Claim for Tax Exemptions

General Rule: Tax exemptions are frowned upon. Therefore, no law granting any tax
exemption shall be passed without the concurrence of a majority of all the Members of
Congress [Sec. 28 (4), Art VI]
There is no vested right in a tax exemption [.] Being a mere statutory privilege, a tax
exemption may be modified or withdrawn at will by the granting authority. [Republic v.
Caguioa (2009)]
Exemptions may either be constitutional or statutory.
Constitutional exemptions [Sec. 28(3), Art. VI]
Requisites: Actual, Direct and Exclusive Use by the following:
(a) Educational institutions
(b)Charitable institutions
(c) Religious organizations
If statutory, it has to have been passed by majority of all the members of Congress. [Sec.
28 (4), Art. VI]
Cases:
1. Com. of Internal Revenue v. S. C Johnson & Son, Inc., 309 SCRA 87. In negotiating
tax
treaties, the underlying rationale for reducing the tax rate is that the Philippines will give
up
a part of the tar in the expectation that the tax given up for this particular investment is not
taxed by the other country.
In order to eliminate double taxation, a tax treaty resorts to several methods. First, it sets
out the respective rights to tax of the state of source or situs and of the state of residence
with regard to certain classes of income or capital.
The second method for the elimination of double taxation applies whenever the state of
source is given a full or limited right to tax together with the state of residence. In this
case,
the treaties make it incumbent upon the state of residence to allow relief in order to avoid
double taxation.
2. Philippine Health Care Providers, Inc. v. Commissioner of Internal Revenue,
600 SCRA 413 (2009): payment of documentary taxes and VAT by way of deficiency
assessment by the BIR; contracts of HMO are not subject to DST and VAT since they are
insurance contracts and the companies issuing such policies are regulated by the DOH
3. National Power Corporation v. City of Cabanatuan, 737 SCRA 305 (2014):
assessment
of franchise tax on NAPOCOR; NAPOCOR is liable to pay franchise tax to the LGU but
LGU has the burden to specify the liability for a given period of time.
4. Nursery Care Corporation vs. Acevedo, 731 SCRA 280, G.R. No. 180651 July 30,
2014:
There is double taxation when the same taxpayer is taxed twice when he should be taxed
only
once for the same purpose by the same taxing authority within the same jurisdiction
during
the same taxing period, and the taxes are of the same kind or character.
H. HISTORY AND PURPOSE OF THE BILL OF RIGHTS
A. Concept of Sovereign Will: Preamble Art. II, Sections 1 and 3, Art V, Constitution
B. The Concept of Separation of Powers and the Three Branches of Government:
Art.VI,
VII and VIII, Constitution
C. Definition and Purpose of the Bill of Rights: protection of guaranteed rights to
liberty,
property and other freedoms. (Section 1, Article III, Constitution)
The Bill of Rights: "The Bill of Rights governs the relationship between the
individual and the state. Its concern is not the relation between individuals, between a
private individual and other individuals. What the Bill of Rights does is to declare
Wage