G.R. No. 46720, June 28, 1940.

FACTS:

Birdie Lillian Eye died in Los Angeles, California, the place of her alleged last residence and domicile. Among the properties she left was 35,000 shares of stock in the Benguet Consolidated Mining Company, a Philippine corporation.  Her will was duly admitted to probate in California. Wells Fargo was duly appointed trustee.

The CIR sought to subject the  shares of stock to the Philippine inheritance tax. 
Wells Fargo protested. It concedes that  (a) the Philippine inheritance tax is not a tax on property, but upon transmission by inheritance and  (b) intangibles, like the shares of stocks, their situs is in the domicile of the owner thereof, and, therefore, their trans­mission by death necessarily takes place under his domicil­iary laws.

FACTS:

On June 21, 1989, the petitioner received an assessment letter from the Commissioner of Internal Revenue for the payment of deficiency amusement tax amounted to P5,864,260.84.

Petitioner contested the assessment by filing a protest who denied the same by the Commissioner of Internal Revenue.

On January 8, 1990, petitioner filed a petition for review with the Court of Tax Appeals whom on December 24, 1993, dismissed petitioner’s petition, holding petitioner to pay P5,864,260.84 as deficiency amusement tax for the year 1987 plus 20% annual delinquency interest from July 22, 1989 pursuant to the provision of Sec.248 & 249

Petitioner presented a motion for reconsideration of the said decision but the same was denied by CTA. Petitioner appealed the CTA decision to the Court of Appeals, however, the CA affirmed CTA’s decision.

TOPIC:

VAT; Destination Principle And Cross Border Doctrine

Doctrines: 

• As a general rule, the VAT system uses the destination principle as a basis for the jurisdictional reach of the tax. Goods and services are taxed only in the country where they are consumed. Thus, exports are zero-rated, while imports are taxed.
• An exception to the destination principle; that is, for a zero percent VAT rate for services that are performed in the Philippines, “paid for in acceptable foreign currency and accounted for in accordance with the rules and regulations of the [BSP]

Topic:

Real and Local Property Taxation

Doctrine: 

Payment was made through error or mistake, in the honest belief that petitioner was liable, and therefore could not have been made under protest, but with complete voluntariness. In any case, a taxpayer should not be held to suffer loss by his good intention to comply with what he believes is his legal obligation, where such obligation does not really exist.