Tax exclusions are income earned or received but is not included in the determination of gross income.

Tax deductions are items or amounts allowed to be subtracted from gross income to arrive at the
taxable income.

Q6

NO. In a recent case, the SC ruled that when an airline owned by a foreign Corp operates through a local
agency where the latter sells and collects payment for sales of airplane tickets in the Philippines, the
same foreign Corp shall be regarded as a resident-Corp for purposes of taxation, though it neither have
an actual transactions with passengers nor any commercial dealings within Philippine territory. Here,
XYZ Corp dealt with a domestic agency, ABC, for the sale of airplane tickets, which may qualify XYZ as a
non-resident Corp subject to tax from all income derived within. Hence, XYZ’s protest is devoid of
merits.

Boac doctrine-The liability of BOAC to Philippine income taxation in respect of such income depends,
not on BOAC's status as a "resident foreign corporation" or alternatively, as a "non-resident foreign
corporation," but rather on whether or not such income is derived from "source within the Philippines

Q5

a. No, Funeral expenses can no longer be claimed as deductions due to passage of TRAIN law.

However, A’s heirs can claim family home as deduction on its property located at Alabang.

b. Yes. A standard deduction equivalent to 5M can be validly claimed without need to present any
documentary evidence.

c. Yes, The gross estate of a resident citizen shall include all properties, wherever situated.

a. Funeral expenses are no longer deductible under the TRAIN Law and RR No. 12-2018

c. Yes, the gross estate of a resident citizen decedent includes all properties within and outside the
Philippines.
Q3

a.

- Gifts made to or for the use of the National Government or any entity created by any of its agencies
which is not conducted for profit, or to any political subdivision of the said Government; and

- Gifts in favor of an educational and/or charitable, religious, cultural or social welfare corporation,
institution, accredited non-government organization, trust or philanthropic organization or research
institution or organization: Provided, however, not more than 30% of said gifts will be used by such
donee for administration purposes.

Q3

Association dues, membership fees and other charges collected by homeowners associations are now
exempt from VAT

Q8

No. Tax-free exchanges refer to those instances enumerated in Section 40(C)(2) of the National
Internal Revenue Code (NIRC) of 1997 that are not subject to Income Tax, Capital Gains Tax,
Documentary Stamp Tax and/or Value-added Tax, as the case may be.

In general, there are two kinds of tax-free exchange: (1) transfer to a controlled corporation; and, (2)
merger or consolidation.

In the first instance, no gain or loss shall be recognized if property is transferred to a corporation by a
person in exchange for stock or unit of participation in such corporation of which as a result of such
exchange said person, alone or together with others, not exceeding four persons, gains control of said
corporation.

No. In case of a merger or consolidation where there occurs a transfer of property to shares of stock
(property to stock), the transaction may be regarded as a tax-free exchange, not subject to taxation, a
scheme authorized by law to reduce the burden of taxation to taxpayer, it does not amount to tax
evation. Here, B transferred his properties to ABC Corp, in which he is a stockholder, in exchange for
shares of stocks. Thus, B may not pay the tax for it may be regarded as tax-free exchange.

Q9
Dale Geomari du eto yung SMI-ED Phils vs CIR

Q11

The 5k winning is subject to income tax. Those above 10k are subject to 20% final tax. Passive income.

Q12

A. No. For purposes of taxation, a non-resident citizen shall only be taxed for income derived
within. Here, Mr. F, a Filipino citizen, was sent to Tokyo for 10 months and worked as an
engineer pursuant to an agreement between two (2) affiliates, a domestic and foreign
corporation. His services for the said months were rendered in Japan. On the basis of the
foregoing facts, Mr. F may be considered as a non-resident citizen, whose income abroad shall
be exempt from taxation. Thus, BIR is not correct in basing its income tax assessment on the
worldwide income of Mr. X.

(a.) Yes, Under the Philippine Revenue Tax Code, a resident citizen is taxable on all income derived
from worldwide sources. (b.) No, Mr. J is a Non-Resident Allien, his Philippine income source
is subject to final tax of 25%

Q13

B. Exempt from FBT since the housing is located within the Company's premises

Under Section 234 of the Local Government Code, real property owned by the Republic of the
Philippines or any of its political subdivision is exempt from payment of real property tax except
when the beneficial use thereof has been granted , for consideration or otherwise, to a taxable
person/entity.

Q15

(a)(b) No, individuals receiving purely compensation income from a single employer, which has
been correctly withheld(withholding tax) are no longer required to file their annual ITR

The employer’s annual return is considered as the substitute income tax return of employee
inasmuch as the information provided in his ITR would be exactly the same information contained
in the employer’s annual return
Revenue Memorandum Circular (RMC) 1-2003

Q16

(a)Calendar year is an accounting period which begins on January 1 and ends on December 31,
fiscal year is a twelve month ending on the last day of any month other than January.

(b)return is filed on or before the 15th day of the 4th month following the close of the taxable
year.

(a) Calendar year means an accounting period of twelve months ending on the last day of
December. Fiscal year means an accounting period of twelve months ending on the last day of any
month other than December.

(b) For a calendar year, the final return is filed on or before the 15th day of April following the
close of the taxable year. For a fiscal year, the final return is filed on of before the 15th day of the
4th month following the close of the taxable year.

Q17

(a) (1) ABC Bank

(2) XYZ Corp

(b) (1) (2) The taxpayer must first file an administrative claim before the BIR within 2 years from
the date of payment.

In filing for judicial claim for refund, the taxpayer has 30 days from receipt of decision/denial of
BIR to elevate the claim to CTA via petition for review

Q19

a) NO, see CBK Power Co. Limited v. CIR (G.R. Nos. 193383-84, 193407-08, January 14, 2015) b)
NO, 120+30-day period rule is mandatory and jurisdictional. filing of judicial claim within the 120-
day period is premature (see San Roque case), except when the filing was made on December 10,
2003 to October 5, 2010, the effective date of BIR Ruling No. DA-489-03. (CIR v. Toledo Power
Co.,G.R. No. 196415, December 02, 2015).

Q20

(a) Yes. If a taxpayer disputes the correctness of real property tax assessment, he is required to
"first pay the tax" under protest. Here, the City Treasurer correctly dismissed the protest for
failure of ABC, Inc. to pay the RPT.

(b) The appeal should be filed with the Local Board of Assessment Appeals (LBAA) in accordance
with the Local Government Code of 1991.