COMMISSIONER OF INTERNAL REVENUE vs. HAWAIIAN-PHILIPPINE COMPANY G.R. No.

L-16315
Facts: Hawaiian-Philippine Company, a corporation duly organized in accordance with law, is operating a sugar
central in the City of Silay, Occidental Negros. It produces centrifugal sugar from sugarcane supplied by
planters. The processed sugar is divided between the planters and the petitionerand thereafter is deposited in
the warehouses of the latter.For the sugar deposited by the planters, the petitioner issues the corresponding
warehouse receipts of "quedans". It does not collect storage charges on the sugar deposited in its warehouse
during the first 90 days period counted from the time it is extracted from the sugarcane. Upon the lapse of the
first ninety days and up to the beginning of the next milling season, it collects a fee of P0.30 per picul a month.
Henceforth, if the sugar is not yet withdrawn, a penalty of P0.25 per picul or fraction thereof a month is
imposed.
Upon investigation conducted by the Bureau, it was found that during the years 1949 to 1957, the petitioner
realized from collected storage fees a total gross receipts of P212,853.00, on the basis of which the Bureau
determined the Co.s liability for fixed and percentage taxes, 25% surcharge, and administrative penalty in the
aggregate amount of P8,411.99.
The Co. deposited the amount with the Office of the City Treasurer of Silay. Later, it filed its petition for review
before the CTA. The Co. disclaims liability, alleging that it is not engaged in the business of storing its planters'
sugar for profit; that the maintenance of its warehouses is merely incidental to its business of manufacturing
sugar and in compliance with its obligation to its planters. The Co. contend that the imposition of the tax
under consideration would amount to double taxation.
Issue: Whether or not petitioner is a warehouseman liable for the payment of the fixed and percentage taxes.
Whether or not there is Double Taxation.
Held: SEC. 182. of the Tax Code provides that unless otherwise provided every person engaging in a business
on which the percentage tax is imposed shall pay a fixed annual tax of twenty pesos. SEC. 191 also provides
that warehousemenshall pay a tax equivalent to THREE PERCENTUM of their gross receipts. A warehouseman
has been defined as one who receives and stores goods of another for compensation. For one to be
considered engaged in the warehousing business, therefore, it is sufficient that he receives goods owned by
another for storage, and collects fees in connection with the same. It is clear from the facts of the case that,
after manufacturing the sugar of its planters, respondent stores it in its warehouses and issues the
corresponding "quedans" to the planters who own the sugarand collects storage fees upon the expiration of
the 90 day period. The fact that respondent's warehousing business is carried in addition to, or in relation
with, the operation of its sugar central is not sufficient to exempt it from payment of the tax prescribed in the
legal provisions quoted. Under Section 178 of the National Internal Revenue Code, the tax on business is
payable for every separate or distinct establishment or place where business subject to the tax is conducted,
and one line of business or occupation does not become exempt by being conducted with some other
business or occupation for which such tax has been paid.

Lastly, respondent's contention that the imposition of the tax under consideration would amount to double
taxation is likewise without merit. As is clear from the facts, respondent's warehousing business, although
carried on in relation to the operation of its sugar central, is a distinct and separate business taxable under a
different provision of the Tax Code. There can be no double taxation where the State merely imposes a tax on
every separate and distinct business in which a party is engaged.
COMMISSIONER OF INTERNAL REVENUE vs. PROCTER & GAMBLE PHILIPPINE MANUFACTURING
CORPORATION and THE COURT OF TAX APPEALS (G.R. No. L-66838 December 2, 1991)

FACTS: Procter and Gamble Philippines declared dividends payable to its parent company and sole
stockholder, P&G USA. Such dividends amounted to Php 24.1M. P&G Phil paid a 35% dividend withholding tax
to the BIR which amounted to Php 8.4M It subsequently filed a claim with the Commissioner of Internal
Revenue for a refund or tax credit, claiming that pursuant to Section 24(b)(1) of the National Internal Revenue
Code, as amended by Presidential Decree No. 369, the applicable rate of withholding tax on the dividends
remitted was only 15%.

ISSUE: Whether or not P&G Philippines is entitled to the refund or tax credit.

HELD: YES. P&G Philippines is entitled. Sec. 24 (b) (1) of the NIRC states that an ordinary 35% tax rate will be
applied to dividend remittances to non-resident corporate stockholders of a Philippine corporation. This rate
goes down to 15% only if the country of domicile of the foreign stockholder corporation shall allow such
foreign corporation a tax credit for taxes deemed paid in the Philippines, applicable against the tax payable
to the domiciliary country by the foreign stockholder corporation. However, such tax credit for taxes deemed
paid in the Philippines MUST, as a minimum, reach an amount equivalent to 20 percentage points which
represents the difference between the regular 35% dividend tax rate and the reduced 15% tax rate. Thus, the
test is if USA shall allow P&G USA a tax credit for taxes deemed paid in the Philippines applicable against
the US taxes of P&G USA, and such tax credit must reach at least 20 percentage points. Requirements were
met.
COMPANIA GENERAL DE TABACOS DE FILIPINAS -appellee VS CITY OF MANILA -appellant

FACTS: City of Manila went to Court praying for the reversal of the decision of the Court of First Instance (CFI)
of the City of Manila (hereinafter referred to as the City) ordering herein appellant to refund the overpayment
of the appellee (hereinafter referred to as the Tabacalera) representing the payment of wholesale and retail
tax amounting to 15,205 pesos to the City for the period 3 rd quarter of 1954 to 2nd quarter of 1957 pursuant to
City ordinances. A certain Sycip& Coy accounting firm issued an opinion, upon request by the city treasurer,
saying that the companies engaged in wholesale and retail of liquor and other intoxicating beverages are no
longer required to pay other form of taxes levied by the City Government upon payment of license fee
imposed by other city ordinance. Tabacaleras argument claim for refund was hinged upon this opinion of the
aforesaid accounting firm that license is entirely separate from sales revenue tax and this would constitute
double taxation. The City refused to heed on the ground that the City Ordinances covered all merchandise,
including liquor, as defined by the Philippines Internal Revenue Code.

ISSUES:
1. WON license is the same with tax.
2. WON the payment of wholesale and retail tax after license had been paid constitute double taxation.

HELD:
1. Tax refers to all forms of exaction imposed by the government in order to raise revenue. However,
license is a legal concept which is quite distinct for taxation imposed by the government in the exercise
of its police power for purposes of regulation while tax is imposed in the exercise of taxation power for
revenue generation.
2. It is settled that both license fee and tax may be imposed to the same business, occupation, selling any
article, this not being a violation of the rule against double taxation.
VICTORIAS MILLING CO., INC. vs MUN. OF VICTORIAS, PROVINCE OF NEGROS OCCIDENTAL, G.R. No. L-21183
(September 27, 1968)

FACTS: The Municipal Council of the Municipal of Victoria, Negros Occidental approved Ordinance No. 1, series
of 1956, which amends Ordinance No. 25, S. 1953 and Ordinance No. 18, S. 1947. separately imposing license
taxes on operators of sugar centrals and sugar refineries. With respect to sugar centrals, the ordinance
increases the rates of license taxes; and as to sugar refineries, it increases the rates of license taxes as well as
the range of graduated schedule of annual output capacity. The ordinance was enacted pursuant to the taxing
power of the Municipal Council as conferred by Commonwealth Act 472, which provides that, A municipal
council or municipal district council shall have authority to impose municipal license taxes upon persons
engaged in any occupation or business, or exercising privileges in the municipality or municipal district, by
requiring them to secure licenses at rates fixed by the municipal council xxx

Example: Sugar central with mill having an annual output capacity of not less than 50,000 piculs of centrifugal
sugar - annual municipal license tax is P1,000.00. The schedule of taxes continues with P2,000.00 progressively
upward in twelve other grades until an output capacity of 1,500,001 piculs or more shall have been reached
(For this, the annual tax is P40,000.00)

Sugar refinery with mill having an annual output capacity of not less than 25,000 bags of 100 lbs. of refined
sugar- annual municipal license tax is P1,000.00. 25,001 bags to 75,000 bags of 100 lbs- annual municipal
license tax is P1,500.00 The ceiling placed at a capacity of 1,750,001 bags or more- the annual municipal
license tax is P40,000.00..

Victorias Milling Co., Inc. which has sugar central and sugar refinery located in the Municipality of Victorias,
affected by the said Ordinance, sought to declare the same for being null and void and prayed for the refund
of all license taxes it paid and to be paid under protest.

Victorias Milling contended that the ordinance (1) exceeds the amount fixed in Provincial Circular issued by
the Finance Department, (2) it is discriminatory since it singles out plaintiff which is the only operator of a
sugar central and sugar refinery in the said Municipality, (3) it constitutes double taxation, and (4) the national
government pre-empted the field of taxation with respect to sugar centrals or refineries. The trial court,
declared that since the ordinance in question refers to license taxes or fees and that it is settled that a license
tax should be limited to the cost of licensing, regulating and surveillance, it ruled that said license taxes in
dispute are unreasonable and held that If the Municipality has the power to tax the plaintiff for purposes of
revenue, it may do so by proper municipal legislation, but not in the guise of a license tax, and rendered
Ordinance No. 1, S. 1956 as invalid.

ISSUE: Whether or not there is double taxation. (Reasoning by the Victorias Milling: in computing the amount
of taxes to be paid by Sugar Refinery, the cost of the raw sugar coming from the sugar central is not
deductedthus, they are taxed twice on the raw sugar)

HELD: There is no double taxation. Double taxation has been otherwise described as "direct duplicate
taxation." For double taxation to exist, "the same property must be taxed twice, when it should be taxed but
once." Double taxation has also been "defined as taxing the same person twice by the same jurisdiction for the
same thing." In the case at bar, the two taxes cover two different objects. Section 1 of the ordinance taxes a
person operating sugar centrals or engaged in the manufacture of centrifugal sugar. While under Section 2,
those taxed are the operators of sugar refinery mills. One occupation or business is different from the other.
Moreover, the disputed taxes are imposed on occupation or business. Both taxes are not on sugar. The
amount thereof depends on the annual output capacity of the mills concerned, regardless of the actual sugar
milled.
EUSEBIO VILLANUEVA, ET. AL. VS. CITY OF ILOILO G.R. NO. L-26521, DECEMBER 28, 1968

FACTS: With the passage of the Local Autonomy Act, the municipal board of the City of Iloilo
enacted Ordinance No. 11 series of 1960 which imposed license taxes on persons engaged in
the business of operating tenement houses. By virtue of the ordinance in question, the City
collected from the owners of tenement houses namely the spouses Eusebio Villanueva and
Remedios S. Villanueva the sum of P 5,824.30 and appellees Pio Sian Melliza, Teresita S.
Topacio and Remedios S. Villanueva the sum of P 1,317.00 all for the years 1960 to 1964. The
owners filed complaints against the City praying that the ordinance be declared invalid for
being ultra vires and unconstitutional, and that the City be ordered to refund the amounts
collected from them. The lower court condemned the ordinance as constituting not only
double but treble taxation because owners have to pay real estate taxes and income taxes as
provided for in the National Internal Revenue Code as real estate dealers beside the tenement
tax imposed under said ordinance.
ISSUE: Whether or not Ordinance No. 11 of the City of Iloilo should be void for constituting
double taxation.
HELD: No. While plaintiffs are taxable under the provisions of the National Internal Revenue
Code as real estate dealers and taxable under the ordinance in question, the argument against
double taxation may not be invoked. The same tax may be imposed by the national
government as well as the local government. There is nothing inherently obnoxious in the
exaction of license fees or taxes with respect to the same occupation, calling or activity by
both the State and a political subdivision thereof. The contention that the plaintiffs-appellees
are doubly taxed because they are paying the real estate taxes and the tenement tax imposed
by the ordinance in question, is also devoid of merit. It is a well-settled rule that a license tax
may be levied upon a business or occupation although the land or property used in connection
therewith is subject to property tax. The State may collect an ad valorem tax on property used
in a calling, and at the same time impose a license tax on that calling, the imposition of the
latter kind of tax being in no sense a double tax. In order to constitute double taxation in the
objectionable or prohibited sense the same property must be taxed twice when it should be
taxed but once; both taxes must be imposed on the same property or subject-matter, for the
same purpose, by the same State, Government, or taxing authority, within the same
jurisdiction or taxing district, during the same taxing period, and they must be the same kind or
character of tax. It has been shown that a real estate tax and the tenement tax imposed by the
ordinance, although imposed by the same taxing authority, are not of the same kind or
character. At all events, there is no constitutional prohibition against double taxation in the
Philippines. It is something not favored, but is permissible, provided some other constitutional
requirement is not thereby violated, such as the requirement that taxes must be uniform.
Davao Light and Power v. Commissioner of Customs L-28902, March 29,
1972
Facts: The Davao Light & Power Co. Inc. (Davao Light) is the grantee of a
legislative franchise to install, operate and maintain an electric light, heat
and power plant in the city of Davao for a period of 50 years. On two
different occasions in 1962, it imported electrical supplies, materials and
equipment for installation in its power plan. Davao Light paid under
protest, customs duties and taxes in the total amount of P9,928.00. The
Collector of Customs ruled unfavorable on the protest and denied its
claim for refund of the taxed and duties. The Commissioner of Customs
sustained the action of the Collector. Davao Light went to the Court of
Tax Appeals, maintaining its claim to exemption from the taxes and
duties as similarly given to NAPOCOR (NPC). CTA affirmed the ruling of
the Customs Commissioner. Hence, the petition.
Issue: Whether or not petitioner can lay claim to the enjoyment of the
tax exemption benefits given to NPC because said corporation happened
to be operating a power plant in the same locality?
Ruling: No. Petitioner cannot lay claim to the enjoyment of tax
exemption benefits. The provision of Sec. 2 of RA 358 granting tax
exemption to the NPC, taken in the light of the existing legislation
affecting the NPC, notably RA 358 must be construed as intended to
benefit only the NPC. Exemption from taxation is never presumed; for
tax exemption to be recognized, the grant must be clear and expressed;
it cannot be made to rest on vague implications. The possession by
petitioner of a permit to operate an electric plant in Davao City does not
entitle it to the same exemption privileges enjoyed by another operator
without an express provision of the law to that effect.
SURIGAO CONSOLIDATED MINING CO. vs. COLLECTOR OF INTERNAL REVENUE
FACTS: Surigao Consolidated Mining Company had its principal office in the City of Iloilo, and
was operating its mining concessions in Mainit, Surigao. Pursuant to section 246 of the Internal
Revenue Code, it filed a bond and had been regularly filing its returns for minerals removed
from its mines during each calendar quarter and paying ad valorem tax thereon within 20 days
after the close of every quarter. In each case, computation of the ad valorem tax was based on
the market value of the minerals set forth in the returns. Due to the interruption of the
communications due to the outbreak of the war, the principal office of Surigao Consolidated
lost contact with its mines and never received the production reports for the fourth quarter of
1941. In order to avoid incurring any tax penalty, it deposited a check amount of P 27,000.00
payable to and indorsed in favor of the City Treasurer (of Iloilo) in payment of the ad
valorem taxes for the fourth quarter of 1941. After the termination of the war,
Commonwealth Act No. 722 was enacted, which provided for the filing of returns for minerals
removed during the last quarter of 1941 up to December 31, 1945 and the payment of ad
valorem tax on said minerals to February 28, 1946. Surigao Consolidated in its final submission
filed its tax returns with a request for refund amounting to P 17,051.14 for the paid taxes
during the war, invoking Republic Act No. 81 which provided for tax condonation of unpaid
taxes during the course of the war. It argues that since the law condones the taxes due from
taxpayers who failed to pay their taxes, it would be unfair to deny this benefit to those
taxpayers who had been prompt in paying theirs. CIR denied the request for the refund on the
ground that the money already paid as ad valorem tax was legally due to the Government. The
Court of Tax Appeals, likewise rendered its decision denying the claim for refund.
ISSUE: Is Surigao Consolidated entitled to the refund of ad valorem tax?
HELD: No, Surigao Consolidated is not entitled to the refund. R.A. 81 clearly refers to the
condonation of unpaid taxes only. The condonation of a tax liability is equivalent and is in the
nature of a tax exemption. Being so, it should be sustained only when expressed in explicit
terms, and it cannot be extended beyond the plain meaning of those terms. It is the universal
rule that he who claims an exemption from his share of the common burden of taxation must
justify his claim by showing that the Legislature intended to exempt him by words too plain to
be mistaken. Petitioner failed to point any portion of the law that explicitly provides for a
refund of those taxpayers who had paid their taxes on the items and under circumstances
mentioned in the RA 81. Thus, Surigao Consolidated is not entitled to such exemption.