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    Cir vs. Rueda

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    Wen Junhui
    The document discusses a tax case from 1971 where the estate of a Spanish citizen who died in Tangier, Morocco was assessed deficiency tax in the Philippines. The administrator refused to pay, claiming exemption under the tax code since Tangier provides a similar exemption. The issue was whether Tangier qualifies as a 'state' under the tax code. The Supreme Court ruled that Tangier meets the definition of a foreign country or state for tax purposes based on it being a politically organized community with a government.

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    Cir vs. Rueda

    Uploaded by

    Wen Junhui
    26 views1 page
    The document discusses a tax case from 1971 where the estate of a Spanish citizen who died in Tangier, Morocco was assessed deficiency tax in the Philippines. The administrator refused to pay, claiming exemption under the tax code since Tangier provides a similar exemption. The issue was whether Tangier qualifies as a 'state' under the tax code. The Supreme Court ruled that Tangier meets the definition of a foreign country or state for tax purposes based on it being a politically organized community with a government.

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    The document discusses a tax case from 1971 where the estate of a Spanish citizen who died in Tangier, Morocco was assessed deficiency tax in the Philippines. The administrator refused to pay, claiming exemption under the tax code since Tangier provides a similar exemption. The issue was whether Tangier qualifies as a 'state' under the tax code. The Supreme Court ruled that Tangier meets the definition of a foreign country or state for tax purposes based on it being a politically organized community with a government.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    26 views1 page

    Cir vs. Rueda

    Uploaded by

    Wen Junhui
    The document discusses a tax case from 1971 where the estate of a Spanish citizen who died in Tangier, Morocco was assessed deficiency tax in the Philippines. The administrator refused to pay, claiming exemption under the tax code since Tangier provides a similar exemption. The issue was whether Tangier qualifies as a 'state' under the tax code. The Supreme Court ruled that Tangier meets the definition of a foreign country or state for tax purposes based on it being a politically organized community with a government.

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    © All Rights Reserved
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    G.R. No.

    L-13250 October 29, 1971


    THE COLLECTOR OF INTERNAL REVENUE, petitioner,
    vs. ANTONIO CAMPOS RUEDA, respondent

    (PRINCIPLE LAID DOWN IN THE CASE: – Definition of “State”)


    FACTS:
    In January 1955, Maria Cerdeira died in Tangier, Morocco (an international zone [foreign
    country] in North Africa). At the time of her death, she was a Spanish citizen and was a resident
    of Tangier. She however left some personal properties (shares of stocks and other intangibles)
    in the Philippines. The designated administrator of her estate here is Antonio Campos Rueda.
    In the same year, the Collector of Internal Revenue (CIR) assessed the estate for deficiency tax
    amounting to about P161k. Campos Rueda refused to pay the assessed tax as he claimed that
    the estate is exempt from the payment of said taxes pursuant to section 122 of the Tax Code
    which provides:
    That no tax shall be collected under this Title in respect of intangible personal property (a) if the
    decedent at the time of his death was a resident of a foreign country which at the time of his
    death did not impose a transfer tax or death tax of any character in respect of intangible person
    property of the Philippines not residing in that foreign country, or (b) if the laws of the foreign
    country of which the decedent was a resident at the time of his death allow a similar exemption
    from transfer taxes or death taxes of every character in respect of intangible personal property
    owned by citizens of the Philippines not residing in that foreign country.
    Campos Rueda was able to prove that there is reciprocity between Tangier and the Philippines.
    However, the CIR still denied any tax exemption in favor of the estate as it averred that Tangier
    is not a “state” as contemplated by Section 22 of the Tax Code and that the Philippines does not
    recognize Tangier as a foreign country.

    ISSUE: Whether or not Tangier is a state.

    RULING: Yes. For purposes of the Tax Code, Tangier is a foreign country.
    A foreign country to be identified as a state must be a politically organized sovereign
    community independent of outside control bound by penalties of nationhood, legally supreme
    within its territory, acting through a government functioning under a regime of law. The stress
    is on its being a nation, its people occupying a definite territory, politically organized, exercising
    by means of its government its sovereign will over the individuals within it and maintaining its
    separate international personality. Further, the Supreme Court noted that there is already an
    existing jurisprudence (Collector vs De Lara) which provides that even a tiny principality, that of
    Liechtenstein, hardly an international personality in the sense, did fall under the exempt
    category provided for in Section 22 of the Tax Code. Thus, recognition is not necessary. Hence,
    since it was proven that Tangier provides such exemption to personal properties of Filipinos
    found therein so must the Philippines honor the exemption as provided for by our tax law with
    respect to the doctrine of reciprocity.

    WHEREFORE, the decision of the respondent Court of Tax Appeals of October 30, 1957 is
    affirmed.

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