Principles of Taxation

Question 1

Out of the 3 powers of state, which can be exercised by private entities?

Answer 1

ONLY eminent domain

Question 2

Out of the 3 powers of state, which is inferior to the non impairment clause?

Answer 2

ONLY taxation

Question 3

Similarities of the 3 (LII)

Answer 3

• legislative in nature (congress only)
• inherent
• independent of constitution

Question 4

2 Process of Taxation

Answer 4

1. Levying / Imposition - Impact of Taxation
2. Assessment / Collection - Incidence of taxation

Question 5

Impact of taxation is exercised by what branch of government?

Incidence of taxation is exercised by what branch of government?

Answer 5

Legislative

Executive

Question 6

Scope of Taxation

CUPS

Answer 6

Comprehensive
Unlimited
Plenary
Supreme

Question 7

Theory of Taxation

Answer 7

a necessity (lifeblood doctrine)

Question 8

Basis of Taxation

Answer 8

reciprocal duties (benefits-received)

Question 9

Basic Principles of a Sound Tax System

FAT

Answer 9

Fiscal Adequacy
Administrative Feasibility
Theoretical Justice

Question 10

Inherent Limitation

TIP-END

Answer 10

Territoriality
International Comity
Public Purpose
Exemption of Government
Non Delegation of power of taxation

Question 11

In case of conflict between domestic law and treaty, who will prevail?

Answer 11

treaty

Question 12

GOCC is part of government. They are exempt. True or False?

Answer 12

False (GOCC is taxable)

Question 13

In case of deficiency
- prescription period for assessment

Answer 13

3 years from filing OR deadline of return (whichever is later)

Question 14

In case of deficiency
- prescription period for collection

Answer 14

5 years from date of assessment

Question 15

In case of delinquency
- prescription period for non filing or fraud

Answer 15

10 years from discovery

Question 16

X will not be imprisoned if he did not pay for debt tax. True or False?

Answer 16

True (constitutional limitation)

Question 17

Correct Hierarchy in Tax Cases
- CTA, SC, BIR

Answer 17

BIR → CTA → SC

Question 18

To be exempt from PROPERTY tax, what is the rule for religious, educational, charitable?

Answer 18

Doctrine of Use
ADE (actually, directly, exclusively)

Question 19

To pass a tax exemption law, what must be the number of votes in congress?

Answer 19

Half + 1 (majority)

Question 20

Appropriation of Tariff Bills come from senate. True or False?

Answer 20

False (come from HoR, but senate may propose amendments)

Question 21

What is the primary element for double taxation?

Answer 21

Same subject

Question 22

Examples of National Taxes

BITES-C

Answer 22

• Business Tax
• Income Tax
• Transfer Tax
• Excise Tax
• Stamp Tax
• Custom Duties

Question 23

Specific vs Ad Valorem

Answer 23

Specific - per unit basis
Ad Valorem - based on value

Question 24

Tax vs Toll
- Tax is demand of ownership. True or False?

Answer 24

False (demand of sovereignty)

Question 25

Tax vs Special Assessment - Tax is a personal liability. True or False?

Answer 25

True - Special Assessment → land yung liable na magbayad (since for land lang naman yung special assessment)

Question 26

Tax vs License - Non payment of tax makes a business illegal. True or False?

Answer 26

False (sa license yon, since hindi dapat mag-operate ang business habang di pa nababayaran yung license)

Question 27

Tax vs Debt - Liability to pay tax is not assignable. True or False?

Answer 27

True (Debt → assignable)

Question 28

Tax vs Debt - Tax may be paid in kind and may be subject to set-off. True or False?

Answer 28

False (payable in money, and not subject to set-off)

Question 29

Forms of Escape From Taxation ## Footnote no loss to government

Answer 29

Shifting Capitalization - lower price, buyer will shoulder tax Transformation - increase quantity of production

Question 30

Forms of Escape From Taxation ## Footnote with loss to government

Answer 30

Exemption Evasion (Dodging) Avoidance (Minimization)

Question 31

Power to Destroy. What doctrine is this? ## Footnote DM

Answer 31

Marshall Doctrine

Question 32

Power to Build. What doctrine is this? ## Footnote HB

Answer 32

Holmes Doctrine

Question 33

Fundamental Doctrines in Taxation - Judicial Non Interference

Answer 33

yes

Question 34

Fundamental Doctrines in Taxation - Government's right to collect tax prescribe. True or False?

Answer 34

False (impresciptibility)

Question 35

Fundamental Doctrines in Taxation - Tax is prospective in nature. True or False?

Answer 35

True

Question 36

Fundamental Doctrines in Taxation - Tax is civil in nature (not penal). True or False?

Answer 36

True

Question 37

In case of conflict between tax law and GAAP, who will prevail?

Answer 37

tax law

Question 38

Tax law is strictly against government and liberally in favor of taxpayer. Explain (also explain tax exemption)

Answer 38

yes

Question 39

Revenue Regulation - to specify, define, prescribe rules. True or False? - has no effect of law. True or False?

Answer 39

True False (RR has force and effect of law)

Question 40

BIR Rulings - internal instructions for officer of BIR. True or False? - binding and applicable to addressee only. True or False?

Answer 40

False (definition of RMC) BIR Rulings → Q&A True

Question 41

4 Deputy Commissioner of BIR ## Footnote RILO

Answer 41

Resource Management Information Systems Legal Enforcement Operations

Question 42

Powers of CIR that Cannot be Delegated ## Footnote RICA

Answer 42

- Recomment promulgation of rules and regulations to secretary of DOF - Issue rulings of first impression or to reverse or modify existing rulings of BIR - Compromise or abate tax liability (**XPN** - basic deficiency tax of 500K or less) - Assign and reassign internal revenue officers to establishment where articles subject to excise tax are produced or kept

Question 43

Tax Amnesty vs Tax Condonation ## Footnote Tax Amnesty

Answer 43

- intentional overlooking of state - to give a chance to reform and have a clean slate - no tax liability at all - need not pay anything - can be availed by any qualified taxpayer

Question 44

Tax Amnesty vs Tax Condonation ## Footnote Tax Condonation

Answer 44

- no refund for taxes already paid - condonation from payment of existing tax liability - pays a portion - not always available