CTA Case No. 332 (Decision)

\ � .. liiLIPPIN~..I .AI:.Pk~ TI \~~ A in1strator of the d ceased a d�~' !a de la str lla oria. o GJ iud� de Cerdeir , etitio er, ��� � 332 -v sus - t . ~ c iJ 14 Tl� C LI.E.CT t"- ~-lAc 1tj VE � J. \, .. 1 L [- , J j..s-V, espond nt. (; .( ' . ...... -x -- -- - - X� - -.. 11)/ / ft~Y � rj E tJ I 1 O. a hi i' n appeal lnterpo e y petitioner nton!o po a, as inistrator of the estat of th dec� sed ora ria � la strell� ~ori noV a . 1 ctor of Intern l ev � a in in t iln fro t of 16l , o7 . 9~ as t nee t x s , ncl~d�ng interests an pen lties, n t e transfe o intangible person 1 properties situated in the Philippines at longin to said r!a d la strell or ano a. de Cerdeir � aria � la strolla or1ano d�. ~ r ir ( arta "erd ir~ fo sho t) is a p n 1 11 ti al reason of her rl to a pan1 1 citi x n and as a resident of ran ier, rroco fro 1931 Ul) to er eath on January 2, 195~. At the t f her de i& she left, ng others, intangible person 1 opert!es

� o. 32 - 2- tn the Philippines. epte ~ 29 , 19~5, petitio er filed a pro� visional estate ana !n ritan~� ta return on all th pzopezties of t � late ar a er e!ra. the s e date, respondent, pen lng nveat!g t n, lssu d assessment or estate and 1 erlt nee taxes in the reap ~tive a unts of 111 , ~2. and or 1~7 , 791.48 , a total of 269 , 3. 6, hie ax 1 a ilit � by petttloner (p. 6, ecor s). On ove r 17, 19~~. n ended ret n fled ( xh it � � , p. 75, rd ) ~ eln � personal properties with t � cla as ex te fr taxes. r 23, 1955, re po ent, p din v tig tion, ued anot � ass � t f r estat xs1nte unt of 2, 262. 2. 4, es ct1 ely, or a total of <469,665. 2 r or a) . In a letter d te J ary 11, 19 � reapo � t ie t � est for exe t n o t e ound that t � la of s o reciprocal to ection 122 of � atl I ternal eve � ode. ence , re � pondent eaanded t � pay nt of t e su � f 239, 39.49 representing deficiency estate ta ce taxes and co .rom1 al lea ( �x lt � , pp. <4- 5, recorda). In a letter, date e ary , 1956, and re� be ollowlng ay, t!tloner .re ested tor t � reconslderati of the eclsion deny� tng tM c:lala for tax ex t o of the tntang le pu� sonal properties and the osition of t 2 a d 595

I� .,A E O. 32 - 3- co s) . ver. respon tnt n is eat. in hts lett r d ted ay , 19 (Ex its �K� and 1" � p � 126-1 � ~ ec r ) rece v to r n y 21 . 1 56. � pon nt .p:r 1 the oundt that t er �a no r ciproc !ty of r n ier law with Philippine 1 nd that the ity f l er wa� a re rlnc lp lity, ot a fore n c: ntry. n� �� ently, res o nt nde nt of 73, 1. 21 8,02 tiv y, r 1 of 1 1, 7 � f ci nd �nh r ta s incl s , nt r t d c pe 1tles. In a 1 tt r , d t , nd r c lv d y espo nt n . y 26, 9~6 . p tit ht n th c ithh ld until ar- .Jo qutn mir z, ho t n p r on 1 cr c ( blt �L� � p. 129 , c rd � r� coun 1, ln a 1 tt r of July 2, 1 56 r c ved y espon nt n the fol1 y , c no - 1 � re spo t � 1 tt r y� est d� r con r tlon f h ni 1 - it '~. p � 1 -172, din t tax r c ). In v etted t ti n r on u c- lty ifle c py of t rita c of Tang er � n o r h t a c t on aa to th r or ot th 1 t d y th 596

- 4- � c ty in its c � � s v n s te po - s int rn t on � rson lit �" (Exhf lt � p. 17 � I r cord). Int 0 co n c tio � d d ep 17 22, ly, etit enclo nt � upport r X pt!o { of t� cl t �p n � pp. co ). 1 3-1 4, t r � 1 56 ( �xhib t � � # 0 n rc er n ov �1 ( - v 1). n t 0 n r - 1' c n 1 f 1, - � r t nc �1 � s tt v f 1� � th ttl er f l t0 t� � th � ch the t c � ~. 59 7

. T. � E � 2 - 5 .. Th r � no d aput t n the p rtie regard- � 1n t he properties n th th ttcal corr e tn s of t h ef c ey ssess nt. enee he is u � � ca y ' foll � elat � o t � f st s ue, res de t a tt nt nd - i ta � - eon of � �1 tions or �� 1� t0 on do n of th � crl t ve .rio ht t ct � 1125. of t by th Coll �� gr i y tr de ay 5, l 6 conslde � a t c 1 0 hi Court. ., .� 59

C 'I c � � � � o. 32 ver, 1 spondent reop ned the caae and grant pet �t on r r h ring y re �ir in t � latt r to ub t dd tion 1 ev d nc to the in erit c tax 1 ~ ~ of Tan r nd ord r to v rlfy her or not it a n sov r n t t po ss n - an intern t lon 1 rson 1 ty" . Th r op nin nd r - earin f the c se p rt k s of th n tur of r nt of � ne tr 1 n r u nt to ct on 1 n 5 f ule 37 of h ul s of Co rt , h t ff c of v - c t n r spond nt' s jud nt c 1 on of y , 19 6 ( ort n r son o. vs . Coli ctor , c.T.A. C o. 254, r 2 , 19 7) . hu , th r nn n_ of th t h t y� y er - ct on ll. o i.e t t r- dent' a 1 its � nt 6 ( x- �n 2 ). t ton or ie t 0 on 1 f th or n � ntrodue case . � f ct h t t ur �t t n �h n 0 l- lnal c � 0 f qu r it 0 1 flndin � 0 t h d to in th ew deci on 0 r r 29, 1 56. It on r c v d th c i i on ly � t co the !natant pet t on � 19 � ly l v (12) d ys d � f 1- lo s t h t t al w th 1 nt r y 599

ECIS - .T.A. C E O. 32 o. 11 � n ft e ond t rns upon r soll.l ti n 1 In- t1 f s ct on 122 f te nal hlch 600

� - 8- r� ln urn ceo nted yce:r i ' icatl n a r ic v � 0 ul ( ctln 1n the f � hUi':'! pin 1: 0 t c ul r r� n ativ ) ai f cJ. ls. Th ce:rttf c ad f oll �� � 2 601

c ��� �2 - t oth r h nd. r t c t~nd th t p ti- t annot cl t on from the Philipp � t nd inh r t nc t x n the follo in 1 (1) pet tlon r f 11 d to prov th l or l 0 an r h ch ly r nt r clpr e 1 X. t mpt ion; ( 2) th co on h 1 of r n- 1n 92 d 1932 1h!ch t t ty 0 t nt -thr y f r J nu ry 2. 195::.>. h t dc n d n t prov th l 0 y tt ' r do t r nt th 1 t Xe y ct1 n 122 of tion 1 n C ; n (4) t Int 0 n t co n z d t t y th Phil� n v c y th tion f it! n r' cl 1m r nt 1 1 rt n t vn ov � l X pti n IX or 1 � h 1 of n r� fore! n 1 t er of ct n n 1 (� a s v. 1 u. � 19 � 1 3). Co nt y. t exist� r v in t1 ctory n th 1 tion of f ct � 0 uc law Sy 1. v. y 1 � 16 eation cr � up aa to .r r � .. �1" . .. -1" ..r�.. co st tu 602

ISI � 32 . T. A. .. 10 - � exi � of the r 1er 1 w p n ,f.ch p t- r' � tlon cla for �� ptto 18 edtc .cl. � h! e a fore! la , or th:l.~ att�... le angier 1 � y pr ve � u er � provts!o f o;i ction 41, ule 123 o th ules o ourt, y ial u 11- cat! th 1:e f o copy t et d th ff r having leg~l custody of e r c rd, or y his puty, nd 1� c r i ca f n o c i th Phlllppu1e fo~ i n r ce st~tione 1n that fore! n coun ry ept , an uth nticated by th 1 1 h of ce, ti � 41 of ule 123 i t 11- r in t p.r e1u tio etent to PJ: v t� 0. t e1 ork � 1, 61 il. 4 ci lly 1n � c ae of tlC aa n or in nee x la on h nc of p.ro rt. � te 1 c � o hr th t OS ntio. in tion 1 of ule 12 � s auff cient lon it ti f ctorily est l th ex1stene or n n- xi t e 0 t, T r1 s to th s1tion uf 1 rita ce or cc sion ta n v� 1 $ . � .lie e that Xh it D- " � 1 � - 1" �t�, consid r d to ther, hollv co pet nt ev - .~ce of the p tic l r 1 of rangier. Yr ex c te by offlc als, o, y reason of h ir uties, to coov rs t thi par cular 1� 603

� 332 - 11 - of t � c ntry f ie h y ue ffic .tals. And y � iaf ~ 11y establish 1 of T ier on the n�li bll!ty o va l� oper~y locate in an ier fo ece � tax � r os �� ��po 1 o contends t at e nts on tn la o 1n 19~ nd 1932, wbich re a t thirty nty�thre years fore ate f t MO ia a . � Car eira ot r � h l w f aai cou try at t t ~ h. I t . � - n c � 1s to t0 l � �t t x- .. � r th n r l.bi � -1 .-1� ,,d i Ty c t -1 r la of ca nt of 'I t t er i� c � !a r ir, nn r f ~re In th c r- 1n ru stl n, l! y xr s c :cti 1- � ty ye � l ht l � or l� t1on h \. thtn � 6~ (dd), ule 12 ul f qu ntly, pr or a to t contrary, t la of n itr of J v:y � 1 32, 0 fy:in t ahir of �Y 1 � 'l 25, �� prov in xh its �D-1", ... ... ��� .. -1" � � -1� end �T� , stlll tn force n J uary 2, i9e.~ (see In e ... &- , 27 784). Jus 6 0 tl

EC I :Y - C.T�� C E r � 332 - 1�"- - espond t 1 ew! e ar u t at laws of Tangier c!o not nt th c1p ocal tax ex ption requ ed by S ction 122 of our T X do for t r a so. t at t id 1 w e.lt t �- 1 pro �� T4l y 1- zena not r d t h ly fro b f 1nher t nc tax. ccor gly, t y c 1 0 r- c proca1 to aaid ec 0 12~. . ieh r vide f r th � exe pt 0 11 pplnes fr estate n :rit ce t ly. u ur t ceor c tax� ts t � 1� t ry ... w t ea 0 f T ,. et1on. he y in :.ri c x in n o leally, y pr ciple f ne- ral a v r n ral ter 1 f. nr � nr 1 t � expr cc :x a uld lly. 605

IS! u. 332 C.T.A. - 13 - 1., I n 1 0 road � th for , tr it c nt R n x etion the rty on ath. It in 1 on n- er t ce t X f u d co str ' und r to � t x, ich l l on th c t pon ath, herit c n t a 0 r c ivln ld p tv c n t nt � �n 0 f S2, . yin D ir 12� cl 1 c n� 1 0 � i 1 c nt t �.. t c ion 122 0 11 n -- r c n�z cl y c ry t x cut t, t. r ti n 1 lly ��� nh n so r niz � 1 1 c y lt t � co t p 1 f co �l ct o�� �� t, c te.r �eountr t X 0 �f co n r 606

2 � 14 - � 2 ( ) of t ~ of r 2� ta � a � 227. � 2 � c ap. 1 6� icb ��� � tax ~re tine tt f ta -- f rei Y� re era t hat f e t lavy f r the tlo l at \ ter t �� nt.ey t es f �� - n eo tax and e 2� f al � c 2 � 1� 1 � � try�.. Q 607

� 332 - 15 - foun n r v nue Code. Th sa!d proviso $tateG that n estate , in r t ne and g ft tax s shall eoll et n tang bl ron 1 es of a d - ced nt , at tb t m of his d s a r !d nt of a -.f--...~...._;;;;..;..o;.;.,;,;;;.o:;.4 ic t t t of hi ath death t x, or t he l a s of wh ch ( f re n co nt ) l r exe pt on f o transfer t x� o ath t t !bl per- so al pr t �� y c t!z n not reatd!ng t re � T � express on co ntry� , used n the pr v so , s n featly e plo th n . of ov~rn- � nt c ld not p atr af r de th t x, rt l f � lc 11 a 11 r ex pt fr �f�r taxe or th ta t 0 ve nt it r f rs. t r t f � or 1 p ich en oya � status an t ture of n nt r - ti 1 per on, or th t of r ly pol1t c 1 nt ty 1c , oa not en oying st ua d t t~re, 0 uch nsf r xe upon 1 t n ibl rson 1 �y r hos l ll s 11 1 no � oove us to certain n c nsi the r� pose or pur b hind t ' n ct. nt of th la t pro- vlso of ection 122 of our T x Cod � h last prov so of ct on 122 of th x Code as en c d to avo d th 11 f dou 1 t x t o , o avoid the po t fer or th t ~ \lpon int ng b p r n l pop .t h for 1 l nd the 1 of th for � r s rpos is s il to 60

c. r�� o. 32 -l - t t of c ion 2 a ( ) of t he u. � venu ct of tr n f er v 1 21 . S i p vi to to e co ra for 1 n c ntri t or i p r on 1 r r by our c i en t r by provi n our c itiz n t c qu 1 ' ch prop rt i t r ein . s & 1ut r y pur r co r llin c in dt rh 1 c untrr' foun in t h prov so r f r t r n y- in t h st t u nd t t ur of n �n r n 1 or ot r . il t �s if r th r c for i n r t n 11 rpo re tt in it purpo .,ul v d f th xpr 1 11 or 1 n d p ct ng for 1 n r 1n nt rn t p r- on 1 ty, o not po r r d th x upon ntan p r on 1 y ur cit z n t r ln. t 0 ld f tr t on of r 11 f r n c n� try" to n for o r in th nt 1 � n b 1 v , n o old, t t th x- r1 r n country , d n th 1 t rovi o o ecti n l 2 of t t on 1 Int r 1 o e, re era to a o rn nt of h t or r al u h not t rn tl r t n 609

"'I~ I - C. T�� C E � 332 - 17 - ter tl al 1 � 0 not oae ans er or th ta 1 t g le r& n 1 ro rt e of our not tion .�- or � la allo s I 11 ry th t X It � f or� , not r e nlz. d nt - 1 t p pet t on r to t vis ct on 122 f ur X 0 � th d c on of th r P n nt 1- lector of Int rn l ev nu 1 h r y v r � t out pronounce nt s to co t � � 30, 1957. n 1 � h 1 PP n ' t 610