Dr. V. Orestes Romualdez Educational Foundation, Inc.

College of Law

COURSE TITLE: TAXATION I

COURSE CREDIT : 3 UNITS
CONTACT HOURS: 3 hours of synchronous and asynchronous meetings
INSTRUCTOR: ATTY. JOMILA A. ALVERO-ROBEL, CPA

I. General Principles of Taxation

1. Taxation Defined
2. Theory and Bases of Taxation
2.1 The Life-blood theory
2.2 Necessity Theory
2.3 Benefits Protection / Reciprocity Theory (Doctrine of
Symbiotic Relationship)
2.4 Jurisdiction Over Subjects and Objects

3. Nature of the Taxing Power of the State

3.1 Extent of the Taxing Power

4. Power of Taxation in Comparison to the Other Inherent

Powers of the State
5. Taxes, Defined
5.1 Nature and Characteristics of Taxes
5.2 Requisites of a Valid Tax
5.3 Classification of Taxes
5.4 Tax distinguished from Other Impositions

6. Doctrines of Taxation
6.1 Imprescriptibly of Taxes
6.2 Prospectivity of Tax Laws
6.3 Doctrine of Equitable Recoupment
6.4 Compensation or Set-Off
6.5 Compromise
6.6 Taxpayer’s Suit
6.7 Inapplicability of Estoppel Against the Government
6.8 Means of Escape from Taxation
6.9 Double Taxation

7. Limitations of Taxation
7.1 Inherent Limitations on the Power of Taxation
7.2 The General Constitutional Limitation on Taxation
 8. Stages of a System of Taxation
9. Tax Laws
10. Tax Credit v. Tax Deductions

II. TAX ADMINISTRATION AND PROCEDURES

1. Overview
2. The Bureau of Internal Revenue
3. Jurisdiction, power, and functions of the Commissioner of
Internal Revenue
4. Sources of Internal Revenue

III. INCOME TAXATION

1. Definition, nature, and general principles

1.1 Criteria in imposing Philippine income tax
1.2 Types of Philippine income taxes
1.3 Taxable period
1.4 Kinds of taxpayers

2. Income
2.1 Definition and nature
2.2 When income is taxable .
i. Existence of income
ii. Realization and recognition of income
2.3 Tests in determining whether income is earned for tax
purposes
i. Realization test
ii. Economic benefit test, doctrine of proprietary interest
iii. Severance test
2.4 Tax-free exchanges
2.5 Situs of income taxation

3. Gross income
3.1 Definition
3.2 Concept of income from whatever source derived
3.3 Gross income vs. net income vs. taxable income
3.4 Classification of income subject to tax
i. Compensation income
ii. Fringe benefits
iii. Professional income
iv. Income from business
v. Income from dealings in property
vi. Passive investment income
vii. Annuities, proceeds from life insurance or other types
of insurance
 viii. Prizes and awards
ix. Pensions, retirement benefit or separation pay
x. Income from any source
3.5 Exclusions and exemptions
i. Rationale
ii. Taxpayers who may avail
iii. Distinguished from deductions and tax credits

4. Deductions from gross income

4.1 Concept as return of capital
4.2 Itemized deductions vs. Optional Standard Deduction
4.3 Items not deductible

5. Income tax on individuals

5.1 Resident citizens, non-resident citizens, and resident
aliens
i. Inclusions and exclusions for taxation on
compensation income
ii. Taxation of business income/income from practice of
profession
iii. Taxation of passive income
iv. Taxation of capital gains
v. Capital asset vs. ordinary asset
5.2 Income tax on non-resident aliens engaged in trade or
business
5.3 Income tax on non-resident aliens not engaged in trade
or business
5.4 Individual taxpayers exempt from income tax
i. Senior citizens
ii. Minimum wage earners
iii. Exemptions granted under international agreements

6. Income tax on corporations

6.1 Income tax on domestic corporations and resident
foreign corporations
i. Minimum Corporate Income Tax
ii. Branch Profit Remittance Tax
iii. Itemized deductions vs. Optional Standard
Deductions
iv. Taxation of passive income
v. Taxation of capital gains

6.2 Income tax on non-resident foreign corporations

6.3 Income tax on special corporations
i. Proprietary educational institutions and hospitals
ii. Non-profit hospitals
 iii. Government-owned or controlled corporations, agencies,
or instrumentalities
iv. Domestic depository banks (foreign currency deposit
units)
v. International carriers doing business in the Philippines
vi. Off-shore banking units
vii. Resident foreign depository banks (foreign currency
deposit units)
viii. Regional or area headquarters and regional operating
headquarters of multinational companies
6.4 Improperly Accumulated Earnings Tax (IAET)
6.5 Exemptions from tax on corporations
6.6 Tax on other business entities: general partnerships,
general professional partnerships, co-ownerships, joint
ventures, and consortia

7. Filing of returns and payment

7.1 Period within which to file income tax return of
individuals and corporations
7.2 Substituted filing
7.3 Failure to file returns

8. Withholding taxes
8.1 Concept
8.2 Creditable vs. withholding taxes
8.3 Duties of a withholding agent

INSTRUCTIONAL RESOURCES:

1. National Internal Revenue Code, as Annotated by E. Casasola

2. Dimaampao, Japar (2018/Sixth Edition), Basic Approach to Income
Taxation, Rex Book Store, Inc
3. Dimaampao, Japar (2018/Fifth Edition), Tax Principles and Remedies
4. Ingles, Ignatius Michael D. (2018/Second Edition), Tax Made Less Taxing: A
Reviewer With Codals and Cases
5. Domondon, Abelardo T., Principles of Taxation
6. Local Government Code (Related Provisions of Taxation)
7. BIR Revenue Regulations
8. CTA and SC Decisions for Tax Cases