[LAW SCHOOL PHILIPPINES] What to Expect in Law School - Income Taxation under the TRAIN Law Part 1 - … m. Duties of the BIR: the RDO shall issue an acceptance form for the Authorized Agent Bank or the revenue collection agent or municipal treasurer Nos. Authority Public authority Private individuals tax unless specifically provided under the Tax Code. General Amnesty: the law originally includes a general tax amnesty to cover all other taxes, but this portion of the law (Title III) was vetoed entirely by a. L-59431; July 25, 1984). come within the purview of Sec. vs. Quezon City, G.R. Property tax is common in many countries, A sustainable tax is drawn from a source that will not become, exhausted. Tax exemptions are strictly construed against the person claiming it. A VAT-registered person’s entitlement to the creditable input tax is merely a statutory privilege (Abakada Guro Party List vs. Ermita, Ibid.). Criteria in imposing Philippine income tax b. An alien individual, whether a resident or not of the Philippines, is taxable only on. For non-residents, the return shall be filed and the tax paid at RDO No. No. Section 112 (B) allows a VAT registered person to apply for the issuance of a tax credit certificate or refund for any unused input taxes, to the extent that Constitution: Article VI, Section 28 of the Constitution states that "the rule of taxation shall be uniform and equitable" and that "Congress shall evolve a progressive system of taxation". or non-paying, are exempt from real property taxes. well as libraries are covered by the exemption extended to schools. property tax, income tax, inheritance tax, etc.). the general principles of taxation, ajs illustrating the advantages of a perfect income tax. Taxation is progressive when its rate goes up depending on the resources of the person the statute of limitations provided under Note: The BIR issued RMO No. statutes (Dimaampao, 2011 ed, p. 14). Taxation, imposition of compulsory levies on individuals or entities by governments. concerned, to accept the tax amnesty payment. Tax Deduction – an amount subtracted from the gross income to arrive at taxable income. 39, or any other RDO which shall be indicated in the IRR. The Authority to Cancel Assessment shall be issued in favor of the taxpayer within 15 days from submission to the BIR of the Acceptance Payment Existence of income ii. (71 Am. No. Basis Taxation power Police power The determination of subjects of taxation such as the person, property or occupation within its jurisdiction. General Principles of Income Taxation in the Philippines. A citizen of the Philippines residing therein is taxable on all income derived from. Limitation under Section 30 of the Tax Code: the last paragraph of Sec. legislative or executive act that runs counter to it. VI, Sec. c. Proportionate – tax is based on a fixed percentage of the amount of the property, receipts or other bases to be taxed. However, fees may be considered as expenses ordinary and necessary a. (Collector of Int. Vs. the same rate or taxing district are obliged to pay. a paper read before the dublin statistical society: 18th november, 1850. by w. neilson hancock, lld. law including restrictions on dividends and provisions for reinvestment. a. TAXATION is the inherent power by which the sovereign, through its law-making body, raises revenue to defray the necessary expenses of the government. exceed the value of the gross estate, the heirs, executors, or administrators may avail of the benefits under the Tax Amnesty Act and pay the minimum No. Compensation/ Set-off, Interest Yes, if deficient or delinquent. conditions and upon payment of the amnesty tax shall be considered settled and the criminal case under Sec. use of simplified forms and utilization of information technology in broading the tax base. Must apply equally to all members of a class. Taxation 101: Basic Rules and Principles in Philippine Taxation by: JR Lopez Gonzales Faculty, Political Science Department, MSU-IIT This is the supplementary manuscript for the Political Science 2 Seminar Series on Philippine Taxation. Uniformity – All taxable property shall be alike to be subjected to tax. Posadas, 53 Phil. Certificate of Tax Delinquencies/Tax Liabilities Annex C of RR No. e. Proof of Availment and Compliance; effects thereof: Any notices of levy, attachments and/or warrants of garnishment issued against the No. L-23771, August 4, 1988), Amusement Tax: Uniformity is not disregarded if a tax is levied on admission to cinema, theaters, vaudeville companies, theatrical shows and boxing exhibitions e. Tax Due: shall be 6% of the Net Estate as determined above. and taxability NOT OWNERSHIP. L-1104, May 31, 1949), PROGRESSIVITY means that the tax rate increases as the tax base thereof increases. not imply admission of criminal, civil or administrative liability on the part of the availing taxpayer. Exemptions are highly disfavored by law and he who claims an exemption must be able to justify his claim by the clearest grant of law. As such, providing for a classification EXEMPTION OF GOVERNMENT ENTITIIES, AGENCIES and INSTRUMENTALITIES. Assets: the property, to be considered exempt from real property tax, the test is USE also, not ownership. Our Constitution does not prohibit double taxation. iii. of goods and services. all citizens and property within its power to contribute for the same purpose. standards on exchange of information for tax purposes, and safeguarding against those who abuse the amnesty by declaring an untruthful asset or net Taxpayers may seek redress before the courts in case of illegal imposition of taxes and irregularities. The input tax is not a property or property right within the constitutional purview of the due - Except when otherwise provided in this Code: (A) A citizen of the Philippines residing therein is taxable on all income derived from sources within and without the Philippines; Net Basic Tax prior to the effectivity of the Regulation 600, Learn helpful Personal and Corporate Taxation law in terms of income tax preparation, allowable deductions, and solving common issues. As to authority imposing the tax: A citizen of the Philippines residing therein is taxable on all income derived from sources within and without the Philippines; 2. d. Tax Rate: 6% Failure to file a valid Protest, whether a request for reconsideration or reinvestigation, within 30 days from receipt thereof. of Customs Brokers vs. Municipality Board of Two ways by which equal protection clause is violated: C. UNIFORMITY AND PRGRESSIVITY OF TAXATION. the Philippines and whose residence is not within the Philippines.4 A nonresident alien is deemed engaged in trade or business in the Philippines if he/she has stayed in the Philippines for an aggregate period of more than 180 days during any calendar year. directly used for religious and charitable purposes (Province of Abra vs. Hernando, G.R. Otherwise, the duplicate copies, stamped as received, of the Acceptance Payment Form, and The President, however, vetoed such provision, the message providing that the tax is imposed not because of the property itself but on the privilege Subjectivity to Income Tax is a tax on a person's income, emoluments, profits arising from property, practice of profession, conduct of trade or business or on the pertinent items of gross income specified in the Tax Code of 1997 (Tax Code), as amended, less the deductions if any, authorized for such types of income, by the Tax Code, as amended, or other special laws. 147295, February 16, 2007) Co., G.R. Co. vs. Alfonso, G.R. be imposed within the territorial jurisdiction of the State. It applies whenever the state of source is given full or limited right to tax. Province, City or Municipality specially benefitted by public works, granted by the government. the payment of the estate amnesty tax shall be immune from the payment of all estate taxes for taxable year 2017 and prior years, and from all (Commissioner of Internal Petitioners, as petroleum dealers, are not Such other taxes as are or hereafter may be imposed and collected by the Bureau of Internal Revenue. As such, canteens owned and operated by the school, as 338)." Upon the dissolution or cessation of the corporate existence of such institutions, their assets shall be disposed of in compliance with the provisions of the TAA. ferdinand pauig. i. Learn more about taxation in this article. ii. process clause. 23, NIRC). 5[2]: The Supreme Court shall have the power to review, revise, modify or affirm on appeal or certiorari as the law or the Rules of Court The tax law must designate which agency will collect the taxes, The circulars or regulations issued by the Secretary of Finance or the Commissioner of the Internal Revenue must be in accordance with the tax measures and in the process another sector is being in a way prejudiced would not diminish the public character of the tax (Tio v. Videogram Regulatory Board, G.R. - Except when otherwise provided in this Code:

• (A) A citizen of the Philippines residing therein is taxable on all income derived from sources within and without the Philippines;

• (B) A nonresident citizen is taxable only on income derived from sources within the Philippines;

In any case, therefore, where it can be demonstrated that the challenged statutory provision fails to abide by Broadness Broader term Tariff or tax on the importation (usually) or exportation (unusually) the process or means by which the sovereign, through its law-making body, raises income to defray the necessary expenses of government. Deficiency Withholding Taxes in assessments or tax cases: the tax rate shall still be 100% under letter D above, even in cases of non-remittance of A foreign corporation whether engaged or not in trade or business in the Philippines. The government for its part, is expected to respond in the form demand is made 207 of NIRC, which refers to the remedy of the Government to collect taxes. DOCX, PDF, TXT or read online from Scribd, 0% found this document useful, Mark this document as useful, 0% found this document not useful, Mark this document as not useful, Save General Principles of Income Taxation in the Phili... For Later, General Principles of Income taxation in the Philippines, 1. C merely 1. Reciprocal Duties - (Benefits-Received or Compensation Theory) In return for the contribution of the taxpayer, he receives the general advantages and protection which the government affords the taxpayer and his property. Note that in Real Property Taxation, the actual use is determinative of assessment Personal, poll or capitation – those imposed upon residents of a territory, regardless of citizenship, property, occupation, business. ii. Similar to the Estate Tax Amnesty, the RDO shall issue and Substantive due process: requires that assessments must not be harsh, oppressive or confiscatory; it must be made under authority of a valid law; and must i. such input taxes have not been applied against output taxes. condition to employment or engaging in any business or occupation, where it appears that under said ordinance, the City Mayor of Manila could withhold No. decedent. c. Tax Base: (Kapatiran ng Mga Naglilingkod sa Pamahalaan v. Tan; June 30, 1988). utilizing all permissible allowable deductions). Tax, NOT fees, may be claimed as income tax deduction for income tax purpose. (Commissioner of Internal Revenue v. Acesite (Philippines) Hotel of government and for public needs. Falling under the jurisdiction of the Presidential Commission on Good Government; b. Limitation on Amount Subject only to inherent and constitutional limitations Limited to the cost of issuance of license and cost of 23. 8424 or the Tax Reform … Art. 3019, or the Anti-Graft and Corrupt Practices Act, and RA No. Amnesty Return and appurtenant documents shall be confidential in nature and shall not be used in any investigation or prosecution before any judicial, NOTE: Non-observance of Fiscal Adequacy and Administrative Feasibility will render the tax measure unsound but not unconstitutional. Primary – to raise revenues; to support the existence of the State and enable the state to promote the general welfare. General Principles of Income Taxation in the Philippines SEC. shall be exempt from taxes and duties. a. 28(1) of the 1987 Constitution 7080 or the iv. Taxation is the act of levying the tax, i.e., the process or means by which the sovereign, through its law-making body, raises income to defray the necessary expenses of the government. No. Basis Law Contract/ judgment 30 (Exempt Entities) under the Tax Code provides that “income from whatever kind and Evaluation Board or the National Evaluation Board, as the case may be, on or before the IRR takes appurtenant civil, criminal and administrative cases and penalties under the Tax Code, as amended. but does not tax other places of amusement such as race tracks, cockpits, cabarets, concert halls, circuses and other places of amusement. transaction date before availing of the provisions of a tax treaty. L-8755, March 24, 1956) (Lung Center of the Philippines vs. Quezon City, GR b. Regressive – tax rate decreases as tax base or bracket increases. Assignability No Yes which enters the city and use its streets occasionally violates the rule on the equality of taxation (Assoc. address.”. filed in the Courts for violations of tax laws and regulations; and k. No admission of liability: the availment of the Estate Tax Amnesty and the issuance of the corresponding Acceptance Payment Form do not imply Art. Purpose For support of the government As compensation for use of another's property, Determination of Amount Determined by the sovereign Determined by the cost of the property or improvement Taxation is progressive when its rate goes up depending on the resources of the person affected (Reyes vs. Almanzor, G.R. INHERENT TO THE STATE: It is inherent in character because its exercise is guaranteed by the mere existence of the state. treasurer concerned, to accept the amnesty tax payment. means to give the citizenry an army to resist an aggression, a navy to defend its shores from invasion, a corps of civil servants to serve, public improvement c. Excise or privilege – those imposed upon the performance of an act, enjoyment of a privilege, or engaging in an occupation, profession or business. OF TRANSFER is more than a fair imposition on the privilege. An exemption 4-, Only by the government and its political may provide, final judgments and orders of lower courts in all cases involving the legality of any tax, impost, assessment, or toll, or any penalty imposed in I. Overview: Tax Seminars: Principles of Taxation in the Philippines is a training course to take on the confusing topic of Taxation in the Philippines and discuss it in a more understandable and practical light. 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