Question: 6/8 points, actually error question to according mismo appeal to the CTA.

the CTA. When the taxpayer filed an administrative appeal

kay sir and another 180-day period had lapsed, the taxpayer already
lost his 30-day period to appeal before the CTA. Notwithstanding the
kaya medyo labo labo yung sagot pero may kamukha kasi syang fact that the 30-day period to appeal to the CTA is lost, the
CASE kaya naka based doon yung sagot ko. taxpayer could still appeal to the CTA but he must wait for the
Bali sa question ni sir under letter A, wala naibigay na ruling si decision of the CIR regarding the protest and upon receipt of the
sir pero ang tanung nya is, decision even beyond the 180-day, the taxpayer could appeal to the
“is the ruling of the CTA proper”, kaya may assumption. CTA within 30 days from receipt of the decision of the CIR.
Basically, yung facts is, yung assessment is na release, sent or Unfortunately, this is wanting in this case. The taxpayer filed his
mailed on september 12, 2017 tapos nag issue ng garnishment appeal to the CTA even without the decision of the CIR after the
only on Mark 05, 2021. So ang dapat na e discuss mod aw is lapse of 180-day period to decide and 30 days to appeal to CTA. Thus,
about sa prescription ng power to collect the CTA cannot take cognizance of the case for lack of
jurisdiction.

Question: 4/4 NPC used exemption from real property tax as a

A: a. On the assumption that tha CTA division ruled against the defense is assailing the validity of an assessment. Since the basis of
taxpayer, then the decision is not correct. The government has the its claim is exemption, NPC should not be required to observe the rule
power to collect tax liabilities within 3 years from the released, sent on exhaustion of administrative remedies and could therefore directly
or mail of the final assessment notice. In the case, the file its claim with the court of competent jurisdiction. Is NPC correct?
assessment was issued on September 12, 2017. Thus, the
government has 3 years from September 12, 2017 or until September No. For real property tax purposes, invoking tax exemption from the
12, 2020 to collect the tax liability of the taxpayer. However, the application thereof as a defense by the taxpayer which
government filed its garnishment for purposes of collecting the tax assails the validity of a real property tax assessment is considered a
only on March 05, 2021, which is beyond the 3-year period for the question on the assessment on the ground of being
government to collect the tax liability. Thus, under this premise, erroneous. In the case, it is wrong for NPC to argue that the defense
the ruling of the CTA division is not correct. of exemption from real property tax is a question of the
authority to make an assessment. NPC, which invokes exemption
As for question B, error question din ito. Wala ring naibigay si sir na from real property tax, is actually assailing the assessment
ruling from CTA pero the question is “is the ruling of the CTA correct” issued against it on the ground of being erroneous. Since the ground
pero based sa facts nya, parang ito yung case na kung saan si CTA of assailing the real property tax assessment is grounded on
division nag issue ng ruling tapos nag final and executory na yung the fact that it was erroneously made, it is therefore jurisdictional on
ruling, ngayun nag appeal sila sa CTA en banc, may power ba si CTA the part of NPC to observe the rule on exhaustion of
en banc na e reverse yung final and executory decision ni CTA administrative remedies which include that payment under protest
division? by NPC in order for it to successfully assail the validity of the
real property assessment. Thus, the contention of NPC is not correct.
b. No. Under the assumption that the decision of the CTA division
had already attained finality, the same can no longer be assailed Question:1/4
under grave abuse of discretion before the CTA en banc. CTA division
and CTA en banc belong to the same level of judicial remedy, albeit, wrong ko to, so hindi ko alam yung sagot pero the facts are: Baguio
they are divided into divisions. Thus, in the heirarchy of judicial Benguet Community Credit Cooperative is being charged with real
remedies, property tax and it claimed that it should be exempt as the beneficial
CTA division and CTA en banc are within the same level. Thus, under use thereof is being enjoyed by the lessees and not Baguio Benguet
the premised that the decision of the CTA division had Community Credit Cooperative.
already attained finality, the same can no longer be assailed thorugh
grave abuse of discretion, within the CTA en banc which is the Note: hindi ko alam kung ito yung sagot: yo have to search sa
same level of judicial remedy. coverage ng RA 6938, and tanung is covered ba nya si Baguio
Benguet Community Credit Cooperative.
Question: 3/4; feedback, mayron daw issue about decision of the
regional director appealing it to the CIR. Hindi ko daw to na tackle
case: the real properties owned by Cooperative registered under RA
kaya minus 1. So need nyo din aralin yugn rule about appeal from
6938, whether the beneficial use of the same is being enjoyed by other
regional director to CIR.
taxable entities, shall be exempt from real property tax. The LGC
Basically, nag file ng protest si taxpayer kay CIR, after the 180-days, exempts all real properties owned by Cooperative under RA 6938
the CIR did not act on the protest. Hence, the taxpayer filed an without distinction. Nothing in the law suggest that real property tax
administrative appeal or a Motion for reconsideration to the CIR. After exemption only applies when the real property is used by the
another 180 days had lapse after the filling of the administrative cooperative itself.
appeal or the Motion for reconsideration, the CIR did not still act on
the said protest, nor to the administrative appeal or to the Motion for
Reconsideration, the CIR did not act on any of it. Out of fear, the
taxpayer, within 30 days from the lapse of the second 180-days, filed Question: 4/4 Baguio owned a real property with a newly constructed
an appeal via petition for review before the CTA. Should the CTA take residential house which is being sold to private individuals. XX, the
cognizance of the case. buyer of Lot 27, has not yet given the full amount of the payment and
no indication as to whether he is already occupying the property.
No. For purposes of protest against assessment of internal revenue Should lot 27 be subject to real property tax?
liabilities, the Commissioner of Internal Revenue (CIR) is
given 180 days to decide on the protest. On the other hand, the A: The property may not be subject to real property tax. The Republic
taxpayer is given 30 days to appeal to the Court of tax Appeals of the Philippines, its instrumentalities and political
(CTA) from the lapse of the 180-days in case when the CIR did not act subdivisions shall not be subject to real property tax unless the
on the protest within the given period to decide. In the case, beneficial use thereof is given to a taxable entity. In the case, since
the taxpayer should not have filed an administrative appeal with the the property is owned by Baguio City, a political subdivision of the
CIR on the ground that there is nothing to administratively State, it cannot be subject to real property tax. However, the
appeal because the CIR did not act on the said protest. In case of buyer, who at the moment have not yet fully paid the property, may
inaction on the part of the CIR regarding protest, administrative be charged of the real property tax under the assumption that
appeal is not a proper remedy. When the 180-day period had lapsed, said buyers are currently enjoying the beneficial use of the property.
the taxpayer should have filed his appeal before the CTA If the buyer is not yet occupying the property and therefore
within 30 days after the 180-day period. However, the taxpayer filed not in the beneficial use thereof, then the property cannot be subject
an administrative appeal which will not toll the 30-day period to to real property tax as this is owned by a political subdivision,
Baguio City in this case.
 including provinces is empowered to impose local tax. Is the Province
of Benguent correct?
Question: 4/4 this is the usual question about sa ZERO RATE under
export of goods or service.
Things to consider
The Province of Benguet if wrong. Local Government Code is not the
1. According kay sir, it is much proper to answer “yes, it is source of taxing power of a local government unit. The
subject to VAT at a zero rate” instead of ”No, it is not subject power to tax of a local government unit is in fact constitutionally
to VAT as it is at zero rate. granted and the Local Government Code is actually a limitation and
2. The transaction should transpire between a VAT registered guidance set forth by the Congress for purposes of exercise of local
entity and an Entity registered under PEZA. tax by a local government unit. One of the limitations and
3. The transaction should transpire within the ZONE guidance set forth in the Local Government Code is, in order for a
4. The premise of being a ZERO rate in anchored on the fact local government unit to exercise and impose local tax, it is a
that it was an “export” must that an ordinance shall be enacted by the respective
5. Tax holidy in itself shall not negate the fact that it was a Sanggunian of a given local government unit imposing local tax.
zero rate transaction. Thus,
the Province of Benguet is wrong as it cannot rely merely on the
No. A VAT registered entity transacting with another entity registered provision of the Local Government Code for purposes of imposing
under the Philippines Economic Zone Authority (PEZA) and a tax on sand, gravel and other quarries on public land. The Province
the said transaction transpired within the said zone, the same shall of Benguet must enact an ordinance first before it could
be subject to VAT at a zero-rate for being an export sale of impose tax on sand, gravel and other quarries on public land.
service or goods . In the case, SMZ, a VAT registered entity transacted
with HP international, a PEZA registered entity. The
transaction or the sale of service between SMZ and HP international
transpired within the PEZA, which, by fiction of law is
considered a foreign land and thus, transaction therein is considered Question: 4/4
as export of service or goods, hence, it shall be subject to VAT
at a zero-rate. The fact that HP international is already enjoying an
income tax holiday is of no moment. Enjoyment of tax holiday
shall not negate the fact that the transaction between SMZ and HP A: Yes. Property that has been used or being used in the business
international is subject to VAT at a zero rate. Thus, the BIR is whether by the owner or members and shareholders of the
not correct in denying the SMZ's application for sale of service at zero- business shall be considered as ordinary asset. The sale of an
rate. ordinary asset is subject to VAT. In the case, the house and lot
being used by the Klaus, Inc's president, Atty, Krimson as his
residence is considered an ordinary asset because it is being used by
the corporation's single largest shareholder. Thus, the sale of the
Question: 3/4, wala namang feedback si sir pero hindi pa din full house and lot being an ordinary asset shall be subject to VAT.
points kaloka. Haha

Basically, si taxpayer, nag file ng protest. The CIR, instead of acting

on the protest, the CIR filed in the RTC a warrant of distraint and levy
against the property of the taxpayer. Taxpayer on the other hand,
question: wrong premise ito nakakaiyak: kasi ang sagot ko is
filed his petition for review with the CTA alleging that the action of RESIDENT ALIEN SYA pero apparently, non-resident alien engaged
CIR in filing a warrant of distraint and levy should amount to his in business here in the Philippines siya ata dapat.
denial of the protest. CIR claim that the CTA should not take
cognizance of the case as the CIR did not yet act on the protest. Is Facts: Pierre, is a foreign national and lives in the Philippines from
the taxpayer correct? Janury 01 to August 01 for the year 2021 and then umalis sya dito
Pinas tapos bumalik nalang sya nung November 5, 2021 up to April
Yes. Decision of the Commissioner of Internal Revenue (CIR) 21 of the following year. Ngayun anong status ni Pierre and is the
concerning an assailed assessment for internal revenue liabilities income of Pierre taxable, which part?
shall be appealable to the Court of Tax Appeals (CTA). In the case,
Valera protested the assessment and requested for a
reinvestigation. In turn, the CIR issued a warrant of distraint and levy A: Pierre is a Non-res alien engaged in TBP- not a citizen nor a
on the properties and ordered the filing of action in the resident but engaged in business here in the phil. If he stays here in
Regional Trial Court (RTC) for the collection of the tax. Due to this act an aggregate (non-continuous) 180 days, then he shall be deemed as
of the CIR, Valera is correct in appealing the case to the engage in TBP here in Phils. Taxable for income sourced within In
CTA. Valera cannot be faulted for appealing to the CTA when, after the case,
protesting the assessment, the CIR issued a warrant of levy and
order a filing of collection case to the RTC. This action of the CIR is Pierre lives and engaged in business in the Philippines from Janury
contrary to his mandate to make a clear and unequivocal 01 to August 01 for the year 2021 and from November 5, 2021 up to
decision regarding a protest. It is the obligation of the CIR to make the end of 2021. Thus, he stay here in the Philippines
clear to the taxpayer that his action constitutes his final decision more than 180 days in the taxable year 2021. He shall therefore
regarding the protest in order to inform the taxpayer and enable the classified as resident alien engaged in business. In effect, his
latter to avail of remedies which, if not availed on time, would income sourced within the Philippines shall be subject to income tax.
result to an irreparable lost on the part of the taxpayer. Thus, Valera
is correct when it appealed to CTA and pray for injunction as 1
the action of the CIR in issuing a warrant of levy and order a filing of Question: mali ko din ngay to. Wrong premise.
collection case to the RTC shall constitute as the final action of
the CIR concerning the protest filed by Valera which therefore facts: the ordinance imposing 5% share on the gross receipts
appealable to CTA. representing the rental of space in the public market owned and
operated by the city. Is the ordinance valid?

Ang sagot ko dito is “violation of the principle of pre-emption” pero

Question: 3.5/4 wala din feedback si sir so di ko alam kung paano. since wrong premise sya, mali yun.

Basically, si Province of Benguent imposes a local tax by virtue of the Question:

provision of the local government code stating therein that any LGU,
Facts: Expanded Foreign currency deposit of 15% is the subject of a optional standard deduction, I will be entitled to 1 million worth of
refund filed by DEF. The CIR denied the refund alleging that the deduction without the need of complying with substantiation
refund is beyond the 2 years which is reckoned from payment requirement. In comparison, in itemized deduction, I could only avail
regardless of any supervening event. up to the 500 thousand worth of itemized deduction.
representing my office rental, salary of my secretary and office
No. In refund for erroneously paid tax concerning final tax, the same supplies and this is still subject to my compliance with the requisites
may be filed within 2 years from remittance of the said of deductibility of itemized deduction. Thus, it is more beneficial on
tax. In the case, the final withholding tax was filed and remitted to my part to elect optional standard deduction as I would be
the BIR on January 10, 2020. Hence, this would be the reckoning entitled to a one million pesos worth of deductions as compare to 500
period for the filing of a claim for refund of erroneously paid final tax. thousand worth of deduction if its itemized deduction.
Thus, DEF corporation shall have until January 10, 2022 to file
its claim for refund which is second year from the date when the DEF
corporation remitted its erroneously paid final tax.
Additional discussion na gusto ni sir,
Expanded foreign currency deposit is a final tax. Hence, reckoning is
from “remittance (lahat ng final tax, final withholding tax, ang Taxpayer engaged in trade, Business or Practice of profession or self
reckoning is REMITTANCE) employed

Question: DEF is the one which withheld the tax and thus it was the ➢ He has two exclusive options:
one claiming for the refund. CIR however denied the refund alleging
that DEF is not the taxpayer. Is the CIR correct? • Graduated rate; or
• 8% tax rate in lieu of graduated income tax and other
Answer”. No. percentage tax.
The liability of a withholding agent is separate and distinct from the
liability of the taxpayer. A withholding agent may be held liable in ▪ The tax based of 8% shall be the excess of 250k.
case he failed to fulfil his obligation to withhold and/or remit the tax.
Thus, a withholding agent, being liable for and subject of a tax, ▪ He must indicate as early as quarter returns that
has the legal personality to claim for refund of tax. Thus, a defense he is availing of the 8% rate, otherwise, he will, by
that DEF corporation is not a proper party to file a refund has not default, be subject to graduated income tax.
merit.

Question:4/4
XX corporation Phils. assigned LL to the XX corporation Singapore
from January to September 2022 in order for LL to directly administer
Question: 3/4 - the following are the gross receipts of FF, which of the inventory of XX corporation Singapore. The admistrative function
the following should he include in his gross receipts for purposes of of LL was rendered in Singapore but all of the income of LL was given
VAT liability: by XX corporation Phils. should the income of LL be subject to income
tax?
1. gross receipts from the lease income
2. 3% charge against lessees of their gross sales,
3. shares from electricity and water bill No. Income from service shall only be subject to income tax if the
4. Amount collected for the use of the restrooms. service was rendered here in the Philippines. Also, a nonresident
citizen shall only be subject to income tax if the income is sourced
from within the Philippines. In the case, the income of LL
Answer: FF should include all his gross receipts from the lease is sourced outside the Philippines as the service, which is the activity
income, 3% charge against lessees of their gross sales, shares from that produces the income, was rendered abroad. Also, LL is a
electricity and water bill as well as the amount for the use of the non-resident citizen because he derives income abroad and his
restrooms. employment thereat requires him to be physically present abroad
most of the time. He has employer abroad, the SS corporation and he
VAT is imposed on importation, whether in ordinary course of is physically present abroad most of the time, 8 months to be
business or not, and on sale, barter, exchange, and lease of goods or exact, during the taxable year. Since the income is sourced outside
service, including those incidental activities thereto. the Philippines and LL, a non-resident citizen, who can only be
subject to income tax sourced within, the income he earned from the
In the case, for purposes of imposition of VAT, the income from lease service he rendered abroad shall not be subject to withholding
business of FF shall include all incidental activities thereto taxes.
namely, the 3% charge against lessees of their gross sales, shares
from electricity and water bill as well as the amount for the use Question: 3/4
of the restrooms. Thus, all this incidental activities shall be included
for purposes of VAT How should the following be treated for purposes of income tax:

question: feedback ni sir is need ko daw e discuss yung 8% tax rate. NSNP educational institution
Hindi ko alam kung paano yung tho 2/4
1. Tuition fees collected
You have 500 thousand worth of itemized deduction representing my 2. Rental fees/ lease- said income was used for the
office rental, salary of my secretary and office supplies. For purposes improvement of the facilities and laboratories of the school
of allowable deductions, which option is more beneficial for you? 3. Income from investment

It would be more beneficial on my part to adopt optional standard Answer: The foregoing income items shall be treated, for income tax
deduction. In optional standard deduction, the taxpayer is purposes, in the following manner: As for the entire income from
entitled up to 40% of deduction without the need of complying with tuition fees, the same shall be exempt from income tax. Income
substantiation requirement. On the other hand, itemized earned by a non-stock, non-profit educational institution from
deductions, the deduction can be fully utilized provided that the educational related activities such as tuition fee, shall be exempt from
taxpayer will be able to comply with all the requisites of each tax. It is immaterial as to whether the income earned from
itemized deductions. In the case, the 40% of 2.5 million is already tuition fee was used for other activities related or not related to
one million pesos worth of deductions, thus, if I opted to elect educational purposes. The income earned from tuition fee acquires
its exemption for being sourced from educational related activities regular basis or not. Thus, his holiday pay, overtime pay, night shift
and not from its usage. differential pay, rice allowance, 13th month pay, and christmas
bunos shall be exempt from income tax.
As for the income from lease, the same may be exempt from tax.
Income earned by a non-stock, non-profit educational institution
from activities not directly related to educational activities can still be
exempt from income tax if said income is actually, directly, and Question: CIR denied the application of a TCC on the ground that it
exclusively used for educational purposes. In this case, the income failed to meet the post-audit requirement as suspensive condition
earned from the lease may be exempt from tax considering that said before the TCC could be used by the Soaring. On the other hand,
income is used for improvement of the facilities and laboratories of Soaring claim to be a buyer in good faith and for value and thus, it
the school which is considered as actually, directly, and exclusively should be allowed to avail of the TCC. Is Soaring correct?
used for educational purposes.
Yes. Tax credit certificate (TCC) is an undertaking of the government
As for the remaining income from investment, it may be exempt from to be creditable against any other internal revenue liabilities
income tax if it can be proven that the same is actually, directly, and which shall be valid from issuance to the buyer in good faith and for
exclusively used for educational purposes value. In the case, the application of the TCC acquired by
Soaring Eagle in good faith and for value cannot be denied without
Feedback ni sir: pag mag bibigay daw ng categorical answer, wag daw being violative of the due process clause of the Constitution.
mere “no” or yes” lang, dapat daw kumpleto. Example, The TCC is meant to be used as payment of any other internal
“no, the refund should not be allowed” revenue liabilities which bears the presumption of validity for being
an undertaking of the government particularly when issued to a
Question: buyer in good faith and for value. The post-audit requirement shall
big corporation has excess credit of 50 million from the year 2021. not be considered as suspensive condition before the TCC could be
In 2022, it incurred 30 million tax liability. Said liability was not paid used by the Soaring, to rule otherwise, the purpose of TCC will
by the big corporation alleging that it has 50 million worth of excess be defeated because any buyer in good faith and for value can no
credit. In 2023 it opted to refund the remaining unused excess credit longer rely on the effectivity of a TCC because of the fear that it
from the year 2021. Should the refund be allowed? could be denied if the suspensive condition of post-audit shall be
ruled upon against the taxpayer.
Answer. No, the refund should not be allowed.
Question: The congress enacted a tax law which imposes taxes on all
Excess credit already applied and carried over to the succeeding years income worldwide of all resident citizen, non resident citizen, and
or quarters can no longer be subject to refund as the resident alien. Will, a resident alien, is now subject to income tax for
option of carry-over with regard to the excess credit already applied all his income, sourced within and without. Will filed a case. Is it
and carried shall be irrevocable. going to prosper?

In the case, the excess credit of Big Corporation during the year 2021 Answer: No. The Congress, under the principle of residence, is
had already been applied and carried-over to 2022 tax liability. justified to impose income taxes for the income earned of all residents
whether citizen or alien and whether the income is sourced within or
The fact that the corporation did not pay the its 2022 tax aliability in outside the Philippines. The Congress, under the principle of
the amount of 30 million on the ground that it has 50 million excess residence for purposes of income tax, is justified in imposing the tax
credit in the year 2021 is an indication that the corporation applied by reason of the privity of any Philippine resident towards the
and carried over the excess credit from 2021 to its tax alibility for Philippine government. The latter is considered as partner of the
year 2022. resident in acquiring income sourced worldwide. The said resident
is also enjoying the protection being given by the Philippine
Considering that the Big Corporation already applied and carried- government in so far as his person, property and rights and thus, the
over its excess credit from 2021, the rule on irrevocability of option imposition of the income sourced world wide by a resident alien is
to carry-over has already set-in and thus can no longer be subject of justified. Therefore, I will not file a case for Will.
refund. Therefore, the action take by the Big corporation is Grader Feedback: N/A
wrong.
23
Question: the LGU of Quezon City imposes a Socialized Housing Tax
Question:FIT corporation sold lands, buildings, machineries and (SHT) primary for socialize housing projects, including acquisition of
equipment. The CIR theorized that all of these properties sold are property for human settlements and remove slum areas. Saint Paul
classified as capital assets which therefore be subject to capital gains Quezon City, a non-stock, non-profit educational institution, alleged
tax. that it should not be subject of the SHT as this is a real property tax
by nature and thus, it should be exempt by virtue of a constitutional
Answer: The theory of the BIR has no merit. For corporate taxpayer, mandate.
the sale of lands and buildings classified as capital asset shall be
subject to capital gains tax. However, machineries and equipment,
although real property by nature cannot be considered as real Answer: Yes. Saint Paul Quezon City can be held liable for SHT. The
property classified as capital asset subject of capital gains tax. In the exemption of a non-stock, non-profit educational institution pertains
case, the sale of the machineries of FIT corporation, for being only to exemption from paying real property tax for its real property
a corporate taxpayer, cannot be considered as real property classified actually, directly and exclusively used for educational purposes.
as capital asset subject to capital gains tax. The sale of the This exemption does not cover its liability from regulatory fees. In the
said machineries however may be subject to normal corporate tax. case, the SHT is considered as regulatory fee as the primary
Thus, the theory of BIR is wrong. purpose of the ordinance is to provide socialize housing projects,
including acquisition of property for human settlements. This is
regulatory by nature because it aims to remove slum areas which
would promote general welfare, safety and enjoyment as well as
Question: jonjon is a minimum wage earner who received the increase of the value of the resident's property. Thus, Saint Paul
following: holiday pay, overtime pay, night shift differential pay, rice Quezon City can be held liable for the SHT as the said non-stock,
allowance, 13th month pay, and Christmas bunos. Which of the non-profit educational institution enjoys no exemption from paying a
following is subject to income tax? regulatory fee.
Grader Feedback: N/A
None of the income of Jonjon shall be taxable. A minimum wage
earner is income tax exempt from all of his income whether
received regularly or not. Jonjon, a minimum wage earner, shall be
income tax exempt from all his income whether received in a