SAN BEDA UNIVERSITY

College of Law
COURSE SYLLABUS
For
TAXATION 1

COURSE CREDIT: 3 UNITS

TERM/ACADEMIC YEAR: FIRST SEMESTER SCHOOL YEAR 2022-2023
COURSE DELIVERY MODE: FULL ONLINE

COURSE DESCRIPTION:

A detailed evaluation of laws on taxation, national and local (excluding pertinent

portions of the NIRC which will form part of Taxation 2), including general
principles of taxation, limitations on taxation, sources of tax laws as well as
judicial and administrative remedies in taxation.

COURSE GOALS: Expected College of Law Graduate Attributes (ELGAs)

Know and understand the laws, cases and administrative issuances, memorize
important provisions and doctrines, critical and analytical thinking, effective in
written and oral communication, logical reasoning, and sound judgment, exercise
of proper professional and ethical responsibilities.

LEARNING OBJECTIVES/OUTCOMES (LOs):

1. Knowledge/Remembering: define, list, recognize

2. Comprehension/Understanding: describe, explain, identify, recognize
3. Application/Applying: choose, demonstrate, implement, perform
4. Analysis/Analyzing: analyze, categorize, compare, differentiate
5. Evaluation/Evaluating: assess, critique, evaluate, rank, rate
6. Synthesis/Creating: construct, design, formulate, organize, synthesize

Upon completion of Taxation 1 course, the student is expected to be able to:

Expected College of
Law Graduate LEARNING OUTCOMES (LOs)
Attributes (ELGAs)
Critical and analytical LO1. Explain how law is created and enforced by executive,
thinking legislative, and regulatory bodies during class recitation and
discussion.
Effective in written and
oral communication LO2. Analyze the practical and policy implications of current and
proposed statutes, regulations, judicial rulings, legal arguments, and
Logical reasoning
strategies in preparing a Legal Case.
Sound judgment LO3. Assess client concerns and translating them into responsive legal
Exercise of proper arguments and strategies.
professional and ethical LO4. Utilize legal research tools to gather information that aids in the
responsibilities analysis of legal issues in submitting the Research Paper.
ASSESSMENT/GRADING SYSTEM:

The student will be graded according to the following:

Percentage
Scope of (Weight is based
Requirements (Based on the Learning Outcomes) Work(Individu on
al) theimportance
of the LO)
LO1Class recitations and Quizzes Individual
LO2 Individual
LO3 Individual
LO4 - - Research Paper/Case study – optional on part of
professor

Class Standing before Midterms Individual 16.67%

Midterm Examination Grade Individual 16.67%
Class Standing after Midterms Individual 33.33%
Final Examination Grade Individual 33.33%
TOTAL 100%

LEARNING PLAN:

Design or the structure of the course that includes content/topics to be covered;

learning resources to be used; weekly schedule of the topics to be taken up; and
the learning methods to be utilized that are most likely to lead students towards
the goals and learning outcomes that were defined.
 WEEK/ LEARNING
DATE METHODS
TOPIC/CONTENT LEARNING
(Schedule of (activities designed or
(arrangement or sequence of RESOURCES
each Topic, deployed by the
the major topics is based on a (print and non-print
Assign, teacher to bring
logical order) materials and online/
Exam for the about, or create the
open-access resources)
entire conditions for
semester) learning)

Course Introduction
 Course overview Syllabus Aug. 10-29, Lecture
 Course assignments Student’s Handbook 2022 Open Forum
 Course requirements Discussion
 Course expectations
 Difficulty of hurdling
taxation subject in the
annual bar examinations

All subsequent Modules will be conducted under the following:

 Recitations;
 Lectures (optional on part of Professor); and
 Quizzes.

Module 1 - General principles

a. Definition of Taxation
b. Definition of Taxes
c. Purposes/Objectives of Taxation
d. Theory and Basis of Taxation
e. Jurisdiction over Subjects and Objects
f. Attributes of Taxation
g. Characteristics of Taxes/Requisites of a Valid Tax
h. Kinds of taxes
i. Taxation as Inherent Power of State
j. Taxation distinguished from 2 other inherent powers
k. Aspects/Stages of Taxation
l. Characteristics/Principles of a Sound Tax System
m. Kinds of Taxes
n. Taxes as distinguished from other impositions/exactions/levies
o. Taxes vs. Set Off/Legal Compensation
p. Equitable Recoupment
 q. Lifeblood Doctrine
r. Necessity Theory
s. Benefits-Protection Theory
t. Power to Tax involves the Power to Destroy
u. Kinds of Double Taxation
v. Kinds of Tax Exemptions
w. Principles/Interpretations/Construction on Tax Laws, Tax Exemptions and BIR Rules and
Regulations
x. Prospectivity of Tax Laws
y. Prescriptability/Imprescriptability of Taxes
z. Forms of Escape from Taxation (shifting, tax avoidance and tax evasion)
aa. Difference between Tax Evasion vs. Tax Avoidance
bb. Tax refund
cc. Tax credit
dd. Tax amnesty
ee. Compromise vs. abatement
ff. Judicial Review of Taxation
gg. Taxpayer’s Suit

Module 2 - Limitations

a. Constitutional Limitations – Memorize all tax related provisions (direct and indirect).
Read entire 1987 Constitution again
b. 5 Inherent Limitations
c. Tax Treaty – Read and compare RP-USA Tax Treaty and RP-China Tax Treaty
d. Review landmark cases under PoliLaw relating to constitutional and inherent limitations

Module 3 – National Taxation under NIRC

A. Taxing Authority
1. Jurisdiction, Power, and Functions of the Commissioner of Internal Revenue
a) Interpreting Tax Laws and Deciding Tax Cases
b) Non-Retroactivity of Rulings
2. Rule-Making Authority of the Secretary of Finance

B. Income Tax
1. Definition, Nature, and General Principles
a) Criteria in Imposing Philippine Income Tax
b) Types of Philippine Income Taxes
c) Taxable Period
 d) Kinds of Taxpayers
2. Income
a) Definition and Nature
b) When Income is Taxable
c) Tests in Determining Whether Income is Earned for Tax Purposes
(1) Realization Test
(2) Economic Benefit Test, Doctrine of Proprietary Interest
(3) Severance Test
d) Tax-Free Exchanges
e) Situs of Income Taxation
3. Gross Income
a) Definition
b) Concept of Income from Whatever Source Derived
c) Gross Income vs. Net Income vs. Taxable Income
d) Sources of Income Subject to Tax
(1) Compensation Income
(2) Fringe Benefits
(3) Professional Income
(4) Income from Business
(5) Income from Dealings in Property
(6) Passive Investment Income
(7) Annuities, Proceeds from Life Insurance or Other Types of Insurance
(8) Prizes and Awards
(9) Pensions, Retirement Benefit or Separation Pay
(10) Income from Any Source
e) Exclusions
(1) Taxpayers Who May Avail
(2) Distinguished from Deductions and Tax Credits
4. Deductions from Gross Income
a) Concept as Return of Capital
b) Itemized Deductions vs. Optional Standard Deduction
c) Items Not Deductible
5. Income Tax on Individuals
a) Resident Citizens, Non-Resident Citizens, and Resident Aliens
(1) Inclusions and Exclusions for Taxation on Compensation Income
(2) Taxation of Business Income/Income from Practice of Profession
(3) Taxation of Passive Income
(4) Taxation of Capital Gains
(5) Capital Asset vs. Ordinary Asset
b) Income Tax on Non-Resident Aliens Engaged in Trade or Business
 c) Income Tax on Non-Resident Aliens Not Engaged in Trade or Business
d) Individual Taxpayers Exempt from Income Tax
(1) Senior Citizens
(2) Minimum Wage Earners
(3) Exemptions Granted Under International Agreements
6. Income Tax on Corporations
a) Income Tax on Domestic Corporations and Resident Foreign Corporations
(1) Branch Profit Remittance Tax
(2) Itemized Deductions vs. Optional Standard Deductions
b) Income Tax on Non-Resident Foreign Corporations
c) Income Tax on Special Corporations
d) Exemptions from Tax on Corporations
e) Period Within Which to File Income Tax Return of Individuals and Corporations
f) Substituted Filing
g) Failure to File Returns
7. Withholding Taxes
a) Concept
b) Creditable vs. Withholding Taxes

Module 4 – Tax Remedies under NIRC

1. Assessment of Internal Revenue Taxes

a) Procedural Due Process in Tax Assessments
b) Requisites of a Valid Assessment
c) Tax Delinquency vs. Tax Deficiency
d) Prescriptive Period for Assessment
(1) False Returns vs. Fraudulent Returns vs. Non-Filing of Returns
(2) Suspension of the Running of Statute of Limitations

2. Taxpayer’s Remedies
a) Protesting an Assessment
(1) Period to File Protest
(2) Submission of Supporting Documents
(3) Effect of Failure to File Protest
(4) Action of the Commissioner on the Protest Filed
b) Compromise and Abatement of Taxes
c) Recovery of Tax Erroneously or Illegally Collected

3. Government Remedies for Collection of Delinquent Taxes

a) Requisites
b) Prescriptive Periods
 4. Civil Penalties
a) Delinquency Interest and Deficiency Interest
b) Surcharge
c) Compromise Penalty

Important Reminders for Modules 3 and 4:

a. Memorize Sections 203, 204, 222, 228 and 246;

b. Study RevRegs No. 12-1999, RevRegs No. 18-2013, RevRegs No. 7-2018, RMO No. 26-
2016, and RMC No. 11-2014 (Section 228);
c. Study RevRegs No. 30-2002, RevRegs No. 08-2004, RevRegs No. 9-2013, and RMC No.
34-2014;
d. Study RMO No. 20-1990, RDAO No. 05-2001, RMC No. 06-2005, RMC No. 29-2012
and RMO No. 14-2016 (waivers);

First half cases:

1. CIR vs. Algue, G.R. No. L-28896, Feb. 17, 1988

2. Valley Trading Co. vs. Court of First Instance, L-49529, Mar. 31, 1989
3. CIR vs. BPI, 521 SCRA 373 [2007]
4. Phil. Guaranty Co., Inc. vs. Commissioner, supra
5. Chavez vs. Ongpin, 186 SCRA 331
6. Municipality of Cainta vs. City of Pasig and Uniwide Sales Warehouse Club, G.R. Nos.
176703 & 176721, June 28, 2017
7. Diaz vs. Secretary of Finance, Tanada vs. Tuvera, G.R. No. 63915, Apr. 24, 1985
8. Gerochi vs. Dept. of Energy, G.R. No. 159796, July 17, 2007
9. Pepsi-Cola vs. Municipality of Tanauan, Leyte, G.R. No. L-31156, Feb. 27, 1976
10. De la Salle University – College of St. Benilde Inc. vs. CIR, G.R. No. 202792, Feb. 27,
2019
11. Raegan vs. CIR, G.R. No. L-26379, Dec. 27, 1969
12. Pascual vs. Secretary of Public Works and Communications, G.R. No. L-10405, Dec. 29,
1960
13. Basco vs. Philippine Amusements and Gaming Corp., supra
14. Cebu Portland Cement Co. vs. CIR, G. R. No. L-18649, Feb. 27, 1965
15. CIR vs. Ayala Securities Corp., G. R. No. L-29485, Nov. 21, 1980
16. CIR vs. Marubeni Corp., G. R. No. 137377, Dec. 18, 2001
17. CIR vs. British Overseas Airways Corp., G. R. No. L-65773-74, Apr. 30, 1987)
18. CIR vs. American Express International, Inc., June 29, 2005)
19. Nursery Care Corp. vs. Anthony Acevedo, G. R. No. 180651, July 30, 2014
20. CIR vs. Procter & Gamble Phil. Manufacturing Corp., G. R. No. 66838, Dec. 02, 1991,
204 SCRA 377)
21. Air Canada vs. CIR, G.R. No. 169507, Jan. 11, 2016
22. Deutsche Bank vs. CIR, G.R. No. 188550, Aug. 28, 2013
 23. CIR vs. S.C. Johnson and Son, Inc., G. R. No. 127105, June 25, 1999
24. CIR vs. Estate of Benigno Toda, G.R. No. 147188, Sept. 14, 2004
25. Delpher Trade Industries vs. IAC, G.R. No. L-69259, Jan. 26, 1988
26. City of Iloilo Vs. Smart Communications, Inc., G.R. No. 167260, Aug. 12, 1991
27. Citytrust Banking Corp. vs. CIR, CTA Case No.4099, Oct. 16, 1997
28. Investors Finance Corp. vs. CIR, CTA Case No. 3717, May 10, 1993
29. Philex Mining Corp. vs. CIR, G.R. No. 125704, Aug. 28, 1998
30. CS Garment, Inc. vs. CIR, G.R. No. 182399, Mar. 12, 2014
31. Philippine Health Care Providers Inc. vs. CIR, G. R. No. 167330, Sept. 18, 2009
32. CIR vs. Guerrero, G.R. No. L-20942, Sept. 22, 1967
33. Quezon City vs. ABS-CBN Broadcasting Corp., G. R. No. 166408, Oct. 06, 2008
34. CIR vs. Philippine Airlines, G. R. No. 180066, July 08, 2009
35. Purisima vs. Lazatin, G. R. No. 210588, Nov. 29, 2016

MIDTERMS CUT-OFF (September 26 to October 1 unless otherwise announced)

Module 5 - Local Taxation

1. General Principles
2. Nature and Source of Taxing Power
a) Grant of Local Taxing Power Under the Local Government Code
b) Authority to Prescribe Penalties for Tax Violations
c) Authority to Grant Local Tax Exemptions
d) Withdrawal of Exemptions
3. Scope of Taxing Power
4. Specific Taxing Power of Local Government Units
5. Common Revenue Raising Powers
6. Community Tax
7. Common Limitations on the Taxing Powers of Local Government Units
8. Requirements for a Valid Tax Ordinance
9. Taxpayer's Remedies
a) Protest
b) Refund
c) Action before the Secretary of Justice
10. Assessment and Collection of Local Taxes
a) Remedies of Local Government Units
b) Prescriptive Period

Important reminders for Module 5:

a. Read Sections 128 to 196 – RA No. 7160 (LGC)

 b. Memorize Sections 130 (Fundamental Principles), 133 (Common Limitations), 150
(Situs), and 195 (Protest).
c. Read pertinent portions of IRR of LGC related to item (a) above
d. Read selected local finance circulars/DILG circulars

Module 6 - Real Property Taxation

1. Fundamental Principles
2. Nature
3. Imposition
a) Power to Levy
b) Exemption from Real Property Tax
4. Appraisal and Assessment
a) Classes of Real Property
b) Assessment Based on Actual Use
5. Collection
a) Date of Accrual
b) Periods to Collect
c) Remedies of Local Government Units
6. Taxpayer’s Remedies
a) Contesting an Assessment
(1) Payment Under Protest; Exceptions
b) Contesting a Valuation of Property
(1) Appeal to the Local Board of Assessment Appeals
(2) Appeal to the Central Board of Assessment Appeals
(3) Effect of Payment of Taxes
c) Compromise of Real Property Tax Assessment

Important reminders for Module 6:

a. Read Sections 197 to 283 – RA No. 7160 (LGC)

b. Memorize Section 198 (Fundamental Principles), 215 (Classes of Real Property), 216
(Special Classes), 234 (Exemptions), 235 (SEF), 236 to 238 (Idle lands) and 270
(Period to collect)
c. Read pertinent portions of IRR of LGC related to item (a) above
d. Read selected local finance circulars/DILG circulars

Module 7 - CTA/Judicial Remedies

A. Court of Tax Appeals (CTA)

1. Exclusive Original and Appellate Jurisdiction Over Civil Cases
 2. Exclusive Original and Appellate Jurisdiction Over Criminal Cases
B. Procedures
1. Filing of an Action for Collection of Taxes
a) Internal Revenue Taxes
b) Local Taxes
2. Civil Cases
a) Who May Appeal, Mode of Appeal, and Effect of Appeal
b) Suspension of Collection of Taxes
c) Injunction Not Available to Restrain Collection
3. Criminal Cases
a) Institution and Prosecution of Criminal Action
b) Institution of Civil Action in Criminal Action
c) Period to Appeal
4. Appeal to the CTA En Banc
5. Petition for Review on Certiorari to the SC

Important reminders for Module 7:

1. Read CTA Jurisdiction under CTA Laws (RA No. 1125, 9282 and 9503) – collection of
taxes, civil cases and criminal cases, appeal to CTA En Banc, Petition for Review to
SC
2. Read CTA Rules of Court
3. Review again remedies under NIRC, CMTA and LGC and correlate with CTA
Laws/Rules of Court

Second half cases:

1. Victorias Milling Co. vs. Municipality of Victorias Negros Occidental, G. R. No. L-

21183, Sept. 27, 1968
2. Pepsi-Cola Bottling Co. vs. Municipality of Tanauan, G.R. No. L-31156, Feb. 27, 1976
3. MIAA vs. CA, G.R. No. 155650, July 20, 2006
4. Lung Center of the Phils. Vs. Quezon City, G.R. No. 144104, June 29, 2004
5. City of Lapu-Lapu vs. PEZA, G.R. No. 184203, Nov. 26, 2014
6. NPC vs. Provincial Treasurer of Benguet, G.R. No. 209303, Nov. 14, 2016
7. Ty vs. Trampe, G.R. No. 117577, Dec. 01, 1995
8. Fels Energy Inc. vs. Province of Batangas, G.R. No. 158557, Feb. 16, 2007
9. CIR vs. CA, G.R. No. 115349, Apr. 18, 1997
10. CIR vs. Gen. Foods, Inc., G.R. No. 143672, Apr. 24, 2003
11. Perez vs. CTA, G.R. No. L-10507, May 30,1958
12. CIR vs. Yuseco, G.R. No. L-12518, Oct. 28, 1961
13. City of Manila vs. Grecia-Cuerdo, G.R. No. 175723, Feb. 04, 2014
14. CIR vs. CTA, G.R. No. L-21463, 1969
15. Atlas Consolidated vs. CA, G.R. No. 104151 and 105563, 1995
16. CIR vs. Hantex, G.R. No. 136975, 2005
 17. CIR vs. Sony Philippines, G.R. No. 178697, 2010
18. MedicardPhils. Vs. CIR, G.R. No. 222743, 2017
19. CIR vs. Pacific Bayview, CTA EB No. 1677, 2018
20. CIR vs. Pascor, G.R. No. 128315, 1999
21. Takenaka Corporation vs. CIR, CTA EB No. 745, 2012
22. CIR vs. Primetown Property, G.R. No. 162155, 2007
23. CIR vs. Next Mobile, G.R. No. 212825
24. CIR vs. Liquigaz, G.R. No. 215534, 2016
25. Vda. De Aguinaldo vs. CIR, G.R. No. L-19927, 1965
26. Hongkong & Shanghai Banking Corp. vs. Rafferty, G.R. No. L-13188, Nov. 15, 1918
27. CIR vs. Union Shipping, G.R. No. L-66160, May 21, 1990
28. Lim, Sr. vs. CA, G.R. Nos. L-48134-37, Oct. 18, 1990
29. Republic vs. Patanao, G.R. No. L-14142, May 30, 1961
30. Lim Co Chui vs. Posadas, G.R. No. L-23487, Feb. 11, 1925
31. Michel J. Lhullier Pawnshop, Inc. vs. CIR, G.R. No. 166766, Sept. 11, 2006
32. Cagayan Electric Power & Light Co, Inc. vs. CIR, G.R. No. L-60126, Sept. 25, 1985
33. Wonder Mechanical Engineering Corp. vs. CTA, G.R. No. L-22805, June 30,1975
34. Mercalco Securities Corp. vs. Savellano, G.R. No. L-36181, Oct. 23,1982

FINALS EXAMINATIONS (December 7 to 12 unless otherwise announced)

TEXTBOOK/REFERENCE BOOK:

Read as many taxation books as possible

POLICIES:
Policies and values that the professor might want to communicate through the
syllabus concerning attendance, participation, academic integrity (e.g. plagiarism,
cheating, fabrication), missing assignments, missed exams, recording classroom
activities, online behavior during synchronous sessions, etc.

1. Attendance will be checked by the beadle every online meeting.

2. Students who missed an announced quiz will get a grade of 65.
3. Students are prohibited from recording the online class as this is a violation of the
Copyright of the Professor.

Approved by:

Atty. Marciano G. Delson

Dean, College of Law