I.

SITUS OF TAXATION
Means place of taxation. It determines what State can levy and collect a tax.

FACTORS AFFECTING THE SITUS OF TAXATION

1. Subject Matter - what is being taxed. It can be a person, property or

right/activity/privilege.
2. Nature of Tax to be imposed - what tax is to be imposed. It can be income tax,
community tax, value added tax and other taxes.
3. Taxpayer’s place of residence
4. Taxpayer’s citizenship
5. Place where income is earned, business or occupation being conducted and location of
the property.

II. DIRECT DOUBLE TAXATION

It is prohibited because it violates the constitutional provision on uniformity and equality. It
means:
1. the subject matter is taxed twice
2. By the same taxing authority
3. Within the same jurisdiction or taxing district
4. For the same purpose
5. In the same year or taxing period
6. Same kind or character of tax
III. INTERPRETATION OF TAX LAWS
A. In case of doubt, tax statutes are construed strictly against the government and liberally
in favor of the taxpayer.
B. The tax laws are prospective in operation
C. The tax laws do not presume exemption. The person claiming the exemption shall
prove his exemption from taxation.

IV. CLASSIFICATION OF TAXES

A. As to subject matter
1. Personal/Poll/Capitation - the subject matter is the person residing in a certain
territory. Ex. community tax.
2. Property - the subject matter is the property. Ex. real property/estate tax.
3. Excise - the subject matter is the right, activity or privileges. Ex. Income tax, estate tax,
donor’s tax, VAT, Other Percentage Tax, Excise Tax, Documentary stamp tax, etc
B. As to who bears the burden
1. Direct - taxes which cannot be shifted to others. Ex. income tax, estate tax, donor’s tax,
some percentage tax, etc.
2. Indirect - taxes which can be passed on to others. Ex. VAT, Excise tax on alcoholic
beverages, tobacco products, sweetened beverages, customs duties, some percentage taxes
C. As to determination of amount
1. Specific - tax is based on a unit of measure. Ex. excise tax
2. Ad Valorem - tax is based on the value of the property subject to tax. Ex. estate tax, real
property tax, donor’s tax, capital gains tax
D. As to Purpose
1. Fiscal/General/Revenue - taxes imposed to generate funds for the government.
Ex. Income tax, VAT, Other Percentage Tax, Estate tax, donor’s tax
2. Regulatory/Special - taxes imposed to attain social and economic ends. Ex.
Customs duties on imported goods.
E. As to Authority Imposing the tax
1. National - imposed by the National Government. Ex. Income tax, estate tax,
donor’s tax, capital gains tax, documentary stamp tax, excise tax, customs duties, VAT,
Other Percentage taxes
2. Local - imposed by the local government. Ex. community tax, real property tax,
amusement tax (cinemas)