it is important to determine if the tax exemption granted to a

taxpayer specifically includes the indirect tax which is shifted to him as part
of the purchase price, otherwise it is
presumed that the tax exemption embraces only those taxes for which the buyer is
directly liable. Since RA 7082 did not
specifically include indirect taxes in the exemption granted to PLDT, the latter
cannot claim exemption from VAT, advance
sales tax and compensating tax.
7.The clause in lieu of all taxes in Section 12 of RA 7082 is immediately followed
by the qualifying clause on this
franchise or earnings thereof , suggesting that the exemption is limited to taxes
imposed directly on PLDT since taxes
pertaining to PLDT s franchise or earnings are its direct liability. Accordingly,
indirect taxes, not being taxes on PLDT s
franchise or earnings, are not included in the exemption provision.
As a rule, intangibles follow the person (mobilia sequuntur personam). Hence, in
tangibles are taxable in the place
where their owner may be domiciled.
two taxes must be imposed on
the same subject matter, for the same purpose, by the same taxing authority, wit
hin the same jurisdiction, during
the same taxing period; and they must be of the same kind or character.
First, the taxes herein are imposed on two different subject matters. A tax base
d on receipts is a tax on
business rather than on the property; hence, GRT is an excise rather than a prop
erty tax. It is not an income tax,
unlike the FWT.
? FWT = passive income generated in the form of interest on deposits and yield o
n deposit substitutes.
? GRT = the privilege of engaging in the business of banking.
? Second, although both taxes are national in scope because they are imposed by
the same taxing authority the
national government under the Tax Code and operate within the same Philippine juri
sdiction for the same
purpose of raising revenues, the taxing periods they affect are different.
? FWT = deducted and withheld as soon as the income is earned, and is paid after
every calendar quarter
in which it is earned.
? GRT = neither deducted nor withheld, but is paid only after every taxable quar
ter in which it is earned.
? Third, these two taxes are of different kinds or characters.
? FWT = an income tax subject to withholding.
? GRT = percentage tax not subject to withholding.
In short, there is no double taxation, because there is no taxing twice, by the
same taxing authority, within the same
jurisdiction, for the same purpose, in different taxing periods, some of the pro
perty in the territory. Subjecting interest
income to a 20% FWT and including it in the computation of the 5% GRT is clearly
not double taxation.
Final Withholding tax is classified as an income tax while the Gross Receipts Ta
x is classified as a business tax.
There is no double taxation if the law imposes different taxes on the same busin
ess, income or property.
The constitution allows subjecting the same income or receipt to an income tax a
nd other types of tax. As such, it may
also be subject to a Value Added Tax and Excise Tax. If the tax law follows the
constitutional rule of uniformity thereby
making all income, business or property of the same class taxable at the same ra
te, then the taxation of the same income,
business or property twice is valid.
the Tax Treaty should
apply only if the taxes imposed upon royalties in the RP-US Tax Treaty and in th
e RP-Germany Tax Treaty are paid under
similar circumstances. This would mean that private respondent must prove that t
he RP-US Tax Treaty grants similar tax
reliefs to residents of the United States in respect of the taxes imposable upon
royalties earned from sources within the
Philippines as those allowed to their German counterparts under the RPGermany Ta
x Treaty.
The said provision, although referring only to purchases made by the WHO, indica
tes a clear
intention to exempt the WHO from indirect taxation.
? The 3% contractor s tax is within the purview if the taxes exempted by the Host Ag
reement and
should be viewed as a form of indirect tax on the WHO, as the payment thereof or i
ts inclusion
in the bid price would have meant an increase in the construction of the buildin
g.
? Hence, WHO s exemption from indirect taxes implies Gotamco s exemption from contract
or s
tax.
Exemption claimed by the YMCA is expressly disallowed by the very wording of the
last paragraph of Section 27 of the NIRC which mandates
that the income of exempt organizations (such as the YMCA) from any of their pro
perties, real or personal, be subject to the imposed by the
same code.
? The phrase any of their activities conducted for profit does not qualify the w
ord properties. This makes income from the property of the
organization taxable, regardless of how that income is used, whether for profit
or for lofty non-profit purposes.
? Income is taxable regardless of where such income is derived and how it is use
d or disposed of.
YMCA is exempt from payment of property taxes, but not income tax on the rentals
from its properties.
The authority of the Minister of Finance (now the Secretary of Finance), in conj
unction with the Commissioner of
Internal Revenue, to promulgate all needful rules and regulations for the effect
ive enforcement of internal revenue laws
cannot be controverted. Neither can it be disputed that such rules and regulatio
ns, as well as administrative opinions and
rulings, ordinarily should deserve weight and respect by the courts. Much more f
undamental than either of the above,
however, is that all such issuances must not override, but must remain consisten
t and in harmony with, the law they seek
to apply and implement. Administrative rules and regulations are intended to car
ry out, neither to supplant nor to modify,
the law.
under Sec. 246 of the National Internal Revenue Code, rulings of the BIR may not
be given retroactive effect, if the same is
prejudicial to the taxpayer.