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2017 BAR EXAMINATION
LAW ON TAXATION
PART |. GENERAL PRINCIPLES OF TAXATION
Definition, Concept and Purpose of Taxation
Nature and Characteristics of Taxation
Power of Taxation as distinguished from Police Power and
Power of Eminent Domain
Theory and Basis of Taxation
Principles of a Sound Tax System
Scope and Limitations of Taxation
1. Inherent limitations
2. Constitutional limitations
Stages or Aspects of Taxation
Definition, Nature and Characteristics of Taxes
Requisites of a Valid Tax
Tax as distinguished from other forms of exactions
Kinds of Taxes
Situs of Taxation
Construction and Interpretation of
1. Tax Laws
2. Tax Exemption and Exclusion
3. Tax Rules and Regulations
4, Penal provisions of Tax Laws
5. Non-retroactive application to Taxpayers
Sources of Tax Laws
Doctrines in Taxation
1. Prospectivity of Tax Laws
2. Imprescriptibility of Taxes
3. Double Taxation
4. Power to Tax involves Power to Destroy
5. Escape from Taxation
a. Shifting of Tax Burden
b. Tax Avoidance
c. Tax Evasion
Exemption from Taxation
Doctrine of Equitable Recoupment
Compensation and Set-off
Compromise and Tax Amnesty
22ND
Page 1 of 162017 Bar Examinations
Taxation Law
10.
a
b.
c.
Taxpayer's Suit
Nature and Concept
As distinguished from a citizen's suit
Requisites of a Taxpayer's suit challenging the
constitutionality of a tax measure or act of a taxing
authority; concept of locus standi, doctrine of
transcendental importance and ripeness for judicial
determination
PART II. NATIONAL TAXATION
A. Organization and Functions of the Bureau of Internal Revenue
1, Rule-making authority of the Secretary of Finance
a. Authority of the Secretary of Finance to promulgate
rules and regulations
b. Specific provisions to be contained in rules and
regulations
2. Jurisdiction, Power and Functions of the Commissioner of
Internal Revenue
a. Powers and duties of the Bureau of Internal Revenue
b. Power of the Commissioner to interpret tax laws and to
decide tax cases.
c. Non-retroactivity of rulings
B. National Internal Revenue Code (NIRC) of 1997, as amended
1
Income taxation
a. Definition, Nature and General Principles
a.1 Income Tax systems — Global, Schedular and
Semi-schedular or Semi-Global Taxpayer's income
a.2 Features of the Philippine Income Tax Law
a.3 Criteria in imposing Philippine income tax
a.4 Types of Philippine income tax
a.5 Taxable period
a.6 Kinds of taxpayers
b. Income Tax
b.1 Definition, Nature and General principles
b.2 Income
b.2.1 Definition and nature
b.2.2 When income is taxable
i, Existence of income
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Taxation Law
b.3
b.4
ii, Realization of income
iii, Recognition of income
iv. Cash method of accounting versus Accrual
method of accounting
b.2.3 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
iv. Severance test
v. All events test
b.2.4 Classification of income
b.2.5 Situs of Income Taxation
Gross Income
b.3.1 Definition
b.3.2 Concept of income from whatever source
derived
b.3.3 Gross income vis-a-vis net income vis-a-vis
taxable income
b.3.4 Sources of income subject to tax
b.3.5 Classification of income subject to tax
i. Compensation income
ii. Fringe benefits
iii, Professional income
iv. Income from business
v. Income from dealings in property
vi. Passive investment income
vii. Annuities, proceeds from life insurance or
other types of insurance
vill, Prizes and awards
ix. Pensions, retirement benefit or separation
pay
x. Income from any source whatever
b.3.6 Exclusions from gross income
i. Rationale for the exclusions
ii. Taxpayers who may avail of the exclusions
iii. Exclusions distinguished from deductions
and tax credit
iv. Exclusions under the Constitution
v. Exclusions under the Tax Code
vi. Exclusions under special laws
ii
Deductions from Gross Income
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