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TAXATION I

GENERAL PRINCIPLES AND INCOME TAX

I. General Principles

A. Definition and Concept of Taxation


B. Nature and Characteristics of Taxation
CIR vs. Algue, Inc., GR No. L-28896 dated February 17, 1988
Roxas vs. CTA, GR No. L-25043 dated April 26, 1968
Sison, Jr. vs. Ancheta, GR No. L-59431 dated July 25, 1984
Tan Tiong Bio vs. CIR, GR No. L-15778 dated April 23, 1962

C. Purpose of Taxation
1. To raise revenues
2. Regulatory / Special
3. Others
Philippine Airlines, Inc. vs. Edu, GR No. L-41383 dated August 15, 1988
Osmena vs. Orbos, GR No. 99886 dated March 31, 1993
Caltex Phils., Inc., s. COA, GR No. 92585 dated May 8, 1992

D. Principles of sound tax system


1. Fiscal adequacy
2. Administrative feasibility
3. Theoretical justice

E. Theory and basis of taxation


1. Lifeblood theory
2. Necessity theory
3. Benefits-Protection theory
4. Jurisdiction over subject and objects (From SC Syllabus)
Gomez vs. Palomar, GR No. L-23645 dated October 29, 1968
Lorenzo vs. Posadas, GR No. 43082 dated June 18, 1937

F. Aspects or Stages of Taxation (include refund from SC Syllabus)


G. Tax compared to the following:
1. Police power and Eminent Domain
2. Toll Fee
i. Sec. 155 of the Local Government Code;
3. License Fees or Charges
Philippine Airlines, Inc. vs. Edu, GR No. L-41383 dated August 15, 1988
Angeles University Foundation vs. City of Angeles, GR No. 18999 dated June 27, 2012
City of Iloilo vs. Villanueva, GR No. L-12695 dated March 23, 1959
4. Special Assessment
i. Sec. 240 of the Local Government Code
Republic vs. Bacolod-Murcia Milling Co. Inc., GR No. L-19824-26 dated July 9, 1999
5. Toll Fees
i. Sec. 155 of the Local Government Code
Diaz vs. Secretary of Finance, GR No. 193007 dated July 19, 2011

6. Customs Duties
Garcia vs. The Executive Secretary, GR No. 101273 dated July 3, 1992

7. Debt
i. Rule on Compensation under the Civil Code (Art. 1279)
ii. Are taxes subject to set-off?
Francia vs. IAC, GR No. 67649 dated June 28, 1988
Philex Mining vs. CIR, GR No. 125704 dated August 28, 1988
Domingo vs. Garlitos, GR No. L-18994 dated June 29, 1963
Air Canada vs. CIR, GR No. 169507 dated January 11, 2016 (set-off issue)

H. Other Principles and Doctrines


1. Double Taxation
i. Kinds
ii. Modes of eliminating double taxation
1. RMO No. 72-2010 dated August 25, 2010
CIR vs. Solidbank, GR No. 148191 dated November 25, 2003
Nursery Care Corporation vs. Acevedo, GR No. 180651 dated July 30, 2014
CIR vs. S.C. Johnson and Sons, Inc., GR No. 127105 dated June 25, 1999
Deutsche Bank AG Manila Branch vs. GR No. 188660 dated August 19, 2013

2. Taxpayers suit
Mamba vs. Lara, GR No. 165109 dated December 14, 2009

3. Kinds of taxes
4. Construction and applicability of tax laws
CIR vs. Filipinas Compania De Seguros, GR No. L-14880 dated April 29, 1960
CIR vs. CA, GR No. 115349 dated April 18, 1997
Manila International Airport Authority vs. CA, GR No. 155650 dated July 20, 2006
5. Tax Amnesty
i. Nature and Benefits
ii. Old Amnesty Laws - RA No. 9480 dated May 24, 2007 and RA No. 9399 dated
March 20, 2007 (concept only)
1. Administrative Amnesty Last Priority in Tax Audit

I. Inherent Limitations
1. Public Purpose
Pascual vs. Secretary of Public Works, GR No. L-10405 dated December 29, 1960
2. Legislative in Nature
i. Delegation to Local Government Units
ii. Delegation to the President
1. Sec. 28(2) Article VI of the Constitution
2. Flexible Tariff Clause Sec. 401 of the Tariff and Customs Code
iii. Delegation to administrative agencies
Pepsi Cola Bottling Co. of the Phils. vs. Municipality of Tanauan, GR No. L-31156 dated
February 27, 1976
Abakada Guro Party List vs. Executive Secretary, GR No. 168056 dated September 1,
2005
Garcia vs. The Executive Secretary, GR No. 101273 dated July 3, 1992
CIR vs. CA, GR No. 119761 dated August 29, 1996

3. Territorial
i. Rule on situs of taxation of different kinds of taxes
4. International Comity
i. Sec. 2 Art II of the Constitution
ii. Sec. 32(b)(7)(a) of the NIRC
iii. Sec. 159 of the Local Government Code

5. Exemption of Government entities, agencies and instrumentalities


i. Sec. 27(C) of the NIRC
ii. Sec. 133(o) of the Local Government Code
Manila International Airport Authority vs. CA, GR No. 155650 dated July 20, 2006

J. Constitutional Limitations
1. Due Process and Equal Protection
Tan vs. Del Rosario, GR No. 109280 dated October 3, 1994
PAGCOR vs. The BIR, GR No. 172087 dated March 15, 2011

2. Prohibition against imprisonment for non-payment of poll tax


i. Sec. 20 Art. III of the Constitution
ii. Community Tax under the Local Government Code
3. Uniformity and Equality of Taxation
i. Sec. 28(1) Art. VI of the Constitution
Tolentino vs. Secretary of Finance, GR No. 115455 dated October 30, 1995
Abakada Guro Party List vs. Executive Secretary, GR No. 168056 dated September 1,
2005
Tan vs. Del Rosario, GR No. 109280 dated October 3, 1994

4. Authority of the President to impose tariff rates


i. Sec. 28(2) Article VI of the Constitution
ii. Flexible Tariff Clause Sec. 401 of the Tariff and Customs Code
5. Non-impairment of obligation of contracts / Grant of Franchise
i. Sec. 10 Art. III of the Constitution
ii. Sec. 11 Art. XII of the Constitution
Meralco vs. Province of Laguna, GR No. 131359 dated May 5, 1999
Smart Communications, Inc. vs. City of Davao, GR No. 155491 dated September 16, 2008

6. Infringement of Religious Freedom


i. Sec. 5 Art. III of the Constitution
American Bible Society vs. City of Manila, GR No. L-9637 dated April 30, 1957
Tolentino vs. Secretary of Finance, GR No. 115455 dated October 30, 1995
7. Infringement of Press Freedom
i. Sec. 4 Art. III of the Constitution
Tolentino vs. Secretary of Finance, GR No. 115455 dated October 30, 1995
8. Exemption of Religious, Charitable and Educational Institutions from tax
i. Sec. 28(3) Art. VI of the Constitution
ii. Sec. 4 (3) and (4) Art. XIV of the Constitution
iii. Secs. 27(B) and 30 of the NIRC
CIR vs. CA, GR No. 124043 dated October 14, 1998
Lung Center of the Philippines vs. Quezon City, GR No. 144104 dated June 29,
2004

9. Prohibition on use of tax levied for special purpose


i. Sec. 29 Art. VI of the Constitution
Osmena vs. Orbos, GR No. 99886 dated March 31, 1993

10. Origin of Appropriation, Revenue and Tariff Bills


i. Sec. 24 Art. VI of the Constitution
Tolentino vs. Secretary of Finance, GR No. 115455 dated October 30, 1995

11. Grant of Tax Exemption


i. Sec. 28(4) Art. VI of the Constitution
12. Non-impairment of Supreme Courts Jurisdiction
i. Secs. 2 and 5 Art. VIII of the Constitution

II. Income Taxation

A. Income Tax Systems


1. Global
2. Schedular
3. Semi-schedular or semi-global
B. Characteristics and Features of the Philippine Income Tax System
C. Definition of Income
Fisher vs. Trinidad, GR No. 17518 dated October 30, 1922
1. When is income taxable
i. Realization Test
1. Sec. 38 of RR No. 2-40 dated February 10, 1940
Manila Mandarin Hotels, Inc. vs. CIR, CTA Case No. 5046 dated March 24, 1997
Compare with BIR Ruling No. DA-049-98 dated February 10, 1998
ii. Claim of Right Doctrine
BIR Ruling No. (C-168) 519-08 dated December 12, 2008
Manila Electric Company vs. CIR, CTA Case No. 7242 dated December 6, 2010
(also read dissent of Justice Castaneda)
Manila Electric Company vs. CIR, CTA Case No. 7242 dated April 15, 2011
(also read dissent of Justice Castaneda)
iii. All events test
CIR vs. Isabela Cultural Corporation, GR No. 172231 dated February 12, 2007

D. Accounting Periods and Methods correlate with recognition of income and expense
1. Sec. 43-50 of the NIRC
2. Change in Accounting Period
E. Individual Income Taxation
1. Kinds of Individuals (Sec. 22)
i. Resident Citizens
ii. Resident Aliens
1. Sec. 5 of RR No. 2-40
iii. Non-resident citizens
1. Overseas Contract Workers
a. Sec. 23 of the NIRC
b. Secs. 2 and 3(A) of RR No. 1-11 dated February 24, 2011
2. Meaning of most of the time
a. BIR Ruling No. 033-00 dated September 5, 2000
iv. Non-resident alien engaged in trade or business
1. Sec. 25(A)(1) of the NIRC
2. Sec. 8 of RR No. 2-40
v. Non-resident aliens not engaged in trade or business
1. Sec. 25(B) of the NIRC
vi. Others
1. Minimum Wage Earners
a. Sec. 22(HH)
b. Sec. 1 of RR No. 10-08 dated July 8, 2008
2. Estates and trusts taxed as individuals (Sec. 60 to 66 of the NIRC) to be
discussed under Part O of the syllabus.
3. Aliens employed by Regional or Area Headquarters and Regional
Operating Headquarters of Multinational Companies
a. Sec. 25 (C) of the NIRC
b. Same tax treatment to Filipinos occupying Technical and
Managerial positions
i. Sec. 2.57.1 (D) of RR No. 2-98 dated April 17, 1998
ii. Secs. 1 to 4 of RR 11-2010 dated October 26, 2010
4. Aliens employed by Offshore Banking Units
a. Sec. 25 (D) of the NIRC
b. Same tax treatment to Filipinos
5. Aliens employed by Petroleum Service Contractor and Subcontractor
a. Sec. 25 (E) of the NIRC
b. Same tax treatment to Filipinos

2. General Principles of Income Taxation


i. Sec. 23 of the NIRC
3. Kinds of Income
i. Income subject to ordinary income tax
1. Business/Profession income
2. Compensation income
ii. Income subject to final tax
1. Sec. 2.57(A) of t RR No. 2-98
2. Secs. 24 and 25 of the NIRC
4. Personal and additional exemptions
i. Sec. 35 of the NIRC
ii. Senior Citizens
1. Secs. 2(a), 2(c) and 11 of RR No. 7-10 dated July 20, 2010

5. Premium payments on health and/or hospitalization insurance


i. Sec. 34(M) of the NIRC

F. Corporate Income Taxation


1. Definition Sec. 22(B) of the NIRC
2. Partnerships taxed as a corporation
i. Joint Ventures engaged in construction projects
1. Secs. 2 and 3 of RR No. 10-12 dated June 1, 2012
CIR vs. Batangas Transportation Co., GR No. L-9692 dated January 6, 1958 (take note of
the discussion of the Evangelista Case)
Ona vs. CIR, GR No. L-19342 dated May 25, 1972
Obillos vs. CIR, GR No. L-68118 dated October 29, 1985
Pascual vs. CIR, GR No. 78133 dated October 18, 1988
AFISCO Insurance Corporation vs. CA, GR No. 112675 dated January 25, 1999

ii. Income of partners in a regular partnership - Sec. 73(D)

3. Kinds of Corporations
i. Domestic
ii. Resident Foreign Corporation
iii. Non-resident Foreign Corporation
Marubeni Corporation vs. CIR, GR No. 76573 dated September 15, 1989

iv. Others
1. Private Educational Institutions and Non-Profit Hospitals
a. Sec. 27(B) of the NIRC
b. Sec. 34(A)(2) of the NIRC
CIR vs. St. Lukes Medical Center, GR Nos. 195909 and 195960 dated
September 26, 2012

2. International Carrier
a. Sec. 28(A)(3) of the NIRC
b. Secs. 2 to 5 and 8 of RR No. 15-02 dated May 30, 2002
c. Sec. 1 of RA No. 10378 dated March 7, 2013
i. Secs. 1 to 4 of RR No. 15-13 dated September 20, 2013
CIR vs. British Overseas Airways Corporation, GR Nos. L-65773-74 dated
April 30, 1987
South African Airways vs. CIR, GR No. 180356 dated February 16, 2010
Air Canada vs. CIR, GR No. 169507 dated January 11, 2016 (Tax Treaty
issue)

3. Foreign Currency Deposit Units


a. Sec. 27(D)(3) of the NIRC
b. Sec. 28(A)(7)(b) of the NIRC
c. Sec. Sec. 5 of RR No. 14-12 dated November 7, 2012

4. Offshore banking units


a. Sec. 28(A)(4) of the NIRC
b. Sec. 6 of RR No. 14-12 dated November 7, 2012

5. Regional or Area Headquarters and Regional


Operating Headquarters of Multinational Companies
a. Secs. 22 (DD) and 22 (EE)

6. Other Non-Resident Foreign Corporations


a. Secs. 28(B)(2) to 4

4. Exempt Corporations
i. GOCCs
1. Sec. 27(C) of the NIRC
2. RA 10026 dated March 11, 2010
PAGCOS vs. The BIR, GR No. 215427 dated December 10, 2014

ii. Sec. 30 of the NIRC


1. DOF Order No. 137-87 dated December 16, 1987
2. DOF Order No. 149-95 dated November 24, 1995
3. Sec. 30 of RR No. 2-40 on what may be considered income exempt from
income tax.
4. RMC No. 65-2012 on taxability of condominium corporations;
5. RMC No. 9-2013 on taxability of homeowner's associations.
6. RMC No. 35-2012 on taxability of clubs operated exclusively for
pleasure, recreation and other non-profit purposes.

CIR vs. V. G. Sinco Educational Corporation, GR No. L-9276 dated October 23,
1956
CIR vs. St. Lukes Medical Center, GR Nos. 195909 and 195960 dated September
26, 2012
Ateneo de Manila (Quezon City) vs. CIR, CTA Case Nos. 7246 and 7293 dated
March 11, 2010
De La Salle University, Inc. vs. CIR, CTA Case No. 7303 dated January 5, 2010
CIR vs. CA, GR No. 124043 dated October 14, 1998.
CIR vs. Club Fililpino de Cebu, GR No. L-12719 dated May 31, 1962 - on definition
of "Non-profit", discussed in the St. Luke's Case.

iii. Secs. 1,2,6, and 9-12 of RMO 20-13 dated July 22, 2013
1. RMO No. 44-2016 dated July 25, 2016
iv. Inurement Prohibition
1. RMC 51-14 dated June 6, 2014
v. General Professional Partnerships
1. Sec. 22 (B) of the NIRC
2. Sec. 26 of the NIRC
3. RMC 3-12 dated January 11, 2012
G. Income Subject to Final Tax Applicable to both Individuals and Corporations
1. Final Income Tax on Interests, Royalties, Prizes and Other Winnings
i. RR No. 14-12
ii. Sec. 24 (B) Citizens and Resident Aliens
1. OCWs
a. Sec. 3 of RR No. 1-11
iii. Sec. 25 (A)(2) Non-resident Alien Engaged in Trade or Business
iv. Sec. 27 (D)(1) and (3) Domestic Corporations
v. Sec. 28 (A)(7)(a) and (b) Resident Foreign Corporations
vi. Sec. 28(B)(1)(5)(a) Non-resident Foreign Corporation
1. Interest on Foreign Loans
Iconic Beverages, Inc. vs. CIR, CTA Case No. 8607 dated August 14, 2015
vii. Deposit Substitutes
1. 20-lender rule
2. Sec. 22(Y) of the NIRC
viii. Long-Term Deposits
1. Sec. 3 of RR No. 14-12
2. Sec. 22(F) of the NIRC
BDO vs. Republic of the Philippines, GR No. 198756 dated January 13, 2015.

2. Final Income Tax on Cash and Property Dividends


i. Sec. 24(B)(2) - Citizens and Resident Aliens
ii. Sec. 25 (A)(2) Non-resident Alien Engaged in Trade or Business
iii. Sec. 27(D)(4) Domestic Corporations
iv. Sec. 28 (A)(7)(d) Resident Foreign Corporations
v. Sec. 28(B)(1)(5)(b) Non-resident Foreign Corporation
Marubeni Corporation vs. CIR, GR No. 76573 dated September 15, 1989

1. Tax Sparing Rule


CIR vs. Wander Philippines, Inc., GR No. 68375 dated April 15, 1988
CIR vs. Procter & Gamble Philippine Manufacturing Corp., GR No. 66838
dated December 2, 1991

3. Final Income Tax on Sale of Shares of Stock


i. Sec. 24(C) - Citizens and Resident Aliens
ii. Sec. 25 (A)(3) Non-resident Alien Engaged in Trade or Business
iii. Sec. 25 (B) Non-resident Alien Not Engaged in Trade or Business
iv. Sec. 27(D)(2) Domestic Corporations
v. Sec. 28 (A)(7)(c) Resident Foreign Corporations
vi. Sec. 28(B)(1)(5)(c) Non-resident Foreign Corporation
vii. Stock Transaction Tax
1. Sec. 127 of the NIRC
viii. RR No. 6-2008 dated April 22, 2008

4. Final Income Tax on Sale of Real Property


i. Sec. 24(D)(1) - Citizens and Resident Aliens
ii. Sec. 25 (A)(3) Non-resident Alien Engaged in Trade or Business
iii. Sec. 25 (B) Non-resident Alien Not Engaged in Trade or Business
iv. Sec. 27(D)(5) Domestic Corporations
SMI-ED Technology Corporation, Inc. vs. CIR, GR No. 175410 dated November 12,
2014
v. RR No. 8-98 dated August 25, 1998 (with numerous amendments)
vi. Foreclosure Sales
1. RR No. 4-99 dated March 9, 1999
2. RMC No. 058-08 dated August 15, 2008 who should pay/statutory
seller
3. RR No. 9-2012 dated May 31, 2012
vii. Sale of Principal Residence
1. RR No. 13-99 dated July 26, 1999
2. RR No. 14-00 dated November 20, 1999

H. Taxes Applicable to Corporations


i. Regular Corporate Income Tax vs. Minimum Corporate Income Tax
1. Regular Corporate Income Tax
2. Minimum Corporate Income Tax
a. Secs. 27(E) and 28(A)(2) of the NIRC
b. RR No. 9-98 dated August 25, 1998
c. RR No. 12-07 dated October 10, 2007
CREBA vs. Romulo, GR No. 160756 dated March 9, 2010
Manila Banking Corporation vs. CIR, GR No. 168118 dated August 28,
2006

ii. Branch Profits Remittance Tax


1. Sec. 28(A)(5) of the NIRC
Bank of America NT & SA vs. CA, GR No. 103092 dated July 21, 1994

iii. Improperly Accumulated Earnings Tax


1. Sec. 29 of the NIRC
2. RR No. 2-01 dated February 12, 2001
a. Clarification by RMC No. 35-11 dated March 14, 2011
3. Immediacy Test
Cynamid Phils., Inc. vs. CA, GR No. 108067 dated January 20, 2000

I. Inclusions from Gross Income


1. Sec. 32(A)
2. Compensation
i. Sec. 2.78.1(A) of RR No. 2-98
3. Gross Income from trade or business
i. Forgiveness of Indebtedness
1. Sec. 50 of RR No. 2-40
4. Gains from dealings in property
5. Interests
i. Rule on Imputation of interest on loans
CIR vs. Filinvest Development Corporation, GR No. 16353 dated July 19, 2011
6. Rents
i. Rule on improvements
1. Sec. 49 of RR No. 2-40

7. Royalties
8. Dividends
i. Cash and/or Property Dividends
ii. Forgiveness of Indebtedness
1. Sec. 50 of RR No. 2-40
iii. Stock Dividends
1. Sec. 73 (B) of the NIRC
CIR vs. Manning, GR No. L-28398 dated August 6, 1975
CIR vs. CA, GR No. 108576 dated January 20, 1999

iv. Liquidating Dividends


1. Sec. 73(A) of the NIRC
2. RR No. 6-2008 dated April 22, 2008
Wise & Co., Inc. vs. Meer, GR No. L-48231 dated June 30, 1947

9. Annuities
10. Prizes and winnings
11. Pensions
12. Partners distributive share from the net income of the general professional partnership
i. Sec. 26 of the NIRC
ii. RMC 3-12 dated January 11, 2012

13. Tax Benefit Rule


i. Refunded Taxes
1. Sec. 34(C)(1) of the NIRC
ii. Recovered Bad Debts
1. Sec. 34(E)(1) of the NIRC
2. Sec. 4 of RR No. 5-99 dated March 10, 1999

J. Exclusions from Gross Income


1. Life Insurance
i. Secs. 32(B)(1) and (2) of the NIRC
2. Gifts, Bequests, and Devises
i. Sec. 32(B)(3) of the NIRC
3. Compensation for Injuries or Sickness
i. Sec. 32(B)(4)of the NIRC
ii. Are damages taxable?
4. Income under Tax Treaty
5. Retirement Benefits, Pensions, Gratuities, etc.
i. Secs. 32(B)(6)(a) to (f)of the NIRC
ii. Art. 287 of the Labor Code
iii. Sec. 2.78.1(B)(1)(a) and (b) of RR No. 2-98
CIR vs. CA, GR No. 96016 dated October 17, 1991
In Re: Zialcita, AM No. 90-6-015-SC dated October 18, 1990
International Broadcasting Corporation, Inc. vs. Amarilla, GR No. 162775 dated
October 27, 2006
BIR Ruling No. DA-151-04 dated March 31, 2004
BIR Ruling No. 052-00 dated October 30, 2000
BIR Ruling No. 496-14 dated December 12, 2014

6. Income Derived by Foreign Government


i. Sec. 32(B)(7)(a)of the NIRC
CIR vs. Mitsubishi Metal Corporation, GR No. 54908 dated January 22, 1990
7. Income Derived by the Government or its Political Subdivisions
i. Sec. 32(B)(7)(b)of the NIRC
8. Prizes and Awards
i. Secs. 32(B)(7)(c) and (d)of the NIRC
9. 13th Month Pay and Other Benefits
i. RA No. 10653 dated February 12, 2015
ii. Sec. 32(B)(7)(e)of the NIRC
iii. Rule on excess De Minimis Benefits
Sec. 1 of RR No. 10-08 dated
10. Gains from Sale of Bonds, Debentures or Other Certificates of Indebtedness
i. Secs. 32(B)(7)(c) and (e)of the NIRC
BDO vs. Republic of the Philippines, GR No. 198756 dated January 13, 2015.

K. Fringe Benefits Tax


1. Sec. 33 of the NIRC
i. Definition of Fringe Benefits
ii. Fringe Benefits subject to FBT
iii. Fringe Benefits not subject to FBT
iv. RR No. 3-98 dated May 21, 1998 (exclude tax accounting rules)
2. De Minimis Benefits
i. Definition
ii. Enumeration of De Minimis Benefits
RR No. 3-98 dated May 21, 1998
RR No. 8-00 dated August 21, 2000
RR No. 10-00 dated December 14, 2000
RR No. 05-08 dated April 17, 2008
RR No. 5-11 dated March 16, 2011
RR No. 8-12 dated May, 11, 2012
RR No. 1-15 dated January 1, 2015

L. Deductions from Gross Income


1. Expenses
i. Sec. 34(A)of the NIRC
1. RR No. 10-02 dated July 10, 2002
ii. Sec. 36(A)of the NIRC
iii. Sec. 45of the NIRC
CIR vs. Isabela Cultural Corporation, GR No. 172231 dated February 12, 2007
CIR vs. General Foods, Inc., GR No. 143672 dated April 24, 2003
Atlas Consolidated Mining & Devt Corp., GR No. L-29111 dated January 27, 1981
H. Tambunting Pawnshop, Inc. vs. CIR, GR No. 173373 dated July 29, 2013
2. Interest
i. Sec. 34(B)of the NIRC
ii. Sec. 36 of the NIRC
iii. RR No. 13-00 dated November 20, 2000
iv. Tax Arbitrage Rule/Scheme
CIR vs. Vda. De Prieto, GR No. L-13912 dated September 30, 1960
Paper Industries Corporation of the Philippines vs. CA, GR Nos. 106949-50 dated
December 1, 1995

3. Taxes
i. Sec. 34(C)of the NIRC
CIR vs. Lednicky, GR No. L-18169 dated July 31, 1964
CIR vs. Vda. De Prieto, GR No. L-13912 dated September 30, 1960

4. Losses
i. Sec. 34(D)of the NIRC
ii. Casualty Losses
RMO 31-09 dated October 16, 2009
iii. Net Operating Loss Carry-Over
1. RR No. 14-01 dated August 27, 2001
Paper Industries Corporation of the Philippines vs. CA, GR Nos. 106949-50 dated
December 1, 1995

5. Bad Debts
i. Sec. 34(E)of the NIRC
ii. RR No. 5-99
Philippine Refining Company vs. CA, GR No. 118794 dated May 8, 1996
Fernandez Hermanos vs. CIR, GR No. L-21551 dated September 30, 1969

6. Depreciation
i. Sec. 34(F)of the NIRC
ii. RR No. 12-12 dated October 12, 2012
Basilan Estates, Inc. vs. CIR, GR No. L-22492 dated September 5, 1967

7. Depletion
i. Sec. 34(G)of the NIRC
8. Charitable and Other Contributions
i. Sec. 34(H)of the NIRC
ii. Secs. 3, and 5-8 of RR No. 13-98 dated December 8, 1998
iii. Sec. 13(C) of RR No. 2-03 dated December 16, 2002
iv. RMC No. 86-2014 dated December 5, 2014

9. Research and Development


i. Sec. 34(I) of the NIRC

10. Pension Trusts


i. Sec. 34(J) of the NIRC
11. Optional Standard Deduction
i. Sec. 34(L) of the NIRC
ii. Secs. 1 to 7 of RR No. 16-08 dated November 26, 2008
iii. RR No. 2-10 dated February 18, 2010
iv. Sec. 5 of RR No. 2-14 dated January 24, 2014

12. Additional Requirements for Deductibility


i. Sec. 34(K)
ii. RR No. 12-13 dated July 12, 2013

M. Gains and Losses from Sale or Exchange of Property


1. Capital Gains and Losses
i. Capital Assets vs. Ordinary Assets
1. Sec. 39 of the NIRC
2. Secs. 1 to 3 of RR No. 7-03 dated February 11, 2003
3. Sec. 22(Z) of the NIRC
ii. Loss Limitation Rule
iii. Holding Period Rule
iv. Net Capital Loss Carry-over Rule
Calasanz vs. CIR, GR No. L-26284 dated October 8, 1986
China Banking Corporation vs. CA, GR No. 125508 dated July 19, 2000

2. Determination of Gain or Loss


i. Sec. 40 of the NIRC
ii. Cost Basis depending on mode of acquisition
iii. Tax Free Exchange
1. Merger or Consolidation
2. Transfers to Controlled Corporation
3. Sec. 40(C)(2) of the NIRC
4. RR No. 18-01 dated November 13, 2001
5. RMR No. 1-01 dated November 29, 2001
6. RMR No. 1-02 dated April 25, 2002
7. RR No. RR No. 6-2008 dated April 22, 2008
8. RMO 17-2016 dated May 5, 2016
Delpher Trades Corporation vs. IAC, GR No. 69259 dated January 26, 1988
CIR vs. Filinvest Development Corporation, GR No. 16353 dated July 19, 2011
CIR vs. Rufino, GR Nos. L-33665-8 dated February 27, 1987

3. Loss from Wash Sales of Stocks or Securities


i. Sec. 38 of the NIRC
ii. Sec. 7 (c.6) of RR No. 6-08 dated April 22, 2008

N. Situs Rules
1. Sec. 42 of the NIRC
National Development Company vs. CIR, G.R. No. 53961 dated June 30, 1987
CIR vs. British Overseas Airways Corporation, GR Nos. L-65773-74 dated April 30, 1987
CIR vs. Juliane Baier-Nickel, GR No. 153793 dated August 29, 2006
CIR vs. CTA, GR No. L-54108 dated January 17, 1984
O. Estates and Trusts
1. Taxable Trusts and Estates
i. Sec. 60(A) of the NIRC
2. Employees Trust
i. Sec. 60(B) of the NIRC
ii. RMC 39-14 dated May 12, 2014
Ossorio Pension Foundation, Inc., vs. CA, GR No. 162175 dated June 28, 2010

3. Taxable Income
i. Sec. 61 of the NIRC
1. Deductions
2. Trust administered in a foreign country
4. Exemption allowed to Estates and Trusts
i. Sec. 62 of the NIRC
5. Revocable Trusts
i. Sec. 63 of the NIRC
6. Income for Benefit of Grantor
i. Sec. 64 of the NIRC
7. Other Matters
i. Secs. 65 and 66 of the NIRC

P. Returns and Payment of Tax under the NIRC


1. Individual Income Tax Returns
i. Sec. 51
ii. Sec. 56
iii. Sec. 74
iv. Substituted Filing
1. RR No. 03-02 dated March 22, 2002, as amended
2. Corporate Tax Returns
i. Sec. 52
ii. Sec. 53
iii. Sec. 56
iv. Sec. 75
v. Sec. 76
vi. Sec. 77
vii. Sec. 52(C)
3. Creditable Withholding Tax vs. Final Withholding Tax
i. Sec. 57 of the NIRC
ii. RR No. 2-98
CREBA vs. Romulo, GR No. 160756 dated March 9, 2010
4. Withholding on Wages
i. Secs. 78 to 82
5. Time of Withholding
i. Sec. 2.57 of RR No. 2-98, as amended by RR No. 12-2001.
ii. 3. Sec. 2.78 and 2.83 of RR No. 2-98.
ING Bank vs. CIR, GR No. 167679 dated July 22, 2015