LGC of 1991

NO ASSESSMENT – because everything accrues on January 1

All local taxes accrue on January 1, due on January 20 each year. Kahit ano yung date ng effectivity, it all
ends on December 31.
Quarter of installment – only mode of payment, pwedeng installment, it is allowed.
Some are specified in the LGC, while some are not written. Yung mga di nakasulat, kailangan ng local
ordinance (substantive and procedural)
Boundary dispute? – check the TCT to know where to pay

Ordinary local taxes

1. Appraisal/assessment – LGU can revalue or reappraise value of properties every three years.
Hindi naniningil
a. Used for basis of capital gains tax (CGT)
b. done by assessor, treasurer
c. usual: franchise tax, business tax, professional tax
d. basis: operation for the previous year
e. cases:
i. Branch where sales are consummated, dun magbabayad ng tax. But if the main
office also sells, 70% allocated sa branch, 30% sa head office.
ii. Municipality cannot charge a franchise tax. When the municipality becomes a
city, it does not cure the past defect. Charge only from the time it becomes a
city
2. Levy and collection
a. Done by the local treasurer (collection), sanggunian (validity of ordinance)

RPT

CMTA
Importation
3. Begin – enters the territorial jurisdiction of the Philippines for the purpose of importing
4. End – at the time the duties are paid

DOCTRINE OF HOT PURSUIT

 probable cause for BOC to believe na may smuggled goods
 point of entry: hanggang high seas, hanggang di pumasok sa
 200 nm ng ibang bansa
 what can the BOC seize?
o Privately chartered – seize the vessel and goods unless the owner is not aware that
there were illegal goods
o commercial – seize the goods unless the owner is aware that the goods have illegal
goods
 The BOC can open the thing? YES
 If the thing exits the BOC – pwede pa din habulin yung car only up to the gate of a house, etc.
(residential dwelling, protected); commercial building – pwede kahit search warrant
CRIMINAL CASES
SoJ denying PetRev  CTA
CTA can entertain an appeal from SoJ denying the PetRev for tax criminal cases

NIRC

SELF DECLARATION – you tell them how much youll pay depending on how much you earn.
False return (inadvertent) – 3 years
 amend return 3 years from filing, provided that no notice of assessment is received by the taxpayer
 amend to increase the tax due, not to decrease the tax due. Meaning, yung increase is subject to
penalties, interests, and surcharges
False with intent to evade payment– 10 years from discovery of falsified return
Fraud – 10 years from discovery of fraudulent return

RETURN
- CIE: 15 April, the following year, unless substituted filing is allowed
o Substituted filing – one employee, only one employer, employer files in behalf of
employee – February 28 due
- SEP/SEI/MIE
o 15 May
o 15 August
o 15 November
o 15 April the following year
- Corporation
o 3 quarterly returns – within 60 days from the close of each quarter
o 15 April – consolidated; 15th day of the fourth month on the close of month after the
fiscal year
o 10th day of the following month – for CIE
o 20th day of the following month – VAT monthly
 Quarterly – 25th day of the close of the quarter
- donors tax – 30 days from gift
- estate tax – 6 months from death
- WRONG VENUE = NON FILING
o Tao - residence or place of work
o Business – principal place of business
 Branch

Requisites of valid FAN

Deficiency/Delinquency interest – cannot be imposed at the same time

Requisites of a valid waiver

a. In accordance with the prescribed format, indicating the expiry date
b. Executed prior to the expiration of the original period of assessment
c. Notarized
d. Signature of the taxpayer should be indicated, including the date
e. Acceptance of BIR should be indicated, signature of the BIR representative
f. 3 original copies
 g. Proof of receipt by the taxpayer of his copy shall be indicated

If you don’t do it – jeopardy assessment will be issued by the BIR

112 V. 228
VAT REFUND
Refund from zero-rated sales Erroneously made
Illegally made
2 years from the close of the taxable quarter 2 years from the date the tax was paid
from when the relevant sales were made
2 years only for admin claim 2 years for admin and judicial claim
 INCOME TAX VAT DONORS TAX ESTATE TAX
taxability Source of income Sale of goods Location Location
Sale of services
Importation of goods
taxpayers Within and without: Someone engaged in trade or Donors Decedent or estate
RC – stay in the Philippines is business
more or less permanently RC – within/without RC – within/without
NRC NRC – within/without NRC – within/without
NRA – within/without NRA – within/without
Within only: NRA – within NRA – within
RA
NRAETB – 180 day period Sec. 104 Sec. 104
NRANETB NRA with franchise, shares, NRA with franchise, shares,
DC obligations of corp 85% of obligations of corp 85% of
RFC which is in the Phils., which is in the Phils., Philippine
NRFC Philippine situs, SUBJECT TO situs, SUBJECT TO
RECIPROCITY RULE, deemed RECIPROCITY RULE, deemed
located in the Phils., so taxable located in the Phils., so taxable
here here
Taxable 12 months (fiscal or calendar)
period
Compute Revenue – expense

Cash basis
Accrual basis
Installment basis
Crop basis
Exempt Individuals: Sec. 109 NIRC: Deductions: Merger of usufruct to the
PCSO/lotto winnings Lease of residential unit – Dowries or gifts owner of naked title
Long-term deposits which you 12800 Transfers in favor of the Transfer from fiduciary to
do not pre-terminate for five Sale of residential lot – government fideicommissary
years 1919500 In favor of various
organizations (not more than
 Sale of RP located in the Phils.,
capital asset, to purchase or
build a home in the next 18
months
MWE for statutory minimum
wage, regardless of w/n he has
other sources of income
NSD/OT/Holiday pay etc. of
MWE
De minimis within limits
Corporation:
Other: Life insurance:
Profit not taxable
Interest taxable
Return of premium not taxable
Compensation:
Only actual damage is
excluded
Sale of house and lot –
3199200
Sale of agri food products in
the original state (simple
procedures for preservation)
ER/EE relationship
Gross sales do not exceed
1919500 (but pay percentage
tax of 3%)
Zero rated:
VATable at 0%
30% is used for admin
purposes)
Exempt:
Recipient is government
Charitable, religious,
educational institution (subject
to 30% admin)
Political party or campaign
candidate
Stranger – 30% donor’s tax
Related – 2 to 15%
(BY BLOOD ONLY, descendant,
ascendant, collateral within 4th
degree, spouse)
Transfer IFO of various
organizations (not more than
30% for admin purposes)
Funeral expense
Judicial expense
Claims against insolvent
persons
Claims against the estate
Transfers for public use
Casualty loss
Family home
Standard deduction
Life insurance:
Revocable – taxable
Irrevocable and designated
person other than himself,
executor, administrator – not
taxable

Retirement benefits:
SSS, GSIS, US Veterans Act,
private retirement plan
(50yo/10 yrs continuous
service; once; duly approved
by BIR)
Government sector all are
income but not subject to tax

Prizes and winnings in sports

competition sanctioned by the
government
Prizes and awards:
Civic achievement, religious,
etc. provided that the winner
did not actively participate to
join the contest and not
required to provide future
services

13th month and other benefits:

82K limit

Separation pay:
Causes attributable to
employer or beyond the
control of the employee – no
tax
Causes attributable to
employee - tax
ONLY for DC/RFC
MCIT – 2% is of gross income is higher than NiT of 30%
IAET – 10% of retained earnings, beyond necessary business needs; it is in addition to other taxes

NOLCO NCLCO
Corporation Individual
Expense is more than revenue  LUGI Loss is sustained in exchanges of capital asset
3 years carry over 1 year carry over
MCIT comes in on the 4th year. No MCIT (kasi individual)
Which is higher? NIT or 2% on the gross?

Casualty lost in INCOME TAX Casualty loss in ESTATE TAX

Subject to NOLCO May happen until after 6 months from death
(bayaran ng estate tax)
Loss sustained in trade or business No trade or business
Claim it once, in income or estate tax.