Corporate Legal

Responsibility
TAX EVASION & TAX AVOIDANCE
Corporate Legal Responsibility

 Registration & Secure Permits/ Licensing

 Enter into contracts
 Sell goods and services
 Health and Safety
 Hire employees
 Own assets
 Pay TAXES

** Reference: Investopedia Tax Law

 CORPORATIONS

CORPORATE SOCIAL
LEGAL RESPONSIBILITY
RESPONSIBILITY

LAW MORAL

ACCOUNTABILITY

**Reference:Mallika Tamvada Article 14Apr2020

What is a TAX?
 a COMPULSORY contribution to state REVENUE, levied by the government
on workers' income and business profits, or added to the cost of some goods, services,
and transactions.

 Enforced contribution
 Payable in Money
 Proportionate in Character
 Levied in persons, property or exercise of a right or privilege
 Levied by the State
 Levied by the Law making body of the State
 Levied for public purpose or purposes.
Types of Taxes
 Business Taxes
1. Income Tax
2. Indirect Tax – Value Added Tax (VAT) and Percentage Tax
3. Excise Tax
4. Documentary Stamp Tax

 Other National Taxes:

5. Estate Tax
6. Capital Gains Tax
7. Withholding Tax
8. Donors Tax
*** Source: Republic Act 8424 or National Internal Revenue Code of 1997
Tax Evasion
Definition:
 Failure to pay or a DELIBERATE underpayment of taxes.

Penalties:
  Imprisonment of not less than 6 years but not more than 10 years and will be fined not less than
P500,000 but not more than P10 million.
 Corporate taxpayers who failed to transmit sales data to the BIR’s electronic sales reporting system
would be penalized with one-tenth of 1 percent of the annual net income reflected in the taxpayer’s
audited financial statements in the second year after the current taxable year, or P10,000, whichever
was higher, for every day of violation.
 Firms/ Businesses who fails to submit sales data for 180 days during the taxable year will also be
permanently closed . Valuable fines/ penalties will not apply.
 The maximum penalty shall apply in case of cumulative suppression of electronic sales record in
excess of the amount of PHP 50 million which shall be considered as Economic Sabotage.

**Source: Republic Act 13-2021

Tax Avoidance
Definition:
 An action taken to lessen tax liability and maximize after tax income. There is a
use of LEGAL METHODS to modify financial situation to lower the amount of
income tax owed.

o Under-reporting or omitting certain income.

o Claim of personal expense as business expense
o Hiding assets or income
 CORPORATIONS

CORPORATE SOCIAL
LEGAL RESPONSIBILITY
RESPONSIBILITY

Revenue Protection
TAX
Gen. Welfare Health Services

Infrastructure ETC.

Tax Evasion Tax Avoidance

ACCOUNTABILITY
Thank you