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Manuel L.

Quezon University
School of Law

Course Outline1

ATTY. MARVIN P. CANERO

TAXATION LAW 1

A. General Principles of Taxation


a. Definition and concept of taxation
b. Nature of taxation
c. Characteristics of taxation
d. Power of taxation compared with other powers
e. Purpose of taxation
i. Caltex Philippines, Inc. vs. COA, GR No. 92585, 8 May 1992)
ii. Tio vs. Videogram Regulatory Board, GR No. L-75697, 18 June 1997
iii. Commissioner of Customs v. Philippine Phosphate Fertilizer Corp., GR No.
144440, September 1, 2004)
f. Principles of sound tax system
i. Fiscal adequacy
ii. Administrative feasibility
iii. Theoretical justice
g. Theory and basis of taxation
i. Phil. Guaranty Co. vs. Commissioner, 13 SCRA 775
ii. Commissioner of Internal Revenue v. Algue, Inc. et al., 158 SCRA 9, 16-17)
h. Doctrines in taxation
i. Prospectivity of tax laws
ii. Imprescriptibility
iii. Double taxation
1. CIR vs. Bank of Commerce, GR No. 149636, 8 June2005
2. Pepsi Cola Bottling Co. v. City of Butuan, GR L-22814, 28 August 1968;
3. (CIR vs. Solidbank Corporation, GR No. 148191, 25 Nov. 2003;
4. CIR v. S.C. Johnson and Son, Inc., GR No. 127105, 25 June 2009)
5. Deutsche Bank AG Manila Branch vs. CIR, GR No. 188550, 19 Aug 2013
iv. Escape from taxation
1. Shifting of tax burden
a. Ways of shifting the tax burden
b. Taxes that can be shifted
c. Meaning of impact and incidence of taxation
2. Tax avoidance
3. Tax evasion
a. CIR vs. Estate of Toda, GR No. 147188, 14 Sept 2004)
b. Sec. 248 (B), NIRC)

1
Based on the Syllabus provided by the Supreme Court
v. Exemption from taxation
1. Republic vs. Caguioa, GR No. 168584, 15 Oct 2007)
2. John Hay vs. Lim, GR No. 119775, 24 Oct 2003)
3. Province of Misamis Oriental vs Cagayan Electric Power and Light Co.
Inc. , GR No. 45355, 12 January 1990)
vi. Compensation and set-off
1. (Republic vs. Mambulao, 6 SCRA 622)
2. Domingo vs. Carlitos (8 SCRA 443)
3. (Caltex vs. COA, GR No. 925855, 8 May 1992)
4. (South Afriacan Airways vs. CIR, GR No. 180356, 16 February 2010).
5. Commissioner of Internal Revenue v. Court of Tax Appeals, G.R. No.
106611, July 21, 1994
vii. Compromise
viii. Tax amnesty
1. CS GARMENT, INC., vs. CIR, G.R. No. 182399. March 12, 2014
2. Bibiano V. Baas, Jr. vs. Court of Appeals, et al., G.R. No. 102967,
February 10, 2000)
3. Distinguished from tax exemption
ix. Construction and interpretation of:
1. Tax laws
2. Tax exemption and exclusion
3. Tax rules and regulations
4. Penal provisions of tax laws
5. Non-retroactive application to taxpayers - CIR vs. Puregold Duty Free,
Inc. G.R. No. 202789, June 22, 2015)

i. Scope and limitation of taxation


i. Inherent limitations
1. Public purpose
2. Inherently legislative
a. Art X, Section 5,Constitution
b. Art VI, Sec. 28(2),Constitution
3. Territorial
4. International comity
5. Exemption of government entities, agencies, and instrumentalities
ii. Constitutional limitations
1. Provisions directly affecting taxation
a. Prohibition against imprisonment for non-payment of poll tax -
Art. III, Sec. 20, 1987 Constitution
b. Uniformity, equality and progressivity of taxation - Art. VI, Sec.
28(1), 1987 Constitution; Tan vs. Del Rosario, Jr., et al, GR No.
109289; Villanueva vs. City of Iloilo, G.R. No. L-
26521 December 28, 1968; EVAT En Banc Resolution,
Tolentino, et al vs Secretary of Finance, October 30, 1995)
c. Limitations On The Congressional Power To Delegate To The
President The Authority To Fix Tariff Rates, Import And Export
Quotas, Etc. (Art. VI, Sec. 28(2), 1987 Constitution)
d. Exemption from Taxes of the Revenues and Assets of
Educational Institutions, Including Grants, Endowments,
Donations and Contributions - Art. XIV, Sec. 4(3) And (4), 1987
Constitution; .CIR vs. CA,YMCA Gr NO. 123043, 14 Oct 1998;
Department Order No. 149-95 dated November 24, 1995
amending Department Order No. 137-87
e. Non-appropriation of public money or property for the use,
benefit, or support of any sect, church, or system of religion.
(Art. VI, Sec. 29 (2), 1987 Constitution)
f. Majority vote of Congress for grant of tax exemption - (Art. VI,
Sec. 28(4), 1987 Constitution
g. Treatment of taxes levied for a special purpose. (Art. VI, Sec. 29
(3), 1987 Constitution)
h. Rule Requiring That Appropriations, Revenue and Tariff Bills
Shall Originate Exclusively From the House of Representatives -
Art. VI, Sec. 24, 1987 Constitution ; Tolentino vs. Secretary of
Finance, G.R. No. 115455 August 25, 1994
i. Non-impairment of jurisdiction of the Supreme Court - Art. VIII,
Sec. 2 And 5(2)(B), 1987 Constitution)
j. Grant of power to the local government units to create its own
sources of revenue Art. X, Section 5, Constitution
k. Internal revenue allotments to local government units. (Art. X,
Sec. 6, 1987 Constitution)
l. Tax Exemption of Properties Actually, Directly and Exclusively
Used For Religious, Charitable and Educational Purposes - Art.
VI, Sec. 28(3) 7, 1987 Constitution; Lladoc vs. Commissioner, GR
No. L-19201, June 16, 1965; Province of Abra vs. Hernando, GR
No. L-49336, August 31, 1981; Abra Valley College Inc. vs.
Aquino, GR No. L-39086, June 15, 1988; Herrera vs. QC BOAA;
Lung Center of the Philippines vs. QC, G.R. No. 144104. June 29,
2004
m. Power of the President to veto any particular item or items in an
appropriation, revenue, or tariff bill. (Art VI, Sec. 27(2), 1987
Constitution)
n. Necessity of an appropriation before money may be paid out of
the public treasury. (Art. VI, Sec. 29 (1), 1987 Constitution)

2. Provisions indirectly affecting taxation


a. Due process - Art. III, Sec. 1, 1987 Constitution
b. Equal protection - Art. III, Sec. 1, 1987 Constitution; Chamber of
Real Estate and Builders Association, Inc. vs. Sec. Romulo, GR
No. 160756, 9 March 2010;Tiu vs. CA, GR No. 127410, 20 Jan
1999
c. Religious freedom - Sec. 5, Art III, Constitution; Tolentino vs.
Sec. of Finance, GR No. 115455, 25 Aug 1994
d. Non-impairment of obligations of contracts - (Sec. 10, Art. III,
Constitution; Sec. 11, Art XII of the Constitution; Cagayan
Electric and Light Co., Inc. vs. Commissioner, G.R. No. 60216,
September 25, 1985;PAGCOR vs. BIR, GR No. 172087, 15 March
2011
e. Freedom of Speech and Of the Press - Art. III, Sec. 4, 1987
Constitution; Tolentino vs. Secretary of Finance, GR No. 115455,
August 25, 1994
f. Presidential power to grant reprieves, commutations and
pardons and remit fines and forfeitures after conviction- ART.
VII, SEC. 19, 1987 CONSTITUTION

j. Stages of taxation
k. Definition, nature, and characteristics of taxes
l. Requisites of a valid tax
m. Tax as distinguished from other forms of exactions
i. Tariff
ii. Toll
iii. License fee
iv. Special assessment
v. Debt
n. Kinds of taxes
i. As to object
1. Personal, capitation, or poll tax
2. Property tax
3. Privilege tax
ii. As to burden or incidence
1. Direct
2. Indirect
3. Cases - Quezon City vs. ABS-CBN, GR No. 166408, 6 October 2008; CIR
vs. PLDT, GR No. 140230, 15 Dec 2005; CIR vs. John Gotamco and Sons,
Inc., GR NO. L-31092, 27 Feb 1987; Exxonmobil Petroleum vs. CIR, GR
No. 180909, 19 January 2011
iii. As to tax rates
1. Specific
2. Ad valorem
3. Mixed
iv. As to purposes
1. General or fiscal
2. Special, regulatory, or sumptuary
v. As to scope or authority to impose
1. National internal revenue taxes
2. Local real property tax, municipal tax
vi. As to graduation
1. Progressive
2. Regressive
3. Proportionate

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