Documente Academic
Documente Profesional
Documente Cultură
GEOCANIGA
Academic Year 2017-2018
2nd Sem
Tax I
INCOME TAX
Necessity Theory
Benefits-Protection Theory
Jurisdiction over subjects and objects
b. Purpose of Taxation
1. Revenue Raising
2. Regulatory
Tio vs. Videogram Regulatory Board 151 SCRA 208 (1987)
Philippine Health Care Providers vs Commissioner of Internal Revenue 554 SCRA 411
c. Power of Taxation compared with other powers
1. Police Power
2. Power of eminent domain
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d. Limitations on Taxing Power
1. Public Purpose
2. Inherently legislative
Mactan Cebu International Airport Authority vs. Marcos 261 SCRA 667
Napocor vs. City of Cabanatuan G.R. No. 1491110, April 9, 2003
3. Territorial; Situs of Taxation
4. Exemption of government
5. Constitutional Limitations of Taxation
e. Doctrines in Taxation
1. Prescription of tax laws
Republic vs. Ablaza 108 PHIL 1105
2. Double Taxation
Commissioner of Internal Revenue vs. Solidbank Corporation 416 SCRA 436
Compania General De Tabacos vs City of Manila 8 SCRA 367
City of Baguio vs. De Leon 25 SCRA 938
3. Direct vs. Indirect Taxes
Asia International Auctioneers vs. Commissioner of Internal Revenue (G.R. No. 179115, September 26, 2012)
4. Tax Exemption
Republic vs. Caguioa 536 SCRA 194
5. Compensation and set-off
Commissioner of Internal Revenue vs. Gould Pumps Inc. (August 22, 2012)
Solutio Indebiti
Filinvest Development Corporation vs. CIR 529 SCRA 605
Tax Amnesty
6. Construction of tax statutes
Liberal Construction in favor of Taxpayers- Manila Railroad vs. Collector of Customs 52 Phil 950 (1929)
Philippine Health Care Providers vs Commissioner of Internal Revenue 554 SCRA 411
Commissioner of Customs vs. Hypermix Feeds G.R. No. 179579, February 1, 2012
Meralco vs. Vera 67 SCRA 352
Quezon City vs. ABS-CBN 567 SCRA 495- Stricissimi Juris
Non-retroactive application (Section 246 of Tax Code)
PBCOM vs. CIR 302 SCRA 241
BIR Ruling No. 370-2011 October 7, 2011
G.R. No. 198756, January 13, 2015- BDO vs. CIR, et.al
1. Definitions
2. Income
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In general
Madrigal vs. Rafferty (August 7, 1918)
Fisher vs. Trinidad (October 30, 1922)
Limpan Investment Corporation vs. Commissioner of Internal Revenue (July 26, 1966)
Conwi vs. Court of Tax Appeals ( August 31, 1992)
Commissioner v. Glenshaw Glass Co., 348 U.S. 426 (March 28, 1955)
Murphy vs. Internal Revenue Service 460 F3rd 79 – D.C. Circuit Court (August 22, 2006)
Statutory “inclusions”
Section 32 (A), Tax Code
Rents
Helvering vs. Bruun, 309 US 461 (March 25, 1940)
Section 49, RR 2
Dividends
Section 73 (A) to (C), Tax Code
Section 250-256, RR 2
Section 50, RR 2
RMC 13-80 (April 10, 1980)
Inventories
Section 41, Tax Code
Exclusions
De minimis/ PERA
Republic Act 9505
3. General Principles
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4. Source of Income Rules
Quill Corp. vs. North Dakota, 504 US 298 (May 26, 1992)
Vodafone International Holdings B.V. vs. Union of India & Anr. (Supreme Court of India, Civil Appeal No. 733 of 2012;
January 20, 2012)
5. Deductions
Business expenses
Republic Act 10026 (Sections 3 & 14 only)
Republic Act 8502
Republic Act 8525 (Sections 1 to 5 only)
Republic Act 9999
Commissioner of Internal Revenue vs. Isabela Cultural Corporation (February 12, 2007)
Commissioner of Internal Revenue vs. General Foods (Phils.) Inc. (April 24,
2003)
Aguinaldo Industries Corporation vs. Commissioner of Internal Revenue (February 25, 1982)
Atlas Consolidated Mining & Development Corporation vs. Commissioner of Internal Revenue (January 27, 1981)
Zamora vs. Collector of Internal Revenue (May 31, 1963)
C.M. Hoskins & Co., Inc. vs. Commissioner of Internal Revenue (November 28, 1969)
Calanoc vs. Collector of Internal Revenue (November 29, 1961)
Kuenzle & Streiff, Inc. vs. Collector of Internal Revenue (October 20, 1959)
Interest arbitrage
Taxes
Commissioner of Internal Revenue vs. Lednicky (July 31, 1964)
Losses
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RR 14-01 (August 27, 2001)
BIR Ruling 30-00 (August 10, 2000)
Forex losses
BIR Ruling 206-90 (October 30, 1990)
BIR Ruling No. 144-85 (August 26, 1985)
Bad Debts
Philex Mining Corporation vs. Commissioner of Internal Revenue (April 16, 2008)
Philippine Refining Company vs. Court of Appeals (May 8, 1996)
Fernandez Hermanos, Inc. vs. Commissioner of Internal Revenue (September 30, 1969)
Depreciation
Basilan Estates, Inc. vs. Commissioner of Internal Revenue (September 5, 1967)
Limpan Investment Corporation vs. Commissioner of Internal Revenue (July 26, 1966)
Depletion
Consolidated Mines, Inc. vs. Court of Tax Appeals (August 29, 1974)
Non-deductible expenses
Section 36, Tax Code
Esso Standard Eastern, Inc. vs. Commissioner of Internal Revenue (July 7, 1989)
Section 119-122, RR 2
6. Individuals
Sections 24 (as amended by Republic Act 9504) & 25, Tax Code
Ordinary Income
Passive Income
Section 22 (T) to (Y), Tax Code
Supreme Transliner, Inc. vs. BPI Family Savings Bank, Inc. (February 23, 2011)
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BIR Ruling DA 287-07 (May 8, 2007)
RR 6-2013 (April 11, 2013)
OCWs/Senior Citizens/Disabled
M.E. Holdings Corporation vs. CIR & CTA (March 3, 2008)
7. Partnerships
8. Corporations
Sections 27 (A) & (D), and 28, Tax Code as amended by Republic Act 9294 & Republic Act 9337
Ordinary Income
Passive Income
Capital Gains Tax
RR 4-99 (March 9, 1999)
RR 06-2008 (April 22, 2008)
RMC 55-2010 (June 28, 2010)
BIR Ruling DA 455-07 (August 17, 2007)
In general
International Carrier
Air New Zealand vs. Commissioner of Internal Revenue (CTA Case, January 30, 2008)
Commissioner of Internal Revenue vs. BOAC (April 30, 1987)
United Airlines, Inc. vs. Commissioner of Internal Revenue (September 29, 2010)
RR 15-2002 – Sections 1 to 5 only
OBUs/FCDUs
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In general
Commissioner of Internal Revenue vs. S.C. Johnson and Son, Inc. (June 25, 1999)
Marubeni Corporation vs. Commissioner of Internal Revenue (September 14, 1989)
N.V. Reederij “Amsterdam” and Royal InterOcean Lines vs. Commissioner of Internal Revenue (June 23,
1988)
Special non-resident foreign corporations
Tax on Certain Incomes of Non-resident Foreign Corporations
Interest on foreign loans
Intercorporate dividends
Section 28 (B)(5)(b), Tax Code, as amended by Republic Act 9337
Commissioner of Internal Revenue vs. Procter & Gamble Philippines Manufacturing Corp.
(December 2, 1991)
Interpublic Group of Companies vs. Commissioner of Internal Revenue (CTA Case No. 7796,
February 21, 2011)
BIR Ruling DA-145-07 (March 8, 2007)
Income covered by Tax Treaties
Mirant (Philippines) Operations Corporation vs. Commissioner of Internal Revenue (CTA EB
Case No. 40, June 7, 2005 as affirmed by SC Minute Resolution dated February 18, 2008)
9. Withholding Tax
Chamber of Real Estate Builders’ Association, Inc. vs. Executive Secretary (March 9, 2010)
Commissioner of Internal Revenue vs. Philippine Airlines , Inc. (July 7, 2009)
RR 9-98 (August 25, 1998) – except Sec. 2.28 (E)(7) “Accounting treatment” – as amended by RR 12-2007 (October 10,
2007)
The Manila Wine Merchants, Inc. vs. Commissioner of Internal Revenue (February 20, 1984)
Commissioner of Internal Revenue vs. Tuason (May 15, 1989)
Cyanamid Philippines, Inc. vs. Court of Appeals (January 20, 2000)
RR 2-01 (February 12, 2001)
RMC 35-2011 (March 14, 2011)
BIR Ruling 25-02 (June 25, 2002)
BIR Ruling 094-2013
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(3) Fringe Benefits Tax
Section 22(A) and 33, Tax Code
Commissioner of Internal Revenue vs. Filinvest Development Corporation (July 19, 2011)
Her Majesty the Queen vs. GlaxoSmithKline Inc., 2012 SCC 52 (Supreme Court of Canada, Court File 33874; October 18,
2012)
Commissioner of Internal Revenue vs. St. Luke’s Medical Center, Inc. (September 26, 2012)
(2) GOCCs
Dumaguete Cathedral Credit Cooperative vs. Commissioner of Internal Revenue (January 22, 2010)
Commissioner of Internal Revenue vs. G. Sinco Educational Corp. (October 23, 1956)
Capital assets/income
Calasanz vs. Commissioner of Internal Revenue (October 9, 1986)
Section 132, RR 2
BIR Ruling 27-02 (July 15, 2002)
BIR Ruling 142-2011
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Ordinary assets/income
Section 22 (Z), Tax Code
Tuason vs. Lingad (July 31, 1974)
Net capital gain, net capital loss
Percentage taken into account
Limitation on capital loss
China Banking Corporation vs. Court of Appeals (July 19, 2000)
Section 136-143, RR 2
Computation of gain or loss
Cost or basis for determining gain or loss
Exchange of property (Tax-free exchange)
Definitions
Section 40 (C)(6), Tax Code
Merger or consolidation
Commissioner of Internal Revenue vs. Rufino (February 27, 1987
Transfer of "substantially all" the assets
Transfer of property for shares of stocks
Commissioner of Internal Revenue vs. Filinvest Development Corporation (July 19, 2011)
BIR Ruling No. 274-87 (September 9, 1987)
Administrative requirements in case of tax-free exchanges
RR 18-01 (November 13, 2001) – (only Sections 3 to 6 and 9 to 12)
RMR 1-02 (April 25, 2002)
Assumption of liability in tax-free exchanges
Cost or basis in tax-free exchanges
Business Purpose
Gregory vs. Helvering, 293 U.S. 465; 55 S.CT. 266 (January 7, 1935)
Rulings
RMC 40-2012 (August 3, 2012)
Losses from Wash Sales of Stocks or Securities
Section 38, Tax Code
Section 131, RR 2
BIR Ruling 614-2012
Individual Return
Section 51 & 56, Tax Code
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Section 74, Tax Code
Corporation Returns
Section 52, 53 & 56, Tax Code
Quarterly Income Tax
Section 75, Tax Code
Final Adjustment Return
Section 76, Tax Code
Systra Philippines, Inc. vs. Commissioner of Internal Revenue (September 21, 2007)
Philam Asset Management, Inc. vs. Commissioner of Internal Revenue (December 14, 2005)
Where to file
When to file
Section 77, Tax Code
When to pay
Capital gains on shares of stock
Return of corporations contemplating dissolution/reorganization
Section 52 (C), Tax Code
Sec. 244, RR 2
Bank of the Philippine Islands v. Commissioner of Internal Revenue - CA-GR Sp. No. 38304 (April 14, 2000)
Returns of GPPs
Section 55, Tax Code
Returns of Receivers, Trustees in Bankruptcy or Assignees
Section 54, Tax Code
Others not captured
Section 59, Tax Code
United Airlines, Inc. vs. Commissioner of Internal Revenue (September 29, 2010)
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