UNIVERSITY OF BAGUIO

SCHOOL OF LAW

COURSE OUTLINE
TAX 2
2018

II. VALUE ADDED TAX

A. Concept/Nature
Kapatiran v. Tan, GR NO. L-81311, June 30, 1988
Tolentino v. Secretary of Finance, August 25, 1994 (orig dec) and GR No.
115455, October 30, 1995 (Motion for Reconsideration)
ABAKADA Guro Party List v. Ermita, GR. No. 168056, September 1, 2005
CIR v. Magsaysay Lines, GR No. 146984, July 28, 2006
Philippine Acetylene v. CIR, August 17, 1967
CIR v. American Rubber, November 29, 1966
CIR v. John Gotamco and Sons, February 27, 1987
. Power Sector Assets and Liabilities Management
Corporation versus CIR, GR No. 198146 dated August 8, 2017.
(whether sale of power plants are subject to VAT; jurisdiction of
DOJ)

B. Characteristics/Elements of a VAT-Taxable transaction

C. Impact of tax

D. Incidence of tax

E. Tax credit method

F. Destination principle

G. Persons liable/VAT Person

H. VAT Exempt Person

For reporting – Discussion of old and new provisions (see Sec. 86 of RA No.
109863)

I. VAT on sale of goods or properties

Requisites of taxability of sale of goods or properties
Power Sector Assets and Liabilities Management Corporation versus CIR,
GR No. 198146 dated August 8, 2017. (whether sale of power plants are
subject to VAT; jurisdiction of DOJ)
-electric cooperatives now subject to VAT
See amendments in RA 10963, sec 33 – amending sec 108 of the NIRC

J. Zero-rated transactions
 Zero-rated sales of goods or properties, and effectively zero-rated sales of

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 goods or properties
 Zero-rated sale of services
See Amendment of NIRC sec 108 (B) by sec 33 of RA No. 10963
Cases:
Silicon Philippines, Inc. v. CIR, GR No. 172378, January 17, 2011
Microsoft Philippines, Inc. v. CIR, 644 SCRA 433
CIR v. Seksui Jushi Phils, Inc. GR No. 149671, July 21, 2006
Western Mindanao Power Corporation v. CIR, GR No. 181136,
June 13, 2012
Panasonic v. CIR, GR No. 178090, February 8, 2010
Hitachi v. CIR, GR No. 174212, October 20, 2010
CIR v. Manila Mining Corp., GR No. 153204, August 31, 2005
PAGCOR v. BIR, GR No. 172087, March 15, 2011
-Jurisdiction of DOJ over the case
-
See Amendments of SEC 108B, sec 33 of RA 10963
incl

K. Doctrine on Effectively Zero-rated sales –

CIR v. Acesite Hotel Corp., GR No. 147295, February 16, 2007

L. Transactions deemed sale

CIR v. Magsaysay Lines, GR No. 146984, July 28, 2006

M. VAT on Services
CIR v. Placerdome Tech Services (Phils), GR No. 164365, June 8, 2007
CIR v. American Express Phil Branch, GR No. 1526-0, June 29, 2005

N. Change or cessation of status as VAT-registered person

1. Subject to VAT
2. Not subject to VAT

O. VAT on importation of goods

P. VAT on sale of service and use or lease of properties

Q. VAT exempt transactions – Section 109, NIRC

1. Requisites
2. Exempt transaction, enumerated
Pawnshops-Tambunting Pawnshop Inc v. CIR, GR No. 179085,
January 21, 2010
See sec 34 of RA 10963 amending sec 109 (D)

R. Zero-rated sales and VAT exempt sales distinguished

For reporting. Discuss amendments and old provisions

S. Input tax and output tax, defined

T. Sources of input tax

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U. Transitional Input Tax
Fort Bonifacio Development Corporation v. CIR, GR Nos. 158885 &
170580, April 2, 2009
Fort Bonifacio Development Corporation vs. Commissioner of Internal
Revenue and Revenue District Officer, etc., G.R. No. 173425. January
22, 2013.

V. Tax credits
CIR V. Eastern Telecommunications Phil, Inc., GR No. 163835, July 7,
2010
San Roque Power Corp v. CIR, GR No. 180345, November 25, 2009

See amendments to sec 110 by sec 35 of RA No. 10963

W. Determination of output/input tax; VAT payable; excess input tax credits

X. Substantiation of input tax credits

Y. Refund or tax credit of excess input tax

See sec 36 of RA 10963 amending some parts of sec 112 of the NIRC

Z. Invoicing requirements

Aa. Refund of VAT – Section 112 v. Sec 229, NIRC

Nippon Express Phils. Corporation v. Commissioner of Internal Revenue,

G.R. No. 185666,
4 February 2015
Silicon Philippines, Inc. v. Commissioner of Internal Revenue – G.R.
No173241, 25 March 2015
Eastern Telecommunications Philippines, Inc. v. CIR, G.R. No. 183531,
25 March 2015
Northern Mindanao Power Corporation v. CIR- G.R. No. 185115, 18
February 2015
Panay Power Corporation v. CIR- G.R. No. 203351, 21 January 2015
Cargill Philippines v. CIR – G.R. No. 203774, 11 March 2015
Philippine National Bank v. CIR – G.R. No. 206019; 18 March 2015
Commisioner of Internal Revenue Vs. Mirant Pagbilao Corporation, G. R.
No.180434, January 20, 2016
Silicon Philippines, Inc. Vs. Commissioner of Internal Revenue, GR No.
182737, March 2, 2016

For reporting. See sec 31

Bb. Filing of return and payment

See Section 37 of RA No. 10963 amending setion 114 of NIRC

Cc. Withholding of final VAT on sales to government

CIR v. Ironcon Builders and Development Corp., GR No. 180042,
February 8, 2010

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 See Section 37 of RA No. 10963 amending setion 114 of NIRC

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