De La Salle University

COLLEGE : RVRCOB DEPARTMENT Accountancy :

COURSE CODE : ACCTAX1 CREDIT : Three (3) units
FACULTY : TYPE OF : Major Subject
COURSE
CLASS DAYS AND Saturdays ROOM :
CLASS TIME : 0900-1215

COURSE DESCRIPTION:

This course (ACCTAX1 or Income Taxation) involves an intensive study of the Philippine income tax system. It
deals with conceptual and practical application of income taxation of individuals, partnerships and corporations,
including withholding taxes, preferential taxes, and taxes under double taxation agreements, as they relate to
accounting practice. The emphasis is on the application of the theories and principles in solving tax problems
and the use of these to enhance human development and social transformation.

LEARNING OUTCOMES (LO):

UNIVERSITY LEARNING OUTCOMES (LO)

EXPECTED LASALLIAN
GRADUATE ATTRIBUTES
(ELGA)
Critical and creative thinker
Effective communicator
Reflective lifelong learner
On completion of the course, the student is expected to be able to
do the following:
LO1: Calculate income tax liabilities of various types of
taxpayers, and prepare the related tax returns in
accordance with the National Internal Revenue Code
(NIRC or Tax Code) and its implementing regulations;
special laws and related rules and regulations; and
relevant tax treaties.

LO2: Prepare a business report covering advice on a practical

tax issue encountered by taxpayers, applying the tax
concepts and principles under the Tax Code and its
implementing regulations; special laws and related rules
and regulations; and relevant tax treaties.

FINAL COURSE OUTPUT:

As evidence of attaining the above learning outcomes, the student is required to do and submit the following
during the indicated dates of the term.

LEARNING OUTCOMES (LO) REQUIRED OUTPUTS DUE DATE

LO1: Calculate income tax Complete proposed solutions to exercises Weeks 1, 2, 3, 5, 6,
liabilities of various types of and problems. 7, 9, 10, 11 and 13
taxpayers, and prepare the
related tax returns in accordance
with the Tax Code and its
implementing regulations;
special laws and related rules
and regulations; and relevant tax
treaties.
LO1: Calculate income tax At least three (3) oral reports discussing the Weeks 1, 2, 3, 5, 6,
liabilities of various types of solutions to the problems and cases during 7, 9, 10, 11 and 13
taxpayers, and prepare the the term.
related tax returns in accordance
with the Tax Code and its
implementing regulations;
special laws and related rules
and regulations; and relevant tax
treaties.
LO1: Calculate income tax At least two (2) duly accomplished income tax Weeks 10, 12
liabilities of various types of returns (one for individual and one for
taxpayers, and prepare the corporation).
related tax returns in accordance
with the Tax Code and its
implementing regulations;
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 LEARNING OUTCOMES (LO) REQUIRED OUTPUTS DUE DATE
special laws and related rules
and regulations; and relevant tax
treaties.
LO2: Prepare a business report One (1) proposal, outline and business report Weeks 4, 7, 14
covering advice on a practical on tax issue or problem.
tax issue encountered by
taxpayers, applying the tax
concepts and principles under
the Tax Code and its
implementing regulations;
special laws and related rules
and regulations; and relevant tax
treaties.

RUBRIC FOR ASSESSMENT:

Below are the rubrics that students will use to self-check their required output prior to submission. The same
rubrics will also be used to grade the student’s work.

Answered exercises and problems

CRITERIA EXEMPLARY SATISFACTORY DEVELOPING BEGINNING RATING
(100) (90) (80) (70)
Completeness The student The student The student The student fails to
(100%) answers all answers majority answers some of answer any
exercises of the exercises the exercises assigned
completely completely completely exercises

Preparation of income tax returns

CRITERIA EXEMPLARY SATISFACTORY DEVELOPING BEGINNING RATING
(100) (90) (80) (70)
Correctness & The student The student The student The student fails to
completeness of prepares correct prepares prepares partly prepare correct
filling-up income tax substantially correct income tax income tax
[50%] returns. correct income tax returns. returns.
returns.
Correctness of The student The student The student The student
tax calculation calculated the calculated the calculated the calculated the
[50%] income tax liability income tax liability income tax liability income tax liability
correctly. mostly correct. partly correct. substantially
incorrect.
TOTAL:

Business report
CRITERIA EXEMPLARY SATISFACTORY DEVELOPING BEGINNING RATING
(100) (90) (80) (70)
Content The group applies The group applies The group applies The group fails to
(Application of all relevant income some income tax few income tax apply income tax
theories learned tax topics topics topics topics
to the business appropriately. appropriately. appropriately. appropriately.
case)
[80%]
Format and The group follows The group follows The group follows The group does
English the format and the format and the format but not follow the
language uses excellent uses English uses the English format and uses
[10%] English language. language in the language the English
paper which is at somewhat language
an acceptable inappropriately. inappropriately.
level.
Teamwork The group shows The group shows The group shows The group shows
[10%] strong teamwork teamwork as somewhat lack of lack of teamwork
as evidenced by evidenced by teamwork as as evidenced by
consistency both consistency in evidenced by inconsistencies
in the flow and terms of content of some both in the flow
contents of the the paper. inconsistencies and contents of
paper. both in the flow the paper.
and contents of
the paper.
TOTAL:

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OTHER REQUIREMENTS AND ASSESSMENTS:

Aside from the final output, the student will be assessed at other times during the term by the following:

Departmental long examinations

There will be three (3) departmental long examinations for three (3) hours. This will consist of theories and
problems. Problems may be short or long problems which should be supported by solutions to be written on the
answer sheets.

Departmental final examination

This will be for three (3) hours which will cover all the topics of the course. This will consist of theories and
problems. Solutions to the problems are required to be written on the answer sheets.

Business report
The purpose of this business report is to apply the tax concepts and techniques in an analysis of a real-world tax
issue or problem.

This will be a group written report. Each group will comprise of two (2) to four (4) members. The group will
either: identify the tax issue or problem which will be submitted to the faculty on Week 3 for approval, or the
faculty will provide the tax issue or problem for resolution. This will cover a specific problem or issue that a
taxpayer encounters in practice. The group will come up with a tax advice to address the tax problem or issue.

The business report will be submitted on Week 14 in softcopy (pdf format, 12 font size, double-space) to the
faculty. The business report should contain the following:

1. Executive summary
2. Table of contents
3. List of tables
4. List of figures
5. Nature of the tax issue or problem
6. Evaluation of the tax issue or problem with extensive discussion of legal bases
7. Possible alternatives (enumerate alternatives to address the tax issue or problem)
8. Evaluation of possible alternatives (discussion on the evaluation of alternatives with discussion
of legal bases and computations)
9. Recommendation
10. Reference list

The headings for items 5 and 6 should be specific to the issue or problem being addressed (e.g., Sale of real
properties for no. 5; Tax implication of sale of real properties for no. 6 with sub-headings: regular corporate
income tax/minimum corporate income tax, capital gains tax, among others). The business report should not
contain other headings other than the above items unless approved by the faculty.

The business report may contain 3,000 to 5,000 words (body only), however, it is the quality that matters. It may
contain pictures, charts or diagrams, and appendices showing the calculations and supporting documentations.

Use business English in preparing the business report and write using the first person (i.e., use “we”). Assume
that the group is a tax consultant.

Case study on tax return preparation

This will be an individual assessment on the preparation of tax returns. Cases will be assigned on certain
meetings to require students to prepare the applicable tax returns. The purpose of this is to apply the concepts
and techniques in the preparation of the applicable tax returns.

Class standing
This will include the following:
Graded recitation/class participation
Attendance, punctuality, good manners and right conduct
Assignment notebook (columnar)

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 GRADING SYSTEM:

GRADE POINT DESCRIPTION PERCENTAGE

4.0 Excellent 97 – 100
3.5 Superior 94 – 96
3.0 Very Good 91 – 93
2.5 Good 87 – 90
2.0 Satisfactory 83 – 86
1.5 Fair 77 – 82
1.0 Pass 70 – 76
0.0 Fail Below 70

The student will be graded according to the following:

Basis Percentage
Departmental long examinations (3 exams) 45%
Departmental final examination 15%
Business report 15%
Case study on tax return preparation 15%
Class standing 10%
Total 100%

LEARNING PLAN:

LEARNING WEEK
TOPICS LEARNING ACTIVITIES
OUTCOMES NO.

PART 1 – GENERAL PRINCIPLES AND CONCEPT OF

TAXATION
Understand the Unit 1 – General principles of taxation 1 Lecture and discussions
general principles 1.1 Concept, nature and characteristics of taxation De Leon (DL) (Ch1),
and concept of 1.2 Classifications and distinctions of taxes Fundamentals (F) (Ch1)
taxation. 1.3 Limitations on the power of taxation
1.4 Situs of taxation and double taxaton
1.5 Forms of escape from taxation
1.6 Exemption from taxation
1.7 Nature, construction, application and sources of tax
laws

Unit 2 – Tax administration 1 Lecture and discussions

2.1 Administrative agencies and courts DL (Ch1), F (Ch3A,
2.2 Bureau of Internal Revenue (BIR) Ch3O)
2.3 Court of Tax Appeals (CTA)

PART 2 – INCOME TAXATION

Calculate taxable Unit 3 – Gross income 2, 3
income of 3.1 Concept of income Lecture, discussions,
taxpayers in 3.2 Components of gross income exercises and problem
accordance with 3.3 Exclusions from gross income solving
the NIRC or Tax 3.4 Special treatment of fringe benefits DL (Ch2, Ch3, Ch4)
Code and the
implementating FIRST LONG EXAMINATION 4 Units 1 to 3
rules, regulations
and other Unit 4 – Deductions from gross income 5, 6
issurances. 4.1 Definition, timing and other requirements Lecture, discussions,
4.2 Business expenses exercises and problem
4.3 Interest expense solving
4.4 Taxes DL (Ch5, Ch6)
4.5 Losses
4.6 Bad debts
4.7 Depreciation
4.8 Depletion
4.9 Charitable and other contributions
4.10 Research and development
4.11 Pension trusts
4.12 Optional standard deduction
4.13 Premium payments
4.14 Special deductions
4.15 Items not deductible
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 LEARNING WEEK
TOPICS LEARNING ACTIVITIES
OUTCOMES NO.

Unit 5 – Gains and losses from disposition of property 7

5.1 Tax basis of properties Lecture, discussions,
5.2 Exchanges of properties in corporate readjustments exercises and problem
5.3 Capital gains and losses solving
5.4 Capital gains on sale or real property DL (Ch7)
5.5 Dealings in stocks and securities
5.6 Capital gains on stock transactions

Unit 6 – Sources of income 7

6.1 Situs of sources of income Lecture, discussions,
6.2 Gross income from sources within the Philippines exercises and problem
6.3 Taxable income from sources within the Philippines solving
6.4 Gross income from sources without the Philippines DL (Ch8)
6.5 Taxable income from sources without the Philippines
6.6 Income from sources partly within and partly without
the Philippines

SECOND LONG EXAMINATION 8 Units 4 to 6

Calculate income Unit 7 – Taxation of individuals 9, 10

tax liabilities of 7.1 Classes of individual taxpayers Lecture, discussions,
various taxpayers 7.2 Personal and additional exemptions exercises, problem
and prepare the 7.3 Compensation income earners solving, and tax return
related income tax 7.4 Business income earners preparation
returns in 7.4.1 Itemized deduction DL (Ch5E, Ch9)
accordance with 7.4.2 Optional standard deduction
the NIRC or Tax 7.4.3 8% income tax
Code and the 7.5 Minimum wage earners
implementating 7.6 Income tax of spouses
rules, regulations
7.7 Senior citizen and persons with disabilities
and other
7.8 Tax credits
issurances.
7.9 Income subject to final tax

Unit 8 – Taxation of corporations 10

8.1 Classification of corporations Lecture, discussions,
8.2 Regular corporate income tax exercises, problem
8.3 Minimum corporate income tax solving and tax return
8.4 Optional corporate income tax preparation
8.5 Tax credits DL (Ch5E, Ch10)
8.6 Income subject to final tax
8.7 Improperly accumulated earnings tax
8.8 Exempt corporations

Unit 9 – Taxation of partnerships, estates and trusts 11

9.1 Classification of partnerships Lecture, discussions,
9.2 Business partnership exercises, problem
9.3 General professional partnership solving and tax return
9.4 Estates and trusts preparation
DL (Ch11, Ch12)
Unit 10 – Accounting methods 11
10.1 Methods of accounting Lecture, discussions,
10.2 Inventories exercises and problem
10.3 Indirect methods of determining income solving
10.4 Accounting periods DL (Ch13)
10.5 Controlled taxpayers

Unit 11 – Filing of returns, payment of tax and 11

administrative requirements
11.1 Individuals Lecture, discussions,
11.2 Corporations exercises, problem
11.3 Partnerships, estates and trusts solving and tax return
11.4 Administrative requirements preparation
DL (Ch14A, Ch14B)
THIRD LONG EXAMINATION 12 Units 7 to 11

Unit 12 – Withholding taxes 11

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 LEARNING WEEK
TOPICS LEARNING ACTIVITIES
OUTCOMES NO.
Calculate 12.1 Withholding tax system Lecture, discussions,
withholding tax 12.2 Kinds of withholding taxes exercises and problem
liabilities of 12.3 Withholding agents solving
taxpayers in 12.4 Timing of withholding DL (Ch14C)
accordance with 12.5 Exemption from withholding RR No. 2-98, as
the NIRC or Tax 12.6 Withholding tax on wages (WTW) amended
Code and the 12.7 Expanded withholding tax (EWT)
implementating 12.8 Final withholding tax (FWT)
rules, regulations 12.9 Administative requirements
and other
issurances.
PART 3 – PREFERENTIAL TAXATION
Calculate income Unit 13 – Omnibus Investments Code 13
tax liabilities of 13.1 Investment Priorities Plan Lecture, discussions,
taxpayers enjoying 13.2 Registered enterprises exercises and problem
tax incentives and 13.3 Income tax holiday (ITH) incentive solving
prepare the related 13.4 Other incentives to registered enteprises Book 1 EO No. 226
income tax returns 13.5 Incentives to less-developed area registered
in accordance with enteprises
the special laws 13.6 Administrative requirements
and the
implementating Unit 14 – Special Economic Zone Act 13
rules, regulations 14.1 Philippine Economic Zone Authority Lecture, discussions,
and other 14.2 Registered enterprises exercises and problem
issurances. solving
14.3 Income tax holiday (ITH) incentive
14.4 5% preferential tax RA No. 7916
14.5 Administrative requirements

Unit 15 – Barangay Micro Business Enterprises 13

15.1 Registration and operation of Barangay Micro Lecture, discussions,
Business Enterprises (BMBE) exercises and problem
15.2 Incentives and benefits solving
15.3 Administrative requirements RA No. 9178

Calculate income Unit 16 – Double Taxation Agreements 13

tax liabilities of 16.1 Concept of tax treaties/double taxation agreements Lecture, discussions,
taxpayers in 16.2 Permanent establishment exercises and problem
accordance with 16.3 Business profits solving
the tax treaties. 16.4 Royalties OECD Model Tax Treaty
16.5 Dividends
16.6 Interests
16.7 Other income
16.8 Administrative requirements

FINAL EXAMINATION 14 Units 1 to 17

REFERENCES:

A. Books

De Leon, H. S. and De Leon, H. M. (2016) The Law on Income Taxation (With Illustrations, Problems
and Solutions), 15th Edition. Manila, Philippines: Rex Book Store.

Casasola, E. M. (2012) NIRC and Other Tax laws. Manila, Philippines: Rex Book Store.

De Leon, H. S. and De Leon, H. M. (2016) The Fundamentals of Taxation, 17th Edition. Manila,
Philippines: Rex Book Store.

B. Revenue Regulations, Revenue Memorandum Circulars and other BIR Issuances

C. Online Resources

Republic Act (RA) No. 10963 (2017). “Tax Reform for Acceleration and Inclusion.” [Online]. Available
from: http://www.officialgazette.gov.ph/downloads/2017/12dec/20171219-RA-10963-RRD.pdf
(Accessed: January 11, 2018).

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Republic Act (RA) No. 9178 (2002). “An Act to Promote the Establishment of Barangay Micro Busine”ss
Enterprises (BMBEs), Providing Incentives and Benefits Therefor, and for Other Purposes.” [Online].
Available from: http://www.bsp.gov.ph/downloads/laws/RA9178.pdf (Accessed: January 3, 2017).

Executive Order (EO) No. 226 (1987). “The Omnibus Investments Code of 1987.” [Online]. Available
from: http://www.gov.ph/1987/07/16/executive-order-no-226-s-1987/ (Accessed: January 3, 2017).

Republic Act (RA) No. 7916 (1995). “The Special Economic Zone Act fo 1995.” [Online]. Available from:
http://www.peza.gov.ph/index.php/about-peza/special-economic-zone-act (Accessed: January 3, 2017).

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