regulations 2-78 (Nolledo, p. 1001)
RMC 48-90, April 23,1990 (counting of 3-year period of 365 x 3 regardless of leap year
and Asianbank v. Commissioner, CTA Case No. 6095, October 9,2001)
8. RA 9282, expanding the jurisdiction of the CTA, elevating it to collegiate court,
amending RA 1125 (effective April 23,2004)

RA 9503, (June 12, 2008) further expanding the composition of CTA by adding 3 new
Justices (9 in all)
LOCAL TAXATION
(Local Government Code - RA 7160)
Local Government Taxation
Section 128-196 (LGQ
Alejandro Ty v. Hon. Trampe & Municpal Assessor of Pasig
GR 117577, December 1,1995
Rule XXX, Art 217 - 287 (Rules and Regulations Implementing the Local Government
Code)
Local Finance Circular 1-93 (banks)
Local Finance Circular 2-93 (insurance companies)
Local Finance Circular 3-93 (finance companies)
Memo Circular 92-02, January 16,1992, issued by the Department of Interior and Local
Government
Memo Circular 5-93, October 22,1993, issued by the Department of Finance
Sec Drilon v. Mayo Iim, GR 112497, August 4,1994, Manila Tax Ordinance
Coca-Cola Bottlers Phils., Inc. v. City of Manila, GR No. 156252, June 27,2006 (validity of
Manila Tax Ordinance) See also City of Manila vs. Coca-Cola, GR No. 181845, August
12,2009 (Double Taxation)
International Container Terminal Services, Inc v. City of Manila, CTA AC No. 11, May
22, 2006 (Manila. Tax Ordinance Sec. 21(A) - Double Taxation); Coca-Cola v. City of
Manila, GR No. 181845, August 12,2009
Phil. Match Co., Ltd. V. City of Cebu, 81 SCRA 99, January 19,1999 {situs of payment of
local business tax)
PLDT v. City of Davao, GR No. 143867, March 25,2003
(PLOT liable to franchise tax imposed by city)
Palma Development Corp. v. Municipality of Malangas, GR 152492, October 16,2003
(Limitations on Wharfage fees etc. Sec. 133(c), LGC)

10

PLDT v. Province of Laguna, GR 151899, August 16,2005

Smart Communications v. City of Makati, October 13,2004
Smart Communications v. City of Davao, GR 155491, Sept 16,2008
(Liable to Davao City Franchise Tax)
Yamane v. BA Lepanto Condo. Corp., SC GR 154993, October 25, 2005 (condominium
corporation is not business entity)
Ericsson Telecoms Inc. v. City of Pasig, GR No. 176667, November 22,2007 "Definition
of Gross Receipt"
Fels Energy v. Batangas 516 SCRA 186
REAL PROPERTY TAXATION - LOCAL GOVERNMENT CODE (RA 7160)
Secl97to283 Local Government Code
Definition of Machinery and Equipment
Sec 199 Local Government Code
Sec 299

Implementing Rules and Regulations

Sec. 202

Declaration of real property

Sec 215-216

Classes of real property

Sec 218

Assessment Levels

Sec 226-230

Local Board Assessment Appeals

Central Board Assessment Appeals

Sec 232-235

Rates of Levy. .:, ........... .

Sec234

Exemption from real property tax

Sec 237

Idle lands

Sec 250-251

Payment of real property taxes and di

Sec 252

Protest

Sec 255

Interest on unpaid taxes

11

Sec 270 Period to collect real property taxes

Cases:
1. Lung Center of the Philippines v. Quezon City, GR 144104, June 29,2004
(Exemption based on actual use)
2. Mactan Airport Authority v. Pres. Marcos, GR 120082, September 11,1996
(Exemption from real property tax lifted by RA 7160 (LGC))
3. Manila International Airport Authority v. Court of Appeals, GR No. 155650, July 20,
2006 (Exemption from RPT of MIAA) (En Banc GR No. 163072, April 2,2009)
4. Quezon City Gov't, v. BayanTel Corp., GR No. 162015, March 6,2006
5. NFC vs. Central Board of Assessment Appeals, GR No. 171470, Jan. 30, 2oW"on Sec.
234(c) LGC. Also NPC v. Quezon Power, July 15,2Sg? '
TARIFF AND CUSTOMS CODE
L CONCEPT
A. The Tariff and Customs Code
B. The Bureau of Customs
Duties, power and jurisdiction
IL ARTICLES SUBJECT TO DUTY
A. Export (suspended except on logs) and import duties
B. Meaning of Importation (Sec. 1201,1202)
. C . Classes of Importation
a. Dutiable importation -Section 100 -
b. Prohibited importations - Sec. 101,1207
c. Conditionally-free importation - Sec 105

12

m. RATES OF DUTY
A. General Rules (Sec. 104)
B. Basis of Duty (Sees. 201,202,204,205,1308-10,1313)
Customs Administrative Order 2-96, June 14,1996
RA 8181 (transaction value), as amended by RA 9135
CAO 2-99, implementing RA 8181 on customs dutiable value and CAO 05-2001
implementing RA 9135.
C Special Duties
a. Dumping Sec. 301
b. Countervailing Sec. 302
c. Marking Sec: 303
d. Discriminatory Sec 304
D. Flexible Tariff Rates (Sec 401)
IV. IMPOSITION OF DUTIES
A. Persons liable - Sec. 1203-5
B. Declaration-Sec 1302-1307
C Examination, appraisal and classification - Sec 1405-3
D. Assessment of. Taxes
. E. Liquidation-Sec 1601-1603
V.

REMEDIES

OF

THE

GOVERNMENT

A. Extrajudicial
1. Enforcement of Tax Lien - Sec 1508
2. Seizure and Forfeiture - Sec. 2203-2209,2301-2316
B. Judicial

13

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