DE LA SALLE UNIVERSITY

COLLEGE OF LAW
COURSE SYLLABUS
TAXATION I
Atty. Shirley C. Tuazon
I. General Principles of Taxation
A. Definition and concept of taxation
B. Nature of taxation
C. Characteristics of taxation
D. Power of taxation compared with other powers
Gerochi vs. Doe, GR No. 159796, July 17, 2007
1. Police power
2. Power of eminent domain
E. Purpose of taxation
1. Revenue-raising
2. Non-revenue/special or regulatory
F. Principles of sound tax system
1. Fiscal adequacy
2. Administrative feasibility
3. Theoretical justice
G. Theory and basis of taxation
1. Lifeblood theory
2. Necessity theory
3. Benefits-protection theory (Symbiotic relationship)
4. Jurisdiction over subject and objects
H. Doctrines in taxation
1. Prospectivity of tax laws
2. Imprescriptibility
3. Double taxation
4. Escape from taxation
a) Shifting of tax burden
b) Tax avoidance
c) Tax evasion
5. Exemption from taxation
CIR vs. Acesite (Philippines) Hotel Corporation, G.R. No. 147295,
February 16, 2007
Digital Telecommunications Phils. Inc. vs. Province of
Pangasinan, GR No. 152534, February 23, 2007

6.
7.
8.
9.

Silkair (Singapore) PTE, Ltd vs. CIR, GR No. 173594, February 6,

2008
Davao Oriental Electric Cooperative vs. The Province of Davao
Oriental, GR No. 170901, January 20, 2009
NAPOCOR vs. CBAA, LBAA of La Union, et al, GR No. 171470,
January 30, 2009
CIR vs. PAL, GR No. 160528, October 9, 2006
San Pablo Manufacturing Corporation vs. CIR, GR No. 147749,
June 22, 2006
PAL vs. CIR, GR 198759, July 1, 2013
Compensation and set-off
Compromise
Tax amnesty
Construction and interpretation of:
CIR vs. San Miguel Corporation, GR 184428, November 23, 2011
a) Tax laws
b) Tax exemption and exclusion
c) Tax rules and regulations
d) Penal provisions of tax laws
e) Non-retroactive application to taxpayers

I. Scope and limitation of taxation

1. Inherent limitations
a) Public purpose
b) Inherently legislative
Philippine Fisheries Development Authority vs. CA, GR No.
150301, October 2, 2007
c) Territorial
d) International comity
Deutsche Bank AG Manila Branch vs. CIR, GR No. 188550,
August 19, 2013
e) Exemption of government entities, agencies, and
instrumentalities
City of Pasig vs. Republic, GR 185023, August 24, 2011
Phil. Fisheries Development Authority vs. CBAA, GR
178030, December 15, 2010
2. Constitutional limitations
CIR vs. Hon. Raul Gonzales, GR. 177279, October 13, 2010
J. Stages of taxation
1. Levy
2. Assessment and collection

3. Payment
4. Refund
K. Definition, nature, and characteristics of taxes
L. Requisites of a valid tax
M. Tax as distinguished from other forms of exactions
1. Tariff
2. Toll
3. License fee
4. Special assessment
5. Debt
N. Kinds of taxes
1. As to object
a) Personal, capitation, or poll tax
b) Property tax
c) Privilege tax
2. As to burden or incidence
a) Direct
b) Indirect
Silkair (Singapore) Pte Ltd vs. CIR, GR 166482, January 25,
2012
3. As to tax rates
a) Specific
b) Ad valorem
c) Mixed
4. As to purposes
a) General or fiscal
b) Special, regulatory, or sumptuary
5. As to scope or authority to impose
a) National internal revenue taxes
b) Local real property tax, municipal tax
6. As to graduation
a) Progressive
b) Regressive
c) Proportionate
II. National Internal Revenue Code (NIRC) of 1997, as amended
RA 9504
A. Income taxation - Sections 22 to 83
1. Income tax systems
a) Global tax system
b) Schedular tax system
c) Semi-schedular or semi-global tax system
2. Features of the Philippine income tax law
a) Direct tax
b) Progressive
c) Comprehensive

3.

4.
5.

6.

7.

8.

d) Semi-schedular or semi-global tax system

Criteria in imposing Philippine income tax
a) Citizenship principle
b) Residence principle
c) Source principle
Types of Philippine income tax
Taxable period
a) Calendar period
b) Fiscal period
c) Short period
Kinds of taxpayers
a) Individual taxpayers
(i) Citizens
(a) Resident citizens
(b) Non-resident citizens
(ii) Aliens
(a) Resident aliens
(b) Non-resident aliens
(1) Engaged in trade or business
(2) Not engaged in trade or business
(iii) Special class of individual employees
(a) Minimum wage earner RMC 7-2014
b) Corporations
(i) Domestic corporations
(ii) Foreign corporations
a) Resident foreign corporations
(b) Non-resident foreign corporations
(iii) Joint venture and consortium
c) Partnerships
d) General professional partnerships
e) Estates and trusts
f) Co-ownerships
Income taxation
a) Definition
b) Nature
c) General principles
Income
a) Definition
b) Nature
c) When income is taxable
(i) Existence of income
(ii) Realization of income
(a) Tests of realization
(b) Actual vis--vis constructive receipt
(iii) Recognition of income
(iv) Methods of accounting

(a) Cash method vis--vis accrual method

(b) Installment payment vis--vis deferred payment
vis--vis percentage completion (in long-term contracts)
d) Tests in determining whether income is earned for tax
purposes
(i) Realization test
(ii) Claim of right doctrine or doctrine of ownership,
command, or control
(iii) Economic benefit test, doctrine of proprietary interest
(iv) Severance test
(v) All events test
9. Gross income
a) Definition
b) Concept of income from whatever source derived
c) Gross income vis--vis net income vis--vis taxable income
d) Classification of income as to source
e) Sources of income subject to tax
(f) Situs of income taxation (see page 2 under inherent
limitations, territorial)
(g) Exclusions from gross income
(h) Deductions from gross income
CIR vs. Isabela Cultural Corporation G.R. No. 172231,
February 12, 2007
RR 16-2008
Carmelino Pansacola vs. CIR, GR No. 159991, November 16,
2006
10. Taxation of resident citizens, non-resident citizens, and resident
aliens

RR 11-2012
RR 8-2012
RMC 20-2011
RR 10-2008

11. Taxation of non-resident aliens engaged in trade or business

12. Individual taxpayers exempt from income tax a) Senior citizens RA 9994
M.E. Holding Corporation vs. CA, GR No. 160193, March 3,
3008
CIR vs. Cental Luzon Drug Corporation, GR No. 159610, June
12, 2008
Bicolandia Drug Corp vs. CIR, GR No. 142299, June 22, 2006
Carlos Superdrug Corp vs. DSWD, GR No. 166494, June 29,
2007
b) Minimum wage earners RA 9504; RMC 23-2011

c) Exemptions granted under international agreements

13. Taxation of domestic corporations
Chamber of Real Estate and Builders Association vs. Romulo et., al,
GR No. 160756, March 9, 2010
CIR vs. PAL, GR 179259, September 25, 2013
CIR vs. St. Lukes Medical Center, GR 195909, September 26, 2012
RR 1-2009
RR 1-2007
14. Taxation of resident foreign corporations
CIR vs. Citytrust Investment Phils, Inc., GR No. 139786,
September 27, 2006
South African Airways vs. CIR, GR No. 180356, February 16, 2010
RA 10378; RR 15-2013
15. Taxation of non-resident foreign corporations
16. Improperly accumulated earnings of corporations
17. Exemption from tax on corporations
18. Taxation of partnerships
19. Taxation of general professional partnerships
20. Withholding tax RR 2-98 as amended
RR 12-2013
CIR vs. SMART Communications, Inc. GR No. 179045-46,
August 25, 2010

GRADING SYSTEM:
Recitations & Quizzes ------------------------------------------- 30%
Examination --------------------------------------------------------- 70%

Preliminary --------------------- 35%

Finals ----------------------------- 35%

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