JLo Cases Flashcards
Is COMELEC covered by PD242 in settlement or adjudication of disputes/claims?
(PRESCRIBING THE PROCEDURE FOR ADMINISTRATIVE SETTLEMENT OR ADJUDICATION OF DISPUTES, CLAIMS AND CONTROVERSIES BETWEEN OR AMONG GOVERNMENT OFFICES, AGENCIES AND INSTRUMENTALITIES, INCLUDING GOVERNMENT-OWNED OR CONTROLLED CORPORATIONS, AND FOR OTHER PURPOSES)
PD No. 242 is not the law applicable for the settlement or adjudication of disputes, claims, and controversies between a constitutional office, like the COMELEC.
PD No. 242 specifically excluded constitutional offices or agencies in its coverage
Does the CTA has exclusive appellate jurisdiction to decide the dispute between the COMELEC and the BIR on the deficiency tax assessment.
Yes, Section 7 of Republic Act No. 9282 (Expanded the jurisdiction of the Court of Tax Appeals)
Sec. 7. Jurisdiction. - The CTA shall exercise:
(a) Inclusive appellate jurisdiction to review by appeal, as herein provided:
(1) Decisions of the Commissioner of Internal Revenue in cases involving disputed assessments, refunds of internal revenue taxes,***
What are the primary purposes of withholding tax?
(1) to provide taxpayers a. convenient manner to meet their probable income tax liability;
(2) to ensure the collection of income tax which can otherwise be lost or substantially reduced through failure to file the corresponding returns; and
(3) to improve the government’s cash flow.
Simply put, withholding tax is intended to facilitate the collection of income tax. Therefore, unless the income recipient is exempt from income tax, the payor is generally required to deduct, and withhold EWT on income payments made
Is the Government agencies exempt from withholding taxes?
No. Withholding tax system embraces not only private individuals, organizations and corporations, but also covers organizations exempt from income tax, including the Government of the Philippines, its agencies, instrumentalities, and political subdivisions.
What are the conditions to qualify for VAT zero-rating, Section 108 (B)(2)?
First, the services rendered should be other than “processing, manufacturing or repacking of goods;”
Second, the services are performed in the Philippines;
Third, the service-recipient is (a) a person engaged in business conducted outside the Philippines; or (b) a non-resident person not engaged in a business which is outside the Philippines when the services are performed; and,
Fourth, the services are paid for in acceptable foreign currency inwardly remitted and accounted for in conformity with BSP rules and regulations.
What are the conditions for sales to a non-resident foreign corporation to qualify for zero-rating?
(1) that their client was established under the laws of a country, not the Philippines or, simply, is not a domestic corporation; and
(2) that it is not engaged in trade or business in the Philippines.
To be sure, there must be sufficient proof of both of these components:
- not only that the clients are foreign corporations,
- not doing business in the Philippines.
What are the condition under Section 112(A), NIRC before refund can be made?
(a) the taxpayer must be VAT-registered;
(b) the sale
must be zero-rated or effectively zero-rated;
( c) apply for refund within two (2) years after the close of the taxable quarter when the sales were made;
(d) apply for the issuance of a TCC or refund of creditable input tax due or paid attributable to such sales except transitional input tax.
What is the nature of tax refunds?
While tax refunds are in the nature of tax exemptions and are construed strictissimi juris against the taxpayer, tax statutes shall be construed strictly against the taxing authority and liberally in favor of the taxpayer, for taxes, being burdens, are not to be presumed beyond what the statute expressly and clearly declares.
Can refund be denied by failing to keep subsidiary journals and the filing of monthly value-added tax (VAT) declarations?
While the tax law requires mandatory compliance with the keeping of subsidiary journals and the filing of monthly value-added tax (VAT) declarations, the Court will not deny the request for refund on the sole basis that the taxpayer failed to comply with these requirements when the law does not provide for its compliance by the taxpayer to be entitled for refund.
The Court may not construe a statute that is free from doubt; neither can we impose conditions or limitations when none is provided for.
(Commissioner vs PHILEX MINING CORPORATION GR230016)
What is the “Cross Border Doctrine” of the VAT System?
Cross Border Doctrine - No value-added tax shall form part of the cost component of products which are destined for consumption outside of the territorial border of the Philippines.
This principle is achieved through the application of VAT zero-rating products exported from the Philippines to foreign countries.
When are sales made to a BOI-registered buyer export sales subject to the zero percent rate?
Sales made to a BOI-registered buyer are export sales subject to the zero percent rate if the following conditions are met:
(1) the buyer is a BOI-registered manufacturer/producer; (2) the buyer’s products are 100% exported; and
(3) the BOI certified that the buyer exported 100% of its products.
For this purpose, the BOI Certification is vital for the seller-taxpayer to avail of the benefits of zero-rating.
The certification is evidence that the buyer exported its entire products and shall serve as authority for the seller to claim for refund or tax credit.
When can exportation of goods on consignment deemed export sales?
The exportation of goods on consignment shall not be deemed export sales until:
1. the export products consigned are in fact sold by the consignee;
2. Provided, finally, that sales of goods, properties or services made by a VAT-registered supplier to a BOI-registered manufacturer/producer whose products are 100% exported are considered export sales.
A certification to this effect must be issued by the Board of Investment (BOI) which shall be good for one year unless subsequently re-issued by the BOI.
(Commissioner vs. Filminera Resources GR 236325)
Tax Remedies
What should contain in a Notice of Assessment in cases where the taxing authority find that correct taxes, fees, or charges have not been paid?
Section 195 of the Local Government Code;
he shall issue a notice of assessment stating the
1. nature of the tax, fee, or charge,
2. the amount of deficiency,
3. the surcharges, interests and penalties.
What is the purpose of the written Notice of Assessment where the taxing authority find that correct taxes, fees, or charges have not been paid?
- To officially made aware of the pending tax liability,
- should be sufficiently informative to apprise the taxpayer the legal basis of the tax.
- To aid the taxpayer in making a reasonable protest, if necessary
Merely notifying the taxpayer of his or her tax liabilities without details or particulars is not enough.
What should the final assessment notice provides?
A final assessment notice provides for the amount of tax due with a demand for payment. This is to determine the amount of tax due to a taxpayer.
However, Due process requires that taxpayers be informed in writing of the facts and law on which the assessment is based in order to aid the taxpayer in making a reasonable protest.
