Western Mindanao State University

College of Law
Basic Taxation Law
2nd Semester, S.Y. 2023-2024
Atty. Armee Jay L. Cresmundo, CPA

Course Outline:
WEEK TOPICS/CASE ASSIGNMENTS
1 (Jan 15-20) Class Orientation
2 (Jan 22-27) GENERAL PRINCIPLES OF TAXATION
3 (Jan 29-Feb 3) A. Definition, Characteristics, and Purpose
§ CIR v. Algue, G.R. No. L-28896, 1988
§ CIR v. Fortune Tobacco Corporation, 559 SCRA 160, 2008
§ Tio v. Videogram Regulatory Board, G.R. No. 75697, 1987
§ Pambansang Koalisyon ng mga Samahang Magsasaka et al. v. Executive
Secretary, G.R. Nos. 147036-37, 2012
§ Batangas Power Corporation v. Batangas City, G.R. No. 152675, 2004
§ Chamber of Real Estate and Builders’ Association v. Romulo, 614 SCRA
605, 2010
§ Secretary of Finance v. Lazatin, G.R. No. 210586, G.R. No. 210588, 2016

B. Distinguished from Police Power and Eminent Domain

§ Planters Products v. Fertiphil Corporation, 548 SCRA 485, 2008
§ Southern Luzon Drug v. DSWD, G.R. No. 199669, 2017
§ Drugstores Association of the Philippines v. National Council on Disability
Affairs, G.R. No. 194561, 2016
§ CIR v. Central Luzon Drug Corporation, G.R. No. 159647, 2005

C. Inherent and Constitutional Limitations

§ Pascual v. Secretary of Public Works, G.R. No. L-10405, 1960
§ PKSMMN vs. Executive Secretary, supra.
§ La Suerte Cigar v. CA, G.R. No. 125346, 2014
§ Film Development Council v. Colon Heritage Realty, G.R. No. 203754, 2015
§ Abakada Guro Party List v. Ermita, G.R. No. 168056, 2005
§ Deutsche Bank AG Manila Branch v. CIR, G.R. 188550, 2013
§ Maceda v. Macaraeg, Jr., G.R. No. 88291, 1991
§ CIR v. DLSU, G.R. No. 196596, 2016
§ White Light Corporation v. City of Manila, G.R. No. 122846, 2009
§ Abakada Guro, supra.
§ Drugstores Association of the Philippines, supra.
§ Jacinto-Henares v. St. Paul College of Manila, G.R. No. 215383, 2017
§ Lung Center of the Phils., v. Quezon City, G.R. No. 144104, 2004
§ CIR v. St. Luke’s Medical Center, G.R. No. 203514, 2017
§ CIR v. CTA and Manila Golf & Country Club, G.R. No. 47421, 1990
§ Southern Cross Cement v. Cement Manufacturer’s Assoc., G.R. No.
158540, 2005
§ Reyes et al. v. CA, G.R. No. 118233, 1999
§ Manila Electric Company v. Province of Laguna, G.R. No. 131359, 1999
§ Smart Communications, Inc. v. City of Davao, G.R. No. 155491, 2008s
§ British American Tobacco vs. Camacho [G.R. No. 163583. August 20, 2008
and April 15, 2009.]
§ La Sallian Educational Innovators Foundation vs. CIR, G.R. 202792,
February 27, 2019
 D. Requisites of a Valid Tax (1987 CONST., art. VI, sec. 28)

E. Distinguished from Other Forms of Exactions

§ Diaz v. Secretary of Finance and CIR, G.R. No. 193007, July 19, 2011
§ Villanueva v. City of Iloilo, L-26521, 1968
§ Philex Mining Corporation v. CIR, 356 Phil 189, 1998

F. Doctrines in Taxation
1. Lifeblood Theory
2. Construction and Interpretation of Tax Laws, Rules, and Regulations
3. Prospectivity of Tax Laws
4. Imprescriptibility of Taxes
5. Double Taxation
6. Tax Avoidance vs. Tax Evasion
7. Prohibition on Compensation and Set-Off
8. Compromise and Tax Amnesty
§ Angeles City v. Angeles Electric Corporation, 622 SCRA 43, 2010
§ Spouses Pacquiao v. CTA, G.R. No. 213394, 2016
§ Phil. Guaranty Co. v. CIR, G.R. No. L-022074, 1965
§ Hilado v. Collector of Internal Revenue, G.R. No. L-9408, 1956
§ CIR v. Fortune Tobacco, supra.
§ Quezon City v. ABS-CBN, G.R. No. 166408, 2008
§ Cagayan Electric Power v. City of CDO, G.R. No. 191761, 2012
§ CIR v. Eastern Telecommunications Philippines, G.R. No. 163835, 2010
§ Soriano v. Secretary of Finance, G.R. No. 184450, 2017CIR v. Acosta,
etc., G.R. No. 154068, 2007
§ CIR v. Filinvest Development Corp., 654 SCRA 56, 2011
§ La Suerte Cigar, supra.
§ CIR v. Solidbank Corporation, supra.
§ Deutsche Bank AG Manila, supra.
§ CIR v. S.C. Johnson, G.R. No. 127105, 1999
§ Nursery Care Corporation v. Acevedo, G.R. No. 180651, 2014
§ CIR v. Estate of Benigno Toda, 438 SCRA 290, 2004
§ Republic v. Mambulao Lumber, 4 SCRA 622, 1962
§ Domingo v. Garlitos, 8 SCRA 443
§ CIR v. Toledo Power Company, G.R. No. 196415, 2015
§ ING Bank, supra.
§ CS Garment Inc. v. CIR, G.R. No. 182399, 2014

4 (Feb 5-10) INCOME TAXATION

5 (Feb 12-17) A. Kinds of Taxpayers – Section 23
6 (Feb 19-24)
B. Definition and Nature of Income; When Taxable
§ Fisher v. Trinidad, 43 Phil 973
§ Chamber of Real Estate and Builders’ Association v. Romulo, supra.
§ CIR v. Lancaster Philippines, G.R. No. 183408, 2017
§ CIR v. Citytrust Investment Phils., G.R. No. 139786, 2006
§ CIR v. Isabela Cultural Corporation, G.R. No. 172231, 2007

C. Situs of Income Taxation – Section 42

D. Gross Income
1. Definition; Concept of Income from Whatever Source Derived – Section 32
§ Ericsson Telecommunications v. City of Pasig, G.R. No. 176667, 2007

2. Sources of Income Subject to Tax – Section 24; R.R. No. 2-98, as amended
 a. Compensation Income
b. Fringe Benefits
c. Professional Income
d. Income from Business
e. Income from Dealings in Property
f. Passive Investment Income
g. Annuities, Proceeds from Life Insurance or Other Types
h. Prizes and Awards
i. Pensions, Retirement Benefit, Separation Pay
j. Capital Assets vs. Ordinary Assets – Sections 39-40

3. Exclusions from Gross Income – Section 32(B)

4. Deductions from Gross Income – Sections 34 and 36

a. Itemized Deductions
b. Optional Standard Deduction
c. Non-deductible Items
§ Paper Industries Corporation v. CA, G.R. No. 106949, 1995
§ ESSO v. CIR, 175 SCRA 149
§ CIR v. CTA and Smith Kline, G.R. No. L-54108, 1984
§ Palanca v. CIR, 18 SCRA 496
§ Chinabank Corp v. CIR & CTA, 336 SCRA 178
§ PRC v. CIR, 256 SCRA 667, 1995
§ Basilan Estates v. CIR, 21 SCRA 17
§ Fernandez Hermanos Inc. v. CIR, 29 SCRA 552

E. Taxable Individuals – R.A. No. 8424, as amended

1. Resident Citizens, Non-Resident Citizens, and Resident Aliens
2. Non-Resident Aliens Engaged in Trade or Business
3. Non-Resident Aliens Not Engaged in Trade or Business
4. Substituted Filing

F. Taxable Corporations – R.A. No. 11534

§ Gatchalian v. Collector, 67 Phil. 666
§ Obillos v. CIR, G.R. No. L-68118
§ Pascual and Dragon v. CIR, G.R. No. 78133, 1988
§ Evangelista v. Collector, 102 Phil., 140
§ Ona v. CIR, 45 SCRA 74
§ Reyes v. Commissioner, 24 SCRA 198
§ CIR vs. De La Salle University, G.R. No. 196596, 9 November 2016

1. Domestic Corporations and Resident Foreign Corporations – R.A. No. 8424,

as amended, sec. 27
a. Itemized Deductions
b. Optional Standard Deduction
c. Minimum Corporate Income Tax
§ Marubeni Corporation v. CIR, G.R. NO. 76573, 1989
§ Bank of America v. CA, 1994

2. Non-Resident Foreign Corporations

§ CIR v. Procter & Gamble PMC, 160 SCRA 560, 204 SCRA 377
§ CIR v. Wander Phils. Inc. 160 SCRA 573

3. General Professional Partnerships

G. Withholding Taxes; Concept (R.A. No. 8424, as amended, sec. 76)

7 (Feb 26-Mar 2) MIDTERM EXAMINATIONS

8 (Mar 4-9) TRANSFER TAXES

A. Estate Tax; Basic Principles and Concepts
§ Lorenzo v. Posadas, G.R. No. L-43082, 1937
§ CIR v. Fisher, G.R. Nos. L-11622 & L-11668, 1961

B. Donor's Tax; Basic Principles and Concepts

§ Abello v. CIR, G.R. No. 120721, 2005
§ Philamlife v. Secretary of Finance, G.R. No. 210987, 2014

9 (Mar 11-16) VALUE-ADDED TAX (VAT)

A. Concept and Elements of VATable Transactions
§ Abakada Guro Party List v. Ermita, G.R. No. 168056, September 1, 2005
§ CIR v. Magsaysay Lines, G.R. No. 146984, 2006
§ Mindanao II Geothermal v. CIR, 693 SCRA 49, March 11, 2013

B. Destination Principle and Cross-Border Doctrine

§ CIR v. Toshiba Information Equipment, G.R. 150154, 2005
§ CIR v. Burmeister and Wain, G.R. No. 153205, 2007

C. Transactions Deemed Sale Subject to VAT

§ CIR v. Magsaysay Lines, G.R. No. 146984, 2006

D. Zero-Rated Transactions

E. VAT-Exempt Transactions
§ CIR v. Seagate Technology, G.R. No. 153866, 2005
§ CIR v. Cebu Toyo Corporation, 451 SCRA 447

F. Input and Output VAT

§ Kapatiran ng Naglilingkod sa Pamahalaan, 163 SCRA 371
§ Philippine Geothermal Inc. v. CIR, G.R. No. L-154028, 2005
§ Fort Bonifacio Development Corp v. CIR, G.R. No. 173425, 2013
§ Diaz v. Secretary of Finance, G.R. No. 193007, 2011

G. VAT Refund or Credit – Section 112

§ Pilipinas Total Gas v. CIR, G.R. No. 2017112, 2015
§ Philex Mining Corp v. CIR, G.R. No. 125704, 1998
§ Atlas Consolidated Mining v. CIR, 524 SCRA 73 (2007)
§ CIR v. Mirant Pagbilao, G.R. No. 172129, September 12, 2008
§ CIR v. Aichi Forging Company, G.R. No. 184823, October 6, 2010
§ CIR v. San Roque Power Corporation, G.R. Nos. 187485, 196113, and
197156, February 12, 2013
§ Rohm Apollo Semiconductor v. CIR, G.R. No. 168950, 2015
§ KEPCO Philippines v. CIR, G.R. No. 181858, November 24, 2010.

10 (Mar 18-23) TAX REMEDIES

§ Philamlife v. Secretary of Finance, G.R. No. 210987, 2014
§ Collector v. Bautista and Tan, G.R. No. L-12250 & L-12259, 1959
§ CIR v. Philippine Daily Inquirer, G.R. No. 213943, 2017
§ CIR v. Enron Subic Power, G.R. No. 166387, 2009
§ CIR v. Fitness by Design, G.R. No. 215957, 2016
§ Medicard Philippines, Inc. v. CIR, G.R. No. 222743, 2017
§ Lhuiller v. CIR, G.R. No. 166786, 2006
 A. Government
1. Assessment of Internal Revenue Taxes
a. Requisites of a Valid Assessment
b. False Returns, Fraudulent Returns, Non-Filing of Returns
2. Collection of Delinquent Taxes
a. Requisites
b. Civil action for Collection
c. Criminal action for Collection
d. Injunction – R.A. No. 8424, as amended, sec. 218; R.A. No. 9282, as
amended, sec. 11
3. Statute of Limitations

B. Taxpayer’s Remedies
1. Administrative
2. Judicial
3. Compromise and Abatement of Taxes
4. Refund of Tax Erroneously or Illegally Collected – R.A. No. 8424, sec. 229
§ RCBC v. CIR, G.R. No. 168498, 2007
§ Lascona Land Co. v. CIR, G.R. No. 171251, 2012
§ CIR v. Kudos Metal Corporation, G.R. No. 178087, 2010
§ Fishwealth Canning Corp v. CIR, G.R. No. 179343, 2010
§ CIR v. V.Y. Domingo Jeweller, Inc., G.R. No. 22178, 2019
§ CIR v. Wyeth, G.R. No. 76281, 1991
§ CIR v. TMX Sales, G.R. No. 83736, 1992
§ CIR v. Philamlife, G.R. No. 105208, 1995
§ CIR v. Smart Communications, G.R. No. 179045-46, 2010

C. Civil Penalties
1. Tax Delinquency, Tax Deficiency
2. Surcharge

D. Compromise Penalty

11 (Mar 25-30) HOLY WEEK

12 (Apr 1-6) LOCAL TAXATION

§ Mactan Cebu International Airport Authority v. Marcos, G.R. No. 120082,
September 11, 1996
§ City of San Pablo v. Reyes, 305 SCRA 353, 1999
§ Pepsi-Cola Bottling v. City, 24 SCRA 789
§ Matalin Coconut v. Municipal Council, 143 SCRA 404
§ Phil Match Co. Ltd v. City of Cebu, 81 SCRA 99, January 18, 1999
§ PLDT v. City of Davao, G.R. No. 143867, August 22, 2001
§ Meralco v. Province of Laguna, 306 SCRA 353
§ Figuerres v. CA, G.R. No. 119172, March 25, 1999
§ Coca-Cola v. City of Manila, G.R. No. 156252, June 27, 2000
§ Yamane v. BA Lepanto Condominium Corporation 474 SCRA 258
§ Lopez v. City of Manila, 303 SCRA 448
§ Iloilo Bottlers v. Iloilo City, G.R. No. 52019, 1988
§ Arabay v. CFI, 66 SCRA 617, 1975
§ Allied Thread v. City of Manila, G.R. No. 40296, 1984
§ Mobil Philippines v. City Treasurer of Makati, G.R. No. 154092, 2005
§ Hagonoy Market Vendor Association v. Municipality of Hagonoy Bulacan, G.R.
No. 137621, 2002
§ Mindanao Shopping Destination v. Duterte, G.R. No. 211093, 2017
§ Demaala vs. Comm. On Audit , ( G.R. 199752, February 17, 2015);
 § Prieto vs. City of Manila, G.R. 221366, July 18, 2019;
§ Randy Allied Ventures Inc. vs. City of Davao, G.R. 241697, July 29, 2019;
§ Cosmos Bottling Corp. vs. City of Manila, G.R. 196681, June 27, 2018;
§ Noemi Cruz vs. City of Makati, G.R. 210894, September 12, 2018.

A. General Principles – Sections 130 and 132

B. Common Limitations on the Taxing Powers of Local Government Units – Section

133

C. Local Business Tax – Sections 143, 145 and 146

D. Validity of a Local Tax Ordinance – Section 187

E. Taxpayer’s Remedies
1. Administrative – Section 195
2. Judicial
3. Refund or Credit – Section 196

F. Assessment and Collection of Local Taxes – Section 194

1. Remedies of Local Government Units
2. Prescriptive Period
3. Injunction

13 (Apr 8-13) REAL PROPERTY TAXATION

§ Army and Navy Club v. Trinidad, 44 Phil., 383
§ Philippine Fisheries Development Authority v. CBAA, G.R. No. 178030, 2010
§ NPC v. CBAA, G.R. No. 171470, 2009
§ City Assessor of Pasay v. BAA of Pasay City
§ Lopez v. City of Manila, G.R. No. 127139, 1999
§ Callanta v. Abellana, Gr. NO. 115253, 1998
§ Province of Nueva Ejica v. Imperial Mining, G.R. No. 59463, 1982
§ Mindanao Bus Co., v. City Assessor of Cagayan de Oro, G.R. No. 17870, 1962
§ Caltex Philippines v. CBAA, G.R. No. 50466, 1982
§ City Assessor of Cebu v. Association of Benevola de Cebu, G.R. No. 152904,
2007
§ LRT v. SEC, G.R. No. 127316, 2000
§ Allied Banking v. Quezon City, G.R. No. 154126, 2005
§ Sec. of Finance v. Ilarde, G.R. No. 121782, 2005
§ Manila International Airport Authority v. CA, G.R. No. 155650, 2006
§ UP v. City Treasurer of QC, G.R. No. 214044, 2019
§ Mactan-Cebu Int’l Airport Authority vs. Lapu-Lapu City (G.R. 181756, 2015)
§ National Power Corp. vs. Province of Pangasinan, G.R. 210191, March 4, 2019

A. Fundamental Principles; Nature

B. Exemption from Real Property Tax – Section 234

C. Government’s Remedies
1. Real Property Tax Assessment
2. Collection

D. Taxpayer’s Remedies
1. Administrative
2. Judicial
3. Refund or Credit
14 (Apr 15-20) JUDICIAL REMEDIES
§ V.Y. Domingo Jewellers, Inc. vs. CIR, G.R. 221780, March 25, 2019
§ Roca Security & Investigation Agency Inc. vs. CIR, G.R. 241338, April 10, 2019
§ Misnet Inc. vs. CIR, G.R. 210604, June 3, 2019
§ CIR v. CTA and Petron, G.R. No. 207843, 2018
§ Ignacio v. City Treasurer of Quezon City, G.R. No. 221620, 2017
§ Blaquera v. Rodriguez, 103 Phil. 267, 1958
§ Raymundo v. de Joya, 101 SCRA 495, 1980
§ CIR v. CA and Atlas Consolidated, 271 SCRA 605, 1997

A. Jurisdiction of the Court of Tax Appeals – R.A. No. 1125, as amended by R.A.
No. 9282; A.M. No. 05-11-07-CTA; R.A. No. 11576
1. Civil Cases
2. Criminal Cases
3. Institution of Civil Action in Criminal Action
4. Certiorari jurisdiction

B. Suspension of Collection of Taxes

C. Petition for Review on Certiorari to the SC

15 (Apr 22-27) FINAL EXAMINATIONS