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    Taxation Law

    Uploaded by

    Cee Honasan
    This document summarizes key aspects of taxation in the Philippines, including: 1) Types of taxes such as income tax, value added tax (VAT), and local taxes. Income tax rates vary depending on taxpayer type and income amount. VAT is imposed at 12% on sale of goods and services. 2) Taxpayers are classified as resident or non-resident and various entities such as corporations, estates, and trusts. 3) Taxable income is determined by calculating gross income and allowing deductions. Capital expenditures are not deductible. 4) Tax remedies and procedures for assessment, protest, and appeal are outlined if a taxpayer disagrees with tax assessments.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd

    Taxation Law

    Uploaded by

    Cee Honasan
    19 views11 pages
    This document summarizes key aspects of taxation in the Philippines, including: 1) Types of taxes such as income tax, value added tax (VAT), and local taxes. Income tax rates vary depending on taxpayer type and income amount. VAT is imposed at 12% on sale of goods and services. 2) Taxpayers are classified as resident or non-resident and various entities such as corporations, estates, and trusts. 3) Taxable income is determined by calculating gross income and allowing deductions. Capital expenditures are not deductible. 4) Tax remedies and procedures for assessment, protest, and appeal are outlined if a taxpayer disagrees with tax assessments.

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    Original Title

    TAXATION LAW

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    This document summarizes key aspects of taxation in the Philippines, including: 1) Types of taxes such as income tax, value added tax (VAT), and local taxes. Income tax rates vary depending on taxpayer type and income amount. VAT is imposed at 12% on sale of goods and services. 2) Taxpayers are classified as resident or non-resident and various entities such as corporations, estates, and trusts. 3) Taxable income is determined by calculating gross income and allowing deductions. Capital expenditures are not deductible. 4) Tax remedies and procedures for assessment, protest, and appeal are outlined if a taxpayer disagrees with tax assessments.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    19 views11 pages

    Taxation Law

    Uploaded by

    Cee Honasan
    This document summarizes key aspects of taxation in the Philippines, including: 1) Types of taxes such as income tax, value added tax (VAT), and local taxes. Income tax rates vary depending on taxpayer type and income amount. VAT is imposed at 12% on sale of goods and services. 2) Taxpayers are classified as resident or non-resident and various entities such as corporations, estates, and trusts. 3) Taxable income is determined by calculating gross income and allowing deductions. Capital expenditures are not deductible. 4) Tax remedies and procedures for assessment, protest, and appeal are outlined if a taxpayer disagrees with tax assessments.

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    of 11

    NIRC Local Gov.

    Code of 1991

    National Taxes Local Taxes

    1.income tax ordinary/real property

    2. Value added tax

    3. % tax

    INCOME TAX

    1. Income – anything that flow of wealth or increases the net worth of a


    taxpayer

    2. REALIZED
    - Actually received
    - Constructively received

    3. Taxable period
    - Calendar year: starts in Jan ends in Dec

    Person / corporation

    - Fiscal year: starts first day of any month ending after 12month period
    o Corporation

    4. Revenue side expense side


    Income deduction taxable net income x tax rate
    Inclusion not deductible = Net income tax
    Exclusion
    exemption

    Tax on the gross Final withholding tax


    TAO – wages/salaries – Compensation income earner

    - Trade/business – self-employed individual


    - Exercise of profession – self-employed professional
    -

    - Salary compensation

    Trade/Business

    Exercise of profession

    Compensation/ T or B / EP = MIXED INCOME EARNER

    Corporation – Trade or Business

    KINDS of TAXPAYERS

    Resident citizen – Filipino who are residing in the phils.

    Non resident -

    Resident Alien

    Nonresident alien engage T/B

    Non resident not engage in T/B

    Estate/TRUST

    Corporation

    - Domestic corporation
    - Resident foreign corporation (engaged)
    - Nonresident foreign corporation (not engaged)
    - Partnership
    Source of Income

     Within without

    RC yes yes

    NRC yes no

    RA yes no

    NRC ETB yes no

    NRC NETB yes no

    ESTATE/TRSUT

    DC yes yes

    RFC ETB yes no

    NRFC NETB yes no

    Gross income – within

    Taxable income – within

    Gross income from without

    Taxable income from without

    Within and without

    Goods – Gross service

    Sales – Gross receipt

    Puhunan – cost of sales

    Total is Gross Income less allowable deduction = taxable income

    Ibang gastos – allowable deductions

    1. Rentals, royalties, sale of real properties – Lex rei citus = within


    2. Compensation for services rendered – service in the Phils. = within

    3. Interest – Bank deposit = within if the bank nonresident= without

    Loan and obligations – credit=

    4. Dividends

    KINDS OF INCOME / KINDS OF TAX / RATES

    A B C D

    All income Passive I CGT CGT on Real Pro.

    NIT or Interest on BD DC FWT is 15% FWT 6%

    8% of Royalties of Net capital of fair market

    Gross sales Prizes & winnings Gains

    Gross receipts -FWT is 20%

    Do not exceed if traded sell actual resdnce

    3M. .6 x 1%

    NRA-NETB

    -GIT /25%

    DC -NIT/25%

    RFC- NIT/25%

    NRFC-NETB

    -GIT/25%
    1. NET INCOME TAX – 12 months (250k below not taxable)
    35% of excess of 8M
    Gross Income – Allowable deduction = Taxable net income x rates

    2. Withholding tax – Final withholding / creditable / expanded WT

    3. GROSS INCOME TAX

    4. MCIT

    5. INTER CORPORATE DIVIDENDS TAX

    6. BRANCH PROFIT REMITTANCE TAX

    CONSTITUTIONAL LIMITATIONS

    Domestic corporations except from NIT/25%

    Charitable institutions, Churches, convents, Mosque, nonprofit cemeteries,


    parsonages, including all lands buildings and improvement

    Actually, directly and exclusively used for charitable, religious or


    educational purpose shall be exempt from tax. (RPT)

    1. Income from properties R/P Regardless of disposition is NIT taxable

    2. Activity conducted for profit Regardless of disposition is taxable

    Gifts, devices, bequest are items of exclusion from computation of Gross


    Income
    a) Church

    Charitable institutions, Churches, convents, Mosque, nonprofit cemeteries,


    parsonages, including all lands buildings and improvement

    Actually, directly and exclusively used for religious purpose shall be


    exempt from tax. (RPT)

    Income tax

    20M – not subject to tax

    Income as such

    CONSTITUTION

    b) Nonstock nonprofit institution

    - All revenues and assets, lands buildings and improvements of


    non-stock non-profit educational institution Actually Directly
    exclusively for educational purpose shall be exempt from Tax –
    RPT/ TCD/ IRT

    Proprietary educational institutions

    Govt. educational institutions

    - Beneficial use pertains to a nonexempt entity for a consideration


    GOCCs subject to tax except: not subject to RPT

    - GSIS
    - SSS
    - Philippine health insurance corporation
    - Local water district
    - HDMF

    REVENUE SIDE

    Inclusions exclusions exemptions

    GI Sec.32a Proceeds of life insurance Minimum wage

    Return of Premium PCSO 10k below

    Gifts, bequest, devises long term deposit

    Comp for injuries & sickness Not terminated for 5yrs

    EXPENSE SIDE

    Deduction

    X- employer = person or corp. y- employee

    Tapsilugan

    Business expense as deduction:

    Reasonable allowances/wages

    Capital expenditure – not deductible

    Purchase of an asset for the use of trade

    Or business
    Interest –

    Taxes – RPT,PT

    Casualty loss – if stolen

    All that are returned shall be part of the gross income from the time of the
    return

    NOT DEDUCTIBLE:

    -personal and family and living expenditure

    CIE

    -major repairs because they are capital expenditures

    **VALUE ADDED TAX** 12%

    Sec 105-116

    In connection of Trade and Business

    Sale of goods

    Sale of service

    Importation of goods

    12% 0% Exempt

    Gross Selling price

    Gross Sales

    Input of purchases
    Output of Sale

    REMEDIES: VAT Sec 112 claim for input vat with 0% rated transaction

    Tax refund can claim within 2years from the time of the 0% transaction

    BIR acts within 90 days – if it does not act administrative case will be filed

    Appeal to CTA division 30 days of the denial of the 90days

    MR or Motion for new trial si BIR within 15days

    CTA enbanc 15days if denied the MR/Motion

    SC Petition for review on certiorari R45 15days

    REMEDIES: INCOME TAX

    Sec 229

    Within 2yrs from payment

    Judicial claim for refund within the same 2yr period

    Appeal to CTA division 30 days of the denial of the 90days

    MR or Motion for new trial si BIR within 15days

    CTA enbanc 15days if denied the MR/Motion

    SC Petition for review on certiorari R45 15days


    ***TAX REMEDIES***

    Sec 5-15

    After the tax return the BIR will issue,

    Notice of investigation – Letter of Authority = LOA and signed by the duly


    authorized representative of the commissioner

    1. LOA – 120 days


    2. Notice of Discrepancy – 30 days

    NOD is file a reply within 30days from the notice of discrepancy

    3. Preliminary assessment notice – PAN 15 days


    4. Final Assessment notice – FAN

    Assessment

    If filed in good faith – 3years from due date, before, beyond, exactly

    If filed Fraudulent return – 10years from discovery of filing of fraudulent


    return

    No return filed – 10 years from discovery of no filing of return

    5. Protest – MR or Motion for Reinvestigation

    30days from receipt of FAN

    BIR may sit 180days within the filing of protest, is deemed denied if BIR
    does not act within the period

    Protest if denied

    - Appeal R43 to CTA division 30 days of the denial of receipt of


    FDDA
    - MR or Motion for new trial si BIR within 15days
    - CTA enbanc 15days if denied the MR/Motion
    - SC Petition for review on certiorari R45 15days

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