General Principles (Definitions and Enumerations) Flashcards
(28 cards)
What are types of National Internal Revenue Taxes?
- Income Tax
- Estate and Donors Tax
- Value-Added Tax
- Other Percentage Taxes
- Excise Taxes
- Documentary Stamp Taxes
- Others (hereafter imposed and Collected)
What are Capital Gains Taxes?
this is a tax imposed on the gains presumed to have been realized by the seller from the sale, exchange, or other disposition of capital assets located in the Philippines, including pacto de retro sales and other forms of conditional sales.
What is a DST?
This is a tax on documents, instruments, loan agreements and papers evidencing the acceptance, assignment, sale or transfer of an obligation, rights or property incident thereto.
What is donor’s tax?
This is a tax on a donation or gift and is imposed on the gratuitous transfer of property between two persons who are living at the time of the transfer.
Define Estate Tax?
It is a tax on the right of the deceased person to transmit his or her estate to her lawful heirs and beneficiaries at the time of death and on certain transfers which are made by law as equivalent to testamentary disposition;
Define Income Tax.
a tax on all yearly profits arising from property, profession, trades or offices as a tax on person’s income, emoluments, profits, and the like
Define Percengtage Tax.
Percentage tax is a business tax imposed on persons or entities who sell or lease goods, properties or services in the course of trade or business whose gross annual sales or receipts do not exceed 550K and are not VAT-Registered.
What is VAT?
Vat is a business tax imposed and collected from the seller in the course of trade or business on every sale of properties real or personal lease of goods or properties real or personal or vendors of service. It is an indirect tax; thus it can be passed on to the buyer.
Withholding tax on compensation, what is this animal?
This is the tax withheld from individuals receiving purely compensation income.
Expanded Withholding Tax –
this is a kind of withholding tax, obviously, which is prescribed only for certain payors and is creditable against the income tax due of the payee for the taxable quarter year/
Final withholding tax
– another type of withholding tax which is prescribed only for certain payors and is creditable against the income tax due of the payee for the taxable year. Income tax withheld constitutes the full and final payment of the income tax due from the payee on the said income.
Withholding tax on government money payments.
Withholding tax with held by the government offices and instrumentalities including GOCC’s and LGU’s before making any payments to private individuals, corporations, partnerships and or associations.
What is double taxation?
Means taxing twice the same taxpayer for the same tax period upon the same thing or activity, when it should be taxed but once, for the same purpose and with the same kind of character of tax.
What is transformation in relation to escaping from taxes?
TRANSFORMATION – method of escape in taxation whereby the manufacturer or producer upon whom the tax has been imposed pays the tax and endeavors to recoup himself by improving his process of production thereby turning out his units of products at a lower cost. The taxpayer escapes by a transformation of the tax into a gain through the medium of production.
Define tax evasion and cite and example.
Tax Evasion - is the use by the taxpayer of illegal or fraudulent means to defeat or lessen the payment of a tax. It is also known as “tax dodging.” It is punishable by law.
Example: Deliberate failure to report a taxable income or property; deliberate reduction of income that has been received.
What are the elements of tax evasion?
Elements of Tax Evasion
(a) The end to be achieved. Example: the payment of less than that known by the taxpayer to be legally due, or in paying no tax when such is due.
(b) An accompanying state of mind described as being “evil,” “in bad faith,” “willful” or “deliberate and not accidental.”
(c) A course of action (or failure of action) which is unlawful.
What is taxation?
Taxation is a mode by which governments make exactions for revenue in order to support their existence and carry out their legitimate objectives.
What is the Lifeblood theory?
Taxes are the lifeblood of the government and their prompt and certain availability is an imperious need. [CIR v. Pineda]
What is Necessity theory?
The power of taxation proceeds upon theory that the existence of government is a necessity; that is cannot continue without means to pay its expenses; and that for those means it has the right to compel all citizens and property within its limits to contribute.
What is Shifting of tax burden?
Shifting - the transfer of the burden of a tax by the original payer or the one on whom the tax was assessed or imposed to someone else. What is transferred is not the payment of the tax but the burden of the tax.
All indirect taxes may be shifted; direct taxes cannot be shifted.
Meaning of impact and incidence of taxation.
Impact of taxation is the point on which a tax is originally imposed. In so far as the law is concerned, the taxpayer, the subject of tax, is the person who must pay the tax to the government.
Incidence of taxation is that point on which the tax burden finally rests or settles down. It takes place when shifting has been effected from the statutory taxpayer to another.
What is tax avoidance?
The exploitation by the taxpayer of legally permissible alternative tax rates or methods of assessing taxable property or income in order to avoid or reduce tax liability. It is politely called “tax minimization” and is not punishable by law.
WHAT IS THE RULE REGARDING COMPENSATION AND SET-OFF?
General rule: Internal revenue taxes cannot be the subject of set-off or compensation [Republic v. Mambulao Lumber, G.R. No. L-17725, February 28, 1962].
WHAT IS THE EXCEPTION TO NON-COMPENSATION AND NON-SET-OFF OF TAXES?
Exception: If the claims against the government have been recognized and an amount has already been appropriated for that purpose. Where both claims have already become due and demandable as well as fully liquidated, compensation takes place by operation of law under Art. 1200 in relation to Articles 1279 and 1290 of the NCC, and both debts are extinguished to the concurrent amount. [Domingo v. Garlitos, G.R. No. L-18994, June 29, 1963]
