THE COLLECTOR OF INTERNAL REVENUE, petitioner, vs. ANTONIO CAMPOS RUEDA, respondent.. FACTS: In January 1955, Maria Cerdeira died in Tangier, Morocco (an international zone [foreign country] in North Africa). At the time of her death, she was a Spanish citizen and was a resident of Tangier. She however left some personal properties (shares of stocks and other intangibles) in the Philippines. The designated administrator of her estate here is Antonio Campos Rueda. In the same year, the Collector of Internal Revenue (CIR) assessed the estate for deficiency tax amounting to about P161k. Campos Rueda refused to pay the assessed tax as he claimed that the estate is exempt from the payment of said taxes pursuant to section 122 of the Tax Code which provides: That no tax shall be collected under this Title in respect of intangible personal property (a) if the decedent at the time of his death was a resident of a foreign country which at the time of his death did not impose a transfer tax or death tax of any character in respect of intangible person property of the Philippines not residing in that foreign country, or (b) if the laws of the foreign country of which the decedent was a resident at the time of his death allow a similar exemption from transfer taxes or death taxes of every character in respect of intangible personal property owned by citizens of the Philippines not residing in that foreign country. Campos Rueda was able to prove that there is reciprocity between Tangier and the Philippines. However, the CIR still denied any tax exemption in favor of the estate as it averred that Tangier is not a state as contemplated by Section 22 of the Tax Code and that the Philippines does not recognize Tangier as a foreign country. ISSUE: Whether or not Tangier is a state. HELD: Yes. For purposes of the Tax Code, Tangier is a foreign country. A foreign country to be identified as a state must be a politically organized sovereign community independent of outside control bound by penalties of nationhood, legally supreme within its territory, acting through a government functioning under a regime of law. The stress is on its being a nation, its people occupying a definite territory, politically organized, exercising by means of its government its sovereign will over the individuals within it and maintaining its separate international personality. Further, the Supreme Court noted that there is already an existing jurisprudence (Collector vs De Lara) which provides that even a tiny principality, that of Liechtenstein, hardly an international personality in the sense, did fall under the exempt category provided for in Section 22 of the Tax Code. Thus, recognition is not necessary. Hence, since it was proven that Tangier provides such exemption to
personal properties of Filipinos found therein so must the Philippines honor the exemption as provided for by our tax law with respect to the doctrine of reciprocity.
Suzette Nicolas vs Alberto Romulo
On the 1st of November 2005, Daniel Smith committed the crime of rape against Nicole. He was convicted of the said crime and was ordered by the court to suffer imprisonment. Smith was a US serviceman convicted of a crime against our penal laws and the crime was committed within the countrys jurisdiction. But pursuant to the VFA, a treaty between the US and Philippines, the US embassy was granted custody over Smith. Nicole, together with the other petitioners appealed before the SC assailing the validity of the VFA. Their contention is that the VFA was not ratified by the US senate in the same way our senate ratified the VFA. ISSUE: Is the VFA void and unconstitutional & whether or not it is self-executing. HELD: The VFA is a self-executing Agreement because the parties intend its provisions to be enforceable, precisely because the VFA is intended to carry out obligations and undertakings under the RP-US Mutual Defense Treaty. As a matter of fact, the VFA has been implemented and executed, with the US faithfully complying with its obligation to produce Smith before the court during the trial. The VFA is covered by implementing legislation inasmuch as it is the very purpose and intent of the US Congress that executive agreements registered under this Act within 60 days from their ratification be immediately implemented. The SC noted that the VFA is not like other treaties that need implementing legislation such as the Vienna Convention. As regards the implementation of the RP-US Mutual Defense Treaty, military aid or assistance has been given under it and this can only be done through implementing legislation. The VFA itself is another form of implementation of its provisions.