Maria Cerdeira died in Tangier, (an international zone [foreign country] in North Africa), on January

2, 1955. At the time of her demise, she was married to a Spanish Citizen and a permanent
resident of Tangier from 1931 up to her death, on January 2, 1955. She left properties in
Tangier as well as in the Philippines. Among the properties in the Philippines are several
parcels of land and many shares of stock, accounts receivable and other intangible personal
properties. On the real estate the respondent Antonio Campos Rueda, as administrator of her
estate, paid the sum of P111,582.00 as estate tax and the sum of P151,791.48 as inheritance
tax, on the transfer of her real properties in the Philippines, but refused to pay the corresponding
deficiency estate and inheritance taxes due on the transfer of her intangible personal
properties, claiming that the estate is exempt from the payment of said taxes pursuant to section
122 of the Tax Code and that he could avail of the reciprocal provisions of our Tax Code. The
Collector of Internal Revenue in a decision assessed the estate of the deceased, as deficiency
estate and inheritance taxes, the sum of P161,874.95 including interest and penalties, on the
transfer of intangible personal properties of Maria Cerdeira..
ISSUE: Whether or not Rueda is rightfully assessed those taxes.
HELD: Foreign Country used in Sec 122 of the National Internal Revenue Code, refers to a
government of that foreign power which although not an international person in the sense of
international law, DOES NOT impose transfer of death taxes upon intangible personal properties of
citizens not residing therein. Or whose law allows a similar exemption from such taxes. It is not
necessary that Tangier should have been recognized by our government in order to entitle the
petitioner to the exemption benefits provided by our Tax Law. But since such law has not been
alleged, this case is to remanded to the lower court for further trial.