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[G.R. No. L-13250. October 29, 1971.] THE COLLECTOR OF INTERNAL RE EN!E, "et#t#o$er, %&. ANTONIO CA'(O) R!

E*A, re&"o$+e$t. FACT), Respondent Antonio Campos Rueda, administrator of the estate of the deceased Doa Maria de la Estrella Soriano Vda. de Cerdeira, was assessed by the Collector of nternal Re!enue "C R# the sum of $%&%,'().*+ as deficiency estate and inheritance ta,es, includin- interests and penalties, on the transfer of intan-ible personal properties situated in the $hilippines and belon-in- to the decedent, who is a Spanish national and was a resident of .an-ier, Morocco from %*/% up to her death on 0anuary 1, %*++. Respondent re2uested that the said intan-ible personal properties be e,empted from ta,es, but the C R denied the same on the -round that Section %11 of the 3ational nternal Re!enue Code is not reciprocal to the law of .an-ier, which was moreo!er a mere principality, not a forei-n country. .he matter was ele!ated to the Court of .a, Appeals "C.A#. .he C.A ruled a-ainst the contention of the C R and held that the e,pression 4forei-n country4, used in the last pro!iso of Section %11 of the 3ational nternal Re!enue Code, refers to a -o!ernment of that forei-n power which, althou-h not an international person in the sense of international law, does not impose transfer or death ta,es upon intan-ible personal properties of our citi5ens not residin- therein, or whose law allows a similar e,emption from such ta,es. t is, therefore, not necessary that .an-ier should ha!e been reco-ni5ed by our 6o!ernment in order to entitle the petitioner to the e,emption benefits of the last pro!iso of Section %11 of our .a, Code. I))!E, 7hether or not the ac2uisition of an international personality must be satisfied by .an-ier as a 8forei-n country8 to fall within the e,emption of Section %11 of the 3ational nternal Re!enue Code. HEL*, .he Court of .a, Appeals answered the 2uestion in the ne-ati!e, to which the Supreme Court affirmed. Section %11 of our .a, Code does not re2uire that the 8forei-n country8 should possess an international personality to come within its terms. .he fact that the laws of .an-ier do not impose transfer or death ta,es upon intan-ible personal properties of our citi5ens not residin- therein, entitles to a reciprocal e,emption similar properties belon-in- to the decedent who, at the time of her death, resides in .an-iers, no matter that the latter country does not possess international personality in the traditional sense. n Collector of nternal Re!enue !s. De 9ara "%:1 $hil. '%/ ;%*+'<#, it was specifically held by us= 8Considerin- the State of California as a forei-n country in relation to Section %11 of our .a, Code we belie!e and hold, as did the .a, Court that the Ancilliary Administrator is entitled to e,emption from the inheritance ta, on the intan-ible personal property found in the $hilippines.8 .here can be no doubt that California as a state in the American >nion was lac?in- in the alle-ed re2uisite of international personality. 3onetheless, it was held to be a forei-n country within the meanin- of Section %11 of the 3ational nternal Re!enue Code. E!en prior to the De 9ara rulin-, this Court did commit itself to the doctrine that e!en a tiny principality, that of 9iechtenstein, hardly an international personality in the traditional sense, did fall under this e,empt cate-ory.

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