COURT OF TAX APPEALS DECISIONS
THE ASSESSMENT WAS VOID BECAUSE THE RO, WHO HAD NO AUTHORITY UNDER THE LOA, CONDUCTED THE AUDIT, EXAMINATION, AND RECOMMENDATION OF DEFICIENCY ASSESSMENTS; SEE DISSENTING OPINION. Examination of a taxpayer must be conducted only by the Revenue Officers (RO) specifically authorized under a valid Letter of Authority (LOA) as the LOA is the exclusive source of authority to examine a taxpayer’s books and records; any assessment resulting from an audit conducted by unauthorized officers is void, and any collection proceeding based thereon is likewise invalid. Here, the Court held that although the LOA authorized Revenue Officer Ami and Group Supervisor Causapin to examine the taxpayer’s books, the audit, examination, and recommendation of the deficiency assessments were actually performed by Revenue Officer Ventura, who admitted conducting the examination despite having no valid LOA authorizing her to do so. Consequently, the assessment was a nullity from the outset, and the subsequent collection measures. Dissenting Opinion: CTA lacks jurisdiction because the taxpayer failed to file a timely administrative protest against the Formal Letter of Demand/Final Assessment Notice (FLD/FAN), thus, the assessment had attained finality, thereby authorizing the BIR to proceed with collection. Accordingly, the CTA could only determine whether the Warrant of Distraint and/or Levy (WDL) was properly issued in the course of collection, but could no longer invalidate the underlying assessment based on alleged defects in the LOA. The dissent cautioned that allowing the taxpayers to challenge the FLD/FAN indirectly through the CTA’s “other matters” jurisdiction would effectively revive lost remedies, reward failure to comply with statutory protest procedures, improperly expand the CTA’s jurisdiction, and amount to judicial legislation. Consequently, the dissent voted to grant the Petition for Review and uphold the BIR’s collection efforts. [CTA EB No. 2867, CTA Case No. 9745, November 19, 2025; see also CIR v. Misnet Education, Inc., CTA EB No. 2825 (CTA Case No. 9941), November 18, 2025]
TAXPAYER CANNOT BELATEDLY CHALLENGE THE AUTHORITY OF ITS FOOD HANDLERS TO RECEIVE FLD/FAN AND FDDA AFTER CONSISTENTLY ALLOWING THEM TO ACCEPT SUCH DOCUMENTS, INCLUDING LOA WITHOUT OBJECTION. FLD/FAN and Final Decision on Disputed Assessment (FDDA) are validly served when delivered to the taxpayer’s registered address through the modes prescribed by the regulations, and that only a decision or collection notice which constitutes the CIR’s final determination on a disputed assessment is appealable to the CTA. The Court applied the doctrine of equitable estoppel, holding that a taxpayer who previously accepted BIR notices through the same employee and acted upon them cannot later deny such employee’s authority to receive subsequent assessment notices. Applying these principles, the Court found that the FLD/FAN and FDDA were validly served at the taxpayer’s registered address and received by its food handler, who was identified as a staff member. The taxpayer had consistently allowed its food handlers to receive prior BIR communications, including the LOA, and even acted upon those notices without questioning their authority. The Court held that the taxpayer was estopped from later claiming that the same employees were unauthorized to receive the FLD/FAN and FDDA. Consequently, the FDDA became final and executory when the taxpayer failed to appeal within the mandatory 30-day period. Since the taxpayer filed its Petition for Review only after the assessment had become final and executory, the CTA held that it did not acquire jurisdiction over the case and dismissed the petition. (Delicious Kakanin Enterprises Corporation v. CIR and Regional Director, Revenue Region No. 5, Caloocan City, CTA Case No. 10988, March 12, 2026)
ASSESSMENT IS VOID IF THE BIR FAILED TO VALIDLY SERVE THE PAN AND FLD/FAN AFTER SENDING THE NOTICES TO THE TAXPAYER’S FORMER INTRAMUROS ADDRESS DESPITE KNOWLEDGE OF ITS TRANSFER TO QUEZON CITY AND RDO TRANSFER, AND FAILED TO PROVE ACTUAL RECEIPT THEREOF. The assessment notices be served personally, or, if personal service is impracticable, by substituted service or registered mail to the taxpayer’s registered or known address. If the taxpayer denies receipt of assessment notices, the burden shifts to the BIR to establish by competent evidence that the notices were actually received, such as registry return cards bearing the taxpayer’s or its authorized representative’s signature or certifications from the Bureau of Posts. Applying these principles, the Court found that although the BIR claimed to have attempted personal service before sending the PAN and FLD/FAN by registered mail, the notices were sent to the taxpayer’s former address in Intramuros, Manila despite the BIR’s prior knowledge that the taxpayer had already transferred its principal place of business to Quezon City and had completed the corresponding transfer of its RDO. The Court held that the taxpayer had sufficiently established that it had duly informed the BIR of its change of address through the prescribed registration procedures, while the CIR failed to present any evidence to dispute such fact or to prove that the assessment notices were actually received at the old address. The Court likewise rejected the CIR’s contention that the taxpayer should have filed an administrative protest after subsequently requesting and obtaining copies of the assessment notices, stressing that due process requires the BIR itself to validly serve the assessments before the period to protest can commence. The taxpayer’s later acquisition of copies upon request could not cure the invalid service nor validate an assessment that had already been rendered void by non-compliance with the statutory notice requirements. Because the taxpayer was never properly informed of the assessments, it was deprived of the opportunity to administratively contest the alleged deficiency taxes, thereby violating its constitutional right to due process. As a consequence, the PAN, FAN, and FLD were declared void, and the WDL, being merely a collection remedy founded on invalid assessments, was likewise declared without legal basis. (Vestina Security Services, Inc. v. CIR, CTA Case No. 10889, November 24, 2025; see also Freyssinet Philippines, Inc. v. CIR, CTA Case No. 11084, November 21, 2025
TAXPAYER’S LATER DENIAL OF RECEIPT OF PAN IS NOT A NEWLY DISCOVERED EVIDENCE. A taxpayer must be served with a PAN and FLD/FAN, thereby affording the taxpayer an opportunity to respond as part of due process. In addition, under the Rules of Court, a motion for new trial based on additional evidence may be granted only upon proof of fraud, accident, mistake, excusable negligence, or newly discovered evidence. Applying these principles, the Court found that the taxpayer’s right to due process was not violated because the evidence established that the PAN was timely sent through LBC, with the tracking receipt showing that it was posted and scheduled for delivery the following day. More significantly, the taxpayer’s own Finance Clerk, in her original Judicial Affidavit and testimony, unequivocally admitted that BIR officers personally delivered the PAN in and positively identified the PAN presented in court. The taxpayer raised the alleged non-receipt of the PAN only after the CTA Division had rendered an adverse decision, relying on a Supplemental Judicial Affidavit in which the same witness recanted her previous testimony. The Court held that this belated assertion did not constitute newly discovered or omitted evidence because, through the exercise of reasonable diligence, the taxpayer could have raised the issue as early as its receipt of the FAN and certainly during the administrative protest and trial before the CTA. The Court also found the taxpayer’s position to be inherently inconsistent, as it initially argued that it was deprived of the full 15-day period to respond to the PAN, an argument that presupposed receipt of the PAN, before later claiming that it never received the PAN at all. Since the supplemental affidavit merely sought to introduce forgotten evidence through a piecemeal presentation of proof, and no compelling reason existed to warrant a liberal application of procedural rules, the Court sustained the validity of the assessment process and ruled that there was no denial of due process. [IBMS Technology Phils. Corporation v. CIR, CTA EB No. 2907 (CTA Case No. 9970), November 12, 2025]
ISSUANCE OF FLD/FAN ON THE SAME DATE AS ISSUANCE OF THE PAN VIOLATES THE TAXPAYER’S DUE PROCESS. The taxpayer shall have 15 days from receipt of the PAN to submit a reply, and only after receipt of such response or upon the taxpayer’s failure to respond within the prescribed period may the BIR issue the FLD/FAN. The PAN stage is an essential component of administrative due process because it provides the taxpayer an opportunity to dispute the findings and allows the BIR to reconsider its position before issuing a final assessment. The Court likewise ruled that the BIR’s premature issuance of an FLD/FAN before the lapse of the 15-day response period constitutes a denial of due process, and the taxpayer’s subsequent filing of a protest does not cure the defect. In this case, the Court found that the BIR failed to observe the mandatory due process requirements in the issuance of the assessment. The taxpayer received the PAN on January 4, 2012, giving it until January 19, 2012 to file a response. However, the taxpayer issued the FLD/FAN on the same date, January 4, 2012, without waiting for the taxpayer’s reply or the expiration of the 15-day period granted by law and regulations. The fact that the taxpayer subsequently filed a protest to the PAN on January 11, 2012 did not validate the defective assessment, as the BIR had already made a determination of respondent’s alleged tax liabilities without considering any possible response to the PAN. Hence, the premature issuance of the FLD/FAN constituted a violation of respondent’s right to due process, rendering the assessment void and properly subject to cancellation. [CIR v. Asia United Leasing Finance Corporation, CTA EB No. 2984 (CTA Case No. 8525) November 3, 2025; see also CIR v. Misnet Education, Inc., CTA EB No. 2825 (CTA Case No. 9941), November 18, 2025]
A DUE DATE EARLIER THAN THE DATE OF MAILING OF FLD/FAN RENDERS THE ASSESSMENT VOID. A valid FLD/FAN must not only state the taxpayer’s definite tax liability but also require payment within a specific and prospective period. Due date for payment is a substantive requirement, as it affords the taxpayer a real and fair opportunity to comply, and assessments lacking a valid due date are void. Applying these principles, the Court held that the FLD/FAN was invalid even assuming it had been properly served because it indicated September 21, 2022 as the due date for payment but was mailed only on September 23, 2022, making compliance legally impossible before the taxpayer could even receive the notice. The Court ruled that a lapsed due date renders the demand for payment illusory and ineffective, deprives the taxpayer of the opportunity to comply, violates the due process guarantee, which contemplates that delinquency interest accrues only after the taxpayer has been duly notified and has failed to pay on the due date appearing in the notice and demand. Since the FLD/FAN failed to contain a valid, prospective, and enforceable demand for payment, it did not constitute a valid assessment and was declared void (Freyssinet Philippines, Inc. v. CIR, CTA Case No. 11084,November 21, 2025)
BIR HAS 3 YEARS TO ASSESS AS A RULE; TAXPAYER MUST PROVE WHICH PART OF ASSESSMENT PRESCRIBES. The BIR must assess internal revenue taxes within three (3) years from the last day prescribed by law for filing the return or from the actual filing date, whichever is later. Since the BIR neither alleged nor proved the existence of a false or fraudulent return, the ordinary 3-year prescriptive period governed the assessment of the taxpayer’s deficiency taxes. Where the FLD/FAN was issued after 3 years from date of filing, the assessment is considered prescribed. However, the Court held that the assessments for deficiency Income Tax and the December EWT and WTC remained timely, as the FAN was issued within the applicable three-year period for those liabilities. The Court further ruled that a factual determination was still necessary to segregate the alleged deficiencies attributable to the prescribed periods from those pertaining to the non-prescribed periods; otherwise, absent sufficient proof, the deficiencies would be attributed only to the portion of taxable year that remained assessable. [IBMS Technology Phils. Corporation v. CIR, CTA EB No. 2907 (CTA Case No. 9970), November 12, 2025]
BIR CANNOT VALIDLY INVOKE THE 10-YEAR PRESCRIPTIVE PERIOD ABSENT A CLEAR STATEMENT IN THE ASSESSMENT NOTICE, PROOF THAT THE UNDER-DECLARATION EXCEEDED THE 30% THRESHOLD, AND EVIDENCE OF A DELIBERATE OR WILLFUL MISSTATEMENT. The BIR has the right to assess internal revenue taxes within 3 years from the last day prescribed for filing the return or the actual filing thereof, whichever is later, while the ten 10-year prescriptive period applies only in cases of a false or fraudulent return with intent to evade tax or failure to file a return. The extraordinary 10-year period may be invoked only upon strict compliance with due process requirements, namely: (1) the assessment notice must clearly state that the BIR is applying the 10-year prescriptive period instead of the ordinary 3-year period; (2) it must disclose the factual and legal bases for alleging falsity or fraud, including the computation showing that the taxpayer’s under-declaration exceeded the 30% threshold; and (3) the alleged false return must be supported by clear and convincing evidence of a deliberate or willful misstatement, since a false return requires intentional falsity and not merely an inaccurate declaration. Applying these principles, the Court ruled that the BIR could not rely on the 10-year prescriptive period because the FLD/FAN did not state that the extraordinary period was being invoked, and although the BIR alleged that the taxpayer underdeclared sales by more than 30%, it failed to disclose the computation establishing that threshold. More significantly, the BIR failed to present clear and convincing evidence that the taxpayer deliberately or willfully filed a false VAT return, with its own revenue officer admitting during trial that no evidence of willfulness or intent to evade taxes had been established. Consequently, the Court held that the BIR’s authority to assess had already prescribed, rendering the FLD/FAN and the subsequent FDDA void and without legal effect (Justice Maria Lourdes P.A. Sereno v. CIR, CTA Case No. 10793, December 26, 2026; see also Freyssinet Philippines, Inc. v. CIR, CTA Case No. 11084,November 21, 2025; The City of Manila v. CIR, CTA Case No. 10654, November 12, 2025)
BIR HAS 3 YEARS TO COLLECT, WHICH BEGINS UPON THE ISSUANCE OF THE FLD/FAN; REQUEST FOR RECONSIDERATION DOES NOT TOLL THE RUNNING OF THE PERIOD. When a deficiency tax assessment is validly issued within the ordinary 3-year prescriptive period, the BIR has a separate 3-year period from the date the assessment notice is released, mailed, or sent to the taxpayer within which to collect the assessed taxes through distraint, levy, or judicial action. Jurisprudence likewise establishes that only a request for reinvestigation that is granted by the CIR suspends the running of the period to collect, whereas a mere request for reconsideration does not interrupt prescription. In this case, the taxpayer received the FLD in 2014 to initiate collection. Although the taxpayer subsequently filed a protest in the form of a request for reconsideration, such protest did not suspend the prescriptive period because it neither involved the submission of new evidence nor constituted a granted request for reinvestigation. Since the BIR commenced its collection efforts only in 2020, when the WDL was served, more than 3 years had already elapsed from the date the assessment became collectible. Accordingly, the Court held that the BIR’s right to collect had prescribed, rendering its collection efforts legally unenforceable. CIR v. Jimmy Kho, CTA EB No. 2877 (CTA Case No. 10308), November 18, 2025.
BIR HAS 3 YEARS TO COLLECT; FILING OF ANSWER TO PETITION CONSTITUTES JUDICIAL ACTION FOR COLLECTION. When a tax assessment is validly issued within the 3-year prescriptive period, the BIR has another 3 years from the date the assessment notice is released, mailed, or sent to the taxpayer within which to collect the assessed taxes through distraint, levy, or judicial action. Jurisprudence further recognizes that while a granted request for reinvestigation may suspend the running of the period to collect, the filing of a judicial action for collection, such as the BIR’s Answer to a taxpayer’s petition for review before the CTA praying for payment of the assessed taxes, constitutes a valid mode of collection. In this case, the Court found that although the taxpayer’s protest requested a reinvestigation, there was no evidence that the CIR informed the taxpayer that such request had been granted. Consequently, no suspension of the collection period occurred, and the 3-year period to collect commenced upon the issuance of the FLD/FAN. Nevertheless, before the expiration of this period, the BIR filed its Answer to the taxpayer’s Petition for Review, which, under prevailing jurisprudence, constituted a judicial action for the collection of the assessed taxes. Accordingly, the Court held that the BIR timely initiated collection proceedings and that its right to collect had not yet prescribed. [IBMS Technology Phils. Corporation v. CIR, CTA EB No. 2907 (CTA Case No. 9970), November 12, 2025]
THE FLD/FAN WAS DECLARED VOID BECAUSE, DESPITE THE TAXPAYER’S TIMELY REPLY TO THE PAN WITH EXPLANATIONS, RECONCILIATIONS, AND SUPPORTING DOCUMENTS, THE BIR MERELY REITERATED THE PAN FINDINGS IN THE FLD/FAN WITHOUT ADDRESSING THE TAXPAYER’S DEFENSES OR PROVIDING THE FACTUAL AND LEGAL BASES FOR REJECTING THEM, VIOLATING DUE PROCESS. The BIR must inform the taxpayer in writing of the factual and legal bases of the assessment and, as an essential component of due process, consider and address the taxpayer’s defenses and supporting evidence; otherwise, the assessment is void. While the invalidity of a FDDA does not automatically invalidate the underlying assessment, the assessment itself becomes void when the BIR fails to observe these due process requirements. In this case, although the taxpayer timely filed a Reply to the PAN disputing the alleged undeclared receipts, unsupported interest expense, and deficiency expanded withholding tax through explanations, reconciliations, and supporting documents, the BIR merely reproduced the findings in the PAN in the FLD/FAN with only the interest amounts updated, without addressing or explaining why the taxpayer’s defenses were rejected. As a result, the taxpayer was deprived of meaningful notice of the factual and legal bases for the continued assessment, constituting a denial of due process that rendered the deficiency tax assessments null and void (Bethlehem Holdings, Inc. v. CIR, CTA Case No. 10991, November 18, 2025)
THE TAXPAYER’S PROTEST FILED BEYOND THE 30-DAY PERIOD RENDERS ASSESSMENT FINAL, EXECUTORY, AND DEMANDABLE, DEPRIVING THE CTA OF JURISDICTION. A taxpayer must file a valid protest against a FLD/FAN within 30 days from receipt; otherwise, the assessment becomes final, executory, and demandable, leaving the courts without jurisdiction to review it. Applying these rules, the Court held that although the taxpayer’s protest was dated September 8, 2022, the controlling date was the actual filing date, which was September 14, 2022, as evidenced by the registered mail acceptance stamp on the envelope addressed to the authorized Regional Director. Since the taxpayer received the FLD/FAN on August 10, 2022, he had only until September 9, 2022 to file his protest. The Court ruled that the protest was filed five days late, rendering the assessment final and executory. Consequently, the Court no longer had jurisdiction to review the assessment and dismissed the petition (Mangubat v. CIR, CTA Case No. 11063, February 3, 2026)
CTA LACKS JURISDICTION TO ENTERTAIN PETITION FILED 10 MONTHS AFTER RECEIPT OF THE FDDA. A taxpayer adversely affected by the denial of an administrative protest must either appeal the FDDA to the CTA or elevate the matter to CIR, as the case may be, within 30 days from receipt of the FDDA; otherwise, the assessment becomes final, executory, and demandable. A taxpayer has only three remedies after filing an administrative protest: (1) appeal to the CTA within 30 days from receipt of the denial of the protest; (2) if the denial is issued by the CIR’s authorized representative, elevate the protest to the CIR within the same 30-day period; or (3) in case of inaction, appeal to the CTA within 30 days from the lapse of the 180-day period. Applying these rules, the Court found that the taxpayer received the FLD/FAN on April 12, 2021 and timely filed a request for reinvestigation on April 20, 2021. Although the BIR initially granted the taxpayer 60 days to submit supporting documents, it subsequently informed the taxpayer that it would proceed with the issuance of the FDDA due to the taxpayer’s failure to submit the required documents within the prescribed period. The taxpayer received the FDDA, expressly denominated as the BIR’s “final decision” on the protest, on November 12, 2021. Consequently, the taxpayer had only until December 12, 2021 to either appeal to the CTA or elevate the matter to the CIR. However, the taxpayer filed its Petition for Review only on September 27, 2022, approximately ten (10) months after receipt of the FDDA. The Court therefore held that the petition was filed beyond the mandatory and jurisdictional 30-day period, thereby depriving the CTA of jurisdiction to entertain the case. (Delicious Kakanin Enterprises Corporation v. CIR and Regional Director, Revenue Region No. 5, Caloocan City, CTA Case No. 10988, March 12, 2026)
CTA RETAINED JURISDICTION TO REVIEW THE VALIDITY OF THE WDL UNDER “OTHER MATTERS” BUT WILL NOT RULE ON VALIDITY OF THE ASSESSMENT ITSELF AS WDL COULD NOT BE TREATED AS THE CIR’S DECISION ON THE ASSESSMENT. A taxpayer may appeal to the CTA within 30 days from receipt of the CIR’s adverse decision on a disputed assessment or from the lapse of the 180-day period in case of inaction. Where the taxpayer opts to await the CIR’s decision after the 180-day period, such choice is mutually exclusive from immediately appealing the inaction. The CTA has jurisdiction not only over disputed assessments but also over “other matters” arising under the NIRC, including the validity of WDL. Applying these rules, the Court found that the taxpayer timely protested the FLD/FAN and, after the lapse of the 180-day period without action, elected to await the decision of the BIR’s authorized representative instead of immediately appealing to the CTA. When the authorized representative eventually issued the FDDA the taxpayer filed a Request for Reconsideration with the CIR. However, instead of receiving a decision on the administrative appeal, the taxpayer received WDL, which it argued constituted a constructive denial of its Request for Reconsideration. The Court rejected this argument, holding that under prevailing jurisprudence, a WDL issued during collection proceedings can no longer be treated as the CIR’s final decision on a disputed assessment. Since the Request for Reconsideration remained unresolved, there was no appealable decision on the assessment over which the CTA could exercise jurisdiction, and the Court therefore lacked jurisdiction to review the correctness of the assessment and the FDDA. Nevertheless, the Court ruled that it had jurisdiction to determine the validity of the WDL as an “other matter” arising under the Tax Code. Considering that the taxpayer filed its Petition within the filing period granted, the petition was timely insofar as it questioned the validity of the WDL. Accordingly, the Court held that it had only partial jurisdiction over the case, allowing review of the WDL while dismissing the challenge to the assessment for lack of jurisdiction (The Greenbelt Madison Condominium Association, Inc. v. CIR, CTA Case No. 10789, November 26, 2025)
THE TAXPAYER CANNOT VALIDLY INVOKE THE EARLY CLOSURE OF THE CASHIER AND ALLEGED ADVICE OF COURT PERSONNEL TO FILE VIA COURIER TO JUSTIFY LATE FILING; CTA CANNOT RELAX THE RULES TO ALLOW BOTH LATE PAYMENT OF DOCKET FEES AND LATE FILING OF THE PETITION; HENCE, THE CTA ACQUIRED NO JURISDICTION OVER THE CASE. The CTA has exclusive appellate jurisdiction over decisions and inactions of the CIR involving disputed assessments and other matters arising under the NIRC, including the validity of WDL. A taxpayer may directly appeal a WDL to the CTA within 30 days from receipt thereof, as the issuance of a WDL may constitute an implied denial of the taxpayer’s protest. Applying these principles, the Court found that the taxpayer received the WDL on October 28, 2021 and therefore had until November 29, 2021 to file a petition for review. However, the Petition for Review was actually filed only on December 3, 2021, beyond the mandatory and jurisdictional 30-day period. The Court rejected the taxpayer’s claim that it had attempted to file the petition on November 29, 2021 but was prevented from doing so because the cashier had allegedly closed early and court personnel advised it to file through a private courier, ruling that these allegations were unsupported by evidence and, in any event, contradicted by court records showing that the Cash Division continued accepting payments until after 4:30 p.m. The Court likewise held that even assuming such advice had been given, it was not binding on the Court, and the doctrine allowing the late payment of docket fees under exceptional circumstances was inapplicable because the delay pertained not merely to the payment of docket fees but to the actual filing of the petition itself. Since the timely perfection of an appeal is mandatory and jurisdictional, the belated filing deprived the CTA of jurisdiction to entertain the case, warranting the dismissal of the petition. (Helicon Technology Corporation v. CIR, CTA Case No. 10694, December 29, 2025)
THE RECKONING PERIOD FOR FILING AN APPEAL WITH THE CTA EN BANC BEGINS FROM THE OSG’S RECEIPT OF THE DECISION, NOT FROM THE BIR’S RECEIPT THEREOF. A party adversely affected by a decision or resolution of the CTA Division on a motion for reconsideration or new trial must file a petition for review with the CTA En Banc within 15 days from receipt thereof, unless a timely motion for extension is filed before the expiration of the reglementary period. The period to appeal in cases involving the government is reckoned from the date the Office of the Solicitor General (OSG), as the government’s principal counsel, receives the assailed decision or resolution, and not from receipt by the deputized government lawyer, who merely acts as the OSG’s representative under its supervision and control. Applying these principles, the Court found that while the BIR’s deputized counsel received the CTA Division’s Resolution on October 11, 2024, the OSG had actually received it earlier on October 9, 2024. Thus, the 15-day period to file a petition for review or a motion for extension expired on October 24, 2024. Since the CIR filed the Petition for Review only on October 28, 2024, without having sought a timely extension, the appeal was filed beyond the mandatory and jurisdictional period. Consequently, the CTA Division’s Resolution had already become final and executory by operation of law, leaving the CTA En Banc with no jurisdiction to entertain the belated appeal [CIR v. Berong Nickel Corporation, CTA EB No. 3017 (CTA Case No. 10319), December 17, 2025; see also CIR v. Misnet Education, Inc., CTA EB No. 2825 (CTA Case No. 9941), November 18, 2025]
AN ELECTRIC COOPERATIVE MUST ESTABLISH THAT IT IS A NON-STOCK, NON-PROFIT ENTITY DULY REGISTERED WITH THE NEA BEFORE IT MAY VALIDLY INVOKE THE INCOME TAX EXEMPTION. Electric cooperatives registered with the National Electrification Administration (NEA) are granted a permanent exemption from income tax, and despite the temporary withdrawal of tax incentives The Court emphasized that tax exemptions are construed strictly against the taxpayer, who bears the burden of proving entitlement thereto. Applying these principles, the Court held that although the taxpayer claimed to be permanently exempt from income tax as an electric cooperative, it failed to establish that it was a non-stock, non-profit electric cooperative duly registered with the NEA. The document purportedly proving its NEA registration was not formally admitted in evidence, and the BIR specifically denied the taxpayer’s allegation of NEA registration in its Answer. In the absence of competent and admitted evidence establishing the taxpayer’s qualification for the exemption, the Court ruled that the taxpayer could not invoke the tax exemption, thereby sustaining the deficiency income tax assessment, including the corresponding surcharge and interest [Bukidnon II Electric Cooperative, Inc. (BUSECO) v. CIR, CTA Case No. 10930, December 5, 2025]
TO BE DEDUCTIBLE, TAXPAYER MUST PROVE THAT SALARIES AND WAGES WERE SUBJECTED TO WTC; TAXPAYER MUST PROVE LINK TO EXPENSES; AFS MUST BE PRESENTED AND MUST TRACE THE DISALLOWED AMOUNT. Under the Rules of Evidence, entries in official records are prima facie evidence of the facts stated therein, although the taxpayers still bear the burden of proving entitlement to deductions or non-liability for assessed taxes with competent evidence. In this case, the Court upheld the disallowance in Salaries and Wages representing payments to contractors and subcontractors for failure to establish that these were properly subjected to Withholding Tax on Compensation (WTC) noting that while the taxpayer invoked the Monthly Alphalist of Payees (MAP) attached to its Expanded Withholding Tax (EWT) returns and argued that these showed compliance with 2% EWT on payments, the Court found that such documents only proved EWT compliance and did not automatically establish that the subject salaries and wages were duly subjected to WTC or properly linked to the disallowed expenses. The Court further ruled that the taxpayer’s attempt to rely on its Audited Financial Statements to show that the payments formed part of “Direct Labor” under Cost of Services could not be given credence, as the AFS was not admitted in evidence due to failure to present the original documents for comparison, and even if considered, the figures therein did not specifically identify or sufficiently trace the payments to the disallowed amount. Accordingly, the Court sustained the BIR’s disallowance for lack of competent and specific proof that the contested salaries and wages were properly subjected to withholding tax requirements. [IBMS Technology Phils. Corporation v. CIR, CTA EB No. 2907 (CTA Case No. 9970), November 12, 2025]
REVENUE ISSUANCES
REVENUE MEMORANDUM CIRCULAR NO. 72-2026
Under the tax authority’s power to streamline administrative procedures, the requirement to secure a prior confirmatory tax ruling for qualified nominee transfers of proprietary club shares is completely removed, moving instead to a post-audit verification system to improve the ease of doing business.
| Covered Issuance |
Circular clarifying the tax-exempt status of corporate nominee transfers of proprietary club shares and dispensing with advance regulatory approvals.
Transfer is exempt from: • Capital Gains Tax (CGT) • Documentary Stamp Tax (DST) • Donor’s Tax |
| Scope of Exemption and Conditions |
All transfers of proprietary club shares from an outgoing corporate nominee/trustee to an incoming nominee/trustee where the legal title changes but the underlying corporation retains absolute beneficial ownership, solely to comply with club rules requiring registration under a natural person.
Conditions: 1. The corporation remains the beneficial owner. 2. The transfer is documented by a Declaration of Trust or Trust Agreement. 3. The share is recorded in the corporate books. 4. The transfer is without monetary or non-monetary consideration, directly or indirectly, in favor of the outgoing or incoming nominee. |
| Activities Allowed / Conditions |
Taxpayers may bypass advance confirmatory rulings and proceed directly to the appropriate Revenue District Office (RDO) for the processing of the electronic Certificate Authorizing Registration (eCAR).
To qualify, the proprietary club share must be recorded as a corporate asset, a valid Declaration of Trust or Trust Agreement must be executed, and no monetary or non-monetary consideration may be exchanged between the outgoing and incoming nominees. |
| Duration / Resolution |
Effective immediately upon issuance on June 30, 2026.
All pending requests for confirmatory rulings previously submitted to the BIR will no longer be acted upon, and compliance for all covered transactions will be verified solely through mandatory post-audit checks. |
| Pending Applications |
All applications currently pending before the BIR shall no longer be acted upon.
Applicants may proceed directly to the Revenue District Office (RDO) having jurisdiction over the transaction for the processing of the electronic Certificate Authorizing Registration (eCAR). |
BIR DEADLINES FROM JULY 6, 2026 TO JULY 12, 2026. A gentle reminder on the following deadlines, as may be applicable:
| DATE | FILING/SUBMISSION |
| July 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, and Automobiles. Month of June 2026 |
| e-SUBMISSION – Monthly e-Sales Report for all taxpayers using CRM/POS and/or other similar business machines whose last digit of the 9-digit TIN is an even number. Month of June 2026 | |
| July 10, 2026 | SUBMISSION – List of Buyers of Sugar together with a copy of the Certificate of Advance Payment of VAT made by each buyer appearing in the list by a Sugar Cooperative. Month of June 2026 |
| SUBMISSION – Information Return on Releases of Refined Sugar by the Proprietor or Operator of a Sugar Refinery or Mill. Month of June 2026 | |
| e-SUBMISSION – Monthly e-Sales Report for all taxpayers using CRM/POS and/or other similar business machines whose last digit of the 9-digit TIN is an odd number. Month of June 2026 | |
| eFILING & PAYMENT/REMITTANCE (Online/Manual) – BIR Form 2200-M (Excise Tax Return for the Amount of Excise Taxes Collected from Payments Made to Sellers of Metallic Minerals). Month of June 2026 | |
| eFILING & PAYMENT (Online/Manual) – BIR Form 1601-C (Monthly Remittance Return of Income Taxes Withheld on Compensation). Non-eFPS Filers. Month of June 2026 | |
| eFILING & PAYMENT (Online/Manual) – BIR Form 2200-C (Excise Tax Return for Cosmetic Procedures) together with the Monthly Summary of Cosmetic Procedures Performed. Month of June 2026 | |
| eFILING & PAYMENT (Online/Manual) – BIR Form 1600-VT (Monthly Remittance Return of Value-Added Tax) and/or BIR Form 1600-PT (Monthly Remittance Return of Other Percentage Taxes Withheld), together with the Monthly Alphalist of Payees (MAP), for eFPS and Non-eFPS Filers. Month of June 2026 | |
| eFILING & PAYMENT (Online/Manual) – BIR Form 1606 (Withholding Tax Remittance Return for Onerous Transfer of Real Property Other Than Capital Asset, Including Taxable and Exempt Transactions). Month of June 2026 | |
| e-FILING & e-PAYMENT/REMITTANCE – BIR Form 1600-VT (Monthly Remittance Return of Value-Added Tax) and/or BIR Form 1600-PT (Other Percentage Taxes Withheld), and BIR Form 1601-C (Monthly Remittance Return of Income Taxes Withheld on Compensation) for National Government Agencies (NGAs). Month of June 2026 | |
| July 11, 2026 | e-FILING – BIR Form 1601-C (Monthly Remittance Return of Income Taxes Withheld on Compensation) – eFPS Filers under Group E. Month of June 2026 |
| July 12, 2026 | e-FILING – BIR Form 1601-C (Monthly Remittance Return of Income Taxes Withheld on Compensation) – eFPS Filers under Group E. Month of December 2025 |