4. Taxation

COVERAGELAW ON TAXATION

2015 BAR EXAMINATIONS

General Principles of Taxation

Definition and concept of taxationNature of taxationCharacteristics of taxationPower of taxation compared with other powersPolice powerPower of eminent domainPurpose of taxation

Revenue-raising

Non-revenue/special or regulatory

Principles of sound tax system

Fiscal adequacy

Administrative feasibility

Theoretical justice

Theory and basis of taxation

Lifeblood theory

Necessity theory

Benefits-protection theory (Symbiotic relationship)

Jurisdiction over subject and objects

Doctrines in taxation

Prospectivity of tax laws

Imprescriptibility

Double taxation

Strict sense

Broad sense

Constitutionality of double taxation

Modes of eliminating double taxation

Escape from taxation

Shifting of tax burden

Ways of shifting the tax burden

Taxes that can be shifted

Meaning of impact and incidence of taxation

Tax avoidance

Tax evasion2015 Bar Examination Coverage2Law on Taxation

Exemption from taxation

Meaning of exemption from taxation

Nature of tax exemption

Kinds of tax exemption

Express

Implied

Contractual

Rationale/grounds for exemption

Revocation of tax exemption

Compensation and set-off

Compromise

Tax amnesty

Definition

Distinguished from tax exemption

Construction and interpretation of:

Tax laws

General rule

Exception

Tax exemption and exclusion

General rule

Exception

Tax rules and regulations

General rule only

Penal provisions of tax laws

Non-retroactive application to taxpayers

Exceptions

I. Scope and limitation of taxation

Inherent limitations

Public purpose

Inherently legislative

General rule

Exceptions

Delegation to local governments

Delegation to the President

Delegation to administrative agencies

Territorial

Situs of taxation

Meaning

Situs of income tax

From sources within the Philippines2015 Bar Examination Coverage3Law on Taxation

From sources without the Philippines

Income partly within and partly without the Philippines

Situs of property taxes

Taxes on real property

Taxes on personal property

Situs of excise tax

Estate tax

Donors tax

Situs of business tax

Sale of real property

Sale of personal property

Value-Added Tax (VAT)

International comity

Exemption of government entities, agencies, and instrumentalities

Constitutional limitations

Provisions directly affecting taxation

Prohibition against imprisonment for non-payment of poll tax

Uniformity and equality of taxation

Grant by Congress of authority to the president to impose tariff rates

Prohibition against taxation of religious, charitable entities, and educational entities

Prohibition against taxation of non-stock, non-profit institutions

Majority vote of Congress for grant of tax exemption

Prohibition on use of tax levied for special purpose

Presidents veto power on appropriation, revenue, tariff bills

Non-impairment of jurisdiction of the Supreme Court

Grant of power to the local government units to create its own sources of revenue

Flexible tariff clause

Exemption from real property taxes

No appropriation or use of public money for religious purposes

Provisions indirectly affecting taxation

Due process

Equal protection

Religious freedom

Non-impairment of obligations of contracts J. Stages of taxation

Levy

Assessment and collection

Payment2015 Bar Examination Coverage4Law on Taxation

Refund

Definition, nature, and characteristics of taxes

Requisites of a valid tax

Tax as distinguished from other forms of exactions

Tariff

Toll

License fee

Special assessment

Debt

Kinds of taxes

As to object

Personal, capitation, or poll tax

Property tax

Privilege tax

As to burden or incidence

Direct

Indirect

As to tax rates

Specific

Ad valorem

Mixed

As to purposes

General or fiscal

Special, regulatory, or sumptuary

As to scope or authority to impose

National internal revenue taxes

Local real property tax, municipal tax

As to graduation

Progressive

Regressive

Proportionate

II. National Internal Revenue Code (NIRC) of 1997, as amended

Income taxation

Income tax systems

Global tax system

Schedular tax system

Semi-schedular or semi-global tax system

Features of the Philippine income tax law2015 Bar Examination Coverage5Law on Taxation

Direct tax

Progressive

Comprehensive

Semi-schedular or semi-global tax system

Criteria in imposing Philippine income tax

Citizenship principle

Residence principle

Source principle

Types of Philippine income tax

Taxable period

Calendar period

Fiscal period

Short period

Kinds of taxpayers

Individual taxpayers

Citizens

Resident citizens

Non-resident citizens

Aliens

Resident aliens

Non-resident aliens

Engaged in trade or business

Not engaged in trade or business

Special class of individual employees

Minimum wage earner

Corporations

Domestic corporations

Foreign corporations

Resident foreign corporations

Non-resident foreign corporations

Joint venture and consortium

Partnerships

General professional partnerships

Estates and trusts

Co-ownerships

Income taxation

Definition

Nature

General principles2015 Bar Examination Coverage6Law on Taxation

Income

Definition

Nature

When income is taxable

Existence of income

Realization of income

Tests of realization

Actual vis--vis constructive receipt

Recognition of income

Methods of accounting

Cash method vis--vis accrual method

Installment payment vis--vis deferred payment vis--vis percentage completion (in long-term contracts)

Tests in determining whether income is earned for tax purposes

Realization test

Claim of right doctrine or doctrine of ownership, command, or control

Economic benefit test, doctrine of proprietary interest

Severance test

All events test

Gross income

Definition

Concept of income from whatever source derived

Gross income vis--vis net income vis--vis taxable income

Classification of income as to source

Gross income and taxable income from sources within the Philippines

Gross income and taxable income from sources without the Philippines

Income partly within or partly without the Philippines

Sources of income subject to tax

Compensation income

Fringe benefits

Special treatment of fringe benefits

Definition

Taxable and non-taxable fringe benefits

Professional income

Income from business

Income from dealings in property

Types of properties

Ordinary assets

Capital assets

Types of gains from dealings in property2015 Bar Examination Coverage7Law on Taxation

Ordinary income vis--vis capital gain

Actual gain vis--vis presumed gain

Long term capital gain vis--vis short-term capital gain

Net capital gain, net capital loss

Computation of the amount of gain or loss

Income tax treatment of capital loss

Capital loss limitation rule (applicable to both corporations and individuals)

Net loss carry-over rule (applicable only to individuals)

Dealings in real property situated in the Philippines

Dealings in shares of stock of Philippine corporations

Shares listed and traded in the stock exchange

Shares not listed and traded in the stock exchange

Sale of principal residence

Passive investment income

Interest income

Dividend income

Cash dividend

Stock dividend

Property dividend

Liquidating dividend

Royalty income

Rental income

Lease of personal property

Lease of real property

Tax treatment of

Leasehold improvements by lessee

VAT added to rental/paid by the lessee

Advance rental/long term lease

Annuities, proceeds from life insurance or other types of insurance

Prizes and awards

Pensions, retirement benefit, or separation pay

Income from any source whatever

Forgiveness of indebtedness

Recovery of accounts previously written-off when taxable/when not taxable

Receipt of tax refunds or credit

Income from any source whatever

Source rules in determining income from within and without

Interests2015 Bar Examination Coverage8Law on Taxation

Dividends

Services

Rentals

Royalties

Sale of real property

Sale of personal property

Shares of stock of domestic corporation

Situs of income taxation (see page 2 under inherent limitations, territorial)

Exclusions from gross income

Rationale for the exclusions

Taxpayers who may avail of the exclusions

Exclusions distinguished from deductions and tax credit

Under the Constitution

Income derived by the government or its political subdivisions from the exercise of any essential governmental function

Under the Tax Code

Proceeds of life insurance policies

Return of premium paid

Amounts received under life insurance, endowment or annuity contracts

Value of property acquired by gift, bequest, devise or descent

Amount received through accident or health insurance

Income exempt under tax treaty

Retirement benefits, pensions, gratuities, etc.

Winnings, prizes, and awards, including those in sports competition

Under special laws

Personal Equity and Retirement Account

Deductions from gross income

General rules

Deductions must be paid or incurred in connection with

the taxpayers trade, business or profession

Deductions must be supported by adequate receipts or invoices (except standard deduction)

Additional requirement relating to withholding

Return of capital (cost of sales or services)2015 Bar Examination Coverage9Law on Taxation

Sale of inventory of goods by manufacturers and dealers of properties

Sale of stock in trade by a real estate dealer and dealer in securities

Sale of services

Itemized deductions

Expenses

Requisites for deductibility

Nature: ordinary and necessary

Paid and incurred during taxable year

Salaries, wages and other forms of compensation for personal services actually rendered, including the grossed-up monetary value of the fringe benefit subjected to fringe benefit tax which tax should have been paid

Travelling/transportation expenses

Cost of materials

Rentals and/or other payments for use or possession of property

Repairs and maintenance

Expenses under lease agreements

Expenses for professionals

Entertainment/Representation expenses

Political campaign expenses

Training expenses

Interest


Non-deductible interest expense

Interest subject to special rules

Interest paid in advance

Interest periodically amortized

Interest expense incurred to acquire property for use in trade/business/profession

Reduction of interest expense/interest arbitrage

Taxes


Non-deductible taxes

Treatments of surcharges/interests/fines for delinquency

Treatment of special assessment

Tax credit vis--vis deduction2015 Bar Examination Coverage10Law on Taxation

Losses


Other types of losses

Capital losses

Securities becoming worthless

Losses on wash sales of stocks or securities

Wagering losses

Net Operating Loss Carry-Over (NOLCO)

Bad debts


Effect of recovery of bad debts

Depreciation


Methods of computing depreciation allowance

Straight-line method

Declining-balance method

Sum-of-the-years-digit method

Charitable and other contributions


Amount that may be deducted

Contributions to pension trusts


Deductions under special laws

Optional standard deduction

Individuals, except non-resident aliens

Corporations, except non-resident foreign corporations

Partnerships

Personal and additional exemption (R.A. No. 9504, Minimum Wage Earner Law)

Basic personal exemptions

Additional exemptions for taxpayer with dependents

Status-at-the-end-of-the-year rule

Exemptions claimed by non-resident aliens

Items not deductible

General rules

Personal, living or family expenses

Amount paid for new buildings or for permanent improvements (capital expenditures)Amount expended in restoring property (major repairs)

2015 Bar Examination Coverage11Law on Taxation

Premiums paid on life insurance policy covering life or any other officer or employee financially interested

Interest expense, bad debts, and losses from sales of property between related parties

Losses from sales or exchange or property

Non-deductible interest

Nondeductible taxes

Non-deductible losses

Losses from wash sales of stock or securities

Exempt corporations

Propriety educational institutions and hospitals

Government-owned or controlled corporations

Others

Taxation of resident citizens, non-resident citizens, and resident aliens

General rule that resident citizens are taxable on income from all sources within and without the Philippines

Non-resident citizens

Taxation on compensation income

Inclusions

Monetary compensation

Regular salary/wage

Separation pay/retirement benefit not otherwise exempt

Bonuses, 13th month pay, and other benefits not exemptDirectors fees

Non-monetary compensation

Fringe benefit not subject to tax

Exclusions

Fringe benefit subject to tax

De minimis benefits

13th month pay and other benefits, and payments specifically excluded from taxable compensation income

Deductions

Personal exemptions and additional exemptions

Health and hospitalization insurance

Taxation of compensation income of a minimum wage earner

Definition of statutory minimum wage

Definition of minimum wage earner

Income also subject to tax exemption: holiday pay, overtime pay, night-shift differential, and hazard pay

Taxation of business income/income from practice of profession2015 Bar Examination Coverage12Law on Taxation

Taxation of passive income

(i) Passive income subject to final tax

Interest income

Treatment of income from long-term deposits

Royalties

Dividends from domestic corporations

Prizes and other winnings

Passive income not subject to final tax

Taxation of capital gains

Income from sale of shares of stock of a Philippine corporation

Shares traded and listed in the stock exchange

Shares not listed and traded in the stock exchange

Income from the sale of real property situated in the Philippines

Income from the sale, exchange, or other disposition of other capital assets

Taxation of non-resident aliens engaged in trade or business

General rules

Cash and/or property dividends

Capital gains

Exclude: non-resident aliens not engaged in trade or business

Individual taxpayers exempt from income tax

Senior citizens

Minimum wage earners

Exemptions granted under international agreements

Taxation of domestic corporations

Tax payable

Regular tax

Minimum Corporate Income Tax (MCIT)

Imposition of MCIT

Carry forward of excess minimum tax

Relief from the MCIT under certain conditions

Corporations exempt from the MCIT

Applicability of the MCIT where a corporation is governed both under the regular tax system and a special income tax system

Allowable deductions

Itemized deductions

Optional standard deduction

Taxation of passive income

Passive income subject to tax2015 Bar Examination Coverage13Law on Taxation

Interest from deposits and yield, or any other monetary benefit from deposit substitutes and from trust funds and similar arrangements and royalties

Capital gains from the sale of shares of stock not traded in the stock exchange

Income derived under the expanded foreign currency deposit system

Inter-corporate dividends

Capital gains realized from the sale, exchange, or disposition of lands and/or buildings

Passive income not subject to tax

Taxation of capital gains

Income from sale of shares of stock

Income from the sale of real property situated in the Philippines

Income from the sale, exchange, or other disposition of other capital assets

Tax on proprietary educational institutions and hospitals

Tax on government-owned or controlled corporations, agencies or instrumentalities

Taxation of resident foreign corporations

General rule

With respect to their income from sources within the Philippines

Minimum Corporate Income Tax

Tax on certain income

Interest from deposits and yield, or any other monetary benefit from deposit substitutes, trust funds and similar arrangements and royaltiesIncome derived under the expanded foreign currency deposit system

Capital gains from sale of shares of stock not traded in the stock exchange

Inter-corporate dividends

Exclude:

International carrier

Offshore banking units

Branch profits remittances

Regional or area headquarters and regional operating headquarters of multinational companiesTaxation of non-resident foreign corporations

General rule

Tax on certain income

Interest on foreign loans

Inter-corporate dividends2015 Bar Examination Coverage14Law on Taxation

Capital gains from sale of shares of stock not traded in the stock exchange

Exclude:

Non-resident cinematographic film-owner, lessor or distributor

Non-resident owner or lessor of vessels chartered by Philippine nationals

Non-resident owner or lessor of aircraft machineries and other equipmentImproperly accumulated earnings of corporations

Exemption from tax on corporations

Taxation of partnerships

Taxation of general professional partnerships

Withholding tax

Concept

Kinds

Withholding of final tax on certain incomes

Withholding of creditable tax at source

Withholding of VAT

Filing of return and payment of taxes withheld

Return and payment in case of government employees

Statements and returns

Final withholding tax at source

Creditable withholding tax

Expanded withholding tax

Withholding tax on compensation

Timing of withholding

B. Estate tax

Basic principles

Definition

Nature

Purpose or object

Time and transfer of properties

Classification of decedent

Gross estate vis--vis net estate

Determination of gross estate and net estate

Composition of gross estate

Items to be included in gross estate

Deductions from estate

Exclusions from estate2015 Bar Examination Coverage15Law on Taxation

Tax credit for estate taxes paid in a foreign country

Exemption of certain acquisitions and transmissions

Filing of notice of death

Estate tax return

Donors tax

Basic principles

Definition

Nature

Purpose or object

Requisites of valid donation

Transfers which may be constituted as donation

Sale/exchange/transfer of property for insufficient consideration

Condonation/remission of debt

Transfer for less than adequate and full consideration

Classification of donor

Determination of gross gift

Composition of gross gift

Valuation of gifts made in property

Tax credit for donors taxes paid in a foreign country

Exemptions of gifts from donors tax

Person liable

Tax basis

Value-Added Tax (VAT)

Concept

Characteristics/Elements of a VAT-Taxable transaction

Impact of tax

Incidence of tax

Tax credit method

Destination principle

Persons liable

VAT on sale of goods or properties

Requisites of taxability of sale of goods or properties

Zero-rated sales of goods or properties, and effectively zero-rated sales of goods or properties

Transactions deemed sale

Transfer, use or consumption not in the course of business of goods/properties originally intended for sale or use in the course of business

Distribution or transfer to shareholders, investors or creditors2015 Bar Examination Coverage16Law on Taxation

Consignment of goods if actual sale not made within 60 days from date of consignment

Retirement from or cessation of business with respect to inventories on hand

Change or cessation of status as VAT-registered person

Subject to VAT

Change of business activity from VAT taxable status to VAT-exempt status

Approval of request for cancellation of a registration due to reversion to exempt status

Approval of request for cancellation of registration due to desire to revert to exempt status after lapse of 3 consecutive years

Not subject to VAT

Change of control of a corporation

Change in the trade or corporate name

Merger or consolidation of corporations

VAT on importation of goods

Transfer of goods by tax exempt persons

VAT on sale of service and use or lease of properties

Requisites for taxability

Zero-rated sale of services

VAT exempt transactions

VAT exempt transactions, in general

Exempt transaction, enumerated

Input tax and output tax, defined

Sources of input tax

Purchase or importation of goods

Purchase of real properties for which a VAT has actually been paid

Purchase of services in which VAT has actually been paid

Transactions deemed sale

Presumptive input

Transitional input

Persons who can avail of input tax credit

Determination of output/input tax; VAT payable; excess input tax credits

Determination of output tax

Determination of input tax creditable

Allocation of input tax on mixed transactions

Determination of the output tax and VAT payable and computation of VAT payable or excess tax credits

Substantiation of input tax credits

Refund or tax credit of excess input tax2015 Bar Examination Coverage17Law on Taxation

Who may claim for refund/apply for issuance of tax credit certificate

Period to file claim/apply for issuance of tax credit certificate

Manner of giving refund

Destination principle or cross-border doctrine

Invoicing requirements

Invoicing requirements in general

Invoicing and recording deemed sale transactions

Consequences of issuing erroneous VAT invoice or VAT official receipt

Filing of return and payment

Withholding of final VAT on sales to government E. Tax remedies under the NIRC

Taxpayers remedies

Assessment

Concept of assessment

Requisites for valid assessment

Constructive methods of income determination

Inventory method for income determination

Jeopardy assessment

Tax delinquency and tax deficiency

Power of the Commissioner to make assessments and prescribe additional requirements for tax administration and enforcement

Power of the Commissioner to obtain information, and to summon/examine, and take testimony of persons

When assessment is made

Prescriptive period for assessment

False, fraudulent, and non-filing of returns

Suspension of running of statute of limitations

General provisions on additions to the tax

Civil penalties

Interest

Compromise penalties

Assessment process

Tax audit

Notice of informal conference

Issuance of preliminary assessment notice

Notice of informal conference

Issuance of preliminary assessment notice

Exceptions to issuance of preliminary assessment notice

Reply to preliminary assessment notice2015 Bar Examination Coverage18Law on Taxation

Issuance of formal letter of demand and assessment notice/final assessment notice

Disputed assessment

Administrative decision on a disputed assessment

Protesting assessment

Protest of assessment by taxpayer

Protested assessment

When to file a protest

Forms of protest

Content and validity of protest

Submission of documents within 60 days from filing of protest

Effect of failure to protest

Period provided for the protest to be acted upon

Rendition of decision by Commissioner

Denial of protest

Commissioners actions equivalent to denial of protest

Filing of criminal action against taxpayer

Issuing a warrant of distraint and levy

Inaction by Commissioner

Remedies of taxpayer to action by Commissioner

In case of denial of protest

In case of inaction by Commissioner within 180 days from submission of documents

Effect of failure to appeal

Collection

Requisites

Prescriptive periods

Distraint of personal property including garnishment

Summary remedy of distraint of personal property

Purchase by the government at sale upon distraint

Report of sale to the Bureau of Internal Revenue (BIR)

Constructive distraint to protect the interest of the government

Summary remedy of levy on real property

Advertisement and sale

Redemption of property sold

Final deed of purchaser

Forfeiture to government for want of bidder

Remedy of enforcement of forfeitures

Action to contest forfeiture of chattel

Resale of real estate taken for taxes2015 Bar Examination Coverage19Law on Taxation

When property to be sold or destroyed

Disposition of funds recovered in legal proceedings or obtained from forfeiture

Further distraint or levy

Tax lien

Compromise

Authority of the Commissioner to compromise and abate taxes

Civil and criminal actions

Suit to recover tax based on false or fraudulent returns

Refund

Grounds and requisites for refund

Requirements for refund as laid down by cases

Necessity of written claim for refund

Claim containing a categorical demand for reimbursement

Filing of administrative claim for refund and the suit/proceeding before the CTA within 2 years from date of payment regardless of any supervening cause

Legal basis of tax refunds

Statutory basis for tax refund under the tax code

Scope of claims for refund

Necessity of proof for claim or refund

Burden of proof for claim of refund

Nature of erroneously-paid tax/illegally assessed collected

Tax refund vis--vis tax credit

Essential requisites for claim of refund

Who may claim/apply for tax refund/tax credit

Taxpayer/withholding agents of non-resident foreign corporation

Prescriptive period for recovery of tax erroneously or illegally collected

Other consideration affecting tax refunds

Government remedies

Administrative remedies

Tax lien

Levy and sale of real property

Forfeiture of real property to the government for want of bidder

Further distraint and levy

Suspension of business operation

Non-availability of injunction to restrain collection of tax

Judicial remedies

Statutory offenses and penalties

Civil penalties2015 Bar Examination Coverage20Law on Taxation

Surcharge

Interest

In general

Deficiency interest

Delinquency interest

Interest on extended payment

Compromise and abatement of taxes

Compromise

Abatement

Organization and Function of the Bureau of Internal Revenue

Rule-making authority of the Secretary of Finance

Authority of Secretary of Finance to promulgate rules and regulations

Specific provisions to be contained in rules and regulations

Non-retroactivity of rulings

Power of the Commissioner to suspend the business operation of a taxpayer

III. Local Government Code of 1991, as amended

Local government taxation

Fundamental principles

Nature and source of taxing power

Grant of local taxing power under the local government code

Authority to prescribe penalties for tax violations

Authority to grant local tax exemptions

Withdrawal of exemptions

Authority to adjust local tax rates

Residual taxing power of local governments

Authority to issue local tax ordinances

Local taxing authority

Power to create revenues exercised through Local Government Units

Procedure for approval and effectivity of tax ordinances

Scope of taxing power

Specific taxing power of Local Government Units

Taxing powers of provinces

Tax on transfer of real property ownership

Tax on business of printing and publication

Franchise tax

Tax on sand, gravel and other quarry services

Professional tax2015 Bar Examination Coverage21Law on Taxation

Amusement tax

Tax on delivery truck/van

Taxing powers of cities

Taxing powers of municipalities

Tax on various types of businesses

Ceiling on business tax impossible on municipalities within Metro Manila

Tax on retirement on business

Rules on payment of business tax

Fees and charges for regulation & licensing

Situs of tax collected

Taxing powers of barangays

Common revenue raising powers

Service fees and charges

Public utility charges

Toll fees or charges

Community tax

Common limitations on the taxing powers of LGUs

Collection of business tax

Tax period and manner of payment

Accrual of tax

Time of payment

Penalties on unpaid taxes, fees or charges

Authority of treasurer in collection and inspection of books

Taxpayers remedies

Periods of assessment and collection of local taxes, fees or charges

Protest of assessment

Claim for refund of tax credit for erroneously or illegally collected tax, fee or charge

Civil remedies by the LGU for collection of revenues

Local governments lien for delinquent taxes, fees or charges

Civil remedies, in general

Administrative action

Judicial action B. Real property taxation

Fundamental principles

Nature of real property tax

Imposition of real property tax

Power to levy real property tax

Exemption from real property tax2015 Bar Examination Coverage22Law on Taxation

Appraisal and assessment of real property tax

Rule on appraisal of real property at fair market value

Declaration of real property

Listing of real property in assessment rolls

Preparation of schedules of fair market value

Authority of assessor to take evidence

Amendment of schedule of fair market value

Classes of real property

Actual use of property as basis of assessment

Assessment of real property

Assessment levels

General revisions of assessments and property classification

Date of effectivity of assessment or reassessment

Assessment of property subject to back taxes

Notification of new or revised assessment

Appraisal and assessment of machinery

Collection of real property tax

Date of accrual of real property tax and special levies

Collection of tax

Collecting authority

Duty of assessor to furnish local treasurer with assessment rolls

Notice of time for collection of tax

Periods within which to collect real property tax

Special rules on payment

Payment of real property tax in installments

Interests on unpaid real property tax

Condonation of real property tax

Remedies of LGUs for collection of real property tax

Issuance of notice of delinquency for real property tax payment

Local governments lien

Remedies in general

Resale of real estate taken for taxes, fees or charges

Further levy until full payment of amount due

Refund or credit of real property tax

Payment under protest

Repayment of excessive collections

Taxpayers remedies

Contesting an assessment of value of real property

Appeal to the Local Board of Assessment Appeals

Appeal to the Central Board of Assessment Appeals2015 Bar Examination Coverage23

Effect of payment of tax

b. Payment of real property tax under protest

File protest with local treasurer

Appeal to the Local Board of Assessment Appeals

Appeal to the Central Board of Assessment Appeals

Appeal to the CTA

Appeal to the Supreme Court

IV. Tariff and Customs Code of 1978, as amended

Tariff and duties, defined

General rule: all imported articles are subject to duty.

Importation by the government taxable

Purpose for imposition

Flexible tariff clause

Requirements of importation

Beginning and ending of importation

Obligations of importer

Cargo manifest

Import entry

Declaration of correct weight or value

Liability for payment of duties

Liquidation of duties

Keeping of records

Importation in violation of tax credit certificate

Smuggling

Other fraudulent practices

Classification of goods

Taxable importation

Prohibited importation

Conditionally-free importation

Classification of duties

Ordinary/regular duties Law on Taxation2015 Bar Examination Coverage24Law on Taxation

Ad valorem; methods of valuation

Transaction value

Transaction value of identical goods

Transaction value of similar goods

Deductive value

Computed value

Fallback value

Specific

Special duties

Dumping duties

Countervailing duties

Marking duties

Retaliatory/discriminatory duties

Safeguard

Remedies

Government

Administrative/extrajudicial

Search, seizure, forfeiture, arrest

Judicial

Rules on appeal including jurisdiction

Taxpayer

Protest

Abandonment

Abatement and refund

V. Judicial Remedies (R.A. No. 1125, as amended, and the Revised Rules of the Court of Tax Appeals)

Jurisdiction of the Court of Tax Appeals

Exclusive appellate jurisdiction over civil tax cases

Cases within the jurisdiction of the court en banc

Cases within the jurisdiction of the court in divisions

Criminal cases

Exclusive original jurisdiction

Exclusive appellate jurisdiction in criminal cases

Judicial procedures

Judicial action for collection of taxes

Internal revenue taxes2015 Bar Examination Coverage25Law on Taxation

Local taxes

Prescriptive period

Civil cases

Who may appeal, mode of appeal, effect of appeal

Suspension of collection of tax

a) Injunction not available to restrain collection

Taking of evidence

Motion for reconsideration or new trial

Appeal to the CTA, en banc

Petition for review on certiorari to the Supreme Court

Criminal cases

Institution and prosecution of criminal actions

Institution of civil action in criminal action

Appeal and period to appeal

Solicitor General as counsel for the people and government officials sued in their official capacity

Petition for review on certiorari to the Supreme Court

C. Taxpayers suit impugning the validity of tax measures or acts of taxing authorities

Taxpayers suit, defined

Distinguished from citizens suit

Requisites for challenging the constitutionality of a tax measure or act of taxing authority

Concept of locus standi as applied in taxation

Doctrine of transcendental importance

Ripeness for judicial determination

IMPORTANT NOTES:

This listing of covered topics is not intended and should not be used by the law schools as a course outline. This was drawn up for the limited purpose of ensuring that Bar candidates are guided on the coverage of the 2015 Bar Examinations.

All Supreme Court decisions - pertinent to a given Bar subject and its listed topics, and promulgated up to March 31, 2015 - are examinable materials within the coverage of the 2015 Bar Examinations.

4. Taxation

Documents