TAXATION LAW I

SYLLABUS

A.

General Principles

1.

Concept, Nature, and Characteristics of Taxation and Taxes

CASES: a. b. c. Commissioner of Internal Revenue vs. Cebu Portland Cement Company (December 15, 1987) Commissioner of Internal Revenue vs. Algue (February 17, 1988) C.N. Hodges vs. Municipal Board of the City of Iloilo (January 31, 1963)

2.

Classifications and Distinctions

CASES: a. b. c. d. e. f. g. h. i. j. k. l. Association of Customs Brokers, Inc. vs. Municipal Board (May 22, 1953) Esso Standard Eastern, Inc. vs. Commissioner of Internal Revenue (July 7, 1989) Progressive Development Corporation vs. Quezon City (April 24, 1989) PAL vs. Edu (August 15, 1988) Villegas vs. Hiu Chiong Tsai Pao Ho (November 10, 1978) Compania General de Tabacos de Filipinas vs. City of Manila (June 29, 1963) American Mail Lines vs. City of Basilan (May 31, 1961) Osmea vs. Orbos (March 31, 1993) Republic of the Philippines vs. Bacolod-Murcia Milling Co. (July 9, 1966) Victorias Milling Co., Inc. vs. Municipality of Victorias (December 27, 1968) Lutz vs. Araneta (December 22, 1955) PCGG vs. Cojuangco (December 14, 2001)

3.

Certain Doctrines in Taxation

Power to Tax includes the Power to Destroy a. b. c. Commissioner of Internal Revenue vs. Tokyo Shipping Co., Ltd. (May 26, 1995) Reyes vs. Almanzor (April 26, 1991) Commissioner of Internal Revenue vs. Algue (February 17, 1988)

Set-off / Compensation a. b. c. d. e. Philex Mining Corp. vs. Commissioner of Internal Revenue (August 25, 1998) Francia vs. Intermediate Appellate Court (June 28, 1988) Commissioner of Internal Revenue vs. Itogon-Suyoc Mines, Inc. (July 29, 1969) Domingo vs. Garlitos (June 29, 1963) Republic of the Philippines vs. Mambulao Lumber Company (February 28, 1962)

Taxpayer Suit a. b. c. Anti-Graft League of the Philippines vs. San Juan (August 1, 1996) Joya vs. Presidential Commission on Good Government (August 24, 1993) Lozada vs. COMELEC (January 27, 1983)

4.

Limitations on the Power of Taxation

CASES: a. b. c. d. e. f. g. h. i. j. k. l. m. n. o. p. q. r. s. t. u. v. w. x. y. z. aa. Pascual vs. Secretary of Public Works (December 29, 1960) Osmea vs. Orbos (March 31, 1993) Pepsi-Cola Bottling Company vs. Municipality of Tanauan (February 27, 1976) Social Security System vs. City of Bacolod (July 21, 1982) Sea-Land Services, Inc. vs. Court of Appeals (April 30, 2001) Commissioner of Internal Revenue vs. Mitsubishi Metal Corporation (January 22, 1990) 31st Infantry Post Exchange vs. Posadas (September 4, 1930) Commissioner of Internal Revenue vs. Marubeni Corporation (December 18, 2001) Reagan vs. Commissioner of Internal Revenue (December 27, 1969) Tiu vs. Court of Appeals (January 20, 1999) John Hay Peoples Alternative Coalition vs. BCDA (October 24, 2003) Coconut Oil Refiners Association Inc. vs. BCDA (July 29, 2005) Province of Abra vs. Hernando (August 31, 1981) Tolentino vs. Secretary of Finance (October 30, 1995) Abakada Guro Party List vs. Ermita (September 1, 2005) Misamis Oriental Association of Coco Traders, Inc. vs. Department of Finance Secretary (November 10, 1994) Commissioner of Internal Revenue vs. Court of Appeals (August 29, 1996) Commissioner of Internal Revenue vs. Lingayen Gulf Electric Power Co., Inc. (August 4, 1988) Kapatiran ng mga Naglilingkod sa Pamahalaan ng Pilipinas, Inc. vs. Tan (June 30, 1988) Sison vs. Ancheta (July 25, 1984) Villegas vs. Hiu Chiong Tsai Pao Ho (November 10, 1978) Villanueva vs. City of Iloilo (December 28, 1968) Pepsi-Cola Bottling Co. of the Philippines, Inc. vs. City of Butuan (August 28, 1968) Ormoc Sugar Company, Inc. vs. Treasurer of Ormoc City (February 17, 1968) Lutz vs. Araneta (December 22, 1955) Association of Customs Brokers, Inc. vs. Municipal Board (May 22, 1953) Eastern Theatrical Co., Inc. vs. Alfonso (May 31, 1949)

bb. Philippine Trust Company vs. Yatco (January 23, 1940) cc. Churchill vs. Concepcion (September 22, 1916)

dd. Meralco vs. Province of Laguna (May 5, 1999) ee. ff. gg. Province of Misamis Oriental vs. Cagayan Electric Power and Light Company, Inc. (January 12, 1990) Cagayan Electric Power & light o., Inc. vs. Commissioner of Internal Revenue (September 25, 1985) Lealda vs. Commissioner of Internal Revenue (April 30, 1963)

hh. Casanovas vs. Hord (March 22, 1907) ii. jj. American Bible Society vs. City of Manila (April 30, 1957) Abra Valley College vs. Aquino (June 15, 1988)

kk. ll.

Commissioner of Internal Revenue vs. Bishop of the Missionary District of the Philippines (August 14, 1965) Lladoc vs. Commissioner of Internal Revenue (June 16, 1965)

mm. Herrera vs. Quezon City Board of Assessment Appeals (September 30, 1961) nn. Bishop of Nueva Segovia vs. Provincial Board of Ilocos Norte (December 31, 1927) oo. Commissioner of Internal Revenue vs. Court of Appeals and YMCA (October 14, 1998) pp. Lung Center of the Philippines vs. Quezon City (June 29, 2004)

5.

Situs of Taxation and Double Taxation

CASES: a. b. c. d. e. f. g. Republic Bank vs. Court of Tax Appeals (September 2, 1992) Procter & Gamble Philippine Manufacturing Corp. vs. Municipality of Jagna (December 28, 1979) Pepsi-Cola Bottling Company vs. Municipality of Tanauan (February 27, 1976) Villanueva vs. City of Iloilo (December 28, 1968) Victorias Milling Co., Inc. vs. Municipality of Victorias (December 27, 1968) Compania General de Tabacos de Filipinas vs. City of Manila (June 29, 1963) Province of Bulacan vs. Court of Appeals (November 27, 1998)

6.

Forms of Escape from Taxation

CASES: a. b. c. Delpher Trades Corp. vs. Intermediate Appellate Court (January 26, 1988) Heng Tong Textiles Co., Inc. vs. Commissioner of Internal Revenue (August 26, 1968) Commissioner of Internal Revenue vs. Toda (September 14, 2004)

7.

Exemption from Taxation

CASES: a. b. c. d. e. f. g. h. i. j. k. l. m. n. o. p. Davao Gulf Lumber Corp. vs. Commissioner of Internal Revenue (July 23, 1998) Philippine Acetylene Co., Inc. vs. Commissioner of Internal Revenue (August 17, 1967) Commissioner of Internal Revenue vs. Court of Appeals and Ateneo de Manila University (April 18, 1997) Caltex Philippines, Inc. vs. Commission on Audit (May 8, 1992) Luzon Stevedoring Corp. vs. Court of Tax Appeals (July 29, 1988) National Development Company vs. Commissioner of Internal Revenue (June 30, 1987) Manila Electric Company vs. Vera (October 22, 1975) Maceda vs. Macaraig (May 31, 1991 and June 8, 1993 Motion for Reconsideration) Commissioner of Internal Revenue vs. Gotamco & Sons, Inc. (February 27, 1987) Commissioner of Internal Revenue vs. Court of Appeals and YMCA (October 14, 1998) Nitafan vs. Commissioner of Internal Revenue (July 23, 1987) Province of Abra vs. Hernando (August 31, 1981) Commissioner of Internal Revenue vs. Mitsubishi Metal Corporation (January 22, 1990) Commissioner of Internal Revenue vs. Gotamco & Sons, Inc. (February 27, 1987) 31st Infantry Post Exchange vs. Posadas (September 4, 1930) PLDT vs. City of Davao (Aug.22,2001)

q. r. s. t. u. v. w. x.

Sea-Land Services, Inc. vs. Court of Appeals (April 30, 2001) Meralco vs. Province of Laguna (May 5, 1999) Tiu vs. Court of Appeals (January 20, 1999) Mactan Cebu International Airport Authority vs. Marcos (September 11, 1996) Commissioner of Internal Revenue vs. Robertson (August 12, 1986) Basco vs. PAGCOR (May 14, 1991) Republic of the Philippines vs. Intermediate Appellate Court (April 26, 1991) Commissioner of Internal Revenue vs. Court of Appeals (January 20, 1995)

8.

Nature, Construction, Application, and Sources of Tax Laws

CASES: a. b. c. d. e. f. Hilado vs. Commissioner of Internal Revenue (October 31, 1956) Misamis Oriental Association of Coco Traders, Inc. vs. Department of Finance Secretary (November 10, 1994) Commissioner of Internal Revenue vs. Court of Appeals (February 6, 1997) Commissioner of Internal Revenue vs. Lingayen Gulf Electric Power Co., Inc. (August 4, 1988) ABS-CBN Broadcasting Corp. vs. Court of Tax Appeals (October 12, 1981) Philippine Bank of Communications vs. Commissioner of Internal Revenue (January 28, 1999)

B.

Real Property Taxation

1.

General Provisions (Section 197-200, R.A. 7160 - Local Government Code)

2.

Appraisal and Assessment Of Real Property (Section 201-225)

3.

Imposition of Real Property Tax (Section 232-234)

a.

Cases

Davao Sawmill Co. vs. Castillo, G.R. No. 40411, August 7, 1935 City of Baguio vs. Busuego, G.R. No. L-29772, September 18, 1980 Reyes et al. vs. Almanzor, G.R. Nos. 49839-46, April 26, 1991 Pecson vs. Court of Appeals, G.R. No. 105360, Ma 25, 1993 Mathay, Jr. vs. Macalingcag, G.R. No. 97618, December 16, 1993 Patalinhug vs. Court of Appeals, G.R. No. 104786, January 27, 1994 Ty, et al. vs. Trampe, G.R. No. 117577, December 1, 1995 Mactan Cebu International Airport Authority vs. Marcos, G.R. No. 120082, September 11, 1996 Sesbreo vs. Central Board of Assessment Appeals, G.R. No. 106588, March 24, 1997 Lopez vs. City of Manila, G.R. No. 127139, February 19, 1999 Cagayan Robina Sugar Milling Co. vs. Court of Appeals, G.R. No. 122451, October 12, 2000 Light Rail Transit Authority vs. Central Board of Assessment Appeals, G.R. No. 127316, October 12, 2000

4.

Special Levies on Real Property (Section 235-243, 245)

a.

Cases

LRT vs. Manila 342 SCRA 692 Cebu City vs. Mactan 261 SCRA 667

C.

Local Taxation

1.

General Provisions (Sections 128-133)

2.

Cases: a. b. c. d. e. Bulacan vs. Court of Appeals, 229 SCRA 42 Palma vs. Malangas, 413 SCRA 572 Pililia vs. Petron 198 SCRA 82 First Holding Co. vs. Batangas City, 300 SCRA 661 Butuan vs. LTO, 322 SCRA 805

3.

Specific Provisions on the Taxing and Other Revenue Raising Powers of Local Government Units a. b. c. d. e. f. Provinces (Sec. 134-141) Municipalities (Sec. 142-150) Cities (Sec. 151) Barangays (Sec. 152) Common Revenue-Raising Powers (Sec. 153-155) Community Tax (Sec. 156-164)

4.

Cases:

Misamis vs. Cagayan de Oro 181 SCRA 38 Reyes vs. San Pablo City 305 SCRA 353 Meralco vs. Laguna 306 SCRA 750 PLDT vs. Davao City 363 SCRA 522

5.

Local Finance Circular No. 001-2002, April 25, 2002

D.

Tariff and Custom Laws

1.

Applicable Laws a. b. c. d. e. f. Presidential Decree 1464 A Decree to Consolidate all the Tariff and Custom Laws of the Philippines Republic Act No. 9135 Republic Act No. 7651 Republic Act No. 7650 Republic Act No. 8751 Republic Act No. 8752

2.

Import Tariffs (Sections100-101, 105)

3.

Bases of Assessment of Duty (Sec. 201)

4.

Special Duties a. b. c. d. Anti-Dumping Duty (Sec. 301) Counterveiling Duty (Sec. 302) Marking Duty (Sec. 303) Discrimination by Foreign Countries (Sec. 304)

5.

Flexible Tariffs (Sec. 401)

6.

Importation in General (Sec. 1201-1207, 1210-1211)

7.

Entry at Customhouse (Sec. 1301-1302)

8.

Liquidation of Duties (Sec. 1601-1604)

9.

Abatements and Refunds (Sec. 1708)

10. Abandonment of Imported Articles (1801-1802)

11. Administrative and Judicial Proceedings a. b. c. d. Search, Seizure, and Arrest (Sec. 2201-2212) Administrative Proceedings (Sec. 2308-09, 2312-16) Judicial Proceedings (Sec. 2401-2402) Surcharges, Fines, and Forfeiture (Sec. 2530-36)

CASES: a. b. c. Jao vs. Court of Appeals, 249 SCRA 45 Transglobe International vs. Court of Appeals, GR. NO. 126634, JAN. 25, 1999 Acting Commissioner of Customs vs. Court of Appeals, GR NO. L-62636, APRIL 27, 1984

2.

Miscellaneous Provisions (Sec. 3301, 3502, 3513, 3601, 3611)

3.

Statutory Offenses of Officials and Employees (Section 3604)

4.

Failure to Keep Importation Records and Give Full Access to Custom Officers (Section 3610)

5.

Failure to Pay Correct Duties and Taxes on Imported Goods (Sec. 3611)

6.

CMO 10-2006 - SPECIAL RULES PRESCRIBING THE EXERCISE AND CONDUCT OF EXAMINATION, SEARCHES AND SEIZURES PURSUANT TO THE PROVISIONS OF SECTION 2536 OF THE TARIFF AND CUSTOMS CODE OF THE PHILIPPINES, AS WELL AS THE CUSTODY OF AND RESPONSIBILITY OVER THE ARTICLES OR GOODS SEIZED AS INCIDENT THERETO

B.

Remedies

1.

Real Property Taxation a. b. Assessment Appeals (Sec. 226-231, LGC) Collection of Real Property Tax (Sec. 246-270, LGC)

2.

Local Taxation a. b. c. d. Collection of Taxes (Sec. 165-171, LGC) Civil Remedies for Collection of Revenues (Sec. 172-185, LGC) Miscellaneous Provisions (Sec. 186-193,LGC) Taxpayers Remedies (Sec. 194-196, LGC)

3.

National Internal Revenue a. b. c. Remedies in General (Sec. 202-204, NIRC) Civil Remedies for Collection of Taxes (Sec. 205-227, NIRC) Protesting an Assessment, Refund, etc. (Sec. 228-231, NIRC)

CASES: a. b. c. d. e. f. g. St. Stephens Association and St. Stephens Girls School vs. Collector of Internal Revenue, G.R. No. L-11238, August 21, 1958 Advertising Associates vs. Court of Appeals and Commissioner of Internal Revenue, G.R. No. L-59758, December 26, 1984 Commissioner of Internal Revenue vs. Isabela Cultural Corporation, G.R. No. 135210, July 11, 2001 Surigao Electric Co. and Arturo Lumanlan vs. Municipality of Surigao, G.R. No. L-22766, August 30, 1968 Yabes vs. Flojo, G.R. No. L-46954 July 20, 1982 Commissioner of Internal Revenue vs. Algue, G.R. No. L-28896 February 17, 1988 Commissioner of Internal Revenue vs. Union Shipping Corporation, and the CTA, G.R. No. L-66160 May 21, 1990

2.

Revenue Regulations No. 12-99 Implementing the Provisions of the National Internal Revenue Code of 1997, Governing the Rules of Assessment of National Internal Revenue Taxes, Civil Penalties and Interest and the Extrajudicial Settlement of a Taxpayers Criminal Violation of the Code through Payment of Suggested Compromise Penalty.

B.

Court of Tax Appeals

1.

Republic Act No. 1125 as amended by R.A. No. 3457, and further amended by R.A. 9282

2.

Republic Act No. 9505