BASIC TAXATION LAW.d

1. TOMAS CLAUDIO COLLEGES
Taghangin, Morong, Rizal
COLLEGE OF LAW
Basic Taxation Law: Course Outline
I. Estates and Trusts
 Section 60, NIRC – Imposition of Tax
 Section 61, NIRC – Taxable Income
 Section 62, NIRC – Exemption Allowed to Estates and Trust
 Section 63, NIRC – Revocable Trusts
 Section 64, NIRC – Income for the Benefit of Grantor
 Section 65, NIRC – Fiduciary Returns
 Section 66, NIRC – Fiduciaries Indemnified Against Claims for Taxes
Paid
 Section 84, NIRC Rates of Estate Tax
 Section 85, NIRC – Gross Estate
 Section 86, NIRC – Computation of Net Estate
 Section 87, NIRC – Exemption of Certain Acquisition
 Section 88, NIRC – Determination of Value of Estate
 Section 89, NIRC – Notice of Death to be Filed
 Section 90, NIRC – Estate Tax Returns
 Section 91, NIRC – Payment of Tax
 Section 92, NIRC – Discharge of Executor and Administrator from
Personal Liability
 Section 93, NIRC – Definition of Deficiency
 Section 94, NIRC – Payment Before Delivery by Executor or
Administrator
 Section 95, NIRC – Duties of Certain Officers or Debtors
 Section 96, NIRC – Restitution of Tax Upon Satisfaction of Outstanding
Obligations
 Section 97, NIRC – Payment of Tax Antecedent to the Transfer of
Shares, Bonds or Rights
Cases:
1. CIR vs Pajonar (G.R. No. 123206, March 22, 2000)
2. Lorenzo vs Posadas (G.R. No. L-43082, June 18, 1937)
3. Vitug vs CA (G.R. No. 82027, March 29, 1990)
4. Roces vs Posadas (G.R. No. L-34937, March 13, 1933)
5. De Guzman vs De Guzman (G.R. No. L-29276, May 18, 1978)
6. Collector vs Haygood (G.R. No. L-44038, May 18, 1938)
7. Commissioner vs Gonzales (G.R. No. L-19495, November 24, 1966)
8. Vera Vs. Navarro (G.R. No. L-27745 October 18, 1977)

2. II. Gift and Donor’s Tax
 Section 98, NIRC – Imposition of Tax
 Section 99, NIRC - Rates of Tax payable by the Donor
 Section 100, NIRC – Transfer for Less than Adequate or Full
Consideration
 Section 101, NIRC – Exemption of Certain Gifts
 Section 102, NIRC – Valuation of Gifts Made in Property
 Section 103, NIRC – Filing of Return and Payment of Tax
Cases:
1. Abello vs CIR (G.R. No. 120721, February 23, 2005)
2. Philamlife vs Sec. of Finance (G.R. No. 210987, November 24, 2014)
III. Value Added Tax
 Section 105, Persons Liable
 Section 106 VAT on Sales on Goods and Properties
 Section 107, VAT on Importation of Goods
 Section 108, VAT on Sale of Services and Use of Lease of Properties
 Section 109, Exempt Transactions
 Section 110, Tax Credits
 Section 111, Transitional/Presumptive Input Tax Credits
 Section 112, Refunds or Tax Credits of Input tax
 Section 113,Invoicing andAccounting RequirementsofVAT Registered
Persons
 Section 114, Return and Payment of VAT
 Section 115, Power of Commissioner to Suspend the Business
Operations of a Taxpayer
Cases:
1. Kapatiran vs Tan (G.R. No. 81820, June 30, 1988)
2. Atlas Consolidated vs CIR (G.R. No. 134467, November 17, 1999)
3. Commissioner vs SM Prime Holdings (G.R. No. 183505, February 26, 2010)
4. BSP vs American Express International Inc. (G.R. No. 152609, June 29, 2005
5. Mindanao II Geothermal Partnership vs CIR (G.R. No. 93301, March 11, 2013)
6. CIR vs Cebu Toyo Corp. (G.R. No. 149073, February 16, 2005)
7. CIR vs Euro Phil Airline Services (G.R. No. 222436, July 23 2018)
8. CIR vs Acesite Hotel (G.R. No. 147295, February 16, 2007)
9. PAGCOR vs CIR (G.R. No. 172087, March 15, 2011)
10. Fort Bonifacio Devt Corp vs. CIR (G.R. No. 173425, September 4, 2012)

3. 11. CIR vs Aichi Forging Co. of Asia (G.R. No. 184823, October 6, 2010)
12. CIR vs San Roque Power Corp. (G.R. No. 187485, February 12, 2013)
13. CIR vs Team Sual Corp. (G.R. No. 194105, February 5, 2014)
14. CIR vs Burmeister (G.R. No. 190021, October 22, 2014)
15. CIR vs Toledo Power (G.R. No. 183880, January 20, 2014)
IV. Tax Remedies Under the NIRC
A. Remedies in General
 Section 202, Final Deed to Purchaser
 Section 203, Period of limitation upon assessment and collection
 Section 204, Authority of the commissioner to compromise, abate, and
refund or credit taxes
B. Civil Remedies for Collection of Taxes
 Section 205, Remedies for the collection of delinquent taxes
 Section 206, Constructive distraint of the property of a taxpayer
 Section 207, Summary remedies
 Section 208, procedure for Distraint and Garnishment
 Section 209, Sale of property distrained and disposition of proceeds
 Section 210, Release of distrained and disposition of proceeds
 Section 211, Report of sale to the BIR
 Section 212, Purchase of government at sale upon distraint
 Section 213, Advertisement and sale
 Section 214, Redemption of property sold
 Section 215, Forfeiture of government for want of bidder
 Section 216, Sale of real estate taken for taxes
 Section 217, Further distraint or levy
 Section 218, Injunction not available to restrain collection of tax
 Section 219, Nature and extent of tax lien
 Section 220, Form and mode of proceeding in actions under this code
 Section 221, Remedy for enforcement of statutory penal provisions
 Section 222, Exceptions as to period of limitation of assessment and
collection of taxes
 Section 223, Suspension of running of statute of limitations
 Section 224, Remedy of enforcement of forfeiture
 Section 225, When property to be sold or destroyed
 Section 226, Disposition of funds recovered in legal proceedings or
obtained from forfeitures
 Section 227, Satisfaction of judgment recovered against any internal
revenue officer
C. Protesting an Assessment, Refund, etc
 Section 228, Protesting an Assessment
 Section 229, Recovery of Tax Erroneously or Illegally Collected
 Section 230, Forfeiture of Cash Refund and or Tax Credit

4.  Section 231, Action to Contest Forfeiture of Chattel
Cases:
1. CIR vs Sony Philippines (CTA Case No. 4312, 21 December 1988)
2. CIR vs Atlas Consolidated Mining and Development Corp. (G.R. No. 104151,
March 10, 1995)
3. Republic vs CA and Nielsen and Co. Inc. (G.R. No. L-38540, April 30, 1987)
4. CIR vs Pascor Realty and Development Corp (G.R. No. 128315, June 29, 1999)
5. Eugenio Perez vs. Antonio Araneta (G.R. No. L-9193, May 29, 1957)
6. CIR vs Phoenix Assurance Co. Ltd. (G.R. No. L-19727, may 20, 1965)
7. CIR vs Kudos Metal Corp. (G.R. No. 178087, May 5, 2010)
8. Hermanos vs. CIR (G. R. No. L-21551,
9. Samar I Electric Cooperative vs CIR (G. R. No. 193100, Dec. 10, 2014)
10. Lacsona Land Co. Inc. vs CIR (G.R. No. 171251, March 5, 2012)
11. CIR vs Isabela Cultural Corp. (G.R. No. 1352110, July 11, 2001)
12. CIR vs Lim Tiam Teng Sons and Co. Inc. (G.R. No. L21731, March 31, 1966)
13. Rizal Commercial Banking Corp. vs CIR (G.R. No. 168498, April 24, 2007)
14. Andrea R. Vda. De Aguinaldo vs CIR (G.R. No. L-19927, Feb. 26, 1965)
15. CIR vs TMX Sales, Inc. (G.R. No. 83736, January 15, 1992)
16. Cabrera vs. Provincial Treasurer (G.R. No. 502, Jan. 29, 1946)
17. Velayo vs. Ordoreza (G.R. No. L-9061, Nov. 18, 1957)
18. Arches vs Bellosillo (G.R. No. L-23534, May 16, 1967)
19. CIR vs. Salud Hizon (G.R. No. 130430, Dec. 13, 1999)
20. Hongkong and Shanghai Banking vs Rafferty (G. R. No. Nov. 15, 1918)
21. Republic vs. Honorable Peralta (G.R. No. L-56568, May 20, 1987)
22. Republic vs. Acebedo (G.R. No. L-20477, March 29, 1968)
23. Procter’s Services vs CA CIR (G.R. No. 1181176, April 12, 2000)
24. BPI vs CIR (G.R. No. 139736, Oct. 17, 2005)
25. Dayrit vs Cruz (G. R. No. L-13990, Sept. 26, 1988)
26. CIR vs Wander Phils (G.R. No. L-68375, April 15, 1988)
V. Judicial Remedies (RA 1125, as amended, the Revised Rules of the
Court of Tax Appeals)
A. Jurisdiction of the Court of Tax Appeals
 Section 7, Jurisdiction
 Section 10, Power To Issue Subpoena and Punish for Contempt
 Section 11, Who May Appeal, Mode of Appeal, Effect of Appeal
 Section 12, Taking of Evidence
 Section 13, Decision, Maximum Period for Termination of Cases
 Section 14, Effect of Decision that tax is barred from Statute of
Limitations
 Section 15 Publicity of Proceedings and Publication of Decisions
 Section 16, Damages
 Section 17, Violation of Penal Laws
 Section 18, Appeal to the Court of Appeals en banc
 Section 19, Review by Certiorari

5. Cases:
1. Yaokasin vs Commissioner of Customs (G.R. No. 84111, Dec. 22, 1989)
2. CIR vs Ayala Securities (L-25289, June 28, 1974)
3. Surigao Electric Co. vs CTA (G. R. No. L-25289, June 28, 1974)
4. Oceanic Wellness Network vs CIR (G. R. No. 148380, Dec. 9, 2005)
5. Allied Banking Corp. vs CIR (G. R. No. 175097, Feb 5, 2010)
6. Fishwealth Canning Corp. vs CIR (G.R. No. 179343, Jan. 21, 2010)
7. Philamlife vs Secretary of Finance (G.R. No. 2010987, Nov. 24, 2014)
8. Banco de Oro vs. Secretary of Finance (G. R. No. 198756, Jan. 13, 2015)
9. Pacquiao vs CTA (G.R. No. 213394, April 6, 2016)
10. Philippine Ports Authority vs City of Davao (G.R. No. 190324, June 6, 2016)
11. CIR vs Kepco ilijan (G. R. No. 199422, June 21, 2016)
12. CIR vs Leal (G.R. No. 113459, Nov. 18, 2002)
Other Government Agencies
13. PSALM vs CIR (G.R. No. 198146, Aug 8, 2017)
VI. Statutory Offenses and Penalties
Title X. Statutory Offenses and Penalties Chapter I - Additions to the Tax
 Section 247. General Provisions
 Section 248. Civil Penalties
 Section 249. Interest
 Section 250. Failure to File Certain Information Returns
 Section 251. Failure of a Withholding Agent to Collect and Remit Tax
 Section 252. Failure of a Withholding Agent to Refund Excess Withholding Tax
Chapter II. Crimes, Other Offenses and Forfeitures
 Section 253. General Provisions
 Section 254. Attempt to Evade or Defeat Tax
 Section 255. Failure to File Return, Supply Correct and Accurate Information,
Pay Tax, withhold and Remit Tax and Refund Excess Taxes Withheld on
Compensation
 Section 256. Penal Liability of Corporations
 Section 257. Penal Liability for Making False Entries, Records or Reports, or
Using Falsified or Fake Accountable Forms
 Section 258. Unlawful Pursuit of Business
 Section 259. Illegal Collection of Foreign Payments
 Section 260. Unlawful Possession of Cigarette Paper in Bobbins or Rolls, etc
 Section 261. Unlawful Use of Denatured Alcohol
 Section 263. Unlawful Possession or Removal of Articles Subject to Excise Tax
or Without Payment of the Tax
 Section 264. Failure or Refusal to Issue Receipts or Sales or Commercial
Invoices, Violations Related to the Printing of Such Receipts and Invoices and
Other Violations
 Section 264 - A. Failure to Transmit Sales Data Entered on Cash Register
Machine to the BIR’s Electronic Sales Reporting System
 Section 264 – B. Purchase, Use, Possession, Sale or offer to Sell, Installment,
Transfer, Update, Upgrade, Keeping or Maintaining of Sales Suppression
Devices

6.  Section 265. Offenses Relating to Stamps
 Section 265 – A. Offenses Related to Fuel Marking
 Section 266. Failure to Obey Summons
 Section 267. Declaration under Penalties of Perjury
 Section 268. Other Crimes and Offenses
Chapter III. Penalties Imposed on Public Officers
 Section 269. Violation Committed by Government Enforcement Officers
 Section 270. Unlawful Divulgence of Trade Secrets
 Section 271. Unlawful Interest of Revenue Law Enforcers in Business
 Section 272. Violation of Withholding Tax Provision
 Section 273. Penalty for Failure to Issue and Execute Warrant
Chapter IV – Other Penal Provisions
 Section 274. Penalty for Second and Subsequent Offenses
 Section 275. Violation of Other Provisions of this Code or Rules and
Regulations in General
 Section 276. Penalty for Selling, Transferring, Encumbering or in any Way
Disposing of Property Placed Under Constructive Distraint
 Section 277. Failure to Surrender Property Placed Under Distraint and Levy
 Section 278. Procuring Unlawful Divulgence of Trade Secrets
 Section 279. Confiscation and Forfeiture of the Proceeds or Instruments of
Crime
 Section 280. Subsidiary Penalty
 Section 281. Prescription for Violations for Any Provision of this Code
 Section 282. Informer’s Reward to Persons Instrumental in the Discovery of
Violations of the NIRC and in the Discovery of Seizure of Smuggled Goods
Cases:
1. Philippine Refining Co. vs CTA (G.R. No. 118794, May 8, 1996)
2. Commissioner of Customs vs AGFHA Inc. (G.R. No. 187425, March 28, 2011)
3. Commissioner vs Japan Air (G.R. No. 60714, Oct. 4, 1991)
4. Commissioner vs. Javier (G.R. No. 78953, July 31, 1991)
5. Ungab vs Cusi (G.R. No. L41919-24, May 30, 1980)
6. Lim vs CA (G.R. No. 48134-37, Oct. 18, 1990)
7. Petronilo Tupaz vs Ulep (G.R. No. 127777, Oct. 1, 1999)
8. Gaw vs CIR (G.R. No. 222837, July 23, 2018)
9. Proton Pilipinas Corp vs Republic (G.R. No. 165027, Oct. 12, 2006)
10. Republic vs Patanao (G.R. No. L-22356, July 21, 1967)
VII. Local Government Code of 1991 (RA 7160)
Reference Material: Philippine Law on Local Government Taxation Sofronio Ursal,
2000 ed.
Article X. Local Government 1987 Constitution of the Philippines
Book II of the Local Government Code
(Local Taxation and Fiscal Matters)
Chapter I. General Provisions

7.  Section 128. Scope
 Section 129. Power to Create Sources of Revenue
 Section 130. Fundamental Principles
 Section 131. Definition of Terms
 Section 132. Local Taxing Authority
 Section 133. Common Limitations on the Taxing Power of LGUs
ChapterII. Specific Provisionsonthe Taxing and Other RevenueRaising Power
of LGUs
Article One – Provinces
 Section 134. Scope of Taxing Powers
 Section 135. Tax on Transfer of Real Property Ownership
 Section 136. Tax on Business of Printing and Publication
 Section 137. Franchise Tax
 Section 138. Tax on Sand, Gravel and other Quarry Resources
 Section 139. Professional Tax
 Section 140. Amusement Tax
 Section 141. Annual Fixed Tax for Every Delivery Truck or Van of
Manufacturers or Producers, Wholesale of, Dealers, or Retailers in, Certain
Products
Cases:
1. Unson vs Lacson (G.R. No. L13798, July 31, 1961)
2. Basco vs PAGCOR (G.R No. 91649, May 14, 1991)
3. Santos Lumber vs. City of Cebu (G.R. No. L-10196, Jan. 22, 1958)
4. Villanueva vs City fo Iloilo (G.R. No. L-26521, Dec. 28, 1968)
5. Magtajas vs Pryce Properties Corp. (G.R. No. 111097, July 20, 1994)
6. Coca Cola Bottlers vs City of Manila (G.R. No. 181845, Aug. 4, 2009)
7. China Banking Corp vs. Manila (G.R. No. 204117, Dec. 10, 2017)
8. Davao vs. AP Holdings (G.R. No. 245887, Jan. 22, 2020)
9. X Metro Manila Shopping Mecca vs Manila (G.R No. 190818, Nov. 10, 2014)
10. Batangas vs. Pilipinas Shell (G.R. No. 187631, July 8, 2018)
11. Alliance Q.C Homeowners vs QC (G.R. No. 230651, Sept. 17, 2018)
12. NPC vs Cabanatuan (G.R. No. 177322, Oct. 1, 2014)
13. MERALCO vs Laguna (G.R. No. 131359, May 5, 1999)
14. NPC vs Cabanatuan (G.R. No. 149110, April 9, 2003)
15. Capitol Wireless vs Batangas (G.R. No. 180110, May 30, 2016)
16. Bulacan vs Republic Cement (G.R. No. 126232, ov. 27, 1998)
17. League of Provinces in the Phils. Vs. DENR (Gr. No. 175368, April 11, 2013)
18. International Container Terminal Services vs Manila (G.R No. 219340, Oct. 17,
2018)
19. City of Manila vs Cosmos (G.R No. 196681, June 27, 2018)
Article 2. Municipalities
 Section 142. Scope of Taxing Powers
 Section 143. Tax on Business

8.  Section 144. Rates of Tax within the Metro Manila Area
 Section 145. Retirement of Business
 Section 146. Payment of Business Taxes
 Section 147. Fees and Charges
 Section 148. Fees for Sealing and Licensing of Weights and Measures
 Section 149. Fishery Rentals, Fees and Charges
 Section 150. Situs of Tax
Article 3. Cities
 Section 151. Scope of Taxing Powers
Article 4. Barangays
 Section 152. Scope of Taxing Powers
Article 5. Common Revenue Raising
 Section 153. Service Fees and Charges
 Section 154. Public Utility Charges
 Section 155. Toll Fees or Charges
Article 6. Community Tax
 Section 156. Community Tax
Cases:
1. City of Cebu vs. IAC (G.R. No. 70684, Oct. 10, 1986)
2. Olongapo Electric Light and Power vs NPC (L-24912, April 9, 1987)
3. Chamber of Filipino Retailers vs Villegas (G.R. No. L-29864, Feb. 28, 1969
4. Esteban et al vs. City of Cabanatuan (G.R. No. L13662, May 30, 1960)
5. Municipality of Cainta vs. City of Pasig (G.R. No. 176703, June 28, 2017)
6. City Government of Tagum vs National Transmission Corp. (CTA Ac. No. 190,
Nov. 14, 2018)
Chapter 3. Collection of Taxes
 Section 165. Tax Period and Payment
 Section 166. Accrual of Tax
 Section 167. Time of Payment
 Section 168. Surcharges and Penalties on Unpaid Taxes, Fees and
Charges
 Section 169. Interests on Unpaid Revenues
 Section 170. Collection of Local Revenues by Treasurer
Section 171. Examination of Books of Accounts and Pertinent Records of
Businessmen by Local Trea