PM Reyes Bar Reviewer On Taxation Supple PDF
PM Reyes Bar Reviewer On Taxation Supple PDF
PM Reyes Bar Reviewer On Taxation Supple PDF
Note: This covers significant and relevant XYZ Airlines has no personality to file
Supreme Court jurisprudence on taxation law from the subject tax refund claim because it is
January 31, 2013 to March 31, 2014. not the statutory taxpayer. Does XYZ
Airlines have personality to file the
Possessors may reproduce and distribute this refund?
supplement provided my name remains clearly
associated with my work and no alterations in the A. Yes. In Philippine Airlines v.
form and content of this supplement are made. No Commissioner of Internal Revenue,
stamping is allowed. G.R. No. 198759, July 1, 2013, the Supreme
Court held that the rule in the Silkair case does is
--------------------------------------------------------- inapplicable to a case where the party to which
GENERAL PRINCIPLES the economic burden is shifted is provided an
--------------------------------------------------------- exemption from both direct and indirect taxes. In
Silkair, the Court held that the the proper party
Q. What is a tax amnesty? to question, or seek a refund of, an indirect tax is
the statutory taxpayer, the person on whom the
A. A Tax amnesty refers to the articulation of the tax is imposed by law and who paid the same
absolute waiver by a sovereign of its right to even if he shifts the burden thereof to another.
collect taxes and power to impose penalties on
persons or entities guilty of violating a tax law. In this case, the Supreme Court held that the
Tax amnesty aims to grant a general reprieve to abovementioned rule should not apply to
tax evaders who wish to come clean by giving instances where the law clearly grants the party
them an opportunity to straighten out their to which the economic burden of the tax is
records. (CS Garments, Inc. v. shifted an exemption from both direct and
Commissioner of Internal Revenue, indirect taxes. In which case, the latter must be
G.R. No. 182399, March 12, 2014) allowed to claim a tax refund even if it is not
considered as the statutory taxpayer under the
Note: Amnesty taxpayers may immediately law.
enjoy the privileges and immunities under a Tax
Amnesty Law, provided they fulfill the The Court applied the Maceda case, where it
suspensive conditions imposed therein. (CS upheld the National Power Corporation’s
Garments, Inc. v. Commissioner of (NPC) claim for a tax refund since its own
Internal Revenue, G.R. No. 182399, charter specifically granted it an exemption from
March 12, 2014) both direct and indirect taxes.
Q. ABC Petroleum sold XYZ Airlines The Supreme Court held that the propriety of a
petroleum fuel. ABC Petroleum passed tax refund claim is hinged on the kind of
on the related excise tax to XYZ exemption which forms its basis. If the law
Airlines. Now, XYZ Airlines sought to confers an exemption from both direct or indirect
refund the said excise taxes on the basis taxes, a claimant is entitled to a tax refund even if
of the tax exemption privileges provided it only bears the economic burden of the
for in its franchise. The CIR argues that applicable tax. On the other hand, if the
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exemption conferred only applies to direct taxes, serious implications on our Government’s
then the statutory taxpayer is regarded as the commitment to the goals and objectives of the
proper party to file the refund claim. Chicago Convention.
Q. ABC Petroleum sold to various Under the basic international law principle of
international airlines petroleum fuel. pacta sunt servanda, we have the duty to fulfill
ABC Petroleum is prohibited from our treaty obligations in good faith. This entails
passing on the said excise taxes to the harmonization of national legislation with treaty
international airlines as the latter are provisions. In this case, Sec. 135(a) of the NIRC
exempt from excise tax under Section embodies our compliance with our undertakings
135. Thus, ABC Petroleum sought to under the Chicago Convention and various
refund the said excise taxes. The BIR bilateral air service agreements not to impose
argues that pursuant to the Philippine excise tax on aviation fuel purchased by
Acetylene case, a tax exemption being international carriers from domestic
enjoyed by the buyer cannot be the basis manufacturers or suppliers. Construction of the
of a claim for tax exemption by the tax exemption provision in question should give
manufacturer or seller of the goods for primary consideration to its broad implications
any tax due to it as the manufacturer or on our commitment under international
seller. Can ABC Petroleum refund the agreements.
said excise taxes? ---------------------------------------------------------
INCOME TAX
A. Yes. In Commissioner of Internal ---------------------------------------------------------
Revenue v. Pilipinas Shell, G.R. No.
188497, February 19, 2014 , the Supreme Q. XYZ Bank Philippines remitted to XYZ
Court held that a petroleum company, as the Bank Germany an amount representing
statutory taxpayer who is directly liable to pay the the 15% branch profit remittance tax on
excise tax on its petroleum products, is entitled its regular banking unit net income to
to a refund or credit of the excise taxes it paid for XYZ Germany. Realizing that it made an
petroleum products sold to international carriers, overpayment of BPRT, XYZ Philippines
the latter having been granted exemption from filed with the BIR an administrative
the payment of said excise tax under Sec. 135 (a) claim for refund and at the same time
of the NIRC. requested from the International Tax
Affairs Division (ITAD) a confirmation
The Court maintained that Section 135 (a), in of its entitlement to the preferential tax
fulfillment of international agreement and rate of 10% under the RP-Germany Tax
practice to exempt aviation fuel from excise tax Treaty. The BIR denied the claim on the
and other impositions, prohibits the passing of ground that the application for a tax
the excise tax to international carriers who buys treaty relief was not filed with ITAD
petroleum products from local prior to the payment by the former of its
manufacturers/sellers such as respondent. BPRT and actual remittance of its
However, the Court agreed that there was a branch profits to DB Germany, or prior
need to reexamine the effect of denying the to its availment of the preferential rate
domestic manufacturers/sellers’ claim for refund of ten percent (10%) under the RP-
of the excise taxes they already paid on petroleum Germany Tax Treaty provision. The
products sold to international carriers, and its CIR contends that the XYZ Philippines
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violated the fifteen (15) day period indicate a deprivation of entitlement to a tax
mandated under Section III paragraph treaty relief for failure to comply with the 15-day
(2) of Revenue Memorandum Order period. We recognize the clear intention of the
(RMO) No. 1-2000. Will the failure to BIR in implementing RMO No. 1-2000, but the
strictly comply with RMO No. 1-2000 CTA’s outright denial of a tax treaty relief for
deprive persons or corporations of the failure to strictly comply with the prescribed
benefit of a tax treaty? period is not in harmony with the objectives of
the contracting state to ensure that the benefits
A. No. In Deutsche Bank AG Manila v. granted under tax treaties are enjoyed by duly
Commissioner of Internal Revenue, entitled persons or corporations.
G.R. No. 188550, August 19, 2013 , the
Supreme Court held that the noncompliance Bearing in mind the rationale of tax treaties, the
with the 15-day period for prior application period of application for the availment of tax
should not operate to automatically divest treaty relief as required by RMO No. 1-2000
entitlement to the tax treaty relief especially in should not operate to divest entitlement to the
claims for refund. relief as it would constitute a violation of the duty
required by good faith in complying with a tax
Our Constitution provides for adherence to the treaty. The denial of the availment of tax relief for
general principles of international law as part of the failure of a taxpayer to apply within the
the law of the land. The time-honored prescribed period under the administrative
international principle of pacta sunt servanda issuance would impair the value of the tax treaty.
demands the performance in good faith of treaty At most, the application for a tax treaty relief
obligations on the part of the states that enter from the BIR should merely operate to confirm
into the agreement. Every treaty in force is the entitlement of the taxpayer to the relief.
binding upon the parties, and obligations under
the treaty must be performed by them in good The obligation to comply with a tax treaty must
faith. More importantly, treaties have the force take precedence over the objective of RMO No.
and effect of law in this jurisdiction. 1-2000. Logically, noncompliance with tax
treaties has negative implications on
A state that has contracted valid international international relations, and unduly discourages
obligations is bound to make in its legislations foreign investors. While the consequences
those modifications that may be necessary to sought to be prevented by RMO No. 1-2000
ensure the fulfillment of the obligations involve an administrative procedure, these may
undertaken.” Thus, laws and issuances must be remedied through other system management
ensure that the reliefs granted under tax treaties processes, e.g., the imposition of a fine or penalty.
are accorded to the parties entitled thereto. The But we cannot totally deprive those who are
BIR must not impose additional requirements entitled to the benefit of a treaty for failure to
that would negate the availment of the reliefs strictly comply with an administrative issuance
provided for under international agreements. requiring prior application for tax treaty relief.
More so, when the RP-Germany Tax Treaty
does not provide for any pre-requisite for the
availment of the benefits under said agreement. Q. What are the requirements for a claim
for refund of excess creditable
Likewise, it must be stressed that there is withholding tax?
nothing in RMO No. 1-2000 which would
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A. A taxpayer claiming for a tax credit or refund of proceeds have been duly accounted for in
creditable withholding tax must comply with the accordance with the rules and regulations of
following requisites: the Bangko Sentral ng Pilipinas;
8) Where there are both zero-rated or effectively
1) The claim must be filed with the CIR within zero- rated sales and taxable or exempt sales,
the two-year period from the date of and the input taxes cannot be directly and
payment of the tax; entirely attributable to any of these sales, the
2) It must be shown on the return of the input taxes shall be proportionately allocated
recipient that the income received was on the basis of sales volume; and
declared as part of the gross income; and 9) The claim is filed within two years after the
3) The fact of withholding is established by a close of the taxable quarter when such sales
copy of a statement duly issued by the payor were made
to the payee showing the amount paid and
the amount of tax withheld. ( Luzon Hydro Corporation v.
Commissioner of Internal Revenue,
(Commissioner of Internal Revenue v. G.R. No. 188260, November 13, 2013)
TeaM (Philippines) Operations
Corporation, G.R. No. 185728, October Q. ABC Hydro Corporation, is a renewable
16, 2013 ) power generation company. It filed a
claim for refund to cover its unutilized
--------------------------------------------------------- input VAT corresponding to the four
VALUE-ADDED TAX quarters of taxable year 2001. It,
--------------------------------------------------------- however, did not produce evidence
showing! that! it! had! zero3rated! sales! for! the!
Q. What are the requirements for a claim four! quarters! of! taxable! year! 2001.! Should!
for VAT refund? ABC’s!claim!be!denied?
A. A claim for refund or tax credit for unutilized A. Yes. In Luzon Hydro Corporation v.
input VAT may be allowed only if the following Commissioner of Internal Revenue,
requisites concur, namely: G.R. No. 188260, November 13, 2013 , the
Supreme Court held that petitioner did not
1) The taxpayer is VAT-registered; competently establish its claim for refund or tax
2) The taxpayer is engaged in zero-rated or credit. The petitioner did not produce evidence
effectively zero-rated sales; showing that it had zero-rated sales for the four
3) The input taxes are due or paid; quarters of taxable year 2001. The petitioner did
4) The input taxes are not transitional input not reflect any zero-rated sales from its power
taxes; generation in its four quarterly VAT returns,
5) The input taxes have not been applied against which indicated that it had not made any sale of
output taxes during and in the succeeding electricity. Had there been zero-rated sales, it
quarters; would have reported them in the returns. Indeed,
6) The input taxes claimed are attributable to it carried the burden not only that it was entitled
zero-rated or effectively zero-rated sales; under the substantive law to the allowance of its
7) For zero-rated sales under Section claim for refund or tax credit but also that it met
106(A)(2)(1) and (2); 106(B); and 108(B)(1) and all the requirements for evidentiary
(2), the acceptable foreign currency exchange substantiation of its claim.
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without any action from the CIR.
Although the petitioner has correctly contended 4) All taxpayers, however, can rely on BIR
here that the sale of electricity by a power Ruling No. DA-489- 03 from the time of its
generation company like it should be subject to issuance on 10 December 2003 up to its
zero- rated VAT under Republic Act No. 9136, reversal by this Court in Aichi on 6 October
its assertion that it need not prove its having 2010, as an exception to the mandatory and
actually made zero-rated sales of electricity by jurisdictional 120+30 day periods.
presenting the VAT official receipts and VAT
returns cannot be upheld. (See Commissioner of Internal Revenue v.
San Roque Power Corporation, G.R. No.
Q. What are the rules on the determination 187485, Taganito Mining Corporation v.
of the prescriptive period for filing a tax Commissioner of Internal Revenue, G.R.
refund or credit of unutilized input VAT No. 196113, Philex Mining Corporation v.
as provided in Section 112 of the 1997 Commissioner of Internal Revenue, G.R.
Tax Code? No. 197156, February 12, 2013 )
A taxpayer can file his administrative claim for (Commissioner of Internal Revenue v.
refund or issuance of tax credit certificate Mindanao II Geothermal Partnership,
anytime within the two- year prescriptive period. G.R. No. 191498, January 15, 2014 )
If he files his claim on the last day of the two-
year prescriptive period, his claim is still filed on Q. What is the distinction between an
time. The Commissioner will then have 120 days ‘excess input VAT” and an “excessively
from such filing to decide the claim. If the collected” tax?
Commissioner decides the claim on the 120th
day or does not decide it on that day, the A. The input VAT is not “excessively” collected as
taxpayer still has 30 days to file his judicial claim understood under Section 229 because at the
with the CTA. (Team Energy time the input VAT is collected the
Corporation v. Commissioner of amount paid is correct and proper. The
Internal Revenue, G.R. No. 190928, input VAT is a tax liability of, and legally paid by,
January 13, 2014 ) a VAT-registered seller of goods, properties or
services used as input by another VAT-registered
(See Commissioner of Internal Revenue person in the sale of his own goods, properties,
v. Visayas Geothermal Power Company, or services. This tax liability is true even if the
G.R. No. 181276, November 11, 2013 ) seller passes on the input VAT to the buyer as
part of the purchase price. The second VAT-
Q. What is the reckoning date of the two- registered person, who is not legally liable for the
year prescriptive period to file the input VAT, is the one who applies the input
administrative claim for refund? VAT as credit for his own output VAT.
A. The reckoning date is the close of the taxable In a claim for refund or credit of “excess” input
quarter when the relevant sales were made. VAT under Section 110(B) and Section 112(A),
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the input VAT is not “excessively” collected as 187485, Taganito Mining Corporation v.
understood under Section 229. At the time of Commissioner of Internal Revenue, G.R.
payment of the input VAT the amount paid is the No. 196113, Philex Mining Corporation v.
correct and proper amount. Under the VAT Commissioner of Internal Revenue, G.R.
System, there is no claim or issue that the input No. 197156, February 12, 2013 )
VAT is “excessively” collected, that is, that the
input VAT paid is more than what is legally due. Q. What is the effect of failure to comply
The person legally liable for the input VAT with the 120-day waiting period in a
cannot claim that he overpaid the input VAT by claim for refund of input taxes?
the mere existence of an “excess” input VAT. The
term “excess” input VAT simply means that the A. Failure to comply with the 120-day waiting
input VAT available as credit exceeds the output period violates a mandatory provision of law. It
VAT, not that the input VAT is excessively violates the doctrine of exhaustion of
collected because it is more than what is legally administrative remedies and renders the petition
due. Thus, the taxpayer who legally paid the premature and thus without a cause of action,
input VAT cannot claim for refund or credit of with the effect that the CTA does not acquire
the input VAT as “excessively” collected under jurisdiction over the taxpayer’s petition.
Section 229.
The charter of the CTA expressly provides that
Any suggestion that the “excess” input VAT its jurisdiction is to review on appeal “decisions
under the VAT System is an “excessively” of the Commissioner of Internal Revenue in
collected tax under Section 229 may lead cases involving x x x refunds of internal revenue
taxpayers to file a claim for refund or credit for taxes.”
such “excess” input VAT under Section 229 as an
ordinary tax refund or credit outside of the VAT When a taxpayer prematurely files a judicial claim
System. for tax refund or credit with the CTA without
waiting for the decision of the Commissioner,
From the plain text of Section 229, it is clear that there is no “decision” of the Commissioner to
what can be refunded or credited is a tax that is review and thus the CTA as a court of special
“erroneously, x x x illegally, x x x excessively or in jurisdiction has no jurisdiction over the appeal.
any manner wrongfully collected.” In short, there
must be a wrongful payment because what is The charter of the CTA also expressly provides
paid, or part of it, is not legally due. As the Court that if the Commissioner fails to decide within “a
held in Mirant, Section 229 should “apply only to specific period” required by law, such
instances of erroneous payment or illegal “inaction shall be deemed a denial” of the
collection of internal revenue taxes.” Erroneous application for tax refund or credit. It is the
or wrongful payment includes excessive payment Commissioner’s decision, or inaction “deemed a
because they all refer to payment of taxes not denial,” that the taxpayer can take to the CTA for
legally due. Under the VAT System, there is no review. Without a decision or an “inaction x x x
claim or issue that the “excess” input VAT is deemed a denial” of the Commissioner, the CTA
“excessively or in any manner wrongfully has no jurisdiction over a petition for review.
collected.”
(Commissioner of Internal Revenue v.
(Commissioner of Internal Revenue v. San San Roque Power Corporation, G.R.
Roque Power Corporation, G.R. No. No. 187485, Taganito Mining
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Corporation v. Commissioner of or refund of the creditable input tax due or
Internal Revenue, G.R. No. 196113, paid to such sales.” In short, the law states
Philex Mining Corporation v. that the taxpayer may apply with the
Commissioner of Internal Revenue, Commissioner for a refund or credit “within
G.R. No. 197156, February 12, 2013 ) two (2) years,” which means at anytime within
two years. Thus, the application for refund or
The 30-day period to appeal to the CTA is credit may be filed by the taxpayer with the
dependent on the 120-day period and compliance Commissioner on the last day of the two-year
with both periods is jurisdictional. The period of prescriptive period and it will still strictly
120 days is a prerequisite for the commencement comply with the law. The two- year
of the 30-day period to appeal to the CTA. prescriptive period is a grace period in favor of
(CBK Power Limited v. Commissioner the taxpayer and he can avail of the full period
of Internal Revenue, G.R. Nos. 198729- before his right to apply for a tax refund or
30, January 15, 2014 ) credit is barred by prescription.
2) Section 112(C) provides that the
In Nippon Express (Philippines) Commissioner shall decide the application for
Corporation v. Commissioner of refund or credit “within one hundred twenty
Internal Revenue, G.R. No. 196907, (120) days from the date of submission of
March 13, 2013 , the petition failed because the complete documents in support of the
judicial claim of petitioner was filed on April 25, application filed in accordance with
2003, only one day after it submitted its Subsection (A).” The reference in Section
administrative claim to the CIR. Petitioner failed 112(C) of the submission of documents “in
to wait for the lapse of the requisite 120-day support of the application filed in accordance
period or the denial of its claim by the CIR with Subsection A” means that the application
before elevating the case to the CTA by a in Section 112(A) is the administrative claim
petition for review. As its judicial claim was filed that the Commissioner must decide within
during which strict compliance with the 120+30- the 120-day period. In short, the two- year
day period was required, the Court cannot but prescriptive period in Section 112(A) refers to
declare that the filing of the petition for review the period within which the taxpayer can file
with the CTA was premature and that the CTA an administrative claim for tax refund or
had no jurisdiction to hear the case. credit. Stated otherwise, the two-year
prescriptive period does not refer to the filing
Q. Is the 30-day period within which to file of the judicial claim with the CTA but to the
the judicial claim required to fall within filing of the administrative claim with the
the 2-year prescriptive period? Commissioner. As held in Aichi, the “phrase
‘within two years x x x apply for the issuance of
A. The 30-day period need not necessarily fall within a tax credit or refund’ refers to applications for
the two-year prescriptive period for the following refund/credit with the CIR and not to appeals
reasons: made to the CTA.”
3) If the 30-day period, or any part of it, is
1) Section 112(A) clearly, plainly, and required to fall within the two-year
unequivocally provides that the taxpayer “may, prescriptive period (equivalent to 730 days),
within two (2) years after the close of the then the taxpayer must file his administrative
taxable quarter when the sales were made, claim for refund or credit within the first 610
apply for the issuance of a tax credit certificate days of the two-year prescriptive period.
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Otherwise, the filing of the administrative Geothermal Partnership, G.R. No.
claim beyond the first 610 days will result in 191498, January 15, 2014 )
the appeal to the CTA being filed beyond the
two-year prescriptive period. Thus, if the Q. ABC argues that the judicial claim is
taxpayer files his administrative claim on the seasonably filed so long as it is filed after
611th day, the Commissioner, with his 120-day the 120-day waiting period but before the
period, will have until the 731st day to decide lapse of the two-year prescriptive period
the claim. If the Commissioner decides only under Section 112(A). In other words, a
on the 731st day, or does not decide at all, the taxpayer may file an appeal with the
taxpayer can no longer file his judicial claim CTA after the expiration of the 120-day
with the CTA because the two-year period, in which case the 30-day period
prescriptive period (equivalent to 730 days) does not apply. Is this contention
has lapsed. The 30-day period granted by law correct?
to the taxpayer to file an appeal before the
CTA becomes utterly useless, even if the A. No. The! 303day! period! applies! not! only! to!
taxpayer complied with the law by filing his instances! of! actual! denial! by! the! CIR! of! the!
administrative claim within the two-year claim! for! refund! or! tax! credit,! but! to! cases! of!
prescriptive period. inaction!by!the!CIR!as!well.
!
The theory that the 30-day period must fall The taxpayer can file the appeal in one of two
within the two-year prescriptive period adds a ways: (1) file the judicial claim within thirty days
condition that is not found in the law. It after the Commissioner denies the claim within
results in truncating 120 days from the 730 the 120-day period, or (2) file the judicial claim
days that the law grants the taxpayer for filing within thirty days from the expiration of the 120-
his administrative claim with the day period if the Commissioner does not act
Commissioner. This Court cannot interpret a within the 120-day period.
law to defeat, wholly or even partly, a remedy
that the law expressly grants in clear, plain, (Commissioner of Internal Revenue v.
and unequivocal!language. Mindanao II Geothermal Partnership,
G.R. No. 191498, January 15, 2014 )
(Commissioner of Internal Revenue v.
San Roque Power Corporation, G.R. Q. Should the 120+30 day period rule be
No. 187485, Taganito Mining given only prospective effect given that
Corporation v. Commissioner of the manner by which the BIR and the
Internal Revenue, G.R. No. 196113, CTA actually treated the 120+30 day
Philex Mining Corporation v. period constitutes an operative fact?
Commissioner of Internal Revenue,
G.R. No. 197156, February 12, 2013 ) A. No. The general rule is that a void law or
administrative act cannot be the source of legal
It is only the administrative claim that must be rights or duties.
filed within the two-year prescriptive period;
the judicial claim need not fall within the two- The doctrine of operative fact is an exception to
year prescriptive period. (Commissioner of the general rule, such that a judicial declaration
Internal Revenue v. Mindanao II of invalidity may not necessarily obliterate all the
effects and consequences of a void act prior to
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such declaration December 10, 2003 but before October 6, 2010, the
date when the Aichi case was promulgated. Thus,
Clearly, for the operative fact doctrine to apply, even though petitioner's judicial claim was
there must be a “legislative or executive measure,” prematurely filed without waiting for the expiration
meaning a law or executive issuance, that is of the 120-day mandatory period, the CTA may still
invalidated by the court. From the passage of take cognizance of the instant case as it was filed
such law or promulgation of such executive within the period exempted from the 120-30-day
issuance until its invalidation by the court, the mandatory period.
effects of the law or executive issuance, when
relied upon by the public in good faith, may have In Commissioner of Internal Revenue v.
to be recognized as valid. In the present case, Team Sual Corporation, G.R. No. 194105,
however, there is no such law or executive February 5, 2014 , Team Sual filed its judicial
issuance that has been invalidated by the Court claim for refund/tax credit of its unutilized input
except BIR Ruling No. DA-489-03. VAT with the CTA on April 1, 2002 – more than a
year before the issuance of BIR Ruling No. DA-
The doctrine of operative fact was applied by the 489-03. Accordingly, Team Sual cannot benefit
Supreme Court when it recognized the from the declaration laid down in BIR Ruling No.
simultaneous filing during the period between 10 DA-489-03. As stressed by the Court in San Roque,
December 2003, when BIR Ruling No. DA- prior to the issuance of BIR Ruling No. DA-489-
489-03 was issued, and 6 October 2010, when 03, the BIR held that the 120-day period was
this Court promulgated Aichi declaring the mandatory and jurisdictional, which is the correct
120+30 day periods mandatory and jurisdictional, interpretation of the law.
thus reversing BIR Ruling No. DA-489-03.
In Republic of the Philippines v. GST Philippines,
( Commissioner of Internal Revenue v. G.R. No. 190872, October 17, 2013, it was held that
San Roque Power Corporation, G.R. GST can benefit from BIR Ruling No. DA-489-03
No. 187485, Taganito Mining with respect to its claims for refund of unutilized
Corporation v. Commissioner of excess input VAT for the second and third quarters
Internal Revenue, G.R. No. 196113, of taxable year 2005 which were filed before the
Philex Mining Corporation v. CIR on November 18, 2005 but elevated to the
Commissioner of Internal Revenue, CTA on March 17, 2006 before the expiration of the
G.R. No. 197156, October 8, 2013) 120-day period (March 18, 2006 being the 120th
day). BIR Ruling No. DA-489-03 effectively
Note: Thus, in Procter & Gamble Asia PTE shielded the filing of GST's judicial claim from the
Ltd. v. Commissioner of Internal Revenue, vice of prematurity.
G.R. No. 202071, February 19, 2014 , the
Petitioner was able to claim the benefit of BIR GST's claims, however, for the four quarters of
Ruling No. DA-489-03 as the judicial claims were taxable year 2004 and the first quarter of taxable
filed on October 2, 2006 and December 29, 2006. year 2005 should be denied for late filing of the
petition for review before the CTA. GST filed its
In Team Energy Corporation v. VAT Return for the first quarter of 2004 on April
Commissioner of Internal Revenue, G.R. 16, 2004. Reckoned from the close of the first
No. 197760, January 13, 2014 , petitioner filed taxable quarter of 2004 on March 31, 2004, the
its judicial claim on April 18, 2007 or after the administrative claim filed on June 9, 2004 was well
issuance of BIR Ruling No. DA-489-03 on within the required two-year prescriptive period
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from the close of the taxable quarter, the last day of judicial claim for refund must be denied for having
filing being March 31, 2006. The CIR then had 120 been filed late. Although respondent filed its
days from June 9, 2004, or until October 7, 2004, to administrative claim with the BIR on August 9,
decide the claim. Since the Commissioner did not 2004 before the expiration of the two-year period in
act on the claim within the said period, GST had 30 Section l 12(A), it undoubtedly failed to comply with
days from October 7, 2004, or until November 6, the 120+30-day period in Section l l 2(D) (now
2004, to file its judicial claim. However, GST filed subparagraph C) which requires that upon the
its petition for review before the CTA only on inaction of the CIR for 120 days after the
March 17, 2006, or 496 days after the last day of submission of the documents in support of the
filing. In short, GST was late by one year and 131 claim, the taxpayer has to file its judicial claim
days in filing its judicial claim. within 30 days after the lapse of the said period. The
120 days granted to the CIR to decide the case
For the second quarter of taxable year 2004, GST ended on December 7, 2004. Thus, DEPI had 30
filed its administrative claim on August 12, 2004. days therefrom, or until January 6, 2005, to file a
The 120-day period from the filing of such claim petition for review with the CTA. Unfortunately,
ended on December 10, 2004, and the 30th day DEPI only sought judicial relief on May 5, 2005
within which to file a judicial claim fell on January 9, when it belatedly filed its petition to the CTA,
2005. However, GST filed its petition for review despite having had ample time to file the same,
before the CTA only on March 17, 2006, or 432 days almost four months after the period allowed by law.
after the last day of filing. GST was late by one year As a consequence of DEPI's late filing, the CTA
and 67 days in filing its judicial claim. did not properly acquire jurisdiction over the claim.
For the third and fourth quarters of taxable year In Commissioner of Internal Revenue v.
2004, GST filed its administrative claims on Toledo Power Company, G.R. No. 183880,
February 18, 2005. The 120th day, or June 18, 2005, January 20, 2014 Respondent’s judicial claims for
lapsed without any action from the CIR. Thus, refund of its unutilized input VAT covering the
GST had 30 days therefrom, or until July 18, 2005, third and fourth quarters of 2001 were filed on
to file its judicial claim, but it did so only on March October 24, 2003 and January 22, 2004, respectively.
17, 2006, or 242 days after the last day of filing. GST
was late by 242 days in filing its judicial claim. As held in the San Roque ponencia, strict
compliance with the 120+30 day mandatory and
In Applied Food Ingredients Company v. jurisdictional periods is not necessary when the
Commissioner of Internal Revenue, G.R. judicial claims are filed between December 10, 2003
No. 184266, November 11, 2013 , the (issuance of BIR Ruling No. DA-489-03 which
Petitioner’s judicial claim was filed on 24 July 2002, states that the taxpayer need not wait for the 120-day
when the 120+30 day mandatory periods were period to expire before it could seek judicial relief)
already in the law and BIR Ruling No. DA-489-03 to October 6, 2010 (promulgation of the Aichi
had not yet been issued, Petitioner does not have an doctrine).
excuse for not observing the 120+30 day period.
Failure of petitioner to observe the mandatory 120- Clearly, therefore, Respondent’s refund claim of
day period is fatal to its claim and rendered the unutilized input VAT for the third quarter of 2001
CTA devoid of jurisdiction over the judicial claim. was denied for being prematurely filed with the
CTA, while its refund claim of unutilized input
In Commissioner of Internal Revenue v. Dash VAT for the fourth quarter of 2001 may be
Engineering, G.R. No. 184145, December 11, entertained since it falls within the exception
2013, the Supreme Court held that respondent's
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provided in the Court’s most recent rulings. presented beared the name of DEF
Corporation instead of ABC
Q. What is the effect non-compliance with Corporation. The BIR contends that
the documentary and evidentiary ABC failed to comply with the VAT
requirements for a VAT refund claim? invoicing requirements as the use of the
business name “DEF” by ABC was never
A. No. In J.R.A Philippines v. approved by the SEC. Is the BIR’s
Commissioner of Internal Revenue , the contention correct?
Supreme Court held that failure to comply with
the invoicing requirements provides sutt1cient A. Yes. In Bonifacio Water Corporation v.
ground to deny a claim for tax refund or tax The Commissioner of Internal Revenue,
credit. A claim for tax refund or tax credit, the G.R. No. 175142, July 22, 2013, , the
applicant must prove not only entitlement to the Supreme Court held that the change of
claim but also compliance with all the petitioner’s name to “Bonifacio GDE Water
documentary and evidentiary requirements Corporation,” being unauthorized and without
therefor. approval of the SEC, and the issuance of official
receipts under that name which were presented
Q. ABC Corporation filed a claim for to support petitioner’s claim for tax refund,
refund of unutilized input taxes. The cannot be used to allow the grant of tax refund or
BIR contends that ABC failed to comply issuance of a tax credit certificate in petitioner’s
with the VAT invoicing requirements as favor. The absence of official receipts issued in its
the words “zero-rated” was merely name is tantamount to non- compliance with the
stamped and not pre-printed. Is the substantiation requirements provided by law.
BIR’s contention correct?
----------------------------------------------------------
A. No. In Commissioner of Internal Revenue JUDICIAL REMEDIES (CTA)
v. Toledo Power Company, G.R. No. ----------------------------------------------------------
183880, January 20, 2014 , the Supreme
Court held that the words “zero-rated” appeared Q. May the Supreme Court motu proprio
on the VAT invoices/official receipts presented determine if the CTA has jurisdiction
by the Repondent in support of its refund claim. over a claim for refund?
Although the same was merely stamped and not
pre-printed, the same is sufficient compliance A. Yes. In Commissioner of Internal
with the law, since the imprinting of the word Revenue v. Silicon Philippines, G.R.
“zero-rated” was required merely to distinguish No. 169778, March 12, 2014 , the Supreme
sales subject to 12% VAT, those that are subject Court held that the! CTA! is! a! court! of! special!
to 0% VAT (zero-rated) and exempt sales, to jurisdiction.! As! such,! it! can! only! take!
enable the Bureau of Internal Revenue to cognizance! of! such! matters! as! are! clearly!
!
properly implement and enforce the other VAT within! its! jurisdiction. However,! although! the!
provisions of the Tax Code. parties! have! not! raised! the! issue! of!
jurisdiction,! nevertheless,! the! Supreme! court!
Q. ABC Corporation filed a claim for Court!may!motu proprio determine!whether!or!
refund of unutilized input taxes. ABC not!the!CTA!has!jurisdiction!over!respondent’s!
Corporation changed its name to DEF judicial! claim! for! refund! taking! into!
Corporation. Thus, the official receipts consideration,!the!factual!and!legal!allegations!
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contained! in! the! pleadings! filed! by! both!
parties!and!found!by!the!court!a quo.
13!