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College of Law
SYLLABUS FOR SPECIAL PROBLEMS IN TAXATION (Law 163)
[First Semester SY 2015-2016]
(Atty. Edwin R. Abella, CPA, LLB, LLM)
I. General Principles of Taxation
(For discussion on Aug. 12, 2015) Students will be evaluated based on graded
recitation.
1.1.
1.2.
1.3.
1.4.
1.5.
1.6.
1.7.
Basic Principles of a sound tax system (FAT) What is the legal status of
an unsound tax system?
Fiscal adequacy
Administrative feasibility
Theoretical justice
1.8.
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sovereignty for the support of the government and for public needs (1
Cooley 62-63)
Characteristics: (1) Forced charge, (2) Generally payable in money, (3)
levied by the legislative body, (4) Assessed in accordance with some
reasonable rule of apportionment (observance of ability-to-pay
principle), (5) It must be imposed within the jurisdiction of the State,
and (6) It is levied for public purpose.
1.9.
Interpret provisions of this Code and other tax laws subject to review
of the Secretary of Finance (Section 4)
disputed assessments
Income Taxation
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Resident aliens
Non-Resident Aliens
Engaged in trade or business
Not Engaged in trade or business
Special classes of individual taxpayers Sections 60 66, NIRC
Taxable Estate
Taxable Trust
Corporations Section 22(B), NIRC
Domestic corporation
Foreign corporation
Resident foreign corporation
Non-resident foreign corporation
Partnerships, Joint Ventures and Consortiums
General Professional Partnerships Section 26, NIRC
Different classes of income for income tax purposes Sections 24, 25,
27 & 28, NIRC:
Returnable income compensation income, income from trade,
business or practice of profession
Fringe benefits for managerial and supervisory employees
Passive investment income
Capital gains either subject to schedular or global tax regime
Exempt income
Definition of Taxable Income Section 31, NIRC
Exclusions from gross income and the reasons for their exclusion
Section 32(B), NIRC
Proceeds of life insurance policy
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Taxes
Taxes not allowed as deduction destroys the progressivity of
income tax; not business connected; may result to double benefit
Optional treatment of foreign income taxes paid
Losses
Casualty losses The tax side of disasters. (Read also RR No. 1277 & 10-79)
Related party losses incurred in a transaction conducted for profit.
Capital loss deductible only from capital gain
China Bank Corp. v. CIR & CTA, 336 SCRA 178
Net Operating Loss Carry-over (NOLCO)
Bad debts
- PRC v. Commissioner, 256 SCRA 667 (1995)
Depreciation
- Basilan Estates, Inc. v. Commissioner, 21 SCRA 17
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(For discussion on Sept. 16, 2015) Students will be evaluated based on graded
recitation.
Oa v. Commissioner, 45 SCRA 74
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(For discussion on Sept. 23, 2015) Students will be evaluated based on graded
recitation.
2.2 Transfer Taxes
Donation inter vivos v. donation mortis causa. What is being taxed?
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Tax credit for estate taxes paid in a foreign country Whom and
when allowed and other limitations imposed by law
Administrative Provisions
Notice of death when required (Section 89, NIRC)
Filing of the estate tax return
Effects of non-payment of the estate tax
Donors Tax (Section 98 104, NIRC)
Smith vs. Shaughnessy, 318 U.S. 176
Perez vs. CIR, CTA Case No. 1707, Feb. 10, 1969
When does a gift occur?
Requisites of a valid donation Direct donation v. indirect donation
Transfers which may be constituted as donation (Section 100, NIRC)
Sale/exchange/transfer of property for insufficient consideration
Condonation/remission of debt
Determination, composition and valuation of gross gift
Tax credit for donors taxes paid in a foreign country
Exemption of gifts from donors tax (Section 101, NIRC)
Rates of donors tax between relatives and strangers (Section 99,
NIRC)
Administrative Provisions
Filing of the donors tax return (Section 103, NIRC)
Cumulative determination of the tax liability for one calendar
year
Gift splitting as tax avoidance scheme
Effect of non-payment of the donors tax
(For discussion on Sept. 30, 2015) Students will be evaluated based on graded
recitation.
2.3
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What is an assessment?
Alhambra Cigar v.Collector, 1959
CIR v. Pascor Realty Corp.,1999
(For discussion on Oct. 21, 2015) Students will be evaluated based on graded
recitation.
III. Local Government Code of 1991, as amended
3.1
(For discussion on Oct. 28, 2015) Students will be evaluated based on graded
recitation.
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(For discussion on Nov. 11, 2015) Students will be evaluated based on graded
recitation.
IV. Tariff
amended
and
Customs
Code
of
1978,
as
Definition of Tariffs and Duties Nestle Phils. V. Court of Appeals, G.R. No.
134114, July 6, 2001
General rule on duty imposition Section 101; Section 1205, TCC
Purpose of imposition of duties
The flexible tariff clause Section 401, TCC
Requirements of importation
Beginning and ending of importation
Obligations of the importer cargo manifest; import entry; declaration of
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prohibited
importation,
Government remedies
o Administrative/extrajudicial
Tax lien applies only if importation is neither prohibited nor
improperly made - Section 1204, TCC
Administrative fines and forfeitures applies when importation is
unlawful or the importation is prohibited Section 2530 & 2531,
TCC
- Llamado v. Com. of Customs, G.R. No. L-28809, May 16,
1983
Reduction of customs duties/compromise Secs. 709 and 2316,
TCC
Seizure, search, arrest Secs. 2205, 2210 and 2211, TCC
o Judicial Remedies
Civil action Section 1204, TCC
Criminal action
(For discussion on Nov. 18, 2015) Students will be evaluated based on graded
recitation.
V. Judicial Remedies (R.A. 1125, as amended by R.A. 9282, and
implemented by the Revised Rules of the Court of Tax Appeals)
5.1
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5.2
Mode of Appeal
Effect of Appeal
5.3
Taxpayers suit
Citizens suit
5.4
Other
Relevant Cases
Blaquera vs. Rodriguez, 103 Phil 267 (1958)
Raymundo vs. de Joya, 101 SCRA 495 (1980)
CIR vs. CA Atlas & Atlas Consolidated, 271 SCRA 605 (1997)
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