DE LASALLE UNIVERSITY MANILA

Syllabus
COLLEGE: College of Business
COURSE CODE: BUSLAW3 (Law on Income, Transfer and Business Taxes)

DEPARTMENT: Commercial Law

CLASS DAYS AND CLASS TIME:

COURSE DESCRIPTION: The course is the introduction to taxation, income, transfer and business taxes. It deals with the underlying
principles behind the imposition of the tax in general, and income tax and transfer and business taxes in particular. It emphasizes the social and
moral responsibility of the people to pay the taxes in support of the government in order that the government will be able to discharge its
appropriate functions, i.e., to render services in favor of its citizenry. The emphasis is on the application of the theory and principles in
understanding Philippine tax system and solving income, transfer and business tax problems. It tests the students conceptual knowledge and
proficiency in the practical application of the law as they relate to accounting practice, and use the same knowledge to enhance human
development and social transformation.
The course is divided into fourteen (14) weeks at two (2) meetings/week. Each session last for one hour and a half (1 ).

LEARNING OUTCOMES (LO):

On completion of the course, the student is expected to be able to do the following:
To assess, interpret and analyze the taxpayers obligations and responsibilities, and apply the existing tax principles and encourage tax
compliance in dealing with personal and business concerns.

GRADING SYSTEM:

The student will be graded according to the following:

Midterm Grade: Average of 3 Quizzes and Recitation
Second-Half Grade: Average of 3 Quizzes and Recitation
Final Grade: 35% Midterm Grade + 35% Second-Half Grade + 30% Final Exam
LEARNING PLAN:
LEARNING
OUTCOME

TOPIC

Remedies & Procedure on Possible Tax

Litigations
Principles of Income Taxation
Income Taxation of Individual, Estate
and Trust
Income Taxation of
Corporation

LEARNING
ACTIVITIES
Research; Discussion; oral and written examination
Recitation; Discussion of the Applicable Constitutional
Provision to Taxation
Recitation; oral and written examination

4
5

Recitation, oral and written examination

Computation; Exercise and Filling in of ITR for Individual

Computation, Practice Computation in Filling Up ITR for

Corporation

Principles of Transfer Taxes

Taxation
Basic Provisions on Wills &
Succession
Estate Taxation/ Different
Property Relations in Marriage
Settlement
Donors Taxation

Discussion

Recitation and written examination

Basic Principles of Taxation

Provisions of 1987 Constitution

Principles of Business Taxes

Value Added Taxes and Other
Business Taxes
Final Examination

WEEK
NO.
1
2

8-9

Computation, Practice Computation in Filling Up ETR

Applying the different form of marriage settlement

10

Recitation, Computation in Filling Up DTR

11

Discussion/ Recitation

11-13

Research; Classification and Practice Identification of

Transactions; Filling of VAT and other business tax
returns

14

REFERENCES:
SUGGESTED REFERENCES
A. Books
1. National Internal Revenue Code, as amended, latest edition
2. Llamado Jr., Crispin P and Manuel M. San Diego, Philippine Income Tax, latest edition
3. Valencia, Edwin G and Gregorio F. Roxas, Income Taxation
Principles and Laws with Accounting Applications, latest Edition
4. de Leon, Hector S. and Hector M. de Leon, Jr., The Fundamentals of Taxation, latest edition
5. de Leon, Hector S. and Hector M. de Leon, Jr., The Law on Income Taxation, latest edition
6. Dimaampao, Basic Approach to Income Taxation, latest edition
7. Mamalateo, Philippine Income Tax, latest edition
8. de Leon, Hector S. and Hector M. de Leon, Jr., Transfer and Business Taxes, latest edition
9. Tamayo, Asser S. Business and Transfer Taxes
10. Reyes, Virgilio D., Income Tax Law and Accounting, latest edition
11. Reyes, Virgilio D., Philippine Transfer and Business Taxes, latest edition
B Revenue Regulations, Memorandum Circulars
C. Supreme Court decisions

ONLINE AND ELECTRONIC RESOURCES:

Sources of Case-Laws / Jurisprudence:

Lex Libris, CD Technologies Asia, Inc.

Supreme Court Website www.sc.judiciary.gov.ph

BIR Website: www.bir.gov.ph

Philippine Laws and Jurisprudence Databank: www.lawphil.net

CLASS POLICIES:
Attendance. Students are expected to come to class diligently and on time. The maximum class days that a student may be absent is 5 days. 2
occasions of tardiness constitute 1 absence from class. Absence approved and sanctioned by the University shall not be counted against the
student. However, the student is nevertheless responsible and therefore not excused for missed class activities, tests and other class
requirements.
Written Output. All exams, projects, reports, papers and other written outputs must be submitted on time or not later than the date and the
time specified by the professor. Any requirement submitted after the specified date and time shall no longer be received and accepted, and shall
get a grade of 0.0.
Respect and Decorum. The students are expected to observe proper decorum and shall give respect to both his/her professor and classmates.
Final Grade. As a general rule, the passing grade for the class is 1.0.
Cheating, Plagiarism and Acts of Dishonesty. Any form of dishonesty is extremely prohibited and shall be severely dealt with by the University
through the Discipline Office and the Student Handbook.

COURSE OUTLINE
Part 1 Principles of Taxation and Remedies
A.
Meaning of Taxation
B.
Nature, Theory, Basis, Purpose, Scope and Aspect of Taxation
C.
Principles of sound tax system
D.
Similarities and differences among taxation, police power and eminent domain
E.
Limitations of the power of taxation (inherent limitations and constitutional limitations )
F.
Situs/place of taxation
G.
Double taxation (direct and indirect)
H.
Taxes
a.
Essential characteristics
b.
Classification
c.
Tax vs. other charges (toll, special assessment, license fee, debt)
I.
Forms of Escape from Taxation including Tax evasion vs. tax avoidance
J.
Powers and authority of the Commissioner of Internal Revenue under Section 4 to 7, Title 1 of the Tax Code
K.
Tax Remedies
1.
Remedies of the Government (State)
1.
Definition, scope, prescriptive period
2.
Administrative remedies (compromise, levy and distraint)
3.
Judicial actions (civil or criminal)
2.
Remedies of the Taxpayer
1.
Prescriptive periods
2.
Administrative remedies
1.
Against an assessment (protest, request for reinvestigation)
2.
Request for refund or credit of taxes (recovery of erroneously or
illegally collected taxes, forfeiture of cash refund and tax credit)
3.
Expanded jurisdiction of the Court of Tax Appeals (limited to jurisdiction)
Part 2 Income Tax
A. Income tax

B.

1.
2.
3.
4.
Taxpayer and tax base
1.

Definition of Income Tax

Functions, Nature and Purpose of Income Tax
General Principles of Philippine Income Taxation
System of Taxation
Individuals
Classification (citizens, aliens, pure compensation income earner, pure business or
professional income earner, mixed income earner)
c.
Basic and personal exemptions
d.
Premium payments for health and/or hospitalization insurance
e.
Tax on aliens employed by regional operating headquarters of multinationals,
offshore banking units, petroleum service contractor or subcontractor
Corporations
a.
Classification (domestic and foreign)
b.
Income taxes
1.
regular corporate income tax
2.
minimum corporate income tax
3.
optional corporate income tax
4.
improperly accumulated earnings tax
c.
Special corporations
1.
Domestic (proprietary educational institution, non profit hospitals,
government owned or controlled corporation, etc.)
2.
Resident foreign (international carriers, offshore banking units, regional
operating headquarters of multinationals, branch profits remittances)
3.
Non-resident foreign (lessors of equipment, aircraft and machinery; owners of
vessels chartered by Philippine nationals, lessor, distributor or owner of
cinematographic films)
Partnerships (general professional partnerships and business partnerships)
Joint ventures (exempt and taxable)
b.

2.

3.
4.

5.

Estate and trust (exempt and taxable)

Part 3. Gross income

1.
2.
3.

Income
Inclusions/exclusions from the gross income
Kinds of income
a. Compensation
b. Passive income
1. Final withholding tax
c. Business
4.
Compensation income
a. Nature
b. Inclusions/exclusions
c. Withholding tax
d. Computations
e. Fringe benefits tax
5.
Capital gains tax on sale of real property classified as capital asset and the applicable
documentary stamp tax ( including exemption from the capital gains tax)
6.
Capital gains tax on sale of shares of stock not through the local stock exchange and the applicable
documentary stamp tax
7. Business income, income derived from business, trade, practice of profession, gains derived from
dealings in property, interest, rents, royalties, dividends, annuities, prizes and winnings, pensions,
partners distributive share from the net income of the general professional partnership; other income)
8.
Computation of the gross income
9.
Withholding of taxes
Part 4 Deductions from gross income
A. Deductions from gross income
1. Items not deductible
2. Optional Standard deduction
3. Itemized deductions
a. deductions in general
b. expenses
c. losses
d. interest
e. taxes
f. depreciation
g. depletion
h. contribution to pension trust
i. charitable contributions
j. research and development
Part 5 Computation of income tax liabilities
A. Computation of income tax liabilities
1. Individual taxpayers
a. Resident citizen
b. Non resident citizen
c. Resident alien
d. Non resident alien engaged in trade or business
e. Non resident alien not engaged in trade or business
2.
Estates and trusts
a. Estate/trust subject to tax
b. Estate/trust not subject to tax
3. Corporate taxpayers
a. Partnerships 1. Partnerships subject to tax 2. Partnerships not subject to tax
b. Corporation 1 Domestic 2 Resident foreign 3 Non resident foreign
Part 6 Tax return preparation and compliance requirements
A.
Tax return preparation and tax payments (computation, venue and due dates)
B.
Regular filing (including substituted filing of return and electronic filing )
C.
Large taxpayers and non-large taxpayers
D.
Income tax credits (local and foreign)
E.
Payment of taxes in installment
a. Capital gains tax b. Tax due exceeds P2,000.00
F.
Accounting periods (calendar year, fiscal year, short accounting period)
G.
Accounting methods
H. Compliance requirements
1. Administrative requirements (registration, issuance of receipts, printing of receipts
2. Attachments to the income tax return, including CPA certificate, per NIRC requirement
3.
Keeping of books of accounts and records, including report of inventories
4. Prescriptive period of books of accounts and other accounting records.
Part 7 Transfer taxes
A. Transfer taxes B. Estate taxes C. Law on Succession
1. Kinds of succession
2. Kinds of wills
3 Kinds of Decedents
4 Kinds of Properties/Property relationships
a.
Conjugal properties, b. Community properties, c. Exclusive properties
Part 8 Gross Estate
A. Gross estate
1 Inclusions/ Exclusions from the gross estate
2 Transfers of property subject to tax
a.
Decedents interest
b.
Transfers in contemplation of death

c.
d.
e.
f.
g.

Revocable transfers
Property passing under the general power of appointment
Proceeds of life insurance
Prior interest
Transfers for insufficient consideration

Part 9 Deductions from the Gross Estate

A Deductions allowed from the estate (ordinary and special deductions)
1 Ordinary deductions
a. Expenses, losses, indebtedness, taxes
1. funeral expenses
2. judicial expenses of testamentary or intestate proceedings
3 claims against the estate
4 claims against insolvent persons
5 unpaid mortgage or indebtedness on property
6 taxes
7 losses
b. Transfer for public use
c. Vanishing deduction
2. Special deductions
a. Family home
b. Standard deduction
c. Medical expenses
d. Amounts received by heirs under RA 4917
3.
Share of the surviving spouse
Part 10 Computation of tax, tax returns and attachments
A. Tax credit for estate tax paid to a foreign country
B. Filing of estate tax returns, payment of estate tax requirements
C. Attachments to the estate tax return, including CPA certificate
Part 11 Donors Tax
A Donors tax
B. Donations, kinds and formalities
1 Gross gift
2. Exemption of certain gifts and other deductions from gross gift
3. Tax rates in general and when the donee is a stranger
4. Computation of taxable gifts, donors tax
5. Filing of donors tax returns, payment and requirements
Part 12 Business Taxes
A. Value Added Tax
1. VAT-subject transactions
a. Sale of goods or properties (actual sales, deemed sales, zero rated sales)
b. Sale of services and lease of properties (actual sales or lease, zero rated sales)
c. Importation
2. VAT exempt transactions
3. Input Value Added taxes
a. Passed-on VAT
b. Transitional VAT input
c. Presumptive VAT input
d. Withholding VAT (creditable and final)
e. Excess VAT input in previous return
4. Refund of VAT input (zero rated sales, purchase of land and capital goods)
5. Compliance requirements (invoicing, returns and payment of value added tax; power of the Commissioner to
suspend business)
Part 13 Percentage taxes
A Percentage taxes
B. Taxpayer, tax base and tax rates
1. Tax on persons exempt from value added tax
2. Tax on domestic or international carrier (including exemptions)
3. Tax on franchise
4. Overseas communications tax (including exemptions)
5. Tax on banks & non-bank financial intermediaries performing quasi-banking functions
6. Tax on other non-bank financial intermediaries
7. Tax on life insurance
8. Tax on agents of foreign insurance companies
9. Amusement taxes
10. Tax on winnings
11. Stock transaction tax
C. Returns and payment of percentage tax (regular and electronic filing)
Part 14. Excise Tax, Documentary Stamp Tax and Community Tax