INTAX
INTAX
INTAX
o Secondary Purposes
🔍︎: Sin Taxes
✓ To redistribute wealth
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1. Bureau of Customs
2. Bureau of Internal Revenue (BIR)
🔍︎: THE PROCESS (IN GENERAL)
III. Judicial Branch
HOUSE OF REPRESENTATIVES
1. Preparation/Drafting Quasi-Judicial Body
2. First Reading - Has ability to interpret the bill
3. Committee Consideration/Action - BIR Commissioner
4. Second Reading
5. Third Reading
6. Transmittal to Senate If there are issues concerning the
interpretation of tax laws (by BIR),
HOUSE OF SENATE the exhaustion of administrative
1. Senate Action (same process) remedy must be followed.
2. Conference Committee
3. Transmittal to President
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House of Representatives. It is
If straight to Supreme Court, case important to emphasize this,
will be dismissed. because a bill originating in the
House may undergo such
extensive changes in the Senate
o CREATION OF TAX BILLS that the result may be a rewriting
Art. VI, Sec. 24, 1987 Constitution: of the whole.”
- “All appropriation, revenue or
tariff bills, bills authorizing
increase of the public debt, bills f o APPLICATION OF TAX LAWS
local application, and private bills General Rule: Prospectively
shall originate exclusively in the applied
House of Representatives, but Exception: Retroactive
the Senate may propose or effect is expressly declared
concur with amendments.”
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Imposed on same
subject matter Administrative Feasibility
For the same purpose - Effective enforcement
By the same taxing
authority Theoretical Justice
Within the same - Ability to pay
jurisdiction
During the same taxing
period o STAGES OF TAXATION
Of the same Levy/Imposition
kind/character Assessment (self-assessment)
Payment (pay as you file)
- Assessment and collection
o INDIRECT DOUBLE TAXATION - Refund
- Happens when taxation
repeats but these happen: o SITUS OF TAXATION
Foreign tax credit - Place whet ethe tax should
Tax exemption expressly be paid
provided - Jurisdiction of taxing
Tax treaty authority
Reciprocal tax treatment
Example:
o COMPENSATION: OFF-SETTING Municipality of Cainta v. City of
OF TAXES Pasig, G.R. No. 1767703, 28 June
2017:
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IRREVOCABLE TRUST
MANDATORY DEDUCTIONS –
Cannot be modified
PAYROLL
The asset involved is removed
GSIS/SSS
from the trustor’s list of
PHILHEALTH
properties
PAG-IBIG CONTRIBUTIONS
The asset will be distributed
UNION DUES
according to the agreed plan
WITHHOLDING TAX
Taxable
MARRIED TAXPAYERS
Sec. 51. D, NIRC:
- “Married individuals, whether
citizens, resident, or
nonresident aliens, who do
not derive income purely
from compensation, shall
file a return for the taxable
year to include the income of
both spouse, but where it is
impracticable for the
spouses to file one return,
each spouse may file a
separate return of income
but the returns so filed shall
be consolidated by the
Bureau for purposes of
verification for the taxable
year.”
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COMPENSATION IN KIND
RR-98:
“If services are paid for in a medium other
than money, the fair market value of the
thing taken in payment is the amount to be
included as compensation subject to
withholding.”
LESSON 3: WITHHOLDING TAX ON
COMPENSATION
LIVING QUARTERS OR MEALS
MANDATORY CONTRIBUTIONS
RR 2-98:
GSIS
PHILHEALTH General Rule
PAG-IBIG Contributions (HDMF)
“If a person receives a salary as
Union Dues
remuneration for services rendered,
and in addition thereto, living
quarters or meals are provided the
COMPENSATION value to such person of the quarters
RR 2-98: or meals so furnished shall be added
to the remuneration paid for the
“In general, the term “compensation” means purpose of determining the amount
all remuneration for services performed by of compensation subject to
an employee for his employer under an withholding.”
employer-employee relationship.”
Exception
RR 2-98:
“However, if living quarters or meals
“The name by which the remuneration are furnished to an employee for the
for services is designated is immaterial. convenience of the employer, the
Thus, salaries, wages, emoluments, and value thereof need not be included
honoraria, allowances, commissions (e.g. as part of the compensation income”
transportation, representation,
entertainment, and the like); fees including
director’s fees, if the director is, at the same NON-TAXABLE BENEFITS
time, an employee of the
employer/corporation; taxable bonuses and Do not include in the computation.
the fringe benefits except those which are Such as, among others:
subject to the fringe benefits tax under Se. - 13th-month pay, and other
33 of the code; taxable pensions and benefits not exceeding a total of
Php90,000
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PAYMENT OF FBT
Presumed to be withheld at source
Paid by the employer
Paid quarterly
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FRINGE BENEFIT TAX (PART 2) “If the employer purchases the car on an
installment basis, the ownership of which is
EXEMPT HOUSING PRIVILEGES
placed in the name of the employee, the
House privilege granted to the value of the benefit shall be the
military officials of the armed acquisition cost exclusive of interest,
forces of the Philippines. divided by five (5) years. The monetary
value of the fringe benefit shall be the entire
Housing unit situated within the value of the benefit regardless of whether
vicinity or adjacent to, not more he motor vehicle is used by the employee
than 50 meters from the premises partly for his personal purpose and partly for
of a business. the benefit of his employer.”
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percent (50%) of the value of the higher, is hereby imposed upon capital
benefit.” gains presumed to have been realized from
the sale, exchange, or other disposition of
real property located in the Philippines,
“The use of aircraft (including helicopters) classified as capital assets, including pacto
owned and maintained by the employer de retro sales and other forms of conditional
shall be treated as business use and not be sales, by individuals, including estates and
subject to the fringe benefits tax.” trusts.”
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