DOUBLE TAXATION

FUNDAMENTAL PRINCIPLES OF TAXATION

DOUBLE TAXATION

 In its strict sense, double taxation referred to its direct

duplicate taxation.

 In its broad sense, double taxation is referred to as

indirect double taxation. It extends to all cases in which
there is a burden of two or more impositions.
DOUBLE TAXATION

 Direct double taxation means taxing twice

1. By the same taxing authority, jurisdiction or taxing
district
2. For the same purpose
3. In the same year or taxing period
4. Same subject or object
5. Same kind/character of the tax
 TYPES OF DOUBLE TAXATION
1. DIRECT DOUBLE TAXATION – This occurs when all
the element of double taxation exists for both
impositions.
Examples :
a. An income tax of 10% on monthly sales and a 2%
income tax on the annual sales
b. A 5% tax on bank reserve deficiency and another
1% penalty per day as a consequence of such
reserve deficiency
 TYPES OF DOUBLE TAXATION

 Direct double taxation becomes legally objectionable

for being oppressive and inequitable.
 It violates the concept of equal protection, uniformity
and equitableness of taxation in the Constitution
 TYPES OF DOUBLE TAXATION
2. INDIRECT DOUBLE TAXATION – This occurs when
at least one of the secondary elements of double taxation
is not common for both impositions.
Examples :
a. The national government levies business tax on the
sales or gross receipts of business while the local
government levies business tax upon the same sales
or receipts
 TYPES OF DOUBLE TAXATION
Examples :
b. The national government collects income tax from a
taxpayer on his income while the local government
collects community taxes upon the same income.
c. The Philippine government taxes on foreign incomes
of domestic foreign corporations and resident citizens
while a foreign government also taxes the same
income.
 TYPES OF DOUBLE TAXATION
In its strict sense, there is direct double taxation when the
same property is taxed twice when it should be taxed
once:
 On the same property or subject matter
 For the same purpose
 By the same estate
 Within the same jurisdiction
 During the same period
 Same kind or character of tax