Exemption from Taxation

Question 1

Tax Exemption

Answer 1

Tax Exemption – is a grant of immunity, express or implied, to particular persons or corporations from the obligations to pay taxes.

Question 2

Grounds for Tax Exemptions

Answer 2

1.May be based on a contract
2.May be based on some ground of public policy, such as, for example, to encourage new and necessary industries.
3.May be created in a treaty on grounds of reciprocity or to lessen the rigors of international
double or multiple taxation which occur where there are many taxing jurisdictions, as in the taxation of
income and intangible personal property

Question 3

True or false. Equity, not a ground for Tax Exemption

Answer 3

True. There is no tax exemption solely on the
ground of equity, but equity can be used as a basis for statutory exemption. At times the law authorizes condonation of taxes on equitable considerations. (Sec 276, 277, Local Government Code)

Question 4

F.Kinds of Tax Exemptions

Answer 4

1. As to basis
   a.Constitutional Exemptions – Immunities from taxation which originate from the Constitution
   b.Statutory Exemptions – Those which emanate from Legislation
2. As to form
   a.Express Exemption – Whenever
   expressly granted by organic or statute of law
   b.Implied Exemption – Exist whenever particular persons, properties or excises are deemed exempt as they fall outside the scope of the taxing provision itself
3. As to extent
   a.Total Exemption – Connotes absolute immunity
   b.Partial Exemption – One where collection of a part of the tax is dispensed with