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ClickJamesMaster subtitle style By: to edit Louies Un

Taxation

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Inherent Powers of the State

Police Power - the power of the state to enact laws to promote public health, public morals, public safety, and the general welfare of the people. Domain the power of the state to take private property for public use upon full payment of just compensation

Eminent

Taxation
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Definition, Nature and Basis of Taxation

Taxation

is the process or means by which the sovereign, through its law making body, raises income to defray the necessary expenses of the government.

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Jurisprudence
Taxes

are the lifeblood of the government and their prompt and certain availability are an imperious need (Commissioner vs. Pineda) is indispensable and inevitable price for civilized society, without taxes, the government would be paralyzed. (Commissioner vs. Algue, Inc.)

Taxation

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Objectives of Taxation
Raising Shifting

Revenues of Wealth from Rich to the Poor Price Stability Economic Growth Full employment

Maintaining Stimulating

Encouraging

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Social Implications of Taxation

Some

tax rules are enacted for the purpose of mitigating certain undesirable economic and social conditions already existing tax rules provide for incentives for certain desirable activities.

Other

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Aspects of Taxation
Levying

of the Tax. The imposition of the tax requires legislative intervention. of the tax levied. This is essentially an administrative function

Collection

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Basic Principles of a Sound Tax System

Fiscal Adequacy Equality

or Theoretical Justice Feasibility

Administrative

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Limitations on the Powers of Taxation

Constitutional

Limitations
Purpose

Limitations vs. Inherent

Territoriality International Comity Exemption Non-Delegation

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Some Doctrines in Taxation

Prospectivity Double Set-off

of Tax Laws

Taxation of taxes from Taxation

Escape Situs

of Taxation

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Prospectivity of Tax Laws

Taxes

may be imposed retroactively by law but, unless so expressed by sun law, these taxes must only be imposed prospectively. (Hydro Resources Vs. Court of Appeals)

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Double Taxation
Direct

Double Taxation the same subject is taxed twice when it should be taxed once, in a fashion that both taxes are imposed for the same purpose by the same taxing authority, within the same taxing district or jurisdiction, for the same taxable period and for the same kind or character of a tax then it becomes legally objectionable for being oppressive and inequitable.

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Double Taxation
Indirect

Double Taxation Generally avoided. ex. Business tax is imposed by the municipal government prior to the issuance of a business license to a taxpayer for engaging in advertising business. His income from his advertising business shall later be imposed with income tax by the national government. This also applies to foreign products

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Set-off of Taxes
Art.

1279. Taxes are not subject to setoff or legal compensation. The same doctrine was espoused by Republic vs. Mambulao. Mambulao doctrine was replaced by Domingo vs. Garlitos, it declared that legal compensation may take place when the taxes and the tax payers claim are fully liquidated, due and demandable.

The

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Set-off of Taxes
Philex

Mining Corporation vs CIR. This case is currently the ruling case. There can be no offsetting of taxes against the claims that the taxpayer may have against the government. A person cannot refuse to pay a tax on the ground that the government owes him an amount equal or greater than the tax being collected.

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Escape from Taxation

Tax Avoidance

planning

tax minimization or tax

Tax

Evasion tax dodging, examples = under declaration of sales, overstatement of expenses and backdating an important document

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Situs of Taxation
Place

of taxation

Factors
Subject Mater Nature of Tax Citizenship of the Taxpayer Residence of the Taxpayer

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Situs of Taxation
The

following Situs of Taxation apply:

Persons Real Property or tangible Personal property Intangible personal property Income Business, Occupation and transaction Gratuitous transfer of Property.

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Taxes
Are

enforced proportional contributions from persons and property levied by the lawmaking body of the sovereign power for the support of the government and all public needs.

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Essential Characteristics of Tax

It

is an enforced contribution by the law-making body character payable in money

Levied

Proportionate Generally It It

is imposed for the purpose of raising revenues is to be used for public purpose

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Tax Rate Structures

Regressive

- if the average rate decreases as the tax base increases the average rate tax remains constant for all levels of tax base average rate increases as the amount of the tax base increases

Proportional

Progressive

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Classification of Taxes
As

to subject matter or object

Personal, poll or capitation (community tax) Property (real estate tax) Excise (estate tax, donors tax, income tax,

VAT)

As

to who bears the burden

Direct taxes community , income, estate,

donors
Indirect taxes customs duties, VAT
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Classification of Taxes
As

to determination of amount

Specific Sin Taxes Ad valorem real estate tax

As

to purpose

General, Fiscal or Revenue Special or Regulatory

As

to authority imposing the tax or scope

National

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Tax Distinguished from Other Fees

Toll

is a sum of money for the use of something, generally applied to the consideration which is paid for the use of ROAD, BRIDGE. is any sanction imposed as a punishment for violation of law or acts deemed injurious. Violation of tax laws may give rise to imposition of penalty

Penalty

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Tax Distinguished from Other Fees

Special

Assessment an enforced proportional contribution from owners of lands for special benefits resulting from the improvements or license fee is a charge imposed under police power for purpose of regulation generally based on contract while tax is based on law

Permit

Debt

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TAX LAWS

National International Revenue Code Constitution Revenue Regulations by the Department of Finance Rulings by the Commissioner of Internal Revenue and Opinions by the Secretary Justice Provincial, City, Municipal, and Barangay Ordinances subject to limitations set forth in the Local Government Code Treaties or international agreements the purpose of which is to avoid or minimize double taxation

RA 9282 expanding the jurisdiction of the Court of 3/14/12 Appeals Tax

RA 9282
The

Court of Tax Appeals shall be of the same level of the Court of Appeals 1 presiding justice and 5 associate justices.

Composition

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National Internal Revenue Code of 1997

Income Estate

Taxes Tax

and Donors Tax

Value-Added Other

Percentage Tax Tax Stamp Tax

Excise

Documentary

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Tariff and Customs Code 1978

Import Export

Duties Duties

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Local Government Code (RA 7160)

Real

Property Tax Taxes, fees and charges Tax Tax

Business

Professional Community Tax

on banks and other financial institutions Laws

Motor Vehicle Law

Special

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Private Motor Vehicle Tax Law