IV.

NATIONAL TAXATION (National Internal Revenue Code of 1997, as amended by

R.A. 10963 or the Tax Reform for Acceleration and Inclusion Law)

A. Taxing Authority
1. Jurisdiction, power, and functions of the Commissioner of Internal Revenue
a. Interpreting tax laws and deciding tax cases
b. Non-retroactivity of rulings
2. Rule-making authority of the Secretary of Finance

READ: 1. Sections 4, 5, 6, 244, 245 and 246 of the NIRC, as amended

2. CIR vs. Burroughs Limited, 142 SCRA 324 [1986]
3. Commissioner of Customs vs. Hypermix Feeds Corporation, G.R. No. 179579,
February 1, 2012
4. Association of Non-Profit Clubs, Inc. vs. BIR, G.R. No. 228539, June26, 2019
5. Commissioner of Internal Revenue vs. CTA and Petron Corporation,
G.R. No. 207843, July 15, 2015/February 14, 2018

B. Income Tax
1. Definition, nature, and general principles
a. Types of Philippine income taxes
b. Taxable period
c. Kinds of taxpayers
d. Income Tax Systems
- Global
- Schedular
- Semi-Schedular or Semi-Global
2. Income
a. Definition and nature
b. Capital vs Income
c. When income is taxable
d. Tests whether income is earned for taxation purposes
- Realization test
- Economic benefit test
- Claim of right doctrine
- Income from whatever source
e. Tax-free exchanges
f. Situs of income taxation
3. Gross Income
a. Classification of income subject to tax
- Compensation income
- Fringe benefits
- Professional income
- Income from business
- Income from dealings in property
- Passive investment income
- Annuities, proceeds from life insurance or other types of insurance
- Prizes and awards
- Pensions, retirement benefit or separation pay
- Income from any source
b. Exclusions and exemptions
4. Deductions from gross income
a. Itemized deductions vs. Optional Standard Deduction
b. Items not deductible
c. Capital Expenditures
5. Income tax on individuals
a. Resident citizens, non-resident citizens, and resident aliens
- Inclusions and exclusions for taxation on compensation income
- Taxation of business income/income from practice of profession
- Taxation of passive income
- Taxation of capital gains
- Capital asset vs. ordinary asset
 -2-

b. Income tax on non-resident aliens engaged in trade or business in the

Philippines
c. Income tax on non-resident aliens not engaged in trade or business in the
Philippines
d. Individual taxpayers exempt from income tax
- Senior citizens
- Minimum wage earners
- Exemptions granted under international agreements
6. Income tax on corporations
a. Income tax on domestic corporations and resident foreign corporations
- Minimum Corporate Income Tax
- Branch Profit Remittance Tax
- Itemized deductions vs. Optional Standard Deduction
- Taxation of passive income
- Taxation of capital gains
b. Income tax on non-resident foreign corporations
c. Income tax on special corporations
- Proprietary educational institutions and hospitals
- Non-profit hospitals
- Government-owned or controlled corporations, agencies, or
instrumentalities
d. Improperly Accumulated Earnings Tax (IAET)
e. Exemptions from tax on corporations
f. Tax on other business entities: general partnerships, general professional
partnerships, co-ownerships, joint ventures, and consortia
7. Filing of returns and payment
a. Period within which to file income tax return of individuals and corporations
b. Substituted filing
c. Failure to file returns
8. Withholding taxes
a. Concept
b. Creditable vs. Final withholding taxes
c. Duties of a withholding agent

READ: 1. Sections 23, 24, 25, 26, 27, 28, 29, 30, 32, 33, 34, 36, 39, 40, 43, 44, 45, 47,
51, 51-A, 52, 55, 56, 57, 58, 74, 75, 76, 77, 78, 79, 80, 81, 82 and 83 of the
NIRC, as amended
2. Senior Citizens Act (RA 7432), as amended by RA 9257 and RA 9994
3. CIR vs. De La Salle University, G.R. No. 196596, November 9, 2016
3. CIR vs. St. Luke’s Medical Center, Inc., G.R. No. 203514, February 13, 2017
4. Belle Corporation vs. CIR, G.R. No. 181298, January 10, 2011
5. Rhombus Energy, Inc. vs. CIR, G.R. No. 206362, August 1, 2018
6. CIR vs. Central Luzon Drug Corporation, G.R. No. 159647, April 15, 2005
7. Southern Luzon Drug Corporation vs. DSWD, DOF and BIR, G.R. No.
199669, April 25, 2017
8. Manila Banking Corporation vs. CIR, G.R. No. 168118, August 28, 2006
9. CIR VS. PAL, G.R. No. 179259, September 25, 2013
10. PAL vs. CIR/CIR vs. PAL, G.R. No. 206079-80/206309, January 17, 2018

C. Transfer taxes
1. Estate tax
a. Basic principles, concept, and definition
b. Classification of decedent
c. Determination of gross and net estate
d. Deductions and exclusions from estate
e. Exemption of certain acquisitions and transmissions
f. Period for filing estate tax returns
2. Donor’s tax
a. Basic principles, concept, and definition
 b. Requisites of a valid donation
-3-

c. Transfers which may be considered as donation

- Transfer of property for insufficient consideration
- Condonation/remission of debt
- Bona fide arms-length transfers
d. Determination of gross gift
e. Exemption of gifts from donor’s tax

READ: 1. Sections 84, 85, 86, 87, 88, 90, 91, 92, 94, 95, 96 and 97 of the NIRC, as
amended

D. Value-Added Tax (VAT)

1. Concept and elements of transactions subject to VAT
2. Impact and incidence of tax
3. Destination Principle; Cross-Border Doctrine
4. Imposition of VAT on transfer of goods by tax exempt persons
5. Transactions deemed sale subject to VAT
6. Zero-rated and effectively zero-rated sales of goods or properties
7. VAT-exempt transactions
8. Input and output tax
9. Tax refund or tax credit
a. San Roque doctrine
b. Enhanced VAT refund system
10. Filing of returns and payment

READ: 1. Sections 105, 106, 107, 108, 109, 110, 111, 112, 113, 114 and 115 of the
NIRC, as amended
2. CIR vs. Filminera Resources Corporation, G.R. No. 236325, September 16,
2020
3. CIR vs. Deutsche Knowledge Services Pte. Ltd., G.R. No. 234445, July 15,
2020
4. Zuellig-Pharma vs. CIR, G.R. No. 244154, July 15, 2020
5. CIR vs. Chevron Holdings, Inc., G.R. No. 233301, February 17, 2020
6. Power Sector Assets and Liabilities Management Corporation (PSALM) vs.
CIR, G.R. No. 226556, July 3, 2019
7. CIR vs. Team Energy Corporation, G.R. No. 230412, March 27, 2019
8. STEAG State Power, Inc. vs. CIR, G.R. No. 205282, January 14, 2019
9. San Roque Power Corporation vs. CIR, G.R. No. 203249, July 23, 2018
10. Team Energy Corporation vs. CIR/Republic vs Team Energy Corporation,
G.R. No. 197663/197770, March 14, 2018
11. Fort Bonifacio Dev Corp vs. CIR, et. al. G.R. No. 175707/180035/181092,
November 19, 2014
12. Fort Bonifacio Dev Corp vs. CIR, G.R. No. 173425, January 22, 2013
13. Tolentino vs. Sec. of Finance and CIR, 249 SCRA 628
14. CIR vs. Seagate Technology, G.R. No. 153866, February 11, 2005

E. Other Business Taxes

1. Percentage Taxes
a. Tax On Persons Exempt from VAT
b. Tax On Franchises
c. Overseas Communication Tax
- Persons Liable
- Exemptions
d. Gross Receipts Tax on Banks and Non-Bank Financial Intermediaries
e. Amusement Taxes
e. Tax on Sale, Barter or Exchange of Shares of Stocks Listed and Traded
Through the Stock Exchange
2. Excise Taxes
a. Specific and Ad valorem
b. Persons Liable to Pay Excise Tax
 -4-

c. Excise Tax on Imported Articles

d. Excise Tax on Automobiles
e. Excise Tax on Non-essential Goods
f. Documentary Stamp Tax
- Documents Subject to Documentary Stamp Tax
- Documents and Papers Not Subject to Documentary Stamp Tax
- Payment of Documentary Stamp Tax
- Effect of Failure to Stamp a Taxable Document

READ: 1. Sections 116, 119-121, 125, 127, 129-131, 135, 149-150, 173, 199, 200 and
201
2. Games and Amusement Board and BIR vs. Klub Don Juan De Manila,
G.R. 252189, November 3, 2020
3. Pilipinas Shell Petroleum Corporation vs, CIR, G.R. No. 211779,
November 3, 2020
4. Diageo Phils. Inc. vs. CIR, G.R. No. 183553, November 12, 2012
5. China Banking Corporation vs. CIR, G.R. No. 175108, February 27, 2013
6. Sec of Finance and CIR vs. Rep. Carmelo Lazatin, et. al., G.R. No. 210588,
November 29, 2016
7. CIR vs. PNB, G.R. No. 195147, July 11, 2016
8. Phil Bank of Communication vs. CIR, G.R. No. 194065, June 20, 2016

F. Tax remedies under the NIRC

1. General concepts
a. Requisites of a valid assessment
b. Tax delinquency vs. tax deficiency
c. Prescriptive period for assessment
- False returns vs. fraudulent returns vs. non-filing of returns
- Suspension of the running of statute of limitations
2. Civil penalties
a. New rule on delinquency interest and deficiency interest
b. Surcharge
c. Compromise penalty
3. Assessment process and reglementary periods
a. Letter of Authority
b. Notice of Informal Conference
c. Issuance of Preliminary Assessment Notice
d. Issuance of Formal Letter of Demand/ Final Assessment Notice
e. Disputed assessment
4. Collection
a. Requisites
b. Prescriptive periods
5. Protesting an assessment
a. Period to file protest
b. Submission of supporting documents
c. Effect of failure to file protest
d. Decision of the Commissioner on the protest filed
- Period to act upon or decide on protest filed
- Remedies of the taxpayer in case the Commissioner denies the
protest or fails to act on the protest
- Effect of failure to appeal
6. Compromise and abatement of taxes
7. Recovery of tax erroneously or illegally collected
a. Grounds, requisites, and period for filing a claim for refund or issuance
of a tax credit certificate
b. Proper party to file claim for refund or tax credit
8. Judicial and Other remedies

READ: 1. Sections 24, 40, 203 to 231, 247 to 257 of the NIRC, as amended
 2. CIR vs. BPI, G.R. No. 227049, September 16, 2020
-5-

3. Philippine Dream Company, Inc. vs. CIR, G.R. No. 216044, August 27, 2020
4. CIR vs. T. Shuttle Services, Inc. G.R. No. 240729, August 24, 2020
5. CIR vs. Lucio L. Co, et. al., G.R. No. 241424, February 26, 2020
6. CIR vs. BCDA, G.R. No. 217898, January 15, 2020
7. Imelda Sze et.al. vs. BIR, G.R. No. 210238, January 6, 2020
8. CIR vs. V.Y. Domingo Jewellers, Inc., G.R. No. 221780, March 25, 2019
9. Lascona Land Co. Inc. vs. CIR, 683 Phils 430, 440 [2012]
10. Allied Banking Corp vs. CIR, 625 Phils 520, 538 [2010]
11. MISNET, Inc. vs. CIR, G.R. No. 210604, June 3, 2019
12. CIR vs. Univation Motor Phils., Inc., G.R. No. 231581, April 10, 2019
13. CIR vs. La Flor de la Isabela, Inc., G.R. No. 211289, January 14, 2019
14. Macario Lim Gaw, Jr. vs. CIR, G.R. No. 222837, July 23, 2018
15. CIR vs Pilipinas Shell Petroleum Corp/CIR vs Pilipinas Shell Petroleum Corp
and Petron Corporation, G.R. No. 197945/204119-20, July 9, 2018
16. CIR vs. J. P. Morgan Chase Bank, N.A. – Philippine Customer Care Center,
G. R. No. 210528, November 28, 2018
17. CIR vs. Bank of P.I., G.R. No. 224327, June 11, 2018
18. Medicard vs. CIR, G.R. No. 222743, April 5, 2017
19. CIR vs. Phil Daily Inquirer, Inc., G.R. No. 213943, March 22, 2017
20. CIR vs. Asalus Corporation, G.R. No. 221590, February 22, 2017
21. CIR vs. Fitness By Design, Inc., G.R. No. 215957, November 9, 2016
22. CIR vs. Next Mobile, G. R. No. 212825, December 7, 2015