Double Taxation; Methods of Avoiding DTouble Taxation

TAXATION QUESTION 1997

What are the usual methods of avoiding the occurrence of double taxation?

SUGGESTED ANSWER:

The usual methods of avoiding the occurrence of double taxation are:

1          Allowing reciprocal exemption either by law or by treaty;

2          Allowance of tax credit for foreign taxes paid;

3          Allowance of deduction for foreign taxes paid; and

4          Reduction of the Philippine tax rate.

Note: Any three of the methods shall be given full credit. 

Double Taxation; License Fee vs. Local Tax

TAXATION QUESTION 2004

A municipality, BB, has an ordinance which requires that all stores, restaurants, and other establishments selling liquor should pay a fixed annual fee of P20.000. Subsequently, the municipal board proposed an ordinance imposing a sales tax equivalent to 5% of the amount paid for the purchase or consumption of liquor in stores, restaurants and other establishments. The municipal mayor, CC, refused to sign the ordinance on the ground that it would constitute double taxation. Is the refusal of the mayor justified? Reason briefly.

SUGGESTED ANSWER:

No. The refusal of the mayor is not justified. The impositions are of different nature and character. The fixed annual fee is in the nature of a license fee imposed through the exercise of police power while the 5% tax on purchase or consumption is a local tax imposed through the exercise of taxing powers. Both a license fee and a tax may be imposed on the same business or occupation, or for selling the same article and this is not in violation of the rule against double taxation {Campania General de Tabacos de Filipinos v. City of Manila, 8 SCRA 367 [1963]). 

Double Taxation; Indirect Duplicate Taxation

TAXATION QUESTION 1997

When an item of income is taxed in the Philippines and the same income is taxed in another country, is there a case of double taxation?

SUGGESTED ANSWER:

Yes, but it is only a case of indirect duplicate taxation which is not legally prohibited because the taxes are imposed by different taxing authorities. 

Double Taxation: What Constitutes Double Taxation

TAXATION QUESTION 1996

X, a lessor of a property, pays real estate tax on the premises, a real estate dealer's tax based on rental receipts and income tax on the rentals. X claims that this is double taxation? Decide.

SUGGESTED ANSWER:

There is no double taxation. DOUBLE TAXATION means taxing for the same tax period the same thing or activity twice, when it should be taxed but once, by the same taxing authority for the same purpose and with the same kind or character of tax. The REAL ESTATE TAX is a tax on property; the REAL ESTATE DEALER'S TAX is a tax on the privilege to engage in business; while the INCOME TAX is a tax on the privilege to earn an income. These taxes are imposed by different taxing authorities and are essentially of different kind and character (Villanueva vs. City of Iloilo, 26 SCRA 578). 

Double Taxation

TAXATION QUESTION 1997

Is double taxation a valid defense against the legality of a tax measure?

SUGGESTED ANSWER:

No, double taxation standing alone and not being forbidden by our fundamental law is not a valid defense against the legality of a tax measure (Pepsi Cola v. Tanawan, 69 SCRA 460). However, if double taxation amounts to a direct duplicate taxation,

1          in that the same subject is taxed twice when it should be taxed but once, 

2          in a fashion that both taxes are imposed for the same purpose

3          by the same taxing authority, within the same jurisdiction or taxing district, 

4          for the same taxable period and  

5          for the same kind or character of a tax 

then it becomes legally objectionable for being oppressive and inequitable

Liberal Construction; Rules of Court

REMEDIAL LAW QUESTION 1998

How shall the Rules of Court be construed?

SUGGESTED ANSWER:

The Rules of Court should be liberally construed in order to promote their objective of securing a just, speedy and inexpensive disposition of every action and proceeding. (Sec. 6, Rule 1 1997 Rules of Civil Procedure.)

ADDITIONAL ANSWER:

However, strict observance of the rules is an imperative necessity when they are considered indispensable to the prevention of needless delays and to the orderly and speedy dispatch of Judicial business. (Alvero vs. Judge de la Rosa, 76 Phil. 428)

Katarungang Pambarangay; Objective

REMEDIAL LAW QUESTION 1999

What is the object of the Katarungang Pambarangay Law?

SUGGESTED ANSWER:

The object of the Katarungang Pambarangay Law is to effect an amicable settlement of disputes among family and barangay members at the barangay level without judicial recourse and consequently help relieve the courts of docket congestion. (Preamble of P.D. No. 1508, the former and the first Katarungang Pambarangay Law.)

Judicial Autonomy & Impartiality

REMEDIAL LAW QUESTION 2003

In rendering a decision, should a court take into consideration the possible effect of its verdict upon the political stability and economic welfare of the nation?

SUGGESTED ANSWER:

No, because a court is required to take into consideration only the legal issues and the evidence admitted in the case. The political stability and economic welfare of the nation are extraneous to the case. They can have persuasive influence but they are not the main factors that should be considered in deciding a case. A decision should be based on the law, rules of procedure, justice and equity. However, in exceptional cases the court may consider the political stability and economic welfare of the nation when these are capable of being taken into judicial notice of and are relevant to the case 

Judgment vs. Opinion of the Court

REMEDIAL LAW QUESTION 2006

What is the difference between a judgment and an opinion of the court?

SUGGESTED ANSWER:

The judgment or fallo is the final disposition of the Court which is reflected in the dispositive portion of the decision. A decision is directly prepared by a judge and signed by him, containing clearly and distinctly a statement of the facts proved and the law upon which the judgment is based (Etoya v. Abraham Singson, Adm. Matter No. RTJ-91-758, September 26, 1994).

An opinion of the court is the informal expression of the views of the court and cannot prevail against its final order. The opinion of the court is contained in the body of the decision that serves as a guide or enlightenment to determine the ratio decidendi of the decision. The opinion forms no part of the judgment even if combined in one instrument, but may be referred to for the purpose of construing the judgment (Contreras v. Felix, G.R. No. L-477, June 30, 1947).

Interlocutory Order

REMEDIAL LAW QUESTION 2006

What is an interlocutory order?

SUGGESTED ANSWER:

An interlocutory order refers to an order issued between the commencement and the end of the suit which is not a final decision of the whole controversy and leaves something more to be done on its merits

(Gallardo et al. v. People, G.R. No. 142030, April 21, 2005; Investments Inc. v. Court of Appeals,

G.R. No. 60036, January 27, 1987 cited in Denso Phils, v. /AC, G.R. No. 75000, Feb. 27, 1987).