Month: May 2026

COURT OF TAX APPEALS DECISIONS

ASSESSMENT IS VOID IF TAXPAYER DENIES RECEIPT OF THE PAN AND BIR FAILED TO PROVE ACTUAL RECEIPT THEREOF. A PAN must be actually received by the taxpayer and the taxpayer must be given a reasonable opportunity to respond before the issuance of FLD/FAN, as part of the constitutional and statutory requirements of due process in tax assessment proceedings. Once the taxpayer categorically denies receipt of the PAN, the burden shifts to the BIR to prove by a preponderance of evidence that the PAN was in fact received by the taxpayer or its authorized representative. In this case, although the BIR presented a photocopy of a registry receipt allegedly showing mailing of the PAN, this evidence was insufficient to establish actual receipt because it lacked material details of the mailing transaction and was unsupported by an authenticated affidavit of the mailer. Thus, the BIR failed to discharge its burden of proving valid service of the PAN, resulting in a violation of the taxpayer’s right to due process and rendering the deficiency tax assessments null and void. The assessments were further rendered void by the participation of revenue officers who were not properly authorized to conduct the audit examination. [(CIR v. Bohol JSL Enterprises, Incorporated, CTA EB No. 2989 (CTA Case No. 10575, March 17, 2026); see also Mac Graphics Carranz International Corporation v. CIR (CTA Case No. 11150) March 18, 2026)

PARTICIPATION OF A GROUP SUPERVISOR IN THE AUDIT WITHOUT LOA RENDERS THE ASSESSMENT VOID. NIRC requires that an RO must first be specifically authorized through a valid LOA issued by the CIR or his duly authorized representative before conducting any audit or examination of a taxpayer’s books of accounts and accounting records. Jurisprudence consistently holds that the absence of a valid LOA, or the participation of an RO not named in the LOA without the issuance of a new or amended LOA, renders the resulting assessment void for violating due process and existing BIR regulations. In this case, while the subject LOA originally authorized RO De Guzman and GS Yahya to conduct the audit, the records showed that GS Glovasa later actively participated in the audit process, supervised the investigation, signed the Post-Reporting Notice, audit reports, and memorandum recommending the issuance of the PAN, despite not being authorized under any new or amended LOA. The BIR’s own witness likewise admitted that no LOA was issued in favor of GS Glovasa. Since her participation formed an essential part of the audit and assessment process, the deficiency income tax, VAT, and EWT assessments were declared null and void for having been conducted by an unauthorized revenue officer. [CIR v. Bohol JSL Enterprises, Inc., CTA EB No. 2989 (CTA Case No. 10575) March 17, 2026]

TAXPAYER HAS NO FRESH 180-DAY PERIOD ON APPEAL TO CIR; REMEDY IS TO WAIT FOR CIR’S DECISION, WHICH IS APPEALABLE TO THE CTA. A taxpayer may appeal a disputed assessment to the CTA within 30 days from receipt of the denial of the protest or from the lapse of the 180-day period within which CIR or his authorized representative must act on the protest. Jurisprudence further clarifies that the taxpayer’s remedies in cases of inaction are mutually exclusive, and there is only one continuous 180-day period reckoned from the submission of supporting documents, with no fresh 180-day period arising from an administrative appeal to the CIR. In this case, the taxpayer erroneously treated its administrative appeal to CIR filed on December 21, 2018 as giving rise to a new 180-day period, despite the original 180-day period from the filing of the protest having already lapsed on May 20, 2018. Consequently, when the FDDA was issued on November 26, 2018, the taxpayer’s remedy was limited to appealing the adverse decision to the CTA within 30 days from receipt thereof. Since the taxpayer instead relied on an invalid assumption of a renewed 180-day period and belatedly filed its Petition for Review, the CTA Division correctly ruled that it had no jurisdiction over the case due to the late appeal. [Friendlycare Foundation, Inc. v. CIR, CTA EB No. 3056, (CTA Case No. 10123), March 17, 2026]

SPLASH COLOGNES FALL WITHIN THE DEFINITION OF TOILET WATERS SUBJECT TO EXCISE TAX. NIRC imposes excise tax on perfumes and toilet waters, and jurisprudence has consistently held that the definition of “toilet waters” under Revenue Regulations No. 8-84, which implemented the percentage tax regime under the NIRC of 1977, is no longer applicable following the substantive change introduced by Executive Order No. 273 converting the tax on toilet waters from a percentage tax into an excise tax. Since RR No. 8-84 was issued specifically to implement the old sales or percentage tax system, it was deemed impliedly repealed upon the enactment of the new excise tax framework. Consequently, the Court gave weight to the CIR’s subsequent interpretation classifying colognes, including baby colognes and splash colognes, as “toilet waters” subject to excise tax, consistent with the CIR’s authority to interpret tax laws. Applying these principles, the Court held that the taxpayer Green Cross, Inc.’s splash colognes fall within the ordinary and commercial meaning of “toilet waters” and are therefore subject to excise tax, rejecting the taxpayer’s reliance on the 3% essential oil threshold found in RR No. 8-84 and its argument on legislative reenactment (Green Cross, Inc. v. Commissioner of Internal Revenue, CTA Case No. 11163, March 17, 2026)

THE REGIONAL DIRECTOR’S LETTER SIGNIFYING INTENT TO PROCEED WITH COLLECTION IS CONSIDERED A FINAL DECISION; SEE DISSENTING OPINION. A taxpayer may appeal a denial or inaction on a protest to the CTA within 30 days from receipt of the decision or lapse of the 180-day period. A final decision for purposes of appeal must be issued by the CIR or a duly authorized representative and must be unequivocal and final in character; however, the Supreme Court clarified that not all BIR communications, particularly collection-related issuances, constitute appealable final decisions. In this case, the taxpayer argued that it timely filed its judicial appeal after receiving the WDL treating it as the CIR’s final decision on its protest. However, the CTA held that the letter issued by a Regional Director, an official equivalent to a division chief, which explicitly signified the BIR’s intent to proceed with collection, already constituted the final decision on the disputed assessment; thus, the taxpayer should have filed its appeal within 30 days from receipt of said letter, not WDL. The Court rejected the taxpayer’s argument that it was still awaiting resolution of its protest, emphasizing that the CIR’s delegated authority allows regional officials to issue binding final decisions. The Court further held that a WDL is not the final decision on an assessment but merely a collection remedy. Nonetheless, the CTA ultimately ruled that despite procedural finality, the assessment was void ab initio because it was tainted by due process violations, specifically the participation of a revenue officer who was not properly authorized under a valid LOA but was instead assigned through a mere Memorandum of Assignment. Accordingly, the Court held that an assessment issued in violation of due process cannot attain finality, produces no legal effect, and cannot support any collection action; hence, both the deficiency tax assessment and the resulting WDL were declared void, and the BIR was barred from enforcing collection. (Gensbio Marketing Corp. v. CIR, CTA Case No. 10054, March 18, 2026) Separate opinion: only a valid FDDA containing factual and legal bases and an explicit declaration of finality is appealable, and collection issuances like warrants cannot substitute for such a decision;  the letter cannot be treated as an FDDA because it did not state factual/legal bases or indicate finality and therefore cannot trigger the 30-day appeal period) instead, the case should be treated as one of inaction.

DUE DATES LAPSED BEFORE THE RECEIPT OF THE FLD/FAN RENDER THE ASSESSENT VOID. A valid tax assessment must constitute a definite and unequivocal demand for payment within a specific and future due date, as due process requires that taxpayers be properly informed of their liability and given a genuine opportunity to pay or contest the assessment; failure to state a definite due date or the existence of an actual demand for payment renders the assessment void for violating due process. In this case, the Court found that the FLD/FAN and the FDDA were void because both contained due dates that had already lapsed even before the taxpayer received them, effectively depriving petitioner of any meaningful opportunity to comply or respond, and rendering the supposed demand for payment indefinite and illusory since the amounts were also subject to adjustment depending on the date of payment. The Court held that such assessments failed to meet the substantive requirement of a valid assessment under the NIRC because they did not establish a fixed, demandable tax liability payable within a proper prescribed period, and instead merely imposed retrospective and conditional due dates, violating the taxpayer’s right to due process. As a result, both the FLD/FAN and FDDA were declared void, the deficiency tax assessment was cancelled, and the BIR was permanently enjoined from collecting the assessed taxes and compromise penalties. (Eastern Petroleum Corporation v. CIR, CTA Case No. 10342, March 18, 2026)

 ASSESSMENT IS VOID IF THE BIR ignored the taxpayer’s explanation in the PAN; the item of assessment is final if uncontested by the taxpayer. NIRC requires that taxpayers be informed in writing of the facts and law on which an assessment is based. Jurisprudence consistently holds that due process in tax assessments includes not only the taxpayer’s right to be heard but also the BIR’s duty to meaningfully consider and address the taxpayer’s explanations; failure to do so renders the assessment void. In this case, although the taxpayer submitted a detailed Reply to the PAN disputing the use of unverified third-party RELIEF/AITEID data, alleged undeclared purchases and sales, VAT consequences, and disallowed input taxes, the BIR issued the FLD/FAN and FDDA without addressing these defenses and merely reiterated the PAN computations without explanation or evaluation of the taxpayer’s arguments, thereby showing that the Reply to PAN was ignored. Consequently, the Court held that the BIR violated the petitioner’s right to due process, rendering the deficiency tax assessments void and unenforceable insofar as the disputed items were concerned, while allowing examination of uncontested portions. However, the due process infirmity does not extend to the portions of the assessments that were not specifically refuted by the taxpayer in the Reply to PAN. With respect to those items, the Court proceeds to examine their factual and legal validity based on the evidence on record. (Sarcaoga v. CIR, CTA Case No. 10850, March 19, 2026)

TAXPAYER MUST SUBMIT RECEIPTS AND ADEQUATE DOCUMENTATION TO SUPPORT EXPENSES. Deductions from gross income are not allowed unless the taxpayer substantiates such expenses with sufficient evidence such as official receipts or other adequate records, and jurisprudence consistently places the burden on the taxpayer to prove entitlement to deductions once properly disallowed by the BIR. In this case, the BIR disallowed the taxpayer’s claimed purchases on the ground that they were unsupported by official receipts and adequate documentation, and while the taxpayer questioned the basis of the computation, it failed to present competent evidence to substantiate the alleged expenses or refute the BIR’s findings. Thus, applying the rule on burden of proof and the statutory requirement of substantiation, the CTA upheld the disallowance of the unsupported purchases and sustained the resulting deficiency income tax assessment (Sarcaoga v. CIR, CTA Case No. 10850, March 19, 2026)

SEPARATE NOTICE AS TOP WITHHOLDING AGENT (TWA) IS NOT REQUIRED; PUBLICATION ON BIR WEBSITE AND NEWSPAPER IS SUFFICIENT. Certain taxpayers designated as TWA are required to withhold creditable withholding tax at specified rates. Inclusion in the TWA list is effective upon publication in a newspaper of general circulation or posting on the BIR website, which constitutes sufficient notice and triggers the withholding obligation beginning on the first day of the month following publication. In this case, although the taxpayer argues that it was not served a separate written notice of its classification as a TWA, the Court held that such individual notice is not required because publication of the official TWA list in Malaya Business Insight and its availability on the BIR website constituted valid constructive notice, and the petitioner’s obligation to withhold EWT commenced; thus, its failure to withhold the required taxes on purchases of goods and services justified the deficiency EWT assessment. (Sarcaoga v. CIR, CTA Case No. 10850, March 19, 2026)

A TAXPAYER WHO FAILS TO TIMELY AND VALIDLY PROTEST AN FLD/FAN WITHIN 30 DAYS IS BARRED FROM CONTESTING THE ASSESSMENT, ESPECIALLY WHERE ITS PRIOR ACTS AND PARTICIPATION IN THE ASSESSMENT PROCESS ESTABLISH IMPLIED RECEIPT AND AUTHORITY, CAUSING THE ASSESSMENT TO BECOME FINAL, EXECUTORY, AND DEMANDABLE. A taxpayer must file a valid administrative protest within 30 days from receipt of the FLD/FAN; otherwise, the assessment becomes final, executory, and demandable, precluding further inquiry into its merits. In this case, although the taxpayer alleged lack of receipt of the FLD/FAN and questioned the authority of the person who received it, the CTA held that the taxpayer is estopped from denying receipt because it previously recognized and acted on notices served through the same recipient, thereby implying authority under the doctrine of implied authorization. The records further showed that the taxpayer participated in the assessment process through the informal conference and filed a protest without disputing receipt of the FLD/FAN, constituting admission by silence. Moreover, the taxpayer’s acceptance of the FLD/FAN gives rise to a disputable presumption that a complete assessment (including both FLD and FAN) was duly served, which the taxpayer failed to rebut. Having failed to timely and properly protest within the reglementary period, the assessment became final and incontestable, thereby rendering taxpayer liable for the deficiency taxes assessed. (Sirawai Plywood and Lumber Corporation v. Commissioner of Internal Revenue, CTA Case No. 10810, March 31, 2026)

REVENUE ISSUANCES

Revenue Memorandum Circular No. 042-2026

Mandatory Requirement	The Certificate of Entitlement to Tax Incentives (CETI) remains a mandatory attachment to the Annual Income Tax Return (AITR) for RBEs availing of income tax incentives.
Clarifications of Recent Rules	The non-inclusion of the CETI in the illustrative list of attachments in RMC No. 20-2026 does not constitute a waiver or removal of the requirement.
Scope of Application	This applies to all Registered Business Enterprises (RBEs) duly registered with Investment Promotion Agencies (IPAs).
Enforceability	The requirement remains enforceable regardless of whether it is expressly listed in subsequent circulars providing general lists of AITR attachments.

Registered Business Enterprises (RBEs) must continue to attach the Certificate of Entitlement to Tax Incentives (CETI) to their Annual Income Tax Returns (AITR) under the mandates of the CREATE and CREATE MORE Acts.

Mandatory Requirement	The Certificate of Entitlement to Tax Incentives (CETI) remains a mandatory attachment to the Annual Income Tax Return (AITR) for RBEs availing of income tax incentives.
Clarifications of Recent Rules	The non-inclusion of the CETI in the illustrative list of attachments in RMC No. 20-2026 does not constitute a waiver or removal of the requirement.
Scope of Application	This applies to all Registered Business Enterprises (RBEs) duly registered with Investment Promotion Agencies (IPAs).
Enforceability	The requirement remains enforceable regardless of whether it is expressly listed in subsequent circulars providing general lists of AITR attachments.

BIR DEADLINES FROM MAY 18, 2026 TO MAY 24, 2026. A gentle reminder on the following deadlines, as may be applicable:

DATE	FILING/SUBMISSION
May 20, 2026	e-FILING & PAYMENT (Online/Manual) - BIR Form 1600 WP (Remittance Return of Percentage Tax on Winnings and Prizes Withheld by Race Track Operators) – eFPS & Non-eFPS Filers. Month of April 2026

COURT OF TAX APPEALS DECISIONS

THE BIR MUST EXPLAIN THE BASIS FOR STARTING ITS INCOME TAX DEFICIENCY COMPUTATION FROM A ZERO TAXABLE INCOME, DESPITE THE TAXPAYER’S NET LOSS POSITION. Taxpayers must be informed in writing of the legal and factual bases of an assessment; otherwise, the assessment is void for violating due process. In this case, the BIR improperly set the taxpayer’s net taxable income to zero by completely disregarding its declared net operating loss without providing any explanation in the FLD/FAN and FDDA. The Court found that the reported loss was duly supported and constitutes a valid net operating loss. Consequently, the BIR’s unexplained disallowance was invalid, and the taxpayer’s net operating loss must be recognized in computing its 2016 income tax liability (DMCI Holdings, Inc., v. CIR, CTA Case No. 10784, November 4, 2025)

THE BIR CANNOT VALIDLY DISALLOW EXPENSES RELATED TO PASSIVE INCOME. Taxpayers are allowed to deduct from gross income all ordinary and necessary expenses incurred in the conduct of their trade or business, and there is no legal requirement to allocate or apportion such expenses based on the nature or source of income. The Supreme Court also held that common expenses are fully deductible without distinction among income streams. In this case, the BIR disallowed 99% of the reported expenses, by applying an allocation formula that limited allowable deductions to those supposedly attributable to its minimal “active income,” while disallowing expenses linked to “passive income.” The Court found this approach arbitrary and without legal basis, as the law does not mandate such allocation, and the cited authorities were inapplicable, involving different factual contexts such as foreign corporations or tax-exempt income. Moreover, the taxpayer substantiated that its total claimed expenses were properly recorded, reconciled with its audited financial statements, and directly related to its business operations, as confirmed by the ICPA. Consequently, the disallowance of expenses for being “unnecessary” was unsupported by both law and evidence and must be cancelled. (DMCI Holdings, Inc., v. CIR, CTA Case No. 10784, November 4, 2025)

CASH RECEIPTS BOOKS ARE INSUFFICIENT PROOF OF EXEMPTION FROM DST ON ADVANCES. A DST is imposed on specific taxable transactions such as loans, advances, and certain lease agreements; moreover, DST attaches to the instrument and any party to the transaction may pay it, with full payment by one extinguishing the liability of the others. In this case, the Court upheld the DST assessment on the taxpayer’s “advances for future dividends” and “advances from affiliates,” ruling that the cash receipts book presented merely showed a breakdown of cash inflows and was insufficient to prove that the amounts were actually non-taxable dividends receivable rather than taxable advances subject to DST. However, the Court cancelled the DST assessment on “receivables from wholly owned subsidiary,” finding that the same intercompany transaction had already been subjected to and paid for DST. Finally, the taxpayer admitted liability for DST on rent expense, which was accordingly sustained. (DMCI Holdings, Inc., v. CIR, CTA Case No. 10784, November 4, 2025)

TRAVEL EXPENSES AND GOLF MEMBERSHIP FEES ARE SUBJECT TO FBT IF NOT BUSINESS-RELATED. Fringe benefits furnished or granted by an employer to managerial or supervisory employees are subject to FBT, except when they are proven to be necessary business expenses or fall under specifically exempt categories. The burden rests on the taxpayer to substantiate that such expenditures are ordinary and necessary business-related costs. In this case, the BIR assessed the taxpayer for deficiency FBT arising from travel expenses, golf club memberships, and motor vehicle benefits allegedly granted to officers and directors. The Court partially granted the taxpayer’s position on travel expenses, recognizing that a portion incurred by the Managing Director was sufficiently substantiated as business-related participation in an investor event, and thus excluded from FBT. The remaining amount was properly subjected to FBT for lack of adequate proof that the expenses were business-necessary. The Court likewise sustained the FBT assessment on golf membership fees, finding that the taxpayer failed to establish that the club shares and related expenses were used exclusively for business purposes or constituted ordinary and necessary expenses, thereby classifying them as taxable fringe benefits. On the other hand, the FBT assessment on the motor vehicle was cancelled, as the Court found that the correct acquisition cost and computation showed that the taxpayer had properly reported and paid the corresponding tax, rendering the assessment without legal and factual basis. (DMCI Holdings, Inc., v. CIR, CTA Case No. 10784, November 4, 2025)

DIVIDENDS PAID TO A NRFC ARE GENERALLY SUBJECT TO 30% FWT, SUBJECT TO THE TAX-SPARING RULE, WHICH ALLOWS A REDUCED 15% RATE IF THE COUNTRY OF THE RECIPIENT ALLOWS A CREDIT FOR TAXES DEEMED PAID IN THE PHILIPPINES, AND SUBJECT FURTHER TO PREFERENTIAL RATES UNDER APPLICABLE TAX TREATIES OR EXEMPTION FOR QUALIFIED FOREIGN GOVERNMENTS AND CERTAIN FINANCING INSTITUTIONS. In this case, the BIR imposed 30% FWT on the taxpayer’s dividend payments to various foreign entities, alleging failure to sufficiently prove entitlement to exemptions or treaty relief. The Court partly sustained the assessment after reviewing the documentary submissions: (a) entities were recognized as foreign government institutions entitled to exemption; (b) certain were found entitled to 15% preferential treaty rates; and (c) other foreign institutional investors were treated as NRFCs subject to the 30% rate due to lack of sufficient proof of residency, beneficial ownership, or entitlement to tax sparing or treaty relief. (DMCI Holdings, Inc., v. CIR, CTA Case No. 10784, November 4, 2025)

THE ASSESSMENT IS VOID WHEN THE BIR FAILS TO PROPERLY CONSIDER OR ADEQUATELY ADDRESS THE TAXPAYER’S ARGUMENTS IN THE FLD/FAN, OR MERELY ACKNOWLEDGES THEM WITHOUT PROVIDING A CLEAR AND REASONED EXPLANATION. A tax assessment is void if the taxpayer is not properly informed in writing of the factual and legal bases thereof. Jurisprudence further requires the CIR to address the taxpayer’s defenses and evidence; failure to consider or explain the rejection of such arguments constitutes a violation of due process that renders the assessment void. In this case, the BIR failed to meaningfully address petitioner’s protests against the assessment, including its claim that the audit was merely a “table audit” without examination of books, as well as its specific legal and factual defenses on VAT, EWT, FWT, prescription, treaty exemptions, and tax incentives; instead, the either ignored or only partially acknowledged these arguments in the FLD/FAN without explaining their rejection, thereby depriving petitioner of an opportunity to intelligently contest the assessment. Consistent with Avon Case, such failure to consider and explain the rejection of the taxpayer’s evidence and arguments violates due process and invalidates the assessment. Accordingly, the Court cancelled and declared void the deficiency tax assessment (Subic Water & Sewerage Co. Inc. v. CIR, CTA Case No. 10465)

ASSESSMENT IS VOID WHEN THE BIR ISSUED THE FAN/FLD EIGHT DAYS AFTER THE PAN WAS RECEIVED BY THE TAXPAYER. A taxpayers must be given a mandatory 15-day period from receipt of the Preliminary Assessment Notice (PAN) to respond before the issuance of a Formal Letter of Demand/Final Assessment Notice (FLD/FAN), and any violation of this due process requirement renders the assessment void; applying these rules, the taxpayer received the PAN on January 16, 2013 and thus had until January 31, 2013 to reply, yet the BIR issued the FLD/FAN on January 24, 2013, only eight days after receipt and well within the prohibited period, thereby depriving the taxpayer of its right to respond and invalidating the entire assessment regardless of any subsequent protest, leading the Court to declare the deficiency tax assessment null and void and to enjoin its collection (Provident Tree Farms, Inc. v. CIR, CTA Case No. 10459, March 2, 2026)

THE PROPER BASIS FOR APPEALING THE BIR’S ACTION BEFORE THE CTA IS THE WARRANT OF GARNISHMENT, NOT THE LETTERS OR CERTIFICATIONS ISSUED BY BANKS, WHICH ARE MERELY MINISTERIAL IN NATURE AND DO NOT CONSTITUTE APPEALABLE ACTS. Appeals involving disputed assessments or “other matters” (including collection remedies like warrants of garnishment) must be brought within thirty (30) days from the taxpayer’s receipt of the Commissioner’s decision or from the actionable act itself; applying these principles, although the issuance of Warrants of Garnishment (WOGs) constitutes an appealable “other matter” under the CTA’s jurisdiction, the taxpayer failed to properly invoke such jurisdiction by erroneously treating bank-issued letters and certifications - mere ministerial confirmations of garnishment and not acts of the BIR rendered in the exercise of quasi-judicial authority - as the appealable decisions triggering the reglementary period, instead of directly assailing the WOGs or timely obtaining copies thereof from the BIR despite having knowledge of the garnishment, thereby resulting in a failure to file a proper and timely appeal within the period prescribed by law; consequently, the Court is left with no recourse but to dismiss the Petition for Review for lack of jurisdiction without delving into the merits (Feliciano T. Baligod, CTA Case No. 11090, March 2, 2026)

THE PERIOD FOR FILING A MOTION FOR RECONSIDERATION OF THE CTA DIVISION’S DECISION IS COUNTED FROM THE OSG’S RECEIPT OF THE DECISION, NOT FROM THE BIR’S RECEIPT THEREOF. The Office of the Solicitor General (OSG) remains the principal counsel of the government even when it deputizes agency lawyers, such that service of decisions and the reckoning of reglementary periods must be based on the OSG’s receipt, not that of deputized counsel, who merely act under its control and supervision; applying these principles, the BIR’s argument that the prescriptive period should be counted from the BIR legal officers’ receipt of the assailed Decision fails, as the OSG, being the principal counsel, controls the computation of the period to file a Motion for Reconsideration regardless of who actually prepares the pleadings, and any internal arrangement or memorandum delegating such preparation to BIR officers cannot override established procedural rules and jurisprudence, especially where the lack of OSG involvement even contravenes the requirement of its direct supervision, thus rendering petitioner’s Motion for Reconsideration filed out of time when reckoned from the OSG’s receipt and warranting denial of the Petition; accordingly, the Court affirms the ruling that the prescriptive period was correctly computed from the OSG’s receipt. [CIR v. First Telecom Philippines, Inc. CTA EB No. 3140 (CTA Case No. 10688), March 11, 2026]

FAN/FLD WITHOUT DUE DATE RENDERS THE ASSESSMENT VOID; FDDA CANNOT CURE THE DEFECT; DEFECT MAY STILL BE INVOKED EVEN IF RAISED BELATEDLY. A valid deficiency tax assessment must constitute a written notice and demand for payment of a definite tax liability, which becomes demandable only when it contains a specific due date for payment. The Supreme Court also invalidated assessments for failure to indicate due dates in the Formal Letter of Demand/Final Assessment Notice (FLD/FAN), emphasizing that such omission renders the demand incomplete and void; it was further clarified by the Supreme Court that defect in the FLD/FAN cannot be cured by subsequently stating a due date in the Final Decision on Disputed Assessment (FDDA), as both documents serve distinct functions - the FLD/FAN being the operative demand for payment while the FDDA merely resolves the protest; applying these rules, the FLD/FAN failed to state any due date for payment, rendering the assessments void, and although the taxpayer argued that the issue was raised belatedly, the Court properly took cognizance of it since it is directly related to the validity of the assessment and based entirely on evidence already on record, while the BIR’s contention that the defect was cured by inserting due dates in the FDDA was rejected. [CIR v. Grand Union Supermarket, CTA EB No. 2893 (CTA Case No. 10299), March 12, 2026]

A RULING OF THE REGIONAL DIRECTOR ON A REQUEST FOR RECONSIDERATION SUBMITTED TO THE COMMISSIONER IS NOT SUBJECT TO APPEAL BEFORE THE CTA.  The CTA may only take cognizance of appeals involving a “decision, ruling, or inaction” of the Commissioner of Internal Revenue (CIR) or his duly authorized representative in cases involving disputed assessments, and jurisprudence has consistently held that only such final, appealable acts of the CIR or a properly authorized representative may be elevated to the CTA, while acts of subordinate officials without clear delegation of authority are not considered appealable decisions; applying these rules, the taxpayer initially protested the FLD/FAN through an administrative protest and subsequently elevated the matter via a request for reconsideration to the CIR, but instead of a decision from the CIR or a duly authorized representative acting within delegated authority, it was merely Regional Director Tabule who issued the denial letter, despite the taxpayer’s own acknowledgment that only the CIR may resolve such administrative appeals, and no evidence was presented showing that RD Tabule was validly authorized to act for or bind the CIR in deciding the request for reconsideration; thus, RD Tabule’s denial cannot be deemed the final decision contemplated by law that would trigger the CTA’s appellate jurisdiction, as it is a non-appealable act of a subordinate officer lacking authority to render a final ruling on the protest, rendering the petition premature and outside the jurisdiction of the CTA [Bioenergy 8 Corporation v. CIR, CTA EB No. 3004 (CTA Case No. 10260), March 13, 2026)]

AN ASSESSMENT IS VOID WHEN ADDITIONAL EXAMINERS REVIEW THE BOOKS OF ACCOUNTS WITHOUT A NEW OR AMENDED LOA. A Letter of Authority (LOA) is a mandatory prerequisite for a valid tax audit because it confers upon specifically named revenue officers the legal authority to examine a taxpayer’s books, and any audit conducted by officers not expressly covered by a valid LOA - or by officers substituted or added through mere internal memoranda or endorsements without issuance of a new or amended LOA - is void and renders the resulting assessment without legal effect; applying these rules, although the LOA initially authorized Revenue Officers Jan Andre Abellera and Johnro Galicia to examine the taxpayer, the audit was later actually conducted with the participation of Revenue Officers Oradia and Zamora based only on a letter issued by the  Chief purportedly “authorizing” their assistance, without any corresponding new or amended LOA issued by the Commissioner or authorized representative, thereby violating the requirement that only officers named in a valid LOA may conduct or participate in the audit; since these unauthorized officers were actively involved in the examination that led to the issuance of the deficiency tax assessment, the entire audit process was tainted with invalidity, making the resulting assessments void. [CIR v. First Telecom Philippines, Inc. CTA EB No. 3079 (CTA Case No. 10486), March 13, 2026]

REVENUE ISSUANCES

Revenue Memorandum Order No. 037-2026

Qualified taxpayers may electronically file specific income tax returns via the offline eBIRForms system, streamlining compliance with updated filing procedures.

Coverage	Applies to individual taxpayers classified under a specific category (e.g., micro and small taxpayers)
Forms Covered	BIR Forms 1701-MS, 1701, and 1701A
Manner of Filing	1701-MS: Manual or Electronic (Offline eBIRForms); 1701 & 1701A: Electronic via eBIRForms or eFPS
Mode of Payment	Manual: Authorized Agent Banks or Revenue Collection Officers; Online: ePayment gateways or eFPS
Application of Facts	A taxpayer under the covered classification may validly file electronically using the offline system and pay through authorized or online channels, ensuring compliance with updated procedures

Revenue Memorandum Order No. 036-2026

Taxpayers are required to use the updated offline eBIRForms system, applying new forms, tax codes, and extended deadlines to ensure compliant electronic tax filing.

System Update	Release of Offline eBIRForms Package Version 7.9.6.0 with enhanced security and bug fixes
New Form Included	Annual income tax return for micro/small individual taxpayers
Deadline Adjustment	Filing deadline for annual income tax returns extended to May 15 (for applicable year)
Tax Code Updates	Additional Alphanumeric Tax Codes (ATCs) for specific income payments
Other Enhancements	Increased TIN branch code field length and updated tax rates for certain returns
Application to Taxpayer	Taxpayer must adopt the updated system, use revised forms and ATCs, and follow extended deadlines for proper compliance

BIR DEADLINES FROM MAY 4, 2026 TO MAY 10, 2026. A gentle reminder on the following deadlines, as may be applicable:

DATE	FILING/SUBMISSION
May 5, 2026	SUBMISSION - Summary Report of Certification issued by the President of the National Home Mortgage Finance Corporation (NHMFC). Month of April 2026
	e-FILING & PAYMENT (Online/Manual) - BIR Form 2000 (Monthly Documentary Stamp Tax Declaration/Return). Month of April 2026
	e-FILING & PAYMENT (Online/Manual) - BIR Form 2000-OT (Documentary Stamp Tax Declaration/Return One-Time Transactions). Month of April 2026
May 8, 2026	SUBMISSION – All Transcript Sheets of Official Register Books (ORBs) used by Dealers/Manufacturers/Toll Manufacturers/Assemblers/Importers of Alcohol Products, Tobacco Products, Petroleum Products, Non-Essential Goods, Sweetened Beverage Products, Mineral Products & Automobiles. Month of April 2026
	e-SUBMISSION - Monthly e-Sales Report for All Taxpayers using CRM/POS and/or Other Similar Business Machines whose last digit of 9-digit TIN is Even Number. Month of April 2026
May 10, 2026	SUBMISSION – List of Buyers of Sugar Together with a Copy of Certificate of Advance Payment of VAT made by each buyer appearing in the List by a Sugar Cooperative. Month of April 2026
	SUBMISSION – Information Return on Releases of Refined Sugar by the Proprietor or Operator of a Sugar Refinery or Mill. Month of April 2026
	e-SUBMISSION – Monthly e-Sales Report for All Taxpayers using CRM/POS and/or Other Similar Business Machines whose last digit of 9-digit TIN is Odd Number. Month of April 2026
	eFILING & PAYMENT/REMITTANCE (Online/Manual) – BIR Form 2200-M Excise Tax Return for the Amount of Excise Taxes Collected from Payment Made to Sellers of Metallic Minerals. Month of April 2026
	eFILING & PAYMENT (Online/Manual) – BIR Forms 1601-C (Monthly Remittance Return of Income Taxes Withheld on Compensation) and/or 0619-E (Monthly Remittance Form of Creditable Income Taxes Withheld-Expanded) and/or 0619-F (Monthly Remittance Form of Final Income Taxes Withheld). Non-eFPS Filers. Month of April 2026
	e-FILING & PAYMENT (Online/Manual) – BIR Form 2200-C (Excise Tax Return for Cosmetic Procedures) with Monthly Summary of Cosmetic Procedures Performed. Month of April 2026
	e-FILING & PAYMENT (Online/Manual) – BIR Form 1600-VT (Monthly Remittance Return of Value-Added Tax) and/or 1600-PT (Other Percentage Taxes Withheld) and Monthly Alphalist of Payees (MAP). eFPS & Non-eFPS Filers. Month of April 2026
	e-FILING & PAYMENT (Online/Manual) – BIR Form 1606 (Withholding Tax Remittance Return for Onerous Transfer of Real Property Other Than Capital Asset Including Taxable and Exempt). Month of April 2026
	e-FILING & PAYMENT (Online/Manual) – BIR Form 0620 (Monthly Remittance Form of Tax Withheld on the Amount Withdrawn from the Decedent’s Deposit Account) – eFPS & Non-eFPS Filers. Month of April 2026
	e-FILING & e-PAYMENT/REMITTANCE – BIR Form 1600-VT (Monthly Remittance Return of Value-Added Tax) and/or 1600-PT (Other Percentage Taxes Withheld) and BIR Form 1601-C (Monthly Remittance Return of Income Taxes Withheld on Compensation). National Government Agencies (NGAs). Month of April 2026