CODE OF ETHICS

RELATION TO THE
GOVERNMENT
By:
ATTY. RHANDELL ALVIN B. MATULOY
TWO ASPECTS OF RELATIONSHIP WITH
THE GOVERNMENT WITH RESPECT TO
TAXATION
BIR

PAYMENT OF PAYMENT OF
RESP’s OWN TAX CLIENT’S TAXES
CASE STUDY:
• SPOUSES X and Y want to transfer a real property worth
Php12,000,000.00 to their engaged son as a gift on 31 December
2017. They have two concerns:
1. The expensive donor’s tax under 1997 National Internal Revenue
Code;
2. They do not want the future wife of their son to be benefited by
transfer.

What would you advise Spouses X and Y?

 TAX SITUATION
PREVAILING ON 31
DECEMBER 2017
https://pinoygeektivist.wordpress.com/2018/01/06/2017-amendments-to-the-national-internal-revenue-code-by-the-train-law
PROPERTY RELATIONS
OF HUSBAND AND WIFE
PREVAILING
 MARRIAGE SETTLEMENT
* made before celebration of marriage

* in writing (even modifications)

* signed by the parties

* should not prejudice third persons unless registered in the civil

registry

* to fix terms and conditions of their property relations

additional signatories
- 18-21: parents
- civil interdictees & disabled: guardian
rearranged from San Beda Law Memory Aid
SYSTEM OF ABSOLUTE COMMUNITY
The property regime of the
spouses in the absence of a
marriage settlement or when
the marriage is void. This is so
because it is more in keeping
with Filipino culture.
rearranged from San Beda Law Memory Aid
IF MARRIED ON OR
AFTER
03 AUGUST 1988
COMMUNITY PROPERTY
GENERAL RULE:
- shall consist of all property owned by the
spouses at the time of the marriage or acquired
thereafter.
EXCEPTIONS:
1. property acquired before the marriage by
either spouse who has legitimate descendants by
a former marriage
2. property for personal and exclusive use except
jewelry
rearranged from San Beda Law Memory Aid
COMMUNITY PROPERTY
3. property acquired during the
marriage by gratuitous title, except
when the donor, testator or grantor
expressly provides otherwise
NOTE: No waiver of rights allowed
during the marriage except in case of
judicial separation of property. The
waiver must be in a public instrument.
rearranged from San Beda Law Memory Aid
MARRIAGE PRIOR TO
03 AUGUST 1988
CONJUGAL PARTNERSHIP OF GAINS

It is that formed by a husband and wife

whereby they place in a common fund the
fruits of their separate property, and the
income from their work or industry, the same
to be divided between them equally (as a
general rule) upon the dissolution of the
marriage or the partnership.

rearranged from San Beda Law Memory Aid

Conjugal Partnership Property
1.obtained from labor, industry, work or
profession
2. acquired by chance
3.acquired during the marriage with conjugal
funds
4.fruits of the conjugal property
5.acquired through occupation
6.net fruits of their exclusive property
7.share of either spouse in hidden treasure
rearranged from San Beda Law Memory Aid
 Exclusive Property Of Each Spouse:

1.that which is brought to the marriage as his/her

own;

2.acquired during the marriage by gratuitous title;

3.acquired by right of redemption, barter or

exchange with property belonging to either spouse;

4.purchased with exclusive money of either spouse

rearranged from San Beda Law Memory Aid

 TAX EVASION MANEUVERS
PRIOR TO TRAIN LAW
• PREPARE A DEED OF ABSOLUTE SALE
- ADVANTAGE: SAVE TAXES, 6% CAPITAL GAINS TAX ONLY
- DISADVANTAGE: PROPERTY BECOMES COMMUNITY PROPERTY
EFFECT ON DONOR’S
TAX
OF TRAIN LAW
 TAX RATE
2% to 15% if the donor and flat rate of 6 percent
the donee are related (within regardless of relationship,
4th degree consanguinity in thus the concept of stranger
the collateral line), and 30% if was removed
the donation was to a
stranger
 EXEMPTION
gifts below P100,000.00 gifts below P250,000 are
exempt exempted from tax;
dowries or gifts made on
account of marriage are no
longer exempted
 DOCUMENTARY STAMP TAX (DST)
old new
now subject to P15 for every P1,000;

donations or transfers of real property, such as

gifts made to the national government and to
qualified non-stock, non-profit organizations,
which are exempt from donor’s tax, will also not
be subjected to DST.
PRESUMPTION
old new
a sale, exchange or other transfer of property
made in the ordinary course of business (a
transaction that is a bona fide, at arm’s length
and free from any donative intent), will be
considered as made for an adequate and full
consideration in money or money’s worth.