Colegio de San Juan de Letran

Intramuros, Manila
College of Business Administration and Accountancy
ACCOUNTANCY AREA
School Year 2006-2007
I. Course Number

Taxation 1

II. Course Title

Phil. Tax System & Income Tax/Income Taxation

III. Credit

3 units

IV. Pre-Requisite

Accounting 2

V. Course Description

The course is an in-depth study of Philippine tax system and income taxation. It provides a solid foundation on the areas of tax that are
likely to be encountered during the initial stage of a CPAs professional tax practice. It covers the overview of the national tax system, and
the income taxation of employees, unincorporated, and incorporated businesses. Also, provides the students with knowledge of the capital gains
tax; final tax on certain passive income; and the year-end tax, including the minimum corporate tax, the normal tax and the improperly accumulated
profits tax of corporations. Tax forms are provided for specific topics discussed.

VI. Course Rationale

There is a need for the State to raise revenues to carry out its governmental functions objectively. Among its various sources of revenues, taxes
constitute the greater bulk. For students to understand the implications of a sound tax system, a basic knowledge of the Philippine income taxation is
indispensable.

VII. Course Objectives

A. General Objective:

At the end of the course, the students are expected to have an adequate knowledge of the basic principles of taxation and its role in business and in the
State.

B. Specific Objectives:
Cognitive

Establish an extensive knowledge of the nature and concepts of income taxation as well as its relevance in business and in the State.

Affective

Appropriately explain the government's inherent power to impose taxes and enforce collection thereof.
Correctly demonstrate resolution of tax problems of individuals and corporate taxpayers leading to the preparation and filing of tax returns.

Psychomotor

Execute skills in resolving income tax problems of individuals and corporation and to prepare income tax returns accordingly.
1

SPECIFIC
OBJECTIVES

SUBJECT MATTER

Explain the
fundamental
concept of taxation
and the related
provision of NIRC.

1. Principles of taxation in
general
1.1 Definition, nature and
scope of taxation
1.2 Taxation distinguished
from eminent domain and
police power
1.3 Limitation of the power
of taxation
1.4 Basic principles of a
sound tax system
1.5 Definition, nature,
classification and
essential characteristics of
taxes
1.6 Taxes distinguished from
other charges and fees

Describe the
organizational
structure of the BIR
and their duties &
function.

Identify the basic

concepts of Income
Taxation,
its relevance in
the state and in the

VALUES
INTEGRATED

STRATEGIES/
TEACHING
METHODOLOGY

INSTRUCTIONAL
MATERIALS

EVALUATION

TIME
FRAME

EXPECTED
OUTPUT

Appreciation of
subject matter.

Lecture-discussion
Lecture-demonstration
Question and answer
teaching
Exercises, quizzes an &
examination

Books
BIR Circulars/Memos
and Forms

Recitation
Quiz

1st to 3rd
Week

Explained the
fundamental
concept of
taxation and
the related
provision of
NIRC.

2. Organization and function

of the Bureau of Internal
Revenue

Appreciation of
the organizational
structure of the
BIR.

Lecture-discussion

Books

Recitation
Quiz

4th Week

Described the
organizational
structure of
the BIR and
their duties &
function.

3. Income Taxation
3.1 Definition, nature and
scope of income
3.2 Income distinguished
from revenue capital

Faithful
compliance/
adherence to the
provision of the
NIRC.

Lecture-discussion
Lecture-demonstration
Question and answer
teaching
Exercises, quizzes and

Books
BIR Circulars/Memos
and Forms

Recitation
Quiz

5th to 8th
Week

Identified the
basic concepts
of Income
Taxation,
its relevance
2

business.

3.3 Classification of
taxpayers
3.4 Tax on individual
3.4.1 Classification of
individual taxpayers
3.5 Tax on Corporations
3.5.1.Classification of
corporation based on the
CTRP
3.5.2 Tax on different
corporations subject to
income tax
3.5.3 Exempt
corporations
3.5.4 Estates an trusts

examination

in the state
and in the
business.

Honesty and
correctness of tax
due.
Timely filing of
returns.

Lecture-discussion
Lecture-demonstration
Question and answer
teaching
Exercises, quizzes and
examination

Books
BIR Circulars/Memos
and Forms

Recitation
Quiz

Sense of
responsibility in
compliance with
registration
requirements.

Provide checklist to
concerned residents of
community.
Discussion of the flow
of registration.

Registration Forms
with City Government,
BIR and Bureau of
Domestic Trade

Review of
Registration
Forms with
concerned
government
agencies.

Appreciation of
the subject matter.

Lecture-discussion
Lecture-demonstration
Question and answer
teaching
Exercises, quizzes and
examination

Books
BIR Circulars/Memos
and Forms

Recitation
Quiz

COMMUNITY
SERVICE
INTEGRATION
Identify the
registration
requirements for
small scale
business with
government entities
and how the
adapted community
applies..

Registration of small scale

businesses with relevant
government offices.

Identified the
registration
requirements
for small scale
business with
government
entities and
how the
adapted
community
applies..

MID-TERM
EXAMINATION
Discuss the
composition of
gross income of
individual and
corporation.
Distinguish what
income are subject

4. Gross income of individual

and corporation.
4.1 Items incl. In the gross
income of individual and
corporation
4.2 Income subject to final
tax Passive Income

Faithful
compliance/
adherence to the
provision of the

9th to 12th
Week

Discussed the
composition
of gross
income of ind.
And corp.
Distinguished
what income
3

to tax from those

that are exempted
from tax.

4.3 Income exempt from

Income tax
4.4 Sale or exchange of
property
4.4.1Ordinary sale or
exchange of property
subject to income tax
4.4.2Sale of exchange of
property subject to capital
gains and losses
4.4.3Sale of exchange of
real property subject to
capital gains tax
4.4.4Sale of exchange of
shares of stocks
4.5 Dividend Income
4.6 Lease and leasehold
improvements
4.7 Share in the income of a
general professional
partnership, estate and
trust
4.8 Income from whatever
source

Identify the
exclusions &
deductions from
gross income of
individuals &
corporations .

5. Exclusions & deductions

from gross income of
individual and corporation
5.1 Allowed personal
exemptions for individual
taxpayers
5.2 Items in the gross income
exempt from income and
final tax
5.3 Allowed deductible
expenses and losses for
gross business income
and their limitations
5.4 Optional standard

NIRC.

Appreciation of
the allowable
deductions from
gross income.
Honesty in
determination of
allowable
deductions.

are subject to
tax from those
that are
exempted
from tax.

Lecture-discussion
Lecture-demonstration
Question and answer
teaching
Exercises, quizzes and
examination

Books
BIR Circulars/Memos
and Forms

Recitation
Quiz
Board work

13th to 15th
Week

Identified the
exclusions &
deductions
from gross
income of
individuals &
corporations .

deduction
5.5 Non-deductible expenses
and losses
Determine the
taxable income.

6. Determination of the
Taxable Income, Income
Tax Payable and Income
tax credit
6.1 Taxable income
6.2 Income tax payable
(using the tax table and the
applicable tax rates)
6.3 Tax credits
6.3.1 Tax w/held on wages
6.3.2 Tax w/held at source
6.3.3 Foreign tax credit &
its limitation

Accuracy in the
computation of
net income subject
to tax.

Lecture-discussion
Lecture-demonstration
Question and answer
teaching
Exercises, quizzes and
examination

Books
BIR Circulars/Memos
and Forms

Recitation
Quiz
Board work

16th Week

Determined
the taxable
income.

Identify the
different
administrative
provisions.

7. Administrative provisions
7.1 Filing & payment of the
income tax return

Faithful adherence
to the provisions
of NIRC.

Lecture-discussion
Lecture-demonstration
Question and answer
teaching
Exercises, quizzes and
examination

Books
BIR Circulars/Memos
and Forms

Recitation
Quiz
Board work

17th Week

Identified the
different
administrative
provisions.

Identify the
different or various
accounting
methods.

8. Accounting method
8.1 Cash
8.2 Accrual
8.3 Installment methods of
reporting income
8.4 Net worth method

Faithful
compliance/
adherence to the
provision of the
NIRC.

Lecture-discussion
Lecture-demonstration
Question and answer
teaching
Exercises, quizzes and
examination

Books
BIR Circulars/Memos
and Forms

Recitation
Quiz
Board work

18th Week

Identified the
different or
various
accounting
methods.

Develop a correct
attitude towards
the government
power to imposed
taxes and
taxpayers
obligation to pay
5

them.
COMMUNITY
SERVICE
INTEGRATION
Expound the
relevant concepts
of income taxation
as applied to
community
members.

Preparation of Annual Income

Tax Returns for the residents of
the community.

Sense of
responsibility and
honesty as a good
taxpayer.

Actual illustration in
the preparation of
income tax returns.

Income Tax Forms for

Individuals

Review of proforma income tax

returns.

Expounded
the relevant
concepts of
income
taxation as
applied to
community
members.

FINAL EXAMINATION

VIII

Grading System:
MIDTERMS
CLASS STANDING
QUIZZES
MID-TERM EXAM
COMPRE EXAM

25%
25%
10%
40%

MIDTERM GRADE 100%

FINALS
CLASS STANDING
QUIZZES
MID-TERM EXAM
COMPRE EXAM

25%
25%
10%
40%

PRE-FINAL GRADE 100%

FINAL GRADE
MIDTERM
IX.

50%

PRE-FINAL GRADE

50%

100%

Course Policies:
Policies on attendance, tardiness, academic dishonesty are found in the Student Handbook.
In case of missed quizzes and assignments, the student is given the chance to make-up within a week from the day he/she reported, otherwise, it will be
equivalent to 50%.
6

X.

Textbook/References:

Ballada, et. al., Income Taxation, 2005 Edition

Reyes, Virgilio D., Income Tax, Law and Accounting, 2005 Edition
De Leon, Hector, et. al. Internal Revenue Code, as amended, 2005 Edition
Valencia, Edwin, et. al., Income Taxation, Principles and Laws, 2005 Edition.
Litonjua, Virgilio, Philippine Laws on Individual Income Taxation, 2005 Edition