[ASSESSMENTS ISSUED IN CONNECTION WITH THE ISSUANCE OR RENEWAL OF BUSINESS PERMITS, SUCH AS THE TAX ORDERS OF PAYMENT, CANNOT BE DEEMED A NOTICE OF ASSESSMENT CONTEMPLATED UNDER SECTION 195 OF THE LGC OF 1991] [IF THE TAXPAYER RECEIVES AN ASSESSMENT & DOES NOT PAY THE TAX, ITS REMEDY IS TO FILE A WRITTEN PROTEST WITH THE LOCAL TREASURER WITHIN 60 DAYS FROM THE RECEIPT OF THE ASSESSMENT] [NOTICE OF ASSESSMENTS MUST INDICATE THE NATURE OF THE TAX, FEE, OR CHARGE, THE AMOUNT OF DEFICIENCY, THE SURCHARGES, INTERESTS & PENALTIES]

Petitioner Team Energy Corporation filed a Petition for Review seeking to annul the assailed Order, declare the Local Business Tax (LBT) rate for contractors under the Revised Revenue Code of 2017 of the Municipality of Pagbilao as violative of Section 187 of the Local Government Code (LGC) of 1991, as amended, and to obtain a refund of the alleged excess taxes paid pursuant to the disputed rates. The Petitioner contended that the Tax Orders of Payment (TOPs) are merely Billing Statements issued by the LGU for the routine renewal of business permits rather than Notices of Assessment (NOA) under Section 195 of the LGC, thus, Section 196 applies, granting a two-year period from payment of the LBTs to seek a refund, within which both its administrative and judicial claims were timely filed. In addition, the Petitioner asserted its entitlement to a refund of excess LBTs paid, representing the difference between the 60% of 1% rate imposed by the Revised Revenue Code and the 55% of 1% maximum rate allowed under the LGC. Contrarily, the Respondent Municipality of Pagbilao, Quezon, et al., asserted that the Revised Revenue Code remains valid and compliant with the LGC as the proper basis for computing the Petitioner’s LBTs, and that the refund claim was correctly denied for failure to timely appeal the denial of the administrative claim. In ruling, Sections 195 and 196 of the LGC provide distinct remedies for taxpayers, as clarified in the Supreme Court case of City of Manila vs. Cosmos Bottling Corporation. Section 195 addresses protests against assessments issued by local treasurers, while Section 196 covers claims for refunds or tax credits for taxes collected erroneously or illegally. The applicable provision depends on the basis of the LGU’s tax collection. Notably, Section 195 requires that the NOA specify the type of tax, the deficiency amount, and any surcharges, interest, or penalties, as emphasized in Luz R. Yamane vs. BA Lepanto Condominium Corporation. Examination of the TOPs shows that the LBT on contractors did not arise from a tax audit and is not a deficiency tax. The liability is based on the taxpayer’s own gross receipts declarations. Thus, the alleged assessments issued tied to business permit issuance or renewal, like the TOPs, do not qualify as NOA under Section 195. As such, the two-year prescriptive period under Section 196 applies to the Petitioner’s claim for refund or tax credit of improperly collected local taxes. Furthermore, the Petition also challenges the validity of the current rates (60% of 1%) under the Revised Revenue Code of Pagbilao. However, in the case of Mindanao Shopping Destination Corporation, et al. v. Hon. Rodrigo R. Duterte et al., the Supreme Court clarified that Section 191 requires: (i) an existing tax ordinance imposing a tax under the LGC; and (ii) a subsequent ordinance adjusting the tax rate. Premises considered, the case should be REMANDED to RTC for a full trial to determine the Petitioner’s entitlement to a refund. [TEAM ENERGY CORPORATION VS. MUNICIPALITY OF PAGBILAO, QUEZON, ET AL. CTA AC CASE NO. 339, DECEMBER 18, 2025]

MERE PRESENTATION OF THE REGISTRY RECEIPTS, ABSENT ANY AUTHENTICATION OR IDENTIFICATION THAT THE SIGNATURE APPEARING THEREIN IS THE TAXPAYER'S OR HIS OR HER AUTHORIZED REPRESENTATIVE'S, IS INSUFFICIENT TO PROVE ACTUAL RECEIPT BY THE TAXPAYER

Plaintiff-Appellant, People of the Philippines, filed an Appeal seeking to overturn the Regional Trial Court (RTC)’s Decision and Resolution, which acquitted the Accused-Appellee Dexter C. Lao, the President or responsible officer of Bluebasic Marketing Corporation (BMC), of violating Section 255 of the Tax Code and dismissed the civil aspect for deficiency taxes relating to taxable year 2007. Plaintiff-appellant argued that the tax assessment became final and executory because the Accused-Appellee failed to file a protest. It further asserted that it sufficiently proved that the notices were validly served at BMC’s registered address through registered mail and that the Accused-Appellee received them. It averred that all the elements of a violation of Section 255 of the Tax Code, or willful failure to pay tax, were established. In ruling, the Court held that the Assessment Notices were void for violating the Accused-Appellee’s right to due process because the Bureau of Internal Revenue (BIR) failed to prove that these notices were actually received. Although the BIR claimed service by registered mail, it did not formally offer, authenticate, or otherwise prove receipt of the registry receipt or return card, and the Accused categorically denied receiving any notice. Without a valid service, the tax assessment is VOID and produces no legal effect, rendering subsequent collection actions likewise invalid. Consequently, the Prosecution failed to establish the first element of willful failure to pay tax. Further, no civil liability may be imposed despite an acquittal, as the BIR presented no competent evidence proving the existence and amount of the alleged deficiency tax assessments. The use of “Best Evidence Obtainable” was unjustified because the Accused-Appellee was never properly notified. Finally, even assuming tax deficiencies existed, he cannot be held personally liable for corporate tax obligations absent proof of bad faith, fraud, or grounds to pierce the corporate veil. Thus, the Plaintiff-Appellant's appeal was DENIED for lack of merit. Consequently, the assailed Decision and Resolution were AFFIRMED. [PEOPLE OF THE PHILIPPINES VS. DEXTER C. LAO, CTA CRIMINAL CASE NO. A-22, DECEMBER 17, 2025]

SUSPENSION OF PRESCRIPTIVE PERIOD DURING COVID-19 IS VALID UNDER THE TAX CODE & THE BAYANIHAN ACT

Petitioner Supply Oilfield and Marine Personnel Services, Inc. filed a Petition for Review praying that the judgment be rendered ordering the cancellation of the deficiency tax assessment issued by the Respondent Commissioner of Internal Revenue (CIR) for the taxable year (TY) 2018. The Petitioner argues that the Respondent’s right to assess the alleged deficiency Value-Added Tax (VAT), Expanded Withholding Tax (EWT), and Final Withholding Tax (FWT) has already prescribed. Even assuming that the assessments were issued within the prescriptive period, the Petitioner maintains that they are nonetheless invalid for lack of factual and legal basis. On the other hand, the Respondent argues that Final Assessment Notices were validly issued within the allowable prescriptive period under Sections 203 and 223 of the Tax Code. In ruling, the Court held while the three-year prescriptive period under Section 203 of the Tax Code generally applies, the running of the statute of limitations was validly suspended pursuant to Section 223 of the Tax Code, in relation to Republic Act (RA) No. 11469 (Bayanihan to Heal as One Act) and the relevant BIR issuances issued during the COVID-19 pandemic. Consequently, the Respondent’s right to assess portions of the deficiency VAT, EWT, and FWT for TY 2018 was not barred by prescription. The court also found that the Petitioner was partially liable for the deficiency taxes due to unsubstantiated claims and undeclared income, and the deficiency VAT assessment was cancelled for lack of output tax. Additionally, the Petitioner failed to substantiate its claims, particularly its assertion that the foreign entities were Non-Resident Foreign Corporations (NRFCs) and that the services were performed outside the Philippines, justifying the imposition of deficiency taxes. Thus, the Petition is PARTIALLY GRANTED. [SUPPLY OILFIELD AND MARINE PERSONNEL SERVICES, INC. VS COMMISSIONER OF INTERNAL REVENUE, CTA CASE NO. 11048, DECEMBER 17, 2025]

A FINAL ASSESSMENT NOTICE (FAN) IS NOT VALID IF IT DOES NOT CONTAIN A DEFINITE DUE DATE FOR PAYMENT BY THE TAXPAYER

The Petitioner, Commissioner of Internal Revenue, filed a Petition for Review before the Court En Banc, seeking to reverse the Decision and Resolution of the Court of Tax Appeals (CTA) Special Third Division, which canceled the tax assessments against the Respondent, IBMS Technology Phils. Corporation, for taxable year 2015. The Petitioner argued that the Final Assessment Notice (FAN) was valid because it stated both the definite amount of tax liability and the due date for payment (January 7, 2019), claiming the date stated therein (January 7, 2018) was a typographical error. On the other hand, the Respondent claimed that the FAN was void for failure to state a definite amount and a valid due date for payment. In ruling, the Court En Banc held that the FAN was void because it lacked a valid due date, indicating January 7, 2018, which had already lapsed before the issuance of the FAN. The Court found this contrary to established Supreme Court jurisprudence, which emphasized that the specific period stated in the FAN must be a prospective or future date that affords the taxpayer a fair opportunity to comply. Consequently, a due date that has already lapsed at the time of receipt deprives the taxpayer of that opportunity and violates due process. It further held that the FAN failed to provide a definite amount due, given the inconsistencies in the interest computation and ambiguous statements regarding the assessed amount. Thus, the Petition for Review is DENIED for lack of merit. [COMMISSIONER OF INTERNAL REVENUE VS. IBMS TECHNOLOGY PHILS., CORPORATION, CTA EB NO. 2999, DECEMBER 15, 2025]