Taxation} Notes by Domondon} Made 2004} 74 Pages

8/12/2019 Taxation} Notes by Domondon} Made 2004} 74 Pages

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DOMONDONs CUT AND PASTE1

T A X A T I O N

Ver. 2004

Analysis of re!io"s #ar $"es%ions s&o's %&a% %&ere are f"n(a)en%al(o*%rines %&a% are ri*& so"r*es of #ar $"es%ions. +% is for %&is reason '&y %&ea"%&or (e*i(e( %o *raf% so)e sen%en*es an( &rases '&i*& %&e #ar *an(i(a%e)ay *"% an( as%e %o &is ans'ers %o %&e #ar ,"es%ions. T&is 'o"l( alsoser!e as a rea(y referen*e for o-e*%i!e %ye of ,"es%ions s"*& as (efini%ions/en")era%ions/ (is%in*%ions/ e%*. T&e )a%erials 'ere *"lle( fro) areas '&erere!io"s #ar $"es%ions 'ere so"r*e( an( fro) sele*%e( "risr"(en*e " %o"ne 200.

T&e "ser of %&ese *"% an( as%e )a%erials s&o"l( -e 'arne( %&a% %&esen%en*es s&o"l( -e a("s%e( %o )ee% %&e a*%"al re,"ire)en%s of se*ifi* #ar$"es%ions/ an( no% %o -e 'ri%%en !er-a%i) as %&e ans'ers.

T&e "ser s&o"l( *on*en%ra%e on %&e i%e)s )are( BAR-e*a"se %&ey are%&e (o*%rines fro) '&ere #ar ,"es%ions 'ere (eri!e( for %&e erio( 133 %o

200.WARNING: So)e of %&e *on*e%s in!ol!in %&e Co"r% of Ta5 Aeals

s&o"l( -e rea( in rela%ion %o %&e ro!isions of 6e"-li* A*% No. 3272 '&i*& %ooeffe*% on Aril 2/ 2004.

GENERAL PRINCIPLES OF AXA ION Ta5es are %&e life-loo( of %&e o!ern)en% for 'i%&o"% %a5es/ %&eo!ern)en% *an nei%&er e5is% nor en("re. A rin*ial a%%ri-"%e of so!erein%y/

%&e e5er*ise of %a5in o'er (eri!es i%s so"r*e fro) %&e !ery e5is%en*e of %&es%a%e '&ose so*ial *on%ra*% 'i%& *i%i8ens o-lies i% %o ro)o%e "-li* in%eres% an(*o))on oo(. (National Power Corporation v. City of Cabanatuan, G. R. No.149110, April 9, 2003

BAR: 1. T&e %&eory -e&in( %&e e5er*ise of %&e o'er %o %a5 e)ana%esfro) ne*essi%y/ 'i%&o"% %a5es/ o!ern)en% *anno% f"lfill i%s )an(a%e of ro)o%in%&e eneral 'elfare an( 'ell9-ein of %&e eole. (National Power Corporationv. City of Cabanatuan, G. R. No. 149110, April 9, 2003

T&e o'er %o %a5 in*l"(es %&e o'er %o (es%roy/ '&ere %&e %a5 la' is !ali(

-e*a"se a %a5ayer *o"l( no% see %&e n"llifi*a%ion of a !ali( %a5 la' solely "on%&e re)ise %&a% %&e *olle*%ion of %&e %a5 'ill i)o!eris& &i).

T&e e5er*ise of %&e o'er %o %a5 is no% (es%r"*%i!e of a %a5ayers roer%y'&ere %&e so"r*e is an in!ali( %a5 la'/ '&i*& !iola%es %&e in&eren% or*ons%i%"%ional li)i%a%ion -e*a"se %&ere is a sy)a%&e%i* *o"r% %&a% s&all *o)e %o

1Coyri&%e( -y Prof. A#E:A6DO T.DOMONDON


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%&e s"**or of %&e %a5ayer an( (e*lare s"*& %a5 la' as n"ll an( !oi(. +% 'o"l(no% %&"s -e %&e so"r*e of %&e o'er %o (es%roy.

+n *ase of (o"-%/ %a5 la's )"s% -e *ons%r"e( s%ri*%ly aains% %&e S%a%e an(li-erally in fa!or of %&e %a5ayer -e*a"se %a5es/ as -"r(ens '&i*& )"s% -een("re( -y %&e %a5ayer/ s&o"l( no% -e res")e( %o o -eyon( '&a% %&e la'e5ressly an( *learly (e*lares. (!in"oln P#ilippine !ife $n%uran"e Co&pany,$n"., et"., v. Court of Appeal%, et al., 293 'CRA 92, 99

Ta5 e5e)%ions are s%ri*%ly *ons%r"e( aains% %&e %a5ayer an( li-erally infa!or of %&e S%a%e an( )"s% -e *learly s&o'n an( -ase( on lan"ae in %&e la'%oo lain %o -e )is%aen (avao Gulf !u&ber Corporation v. Co&&i%%ioner of$nternal Revenue, et al., 293 'CRA )*, ++, -e*a"se %a5es are ne*essary for %&e*on%in"e( e5is%en*e of %&e S%a%e.

A re!ersal of a #+6 r"lin fa!ora-le %o a %a5ayer 'o"l( no% ne*essarily*rea%e a ere%"al e5e)%ion in &is fa!or/ for af%er all %&e o!ern)en% is ne!er

es%oe( fro) *olle*%in %a5es -e*a"se of )is%aes or errors on %&e ar% of i%saen%s. (!in"oln P#ilippine !ife $n%uran"e Co&pany, $n"., et"., v. Court of

Appeal%, et al., 293 'CRA 92, 99

BAR: 2. As a eneral r"le/ %&e ri&% of %&e o!ern)en% %o *olle*% %a5esis i)res*ri%i-le -e*a"se %&e !ery e5is%en*e of %&e s%a%e (een(s "on %&ee5er*ise of %&is o'er.

;o'e!er/ s%a%"%es )ay ro!i(e for res*ri%i!e erio(s for %&e *olle*%ionof ar%i*"lar in(s of %a5es.

BAR: 3. As a eneral r"le/ No *o"r% s&all &a!e %&e a"%&ori%y %o ran%

an in"n*%ion %o res%rain %&e *olle*%ion of any na%ional in%ernal re!en"e %a5/ fee or*&are.


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ro%e*%ion of lo*al in("s%ries as 'ell as "-li* 'elfare an( si)ilar o-e*%i!es.


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BAR: 6. T&e in&eren% li)i%a%ions are


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T&e si%"s of e5*ise %a5es is %&e la*e '&ere %&e ri!ilee is e5er*ise(-e*a"se i% is %&a% la*e %&a% i!es ro%e*%ion.

T&e si%"s of %ransfer %a5es/ s"*& as es%a%e an( (onors %a5es/ is(e%er)ine( -y %&e na%ionali%y an( resi(en*e of %&e %a5ayer an( %&e la*e '&ere%&e roer%y is lo*a%e(. Please refer %o es%a%e an( (onors %a5es.

T&e si%"s of %a5a%ion of a *on%ra*% for a roe*% '&i*& in*l"(e( %&e*ons%r"*%ion an( ins%alla%ion in %&e P&iliines of e,"i)en% (esine(/ fa-ri*a%e(an( )an"fa*%"re( in aan is %&e P&iliine for %&e *ons%r"*%ion an( ins%alla%ion'or an( for %&e ie*es of e,"i)en% an( aan for s"lies '&i*& 'ere*o)le%ely (esine( an( enineere( in aan. (Co&&i%%ioner of $nternalRevenue v. arubeni Corporation, G.R. No. 13)3)), e"e&ber 1+, 2001

T&e eneral or in(ire*% *ons%i%"%ional li)i%a%ions as 'ell as %&ese*ifi* or (ire*% *ons%i%"%ional li)i%a%ions.

BAR: 8. T&e eneral or in(ire*% *ons%i%"%ional li)i%a%ions are %&efollo'in?

a. D"e ro*ess *la"se@-. E,"al ro%e*%ion *la"se@*. ree(o) of %&e ress@(. 6eliio"s free(o)@e. Non9i)air)en% *la"se@f. :a'9)ain ro*ess?

1= #ill s&o"l( e)-ra*e only one s"-e*% e5resse( in %&e %i%le%&ereof@

2= T&ree


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. Money *olle*%e( on %a5 le!ie( for a se*ial "rose %o -e "se( only fors"*& "rose/ -alan*e if any/ %o eneral f"n(s@

. T&e S"re)e Co"r%s o'er %o re!ie' "()en%s or or(ers of lo'er*o"r%s in all *ases in!ol!in %&e leali%y of any %a5/ i)ose/ assess)en% or %oll or%&e leali%y of any enal%y i)ose( in rela%ion %o %&e a-o!e@

l. A"%&ori%y of lo*al o!ern)en% "ni%s %o *rea%e %&eir o'n so"r*es ofre!en"e/ %o le!y %a5es/ fees an( o%&er *&ares s"-e*% %o "i(elines an(li)i%a%ions i)ose( -y Conress *onsis%en% 'i%& %&e -asi* oli*y of lo*ala"%ono)y@

). A"%o)a%i* release of lo*al o!ern)en%s "s% s&are in na%ional %a5es@n. Ta5 e5e)%ion of all re!en"es an( asse%s of non9s%o*/ non9rofi%

e("*a%ional ins%i%"%ions "se( a*%"ally/ (ire*%ly an( e5*l"si!ely for e("*a%ional"roses@

o. Ta5 e5e)%ion of all re!en"es an( asse%s of rorie%ary or *ooera%i!ee("*a%ional ins%i%"%ions s"-e*% %o li)i%a%ions ro!i(e( -y la' in*l"(inres%ri*%ions on (i!i(en(s an( ro!isions for rein!es%)en% of rofi%s@

. Ta5 e5e)%ion of ran%s/ en(o')en%s/ (ona%ions or *on%ri-"%ions "se(

a*%"ally/ (ire*%ly an( e5*l"si!ely for e("*a%ional "roses s"-e*% %o *on(i%ionsres*ri-e( -y la'.

BAR: 10. E,"al ro%e*%ion of %&e la' *la"se is s"-e*% %o reasona-le*lassifi*a%ion. +f %&e ro"ins are *&ara*%eri8e( -y s"-s%an%ial (is%in*%ions %&a%)ae real (ifferen*es/ one *lass )ay -e %rea%e( an( re"la%e( (ifferen%ly fro)ano%&er. T&e *lassifi*a%ion )"s% also -e er)ane %o %&e "rose of %&e la' an()"s% aly %o all %&ose -elonin %o %&e sa)e *lass. (5iu, et al., v. Court of

Appeal%, et al., G.R. No. 12)410, anuary 20, 1999

BAR: 11. Classifi*a%ion/ %o -e !ali(/ )"s%


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+% is in&eren% in %&e o'er %o %a5 %&a% %&e S%a%e -e free %o sele*% %&es"-e*%s of %a5a%ion/ an( i% &as -een reea%e(ly &el( %&a%/ Fine,"ali%ies '&i*&res"l% fro) a sinlin o"% of one ar%i*"lar *lass of %a5a%ion/ or e5e)%ion/infrine no *ons%i%"%ional li)i%a%ion.F (Co&&i%%ioner of $nternal Revenue, et al.,v. 'anto%, et al., 2)) 'CRA *1)

BAR: 13. A fi5e( ann"al li*ense fee on %&ose enae( in %&e -"siness

of eneral en%errise '&i*& also i)ose( on %&e sale of -i-les -y a reliio"sse*%. is %&is !ali( !iola%es %&e *ons%i%"%ionally "aran%ee( free(o) of %&e ress/an( of reliion..

As a li*ense fee is fi5e( in a)o"n% an( "nrela%e( %o %&e re*ei%s of %&e%a5ayer/ s"*& a li*ense fee/ '&en alie( %o a reliio"s se*% is a*%"ally i)ose(as a *on(i%ion for %&e free e5er*ise of reliion. A li*ense fee res%rains ina(!an*e %&ose *ons%i%"%ional li-er%ies of ress an( reliion an( ine!i%a-ly %en(s%o s"ress %&eir e5er*ise.

T&e P1/000.00 VAT reis%ra%ion fee i)ose( on non9VAT en%errises'&i*& in*l"(es a)on o%&ers/ reliio"s se*%s '&i*& sells an( (is%ri-"%esreliio"s li%era%"re is no% !iola%i!e of reliio"s free(o)/ al%&o"& a fi5e( a)o"n%is no% i)ose( for %&e e5er*ise of a ri!ilee -"% only for %&e "rose of(efrayin ar% of %&e *os% of reis%ra%ion.

T&e reis%ra%ion fee is %&"s )ore of an a()inis%ra%i!e fee/ one no%i)ose( on %&e e5er*ise of a ri!ilee/ )"*& less a *ons%i%"%ional ri&%.(5olentino v. 'e"retary of :inan"e, et al., an "o&panion "a%e%, 23 'CRA *30

Ar%i*le G++/ Se*. 11 of %&e Cons%i%"%ion ro!i(es %&a% %&e ran% of afran*&ise for %&e oera%ion of a "-li* "%ili%y is s"-e*% %o a)en()en%. al%era%ion

or reeal -y Conress '&en %&e *o))on oo( re,"ires@

BAR: 14. A la'f"l %a5 on a ne' s"-e*%/ or an in*rease( %a5 on an ol(one/ (oes no% in%erfere 'i%& a *on%ra*% or i)airs i%s o-lia%ion/ 'i%&in %&e)eanin of %&e *ons%i%"%ion. E!en %&o"& s"*& %a5a%ion )ay affe*% ar%i*"lar*on%ra*%s/ as i% )ay in*rease %&e (e-% of one erson an( lessen %&e se*"ri%y ofano%&er/ or )ay i)ose a((i%ional -"r(ens "on one *lass an( release %&e-"r(ens of ano%&er/ s%ill %&e %a5 )"s% -e ai( "nless ro&i-i%e( -y %&e*ons%i%"%ion/ nor *an i% -e sai( %&a% i% i)airs %&e o-lia%ions of any e5is%in*on%ra*% in i%s %r"e an( leal sense. (5olentino v. 'e"retary of :inan"e, et al.,an "o&panion "a%e%, 23 'CRA *30

BAR: 15. B&ile %&e S"re)e Co"r% &as/ no% %oo infre,"en%ly/ referre(

%o %a5 e5e)%ions *on%aine( in se*ial fran*&ises as -ein in %&e na%"re of*on%ra*%s an( a ar% of %&e in("*e)en% for *arryin o"% %&e fran*&ise/ %&esee5e)%ions/ ne!er%&eless are far fro) -ein s%ri*%ly *on%ra*%"al in na%"re. Cons%i%"%ional %a5 e5e)%ions/ in %&e real sense of %&e %er) an( '&ere %&enon9i)air)en% *la"se of %&e Cons%i%"%ion *an ri&%ly -e in!oe(/ are %&osearee( %o -y %&e %a5in a"%&ori%y in *on%ra*%s/ s"*& as %&ose *on%aine( ino!ern)en% -on(s or (e-en%"res/ la'f"lly en%ere( in%o -y %&e) "n(er ena-linla's in '&i*& %&e o!ern)en%/ a*%in in i%s ri!a%e *aa*i%y s&e(s i%s *loa ofa"%&ori%y an( 'ai!es i%s o!ern)en% i))"ni%y. (anila le"tri" Co&pany v.

Provin"e of !auna, et al., G.R. No. 13139, ay , 1999

Do"-le %a5a%ion in i%s eneri* sense/ %&is )eans %a5in %&e sa)e s"-e*%or o-e*% %'i*e ("rin %&e sa)e %a5a-le erio(.

+n i%s ar%i*"lar sense/ i% )ay )ean (ire*% ("li*a%e %a5a%ion/ '&i*& isro&i-i%e( "n(er %&e *ons%i%"%ion -e*a"se i% !iola%es %&e *on*e% of e,"alro%e*%ion/ "nifor)i%y an( e,"i%a-leness of %a5a%ion. +n(ire*% ("li*a%e %a5a%ionis no% ana%&e)a%i8e( -y %&e a-o!e *ons%i%"%ional li)i%a%ions.

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BAR: 16. T&e ele)en%s of (ire*% ("li*a%e %a5a%ion are?a. Sa)e

1= S"-e*% or o-e*% is %a5e( %'i*e2= Ta5in a"%&ori%y= Ta5in "rose

4= Ta5in erio(-. Ta5in all of %&e s"-e*%s or o-e*%s for %&e firs% %i)e 'i%&o"% %a5in allof %&e) for %&e se*on( %i)e.

+f any of %&e ele)en%s are a-sen% %&en %&ere is in(ire*% ("li*a%e %a5a%ion'&i*& is no% ro&i-i%e( -y %&e *ons%i%"%ion.

BAR: 17. Do"-le %a5a%ion a !ali( (efense aains% %&e leali%y of a %a5)eas"re if %&e (o"-le %a5a%ion is (ire*% ("li*a%e %a5a%ion/ -e*a"se i% 'o"l(!iola%e %&e e,"al ro%e*%ion *la"se of %&e *ons%i%"%ion.

B&en an i%e) of in*o)e is %a5e( in %&e P&iliines an( %&e sa)e in*o)eis %a5e( in ano%&er *o"n%ry/ %&is 'o"l( -e no'n as in%erna%ional "ri(i*al (o"-le%a5a%ion '&i*& is %&e i)osi%ion of *o)ara-le %a5es in %'o or )ore s%a%es on %&esa)e %a5ayer in rese*% of %&e sa)e s"-e*% )a%%er an( for i(en%i*al ro"n(s.(Co&&i%%ioner of $nternal Revenue v. '.C. o#n%on an 'on, $n"., et al., G.R.No. 12)10, une 2, 1999

Do"-le %a5a%ion "s"ally %aes la*e '&en a erson is a resi(en% of a*on%ra*%in s%a%e an( (eri!es in*o)e fro) or o'ns *ai%al in/ %&e o%&er*on%ra*%in s%a%e an( -o%& s%a%es i)ose %a5 on %&a% in*o)e or *ai%al.(Co&&i%%ioner of $nternal Revenue v. '.C. o#n%on an 'on, $n"., et al., G.R.No. 12)10, une 2, 1999

BAR: 18. T&e follo'in are %&e )e%&o(s of a!oi(in (o"-le %a5a%ion?a. Ta5 %rea%ies '&i*& e5e)%s forein na%ionals fro) lo*al %a5a%ion an(

lo*al na%ionals fro) forein %a5a%ion "n(er %&e rin*ile of re*iro*i%y.-. Ta5 *re(i%s '&ere forein %a5es are allo'e( as (e("*%ions fro) lo*al

%a5es %&a% are ("e %o -e ai(.*. Allo'in forein %a5es as a (e("*%ion fro) ross in*o)e.

P"rose of %a5 %rea%ies. To re*on*ile %&e na%ional fis*al leisla%ion of %&e*on%ra*%in ar%ies in or(er %o &el %&e %a5ayer a!oi( si)"l%aneo"s %a5a%ion in%'o (ifferen% "ris(i*%ions. More re*isely/ %&e %a5 *on!en%ions are (raf%e( 'i%& a!ie' %o'ar(s %&e eli)ina%ion of in%erna%ional "ri(i*al (o"-le %a5a%ion.

(Co&&i%%ioner of $nternal Revenue v. '.C. o#n%on an 'on, $n"., et al., G.R.No. 12)10, une 2, 1999

6a%ionale for a!oi(in in%erna%ional "ri(i*al (o"-le %a5a%ion. Toen*o"rae %&e free flo' of oo(s an( ser!i*es an( %&e )o!e)en% of *ai%al/%e*&noloy an( ersons -e%'een *o"n%ries/ *on(i%ions (ee)e( !i%al in *rea%inro-"s% an( (yna)i* e*ono)ies. orein in!es%)en%s 'ill only %&ri!e in a fairlyre(i*%a-le an( reasona-le in%erna%ional in!es%)en% *li)a%e an( %&e ro%e*%ionaains% (o"-le %a5a%ion is *r"*ial in *rea%in s"*& a *li)a%e. (Co&&i%%ioner of$nternal Revenue v. '.C. o#n%on an 'on, $n"., et al., G.R. No. 12)10, une2, 1999

T&e )an(a%e %o Conress is no% %o res*ri-e -"% %o e!ol!e a roressi!esys%e) of %a5a%ion. O%&er'ise/ sales %a5es '&i*& er&as are %&e ol(es% for) ofin(ire*% %a5es/ 'o"l( &a!e -een ro&i-i%e( 'i%& %&e ro*la)a%ion of %&e*ons%i%"%ional ro!ision. Sales %a5es are also reressi!e. (5olentino v. 'e"retary

of :inan"e an "o&panion "a%e%, 249 'CRA *2+

8


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T&e Cons%i%"%ion (oes no% really ro&i-i% %&e i)osi%ion of in(ire*% %a5es'&i*&/ lie %&e VAT/ are reressi!e. T&e *ons%i%"%ional ro!ision )eans si)ly%&a% in(ire*% %a5es s&o"l( -e )ini)i8e(.

6esor% %o in(ire*% %a5es s&o"l( -e )ini)i8e( -"% no% a!oi(e( en%irely-e*a"se i% is (iffi*"l%/ if no% i)ossi-le/ %o a!oi( i)osin s"*& %a5es a**or(in%o %&e %a5ayers a-ili%y %o ay. (5olentino v. 'e"retary of :inan"e an

"o&panion "a%e%, 249 'CRA *2+

+n %&e *ase of VAT/ %&e la' )ini)i8es %&e reressi!e effe*%s of %&isi)osi%ion -y ro!i(in for 8ero ra%in of *er%ain %ransa*%ions '&ile ran%ine5e)%ions %o o%&er %ransa*%ions. T&e %ransa*%ions '&i*& are s"-e*% %o VAT are%&ose '&i*& in!ol!e oo(s an( ser!i*es '&i*& are "se( or a!aile( of )ainly -y&i&er in*o)e ro"s. (5olentino v. 'e"retary of :inan"e an "o&panion "a%e%,

249 'CRA *2+

T&e Cons%i%"%ion re,"ires %&a% all re!en"e -ills s&all oriina%e e5*l"si!elyfro) %&e ;o"se of 6eresen%a%i!es. T&e Cons%i%"%ion si)ly )eans %&a% %&eini%ia%i!e for filin re!en"e/ %ariff or %a5 -ills )"s% *o)e fro) %&e ;o"se of6eresen%a%i!es on %&e %&eory %&a%/ ele*%e( as %&ey are fro) %&e (is%ri*%s/ %&eMe)-ers of %&e ;o"se *an -e e5e*%e( %o -e )ore sensi%i!e %o %&e lo*al nee(san( ro-le)s. (5olentino v. 'e"retary of :inan"e an "o&panion "a%e%, 249

'CRA *2+

+% is no% %&e la' 9 -"% %&e re!en"e -ill 9 '&i*& is re,"ire( -y %&eCons%i%"%ion %o oriina%e e5*l"si!ely in %&e ;o"se of 6eresen%a%i!es -e*a"sea -ill oriina%in in %&e ;o"se )ay "n(ero s"*& e5%ensi!e *&anes in %&eSena%e %&a% %&e res"l% )ay -e a re'ri%in of %&e '&ole/ an( a (is%in*% -ill )ay -ero("*e(. (5olentino v. 'e"retary of :inan"e an "o&panion "a%e%, 23 'CRA

*30

To insis% %&a% a re!en"e s%a%"%e 9 no% only %&e -ill '&i*& ini%ia%e( %&eleisla%i!e ro*ess *"l)ina%in in %&e ena*%)en% of %&e la' 9 )"s% s"-s%an%ially-e %&e sa)e as %&e ;o"se -ill 'o"l( -e %o (eny %&e Sena%es o'er no% only %o*on*"r 'i%& a)en()en%s -"% also %o roose a)en()en%s. +% 'o"l( -e %o!iola%e %&e *oe,"ali%y of leisla%i!e o'er of %&e %'o &o"ses of Conress an( infa*% )ae %&e ;o"se s"erior %o %&e Sena%e.

i!en %&e o'er of %&e Sena%e %o roose a)en()en%s/ i% *an roose i%so'n !ersion e!en 'i%& rese*% %o -ills '&i*& are re,"ire( -y %&e Cons%i%"%ion %ooriina%e in %&e ;o"se. (5olentino v. 'e"retary of :inan"e an "o&panion "a%e%,

249 'CRA *2+

Nor (oes %&e Cons%i%"%ion ro&i-i% %&e filin in %&e Sena%e of a s"-s%i%"%e-ill in an%i*ia%ion of i%s re*ei% of %&e -ill fro) %&e ;o"se/ so lon as a*%ion -y%&e Sena%e as a -o(y is 'i%&&el( en(in re*ei% of %&e ;o"se -ill. SC6A H0=

%&e Presi(en% s&all &a!e %&e o'er %o !e%o any ar%i*"lar i%e) or i%e)s

in an aroria%ion/ re!en"e/ or %ariff -ill/ -"% %&e !e%o s&all no% affe*% %&e i%e) ori%e)s %o '&i*& &e (oes no% o-e*%.

An i%e) in a re!en"e -ill (oes no% refer %o an en%ire se*%ion i)osin aar%i*"lar in( of %a5/ -"% ra%&er %o %&e s"-e*% of %&e %a5 an( %&e %a5 ra%e. +n %&eor%ion of a re!en"e -ill '&i*& a*%"ally i)oses a %a5/ a se*%ion i(en%ifies %&e %a5an( en")era%es %&e ersons lia-le %&erefore 'i%& %&e *orreson(in %a5 ra%e.

To *ons%r"e %&e 'or( i%e) as referrin %o %&e '&ole se*%ion 'o"l( %ie %&ePresi(en%s &an( in *&oosin ei%&er %o aro!e %&e '&ole se*%ion a% %&e e5enseof also aro!in a ro!ision %&erein '&i*& &e (ee)s "na**e%a-le or !e%o %&een%ire se*%ion a% %&e e5ense of foreoin %&e *olle*%ion of %&e in( of %a5al%oe%&er.

9


10/70

BAR: 19. Ta5 e5e)%ions s&all -e ran%e( only "on )aori%y !o%e ofall %&e )e)-ers of Conress.

EGCEPT+ONS?a. B&ere %&e %a5 e5e)%ion is ran%e( %&ro"& a %rea%y@

-. Ta5 e5e)%ions ran%e( -y lo*al o!ern)en% "ni%s@*. Ta5 e5e)%ions ran%e( '&en %&e Presi(en% e5er*ises &is o'ers"n(er %&e fle5i-le %ariff *la"se '&en ro%e*%i!e %ariffs are re)o!e(.

BAR: 20. C&ari%a-le ins%i%"%ions/ *&"r*&es an( arsonaes or *on!en%sa"r%enan% %&ere%o/ )os,"es/ non9rofi% *e)e%eries/ an( all an(s/ -"il(ins an(i)ro!e)en%s %&a% are a*%"ally/ (ire*%ly an( e5*l"si!ely "se( for reliio"s/*&ari%a-le or e("*a%ional "roses are e5e)% fro) %a5a%ion. ISe*.27


11/70

*olle*% "n*olle*%e( %a5 fro) %a5 e!a(ers 'i%&o"% &a!in %o o %&ro"& %&e %e(io"sro*ess of a %a5 *ase. (-ana%, r. v. Court of Appeal%, et al., G.R. No. 1029*),:ebruary 10, 2000

BAR: 22. Ta5 a!oi(an*e is %&e "se of leally er)issi-le )eans %o

re("*e %&e %a5 '&ile %a5 e!asion is %&e "se of illeal )eans %o es*ae %&eay)en% of %a5es.

BAR: 23. T&e (ifferen*es -e%'een %&e %a5 a!oi(an*e an( %a5 e!asionare %&e follo'in?

a. Ta5 a!oi(an*e is leal '&ile %a5 e!asion is illeal.-. T&e o-e*%i!e of %a5 a!oi(an*e in )os% ins%an*es is )erely %o re("*e

%&e %a5 %&a% is ("e '&ile is %a5 e!asion %&e o-e*% is %o en%irely es*ae %&eay)en% of %a5es.

BAR: 24. 6easons '&y na%ional %a5es *anno% -e %&e s"-e*% of

*o)ensa%ion an( se%9off 'i%& (e-%s?a. T&e life-loo( %&eory@-. Ta5es are no% *on%ra*%"al o-lia%ions -"% arise o"% of a ("%y %o/ an( are

%&e osi%i!e a*%s of o!ern)en%/ %o %&e )ain an( enfor*in of '&i*& %&eersonal *onsen% of %&e in(i!i("al %a5ayer is no% re,"ire(. (Republi" v.a&bulao !u&ber Co., 4'CRA *22

*. T&e o!ern)en% an( %&e %a5ayer are no% )"%"ally *re(i%ors an((e-%ors of ea*& o%&er an( a *lai) for %a5es is no s"*& (e-%/ (e)an(/ *on%ra*% or

"()en% as is allo'e( %o -e se%9off. (Calte8 P#ilippine%, $n". v. Co&&i%%ion onAuit, 20+ 'CRA )2*, )*

Co)ensa%ion %aes la*e -y oera%ion of la'/ '&ere %&e lo*al

o!ern)en% an( %&e %a5ayer are in %&eir o'n ri&% re*iro*ally (e-%ors an(*re(i%ors of ea*& o%&er/ an( %&a% %&e (e-%s are -o%& ("e an( (e)an(a-le/ in*onse,"en*e of Ar%i*les 12J7 an( 12J3 of %&e Ci!il Co(e. (o&ino v. Garlito%,+ 'CRA 443

+n *ase of a %a5 o!eray)en%/ '&ere %&e #+6s o-lia%ion %o ref"n( or se%9off arises fro) %&e )o)en% %&e %a5 'as ai( "n(er %&e rin*ile of %olutioinebeti. (Co&&i%%ioner of $nternal Revenue v. %%o 'tanar a%tern, $n", 1)2'RCA 3*4

#"% no%e Ne%tle P#il. v. Court of Appeal%, et al., G.R. No. 134114, uly *,

2001 '&i*& &el( %&a% in or(er for %&e r"le on %olutio inebeti %o aly i% is anessen%ial *on(i%ion %&a% %&e e%i%ioner )"s% firs% s&o' %&a% i%s ay)en% of %&e*"s%o)s ("%ies 'as in e5*ess of '&a% 'as re,"ire( -y %&e la' a% %&e %i)e %&es"-e*% 1H i)or%a%ions of )il an( )il ro("*%s 'ere )a(e. Unless s&o'no%&er'ise/ %&e (is"%a-le res")%ion of re"lari%y of erfor)an*e of ("%y lies infa!or of %&e Colle*%or of C"s%o)s.

BAR: 25. +n*o)e %a5/ es%a%e an( (onors %a5es are (ire*% %a5es B;+:E!al"e9a((e( %a5/ e5*ise %a5/ o%&er er*en%ae %a5es an( (o*")en%ary s%a) %a5are in(ire*% %a5es.

T&e )ain (ifferen*e -e%'een (ire*% %a5es an( in(ire*% %a5es is %&a% %&e

-"r(en of (ire*% %a5es *o"l( no% -e s&if%e( -y %&e %a5ayer %o ano%&er '&ile %&e-"r(en of in(ire*% %a5es *o"l( -e s&if%e( %o ano%&er erson/ s"*& %&e -"r(en!al"e9a((e( %a5es -ein s&if%e( or %ransferre( -y %&e %a5ayer/ %&e seller/ %o %&e-"yer.

HE COUR OF AX APPEALS AND AXREMEDIES

11


12/70

T&e Co"r% of Ta5 Aeals is %&e se*ial %a5 *o"r% *rea%e( "n(er 6e"-li*A*% No. 112>/ as a)en(e( -y 6. A. No. 3272/ an( is *o)ose( of a Presi(in"s%i*e an( fi!e Asso*ia%e "s%i*es/ orani8e( in%o %'o (i!isions.

T&e Co"r% of Ta5 Aeals 'as *rea%e(?a. To re!en% (elay in %&e (isosi%ion of %a5 *ases -y %&e %&en Co"r%s ofirs% +ns%an*e


13/70

BAR: 27. T&e leal re)e(ies "n(er %&e N+6C of 133J a!aila-le %o anarie!e( %a5ayer a% %&e a()inis%ra%i!e an( "(i*ial le!els 'i%& rese*% %o ref"n(or re*o!ery of %a5 erroneo"sly or illeally *olle*%e(/ is %o

a. file a *lai) for ref"n( or *re(i% 'i%& %&e Co))issioner of +n%ernal6e!en"e.


14/70

("ly a"%&ori8e( reresen%a%i!e s&all %&en no%ify %&e %a5ayer of %&e fin(ins in%&e for) of a re9assess)en% no%i*e. T&e re9assess)en% no%i*e re,"ires %&e%a5ayer %o e5lain 'i%&in fif%een = (ays fro) re*ei% '&y no no%i*e ofassess)en% an( le%%er of (e)an( for a((i%ional %a5es s&o"l( -e (ire*%e( %o &i).

e. +f %&e Co))issioner is sa%isfie( 'i%& %&e e5lana%ion of %&e %a5ayer/%&en %&e ro*ess is aain en(e(.

+f %&e %a5ayer inores %&e re9assess)en% no%i*e -y no% reson(in or&is e5lana%ions are no% a**e%e( -y %&e Co))issioner/ %&en a no%i*e ofassess)en% an( a le%%er of (e)an( is iss"e(.

T&e no%i*e of assess)en% )"s% -e iss"e( -y %&e Co))issioner %o %&e%a5ayer 'i%&in a erio( of %&ree


15/70

. +f %&e (e*ision of %&e Co"r% of Ta5 Aeals en ban"affir)s %&e (enial of%&e ro%es% -y %&e Co))issioner or %&e assess)en% in *ase of fail"re -y %&eCo))issioner %o (e*i(e %&e %a5ayer )"s% file a e%i%ion for re!ie' on *er%iorari'i%& %&e S"re)e Co"r% 'i%&in fif%een = (ays fro) no%i*e of %&e "()en% on,"es%ions of la'. An e5%ension of %&ir%y


16/70

or release of roer%y affe*%e(/ fines/ forfei%"res or o%&er enal%ies in rela%ion%&ere%o/ or o%&er )a%%ers arisin "n(er %&e C"s%o)s :a' or o%&er la'sa()inis%ere( -y %&e #"rea" of C"s%o)s@

>. De*isions of %&e Cen%ral #oar( of Assess)en% Aeals in %&ee5er*ise of i%s aella%e "ris(i*%ion o!er *ases in!ol!in %&e assess)en%

an( %a5a%ion of real roer%y oriinally (e*i(e( -y %&e ro!in*ial or *i%y -oar(of assess)en% aeals@

H. De*isions of %&e Se*re%ary of inan*e on *"s%o)s *ases ele!a%e(%o &i) a"%o)a%i*ally for re!ie' fro) (e*isions of %&e Co))issioner ofC"s%o)s '&i*& are a(!erse %o %&e o!ern)en% "n(er Se*%ion 21> of %&eTariff an( C"s%o)s Co(e@

J. De*isions of %&e Se*re%ary of Tra(e an( +n("s%ry/ in *ase ofnonari*"l%"ral ro("*%/ *o))o(i%y or ar%i*le/ an( %&e Se*re%ary of

Ari*"l%"re in %&e *ase of ari*"l%"ral ro("*%/ *o))o(i%y or ar%i*le/ in!ol!in(")in an( *o"n%er!ailin ("%ies "n(er Se*%ion 01 an( 02/ rese*%i!ely/of %&e Tariff an( C"s%o)s Co(e/ an( safe"ar( )eas"res "n(er 6e"-li*

A*% No. 7700/ '&ere ei%&er ar%y )ay aeal %&e (e*ision %o i)ose or no% %oi)ose sai( ("%ies.

-. "ris(i*%ion o!er *ases in!ol!in *ri)inal offenses as &ereinro!i(e(?

1. E5*l"si!e oriinal "ris(i*%ion o!er all *ri)inal *ases arisin fro)!iola%ions of %&e na%ional +n%ernal 6e!en"e Co(e or Tariff an( C"s%o)s Co(ean( o%&er la's a()inis%ere( -y %&e #"rea" of +n%ernal 6e!en"e or %&e#"rea" of C"s%o)s? Provie, #owever, T&a% offenses or felonies )en%ione(in %&is arara& '&ere %&e rin*ial a)o"n% of %a5es an( fees/ e5*l"si!e of*&ares an( enal%ies *lai)e(/ is less %&an One )illion esos


17/70

a. O!er aeals fro) "()en%s/ resol"%ions/ or or(ers of %&e6eional Trial Co"r%s in %a5 *olle*%ion *ases oriinally (e*i(e( -y %&e)/in %&eir rese*%i!e %erri%orial "ris(i*%ion.

-. O!er e%i%ions for re!ie' of %&e "()en%s/ resol"%ions oror(ers of %&e 6eional Trial Co"r%s in %&e e5er*ise of %&eir aella%e

"ris(i*%ion o!er %a5 *olle*%ion *ases oriinally (e*i(e( -y %&eMe%rooli%an Trial Co"r%s/ M"ni*ial Trial Co"r%s an( M"ni*ial Cir*"i%Trial Co"r%s/ in %&eir rese*%i!e "ris(i*%ion. / asa)en(e( -y 6. A. No. 3272/ e)&asis s"lie(=

E5*l"si!e aella%e "ris(i*%ion of Co"r% of Ta5 Aeals %o re!ie' -y aeal(e*isions of %&e Co))issioner of +n%ernal 6e!en"e.

a. Cases in!ol!in?

1) Dis"%e( assess)en%s@ 1= 6ef"n(s of in%ernal re!en"e %a5es/ fees or o%&er *&ares@

2) Penal%ies i)ose( in rela%ion %&ere%o.-. O%&er )a%%ers arisin "n(er?

1= T&e Na%ional +n%ernal 6e!en"e Co(e/ or

2= O%&er la's a()inis%ere( -y %&e #"rea" of +n%ernal 6e!en"e. / as a)en(e( -y 6. A. No. 3272=.

T&e Co"r% of Ta5 Aeals &as "ris(i*%ion o!er (e*isions of %&eCo))issioner of C"s%o)s o!er?

a. Cases in!ol!in?1= :ia-ili%y for *"s%o)s ("%ies/ fees or o%&er )oney *&ares/2= Sei8"res/ (e%en%ion or release of roer%y affe*%e(/= ines/ forfei%"res an( o%&er enal%ies i)ose( in rela%ion

%&ere%o@-. O%&er )a%%ers arisin "n(er?

1= %&e *"s%o)s la'/ or2= O%&er la' or ar% of la' a()inis%ere( -y %&e #"rea" of C"s%o)s

E5*l"si!e aella%e "ris(i*%ion of Co"r% of Ta5 Aeals %o re!ie' -yaeal (e*isions/ or(ers or resol"%ions of %&e 6eional Trial Co"r%s

a. +n lo*al %a5 *ases oriinally (e*i(e( or resol!e( -y %&e) in %&ee5er*ise of %&eir oriinal or aella%e "ris(i*%ion. / asa)en(e( -y 6. A. No. 3272=

-. O!er aeals fro) %&e "()en%s/ resol"%ions or or(ers of %&e6eional Trial Co"r%s in %a5 *olle*%ion *ases (e*i(e( -y %&e)/ in %&eir rese*%i!e%erri%orial "ris(i*%ion.


18/70

NOTE? Ta5 *olle*%ion *ases %&a% are -elo' %&e %&res&ol( a)o"n%s ofP200/000.00 an( P400/000.00 fall 'i%&in %&e "ris(i*%ion of %&e M"ni*ial TrialCo"r%s/ %&e M"ni*ial Trial Co"r%s in Ci%ies/ %&e M"ni*ial Cir*"i% Trial Co"r%s/ or%&e Me%rooli%an Trial Co"r%s. B&ere %&e a)o"n% e5*ee(s P1 )illion/ e5*l"si!eoriinal "ris(i*%ion is !es%e( 'i%& %&e Co"r% of Ta5 Aeals.

E5*l"si!e aella%e "ris(i*%ion of 6eional Trial Co"r%s in %a5 *olle*%ion*ases. 6eional Trial Co"r%s s&all e5er*ise aella%e "ris(i*%ion o!er all *ases(e*i(e( -y Me%rooli%an Trial Co"r%s/ M"ni*ial Trial Co"r%s an( M"ni*ialCir*"i% Trial Co"r%s in %&eir rese*%i!e %erri%orial "ris(i*%ion.


19/70

rear(in %&e re,"es% for re*onsi(era%ion. T&e !ery %i%le e5ressly in(i*a%e( %&a%i% 'as a final no%i*e rior %o sei8"re of roer%y. T&e le%%er i%self *learly s%a%e(%&a% %&e %a5ayer 'as -ein i!en %&is :AST OPPO6TUN+T %o ay@ o%&er'ise/i%s roer%ies 'o"l( -e s"-e*%e( %o (is%rain% an( le!y.

To a !ali( (e*ision on a (is"%e( assess)en%/ %&e (e*ision of %&eCo))issioner or &is ("ly a"%&ori8e( reresen%a%i!e s&all


20/70

la's or r"les an( re"la%ions or '&en %&ere is reason %o -elie!e %&a% any s"*&reor% is false/ in*o)le%e or erroneo"s/ %&e Co))issioner s&all assess %&eroer %a5 on %&e -es% e!i(en*e o-%aina-le.

+n *ase a erson fails %o file a re,"ire( re%"rn or o%&er (o*")en% a% %&e%i)e res*ri-e( -y la'/ or 'illf"lly or o%&er'ise files a false or fra"("len% re%"rnor o%&er (o*")en%/ %&e Co))issioner s&all )ae or a)en( %&e re%"rn fro) &iso'n no'le(e an( fro) s"*& infor)a%ion as &e *an o-%ain %&ro"& %es%i)ony oro%&er'ise/ '&i*& s&all -e pri&a fa"ie *orre*% an( s"ffi*ien% for all leal"roses. ISe*. H


21/70

+n!es%ia%ion/ ;an(-oo on A"(i% Pro*e("res an( Te*&ni,"es L Vol")e +/ .H79J4=

Un(er %&e "ni% an( !al"e )e%&o(/ %&e (e%er)ina%ion or !erifi*a%ion ofross re*ei%s )ay -e *o)"%e( -y alyin ri*e an( rofi% fi"res %o %&eno'n as*er%aina-le ,"ali%y of -"siness of %&e %a5ayer.


22/70

offi*ial !al"a%ion of a %a5ayers roer%y for "rose of %a5a%ion. T&e a-o!e(efini%ion of assess)en% fin(s ali*a%ion "n(er %ariff an( *"s%o)s %a5a%ion as'ell as lo*al o!ern)en% %a5a%ion.

or real roer%y %a5a%ion/ %&ere )ay -e a se*ial )eanin %o %&e -"r(ens%&a% are i)ose( "on real roer%ies %&a% &a!e -een -enefi%e( -y a "-li*'ors e5en(i%"re of a lo*al o!ern)en%. +% is so)e%i)es *alle( a se*ialassess)en% or a se*ial le!y. (Co&&i%%ioner of $nternal Revenue v. Pa%"orRealty an evelop&ent Corporation, et al., G.R. No. 12+31, une 29, 1999

An assess)en% is a no%i*e ("ly sen% %o %&e %a5ayer '&i*& is (ee)e()a(e only '&en %&e #+6 releases/ )ails or sen(s s"*& no%i*e %o %&e %a5ayer.(Co&&i%%ioner of $nternal Revenue v. Pa%"or Realty an evelop&entCorporation, et al., G.R. No. 12+31, une 29, 1999

An affi(a!i%9reor% of %&e e5a)iners "se( %o s"or% a *ri)inal *o)lain%for %a5 e!asion (oes no% *ons%i%"%e an assess)en% %&a% )ay -e %&e s"-e*% of a)o%ion for re*onsi(era%ionrein!es%ia%ion. T&e affi(a!i%9reor% )erely *on%ains a

*o)"%a%ion of %&e lia-ili%ies. +% (oes no% s%a%e a (e)an( or a erio( for ay)en%.+% is no% a((resse( %o %&e %a5ayers -"% %o %&e Dear%)en% of "s%i*e. Clearly/ i%'as no% )ean% %o -e a no%i*e of %&e %a5 ("e an( a (e)an( for %&e ay)en%%&ereof. (Co&&i%%ioner of $nternal Revenue v. Pa%"or Realty an evelop&entCorporation, et al., G.R. No. 12+31, une 29, 1999

BAR: 33. T&e res*ri%i!e erio(s for )ain assess)en%s are?a. %&ree


23/70

Se*. 22/ N+6C of 133J '&i*& ro!i(es for %&e s"sension of %&e res*ri%i!eerio(?

a. B&en %&e Co))issioner is ro&i-i%e( fro) )ain %&e assess)en%/ or-einnin (is%rain%/ or le!y or ro*ee(in in *o"r% an( for si5%y


24/70

-. #efore an assess)en% is iss"e(/ %&ere is/ -y ra*%i*e/ a re9assess)en% no%i*e sen% %o %&e %a5ayer B;+:E s"*& is no% so 'i%& a *ri)inal*&are. T&e *&are is file( (ire*%ly 'i%& %&e Dear%)en% of "s%i*e.

*. A *ri)inal *o)lain% is ins%i%"%e( no% %o (e)an( ay)en%/ -"% %oenali8e %&e %a5ayer for !iola%ion of %&e Ta5 Co(e B;+:E %&e "rose of %&eiss"an*e of an assess)en% is %o *olle*% %&e %a5. (Co&&i%%ioner of $nternalRevenue v. Pa%"or Realty an evelop&ent Corporation, et al., G.R. No.12+31, une 29, 1999

T&e (o*%rines in Co&&i%%ioner of $nternal Revenue v. Court of Appeal%,et al., G.R. No. 119322, une 4, 199*/ Co&&i%%ioner of $nternal Revenue v.Pa%"or Realty an evelop&ent Corporation, et al., G.R. No. 12+31, une 29,1999 an( Una- !. C"si/ 3J SC6A 7JJ/ are (ifferen% fro) one ano%&er.

+n


25/70

-. Cri)inal %a5 fra"( *ases/ *onfir)e( as s"*& -y %&e Co))issioner of+n%ernal 6e!en"e or &is ("ly a"%&ori8e( reresen%a%i!e@

*. Cri)inal !iola%ions alrea(y file( in *o"r%@(. Delin,"en% a**o"n%s 'i%& ("ly aro!e( s*&e("le of ins%all)en%

ay)en%s@e. Cases '&ere final reor%s of rein!es%ia%ion or re*onsi(era%ion &a!e

-een iss"e( res"l%in %o re("*%ion in %&e oriinal assess)en% an( %&e %a5ayer isareea-le %o s"*& (e*ision -y sinin %&e re,"ire( aree)en% for) for %&e"rose. On %&e o%&er &an(/ o%&er ro%es%e( *ases s&all -e &an(le( -y %&e6eional E!al"a%ion #oar(


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f. T&e assess)en%s 'ere iss"e( on or af%er an"ary 1/ 1337/ '&ere %&e(e)an( no%i*e allee(ly faile( %o *o)ly 'i%& %&e for)ali%ies "n(er Se*. 227 of%&e Na%ional +n%ernal 6e!en"e Co(e of 133J@ or

. Assess)en%s )a(e -ase( on %&e #es% E!i(en*e O-%aina-le 6"lean( %&ere is reason %o -elie!e %&a% %&e sa)e *an -e (is"%e( -y s"ffi*ien% an(*o)e%en% e!i(en*e@ or

&. T&e assess)en% 'as iss"e( 'i%&in %&e res*ri%i!e erio( forassess)en% as e5%en(e( -y %&e %a5ayers e5e*"%ion of Bai!er of %&e S%a%"%e of:i)i%a%ions %&e !ali(i%y or a"%&en%i*i%y of '&i*& is -ein ,"es%ione( or a% iss"ean( %&ere is s%ron reason %o -elie!e an( e!i(en*e %o ro!e %&a% i% is no%a"%&en%i*. 00 or less/ or if )arrie(/ '&ose salary %oe%&er 'i%& &is so"se isP21/000 er )on%&/ or less/ an( i% aears %&a% %&e %a5ayer ossesses no o%&erle!ia-le(is%raina-le asse%s o%&er %&an &is fa)ily &o)e@ or

e. T&e %a5ayer &as -een (e*lare( -y any *o)e%en% %ri-"nala"%&ori%y-o(yo!ern)en% aen*y as -anr"% or insol!en%.


27/70

%&e (isosi%ion of %&e *ase/ for %&e Co))issioner 'o"l( *er%ainly (isallo' %&e*lai) for ref"n( in %&e sa)e 'ay as &e (isallo'e( %&e ro%es% aains% %&eassess)en%. T&e la'/ s&o"l( no% -e in%erre%e( as %o res"l% in a-s"r(i%ies.(va. e 'an Au%tin., et".,v. Co&&i%%ioner of $nternal Revenue, G.R. No.13+4+, 'epte&ber 10, 2001 *i%in Ro&an Cat#oli" Ar"#bi%#op of Cebu v.Colle"tor of $nternal Revenue, 4 'CRA 2)9

6e*on*ilia%ion -e%'een no. 40 an( 41. An ali*a%ion for ref"n( or *re(i%"n(er Se*. 223 of %&e N+6C of 133J is re,"ire( '&ere %&e *ase file( -efore %&eCTA is a ref"n( *ase/ '&i*& is no% re)ise( "on a (is"%e( assess)en%.T&ere is no nee( for a rior ali*a%ion for ref"n( or *re(i%/ if %&e ref"n( is)erely a *onse,"en*e of %&e resol"%ion of %&e #+6s (enial of a ro%es%e(assess)en%.

Se*. H3 of %&e 13JJ N+6C


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a inal A("s%)en% 6e%"rn -e*a"se %&ere is no%&in %o a("s% or %o a"(i%. Af%er%&e *orora%ion *ease( oera%ion i%s %a5a-le year 'o"l( -e s&or%ene(. (-an; oft#e P#ilippine $%lan% v. Co&&i%%ioner of $nternal Revenue, G.R. No. 144*3,

Auu%t 2+, 2001=

A si)"l%aneo"s filin of %&e ali*a%ion 'i%& %&e #+6 for ref"n(*re(i% an(%&e ins%i%"%ion of %&e *o"r% s"i% 'i%& %&e CTA is allo'e(. T&ere is no nee( %o 'ai%for a #+6 (enial. 6EASONS?

a. T&e osi%i!e re,"ire)en% of Se*%ion 20 N+6C


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a()inis%ra%i!e -o(ies &a!e o-%aine( e5er%ise/ %&e *o"r%s 'ill (efer. T&is islie'ise re)ise( on %&e life-loo( %&eory '&i*& )an(a%es %&e i))e(ia%e*olle*%ion of %a5es %o ens"re %&e *on%in"e( e5is%en*e of %&e S%a%e.

T&ere are %'o in(s of r"lins %&e #+6 )ay iss"e 9 in%erre%a%i!e r"linsan( leisla%i!e r"lins.

+n%erre%a%i!e r"les are (esine( %o ro!i(e "i(elines %o %&e la' '&i*&%&e a()inis%ra%i!e aen*y is in *&are of enfor*in. No no%i*e/ &earin or"-li*a%ion is re,"ire(/ as %&ey are iss"e( )erely for %&e "i(an*e ofa()inis%ra%i!e offi*ers. +ll"s%ra%ion? 6e!en"e Me)oran(") Cir*"lar No. 4J931*lassifyin *ora as an ari*"l%"ral non9foo( i%e) (e*larin i% e5e)% fro) VATonly if %&e sale is )a(e -y %&e ri)ary ro("*er. < i%a&i% 7riental A%%o"iationof Co"o 5raer%, $n". v. epart&ent of :inan"e 'e"retary, et al., 23+ 'CRA *3@1994

:eisla%i!e r"les are in %&e na%"re of s"-or(ina%e leisla%ion/ (esine( %o

i)le)en% a ri)ary leisla%ion -y ro!i(in %&e (e%ails %&ereof. T&ey are iss"e("n(er %&e ,"asi9leisla%i!e a"%&ori%y of %&e #+6 Co))issioner. T&ere is are,"ire)en% for no%i*e/ &earin an( "-li*a%ion. +ll"s%ra%ion? 6e!en"eMe)oran(") Cir*"lar No. J93 '&i*& la*e( ;oe :"5"ry/ Pre)i") More an(C&a)ion *iare%%es 'i%&in %&e s*oe of %&e a)en(a%ory la' 6.A. No. JH>4 an(s"-e*%e( %&e) %o %&e in*rease( %a5 ra%e re,"ires no%i*e/ &earin an("-li*a%ion. (Co&&i%%ioner of $nternal Revenue v. Court of Appeal%, et al., 2*1'CRA 23*

T&e r"lins an( *ir*"lars ro)"la%e( -y %&e Co))issioner (o no% &a!e

re%roa*%i!e ali*a%ion if %&e re!o*a%ion/ )o(ifi*a%ion/ or re!ersal 'o"l( -e

re"(i*ial %o %&e %a5ayers. ('e". 24*, N$RC of 199)= Co&&i%%ioner of $nternalRevenue v. Court of Appeal%, et al., 2*) 'CRA )

+ns%an*es '&en re!en"e r"lins an( re"la%ions &a!e re%roa*%i!e effe*%e!en if re"(i*ial %o %&e %a5ayer?

a. B&ere %&e %a5ayer (eli-era%ely )iss%a%es or o)i%s )a%erial fa*%s fro)&is re%"rn or in any (o*")en% re,"ire( of &i) -y %&e #+6@

-. B&ere %&e fa*%s s"-se,"en%ly a%&ere( -y %&e #+6 are )a%erially(ifferen% fro) %&e fa*%s on '&i*& %&e r"lin is -ase(/ or

*. B&ere %&e %a5ayer a*%e( in -a( fai%&.


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T&e follo'in are so)e of %&e o'ers %&a% %&e Co))issioner of +n%ernal6e!en"e *o"l( no% (elea%e?

a. T&e o'er %o re*o))en( %&e r"les an( re"la%ions -y %&e Se*re%ary ofinan*e@

-. T&e o'er %o iss"e r"lins of firs% i)ression or %o re!erse/ re!oe/ or)o(ify any e5is%in r"lin of %&e #"rea"@

*. T&e o'er %o *o)ro)ise or a-a%e/ any %a5 (efi*ien*y/ Pro!i(e(/&o'e!er/ %&a% assess)en%s iss"e( -y %&e 6eional Offi*es in!ol!in -asi*(efi*ien*y %a5es of P>00/000.00 or less/ an( )inor *ri)inal !iola%ions as )ay -e(e%er)ine( -y r"les an( re"la%ions %o -e ro)"la%e( -y %&e Se*re%ary ofinan*e/ "on %&e re*o))en(a%ion of %&e Co))issioner/ (is*o!ere( -y reionalan( (is%ri*% offi*ials/ )ay -e *o)ro)ise( -y a reional e!al"a%ion -oar( '&i*&s&all -e *o)ose( of %&e 6eional Dire*%or as C&air)an/ %&e Assis%an% 6eionalDire*%or/ &ea(s of %&e :eal/ Assess)en% an( Colle*%ion Di!isions an( %&e6e!en"e Dis%ri*% Offi*er &a!in "ris(i*%ion o!er %&e %a5ayer/ as )e)-ers@ an(

(. T&e o'er %o assin or reassin in%ernal re!en"e offi*ers %oes%a-lis&)en%s '&ere ar%i*les s"-e*% %o e5*ise %a5 are ro("*e( or e%. / %&e

Co))issioner of +n%ernal 6e!en"e is only a"%&ori8e( %o in,"ire in%o %&e -an(eosi%s of?

a. a (e*e(en% %o (e%er)ine &is ross es%a%e@ an(-. any %a5ayer '&o &as file( an ali*a%ion for *o)ro)ise of &is %a5

lia-ili%y -y reason of finan*ial in*aa*i%y %o ay &is %a5 lia-ili%y. ISe*. >


31/70

BAR: 44.Co9&eirs '&o o'n in&eri%e( roer%ies '&i*& ro("*e in*o)es&o"l( no% a"%o)a%i*ally -e *onsi(ere( as ar%ners of an "nreis%ere(*orora%ion s"-e*% %o in*o)e %a5 for %&e follo'in reasons?

a. %&e s&arin of ross re%"rns (oes no% of i%self es%a-lis& a ar%ners&i/'&e%&er or no% %&e ersons s&arin %&e) &a!e a oin% or *o))on ri&% or in%eres%

in any roer%y fro) '&i*& %&e re%"rns are (eri!e(. T&ere )"s% -e an"n)is%aa-le in%en%ion %o for) a ar%ners&i or oin% !en%"re. (7billo%, r. v.Co&&i%%ioner of $nternal Revenue, 139 'CRA 43*

-. T&ere is no *on%ri-"%ion or in!es%)en% of a((i%ional *ai%al %o in*reaseor e5an( %&e in&eri%e( roer%ies/ )erely *on%in"in %&e (e(i*a%ion of %&eroer%y %o %&e "se %o '&i*& i% &a( -een "% -y %&eir fore-ears.


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a. Cai%al is 'eal%& or f"n(/ B;+:E in*o)e is rofi% or ain fro) %&e flo'of 'eal%&. (Co&&i%%ioner of $nternal Revenue v. Court of Appeal%, et al., G.R.No. 10+)*, anuary 20, 1999

-. Cai%al is a f"n( of roer%y e5is%in a% an ins%an% of %i)e B;+:Ein*o)e is %&a% flo' of ser!i*es ren(ere( -y %&a% *ai%al -y %&e ay)en% of )oneyfro) i% or any o%&er -enefi% ren(ere( -y a f"n( of *ai%al in rela%ion %o s"*& f"n(%&ro"& a erio( of %i)e.

*. Cai%al is 'eal%& B;+:E in*o)e is %&e ser!i*e of 'eal%&@ an((. Cai%al is %&e %ree B;+:E in*o)e is %&e fr"i%. (arial v. Rafferty, 3+

P#il. 414

6eali8a%ion is (e%er)ina%i!e of earnin ro*ess res"l%in %o in*o)e.Bi%&o"% reali8a%ion/ %&ere is no in*o)e.

T&e (e%er)inin fa*%or for %&e i)osi%ion of in*o)e %a5 is '&e%&er anyain or rofi% 'as (eri!e( fro) %&e %ransa*%ion. +n %&e )e%a&or of i%ner v.a"o&ber, 22


33/70

BAR: 48. T&e eneral rin*iles of in*o)e %a5a%ion in %&e P&iliinesO6 %&e si%"s of in*o)e %a5a%ion in %&e P&iliines O6 %&e so"r*e r"le of in*o)e%a5a%ion as alie( in %&e P&iliines.

a. A *i%i8en of %&e P&iliines resi(in %&erein is %a5a-le on all in*o)e(eri!e( fro) so"r*es 'i%&in an( 'i%&o"% %&e P&iliines.

-. A nonresi(en% *i%i8en is %a5a-le only on in*o)e (eri!e( fro) so"r*es'i%&in %&e P&iliines.*. An in(i!i("al *i%i8en of %&e P&iliines '&o is 'orin an( (eri!in

in*o)e fro) a-roa( as an o!erseas *on%ra*% 'orer is %a5a-le only on in*o)efro) so"r*es 'i%&in %&e P&iliines? Pro!i(e(/ T&a% a sea)an '&o is a *i%i8en of%&e P&iliines an( '&o re*ei!es *o)ensa%ion for ser!i*es ren(ere( a-roa( asa )e)-er of %&e *o)le)en% of a !essel enae( e5*l"si!ely in in%erna%ional%ra(e s&all -e %rea%e( as an o!erseas *on%ra*% 'orer.

(. An alien in(i!i("al/ '&e%&er resi(en% or no% of %&e P&iliines/ is%a5a-le only on in*o)e (eri!e( fro) so"r*es 'i%&in %&e P&iliines.

e. A (o)es%i* *orora%ion is %a5a-le on all in*o)e (eri!e( fro) so"r*es'i%&in an( 'i%&o"% %&e P&iliines.

f. A forein *orora%ion/ '&e%&er enae( or no% in %ra(e or -"siness in%&e P&iliines/ is %a5a-le only on in*o)e (eri!e( fro) so"r*es 'i%&in %&eP&iliines.


34/70

T&e fa*% %&a% %&e earnins or rofi%s of a *orora%ion are er)i%%e( %oa**")"la%e( -eyon( %&e reasona-le nee(s of %&e -"siness s&all -e(e%er)ina%i!e of %&e "rose %o a!oi( %&e %a5 "on i%s s&are&ol(ers or )e)-ers"nless %&e *orora%ion/ -y *lear reon(eran*e of e!i(en*e/ s&all ro!e %&e*on%rary. ISe*. 23


35/70

*i%in anila ine er"#ant%, $n". v. Co&&i%%ioner of $nternal Revenue in %"rn*i%in Mer%ens=

T&e %'o


36/70

. :ife or &eal%& ins"ran*e an( o%&er non9life ins"ran*e re)i")s orsi)ilar a)o"n%s in e5*ess of '&a% %&e la' allo's. ISe*. /000 er e)loyee er ann")@

i. lo'ers/ fr"i%s/ -oos/ or si)ilar i%e)s i!en %o e)loyees "n(erse*ial *ir*")s%an*es/ e.. on a**o"n% of illness/ )arriae/ -ir%& of a -a-y/ e%*.@an(

. Daily )eal allo'an*e for o!er%i)e 'or no% e5*ee(in %'en%y fi!eer*en% = of %&e -asi* )ini)") 'ae.

T&e a)o"n% of e &ini&i% -enefi%s *onfor)in %o %&e *eilin &ereinres*ri-e( s&all no% -e *onsi(ere( in (e%er)inin %&e P0/000 *eilin of o%&er-enefi%s ro!i(e( "n(er Se*%ion 2


37/70

e)loyer as -enefi%s %o i%s e)loyees/ '&e%&er *lassifie( as e &ini&i%-enefi%sor frine -enefi%s/ s&all *ons%i%"%e as (e("*%i-le e5ense "on s"*& e)loyer.ISe*. 2.J7.1


38/70

f. 6e%ire)en% -enefi%s re*ei!e( "n(er 6e"-li* A*% No. JH41. 6e%ire)en%re*ei!e( fro) reasona-le ri!a%e -enefi% lan af%er *o)lian*e 'i%& *er%ain*on(i%ions. A)o"n%s re*ei!e( for -eyon( *on%rol seara%ion. orein so*ialse*"ri%y/ re%ire)en% ra%"i%ies/ ensions/ e%*. USVA -enefi%s/ SSS -enefi%s an(S+S -enefi%s.

BAR: 57. Con(i%ions for e5*l"(in re%ire)en% -enefi%s fro) rossin*o)e/ &en*e %a59e5e)%?

a. 6e%ire)en% -enefi%s re*ei!e( "n(er 6e"-li* A*% No. JH41 an( %&osere*ei!e( -y offi*ials an( e)loyees of ri!a%e fir)s/ '&e%&er in(i!i("al or*orora%e/ in a**or(an*e 'i%& %&e e)loyers reasona-le ri!a%e -enefi% lanaro!e( -y %&e #+6.

-. 6e%irin offi*ial or e)loyee1= +n %&e ser!i*e of %&e sa)e e)loyer for a% leas% %en


39/70

a. O!"#$% $#! #&'&(($%%ra(e/ -"siness or rofessional &)*(&(.-. T&e a)o"n% of "#+&&(+ ai( or in*"rre( 'i%&in a %a5a-le year on

in(e-%e(ness in *onne*%ion 'i%& %&e %a5ayers rofession/ %ra(e or -"siness.6esi(en% *i%i8ens/ resi(en% alien in(i!i("als an( nonresi(en% alien

in(i!i("als '&o are enae( in %ra(e an( -"siness/ on %&eir ross in*o)eso%&er fro) *o)ensa%ion in*o)e are allo'e( %o (e("*% %&ese e5enses.Do)es%i* *orora%ions/ es%a%es an( %r"s%s )ay also (e("*% %&is e5ense.Nonresi(en% *i%i8ens an( forein *orora%ions on %&eir ross in*o)es fro) 'i%&in)ay also (e("*% %&is e5ense.

Nonresi(en% alien in(i!i("als no% enae( in %ra(e or -"siness in %&eP&iliines are no% allo'e( %o (e("*% %&is e5ense.

*. T$)&(ai( or in*"rre( 'i%&in %&e %a5a-le year in *onne*%ion 'i%& %&e%a5ayers rofession.

6esi(en% *i%i8ens/ resi(en% alien in(i!i("als an( nonresi(en% alienin(i!i("als '&o are enae( in %ra(e an( -"siness/ on %&eir ross in*o)eso%&er fro) *o)ensa%ion in*o)e are allo'e( %o (e("*% %&ese e5enses.Do)es%i* *orora%ions/ es%a%es an( %r"s%s )ay also (e("*% %&is e5ense.

Nonresi(en% *i%i8ens an( forein *orora%ions on %&eir ross in*o)es fro) 'i%&in)ay also (e("*% %&is e5ense.


(. Or(inary ,-((&(/ losses fro) *as"al%y/ %&ef% or e)-e88le)en%@ an( ne%oera%in losses.

6esi(en% *i%i8ens/ resi(en% alien in(i!i("als an( nonresi(en% alienin(i!i("als '&o are enae( in %ra(e an( -"siness/ on %&eir ross in*o)eso%&er fro) *o)ensa%ion in*o)e are allo'e( %o (e("*% %&ese e5enses.Do)es%i* *orora%ions/ es%a%es an( %r"s%s )ay also (e("*% %&is e5ense.Nonresi(en% *i%i8ens an( forein *orora%ions on %&eir ross in*o)es fro) 'i%&in

)ay also (e("*% %&is e5ense.Nonresi(en% alien in(i!i("als no% enae( in %ra(e or -"siness in %&e

P&iliines are no% allo'e( %o (e("*% %&is e5ense.e. B$! !&+(("e %o %&e %a5ayer/ a*%"ally as*er%aine( %o -e 'or%&less

an( *&are( off 'i%&in %&e %a5a-le year/ *onne*%e( 'i%& rofession/ %ra(e or-"siness/ no% s"s%aine( -e%'een rela%e( ar%ies.

6esi(en% *i%i8ens/ resi(en% alien in(i!i("als an( nonresi(en% alienin(i!i("als '&o are enae( in %ra(e an( -"siness/ on %&eir ross in*o)eso%&er fro) *o)ensa%ion in*o)e are allo'e( %o (e("*% %&ese e5enses.Do)es%i* *orora%ions/ es%a%es an( %r"s%s )ay also (e("*% %&is e5ense.Nonresi(en% *i%i8ens an( forein *orora%ions on %&eir ross in*o)es fro) 'i%&in)ay also (e("*% %&is e5ense.


f. /&*&'"$+"-#or a reasona-le allo'an*e for %&e e5&a"s%ion/ 'ear an(%ear


40/70

Nonresi(en% *i%i8ens an( forein *orora%ions on %&eir ross in*o)es fro) 'i%&in)ay also (e("*% %&is e5ense.


&. C$"+$,& an( o%&er '-#+"+"-#(. 6esi(en% *i%i8ens/ resi(en% alienin(i!i("als an( nonresi(en% alien in(i!i("als '&o are enae( in %ra(e an(-"siness/ on %&eir ross in*o)es o%&er fro) *o)ensa%ion in*o)e are allo'e(%o (e("*% %&ese e5enses. Do)es%i* *orora%ions/ es%a%es an( %r"s%s )ay also(e("*% %&is e5ense. Nonresi(en% *i%i8ens an( forein *orora%ions on %&eirross in*o)es fro) 'i%&in )ay also (e("*% %&is e5ense.


i. R&(&$' $#! !&&,-*+ e5en(i%"res %rea%e( as (eferre(e5enses ai( or in*"rre( -y %&e %a5ayer in *onne*%ion 'i%& &is %ra(e/ -"sinessor rofession/ no% (e("*%e( as e5enses an( *&area-le %o *ai%al a**o"n% -"%no% *&area-le %o roer%y of a *&ara*%er '&i*& is s"-e*% %o (ere*ia%ion or(ele%ion.

6esi(en% *i%i8ens/ resi(en% alien in(i!i("als an( nonresi(en% alienin(i!i("als '&o are enae( in %ra(e an( -"siness/ on %&eir ross in*o)eso%&er fro) *o)ensa%ion in*o)e are allo'e( %o (e("*% %&ese e5enses.Do)es%i* *orora%ions/ es%a%es an( %r"s%s )ay also (e("*% %&is e5ense.Nonresi(en% *i%i8ens an( forein *orora%ions on %&eir ross in*o)es fro) 'i%&in)ay also (e("*% %&is e5ense.


. C-#+"+"-#( +- *("-# +(+(. 6esi(en% *i%i8ens/ resi(en% alienin(i!i("als an( nonresi(en% alien in(i!i("als '&o are enae( in %ra(e an(-"siness/ on %&eir ross in*o)es o%&er fro) *o)ensa%ion in*o)e are allo'e(

%o (e("*% %&ese e5enses. Do)es%i* *orora%ions/ es%a%es an( %r"s%s )ay also(e("*% %&is e5ense. Nonresi(en% *i%i8ens an( forein *orora%ions on %&eirross in*o)es fro) 'i%&in )ay also (e("*% %&is e5ense.


. I#($#'& *&"(for &eal%& an( &osi%ali8a%ion. 6esi(en% *i%i8ens/resi(en% alien in(i!i("als an( nonresi(en% alien in(i!i("als '&o are enae( in%ra(e an( -"siness/ on %&eir ross in*o)es o%&er fro) *o)ensa%ion in*o)eare allo'e( %o (e("*% %&ese e5enses. Nonresi(en% *i%i8ens an( nonresi(en%alien in(i!i("al enae( in %ra(e or -"siness in %&e P&iliine on %&eir rossin*o)es fro) 'i%&in )ay also (e("*% %&ese re)i")s.

Nonresi(en% alien in(i!i("als no% enae( in %ra(e or -"siness in %&eP&iliines are no% allo'e( %o (e("*% %&ese re)i")s.

l. &(-#$, $#! $!!"+"-#$, &)&*+"-#(. 6esi(en% *i%i8ens/ an( resi(en%alien on %&eir ross in*o)es an( fro) *o)ensa%ion in*o)e are allo'e( %o(e("*% %&ese re)i")s. Nonresi(en% *i%i8ens on %&eir ross in*o)es fro) 'i%&in)ay also (e("*% %&is e5ense. Nonresi(en% alien in(i!i("als enae( in %ra(eor -"siness in %&e P&iliines are allo'e( %o (e("*% %&ese e5e)%ions "n(erre*iro*i%y.


E5%raor(inary (e("*%ions

a. T&ose allo'e( %o ins"ran*e *o)anies-. De("*%ions allo'e( %o es%a%es an( %r"s%s a!ailin of i%e)i8e(

(e("*%ions of in*o)e *"rren%ly (is%ri-"%e( %o -enefi*iaries.*. :osses fro) 'as& sales of s%o*s or se*"ri%ies.(. Cer%ain *ai%al losses -"% only fro) *ai%al ains.

Or(inary e5enses are %&ose '&i*& are *o))on %o in*"r in %&e %ra(e or-"siness of %&e %a5ayer B;+:E *ai%al e5en(i%"res are %&ose in*"rre( %o

40


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i)ro!e asse%s an( -enefi%s for )ore %&an one %a5a-le year. Or(inary e5ensesare "s"ally in*"rre( ("rin a %a5a-le year an( -enefi%s s"*& %a5a-le year.Ne*essary e5enses are %&ose '&i*& are aroria%e or &elf"l %o %&e -"siness.

BAR: 61. T&e follo'in are %&e re,"isi%es for (e("*%i-ili%y of -"siness

e5enses?a. Co)lian*e 'i%& %&e -"siness %es%?1= M"s% -e or(inary an( ne*essary@2= M"s% -e ai( or in*"rre( 'i%&in %&e %a5a-le year@= M"s% -e ai( or in*"rre( in *arryin on a %ra(e or -"siness.4= M"s% no% -e -ri-es/ i*-a*s or o%&er illeal e5en(i%"res

-. Co)lian*e 'i%& %&e s"-s%an%ia%ion %es%. Proof -y e!i(en*e or re*or(sof %&e (e("*%ions allo'e( -y la' in*l"(in *o)lian*e 'i%& %&e -"siness %es%.

BAR: 62. A(!er%isin e5enses no% (esine( %o s%i)"la%e %&e f"%"resale of )er*&an(ise are no% (e("*%i-le T&ese are e5en(i%"res in or(er %o*rea%e or )ain%ain so)e for) of oo('ill. T&ese e5en(i%"res are %o -e srea(o!er a reasona-le erio( of %i)e -e*a"se %&ey are *onsi(ere( %&a% a *ai%alasse% '&i*& &as a (e%er)ina-le life &as -een a*,"ire(. (General :oo% @P#il%.,$n". v. Co&&i%%ioner of $nternal Revenue, C5A Ca%e No. 43+*, :ebruary +,1994

E5enses in*"rre( %o *rea%e a fa!ora-le i)ae for %&e *orora%ion %oenera%e sales of i%s s&ares of s%o* *ons%i%"%e *ai%al in!es%)en% -e*a"se %&ear%i*"lar a(!er%isin e5ense 'as in*"rre( in rela%ion %o %&e *ai%al asse% ore,"i%y of %&e *o)any (Atla% Con%oliate inin an evelop&entCorporation v. Co&&i%%ioner of $nternal Revenue, 102 'CRA 24*, an( are %o-e*ai%ali8e( or srea( o!er a reasona-le erio(.

6e,"isi%es of (e("*%i-ili%y of En%er%ain)en%/ A)"se)en% an( 6e*rea%ionE5enses?

a. +% )"s% -e a reasona-le allo'an*e for en%er%ain)en%/ a)"se)en% an(re*rea%ion e5enses ISe*. 4


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2= -"% in no *ase s&all s"*& (e("*%ion e5*ee( 0.>0 er*en% =of ne% sales


43/70

s"-s%an%ia%ion. D"es on *o)any )e)-ers&i *ons%i%"%e (e("*%i-le e5ense.


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v. Col. of $nt. Revenue, + 'CRA 1*3 "ite in Para&ount $n%uran"e Corporationv. Co&&i%%ioner of $nternal Revenue, C5A Ca%e No. 4+44,. une ), 199* +f %rea%e( as a frine -enefi%/ s"-e*% %o %&e frine -enefi%s %a5 "n(er Se*./ N+6C of 133J/ i% )ay -e allo'e( as a (e("*%ion fro) %&e e)loyers rossin*o)e.

6eresen%a%ion e5enses no% s"or%e( -y offi*ial re*ei%s s&o"l( -e(isallo'e(. Mere re*ei%s '&en sine( -y %&e *o)any offi*ers %&e)sel!es areno% s"ffi*ien%/ for '&ile %&ey )ay s&o' %&a% %&ey re*ei!e( %&e a)o"n% fro) %&e*o)any/ %&ey (o no% ro!e ay)en% of %&e allee( reresen%a%ion e5enses %o%&e en%i%y in '&i*& %&e sa)e 'ere in*"rre(. "r%&er)ore/ %&e a-sen*e ofin!oi*es re*ei%s or !o"*&ers/ ar%i*"larly la* of roof of %&e i%e)s *ons%i%"%in%&e e5ense is fa%al %o %&e allo'an*e of %&e (e("*%ion. (Para&ount $n%uran"eCorporation v. Co&&i%%ioner of $nternal Revenue, C5A Ca%e No. 4+44, une ),199* "itin Colle"tor of $nternal Revenue v. Goori"# $nt. Rubber Co., 21 'CRA133* an Gan"ay"o v. Colle"tor of $nternal Revenue, 1 'CRA 9+0

BAR: 63. Preferre( s&ares are *onsi(ere( *ai%al rear(less of %&e*on(i%ions "n(er '&i*& s"*& s&ares are iss"e( an( (i!i(en(s or in%eres%s ai(%&ereon are no% allo'e( as (e("*%ions fro) %&e ross in*o)e of *orora%ions.


45/70

a. T&ere )"s% -e an e5is%in in(e-%e(ness ("e %o %&e %a5ayer '&i*&)"s% -e !ali( an( leally (e)an(a-le@ -. T&e sa)e )"s% -e *onne*%e( 'i%& %&e %a5ayers %ra(e/ -"siness orra*%i*e of rofession@ *. T&e sa)e )"s% no% -e s"s%aine( in a %ransa*%ion en%ere( in%o -e%'eenrela%e( ar%ies@ (. T&e sa)e )"s% -e a*%"ally *&are( off %&e -oos of a**o"n%s of %&e%a5ayer as of %&e en( of %&e %a5a-le year@ an( e. T&e (e-% )"s% -e a*%"ally as*er%aine( %o -e 'or%&less an("n*olle*%i-le ("rin %&e %a5a-le year@ f. T&e (e-%s are "n*olle*%i-le (esi%e (ilien% effor% e5er%e( -y %&e%a5ayer. ISe*. 4 92002@ P#ilippine Refinin Corporation v. Court of Appeal%,et al., 2* 'CRA **)K . M"s% &a!e -een reor%e( as re*ei!a-les in %&e in*o)e %a5 re%"rn of %&e*"rren% or rior years.


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T&e s&ares of %&e *orora%ion are *onsi(ere( as *ai%al asse%s '&ere %&e&ol(er is no% a (ealer in se*"ri%ies. B&ere %&e s&ares are lis%e( an( %ra(e( in%&e s%o* e5*&ane %&e &ol(er s&all -e s"-e*% %o %&e %ransa*%ion %a5/ of Q of 1of %&e ross sellin ri*e/ '&i*& is in lie" of in*o)e %a5.

Cai%al asse%s s&all refer %o all real roer%ies &el( -y a %a5ayer/ '&e%&eror no% *onne*%e( 'i%& &is %ra(e or -"siness/ an( '&i*& are no% in*l"(e( a)on%&e real roer%ies *onsi(ere( as or(inary asse%s.


47/70

-. 6eal roer%y &el( -y %&e %a5ayer ri)arily for sale %o *"s%o)ers in%&e or(inary *o"rse of &is %ra(e or -"siness@ or *. 6eal roer%y "se( in %ra(e or -"siness


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T&e *lassifi*a%ion of s"*& roer%y in %&e &an(s of %&e -"yer%ransferee s&all -e(e%er)ine( in a**or(an*e 'i%& %&e follo'in r"les?

a. 6eal roer%y %ransferre( %&ro"& s"**ession or (ona%ion %o %&e &eir or(onee '&o is no% enae( in %&e real es%a%e -"siness 'i%& rese*% %o %&e realroer%y in&eri%e( or (ona%e(/ an( '&o (oes no% s"-se,"en%ly "se s"*& roer%yin %ra(e or -"siness/ s&all -e *onsi(ere( as a *ai%al asse% in %&e &an(s of %&e&eir or (onee.

-. 6eal roer%y re*ei!e( as (i!i(en( -y s%o*&ol(ers '&o are no%enae( in %&e real es%a%e -"siness an( '&o no% s"-se,"en%ly "se s"*& realroer%y in %ra(e or -"siness s&all -e %rea%e( as *ai%al asse%s in %&e &an(s of%&e re*iien% e!en if %&e *orora%ion '&i*& (e*lare( %&e real roer%y (i!i(en( isenae( in real es%a%e -"siness.

*. T&e real roer%y re*ei!e( in an e5*&ane s&all -e %rea%e( as or(inaryasse% in %&e &an(s of %&e %ransferee in %&e *ase of a %a59free e5*&ane -y%a5ayer no% enae( in real es%a%e -"siness %o a %a5ayer '&o is enae( inreal es%a%e -"siness/ or %o a %a5ayer '&o/ e!en if no% enae( in real es%a%e-"siness/ 'ill "se in -"siness %&e roer%y re*ei!e( in %&e e5*&ane.


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T&e %a5 is i)ose( "on *ai%al ains res")e( %o &a!e -een reali8e(fro) %&e sale/ e5*&ane/ or o%&er (isosi%ion of real roer%y lo*a%e( in %&eP&iliines/ *lassifie( as *ai%al asse%s. ISe*. 24


50/70

+n %&e *ase of in!ol"n%ary %ransfers of real roer%ies/ in*l"(ine5roria%ion or fore*los"re sale/ %&e in!ol"n%ariness of s"*& sale s&all &a!e noeffe*% on %&e *lassifi*a%ion of s"*& real roer%y in %&e &an(s of %&e in!ol"n%aryseller/ ei%&er as *ai%al asse% or or(inary asse% as %&e *ase )ay -e.


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= Nonresi(en% alien enae( in %ra(e or -"siness in %&eP&iliines ISe*. 2>


52/70

%&e s%o* e5*&ane=/ &el( for )ore %&an %'el!e )on%&s.


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)i5e(/ si%"a%e( in %&e P&iliines/ %o %&e e5%en% of %&e in%eres% %&erein of %&e(e*e(en% a% %&e %i)e of &is (ea%&.

BAR: 76. :ife ins"ran*e ro*ee(s in*l"(e( as ar% of %&e ross es%a%eof a (e*e(en%?

a. T&e ins"ran*e 'as %aen -y %&e (e*e(en% on &is o'n life an( %&e-enefi*iary 1= is &i)self/ &is es%a%e/ &is e5e*"%or or a()inis%ra%or. 2= irrese*%i!e of '&e%&er %&e (esina%ion is re!o*a-le orirre!o*a-le.-. T&e ins"ran*e 'as %aen -y %&e (e*e(en% on &is o'n life an( %&e

(esina%e( -enefi*iary is no% &i)self/ &is es%a%e/ &is e5e*"%or or a()inis%ra%or


54/70

No% (e("*%i-le are e5en(i%"res in*"rre( for %&e in(i!i("al -enefi% of %&e&eirs/ (e!isees or lea%ees. T&"s/ in :oren8o !. Posa(as/ %&e Co"r% *ons%r"e(%&e &rase "(i*ial e5enses of %&e %es%a)en%ary or in%es%a%e ro*ee(ins asno% in*l"(in %&e *o)ensa%ion ai( %o a %r"s%ee of %&e (e*e(en%s es%a%e '&en i%aeare( %&a% s"*& %r"s%ee 'as aoin%e( for %&e "rose of )anain %&e(e*e(en%s real roer%y for %&e -enefi% of %&e %es%a)en%ary &eir. +n ano%&er*ase/ %&e Co"r% (isallo'e( %&e re)i")s ai( on %&e -on( file( -y %&ea()inis%ra%or as an e5ense of a()inis%ra%ion sin*e %&e i!in of a -on( is in %&ena%"re of a ,"alifi*a%ion for %&e offi*e/ an( no% ne*essary in %&e se%%le)en% of %&ees%a%e. Nei%&er )ay a%%orneys fees in*i(en% %o li%ia%ion in*"rre( -y %&e &eirs inasser%in %&eir rese*%i!e ri&%s -e *lai)e( as a (e("*%ion fro) %&e ross es%a%e.(Co&&i%%ioner of $nternal Revenue v. Court of Appeal%, et al., G.R. No. 12320*,ar"# 22, 2000

No% e!ery in%er9!i!os %ransfer in an%i*ia%ion of (ea%& is *onsi(ere(%ransfer in *on%e)la%ion of (ea%& for "roses of (e%er)inin %&e roer%y %o-e in*l"(e( in %&e ross es%a%e of a (e*e(en%.

BAR: 78. To -e *onsi(ere( a %ransfer in *on%e)la%ion of (ea%& %&e(e*e(en% &as a% any %i)e )a(e a %ransfer/ -y %r"s% or o%&er'ise/ in*on%e)la%ion of or in%en(e( %o %ae effe*% in ossession or enoy)en% a% or af%er(ea%& ISe*. 7>


55/70

T&e (ona%ion of a ri8e %o an a%&le%e in an in%erna%ional sor%s %o"rna)en%&el( a-roa( an( san*%ione( -y %&e na%ional sor%s asso*ia%ion is e5e)% fro)(onors %a5. 43=

BAR: 83. Any ro!ision of la' %o %&e *on%rary no%'i%&s%an(in/ any

*on%ri-"%ion in *as& or in in( %o any *an(i(a%e or oli%i*al ar%y or *oali%ion ofar%ies for *a)ain "roses/ ("ly reor%e( %o %&e Co))ission on Ele*%ions/s&all no% -e s"-e*% %o %&e ay)en% of any if% %a5.


56/70

in(i!i("al '&ose "re *o)ensa%ion in*o)e (eri!e( fro) so"r*es 'i%&in %&eP&iliines e5*ee(s Si5%y %&o"san( esos J


57/70

Un(er %&e *re(i%a-le 'i%&&ol(in %a5 sys%e)/ %a5es 'i%&&el( on *er%ainin*o)e ay)en%s are in%en(e( %o e,"al or a% leas% aro5i)a%e &e %a5 ("e fro)%&e ayee on %&e sai( in*o)e. T&e in*o)e re*iien% is s%ill re,"ire( %o file anin*o)e %a5 re%"rn an(or ay %&e (ifferen*e -e%'een %&e %a5 'i%&&el( an( %&e %a5("e on %&e in*o)e. I1s%an( 2n(sen%en*es/ Se*. 2>J


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59/70

T&e se*ial *"s%o)s ("%ies are i)ose( for %&e ro%e*%ion of *ons")ersan( )an"fa*%"rers/ as 'ell as P&iliine ro("*%s.

BAR: 91. D")in ("%y is an a((i%ional se*ial ("%y a)o"n%in %o %&e(ifferen*e -e%'een %&e e5or% ri*e an( %&e nor)al !al"e of s"*& ro("*%/

*o))o(i%y or ar%i*le


60/70

T&e an%i9(")in ("%y s&all -e e,"al %o %&e )arin of (")in on s"*&ro("*%/ *o))o(i%y or ar%i*le %&ereaf%er i)or%e( %o %&e P&iliines "n(er si)ilar*ir*")s%an*es/ in a((i%ion %o or(inary ("%ies/ %a5es an( *&ares i)ose( -y la'on %&e i)or%e( ro("*%/ *o))o(i%y or ar%i*le/

BAR: 92. Co"n%er!ailin ("%ies are a((i%ional *"s%o)s ("%ies i)ose(on any ro("*%/ *o))o(i%y or ar%i*le of *o))er*e '&i*& is ran%e( (ire*%ly orin(ire*%ly -y %&e o!ern)en% in %&e *o"n%ry of oriin or e5or%a%ion/ any in( orfor) of se*ifi* s"-si(y "on %&e ro("*%ion/ )an"fa*%"re or e5or%a%ion of s"*&ro("*% *o))o(i%y or ar%i*le/ an( %&e i)or%a%ion of s"*& s"-si(i8e( ro("*%/*o))o(i%y/ or ar%i*le &as *a"se( or %&rea%ens %o *a"se )a%erial in"ry %o a(o)es%i* in("s%ry or &as )a%erially re%ar(e( %&e ro'%& or re!en%s %&ees%a-lis&)en% of a (o)es%i* in("s%ry. 1=

T&e i)osin a"%&ori%y for %&e *o"n%er!ailin ("%ies is %&e Se*re%ary ofTra(e an( +n("s%ry in %&e *ase of non9ari*"l%"ral ro("*%/ *o))o(i%y/ or ar%i*le

or %&e Se*re%ary of Ari*"l%"re/ in %&e *ase of ari*"l%"ral ro("*%/ *o))o(i%y orar%i*le/ af%er for)al in!es%ia%ion an( affir)a%i!e fin(in of %&e Tariff Co))ission.

E!en '&en all %&e re,"ire)en%s for %&e i)osi%ion &a!e -een f"lfille(/ %&e(e*ision on '&e%&er or no% %o i)ose a (efini%i!e an%i9(")in ("%y re)ains %&ereroa%i!e of %&e Tariff Co))ission.


61/70

a. -y resen%in %o %&e Colle*%or a% %&e %i)e '&en ay)en% is )a(e/ or'i%&in fif%een = (ays %&ereaf%er/

-. a 'ri%%en ro%es% se%%in for%& &is o-e*%ion %o %&e r"lin or (e*ision in,"es%ion/ %oe%&er 'i%& &is reasons %&erefor. No ro%es% s&all -e *onsi(ere("nless ay)en% of %&e a)o"n% ("e af%er final li,"i(a%ion &as firs% -een )a(e an(%&e *orreson(in (o*e% fee. of %&e Ci!il Co(e.+n or(er for %&e r"le on %olutio inebeti%o aly i% is an essen%ial *on(i%ion

%&a% %&e e%i%ioner )"s% firs% s&o' %&a% i%s ay)en% of %&e *"s%o)s ("%ies 'as ine5*ess of '&a% 'as re,"ire( -y %&e la' a% %&e %i)e %&e s"-e*% 1H i)or%a%ions of

)il an( )il ro("*%s 'ere )a(e. Unless s&o'n o%&er'ise/ %&e (is"%a-leres")%ion of re"lari%y of erfor)an*e of ("%y lies in fa!or of %&e Colle*%or ofC"s%o)s. (Ne%tle P#il. v. Court of Appeal%, et al., G.R. No. 134114, uly *, 2001

T&ere is no a"%o)a%i* ran% of ref"n(. +n (e%er)inin '&e%&er Nes%le isen%i%le( %o ref"n( of allee( o!eray)en% of *"s%o) ("%ies/ i% is ne*essary %o(e%er)ine e5a*%ly &o' )"*& %&e o!ern)en% is en%i%le( %o *olle*% as *"s%o)s("%ies. Un%il %&ere is s"*& a (e%er)ina%ion -y %&e Colle*%or an( affir)e( orree*%e( -y %&e Co))issioner/ %&en %&e Co"r% of Ta5 Aeals (oes no% &a!e

"ris(i*%ion. T&e CTAs "ris(i*%ion "n(er %&e Tariff an( C"s%o)s Co(e is no%*on*"rren% 'i%& %&a% of %&e Co))issioner of C"s%o)s ("e %o %&e a-sen*e of any*er%ifi*a%ion fro) %&e Colle*%or of C"s%o)s of Manila %&a% s"*& i)or% ("%ies

s&o"l( -e ref"n(e(. Conse,"en%ly/ %&e fin(in -y %&e CTA in ano%&er *ase ofo!eray)en% of in%ernal re!en"e %a5es is no% ne*essarily a fin(in %&a% %&ere 'aso!eray)en% of *"s%o)s ("%ies. (Ne%tle P#il. v. Court of Appeal%, et al., G.R.No. 134114, uly *, 2001

All *lai)s for ref"n( of ("%ies s&all -e )a(e in 'ri%in an( for'ar(e( %o%&e Colle*%or of C"s%o)s %o '&o) s"*& ("%ies are ai(/ '&o "on re*ei% ofs"*& *lai)/ s&all !erify %&e sa)e -y %&e re*or(s of &is Offi*e/ an( if fo"n( %o -e

61


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*orre*% an( in a**or(an*e 'i%& la'/ s&all *er%ify %&e sa)e %o %&e Co))issionerof C"s%o)s 'i%& &is re*o))en(a%ion %oe%&er 'i%& all ne*essary aers an((o*")en%s. Uon re*ei% -y %&e Co))issioner of s"*& *er%ifie( *lai) &e s&all*a"se %&e sa)e %o -e ai( if fo"n( *orre*%.


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in%en%ional/ *onsis%in of (e*e%ion/ 'illf"lly an( (eli-era%ely (one or resor%e( %oin or(er %o in("*e ano%&er %o i!e " so)e ri&%.

ra"( )"s% -e ro!e( %o "s%ify forfei%"re. +% )"s% -e a*%"al/ a)o"n%in %oin%en%ional 'ron9(oin 'i%& %&e *lear "rose of a!oi(in %&e %a5. orfei%"re isno% fa!ore( in la' nor in e,"i%y. Mere nelien*e is no% e,"i!alen% %o %&e fra"(*on%e)la%e( -y la'. An &ones% )is%ae/ 'ill no% (eri!e %&e o!ern)en% of i%sri&% %o *olle*% %&e roer %a5. (Republi", et"., v. 5#e Court of Appeal%, et al.,G.R. No. 13900, 7"tober 2, 2001

6e,"isi%es for forfei%"re of i)or%e( oo(s?a. Bronf"l )ain -y %&e o'ner/ i)or%er/ e5or%er or *onsinee of any

(e*lara%ion or affi(a!i%/ or %&e 'ronf"l )ain or (eli!ery -y %&e sa)e erson ofany in!oi*e/ le%%er or aer L all %o"*&in on %&e i)or%a%ion or e5or%a%ion of)er*&an(ise.

-. %&e falsi%y of s"*& (e*lara%ion/ affi(a!i%/ in!oi*e/ le%%er or aer@ an(*. an in%en%ion on %&e ar% of %&e i)or%er*onsinee %o e!a(e %&e

ay)en% of %&e ("%ies ("e. (Republi", et"., v. 5#e Court of Appeal%, et al., G.R.No. 13900, 7"tober 2, 2001

orfei%"re of sei8e( oo(s in %&e #"rea" of C"s%o)s is in %&e na%"re of aro*ee(in in re&/ i.e. (ire*%e( aains% %&e re% or i)or%e( oo(s an( en%ails a(e%er)ina%ion of %&e leali%y of %&eir i)or%a%ion. +n %&is ro*ee(in/ i% is in leal*on%e)la%ion %&e roer%y i%self '&i*& *o))i%s %&e !iola%ion an( is %rea%e( as%&e offen(er/ 'i%&o"% referen*e '&a%soe!er %o %&e *&ara*%er or *on("*% of %&eo'ner.

T&e iss"e is li)i%e( %o '&e%&er %&e i)or%e( oo(s s&o"l( -e forfei%e(an( (isose( of in a**or(an*e 'i%& la' for !iola%ion of %&e Tariff an( C"s%o)s

Co(e. .(5ran%lobe $nternational, $n". v. Court of Appeal%, et al., G.R. No.12**34, anuary 2, 1999

T&e one9year res*ri%i!e erio( for forfei%"re ro*ee(ins alies only in%&e a-sen*e of fra"(. (Co&&i%%ioner of Cu%to&% v. Court of 5a8 Appeal%, et al.,G.R. No. 132929, ar"# 2), 2000

BAR: 99. T&e Colle*%or of C"s%o)s "on ro-a-le *a"se %&a% %&ear%i*les are i)or%e( or e5or%e(/ or are a%%e)%e( %o -e i)or%e( or e5or%e(/ in!iola%ion of %&e %ariff an( *"s%o)s la's s&all iss"e a 'arran% of sei8"re.


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(. +n"res solely %o %&e lo*al o!ern)en% "ni% le!yin %&e %a5@e. T&e roressi!i%yrin*ile )"s% -e o-ser!e(.

Un(er %&e no' re!ailin Cons%i%"%ion/ '&ere %&ere is nei%&er a ran% norro&i-i%ion -y s%a%"%e/ %&e %a5in o'er of lo*al o!ern)en%s )"s% -e (ee)e( %oe5is% al%&o"& Conress )ay ro!i(e s%a%"%ory li)i%a%ions an( "i(elines inor(er %o safe"ar( %&e !ia-ili%y an( self9s"ffi*ien*y of lo*al o!ern)en% "ni%s -y(ire*%ly ran%in %&e) eneral an( -roa( %a5 o'ers.


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P#ilippine !on i%tan"e 5elep#one Co&pany, $n"., v. City of avao, etal., et".,G.R.No. 143+*), Auu%t 22, 2001/ "&el( %&e a"%&ori%y of %&e Ci%y ofDa!ao/ a lo*al o!ern)en% "ni%/ %o i)ose an( *olle*% a lo*al fran*&ise %a5-e*a"se %&e :o*al o!ern)en% &as 'i%&(ra'n all %a5 e5e)%ions re!io"slyenoye( -y all ersons an( a"%&ori8e( lo*al o!ern)en% "ni%s %o i)ose a %a5 on-"siness enoyin a fran*&ise %a5 no%'i%&s%an(in %&e ran% of %a5 e5e)%ion %o%&e).

Po'er of lo*al o!ern)en%s %o %a5 is only a (elea%e( o'er. :o*alo!ern)en%s (o no% &a!e %&e in&eren% o'er %o %a5 e5*e% %o %&e e5%en% %&a%s"*& o'er )i&% -e (elea%e( %o %&e) ei%&er -y %&e -asi* la' or s%a%"%e.Presen%ly/ "n(er Ar%i*le G of %&e 137J Cons%i%"%ion a eneral (elea%ion of %&a%o'er &as -een i!en in fa!or of lo*al o!ern)en% "ni%s.


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BAR: 103. A la' '&i*& (eri!es lo*al o!ern)en% "ni%s of %&eir o'er%o %a5 'o"l( -e "n*ons%i%"%ional. T&e *ons%i%"%ion &as (elea%e( %o lo*alo!ern)en%s %&e o'er %o le!y %a5es/ fees an( o%&er *&ares. T&is*ons%i%"%ional (elea%ion )ay only -e re)o!e( -y a *ons%i%"%ional a)en()en%.

BAR: 104. T&e o'er of lo*al o!ern)en%s %o %a5 an( raise %&eir o'nso"r*es of re!en"e is e5er*ise( %&ro"& %a5 or(inan*es asse( -y %&e lo*alSan"nians an( aro!e( -y %&e :U C&ief E5e*"%i!e.

T&e a"%&ori%y "n(er %&e :o*al o!ern)en% Co(e %o *olle*% %a5es on,"arry reso"r*es alies only %o %&ose e5%ra*%e( fro) "-li* lan(s.


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e. Araisal an( assess)en% s&all -e e,"i%a-le.

T&e reasona-le )are% !al"e is (e%er)ine( -y %&e assessor in %&e for) ofa s*&e("le of fair )are% !al"es. T&e s*&e("le is %&en ena*%e( -y %&e lo*al%anunian.

T&e assess)en% le!el is fi5e( -y or(inan*es of %&e aroria%e%anunian.

T&e %a5 ra%e is also fi5e( -y or(inan*es of %&e aroria%e %anunian.

BAR: 108. Personal roer%y "n(er %&e *i!il la' )ay -e *onsi(ere( asreal roer%y for "roses of %a5es '&ere %&e roer%y is essen%ial %o %&e *on("*%of %&e -"siness. Un(erro"n( %ans are essen%ial %o %&e *on("*% of %&e -"sinessof a asoline s%a%ion 'i%&o"% '&i*& i% 'o"l( no% -e oera%ional. (Calte8 P#il%.,$n". v. Central -oar of A%%e%%&ent Appeal%, et al., 114 'CRA 29*

:i&% 6ail Transi%

BAR: 109. Proer%y e5e)% fro) %&e ay)en% of real roer%y %a5?a. 6eal roer%y o'ne( -y %&e 6e"-li* of %&e P&iliines or any of i%s

oli%i*al s"-(i!isions e5*e% '&en %&e -enefi*ial "se %&ereof &as -een ran%e( %oa %a5a-le erson for a *onsi(era%ion or o%&er'ise@

-. C&ari%a-le ins%i%"%ions/ *&"r*&es/ arsonaes or *on!en%s a"r%enan%%&ere%o/ )os,"es/ non9rofi% or reliio"s *e)e%eries/ an( all lan(s/ -"il(ins an(i)ro!e)en%s a*%"ally/ (ire*%ly an( e5*l"si!ely "se( for reliio"s/ *&ari%a-le an(e("*a%ional "roses@

*. Ma*&ineries an( e,"i)en%/ a*%"ally/ (ire*%ly an( e5*l"si!ely "se( -ylo*al 'a%er (is%ri*%s@ an( o!ern)en% o'ne( an( *on%rolle( *orora%ionsenae( in %&e s"ly an( (is%ri-"%ion of 'a%er an( enera%ion an( %rans)issionof ele*%ri* o'er@

(. 6eal roer%y o'ne( -y ("ly reis%ere( *ooera%i!es@e. Ma*&inery an( e,"i)en% "se( for oll"%ion *on%rol an( en!iron)en%al

ro%e*%ion.

T&e res%ri*%ion "on %&e o'er of *o"r%s %o i)ea*& %a5 assess)en%'i%&o"% a rior ay)en%/ "n(er ro%es%/ of %&e %a5es assesse( is *onsis%en% 'i%&%&e (o*%rine %&a% %a5es are %&e life-loo( of %&e na%ion/ an( as s"*& %&eir*olle*%ion *anno% -e *"r%aile( -y in"n*%ion or any lie a*%ion@ o%&er'ise/ %&es%a%e or/ in %&is *ase/ %&e lo*al o!ern)en% "ni%/ s&all -e *rile( in (isensin%&e nee(e( ser!i*es %o %&e eole/ an( i%s )a*&inery ra!ely (isa-le(. (anilale"tri" Co&pany v. -arli%, G.R. No. 114231, ay 1+, 2001

T&"s/ %&e %rial *o"r% &as no "ris(i*%ion %o en%er%ain a e%i%ion forro&i-i%ion a-sen% ay)en% "n(er ro%es% of %&e %a5 assesse(.


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rear(less of '&e%&er or no% &e is %&e o'ner. To i)ose %&e real roer%y %a5 on%&e s"-se,"en% o'ner '&i*& 'as nei%&er %&e o'ner no% %&e -enefi*ial "ser of %&eroer%y ("rin %&e (esina%e( erio(s 'o"l( no% only -e *on%rary %o la' -"%also "n"s%.

Conse,"en%ly/ ME6A:CO %&e for)er o'ner"ser of %&e roer%y 'asre,"ire( %o ay %&e %a5 ins%ea( of %&e ne' o'ner NAPOCO6 . (anila le"tri"Co&pany v. -arli%, G.R. No. 114231, ay 1+, 2001

BAR: 111. T&e a()inis%ra%i!e re)e(ies %&a% are ro!i(e( for "n(er %&ero!isions of 6e. A*% No. J1H0/ %&e :o*al o!ern)en% Co(e/ -efore resor% %o*o"r%s is )a(e rela%i!e %o real roer%y %a5es.

a. A %a5ayer )ay ,"es%ion %&e *ons%i%"%ionali%y or leali%y of a %a5or(inan*e on aeal 'i%&in %&ir%y


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'olutio inebeti an( iss"es rela%i!e %o !ali(i%y (o no% re,"ire ay)en%"n(er ro%es%.

T&e *on*"rren% an( si)"l%aneo"s re)e(ies affor(e( lo*al o!ern)en%"ni%s in enfor*in *olle*%ion of real roer%y %a5es?

a. Dis%rain% of ersonal roer%y@-. Sale of (elin,"en% real roer%y/ an(*. Colle*%ion of real roer%y %a5 %&ro"& or(inary *o"r% a*%ion.

T&e re)e(y of le!y *an -e "rs"e( -y "%%in " for sale %&e realroer%y s"-e*% of %a5/ i.e./ %&e (elin,"en% roer%y "on '&i*& %&e %a5 liena%%a*&es/ rear(less of %&e resen% o'ner or ossessor %&ereof. ;o'e!er %&isre)e(y is only one of %&e o%&er re)e(ies. (anila le"tri" Co&pany v. -arli%,G.R. No. 114231, ay 1+, 2001

T&e :U *o"l( also a!ail of %&e re)e(y of (is%rain% an( le!y of ersonalroer%y s"-e*%in any ersonal roer%y of %&e %a5ayer %o e5e*"%ion. %&"s/ %&e

iss"an*e of %&e 'arran%s of arnis&)en% o!er ME6A:COs -an (eosi%s 'asno% i)roer or irre"lar. (anila le"tri" Co&pany v. -arli%, et al., G.R. No.114231, ay 1+, 2001

BAR: 112. +% is %r"e %&a% %&e "nai( %a5 a%%a*&es %o %&e roer%y an( is*&area-le aains% %&e erson '&o &as a*%"al or -enefi*ial "se an( ossessionof i% rear(less of '&e%&er or no% &e is %&e o'ner. ;o'e!er/ %o i)ose %&e realroer%y %a5 on %&e s"-se,"en% o'ner '&i*& 'as nei%&er %&e o'ner nor %&e-enefi*ial "ser of %&e roer%y ("rin %&e (esina%e( erio(s 'o"l( no% only -e*on%rary %o la' -"% also "n"s%.


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o!ern)en% Uni%s for %&e ena*%)en% of an or(inan*e -y %&e %anunian*on*erne(@ an(

-. T&e s*&e("le of fair )are% !al"es s&all -e "-lis&e( in a ne'saerof eneral *ir*"la%ion in %&e ro!in*e/ *i%y or )"ni*iali%y *on*erne( or %&eos%in in %&e ro!in*ial *ai%ol or o%&er la*es as re,"ire( -y la'. (!ope v. Cityof anila, et al., G.R. No. 12)139, :ebruary 19, 1999

Proose( fair )are% !al"es of real roer%y in a lo*al o!ern)en% "ni% as'ell as %&e or(inan*e *on%ainin %&e s*&e("le )"s% -e "-lis&e( in f"ll for %&ree

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