i. Tax Lien

Definition

A legal claim or charge on property, either real or personal, established by law as a security in default of the payment of taxes (Hongkong & Shanghai Banking Corporation v. Rafferty, G.R. No. L-13188, 15 November 1918)¹

Nature of Tax Lien

A lien in favor of the Government of the Philippines when a person liable to pay a tax neglects or refuses to do so upon demand (NIRC, Sec. 219)²

Duration

Lien exists from the time assessment is made by the CIR until paid, with interests, penalties and costs that may accrue in addition thereto; generally, it attaches to all property and rights to property belonging to the taxpayer, but is not valid against a mortgagee, purchaser, or judgment creditor until notice of the lien is filed with the Register of Deeds (NIRC, Sec. 219).

Extent of Lien

Upon all property and rights to property belonging to the taxpayer

Effectivity Against Third Persons

Not valid against any mortgagee, purchaser, or judgment creditor until notice of such lien is filed by the CIR in the Register of Deeds in the province/city where the property is situated

Note: A tax lien is superior to a judgment claim of a private person only after the CIR files notice of the lien with the appropriate Register of Deeds, as required by Sec. 219 of the NIRC.