TAX 2

ESTATE TAX
Definition
Time of transfer of properties
Determination of gross estate and net estate
a. Classification of decedent
b. Reciprocity
c. Items included in gross estate
Valuation of gross estate
Exclusions from the gross estate
Deductions from the gross estate
a. Resident citizen
b. Non-resident aliens
Computation of estate tax
Filing of notice of death
Estate tax returns and payment

DONORS TAX
Nature
Person liable
Requisites of a valid donation
a. Capacity of donor
b. Donative intent
c. Delivery
d. Acceptance
Transfers which may be constituted as donation
a. Sale, exchange or transfer for less than adequate and full consideration
b. Condonation/Remission of debt
c. Renunciation of inheritance
Law governing imposition of donors tax
Determination of gross gift
a. Classification of donor
b. Exemptions on gifts from donors tax
c. Valuation of gifts made in property
d. Computation of donors tax
Returns and Payment

VALUE ADDED TAX
General principles
Essential features of VAT
a. Characteristics
b. Persons Liable
c. In the course of trade or business
d. Registration
Classification of sales subject to VAT
Computation of monthly/quarterly VAT
Coverage of VAT
a. Sale of goods or properties
b. Transactions deemed sale
c. Sale of services and use or lease of properties
d. VAT on importation of goods
e. Non-taxable transactions
Deductions from output tax
Creditable input tax
a. Nature
b. Definition
c. Sources of input tax
d. Persons who can avail of input tax credits
e. Determination of creditable input tax
f. Transitional/Presumptive input tax credits
g. Claim for input tax on depreciable goods
h. Deduction from input tax
i. Apportionment of input tax on mixed transactions
j. Determination of excess output or excess input tax
k. Claim for refund/tax credit certificate of input tax
l. Treatment of excess input tax
Zero-rated transactions
a. Export sales
b. Foreign currency denominated sale
c. Sales to persons or entities deemed tax-exempt under special law or
international agreement
Zero-rate sales of services
Transactions exempt from VAT
Account requirements of VAT-registered persons
Filing of return and payment of tax
Withholding of VAT on government money payments and payments to non-
residents
Compliance requirements
a. Registration requirements
a. Annual registration fee
b. Updating the registration information
c. Cancellation of registration
d. Suspension of operation for failure to register
b. VAT Registration
a. Mandatory VAT registration
b. Optional VAT registration
c. Cancellation of VAT registration
c. Tax Identification Number (TIN)
d. Invoicing Requirements
a. BIR authority to print before printing of receipts or invoices
b. VAT invoicing requirements
c. Erroneous VAT invoicing
e. Exhibition of certificate of payment of taxes
f. Filing of returns and payment (includes estate tax, donors tax and VAT)
a. Estate tax
i. Time and place of filing and payment
ii. Liability for payment
b. Donors tax
i. Requirements for filing a return
ii. Time and place of filing and payment
c. VAT
i. Requirements and time for filing a return and payment of VAT
ii. Place of filing a return and payment
iii. Withholding of creditable VAT

TAX REMEDIES UNDER THE NIRC

Taxpayers Remedies
a. Assessment
a. Concept
i. Requisites for valid assessment
ii. Constructive methods of income determination
iii. Inventory method for income determination
iv. Jeopardy assessment
v. Tax delinquency and tax deficiency
b. Power of the CIR to make assessments and prescribe additional
requirements for tax administration and enforcement
i. Power of the CIR to obtain information and to
summon/examine, and take testimony of persons
c. When assessment is made
i. Prescriptive period for assessment (3 years from last day of
filing)
a) False, fraudulent, and non-filing of returns (10 years
after discovery)
ii. Suspension of running of statute of limitations
d. General provisions on additions to the tax
i. Civil penalties
(a) Surchage
(b) Interest
e. Assessment process
i. Self-assessment
ii. Overview
(a) Tax audit
(b) Notice for informal conference
(c) Issuance of preliminary assessment notice (PAN)
(d) Notice of informal conference
(e) Issuance of formal letter of demand and assessment
notice/final assessment notice (FAN)
(f) Disputed assessment (reply of taxpayer)
(g) Administrative decision on a disputed assessment
f. Protesting Assessment
i. Protest of assessment by taxpayer
(a) Protested assessment
(b) When to file
(c) Forms of protest
a. CIRs actions equivalent to denial of protest
i. Filing of criminal action against taxpayer
ii. Issuing a warrant of distraint and levy
b. Inaction by CIR
i. Remedies of taxpayer to action by CIR
1. In case of denial of protest
2. In case of inaction by
commissioner within 180 days
from submission of documents
3. Effect of failure to appeal

Government Remedies
a. Collection
b. Constructive distraint of property of taxpayer
a. Summary remedy of distraint of personal property
i. Distraint of personal property
ii. Levy on real property
c. Procedure for distraint and garnishment
d. Sales of property distrained and disposition of proceeds
e. Release of distratined property upon payment of prior sale
f. Summary remedy of levy on real property
a. Advertisement and sale
b. Redemption and sale
g. Forfeiture of government for want of bidder
a. Resale of real estate taken for taxes
b. When property to be sold or destroyed (p. 62)
c. Disposition of funds recovered in legal proceedings or obtained from
forfeitures (p.62)
h. Further distraint or levy

Statutory Offenses and Penalties
a. Civil penalties
i. Surcharge
ii. Interest
(a) In general
(b) Deficiency interest
(c) Delinquency interest
(d) Interest on extended payment
b. Compromise and Abatement
i. Compromise
ii. Abatement

Organization and Function of the BIR (p. 66-73)

Local Taxation
a. Nature and Source
a. Power to tax of LGUs
b. Power to create sources of revenue
c. Local taxing authority
i. Power to create revenues through LGUs (Sec. 132, LGC)
ii. Procedure for approval and effectivity of tax ordinances (Sec.
187, LGC)
d. Residual powers of LGUs to levy other taxes, fees or charges
e. Doctrine of pre-emption or exclusionary principle
b. Scope of taxing powers
a. Common limitations on the taxing powers of LGUs (p. 78-79)
b. Taxing powers of provinces
i. Local transfer tax (transfer of real property ownership)
ii. Business tax on printing and publication
iii. Franchise tax
iv. Tax on sand, gravel and quarry resources
v. Professional tax
vi. Amusement tax (as amended by RA 9640)
vii. Annual fixed tax on delivery trucks/vans
c. Taxing powers of cities
d. Taxing powers of municipalities
i. Business taxes
ii. Rates of tax within Metro Manila (ceiling)
iii. Tax on retirement of business
iv. Payment of business taxes
v. Situs of tax
vi. Fees and charges
e. Taxing powers of barangays
f. Common revenue raising powers
i. Service fees and charges
ii. Public utility charges
iii. Toll fees and charges
g. Community Tax
c. Collection of taxes
a. Tax period and manner of payment
b. Accrual of tax
c. Time of payment
d. Surcharges and penalties on unpaid taxes, fees or charges
e. Examination of books of accounts and pertinent records (authority of
treasurer in collection and inspection of books)
d. Civil remedies
a. LGU lien, distraint or levy
b. Administrative action
c. Judicial action
e. Taxpayers remedies
a. Periods of assessment and collection
b. Protest of assessment
c. Appeal to CTA
d. Claim for refund

TARIFF AND CUSTOMS CODE OF 1978, AS AMENDED

Tariff and duties, defined
General rule: all imported articles are subject to duty
a. Importation by the government taxable
Purpose for imposition
Flexible tariff clause
Requirements of importation
a. Beginning and ending of importation
b. Obligations of importer
i. Cargo manifest
ii. Import entry
iii. Declaration of correct weight or value
iv. Liability for payment of duties
v. Liquidation of duties
vi. Keeping of records
Importation in violation of tax credit certificate
a. Smuggling
b. Other fraudulent practices
Classification of goods
a. Taxable importation
b. Prohibited importation
c. Conditionally prohibited imporation
Classification of duties
a. Ordinary/regular duties
i. Ad valorem; methods of valuation
1. Transaction value
2. Transaction value of identical goods
3. Transaction value of similar goods
4. Deductive value
5. Computed value
6. Fallback value
i. Specific
b. Special duties
i. Dumping duties
ii. Countervailing duties
iii. Marking duties
iv. Retaliatory/discriminatory duties
v. Safeguard duty
Drawbacks
Remedies
a. Government
i. Administrative/extrajudicial
7. Search and seizure, forfeiture, arrest
i. Judicial
8. Rules on appeal including jurisdiction
b. Taxpayer
i. Protest
ii. Abandonment
iii. Abatement and refund

JUDICIAL REMEDIES (RA 1125, as amended by RA 9282 and RA 9503 and the
Revised Rules of the CTA)

Salient features of the Court of Tax Appeals
Composition
Jurisdiction of the Court of Tax Appeals
a. Exclusive appellate jurisdiction
i. Cases within the jurisdiction of the court en banc
ii. Cases within the jurisdiction of the court in divisions
b. Criminal cases
i. Exclusive original jurisdiction
ii. Exclusive appellate jurisdiction in criminal cases
Judicial procedures
a. Judicial action for collection of taxes
a. Internal revenue taxes
b. Local taxes
i. Prescriptive period
b. Civil cases
a. Who may appeal, mode of appeal, effect of appeal
i. Suspension of collection of tax
1. Injunction not available to restrain collection
ii. Taking of evidence
iii. Motion for reconsideration or new trial
b. Appeal to the CTA en banc
c. Petition for review on certiorari to the Supreme Court
c. Criminal cases
a. Institution and prosecution of criminal actions
i. Institution on civil action in criminal action
b. Appeal and period to appeal
i. Solicitor General as counsel for the people and government
officials sued in their official capacity
c. Petition for review on certiorari to the Supreme Court
Taxpayers suit impugning the validity of tax measures or acts of taxing authorities
a. Definition
b. Requisites for challenging the constitutionality of a tax measure or act of
taxing authority
i. Concept of locus standi as applied in taxation
ii. Doctrine of transcendental importance
iii. Ripeness for judicial determination