Professional Documents
Culture Documents
TAXATION LAW I
Course Outline Part 3
Income Taxation Fundamental Matters
General References:
I. INCOME TAXATION
A. Definition
B. Basis
1. Lifeblood Doctrine (Necessity Theory)
a. Partnership Theory
CIR vs. Lednicky; G.R. Nos. L-18169, L-18262, L-21434, 31 July 1964
b. Protection Theory
C. Systems
1. Global
2. Schedular
A. Definition
B. Nature
C. Functions (Purposes)
Case: Madrigal vs. Rafferty; G.R. No. L-12287, 07 August 1918
2. Progressive (Proportionate)
3. Direct Tax
4. Comprehensive
6. Self-assessing
7. Pay-As-You-File
8. American Origin
2. Residence Principle
3. Source Principle
V. INCOME
A. Concept
Revenue Regulations No. 2, Sec. 36
Sec. 32(A), NIRC
a. Income vs. Capital
Cases:
1. Fisher vs. Trinidad; G.R. No. L-17518, 30 October 1922
2. Power to Dispose
J. All-Events Test
CIR vs. Isabela Cultural Corp.; G.R. No. 172231, 12 February 2007
o CIR vs. Filinvest Development Corp.; G.R. Nos. 163653 & 167689
c. Realization Principle
Realization vs. Recognition
A. Compensation
B. Business Income (Exercise of Profession)
C. Passive Income
D. Capital l
1. Classification of Taxpayers
A. INDIVIDUAL
1. Citizen
a. Resident Citizen
b. Nonresident Citizen
2. Alien
a. Resident Alien
Seaman
B. CORPORATION
1. Domestic Corporation
2. Foreign Corporation
C. PARTNERSHIP
Ordinary Partnership
Case:
D. ESTATE
E. TRUST
F. CO-OWNERSHIP
2. CIT vs. Japan Air Lines; G.R. No. 60714, 04 October 1991
a. CalendarYear
b. Fiscal Year
a. Commencement of Business
b. Dissolution of Business
d. Death of Taxpayer
B. ACCOUNTING METHODS
1. General Methods
a. Accrual Basis
b. Cash Basis
2. Installment Method
7. Hybrid Method
Filipinas Synthetic Fiber vs. CA; G.R. Nos. 118498 & 124377, 12 October
1999
C. TRANSFER PRICING
D. ARMS LENGTH PRINCIPLE
CONCEPT
THREE-FOLD PURPOSE
KINDS
B. WITHHOLDING OF VAT
C. WITHHOLDING AGENT
D. CASES
o Filipinas Synthetic vs. CA; G.R. Nos. 118498 & 124377, 12 October 1999
D. TIMIE OF WITHHOLDING
E. RETURN AND PAYMENT