3. Estate Tax

Taxation Principles: Gross Philippine Billings, Interpretative Regulations, and Value-Added Tax

In Association of International Shipping Lines, Inc. v. Secretary of Finance and Commissioner of Internal Revenue, G.R. No. 222239, 15 January 2020, the Supreme Court ruled that Gross Philippine Billings encompasses only gross revenue derived from the carriage of persons, cargo, or mail originating from the Philippines up to the final destination¹. Any other income or fees acquired in the normal course of trade or business, such as demurrage and detention fees, do not fall under Gross Philippine Billings and are instead subject to the regular corporate income tax rate¹. Additionally, Association of International Shipping Lines, Inc. held that interpretative regulations merely construe, clarify, or explain existing statutory provisions; because they create no consequences beyond what the statute itself prescribes, their applicability requires only bare issuance, thereby exempting them from requirements of public hearing, consultation, publication, or registration with the University of the Philippines Law Center¹.

Separately, in Tayam v. Recto, G.R. No. 280898, 22 April 2026, the Court reiterated that locus standi is a procedural requirement that may be relaxed when serious constitutional challenges are raised regarding a tax measure that bears transcendental importance, overarching significance to society, or paramount public interest². Addressing consumption taxes, Tayam affirmed that under the destination principle governing the value-added tax, goods and services are subject to tax only in the country where they are consumed².