BIR ISSUANCE
The Bureau of Internal Revenue (BIR) has issued Revenue Memorandum Circular No. 107‑2025, which temporarily suspends all field audits and related operations nationwide, including the issuance, revalidation, extension, or replacement of Letters of Authority (LOAs) and Mission Orders (MOs). This suspension applies to all BIR audit offices and divisions, covering both large and small taxpayers. The directive is intended to provide the BIR sufficient time to review and improve existing audit procedures, ensuring a more transparent and standardized approach in the future. While the suspension is in effect, taxpayers are not prohibited from voluntarily settling known tax liabilities, and operations will resume only upon further notice from the BIR Commissioner.
| Details / Rules | Status under RMC 107‑2025 | |
| Scope of Suspension | All field audits, including issuance of Letters of Authority (LOA) and Mission Orders (MO) | Suspended immediately and temporarily |
| Affected BIR Offices | Large Taxpayers Service; Revenue Regions/Districts; National and Regional Investigation Divisions;Assessment Divisions, VAT audit units/section; Office audit sections; and All other offices conducting examinations | All nationwide offices included |
| Exceptions – Audits Allowed | Time-sensitive cases where statute of limitations expires within 6 monthsEstate, donor’s, and capital gains taxes; withholding taxes on the sale of real properties or shares of stocks; documentary stamp tax returnsTaxpayers retiring from businessActive criminal investigations with verified intelligenceRefund claims requiring LOAOther legally mandated audits or Commissioner’s order | Not suspended |
COURT OF TAX APPEALS DECISIONS
computed from the DOJ’s receipt of the assailed Resolution, as the deputized BIR prosecutor acts only as the DOJ’s representative while the DOJ retains control of the prosecution. Applying this rule, the 15-day period deadline to file the petition began on May 2, 2024, when the DOJ received the Resolution, and expired on May 17, 2024. Because the Petition for Review was filed only on May 22, 2024, it was filed out of time. (People of the Philippines v. Lemuel Sibuma Consolacion, CTA EB Crim. No. 150, CTA Crim Case No. O-983, May 29 2025)
CONDOMINIUM CORPORATIONS ARE NOT SUBJECT TO LOCAL BUSINESS TAX (LBT) UNLESS THEY ENGAGE IN PROFIT-ORIENTED ACTIVITIES, WHICH SHOULD BE PROVED BY THE LGU. Condominium corporations are generally not subject to LBT because their statutory purposes under the Condominium Act are limited to holding and managing common areas and performing activities necessary to maintain the condominium project—not to earn profit. Applying this rule, the MeTC, RTC, and the Court En Banc uniformly found that LGU’s collection of association dues and alleged rental fees fell within its lawful, non-profit functions as a condominium corporation, and LGU failed to present any evidence showing that the Company is engaged in profit-oriented activities that would remove it from the general exemption. Further, the Court held that the Environmental Inspection Fee (EIF) and Business Permit Fee (BPF) are regulatory fees—not taxes—and thus fall outside its jurisdiction. Accordingly, while the petition was procedurally cognizable, the substantive claims on LBT and costs of suit lack merit. (CTA EB No. 2843, RTC SCA Case No. 285, Amended Decision dated Aril 7, 2025; see also Taguig City Treasurer and the City Government of Taguig v. Forbeswood Heights Condominium, CTA EB No. 2888, May 15, 2025)
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UNDER THE 1987 CONSTITUTION AND THE LOCAL GOVERNMENT CODE, A TAXPAYER MUST BE FULLY INFORMED OF THE LEGAL AND FACTUAL BASES OF A LOCAL TAX ASSESSMENT; THE RTC CORRECTLY RULED THAT DKT HEALTH’S ASSESSMENT REPORT VIOLATED DUE PROCESS BECAUSE IT LACKED SUFFICIENT DETAIL ON STATUTORY BASIS AND TAX APPORTIONMENT. Sections 195 and 196 of the Local Government Code prescribe that local tax assessments must clearly state the nature of the tax, the amount of deficiency, surcharges, penalties, and the period covered to adequately inform the taxpayer. In this case, Quezon City issued a two-page Assessment Report for DKT Health covering 2016–2021, but failed to indicate the precise statutory basis under the local revenue code and provided no detailed breakdown of the apportionment of sales between essential and non-essential products. As a result, DKT Health could not verify the computation of the deficiency tax. Precedents on proper assessment content establish that such omissions violate due process. Consequently, the RTC correctly ruled that the Assessment Report did not satisfy the required procedural safeguards, justifying DKT Health’s challenge (Quezon City v. DKT Health, Inc., CTA AC No. 304, June 13, 2025); a valid local tax assessment must inform the taxpayer of the nature, legal basis, period covered, and the specific deficiency tax, surcharge, interest, and penalties, the SOA issued to Royal Cargo cannot qualify as an assessment because it merely listed fees required for business permit renewal and was not issued after an examination of books. Applying this rule, the Court held that the SOA failed to apprise the taxpayer of the factual and legal bases of any deficiency, rendering Section 195 inapplicable and validating Royal Cargo’s recourse to a refund under the remedy for erroneous or illegal collection. (City Treasurer of Parañaque City v. Royal Cargo Inc., CTA EB No. 2908 (CTA AC No. 270), April 15, 2025)
CIVIL LIABILITY FOR UNPAID TAXES ARISES ONLY FROM A VALID TAX ASSESSMENT; A VOID FLD/FAN NEGATES BOTH CRIMINAL AND CIVIL LIABILITY UNDER SECTION 255 OF THE NIRC. Section 255 of the 1997 NIRC, as amended, penalizes any person who willfully fails to pay taxes, file returns, keep proper records, or remit withheld taxes when required by law or regulations, imposing both criminal and potentially civil consequences. While the general rule holds that a criminal acquittal does not automatically extinguish civil liability, which can be pursued based on preponderance of evidence, such liability is contingent upon the existence of a legally valid act or obligation. Here, the respondent was acquitted because the Bureau of Internal Revenue’s FLD/FAN was found void, as it failed to specify a clear due date for payment, rendering the assessment legally ineffective. Consequently, the Court emphasized that extinction of the penal action does not affect civil liability only when the underlying obligation is recognized in law, which is absent here. It was also ruled that Mendez case will not apply because in that case, there was no final assessment, unlike in this case, there is an assessment only that it was found void (People of the Philippines v. Enrico Candelaira Tuazon, CTA EB Crim. No. June 9, 2025).
APPEAL PERIOD IS COUNTED FROM RECEIPT BY THE PRINCIPAL COUNSEL (DOJ) NOT THE DEPUTIZED PROSECUTOR (BIR); HERE, DOJ’S EARLIER RECEIPT MADE THE PETITION LATE. Appeal periods are reckoned from receipt of the assailed ruling by the principal counsel—not a deputized lawyer—the filing period in this case must be computed from the DOJ’s receipt of the assailed Resolution, as the deputized BIR prosecutor acts only as the DOJ’s representative while the DOJ retains control of the prosecution. Applying this rule, the 15-day period deadline to file the petition began on May 2, 2024, when the DOJ received the Resolution, and expired on May 17, 2024. Because the Petition for Review was filed only on May 22, 2024, it was filed out of time. (People of the Philippines v. Lemuel Sibuma Consolacion, CTA EB Crim. No. 150, CTA Crim Case No. O-983, May 29 2025)
CONDOMINIUM CORPORATIONS ARE NOT SUBJECT TO LOCAL BUSINESS TAX (LBT) UNLESS THEY ENGAGE IN PROFIT-ORIENTED ACTIVITIES, WHICH SHOULD BE PROVED BY THE LGU. Condominium corporations are generally not subject to LBT because their statutory purposes under the Condominium Act are limited to holding and managing common areas and performing activities necessary to maintain the condominium project—not to earn profit. Applying this rule, the MeTC, RTC, and the Court En Banc uniformly found that LGU’s collection of association dues and alleged rental fees fell within its lawful, non-profit functions as a condominium corporation, and LGU failed to present any evidence showing that the Company is engaged in profit-oriented activities that would remove it from the general exemption. Further, the Court held that the Environmental Inspection Fee (EIF) and Business Permit Fee (BPF) are regulatory fees—not taxes—and thus fall outside its jurisdiction. Accordingly, while the petition was procedurally cognizable, the substantive claims on LBT and costs of suit lack merit. (CTA EB No. 2843, RTC SCA Case No. 285, Amended Decision dated Aril 7, 2025; see also Taguig City Treasurer and the City Government of Taguig v. Forbeswood Heights Condominium, CTA EB No. 2888, May 15, 2025)