MINDANAO STATE UNIVERSITY

COLLEGE OF LAW

COURSE SYLLABUS

A. COURSE CATALOGUE DESCRIPTION

1. Subject/ Course Code : Law 302

2. Course Description : Taxation 2
3. Semester Offered : A.Y. 2022-2023
4. Course Credit : 2 units
5. Schedule :
6. Number of Hours : 2 hours
7. Meeting Type : Face to face
8. Faculty : Norossana Alauya Sani

B. COURSE OUTLINE

B.1 Course Coverage

WEEKS TOPICS No. of

Hours/Session
1 Introduction & House Rules 2 HRS
Review of Taxation 1 and Overview of Taxation 2
2 I. NATIONAL TAXATION 2 HRS

A. TAXING AUTHORITY
1. Jurisdiction, power, and functions of the Commissioner
of Internal Revenue
2. Rule-making authority of the Secretary of Finance

B. INCOME TAX
1. Definition, nature and general principles
a. Income tax systems
1) Global
2) Schedular
3) Others
b.Features of the Philippine income tax law
c. Criteria in imposing Philippine income tax
1) Citizenship
2) Residence
3) Source
d.General principles of income taxation
e.Types of Philippine income taxes
f. Kinds of taxpayers
g.Taxable period Session
2. Concept of income
a. Definition
b. When income is taxable
1) Existence of income
2) Realization of income
 3) Recognition of income
c. Tests in determining whether income is earned
for tax purposes
1) Realization test
2) Claim of right doctrine or doctrine of
ownership, command or control
3) Economic benefit test or doctrine of
proprietary interest 4) Severance test
d. Methods of accounting
1) Distinguish: cash and accrual method
2) Special method: instalment, deferred
payment, percentage of completion (in
long-term contracts)
e. Situs of income
3-4 Gross income 4 HRS
a. Definition
b. Distinguish: gross income, net income, and taxable
income
c. Sources of income subject to tax
1) Compensation income
2) Fringe benefits
3) Professional income
4) Income from business
5) Income from dealings in property
a) Distinguish ordinary asset and capital
asset
b) Types of gains
c) Special rules pertaining to income or loss
from dealings in property classified as
capital asset (loss limitation rule, loss carry-
over rule, holding period rule)
d) Tax-free exchanges
6) Passive investment income
a) Interest
b) Dividend
c) Royalty income
d) Rental income
7) Annuities and proceeds from life insurance or
other types of insurance
8) Prizes and awards
9) Pension, retirement benefit, or separation pay
10) Income from any source
a) Condonation of indebtedness
b) Recovery of accounts previously written
off
c) Receipt of tax refunds or credit
d. Exclusions
1) Rationale
2) Taxpayers who may avail
3) Distinguish: exclusions, deductions, and tax
credits
4) Exclusions under the Constitution

5 2 HRS
Deductions
a. General rule
b. Concept of return of capital
 c. Distinguish: itemized deductions and optional
standard deduction
d. Requirements for deductible items
e. Items not deductible

6-7 Income Tax on Individuals (TRAIN LAW) 4 HRS

a) Resident citizens, non-resident citizens, and
resident aliens
1) Coverage
2) Taxation on compensation income
a. Inclusions
b. Exclusions
3) Taxation of business income/ income
from practice of profession
a. Schedular
b. 8% option
4) Taxation of partners in a general
professional partnership
5) Taxation of passive income
6) Taxation of capital gains
a. Income from sale of shares of
stock of a Philippine corporation
b. Income from sale of real property
situated in the Philippines
c. Income from sale, exchange, and
other disposition of other capital
assets
b)Non-resident aliens engaged in trade or business
c) Non-resident aliens not engaged in trade or
business
d)Aliens employed by regional headquarters,
regional operating headquarters, offshore banking
units, and petroleum service contractors
e)Individual taxpayers exempt from income tax
1) Minimum wage earner
2) Exemptions granted under international
agreements

8-10 Case Analysis: Important /Latest Jurisprudence 6 HRS

pertaining to Midterm Topics (10 cases)
11 MIDTERM EXAMINATION
12-13 Income Tax on Corporations (CREATE LAW) 4 HRS
a) Domestic corporations
1) Taxation – in general
a. Regular Corporate Income Tax
(RCIT)
b. Minimum Corporate Income Tax
(MCIT)
c. Taxation of passive income
d. Taxation of capital gains
e. Improperly accumulated earnings
tax
2) Proprietary educational institutions and
nonprofit hospitals
3) Government-owned or controlled
corporations, agencies, instrumentalities
4) Foreign currency deposit units
 b) Resident foreign corporations
1) Taxation – in general
a. Regular Corporate Income Tax
(RCIT)
b. Minimum Corporate Income Tax
(MCIT)
c. Branch Profits Remittance Tax
(BPRT)
d. Taxation of passive income e.
Taxation of capital gains
2) Resident foreign corporations subject to
preferential tax rates
a. International carriers
b. Foreign currency deposit units
and offshore banking units
c. Regional or area headquarters and
regional operating headquarters
c) Non-resident foreign corporations (NRFC)
1) Taxation of NRFC in general
2) NRFCs subject to preferential tax rates
d) Corporations exempt from income tax
e) Tax on other business entities: general
partnerships, general professional partnerships, co-
ownerships, joint ventures, and consortia

14 Filing of returns and payment 2 HRS

a) Individual return
1) Who are required to file; exceptions
2) Substituted filing
3) When and where to file
b) Corporate returns
1) Quarterly income tax
2) Final adjustment return
3) When and where to file
4) Return of corporations contemplating
dissolution or reorganization
c) Return on capital gains realized from sale of
shares of stock and real estate

Withholding tax
a) Concept
b) Final withholding tax
c) Creditable withholding tax
1) Expanded withholding tax
2) Withholding tax on compensation
d) Fringe benefits tax
e) Duties of a withholding agent

15 Case Analysis: Important and Latest 2 HRS

Jurisprudence pertaining to Final Topics (5
cases)
FINAL EXAM

B.1.a. Cases for Study- to be assigned.