Updates on Taxation 2012

+AMDG

GENERAL PRINCIPLES

… CDC imposed on Chevron a royalty fee of P0.50 per liter on fuel deliveries made to customers inside the CSEZ. Chevron protested stating that the imposition is a tax which CDC has no power to impose.

??? Is the royalty fee a tax or a regulatory measure?

!!! It is a REGULATORY FEE. The royalty fee was deemed imposed primarily for regulatory purposes and not for generation of income which is the primary feature of a tax levy. The Court mentioned that the oil industry is “greatly imbued with public interest” and that the highly combustible product “poses serious threat to life and property”. It also upheld the reasonable relation between the fee and the regulation sought to be attained given the high volume of fuel entering the CSEZ and the fact that the increasing administrative costs were triggered by security risks arising from possible terrorist strikes. Thus, CDC was authorized to impose the fee.

CHEVRON PHILIPPINES, INC. vs. BCDA & CDC

+AMDG

GENERAL PRINCIPLES

… Petitioner is a non-stock, non-profit educational foundation. It received a Building Permit Fee assessment for the construction of the AUF Medical Center but claimed exemption from the same as well as from other permits and fees by virtue of Republic Act 6055. Respondent disputed the claimed exemption by stating that the impositions are regulatory in nature and not taxes from which Petitioner is exempt under the said law.

??? Is the building permit fee a tax from which Petitioner is exempt?

!!! It is a REGULATORY FEE. The DPWH has in fact issued implementing rules which provide the bases for the assessment of fees and Petitioner has failed to show that they were arbitrarily determined or unrelated to the activity being regulated. Neither has there been proof that the fee was unreasonable or in excess of the cost of regulation or inspection. The Court added that even if there was incidental revenue, the same is deemed not to change the nature of the charge. Thus, the City of Angeles was justified in its assessment.

ANGELES UNIVERSITY FOUNDATION vs. CITY OF ANGELES

+AMDG

GENERAL PRINCIPLES

… Shell filed a claim for refund for excise taxes it paid on sales of gas and fuel oils to various international carriers.

??? Is Shell entitled to refund the excise taxes given the earlier decisions in the Silkair and Exxonmobil cases?

!!! NO. Excise tax on manufactured petroleum products are paid upon withdrawal of the goods. Thus, the excise tax payments made by Shell can not be considered as having been an “erroneous or illegal tax”. The Court also pointed out that the only provision which allows refunds of excise taxes paid is that which relate to goods actually exported. Section 135 of the Tax Code which provides exemption from excise tax on petroleum products sold to international carriers is construed as prohibiting the manufacturers-sellers from passing on the tax to the carriers by incorporating the excise tax into the selling price or effectively shifting the tax burden. This is consistent with the ruling in the Philippine Acetylene case which stated that the “tax exemption being enjoyed by the buyer cannot be the basis of a claim for tax exemption by the manufacturer”.

CIR vs. PILIPINAS SHELL PETROLEUM CORPORATION

+AMDG

GENERAL PRINCIPLES

… BOCEA questions R.A. 9335 (Attrition Act of 2005) and states that the law violates their rights to (1) due process; (2) equal protection of the laws; and (3) security of tenure. They likewise claim that the same is an undue delegation of legislative power and is a bill of attainder.

??? Is the law unconstitutional? !!! NO. (1) Given the clear parameters on revenue targets, rewards, removal levels, etc.,

R.A. 9335 is complete in all its essential terms and conditions and contains sufficient standards that negate a claim of undue delegation.

(2) BOC and BIR are both revenue-generating agencies that are both under the DOF. Such substantial distinction Is germane and related to the purpose of the law.

(3) The law does not deny the BOC employees their right to be heard and they still can not be arbitrarily removed.

(4) It is not a bill of attainder as the same does not seek to punish without a judicial trial as all it does is lays down the grounds for possible termination.

+AMDG

BUREAU OF CUSTOMS EMPLOYEES ASSOCIATION (BOCEA) vs. TEVES

GENERAL PRINCIPLES

… R.A. 8240 took effect on January 1, 1997 and a shift from ad valorem to specific taxes on cigarettes was implemented. The amending law separately provided that (i) the specific tax due from any brand of cigarette within the next 3 years (i.e., the transition period) shall not be lower than the tax due before the new law and (2) the rates of specific tax shall be increased by 12% on January 1, 2000. The BIR then issued RR 17-99 to implement the law increasing the rate and substantially echoed R.A. 8240 except that it additionally stipulated that the specific tax to be paid shall not be lower than the tax actually paid before January 1, 2000. The CIR, in defending the RR, opined that “the adoption of the “higher tax rule” during the transition period shows the intent of Congress not to lessen the excise tax collection”.

??? Is RR 17-99 valid to the extent that it carries the “higher tax rule” for the January 1, 2000 increase?

CIR vs. FORTUNE TOBACCO CORPORATION

+AMDG

GENERAL PRINCIPLES

!!! NO. The “higher tax rule” clearly only applies to the transition period. As such, the RR was deemed an invalid act of administrative legislation. The CIR can not state that the sole purpose for the shift to specific tax was to increase revenue since there were other reasons for the same such as to curb corruption, simplify tax administration, etc. Likewise, the rule of uniformity was deemed violated since brands belonging to the same category would be imposed with different tax rates if the “higher tax rule” were to be implemented. Finally, the Court pointed out that the rule of strictly interpreting tax exemption laws will not apply to the instant tax refund since the refund of the Petitioner is not premised on legislative grace but on the principle of solution indebiti given that the government is put in a position to unjustly enrich itself due to a mistake in law.

+AMDG

GENERAL PRINCIPLES

!!! Serves as a learning institution for tax collectors and administrators of the government and selected applicants from the private sector.

!!! It shall handle all trainings, continuing education programs and other courses for all officials and personnel of the BIR, BOC, and BLGF. All existing officials and personnel of the said agencies shall be required to undergo the re-tooling and enhancement seminars and training programs.

!!! The Board of Trustees will be composed of representatives from the DOF (ex officio Chairman), BIR, BOC, BLGF, and 3 representatives from the academe with at least 5 years of teaching experience. The first 3 will be Presidential appointees.

+AMDG

REPUBLIC ACT NO. 10143 PHILIPPINE TAX ACADEMY

INCOME TAX

??? Is Republic Act 9337 constitutional insofar as it excluded PAGCOR from the enumeration of GOCCs exempt from the payment of corporate income tax?

!!! YES. The original exemption of PAGCOR from corporate income tax was not made pursuant to a valid classification based on substantial distinctions so that the law may operate only on some and not on all. Instead, the same was merely granted due to the acquiescence of the House Committee on Ways and Means to the request of PAGCOR.

The argument that the withdrawal of the exemption also violates the non-impairment clause will not hold since any franchise is subject to amendment, alteration or repeal by Congress.

However, the Court made it clear that PAGCOR remains exempt from payment of indirect taxes and as such its purchases remain not subject to VAT, reiterating the rule laid down in the Acesite case.

+AMDG

PAGCOR vs. BIR

INCOME TAX

… Petitioner was assessed for deficiency withholding taxes on interest from savings and time deposits of its members. The CTA ruled against the Petitioner and said that the withholding of tax on income payments subject to final withholding tax includes the said interest as "interest from x x x similar arrangements . . ." .

??? Is Petitioner liable for the deficiency WT?

!!! NO. The BIR had earlier ruled without any qualification that since interest from any Philippine currency bank deposit and yield or any other monetary benefit from deposit substitutes are paid by banks, other entities such as cooperatives are not required to withhold the corresponding tax on the interest from savings and time deposits of their members. The fact that “similar arrangements” is preceded by banking terms means that that those subject to withholding must have deposit peculiarities. This is also consistent with the preferential treatment accorded to members of cooperatives who are exempt in the same way as the cooperatives themselves.

+AMDG

DUMAGUETE CATHEDRAL CREDIT COOPERATIVE vs. CIR

INCOME TAX

… Filinvest Development Corporation extended advances in favor of its affiliates and supported the same with instructional letters and cash and journal vouchers. The BIR assessed Filinvest for deficiency income tax by unilaterally imputing an “arm’s length” interest rate on its advances to affiliates. Filinvest disputed this by saying that the CIR lacks the authority to impute theoretical interest and that the rule is that interests cannot be demanded in the absence of a stipulation to that effect.

??? Can the CIR unilaterally impute theoretical interest on the advances made by Filinvest to its affiliates?

!!! NO. Despite the seemingly broad power of the CIR to distribute, apportion and allocate gross income under (now) Section 50 of the Tax Code, the same does not include the power to impute theoretical interests even with regard to controlled taxpayers’ transactions. This is true even if the CIR is able to prove that interest expense (on FDC’s own loans) was in fact claimed by FDC.

+AMDG

CIR vs. FILINVEST DEVELOPMENT CORPORATION

INCOME TAX

The term in the definition of gross income that even those income “from whatever source derived” is covered still requires that there must be actual or at least probable receipt or realization of the item of gross income sought to be apportioned, distributed, or allocated. Finally, the rule under the Civil Code that “no interest shall be due unless expressly stipulated in writing” was also applied in this case.

The Court also ruled that the instructional letters, cash and journal vouchers qualify as loan agreements that are subject to DST.

+AMDG

INCOME TAX

… CREBA assails the imposition of the minimum corporate income tax (MCIT) as being violative of the due process clause as it levies income tax even if there is no realized gain. They also question the creditable withholding tax (CWT) on sales of real properties classified as ordinary assets stating that (1) they ignore the different treatment of ordinary assets and capital assets; (2) the use of gross selling price or fair market value as basis for the CWT and the collection of tax on a per transaction basis (and not on the net income at the end of the year) are inconsistent with the tax on ordinary real properties; (3) the government collects income tax even when the net income has not yet been determined; and (4) the CWT is being levied upon real estate enterprises but not on other enterprises, more particularly those in the manufacturing sector.

??? Are the impositions of the MCIT on domestic corporations and CWT on income from sales of real properties classified as ordinary assets unconstitutional?

+AMDG

CHAMBER OF REAL ESTATE AND BUILDERS’ ASSOCIATION, INC. vs. EXECUTIVE SECRETARY

INCOME TAX!!! NO. MCIT does not tax capital but only taxes income as shown by the fact that the MCIT is arrived at by deducting the capital spent by a corporation in the sale of its goods, i.e., the cost of goods and other direct expenses from gross sales. Besides, there are sufficient safeguards that exist for the MCIT: (1) it is only imposed on the 4th year of operations; (2) the law allows the carry forward of any excess MCIT paid over the normal income tax; and (3) the Secretary of Finance can suspend the imposition of MCIT in justifiable instances.

The regulations on CWT did not shift the tax base of a real estate business’ income tax from net income to GSP or FMV of the property sold since the taxes withheld are in the nature of advance tax payments and they are thus just installments on the annual tax which may be due at the end of the taxable year. As such the tax base for the sale of real property classified as ordinary assets remains to be the net taxable income and the use of the GSP or FMV is because these are the only factors reasonably known to the buyer, at the time of sale, in connection with the performance of his duties as a withholding agent. The use of the GSP/FMV as basis to determine the withholding taxes is evidently for purposes of practicality and convenience.

Neither is there violation of equal protection even if the CWT is levied only on the real industry as the real estate industry is, by itself, a class on its own and can be validly treated differently from other businesses. +

AMDG

INCOME TAX

… Mercury Drug granted 20% sales discount to qualified senior citizens on their purchases of medicines. They subsequently filed a refund for taxable years 1993 and 1994 given that the then prevailing rule allowed that the sales discounts be claimed as tax credits.

??? Is the claim for tax credit to be based on the full amount of the 20% senior citizen discount or the acquisition cost of the item sold?

!!! The tax credit should be equivalent to the actual 20% sales discount granted to the senior citizens. The previous ruling of the CTA that the tax credit is based only on the “cost of the discount” which was interpreted to cover only direct acquisition cost, excluding administrative and other incremental costs, was struck down by the Court.

Note: The case of M.E. Holdings Corporation vs. CIR & CTA clarified that the rule will be -- (i) prior to March 21, 2004 (effectivity of Expanded Senior Citizens Act) the discounts are treated as tax credit; (ii) after March 21, 2004 the same are treated as deductions. +

AMDG

MERCURY DRUG CORPORATION vs. CIR

INCOME TAX

… Far East Bank filed a claim for refund of overpaid creditable withholding taxes which included CWT on rental income allegedly earned by the Petitioner as lessor.

??? Can a claim for refund be granted notwithstanding claimant’s failure to show in the return that that income upon which the creditable taxes withheld were based was in fact reported?

!!! NO. The 3 essential requirements for a claim for refund of this nature to prosper are (1) filing the same within the 2-year period; (2) establishing the fact of withholding with copies of the CWT certificates; and (3) showing that the income received was declared as part of gross income. Here the Petitioner failed to prove (3) as the return in fact showed “Not Applicable” under the portion referring to Rental Income. In addition, some certificates were likewise not submitted as evidence.

+AMDG

CIR vs. FAR EAST BANK & TRUST COMPANY

INCOME TAX

… Asiaworld filed its 2001 ITR stating that a portion of the amount representing Prior Year’s Excess Credits was the 1999 excess creditable withholding tax which it is now seeking to refund. The said 1999 excess payment was previously treated as having been carried over to 2000. Asiaworld posits its claim on the portion of the provision which states that the “such option shall be considered irrevocable for that taxable period” in that the same refers to only a one-year prohibition for the action of the claim for refund.

??? Is the irrevocability rule under Section 76 of the Tax Code only applicable to the next taxable year which in this case was the year 2000?

!!! NO. The option to carry-over is not limited to the following taxable year of 2000 but will apply to the succeeding taxable years until the whole amount of the 1999 creditable withholding tax overpayment is fully utilized.

+AMDG

ASIAWORLD PROPERTIES PHILIPPINE CORPORATION vs. CIR

INCOME TAX

… Smart entered into an Agreement with Prism, a nonresident foreign corporation domiciled in Malaysia, whereby Prism will provide programming and consultancy services to Smart. Thinking that the payments to Prism were royalties, Smart withheld 25% under the RP-Malaysia Tax Treaty. Smart then filed a refund with the BIR alleging that the payments were not subject to Philippine withholding taxes given that they constituted business profits paid to an entity without a permanent establishment in the Philippines.

??? Does Smart have the right to file the claim for refund?

!!! YES. The Court reiterated the ruling in Procter & Gamble stating that a person “liable for tax” has sufficient legal interest to bring a suit for refund of taxes he believes were illegally collected from him. Since the withholding agent is an agent of the beneficial owner of the payments (i.e., nonresident), the authority as agent is held to include the filing of a claim for refund. The Silkair case was held inapplicable as it involved excise taxes and not withholding taxes.

+AMDG

CIR vs. SMART COMMUNICATIONS, INC.

INCOME TAX

Smart was granted a refund given that only a portion of its payments represented royalties since it is only that portion over which Prism maintained intellectual property rights and the rest involved full transfer of proprietary rights to Smart and were thus treated as business profits of Prism.

+AMDG

INCOME TAX

… Supreme Transliner took out a loan from respondent but was unable to pay the same. The respondent bank extrajudicially foreclosed the collateral and, before the expiration of the one-year redemption period, the mortgagors notified the bank of its intention to redeem the property.

??? Is the mortgagee-bank liable to pay the capital gains tax upon the execution of the certificate of sale and before the expiry of the redemption period?

!!! NO. It is clear that in foreclosure sale there is no actual transfer of the mortgaged real property until after the expiration of the one-year period and title is consolidated in the name of the mortgagee in case of non-redemption. This is because before the period expires there is yet no transfer of title and no profit or gain is realized by the mortgagor.

Note: Remember that in extrajudicial foreclosures, the mortgagee-bank is the statutory seller who is liable for the CGT.

+AMDG

SUPREME TRANSLINER, INC. vs. BPI FAMILY SAVINGS BANK, INC.

INCOME TAX

… PAL paid the 10% Overseas Communications Tax (OCT) for overseas telephone calls made through PLDT. It then later filed with the BIR a claim for refund of the amount paid as OCT, claiming that other than being liable for basic corporate income tax or the franchise tax, whichever was lower, it was exempted from all other taxes by virtue of the "in lieu of all taxes" clause in its charter.

??? Is PAL liable for the OCT?

!!! NO. The language of PAL’s franchise is clearly all-inclusive --- the basic corporate income tax or franchise tax paid by respondent shall be "in lieu of all other taxes” except only real property tax. It is not the fact of tax payment that exempts it, but the exercise of its option. In the event that respondent incurs a net loss, it shall have zero liability for basic corporate income tax, the lowest possible tax liability. There being no qualification to the exercise of its options, then Respondent is free to choose basic corporate income tax, even if it would have zero liability.

+AMDG

CIR vs. PHILIPPINE AIRLINES, INC.

INCOME TAX

!!! The taxable net income of REITs is the gross income under Section 32 less (a) the deductions under Section 34 AND (b) dividends distributed by the REIT out of its distributable income provided it (a) maintains its status as a public company; (b) maintains the listed status of the investor securities (shares issued by the REIT); and (c) distributes at least 90% of its distributable income.

* Dividends should be distributed before the last day of the 5th month after the close of the taxable year

* Public company defined as 1,000 public shareholders owning at least 50 shares each and owning an aggregate of 40% of the capital stock

(increased to 67% from 3 years after listing)

* Failure to observe the above rules will result to disallowance of dividends as additional deduction (Note: The RR provides a curing period of 30 days)

+AMDG

REPUBLIC ACT 9856 REAL ESTATE INVESTMENT TRUST

INCOME TAX

!!! Other tax rules:

•Not subject to the MCIT•Income payments to REIT are subject to a lower CWT of 1%•Sale of real property to REITs subject to DST reduction of 50%•Dividends received by an OFW from the REIT is exempt from the 10% WT for the first 7 years of the law.•VAT is imposed on sale of real property by the REIT but not of its securities as it is not considered a dealer in securities

+AMDG

INCOME TAX

!!! The following transactions with senior citizens are exempt from VAT (on top of the 20% discount):

• Professional fees of physicians, licensed health workers• Purchase of medicines• Medical and dental services and laboratory fees• Fare for any land transportation• Fare for domestic air and sea services• Utilization of hotels and similar lodging establishments• Admission fees on theaters, concert halls, circuses, etc.• Funeral and burial services

+AMDG

REPUBLIC ACT 9994ADDITIONAL (TAX) BENEFITS TO SENIOR CITIZENS

INCOME TAX

!!! Discounts given by establishments, sellers are still considered as tax deductions and NOT tax credits

!!! Employment of senior citizens will entitle employer to additional tax deduction of 15% of total amount paid as salaries and wages to senior citizens provided that the employment lasts for at least 6 months

!!! Realty tax holiday for the first 5 years is granted to those establishing foster care facilities

+AMDG

INCOME TAX

!!! Local water districts are now exempt from income taxes under Section 27 provided that the amount saved by virtue of the exemption is to be used for capital equipment expenditure to expand water services coverage

!!! All unpaid taxes starting August 13, 1996 are condoned provided (1) the BIR establishes financial incapacity of the LWD and (2) the LWD submits to Congress a program of internal reforms.

+AMDG

REPUBLIC ACT 10026TAX EXEMPTION TO LOCAL WATER DISTRICTS

ESTATE TAX

… There were claims against the estate which the BIR contested stating that lower amounts were paid as compromise payments during the settlement of the estate and these are amounts that should be considered as deductions in arriving at the net estate.

??? Will the compromise amounts be the amounts considered as deductions to the gross estate?

!!! NO. The deductions allowable are the amounts determined at the time of death. Post-death developments are not material in determining the amount of deduction. Thus, the Court applied the “date-of-death valuation rule” which is the US rule on deductions and which is applicable also in the Philippines. The amount deductible is the debt which could have been enforced against the deceased in his lifetime.

+AMDG

DIZON vs. CIR

VALUE ADDED TAX

… Sony Philippines was ordered examined for “the period 1997 and unverified prior years” as indicated in the Letter of Authority . The audit yielded assessments against Sony Philippines for deficiency VAT and FWT, viz: (1) late remittance of FWT on royalties for the period January to March 1998 and (2) deficiency VAT on reimbursable received by Sony Philippines from its offshore affiliate, Sony International Singapore (SIS).

??? (1) Is Petitioner liable for deficiency VAT? (2) Was the investigation of its 1998 FWT return valid?

!!! (1) NO. Sony Philippines did in fact incur expenses supported by valid VAT invoices when it paid for certain advertising costs. This is sufficient to accord it the benefit of input VAT credits and where the money came from to satisfy said advertising billings is another matter but does not alter the VAT effect. In the same way, Sony Philippines can not be deemed to have received the reimbursable as a fee for a VAT-taxable activity.

+AMDG

CIR vs. SONY PHILIPPINES, INC.

VALUE ADDED TAX

The reimbursable was couched as an aid for Sony Philippines by SIS in view of the company’s “dire or adverse economic conditions”. More importantly, the absence of a sale, barter or exchange of goods or properties supports the non-VAT nature of the reimbursement. This was distinguished from the COMASERCO case where even if there was similarly a reimbursement-on-cost arrangement between affiliates, there was in fact an underlying service. Here, the advertising services were rendered in favor of Sony Philippines not SIS.

!!! (2) NO. A Letter of Authority should cover a taxable period not exceeding one year and to indicate that it covers ‘unverified prior years’ should be enough to invalidate it. In addition, even if the FWT was covered by Sony Philippines’ fiscal year ending March 1998, the same fell outside of ‘the period 1997’ and was thus not validly covered by the LOA.

+AMDG

VALUE ADDED TAX

??? Are the gross receipts derived by operators or proprietors of cinema/theater houses from admission tickets subject to VAT?

!!! NO. While (1) the enumeration under Section 108 on the VAT-taxable services is not exhaustive and (2) the said list includes “the lease of motion picture films, films, tapes and discs”, the said activity however is not the same as showing or exhibition of motion pictures or films. Thus, since the showing or exhibition of motion pictures or films is not in the enumeration, the CIR must show that it falls under the phrase “similar services”.

The repeal of the Local Tax Code by the LGC of 1991 is not a legal basis for the imposition of VAT on the gross receipts of cinema/theater operators or proprietors derived from admission tickets. The removal of the prohibition (on the national government to tax certain activities) under the Local Tax Code did not grant nor restore to the national government the power to impose amusement tax on cinema/theater operators or proprietors. Neither did it expand the coverage of VAT.

+AMDG

CIR vs. SM PRIME HOLDINGS, INC.

VALUE ADDED TAX

??? Are toll fees collected by tollway operators subject to VAT?

!!! YES.

(1) VAT is imposed on “all kinds of services” and tollway operators who are engaged in constructing, maintaining, and operating expressways are no different from lessors of property, transportation contractors, etc.

(2) Not only do they fall under the broad term under (1) but also come under those described as “all other franchise grantees” which is not confined only to legislative franchise grantees since the law does not distinguish. They are also not a franchise grantee under Section 119 which would have made them subject to percentage tax and not VAT.

(3) Neither are the services part of the enumeration under Section 109 on VAT-exempt transactions.

+AMDG

DIAZ vs. SECRETARY OF FINANCE

VALUE ADDED TAX

(4) The toll fee is not a user’s tax and thus it is permissible to impose a VAT on the said fee. The MIAA case does not apply and the Court emphasized that toll fees are not taxes since they are not assessed by the BIR and do not go the general coffers of the government. Toll fees are collected by private operators as reimbursement for their costs and expenses with a view to a profit while taxes are imposed by the government as an attribute of its sovereignty. Even if the toll fees were treated as user’s tax, the VAT can not be deemed as a ‘tax on tax’ since the VAT is imposed on the tollway operator and the fact that it might pass-on the same to the tollway user, it will not make the latter directly liable for VAT since the shifted VAT simply becomes part of the cost to use the tollways.

(5) The assertion that the VAT imposed is not administratively feasible given the manner by which the BIR intends to implement the VAT (i.e., rounding off the toll rates and putting any excess collection in an escrow account) is not enough to invalidate the law. Non-observance of the canon of administrative feasibility will not render a tax imposition invalid “except to the extent that specific constitutional or statutory limitations are impaired”.

+AMDG

VALUE ADDED TAX

… Petitioner was assessed for deficiency VAT and DST on the premise that, for the VAT, it was engaged in the sale of services.

??? (1) Is Petitioner liable for the VAT? (2) Can the imposition of surcharge and interest be waived on the imposition of deficiency DST?

!!! (1) NO. Since Petitioner is considered a non-bank financial intermediary, it is subject to 10% VAT for the tax years 1996 to 2002 but since the collection of VAT from non-bank financial intermediaries was specifically deferred by law for that period, Petitioner is not liable for VAT during these tax years. With the full implementation of the VAT system on non-bank financial intermediaries starting January 1, 2003, Petitioner is liable for 10% VAT for said tax year. Beginning 2004 up to the present, by virtue of R.A. No. 9238, Petitioner is no longer liable for VAT but it is subject to percentage tax on gross receipts from 0% to 5%, as the case may be.

+AMDG

TAMBUNTING PAWNSHOP, INC. vs. CIR

VALUE ADDED TAX

!!! (2) YES. Petitioner's argument against liability for surcharges and interest — that it was in good faith in not paying documentary stamp taxes, it having relied on the rulings of respondent CIR and the CTA that pawn tickets are not subject to documentary stamp taxes — was found to be meritorious. Good faith and honest belief that one is not subject to tax on the basis of previous interpretations of government agencies tasked to implement the tax law are sufficient justification to delete the imposition of surcharges and interest.

+AMDG

VALUE ADDED TAX

… Petitioner was engaged by DPWH for the construction of roads and bridges. In turn, LVM subcontracted construction of one of the projects to Respondent’s Joint Venture. After completing the project, the Joint Venture demanded full payment to which Petitioner responded that they discovered that no deductions for EVAT were made on previous payments and as such they were going to deduct 8.5% from the payments still due. Respondent disputed this and said that all the receipts issued to Petitioner would have made them (Respondent) subject to VAT and, consequently, Petitioner can thus claim the input tax thereon.

??? Can Petitioner rightfully deduct the amount representing withholding VAT due on its transaction with the DPWH?

!!! NO. As the entity which dealt directly with the government insofar as the main contract was concerned, LVM was itself required by law to pay the 8.5% (now 5%) VAT which was withheld by DPWH. Given that (1) the Joint Venture complied with their own obligation when they paid their VAT from their own gross receipts and

+AMDG

LVM CONSTRUCTION CORPORATION vs. SANCHEZ

VALUE ADDED TAX

(2) the fact that the contract between LVM and Joint Venture did not stipulate any obligation on LVM assuming the VAT, LVM has no basis to withhold payments . Although the burden to pay an indirect tax like the VAT can be passed on, the liability to pay the same remains with the seller. In this case, both LVM and Joint Venture are liable for their respective VAT obligations as respective sellers.

+AMDG

VALUE ADDED TAX

… Kepco filed a claim for refund of unutilized input VAT based on its zero-rated sale of power to NPC. A substantial portion of the claim was disallowed for having been supported by VAT invoices which only had the TIN-VAT stamped and not printed. There were also certain sales by Kepco which failed to indicate the words “zero-rated”. Lastly, they also alleged that invoices and receipts are interchangeable and either should suffice as proof of purchase and consequently as support for a claim for refund.

??? Is Petitioner entitled to the claim for refund on the disallowed portion?

!!! NO. The requirement that the TIN be imprinted and not merely stamped is a reasonable requirement imposed by the BIR. More importantly, the requirement of the appearance of the words “zero-rated” on the face of the invoice prevents buyers from falsely claiming input VAT from their purchases when no VAT was actually paid. The failure to adhere to the said rules will not only expose the taxpayer to penalties but should also serve to disallow the claim. Finally, the Court disagreed with the position that invoices and receipts are interchangeable since the former clearly refers to sales of goods while the latter to services.

+AMDG

KEPCO PHILIPPINES CORPORATION vs. CIR

VALUE ADDED TAX

… Petitioner was a real estate developer that bought from the national government a parcel of land that used to be the Fort Bonifacio military reservation. At the time of the said sale there was as yet no VAT imposed so Petitioner did not pay any VAT on its purchase. Subsequently, Petitioner sold two parcels of land to Metro Pacific Corp. In reporting the said sale for VAT purposes (because the VAT had already been imposed in the interim), Petitioner claimed transitional input VAT corresponding to its inventory of land. The BIR disallowed the claim of presumptive input VAT and thereby assessed Petitioner for deficiency VAT.

??? Is Petitioner entitled to claim the transitional input VAT on its sale of real properties given its nature as a real estate dealer and if so (i) is the transitional input VAT applied only to the improvements on the real property or is it applied on the value of the entire real property and (ii) should there have been a previous tax payment for the transitional input VAT to be creditable?

+AMDG

FORT BONIFACIO DEVELOPMENT CORPORATION vs. CIR

VALUE ADDED TAX

!!! YES. Petitioner is entitled to claim transitional input VAT based on the value of not only the improvements but on the value of the entire real property and regardless of whether there was in fact actual payment on the purchase of the real property or not.

The amendments to the VAT law do not show any intention to make those in the real estate business subject to a different treatment from those engaged in the sale of other goods or properties or in any other commercial trade or business. On the scope of the basis for determining the available transitional input VAT, the CIR has no power to limit the meaning and coverage of the term "goods" in Section 105 of the Tax Code without statutory authority or basis. The transitional input tax credit operates to benefit newly VAT-registered persons, whether or not they previously paid taxes in the acquisition of their beginning inventory of goods, materials and supplies.

+AMDG

REMEDIES

… An investigation was conducted against LMCEC for taxable years 1997 to 1999. The assessments that came out of the said investigation was disputed by the taxpayers on the grounds that (i) the assessment notices issued were invalid for not bearing serial numbers and (ii) the examinations made on the books of accounts and other records were done more than once in the relevant taxable years.

??? Are the assessments invalid?

!!! NO. The formality of a control number in the assessment notice is not a requirement for its validity but rather it is the contents which should inform the taxpayer of the deficiency and which should contain the facts and the laws on the which the assessment is based. Likewise, this case is an exception to the general rule of having the books examined only once in a year. Section 235 of the Tax Code allows the multiple examinations when (a) there is fraud or irregularity; (b) the taxpayer requests for reinvestigation; (c) there is a required verification of compliance with withholding taxes and capital gains tax liabilities.

+AMDG

CIR vs. GONZALEZ

REMEDIES

??? Whether a taxpayer, by paying the other tax assessments covered by a Waiver of the Statute of Limitations, is consider estopped from questioning the validity of the said waiver (on the basis that the CIR did not sign it) with respect to the other covered but unsettled assessments?

!!! YES. RCBC is considered estopped through its partial payment of the revised assessments within the extended period provided in the said waivers. Thus, it had impliedly admitted the validity of the said waivers. Had it believed that the waiver was invalid and that the period to assess had effectively prescribed, RCBC could have refused to make any payment based on any assessment against it.

+AMDG

RIZAL COMMERCIAL BANKING CORPORATION vs. CIR

REMEDIES

… Metro Star Superama was audited for taxable year 1999 and received a Preliminary 15-day Letter on November 15, 2001. On April 11, 2002, it received a Formal Letter of Demand dated April 3, 2002. Denying that it received a PAN and thus not accorded due process, Metro Star Superama filed a Petition with the CTA.

??? Was the Petitioner accorded the required due process?

!!! NO. Since the Petitioner denied receipt of the PAN, the burden of proving the same shifts to the BIR. To raise the presumption of receipt, it must be shown that (a) the letter was properly addressed with postage prepaid and (b) that it was mailed. If receipt is denied, the BIR must then show actual receipt through presentation of the registry receipt or, if the same cannot be located, at least a certification from the Bureau of Posts.

The Court likewise added that the issuance of a PAN is a mandatory requirement save only on specified instances. The old rule laid down in CIR vs. Menguito that only the FAN is mandatory no longer applies since the same was ruled upon based on the old provision. +

AMDG

CIR vs. METRO STAR SUPERAMA, INC.

REMEDIES

… Fluor Daniel was initially assessed for deficiency EWT on its software maintenance fees paid to an offshore affiliate. In response to Petitioner’s protest, the CIR issued a Final Decision on Disputed Assessment (FDDA) cancelling the deficiency EWT assessment but issuing an assessment for FWT on the same software fees albeit using a lower 15% rate under the RP-US Tax Treaty.

??? Was the Petitioner deprived of due process when the FDDA changed the assessment from deficiency EWT to deficiency FWT?

!!! YES. The change of the assessment in the FDDA itself constituted a new assessment. As such, the taxpayer should have been given the chance to dispute the same via the process laid down in the Tax Code which is by way of filing a protest. Given that this was not complied with as what was issued was already an FDDA, the circumstances certainly deprived the Petitioner of a reasonable opportunity to be heard and submit evidence in support of its defense which is a clear violation of due process requirements.

+AMDG

FLUOR DANIEL PHILIPPINES INC. vs. CIR

REMEDIES

… The BIR assessed Enron which countered by filing a Petition for Review with the CTA stating that the assessment disregarded the provisions of the Tax Code and of RR No. 12-99, when the assessment failed to provide the legal and factual bases of the assessment. The CTA and CA ruled that the assessment notice must not only refer to the supporting revenue laws or regulations for the assessment but must also justify their applicability to the factual milieu of the assessment.

??? Is the disputed assessment valid?

!!! NO. The assessment is not valid. Although the revenue examiners discussed their findings with Respondent’s representative during the pre-assessment stage, the same, together with the Preliminary Five-Day Letter and Petitioner’s Annex G, were not sufficient to comply with the procedural requirement of due process. The Tax Code provides that a taxpayer shall be informed (and not merely “notified” as was the requirement before) in writing of the law and the facts on which the assessment is made; otherwise, the assessment shall be void. The use of the word “shall” indicates the mandatory nature of the requirement.

+AMDG

CIR vs. ENRON SUBIC POWER CORPORATION

REMEDIES

… CIR issued assessment notices against Respondent for deficiency income tax, VAT and documentary stamp tax on deposit on subscription and on pawn tickets. Respondent filed its written protest on the assessments. When the CIR did not act on the protest during the 180-day period (reckoned from the filing of the protest), respondent filed a petition before the CTA.

??? Has the assessment become final and unappealable given that no supporting documents were submitted during the 60-day period?

!!! NO. The assessment against Respondent has not become final and unappealable. It cannot be said that respondent failed to submit relevant supporting documents that would render the assessment final because when Respondent submitted its protest, Respondent attached all the documents it felt were necessary to support its claim. Further, CIR cannot insist on the submission of proof of DST payment because such document does not exist as Respondent claims that it is not liable to pay (and in fact has not paid) the DST on the deposit on subscription.

+AMDG

CIR vs. FIRST EXPRESS PAWNSHOP COMPANY, INC.

REMEDIES

!!! The term "relevant supporting documents" are those documents necessary to support the legal basis in disputing a tax assessment as determined by the taxpayer. The BIR can only inform the taxpayer to submit additional documents and cannot demand what type of supporting documents should be submitted. Otherwise, a taxpayer will be at the mercy of the BIR, which may require the production of documents that a taxpayer cannot submit. Since the taxpayer is deemed to have submitted all supporting documents at the time of filing of its protest, the 180-day period likewise started to run on that same date.

+AMDG

REMEDIES

… Lascona Land appealed a decision by the CIR holding that the assessment against it has become final and executory for failure to appeal to the CTA within 30 days from the lapse of the 180-day period provided for under the Tax Code.

??? In cases of inaction on disputed assessments, can the taxpayer still file an appeal with the CTA even after the lapse of the 180-day period?

!!! YES. In case the CIR fails to act on a disputed assessment within the 180-day period from the submission of documents, the taxpayer can either (a) file an appeal with the CTA within 30 days after the expiry of the 180-day period or (b) await the final decision of the CIR and then appeal the same within 30 days. These options are mutually exclusive and resort to one bars the application of the other. A taxpayer can not be prejudiced if he chooses to wait for the final decision of the CIR as this is the normal expectation when a protest is filed. Thus, an appeal filed within the 30-day period from the receipt of the decision, even if made after the 180-day period, is still considered as having been filed on time.

+AMDG

LASCONA LAND CO., INC. vs. CIR

REMEDIES

… Allied Banking Corporation received a PAN from the BIR which it timely disputed. In response, the BIR issued a Formal Letter of Demand with Assessment Notices. Instead of protesting the FAN, the petitioner filed a Petition for Review with the CTA. The CTA dismissed the Petition stating that it is neither the assessment nor the formal demand letter itself that is appealable before it but instead it should be the decision of the CIR on the disputed assessment.

??? Can the Formal Letter of Demand be construed as the final decision of the CIR appealable to the CTA under Republic Act 9282?

+AMDG

ALLIED BANKING CORPORATION vs. CIR

REMEDIES

!!! YES. This is considered an exception to the general rule on exhaustion of administrative remedies since the CIR is considered estopped from claiming the same principle applies in its case. The tenor of the demand letter is clear that the CIR had already made a final decision and that the remedy of the Petitioner was to appeal the same within 30 days of receipt. This can be gleaned from the use of the terms “final decision” and “appeal” which were deemed unequivocal language pointing to the finality of the decision. While the Court cited the rules relative to (a) protesting the FAN and not the PAN and (b) counting the 30 day period to appeal to the CTA from receipt of the decision of the CIR and not issuance of the assessment, this particular case was deemed a clear exception in view of the CIR’s own actions.

+AMDG

REMEDIES

… The assessment against Hambrecht & Quist had become final and unappelable since there was a failure to protest the same within the 30-day period provided by law. However, the CTA held that the BIR failed to collect within the prescribed time and thus ordered the cancellation of the assessment notice. The CIR disputed the jurisdiction of the CTA arguing that since the assessment had become final and unappealable, the taxpayer can no longer dispute the correctness of the assessment even before the CTA.

??? Can the CTA still take cognizance of an assessment case which has become ‘final and unappealable’ for failure of the taxpayer to protest within the 30-day protest period?

+AMDG

CIR vs. HAMBRECHT & QUIST PHILIPPINES, INC.

REMEDIES

!!! YES. The appellate jurisdiction of the CTA is not limited to cases which involve decisions of the CIR on matters relating to assessments or refunds. The CTA law clearly bestows jurisdiction to the CTA even on “other matters arising under the National Internal Revenue Code”. Thus, the issue of whether the right of the CIR to collect has prescribed, collection being one of the duties of the BIR, is considered covered by the term “other matters”. The fact that assessment has become final for failure to protest only means that the validity or correctness of the assessment may no longer be questioned on appeal. However, this issue is entirely distinct from the issue of whether the right to collect has in fact prescribed.

The Court ruled that the right to collect has indeed prescribed since there was no proof that the request for reinvestigation was in fact granted/acted upon by the CIR. Thus, the period to collect was never suspended.

+AMDG

REMEDIES

… Makati City was assessed by the Regional Director of BIR Makati and the latter sent its FDDA to the taxpayer. Acting on a request by the taxpayer, the case was reopened for reinvestigation upon approval by the Deputy Commissioner based on the recommendation by a Revenue Officer.

??? Was the decision of the Regional Director contained in the FDDA the appealable decision to the CTA?

!!! YES. The subsequent reopening/reinvestigation did not in any way reverse the finality of the decision by the Regional Director. It is the Commissioner who has the power to reverse, revoke or modify any existing ruling of the authorized officers and such power can not be delegated. As such, the reinvestigation approved by the Deputy Commissioner did not have any effect and as such the Regional Director’s FDDA became final and ripe for appeal to the CTA.

+AMDG

CITY OF MAKATI vs. CIR

REMEDIES

??? Is the FDDA issued by the Revenue District Officer (RDO) appealable to the CTA?

!!! NO. The RDO’s decision can not be considered as the CIR’s decision appealable to the CTA in the absence of any proof that the RDO was authorized to decide and act on behalf of the CIR on the protest of a taxpayer. This is notwithstanding the fact that Section 7 of the Tax Code allows the CIR to delegate her vested powers (except those specifically enumerated as non-delegable) to any subordinate official with the rank equivalent to a division chief or higher. Lastly, Sections 11 and 13 of the Tax Code which enumerate the duties and authority of the RDO do not, by themselves, provide that an RDO can issue decisions that are appealable to the CTA.

Note: The RDO has a rank of Division Chief.

+AMDG

FESTO HOLDINGS, INC. vs. CIR

REMEDIES

… A deficiency tax assessment was issued against Petitioners relating to their payment of capital gains tax and VAT on their sale of shares of stock and parcels of land. Subsequent to the preliminary conference, the CIR filed with the Department of Justice her Affidavit of Complaint against Petitioners. The Court of Appeals ultimately ruled that, in a criminal prosecution for tax evasion, assessment of tax deficiency is not required because the offense of tax evasion is complete or consummated when the offender has knowingly and willfully filed a fraudulent return with intent to evade the tax.

??? (1) Has the CIR issued an assessment? (2) Must a criminal prosecution for tax evasion be preceded by a deficiency tax assessment? (3) Does the CTA have jurisdiction on the case?

+AMDG

ADAMSON vs. COURT OF APPEALS

REMEDIES!!! (1) NO. The recommendation letter of the Commissioner cannot be considered a formal assessment as (a) it was not addressed to the taxpayers; (b) there was no demand made on the taxpayers to pay the tax liability, nor a period for payment set therein; (c) the letter was never mailed or sent to the taxpayers by the Commissioner. It was only an affidavit of the computation of the alleged liabilities and thus merely served as prima facie basis for filing a criminal information.

(2) NO. When fraudulent tax returns are involved as in the cases at bar, a proceeding in court after the collection of such tax may be begun without assessment considering that upon investigation of the examiners of the BIR, there was a preliminary finding of gross discrepancy in the computation of the capital gains taxes due from the transactions. The Tax Code is clear that the remedies may proceed simultaneously.

(3) NO. While the laws governing the CTA have expanded the jurisdiction of the Court, they did not change the jurisdiction of the CTA to entertain an appeal only from a final decision of the Commissioner, or in cases of inaction within the prescribed period. Since in the cases at bar, the Commissioner has not issued an assessment of the tax liability of the Petitioners, the CTA has no jurisdiction.

+AMDG

REMEDIES

… The spouses Kintanar were charged under Section 255 of the Tax Code for alleged tax evasion and non-filing of income tax returns. Gloria Kintanar’s defense was that she did not have personal knowledge of the actual filing of the said returns since it was her husband who filed their ITRs. The husband in turn alleged that their ITRs were in fact prepared by their accountant and that they necessarily just relied on the said accountant. These facts supposedly contradicted the claim that their failure to file the returns was willful.

??? Was the defendant guilty of tax evasion?

!!! YES. The elements of a violation under Section 255 have been satisfied. These are (1) that the accused is a person required to make or file a return; (2) that the accused failed to file the return at the time required by law; and (3) that the failure to file was willful. For (1), as income-generating spouses, they were obviously covered by the filing requirements. For (2), the BIR witnesses presented showed sufficient proof that indeed no returns were filed in the RDOs where they should have filed.

+AMDG

PEOPLE OF THE PHILIPPINES vs. GLORIA KINTANAR

REMEDIESFor (3), the Court said that the mere fact of having an accountant prepare one’s returns is not enough to show that that there was no voluntary, intentional or deliberate failure to file. The Court added that the fact of her being a businesswoman presupposes that she ought to know and understand all matters concerning her business including the filing of returns, citing Rule 131 on the Rules on Evidence which states that “it is presumed that a person takes ordinary care of his concern”. More importantly, the Court found no affirmative acts on the part of defendant to make sure her obligation to file ITRs had been fully complied with given that she testified that she does not even know how much her tax liabilities were. This neglect or omission was considered tantamount to “deliberate ignorance” or “conscious avoidance”. Lastly, the Court noted that the accountant himself was not even presented as witness.

+AMDG

REMEDIES

… CIR assessed Kudos Metal Corporation for taxable year 1998. A Waiver of the Statute of Limitations was executed on December 2001. The CTA issued a Resolution canceling the assessment notices issued against Petitioner for having been issued beyond the prescriptive period as the waiver purportedly failed to (a) have the valid officer execute the same (i.e., only the Assistant Commissioner signed it and not the CIR); (b) the date of acceptance was not indicated; (c) the fact of receipt by the taxpayer was not indicated in the original copy.

??? Has the CIR’s right to assess prescribed?

+AMDG

CIR vs. KUDOS METAL CORPORATION

REMEDIES!!! YES. The requirements for a valid waiver as laid down in RMO 20-90 and RDAO No. 5-01 are mandatory to give effect to Section 222 of the Tax Code. Specifically, the flaws in the waiver executed by Kudos Metal were as follows: (a) there was no notarized written authority in favor of the signatory for the company; (b) there is no stated date of acceptance by the Commissioner or his representative; and (c) the fact of the receipt of the copy was not indicated in the original waivers.

Neither can it be said that by merely executing the waiver the taxpayer is already estopped from disputing an action by the CIR beyond the statutory 3-year period since the exception under the Suyoc case (i.e., when the delays were due to taxpayer’s acts) does not apply.

Note: Requisites of a valid waiver: (i) acceptance date; (ii) expiry date; (iii) signed by authorized officer of taxpayer and BIR; (iv) notarized; (v) fact of receipt must be indicated in the copies

+AMDG

REMEDIES

… On September 30, 2004, Aichi Forging filed a claim for refund/credit of input VAT attributable to its zero-rated sales for the period July 1, 2002 to September 30, 2002 with the CIR through the DOF One-Stop Shop. On the same day, Aichi Forging filed a Petition for Review with the CTA for the same action. The BIR disputed the claim and alleged that the same was filed beyond the two-year period given that 2004 was a leap year and thus the claim should have been filed on September 29, 2004. The CIR also raised issues related to the reckoning of the 2-year period and the simultaneous filing of the administrative and judicial claims.

??? (1) Was the Petitioner’s administrative claim filed out of time? (2) Was the filing of the judicial claim premature?

+AMDG

CIR vs. AICHI FORGING COMPANY OF ASIA, INC.

REMEDIES!!! (1) NO. The right to claim the refund must be reckoned from the “close of the taxable quarter when the sales were made” – in this case September 30, 2004. The Court added that the rules under Sections 204 (C) and 229 as cross-referred to Section 114 do not apply as they only cover erroneous payments or illegal collections of taxes which is not the case for refund of unutilized input VAT. Thus, the claim was filed on time even if 2004 was a leap year since the sanctioned method of counting is the number of months.

(2) YES. Section 112 mandates that the taxpayer filing the refund must either wait for the decision of the CIR or the lapse of the 120-day period provided therein before filing its judicial claim. Failure to observe this rule is fatal to a claim. Thus, Section 112 (A) was interpreted to refer only to claims filed with the CIR and not appeals to the CTA given that the word used is “application”. Finally, the Court said that applying the 2-year period even to judicial claims would render nugatory Section 112 (D) which already provides for a specific period to appeal to the CTA --- i.e., (a) within 30 days after a decision within the 120-day period and (b) upon expiry of the 120-day without a decision.

+AMDG

REMEDIES

… United Airlines was formerly an online carrier and stopped being such in 1998 at which time it appointed a sales agent in the Philippines. They filed a claim for refund in 2002 covering alleged overpaid income taxes on gross passenger revenues arising from the years after it became an offline carrier. While the CTA agreed that the Petitioner can no longer be taxed for gross passenger revenues starting 1999, it also found that Petitioner erroneously deducted items from its gross cargo revenues which was not consistent with the Tax Code. The CTA thus disallowed the refund by pointing out that Petitioner in fact underpaid its taxes on cargo revenues by P31 million which amount was higher than the P5 million being claimed for refund.

??? Can the Court, without violating the general principle against offsetting of taxes, disallow a claim for refund on the ground that its (Court’s) finding of a deficiency assessment against the same claimant is even higher than that sought to be refunded?

+AMDG

UNITED AIRLINES, INC. vs. CIR

REMEDIES

!!! YES. Section 72 of the Tax Code states that “When an assessment is made in case of any list, statement or return, which in the opinion of the Commissioner was false or fraudulent or contained any statement or undervaluation, no tax collected under such assessment shall be recovered by any suit, unless it is proved that said list, statement or return was not false nor fraudulent and did not contain any understatement or undervaluation”. While the Court reiterated and recognized the rule against offsetting of tax claims upheld in previous cases, it brought up the point that “the grant of a refund is founded on the assumption that the tax return is valid”. It also said that the practical benefit of dispensing of the issues on the proper assessment in the same claim for refund case likewise avoids a multiplicity of proceedings or suits.

Note: The Court apparently did not find it relevant that the Tax Code provision refers to the Commissioner having such an opinion/finding since in this case it was the CTA which first brought up the issue of the tax return not being relied upon.

+AMDG

REMEDIES

… Petron was an assignee of several Tax Credit Certificates (TCCs) from BOI-registered entities. The said transfers were approved by the DOF’s One Stop Shop Inter-Agency Tax Credit and Duty Drawback Center composed of representatives from DOF, BOI, BOC, and BIR. The said TCCs were then used by Respondent to pay its excise tax liabilities. Subsequently, the BIR issued an assessment against Petron on the ground that the TCCs utilized have been cancelled for having been fraudulently issued and transferred. As such, the excise taxes due against Petron were deemed unpaid.

??? Can the assessment against Petron prosper on the basis that the TCCs are void?

+AMDG

CIR vs. PETRON CORPORATION

REMEDIES

!!! NO. Petron is deemed a transferee in good faith and for value of the TCCs used. This is apparent from the fact that the transfer of the TCCs undergo a very stringent process. In addition, it was stipulated by the parties that Petron did not participate in the procurement and issuance of the TCCs. The Court also upheld the earlier pronouncement in Shell that TCCs are valid and effective upon issuance and that the effectivity of the same are not subject to a suspensive condition premised on the conduct of a post-audit. Finally, it was stated that while the general rule is that estoppel does not apply to the government especially on matters of taxation, an equally applicably principle is that the exception to this rule is if its application would work injustice against an innocent party.

+AMDG

REMEDIES

??? Does the CTA have jurisdiction to set aside a ruling issued by the CIR even if the issuance of the same has not been appealed with the DOF?

!!! NO. While R.A. 9282 vests the CTA with jurisdiction over “decisions” of the CIR on “other matters arising under the Tax Code”, the same Tax Code specifically states that the CIR’s power to interpret provisions of the Tax Code is subject to review by the Secretary of Finance. In addition, DOF Department Order 23-01 provides the guidelines with regard to appeals filed with the DOF on adverse rulings issued by the CIR. The failure to observe the aforementioned processes will be deemed as a failure to exhaust administrative remedies which affects the taxpayer’s right of recourse with the CTA.

+AMDG

ST. PAUL COLLEGE OF SAN RAFEL vs. CIR

REMEDIES

??? Is a Motion for Reconsideration from the decision of a division of the CTA mandatory prior to elevating the case to the CTA en banc

!!! YES. The use of the term “must” clearly indicates that the requirement is mandatory and not merely directory. There is no exigent and persuasive reason (such as relieving a litigant of injustice) to relax the rules in this case.

+AMDG

COMMISSIONER OF CUSTOMS vs. MARINA SALES, INC.

REMEDIES

… Petitioner was assessed for income tax, VAT and withholding tax. After CIR issued a Final Decision on Disputed Assessment, Petitioner filed a Letter of Reconsideration with the CIR instead of appealing the same to the CTA within 30 days. The CIR then issued a Preliminary Collection Letter which prompted the Petitioner to file its Petition with the CTA. CIR argued that the Petition with the CTA was filed out of time.

??? Did the filing of a Reconsideration toll the running of the 30-day period to appeal to the CTA?

!!! NO. A Motion for Reconsideration of the denial of the administrative protest filed with the CIR does not toll the 30-day period to appeal to the CTA.

+AMDG

FISHWEALTH CANNING CORPORATION vs. CIR

REMEDIES

… Aquafresh Seafoods sold two parcels of located at Barrio Banica in Roxas City and paid the corresponding CGT and DST due on the sale. However, the BIR assessed Aquafresh Seafoods based on its conclusion that the lots were classified as commercial and not residential as claimed by the taxpayer. Aquafresh Seafood’s defense was that there was already a pre-defined zonal value for the said lots and thus the BIR could not reclassify the same to be commercial lots.

??? Is the requirement (under Section 6 of the Tax Code) of consultation with competent appraisers both from the public and private sectors in determining fair market value applicable in this case?

+AMDG

CIR vs. AQUAFRESH SEAOODS, INC.

REMEDIES!!! YES. The BIR’s position that the requirement of consultation with appraisers is mandatory only when formulating or making changes in the schedule of zonal values is wrong. The Court held that the BIR’s act of classifying the subject properties involved a re-classification and revision of the prescribed zonal values. It was likewise added that the application of the rule of assigning zonal values based on the ‘predominant use of property’ only applies when the property is located in an area or zone where the properties are not yet classified and their zonal values are not yet determined. If a determination has already been made, the BIR has no discretion as regards its classification and/or valuation.

+AMDG

REMEDIES

!!! The Commissioner can now inquire into bank deposits and other related information held by financial institutions of “a specific taxpayer or taxpayers subject of a request for supply of tax information from a foreign tax authority pursuant to an international convention or agreement on tax matters to which the Philippines is a signatory or a party”. The information may be used by the BIR for tax assessment, verification, audit, and enforcement purposes. The exchange of information shall be done in a secure manner to ensure confidentiality.

!!! The provision of information to a foreign tax authority requires that the requesting foreign tax authority has provided relevant information such as the identity of the taxpayer, the tax purpose, statement that the foreign authority has exhausted all means, etc.

!!! If the subject of the request are income tax returns, the same shall be open to inspection upon the order of the President of the Philippines.

+AMDG

REPUBLIC ACT 10021EXCHANGE OF INFORMATION BY BTHE BUREAU OF INTERNAL

REVENUE ON INTERNATIONALLY-AGREED TAX STANDARDS

REMEDIES

!!! The authority to order the opening for inspection of the income tax returns of specific taxpayers for exchange of information by a foreign tax authority is delegated to the Secretary of Finance.

!!! Any information received by the foreign tax authority as a result of the opening of the income tax returns are absolutely confidential and shall be disclosed only to persons or authorities involved in the assessment or collection of, or enforcement or prosecution in respect of the taxes covered by such conventions/agreements.

+AMDG

EXECUTIVE ORDER 56OPENING OF INCOME TAX RETURNS TO IMPLEMENT

REPUBLIC ACT 10021

REMEDIES

!!! Allows qualified VAT-registered taxpayers to receive cash equivalent of their outstanding TCCs either ---

a. by collecting in advance from a trustee bank a discounted cash value of their TCCs; or

b. collect full cash value of their TCCs upon a certain maturity date to be determined by the BIR and BOC (per DOF Joint Circular 2-2012, the

monetization will start in 2012 for TCCs issued prior to 2004 while those issued in 2011 and 2012 will be monetized in 2016)

!!! Only covers VAT refunds under Section 112 (A) of the Tax Code (zero-rated sales) and Section 106 (e) of the TCCP (drawbacks)

!!! Period of implementation is from 2012 to 2016 but those who do not enroll can continue using/revalidating their TCCs

!!! Beginning 2012, the BIR and BOC shall no longer issue TCCs for VAT refund, unless applied for by the VAT taxpayer, under the aforesaid sections

+AMDG

EXECUTIVE ORDER 68MONETIZATION PROGRAM OF OUTSTANDING VAT TCCs

REMEDIES

… Three rulings issued in 2001 all confirmed that the discount or interest income arising from the issuance of the PEACe Bonds are not subject to the 20% final withholding tax primarily because the said Bonds were not considered to be “public” borrowing (hence not treated as deposit substitutes) since at the time of issuance or origination the bonds were issued only to a single entity, RCBC. It was determined, however, that after the original issuance, RCBC will sell the bonds to CODE-NGO which entity could not have acquired the same upon issuance for not being an accredited government securities dealer. RCBC Capital, in turn, subsequently purchased the bonds from CODE-NGO albeit on its own account and not for the account, or as agent of, any other buyer.

In 2004, another ruling to cover the Bureau of Treasury’s other issuances of treasury bills was issued stating that since the actual number of bondholders or investors may be, at maturity date, more than 20, the direct lenders (origination) and indirect investors (secondary market) are deemed to be what constitute “public”. This ruling was reiterated in two subsequent rulings.

??? Are the 2001 rulings effectively and validly reversed in view of the 2004 ruling and if so can the reversal be made retroactive?

+AMDG

PEACe BONDS ruling

REMEDIES

!!! YES. The BIR stated that the issuances of the office must not override but must instead remain consistent and in harmony with the they law they seek to apply and implement. CODE-NGO may not invoke the principle of non-retroactivity since Section 246 of the Tax Code allows retroactive application of rulings in instances “where the facts subsequently gathered by the Bureau of Internal Revenue are materially different from the facts on which the ruling is based.” The reference was made by the BIR to the involvement of the secondary market which fact was only subsequently gathered. It also stated that there are no vested rights which are based on the wrong interpretation of the law. Thus, the ruling was reversed to state that the BTr shall withhold the final tax due on interest income derived from the PEACe Bonds prior to its payment on the date of maturity.

+AMDG

LOCAL BUSINESS TAX

… Lepanto Consolidated Mining had a mining lease contract for a mining claim in Benguet. They used the sand and gravel mined to construct and maintain concrete structures needed in its mining operations such as a tailings dam, access roads, and offices. The provincial treasurer of Benguet then asked Lepanto Consolidated Mining to pay sand and gravel tax for the quarry materials extracted from the mining site. The counterargument was that the said tax applied only to commercial extractions and since Lepanto did not supply other users for some profit, the tax should not apply.

??? Is Lepanto liable for the tax imposed by Benguet on the sand and gravel that it extracted from within the area of its mining claim used exclusively in its mining operations?

+AMDG

LEPANTO CONSOLIDATED MINING COMPANY vs. AMBANLOC

LOCAL BUSINESS TAX

!!! YES. The CTA erred in applying the provision of the Local Government Code (Section 138) since the basis of Benguet province emanates from the Revised Benguet Revenue Code itself. This notwithstanding, the provincial revenue measure still did not distinguish between commercial and non-commercial extractions.

In addition, the Petitioner’s argument that when a company is taxed on its main business it can no longer be taxable for engaging in an activity that is but part of, incidental to, and necessary to such main business, was held to be inapplicable. The Court said that the cases where the above principle has been applied involved business taxes and thus the incidental activities could not be treated as separate and distinct from the main business. Here the tax being imposed was an excise tax levied on the privilege of extracting gravel and sand.

+AMDG

REAL PROPERTY TAX

… The City Treasurer of Paranaque City issued Warrants of Levy on PRA’s reclaimed properties within the city’s jurisdiction.

??? Is the PRA subject to real property tax?

!!! NO. PRA, much like MIAA, PPA, UP, PFDA, GSIS, and BSP, is considered a government instrumentality exercising corporate powers but which are not considered as GOCCs as they are neither a stock (for not having the authority to distribute dividends) nor a non-stock (for not having members) corporation. In addition, the Constitution likewise provides that a GOCC is created under two conditions: (a) established for a common good and (b) meets the test of economic viability. While test (a) is complied with, the PRA was undoubtedly not created to engage in economic or commercial activities as it is the only entity engaged in reclamation which was described as essentially a public service. Thus, the exemptions under Sections 234 (a) and 133(o) of the LGC apply.

+AMDG

PHILIPPINE RECLAMATION AUTHORITY vs. CITY OF PARANAQUE

REAL PROPERTY TAX

… MPLDC owned two parcels of land in Pasig City. In 1986, Jose Y. Campos, the registered owner of MPLDC, voluntarily surrendered MPLDC to the government. From 2002-2005, Pasig City sent notices of assessment to MPLDC to demand payment of real property taxes. PCGG filed with the RTC a petition for prohibition with a prayer for issuance of a TRO claiming ownership over the said properties.

??? Are the properties owned by PCGG subject to real property taxes?

!!! Only those portions of the properties leased to taxable entities are subject to real estate taxes for the period of such leases and may also be sold at public auctioned to satisfy the tax delinquency. While it was established that the owner of the properties is now clearly the Republic of the Philippines given the voluntary surrender, the Local Government Code clearly states that the exemption will not apply “when the beneficial use thereof has been granted, for consideration or otherwise, to a taxable person”. The Court cited several cases to support the decision such as Philippine Fisheries, GSIS, MIAA, and Lung Center.

+AMDG

CITY OF PASIG vs. PRESIDENTIAL COMMISSION ON GOOD GOVERNMENT

REAL PROPERTY TAX

… The Provincial Assessor issued an assessment against Marcopper for real property taxes supposedly due on the siltation dam and decant system. Respondent submitted a DENR certification stating that the dam is a structure intended primarily for pollution control of silted materials and hence exempt from real property taxes.

??? Are the properties exempt from real property tax?

!!! NO. While Section 234 (e) exempts from the real property tax “machinery and equipment used for pollution control”, the Court found that during the period covered by the assessment, no evidence was presented that the property was used actually, directly, and exclusively for pollution control purposes. In addition, the DENR itself characterized the property as a ‘structure’ rather than as machinery or equipment which thus takes it away from the exempting provision.

+AMDG

PROVINCIAL ASSESSOR OF MARINDUQUE vs. COURT OF APPEALS

REAL PROPERTY TAX

Note: The assessment was for years before the law expanded the definition of “pollution control device” to include infrastructure or improvement. However, the Court said that the owner can not get the benefit of a retroactive application of the amendment.

+AMDG

REAL PROPERTY TAX

… NPC is a GOCC that entered into an Energy Conversion Agreement (ECA) under a build-operate-transfer (BOT) arrangement with Mirant Pagbilao Corp. Under the agreement, Mirant will build and finance a thermal power plant in Quezon, and operate and maintain the same for 25 years, after which, Mirant will transfer the power plant to the Respondent without compensation. NPC also undertook to pay all taxes that the government may impose on Mirant. Quezon then assessed Mirant real property taxes on the power plant and its machineries.

???(1) Can Petitioner (NPC) file the protest against the real property tax assessment? (2) Can Petitioner claim exemption from the RPT given the BOT arrangement

with Mirant? (3) Is payment under protest required before an appeal to the LBAA is made?

+AMDG

NATIONAL POWER CORPORATION vs. PROVINCE OF QUEZON

REAL PROPERTY TAX

!!! (1) NO. The two entities vested with personality to contest an assessment are (a) the owner or (b) the person with legal interest in the property. NPC is neither the owner nor the possessor/user of the subject machineries even if it will acquire ownership of the plant at the end of 25 years. The Court said that legal interest should be an interest that is actual and material, direct and immediate, not simply contingent or expectant. While the Petitioner does indeed assume responsibility for the taxes due on the power plant and its machineries, the tax liability referred to is the liability arising from law that the local government unit can rightfully and successfully enforce, not the contractual liability that is enforceable between the parties to a contract. The local government units cannot be compelled to recognize the protest of a tax assessment from the Petitioner, an entity against whom it cannot enforce the tax liability.

+AMDG

REAL PROPERTY TAX

!!! (2) NO. To successfully claim exemption under Section 234 (c) of the LGC, the claimant must prove two elements: a) the machineries and equipment are actually, directly, and exclusively used by local water districts and government-owned or controlled corporations; and b) the local water districts and government-owned and controlled corporations claiming exemption must be engaged in the supply and distribution of water and/or the generation and transmission of electric power. Since neither the Petitioner nor Mirant satisfies both requirements, the claim for exemption must fall.

(3) YES. If a taxpayer disputes the reasonableness of an increase in a real property tax assessment, he is required to "first pay the tax" under protest. The case of Ty does not apply as it involved a situation where the taxpayer was questioning the very authority and power of the assessor, acting solely and independently, to impose the assessment and of the treasurer to collect the tax. A claim for tax exemption, whether full or partial, does not question the authority of local assessors to assess real property tax.

+AMDG

REAL PROPERTY TAX

??? Can the RTC issue an injunction against the collection of real property taxes if there is a pending appeal with the LBAA ?

!!! YES. Petron was granted the injunction which suspended the collection of taxes given that it was able to show a clear and unmistakable right to refuse or hold in abeyance the payment of taxes. This conclusion was arrived at after Petron showed that the assessments covered more than 10 years, the assessment included items which should properly be excluded, and that the subject assessment should take effect on January 1st the following year. The filing of a bond was also deemed to have been in compliance with Section 11 of Republic Act 9282.

+AMDG

TALENTO vs. ESCALADA

REAL PROPERTY TAX

… An auction sale of the properties of RCBC was conducted in May 30, 2003. The Certificate of Sale of Delinquent Property was registered with the Register of Deeds of Quezon City on February 10, 2004. Respondent tendered payment on June 10, 2004 but the Treasurer of Quezon City refused on the ground that the one-year redemption period has lapsed.

??? Did the Respondent still have the right to redeem?

!!! YES. While the LGC provides that the one year begins from the date of sale on which date the delinquent tax and other fees are paid (in this case May 30, 2003), the local ordinance of Quezon City provides that the period is reckoned from the date of annotation of the sale (in this case February 10, 2004). To reconcile the conflicting provisions, the Court applied the rule laid down in the special law or the Quezon City ordinance.

+AMDG

CITY MAYOR OF QUEZON CITY vs. RIZAL COMMERCIAL BANKING CORPORATION

REAL PROPERTY TAX

!!! Based on the case of NPC vs. Province of Quezon, Quezon Province was allowed to impose RPT on machineries and equipment under a BOT agreement. Given that the payment of the same RPT has been contractually assumed by NPC/PSALM which are GOCCs, the President reduced all RPT liabilities based on an assessment level of 15% .

!!! All fines, penalties, and interest on all deficiencies were likewise condoned.

!!! The reduction was made effective for all years up to 2011.

+AMDG

EXECUTIVE ORDER 27 REDUCTION AND CONDONATION OF REAL PROPERTY TAXES ON POWER GENERATION FACILITIES OF IPPs UNDER BOT CONTRACTS

CUSTOMS

… On September 29, 2001, a shipment described as “agricultural product” arrived at Subic Bay Freeport Zone. On October 23, the BOC issued a Memorandum stating that upon examination the shipment was found to contain rice. The representative of the importer then stated that there was a “misshipment” and manifested willingness to pay appropriate duties and taxes. The BOC then issued a Hold Order on October 25, 2001. Despite several certifications for its clearance, Petitioner SBMA refused to allow the release of the rice shipment. Hence, on June 11, 2002, the respondent-importers filed with the RTC of Olongapo City a complaint for Injunction and Damages against SBMA.

??? Did the RTC have jurisdiction over the case?

+AMDG

SUBIC BAY METROPOLITAN AUTHORITY vs. RODRIGUEZ

CUSTOMS

!!! NO. The Collector of Customs has exclusive jurisdiction over seizure and forfeiture proceedings and the regular courts can not interfere nor can it enjoin these proceedings. This is the rule the moment the imported goods are in the possession or control of the Customs authorities even if no warrant for seizure or detention had previously been issued. The actions of the BOC are then only appealed to the CTA. The Court also said that this rule, which is anchored upon the policy of placing no unnecessary hindrance on the government’s drive to prevent smuggling and fraud and to collect correct duties, is absolute.

+AMDG

CUSTOMS

… Philippine British Assurance Company was an insurance company which regularly issued customs bonds to its clients in favor of the BOC. The bonds secure the release of imported goods in order that the goods may be released without prior payment of duties and taxes. Under these bonds, Petitioner and its clients jointly bind themselves to pay BOC the value of the bonds in the event that the bonds expire without the imported goods being re-exported or the proper duties being paid. BOC then filed a collection case alleging that Petitioner had unliquidated customs bonds. The RTC decided in favor of BOC but the appeal filed with the Court of Appeals was dismissed as the CA claimed lack of jurisdiction and said that the appeal lies with the CTA as a case for collection of taxes.

??? Did the CA, not the CTA, have jurisdiction over the appeal filed from the RTC?

+AMDG

PHILIPPINE BRITISH ASSURANCE COMPANY, INC. vs. BUREAU OF CUSTOMS

CUSTOMS

!!! YES. An action to collect on a bond used to secure the payment of taxes is not a tax collection case but rather a simple case for enforcement of contractual liability. This was the same ruling in Mambulao Lumber where to satisfy its deficiency sales tax, the parties agreed for the taxpayer to pay in installments and as a security a bond was executed. Upon default, the government proceeded against the bond while the taxpayer argued that the 5-year period to collect had set in. The Court also ruled that the prescription rules under the Tax Code do not apply and instead those under the Civil Code apply.

+AMDG

MCQs

(1) Which of the following is a conclusive characteristic of a tax?a. it is imposed and monitored by a regulatory agencyb. its imposition incidentally raises revenuec. the imposition is reasonably related to the cost of

inspection d. none of the above

+AMDG

MCQs

(1) Which of the following is a conclusive characteristic of a tax?a. it is imposed and monitored by a regulatory agencyb. its imposition incidentally raises revenuec. the imposition is reasonably related to the cost of

inspection

d.none of the above

+AMDG

MCQs

(2) Which of the following is exempt from corporate income tax?a. National Power Corporationb. Philippine Reclamation Authorityc. Philippine Amusement and Gaming Corporationd. Philippine Health Insurance Corporation

+AMDG

MCQs

(2) Which of the following is exempt from corporate income tax?a. National Power Corporationb. Philippine Reclamation Authorityc. Philippine Amusement and Gaming Corporation

d.Philippine Health Insurance Corporation

+AMDG

MCQs

(3) All of the following are essential requisites to claim overpaid CWT except--- a. filing within the 2-year periodb. not previously selecting the option to “carry-over”c. showing that the income received was declared as part

of gross income d. the same must be filed by the withholding agent

+AMDG

MCQs

(3) All of the following are essential requisites to claim overpaid CWT except--- a. filing within the 2-year periodb. not previously selecting the option to “carry-over”c. showing that the income received was declared as part

of gross income

d.the same must be filed by the withholding agent

+AMDG

MCQs

(4) The REIT--- a. is subject to MCITb. is allowed to deduct dividend payments made to OFWsc. is required to be publicly-owned to the extent of 40%

at all times d. is not subject to VAT

+AMDG

MCQs

(4) The REIT--- a. is subject to MCIT

b.is allowed to deduct dividend payments made to OFWs

c. is required to be publicly-owned to the extent of 40% at all times

d. is not subject to VAT

+AMDG

MCQs

(5) Mr. C died on September 1, 2012. Prior to his death, he owed Mr. D P1,000,000. After Mr. C’s death, the heirs of Mr. C were able to convince Mr. D for them to just pay P200,000 of the outstanding debt of the deceased. How much will be considered as a deduction against Mr. C’s gross estate?

a. P1,000,000b. P200,000c. P800,000d. P1,200,000

+AMDG

MCQs

(5) Mr. C died on September 1, 2012. Prior to his death, he owed Mr. D P1,000,000. After Mr. C’s death, the heirs of Mr. C were able to convince Mr. D for them to just pay P200,000 of the outstanding debt of the deceased. How much will be considered as a deduction against Mr. C’s gross estate?

a. P1,000,000b. P200,000c. P800,000d. P1,200,000

+AMDG

MCQs

(6) Which of the following is subject to VAT? a. gross receipts of cinema housesb. toll feesc. gross receipts of pawnshopsd. service fees paid for by a 3rd party on behalf of another

on a reimbursement-of-cost basis

+AMDG

MCQs

(6) Which of the following is subject to VAT? a. gross receipts of cinema houses

b.toll feesc. gross receipts of pawnshopsd. service fees paid for by a 3rd party on behalf of another

on a reimbursement-of-cost basis

+AMDG

MCQs

(7) The Waiver of the Statute of Limitations --- a. is no longer subject to dispute as to its validity if the

taxpayer who executed the same has made partial payments

b. need not be notarizedc. can only be valid if the same has a control numberd. can be signed in any instance by any BIR officer as the

signing of the same is a delegable power of the CIR

+AMDG

MCQs

(7) The Waiver of the Statute of Limitations ---

a.is no longer subject to dispute as to its validity if the taxpayer who executed the same has made partial payments

b. need not be notarizedc. can only be valid if the same has a control numberd. can be signed in any instance by any BIR officer as the

signing of the same is a delegable power of the CIR

+AMDG

MCQs

(8) In case the BIR fails to act on a protest --- a. the taxpayer’s only option is to appeal the inaction

within 30 days after the lapse of the 180-day periodb. the assessment becomes final and unappealablec. the taxpayer can either wait for the decision or appeal

the inactiond. the taxpayer can compel them via mandamus to issue a

decision

+AMDG

MCQs

(8) In case the BIR fails to act on a protest --- a. the taxpayer’s only option is to appeal the inaction

within 30 days after the lapse of the 180-day periodb. the assessment becomes final and unappealable

c. the taxpayer can either wait for the decision or appeal the inaction

d. the taxpayer can compel them via mandamus to issue a decision

+AMDG

MCQs

(9) If there is a tax criminal case --- a. the same must have always been preceded by an

assessmentb. the element of the act being willful can be supported

by mere proof that there was deliberate ignorancec. the CTA does not have jurisdiction d. The taxpayer is given the same 60-day period to

provide supporting documents

+AMDG

MCQs

(9) If there is a tax criminal case --- a. the same must have always been preceded by an

assessment

b.the element of the act being willful can be supported by mere proof that there was deliberate ignorance

c. the CTA does not have jurisdiction d. The taxpayer is given the same 60-day period to

provide supporting documents

+AMDG

MCQs

(10) Which of the following is TRUE in the case of VAT refunds arising from unutilized input VAT?

a. The administrative claim must always precede the judicial claim

b. The taxpayer need not wait for the decision or the expiry of the 120-day period if the 2-year period to appeal is about to lapse

c. The legal bases for the claim are Sections 204 and 229 of the Tax Code based in erroneous payment

d. All of the above +

AMDG

MCQs

(10) Which of the following is TRUE in the case of VAT refunds arising from unutilized input VAT?

a. The administrative claim must always precede the judicial claim

b. The taxpayer need not wait for the decision or the expiry of the 120-day period if the 2-year period to appeal is about to lapse

c. The legal bases for the claim are Sections 204 and 229 of the Tax Code based in erroneous payment

d. All of the above +

AMDG

MCQs

(11) A BIR ruling ---a. may be reversed anytimeb. may be modified if facts subsequently

gathered by the BIR are substantially different from the facts on which the ruling is based

c. cannot be reversedd. can be appealed to the CTA

+AMDG

MCQs

(11) A BIR ruling ---a. may be reversed anytimeb. may be modified if facts

subsequently gathered by the BIR are substantially different from the facts on

which the ruling is basedc. cannot be reversedd. can be appealed to the CTA

+AMDG

MCQs

(12) Which of the following is subject to real property tax?

a. machineries owned and operated by NPCb. infrastructure used for pollution controlc. land owned by the national government leased

out to an independent power producerd. Sunken Garden of UP

+AMDG

MCQs

(12) Which of the following is subject to real property tax?

a. machineries owned and operated by NPCb. infrastructure used for pollution controlc. land owned by the national

government leased out to an independent power producer

d. Sunken Garden of UP

+AMDG

THANK YOU.

GOOD LUCK!