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Tax I Syllabus SY 2016 2017

Lyceum College of Law

PART I
CHAPTER I:

Atty. Jon Ligon

TAXATION IN GENERAL

GENERAL PRINCIPLES OF TAXATION

i. TAXATION

A.
B.
C.

Definition
71 Am Jur 2nd 342
Readings: Are Taxes Evil? By Anthony Aguilar
Get to know about Boston Tea Party
Nature of Internal Revenue Law Hilado v CIR 100 Phil 288
Scope and Nature of Taxation
1. Scope
71 Am Jur 2nd 394-395
Sison v Ancheta 130 SCRA 654
citing C.J. John Marshall (McCulloch v Maryland)
and J. Holmes (Panhandle Oil Co. v Mississippi)

Reyes v. Almanzor 196 SCRA 322

2. Nature
71 Am Jur 2nd 397-398
S28 AVI, 1987Constitution
3. Cases
CIR v Pineda 21 SCRA 105
Phil. Guaranty v CIR 13 SCRA 775
Collector v Yuseco 3 SCRA 313
CIR v Algue, Inc. L-28896 Feb 17, 1988
D. Aspects of Taxation
71 Am Jur 2nd 342
E. Underlying theory and basis 71 Am Jur 2nd 346-347
F.
Principles of a sound tax system Chavez v Ongpin 186 SCRA 331
InternetReadings:
a.) Obama Tax Fainess Plan
http://obama.3cdn.net/b7be3b7cd08e587dca_v852mv8ja.pdf
b.) Tax Fairness, Goodluck w/ that
http://money.cnn.com/2009/04/20/pf/taxes/obama_tax_fairness/index.htm
c.) Transgender Tax Collectors
http://edition.cnn.com/2011/WORLD/asiapcf/04/14/pakistan.tax.collectors/index.html
?hpt=C1
d.) Tax Collectors Lifestyle in Ukraine
http://money.cnn.com/video/news/2014/04/30/n-ukraine-tax-office-secretluxury.cnnmoney/
G.

Comparison with Police Power and Eminent Domain

1. Similarities
2. Distinctions 71 Am Jur 2nd 395-397
3. Cases
Phil Match Co. v. Cebu 81 SCRA 99
Matalin v Mun. Council of Malabang 143 SCRA 404
Lutz v Araneta 98 Phil 48
NTC v CA 311 SCRA 508
ii. TAXES

A.

B.
C.

Definition
71 Am Jur 2nd 343-346
Essential Characteristics of Taxes
Taxes distinguished from:
1. Debts
71 Am Jur 2nd 345-346
Caltex v COA 208 SCRA 726
Francia v IAC 162 SCRA 753
RP v Ericta and Sampaguita Pictures 172 SCRA 653

Tax I Syllabus SY 2016 2017

Lyceum College of Law

2.

3.
4.
5.
6.

Atty. Jon Ligon

Domingo v Carlitos 8 SCRA 443

License Fees.
71 Am Jur 2nd 352-353
Progressive Dev. Corp. v QC 172 SCRA 629
PAL v Edu 164 SCRA 320
ESSO v CIR 175 SCRA 149
Special Assessments (now special levies under the 1991 Local
Government Code)
Apostolic Prefect v Treasurer of Baguio 71 Phil. 547
Tolls
71 Am Jur 351
Penalties NDC v CIR 151 SCRA 472
Custom duties
iii. CLASSIFICATION OF TAXES

A.
B.
C.
D.
E.
F.

As to subject matter
71 Am Jur 2nd 357-361
As to incidence 71 Am Jur 2nd 354
As to determination of amount 71 Am Jur 2nd 355
As to purposes
As to scope
As to graduation or rate

CHAPTER II:
I.

LIMITATION UPON THE POWER OF TAXATION

INHERENT LIMITATIONS
A.

B.

C.

D.
E.

Public Purposes
1. Meaning of public purpose
2. Cases:
Lutz v Araneta 98 Phil. 48
Pascual v Sec. Of Public Works 110 Phil. 331
Taxing power may not be delegated
1. In general Delegata potestas non potest delegari
2. Exceptions
3. Cases:
Phil Comm. Satellite Corp. v. Alcuaz 180 SCRA 218
Meralco v. Prov. Of Laguna 306 SCRA 750
Pepsi-Cola Co. v City of Butuan 24 SCRA 789
Smith Bell & Co. v CIR, L-28271 July 25, 1975
Exemption of government agencies
1. Reason for the exemption
2. Exception
a. S27(C) as amended by RA 9337
b. S30(I) NIRC
c. S32(B)(7)(b)
3. Exemptions on GOCCs
a. Philippine Ports Authority vs. City of Iloilo GR No.
109791, July 14, 2003
b. MIAA vs. CA GR 155650 July 20, 2006
c. Philippine Fisheries Development Authority vs. CA GR
169836 July 31, 2007
International Comity
- in par parem, non habet imperium
Territoriality or Situs of Taxation
1. Meaning and scope of limitation
2. Situs of Taxation
a. Meaning
b. Determination of Situs
c. Situs of subjects of taxation

Tax I Syllabus SY 2016 2017

Lyceum College of Law

Atty. Jon Ligon

Persons
S157-158, 1991 LGC
ii. Lex Situs or Lex Rei Sitae - Real Property
iii.
Mobilia Sequuntur Personam - Personal Property
iv. Income
v. Business, Occupation, Transaction
vi. Transfer of property by death or gift
d. Multiple situs of taxation
Cases
Manila Gas v. Collector 62 Phil 895
Vegetable Oil Corp. v Trinidad 45 Phil. 822
Wells Fargo Bank v Col 70 Phil. 325
i.

3.

II.

CONSTITUTIONAL LIMITATIONS
A.

B.

C.

D.

E.
F.

G.

H.
I.

Due process Clause

S1(1) AIII, 1987 Constitution
Com. of Customs v CTA & Campos Rueda Co. 152 SCRA 641
Phil Bank of Comm v. CIR 302 SCRA 241
Sison v Ancheta 130 SCRA 654
Equal Protection Clause
S1 AIII, 1987 Constitution
Ormoc Sugar Co. v. Treasurer of Ormoc City 22 SCRA 603
Villegas v. Hsui Chiong Tsai Pao 86 SCRA 270
Shell Co. v Vano 94 Phil. 388
Tiu v. CA 301 SCRA 279
Rule of Taxation shall be Uniform and Equitable
S28(1) AVI, 1987 Constitution
Pepsi Cola v Butuan City 24 SCRA 789
Manila Race Horse v dela Fuente, 88 Phil. 60
Sison v. Ancheta 130 SCRA 654
Tolentino v. Sec of Fiance 249 SCRA 628
Non-Impairment of Contracts
S10 AIII & S11, AXII, 1987 Constitution
CIR v Lingayen Gulf Electric Co. 164 SCRA 67
Misamis Oriental v CEPALCO, 181 SCRA 38
Meralco v. Prov. Of Laguna 306 SCRA 750
Non-imprisonment for non payment of poll tax
S20 AIII, 1987 Constitution.
Prohibition against taxation of religious, charitable entities
S28(3) AVI, 1987 Constitution
Dealing with the Pajeros Joaquin Bernas
http://opinion.inquirer.net/7518/dealing-with-the%e2%80%98pajeros%e2%80%99
Lladoc v CIR 14 SCRA 292
Province of Abra v Hernando 107 SCRA 1021
Lung Center v QC et. al. GR No. 144104, June 29, 2004
Prohibition against taxation of non-stock non-profit educational
institutions
S4(3) AXIV, 1987 Constitution
S30(H), NIRC
BIR Revenue Memorandum Circular (RMC) No. 45-95
CIR v. CA & YMCA 298 SCRA 83
Freedom of religious professional and worship
S5 AIII, 1987 Constitution
American Bible Society v Manila, 101 Phil. 386.
Passage of tax bills / Granting of tax exemption
S24 AVI, 1987 Constitution
S28(4) AVI, 1987 Constitution

Tax I Syllabus SY 2016 2017

Lyceum College of Law

J.
K.

III.

Tolentino v Secretary of Finance 249 SCRA 628

Veto power of the President S27(2) AVI, 1987 Constitution
Non-impairment of SC Jurisdiction S5(2)(b) AVIII, 1987 Consti.

DOUBLE TAXATION
A.
B.
C.

Definition and Nature. 71 Am Jur 2nd 362-365

Cases:
Procter & Gamble Co. v Mun of Jagna 94 SCRA 894
Sanchez v CIR 97 Phil. 687
Punzalan v Mun Board of Manila 95 Phil. 46
Methods of avoiding the occurrence of double taxation
CIR v. SC Johnson & Sons, Inc. 309 SCRA 87

CHAPTER III:
I.

Atty. Jon Ligon

EXEMPTIONS FROM TAXATION

IN GENERAL
A.
Definition
B.
Kinds of Exemption
C.
Rationale of giving tax exemption
D.
Nature of power to grant tax exemption
E.
Grounds for tax exemption
F.
Examples of Exemption
1.
Constitutional Exemption
2.
Legislative grant of exemption
3.
Exemption created by Treaty
G. Cases:
CIR v Botelho
Shipping Corp. 20 SCRA 487
CIR v CTA, GCL Retirement Plan, 207 SCRA 487
CIR v Guerrero, 21 SCRA 180
Phil. Acetylene v CIR, 20 SCRA 1056
Maceda v Macaraig, Jr 197 SCRA 771
Sea-Land Service v. CA 357 SCRA 441
H. Tax Exemption vs. Tax Amnesty
1. Definition
2. People v Cataneda GR No. L-46881, Sept 15, 1988
3. Phil. Banking vs.CIR; GR No. 170574, Jan. 30, 2009
4. CIR v Marubeni; GR No. 137377 Dec 18, 2001
5. Sample Amnesty Program: RA No. 9480
I. Tax Exemption vs. Tax Avoidance vs. Tax Evasion
1. Definitions
2. CIR v. The Estate of Benigno P. Toda GR 147188, Sept 14, 2004
3. CIR vs. Arieta; GR. No. 164152 Jan. 21, 2010

II.

CONSTRUCTION OF STATUTORY EXEMPTIONS

A.
B.
C.
D.

General rule
Applicability to Claims for Refund
When exemption statutes are liberally construed
Cases: E. Rodriguez, Inc. v Collector 28 SCRA 119
Republic Flour Mills v CIR, 31 SCRA 148
Wonder Mechanical Engineering v CTA 64 SCRA 555
Luzon Stevedoring Corp. v CTA 163 SCRA 647
Floro Cement v Hen. Gorospe 200 SCRA 480
CIR v Ledesma 31 SCRA 95
Resins, Inc. v Auditor Gen. 25, SCRA 754

Tax I Syllabus SY 2016 2017

Lyceum College of Law

Atty. Jon Ligon

CIR v. CA & YMCA 298 SCRA 83

CHAPTER IV:
I.

SOURCES AND CONSTRUCTION OF TAX LAWS

SOURCES OF TAX LAW

A. Statutes
B. Revenue Regulations
C. Revenue Memorandum Circulars/Orders
- BIR Revenue Administrative Order (RAO) No. 2-2001
D. BIR Rulings
- BIR Revenue Administrative Order (RAO) No. 2-2001
- Revenue Regulation 5-2012
E. Opinions of the Secretary of Justice
F. Legislative Materials
G. Court Decision

II.

THE STATUTE
A.

III.

REVENUE REGULATIONS
A.

IV.

BIR-RR
1. Authority to promulgate. S244
2. Specific provisions to be contained in RR. S245
3. What is the force and effect of RR?
Art. 7, Civil Code
Asturias Sugar Central v Comm., 29 SCRA 617

BIR RULINGS
A.

B.

V.

Existing Tax Law

1. National
a. National Internal revenue Code of 1997
b. Tariff and Customs Code
2. Local
a. Book II, 1991 Local Government Code

Power of CIR to Interpret Tax Laws. S4

Non-Retroactivity of Rulings
S246
CIR v Burroughs Ltd., G.R. 66653. June 19, 1986
CIR v Mega Gen. Merchandising 166 SCRA 166
1. Exceptions
PBCOM vs. CIR 302 SCRA 241

CONSTRUCTION OF TAX LAW

A.
B.
C.

General Rules of Construction of Tax Laws

Stevedoring v Trinidad, 43 Phil. 803
Mandatory vs. Directory Provisions
Serafica v Treasurer of Ormoc City 27 SCRA 110
Application of Tax Laws

Tax I Syllabus SY 2016 2017

Lyceum College of Law

MANDATORY REFERENCE
National Internal Revenue Code of 1997
Republic Act 8424
Amendments to Title II of NIRC of 1997
Republic Act No. 9294
Republic Act No. 9337
Republic Act No. 9257
Republic Act No. 9504
Other SUGGESTED REFERENCES:
Fundamentals of Taxation by De Leon
Philippine Income Tax by Mamalateo
Taxation and Jurisprudence by Justice Vitug
Income Tax, Law & Accounting by Virgilio Reyes
Other Tax Books/Reviewers
Note:
RR BIR Revenue Regulations
RMC BIR Revenue Memorandum Circulars

Atty. Jon Ligon