+

+
4 Deputy Commissioners

Operations Group

Legal and Inspection Group

Resource and Management Group

Information Systems Group

+
Bureau of Internal Revenue

Under the supervision and control of the DOF

Its powers and duties comprehend the assessment and

collection of all national internal revenue taxes, fees,
charges and enforcement of all forfeitures, penalties
and fines

Execution of judgment in all cases decided in its favor

by the CTA and the ordinary courts.

To effect and administer the supervisory and police

powers conferred upon it by the NIRC and other special
laws,

+
Powers of the CIR

Power to interpret tax laws and decide tax cases ( Sec.

4)

Power to obtain info and to summon/examine and take

testimony of persons (Sec 5)

Power to make assessments and prescribe additional

requirements for tax administration and enforcement
(Sec 6)

Power to Interpret the NIRC and

other tax laws

Under the exclusive and original jurisdiction of the CIR,

subject to review by the SEC Fin ( Sec 4)

Under RMC 37-07, the authority of the CIR to sign

rulings granting and/or confirming tax incentives, and
tax treaty relief through the ruling process is now
delegated to the Deputy Commissioner of the Legal
and Inspection Group and to the Asst. com of the Legal
Service Group

All rulings of first impression shall be signed by the CIR

A Ruling is a less formal interpretations by the CIR or

his authorized representatives involving tax provisions
and regulations; include:

BIR Rulings

VAT rulings

Rulings issued by International Tax Affairs Division (ITAD)

Rulings issued thru delegated authorities or unnumbered

rulings

+
Non Retroactivity of Rulings

General Rule:

Any revocation, modification, or reversal of any of the rules

or regulations or any of the rulings or circulars promulgated
by the CIR shall not be given any retroactive application if
such revocation. Modification or reversal will be prejudicial
to taxpayers

+
Kinds of Rulings

Rulings of first impression rulings, opinions, and

interpretations of the CIR with respect the the NIRC
and other tax laws without established precedent, and
which are issued in response to a specific request for
ruling filed by a taxpayer with the BIR, includes the
reversal , modification or revocation of any existing
ruling must be issued by the CIR.

Rulings with established precedents -reiteration of

previous rulings, opinions, and interpretations of the
CIR as delegated under RMC No. 37-07

+
Exceptions

Taxpayer deliberately misstates or omits material facts

from his return or any document required of him by the
BIR

Where facts subsequently gathered by the BIR are

materially different from the facts on which the ruling
was based; or

Where the taxpayer acted in bad faith

+
NO retroactive application

[ABS-CBN Broadcasting Corporation v. Court of Tax

Appeals, GR No. L-52306, 12 October 1981.]

CIR v. Burroughs Limited, GR No. L-66653, 19 June

1986.]

CIR v. Court of Appeals, GR No.117982, 6 February

1997.]

CIR v. Benguet Corporation, GR No. 145559, 14 July

2006

CIR v. Philippine Health Care Providers, Inc., GR No.

168129, 24 April 2007.]

+
Exception

CIR v. Court of Appeals, GR No.117982, 6 February

1997.]

CIR v. Philippine Health Care Providers, Inc., GR No.

168129, 24 April 2007

Philippine Bank of Communications v. CIR, GR No.

112024, 28 January 1999.]

Rule Making Authority of the Sec

of Finance

The Secretary of Finance has the power to reverse ,

revise or modify rulings that are adverse to the
Taxpayer

The Secretary of Finance upon recommendation of the

CIR shall promulgate all needful rules and regulations

+
Power to Decide Tax cases

Includes power to decide

Disputed assessments

Refunds of internal revenue taxes, fees or other charges

Penalties imposed in relation to the above; and

Other matters arising under the NIRC

Note: Decisions of the CIR are subject to the exclusive

appellate jurisdiction of the CTA

+Power to Obtain Information,

summon/examine and take testimony of

persons

Purpose

To ascertain correctness of any return;

make return when none has been made; ;

determine liability of any person for any internal revenue tax;

evaluate tax compliance

Authorities
of
the
CIR

Examine any relevant or material book, record, etc.

Obtain info on a regular basis from

Any person other than the person being investigated

Any office or officer of the natl/local government, government

agencies and instrumentalities

Summon to require to produce books, papers, records, etc or

to give testimony the ff persons:

The taxpayer

Any officer or employee of the taxpayer

Any person having in possessions of the book of records

To take testimony of the person concerned, under oath

To cause revenue officers and employees to make a canvass

of any revenue district or region

+Power to make assessments and prescribe

requirements for tax administration and
enforcements
1. Examination of returns and determination of tax due
2. Failure to submit required returns and other documents
3. Inventory taking surveillance prescribing presumptive gross sales and
receipts
4. Terminate taxable period
5. Prescribe real property values
6. Authority to inquire bank deposits
7. Authority to register tax agents
8. Authority to issue access letters addressed to 3 rd parties
Third party Information Rule

+
Unlawful Divulgence of Trade
Secrets

any officer or employee of the Bureau of Internal

Revenue who divulges to any person or makes
known in any other manner than may be
provided by law information regarding the
business, income, or estate of any taxpayer, the
secrets, operation, style or work, or apparatus of
any manufacturer or producer, or confidential
information regarding the business of any
taxpayer, knowledge of which was acquired by
him in the discharge of his official duties, shall,
upon conviction for each act or omission, be
punished by a fine of not less than Fifty
thousand pesos (P50,000) but not more than One
hundred thousand pesos (P100,000), or suffer
imprisonment of not less than two (2) years but
not more than five (5) years, or both.

+
Vera v Cusi

The Court said the BIR itself has regulations issued

pursuant to the Tax Code indicating the instances when
the income of a taxpayer may be made public. One
such instance is provided in Sec. 4(b) of the
Regulations, supra, whereby the return of an individual
shall be open to inspection by the person who made
the return or by his duly constituted attorney in fact.

Authority of the Commissioner to Prescribe Real Property

Values. - The Commissioner is hereby authorized to divide
the Philippines into different zones or areas and shall,
upon consultation with competent appraisers both from
the private and public sectors, determine the fair market
value of real properties located in each zone or area. For
purposes of computing any internal revenue tax, the value
of the property shall be, whichever is the higher of;

(1) the fair market value as determined by the

Commissioner, or

(2) the fair market value as shown in the schedule of

values of the Provincial and City Assessors.

+Authority of the Commissioner to inquire

into Bank Deposit Accounts and Other
Related Information Held by Financial
Institutions
.

) A decedent to determine his gross estate.

(2) Any taxpayer who has filed an application for

compromise of his tax liability under Sec. 204(A)
(2) of this Code by reason of financial incapacity
to pay his tax liability.

A specific taxpayer or taxpayers subject of a

request for the supply of tax information from a
foreign tax authority pursuant to an
international convention or agreement on tax
matters to which the Philippines is a signatory or
a party of

+
kinds of administrative
issuances

* There are two kinds of administrative issuances:

(1) legislative rules is in the nature of subordinate

legislation, designed to implement a primary legislation by
providing the details thereof. In the same way that laws
must have the benefit of public hearing, it is generally
required that before a legislative rule is adopted there must
be hearing. and

(2) interpretative rules are designed to provide guidelines

to the law which the administrative agency is in charge of
enforcing.

+
Revenue Issuances

(1) Revenue Regulations (RRs)

(2) Revenue Memorandum Orders (RMOs)

are issuances that publish pertinent and applicable portions, as well as amplifications, of laws, rules,
regulations and precedents issued by the BIR and other agencies/offices.

(5) Revenue Bulletins (RBs)

are rulings, opinions and interpretations of the CIR with respect to the provisions of the 1997 Tax Code and
other tax laws, as applied to a specific set of facts, with or without established precedents, and which the CIR
may issue from time to time for the purpose of providing taxpayers guidance on the tax consequences in
specific situations. BIR Rulings, therefore, cannot contravene duly issued RMRs. Otherwise, such BIR Rulings
are null and void ab initio.

(4) Revenue Memorandum Circular (RMCs)

are issuances that provide directives or instructions, prescribe guidelines, and outline processes, operations,
activities, workflows, methods and procedures necessary in the implementation of stated policies, goals,
objectives, plans and programs of the BIR in all areas of operations, except auditing.

(3) Revenue Memorandum Rulings (RMRs)

are issuances signed by the Secretary of Finance, upon recommendation of the CIR, that specify, prescribe or
define rules and regulations for the effective enforcement of the provisions of the 1997 Tax Code and related
statutes.

refer to periodic issuances, notices and official announcements of the CIR that consolidate the BIRs position
on certain specific issues of law or administration in relation to the provisions of the 1997 Tax Code, relevant
tax laws and other issuances for the guidance of the public.

(6) BIR Rulings

are the official position of the BIR to queries raised by taxpayers and other stakeholders relative to
clarification and interpretation of tax laws.

+
Sources of Internal Revenue
taxes

Income tax

Estate tax

Donors tax

Percentage tax

Excise tax

VAT

DST

Other taxes that maybe imposed by the BIR

+
Sources of Revenues

Income tax tax imposed on the net or gross income realized in a taxable year. (CIR v Solidbank
416 SCRA 436, 2003)

Estate tax tax that is levied, assessed, collected and paid upon the transfer of the estate of a
decedent to his heirs.

Donors Tax tax imposed on the gratuitous transfer of property between two or more persons
who are living at the time of the transfer.

Percentage tax tax measured by a certain percentage of the gross selling price or gross value
in money of goods sold, bartered or imported, or of the gross receipts or earnings derived by any
person engaged in the sale of services (CIR v Solidbank 416 SCRA 436, 2003)

Value added Tax is a uniform 12% tax levied on every rendition of services in the course of
business or trade, on every sale or barter, exchange or lease of goods or properties in course of
business as they pass along the production and distribution chain, on every importation of
goods, whether or not in the course of business or not; its an indirect tax that may be shifted or
passed on to the buyer, transferee, or lessee of the goods, properties or services . (CIR v
Seagate Technology , 415 SCRA 132, 2005)

Excise tax tax applicable to certain specified or selected goods or articles manufactured or
produced in the Philippines for domestic sale or consumption or for any other disposition and to
things imported into the Philippines

Documentary stamp tax tax levied on the exercise by persons of certain privileges conferred
by law for the creation, revision, or termination of specific legal relationships through execution
of specific instruments ( Phil Home Assurance Corp. vs CA GR. No. 119446, 1999)

+
International Agreements

The purpose of these international agreements is to reconcile

the national fiscal legislations of the contracting parties in
order to help the taxpayer avoid simultaneous taxation in two
different jurisdictions. More precisely, the tax conventions are
drafted with a view towards the elimination of international
juridical double taxation, which is defined as the imposition of
comparable taxes in two or more states on the same
taxpayer in respect of the same subject matter and for
identical periods. The apparent rationale for doing away with
double taxation is to encourage the free flow of goods and
services and the movement of capital, technology and
persons between countries, conditions deemed vital in
creating robust and dynamic economies. CIR vs S.C. Johnson
and Son, Inc. GR No.. 127105, June 25, 1999