I. Taxation II. Taxes III.

Sources of Tax Law

I. Taxation A. Definition B. Nature of Internal Revenue C. Scope and Nature of Taxation D. Underlying Theory and Basis Necessity Theory Benefit Received !rinciple ". !urpose of Taxation #. !rinciples of a Sound Tax Syste$

%. Co$parison &ith !olice !o&er and "$inent Do$ain II. Taxes A. Definition B. "ssential Characteristics of Taxes C. Taxes Distinguished fro$' (. De)ts *. +icense #ees ,. Special Assess$ents-+evies .. Tolls /. !enalties 0. Custo$ Duties D. Tax "vasion Tax Avoidance Sec. */.1 NIRC SEC. 254. Attempt to Evade or Defeat Tax. 2 Any person &ho &illfully atte$pts in any $anner to evade or defeat any tax i$posed under this Code or the pay$ent thereof shall1 in addition to other penalties provided )y la&1 upon conviction thereof1 )e punished )y a fine not less than Thirty thousand 3!,414445 )ut not $ore than 6ne hunderd thousand pesos 3!(4414445 and suffer i$prison$ent of not less than t&o 3*5 years )ut not $ore than four 3.5 years' !rovided1 That the conviction or ac7uittal o)tained under this Section shall not )e a )ar to the filing of a civil suit for the collection of taxes III. Sources of Tax +a& A. Constitution B. Statutes RA 84241 as a$ended 3 Tax Refor$ Act of (8895 RA 9337 3An Act A$ending Sections *91 *:1 ,.1 (401 (491 (4:1 (481 ((41 (((1 ((*1 ((,1 ((.1 ((01 ((91 ((81 (*(1 (.:1 (/(1 *,01 *,9 And *:: 6f The National Internal Revenue Code 6f (8891 As A$ended1 And #or 6ther !urposes5 Tariff and Custo$s Code Boo; II1 +ocal %overn$ent Code Special +a&s

I. Taxation II. Taxes III. Sources of Tax Law

C. Ad$inistrative Issuances BIR Revenue Adm n !trat ve "rder #RA"$ %o. &' 2((3 Revenue Regulations o Se)!. 244'245* %IRC

SEC. 244. Aut+or t, of Se)retar, of - nan)e to .romu/0ate Ru/e! and Re0u/at on!. 2 The Secretary of #inance1 upon reco$$endation of the Co$$issioner1 shall pro$ulgate all needful rules and regulations for the effective enforce$ent of the provisions of this Code.

SEC. 245. Spe) f ) .rov ! on! to 1e Conta ned n Ru/e! and Re0u/at on!. 2 The rules and regulations of the Bureau of Internal Revenue shall1 a$ong other thins1 contain provisions specifying1 prescri)ing or defining' 3a5 The ti$e and $anner in &hich Revenue Regional Director shall canvass their respective Revenue Regions for the purpose of discovering persons and property lia)le to national internal revenue taxes1 and the $anner in &hich their lists and records of taxa)le persons and taxa)le o)<ects shall )e $ade and ;ept 3)5 The for$s of la)els1 )rands or $ar;s to )e re7uired on goods su)<ect to an excise tax1 and the $anner in &hich the la)elling1 )randing or $ar;ing shall )e effected 3c5 The conditions under &hich and the $anner in &hich goods intended for export1 &hich if not exported &ould )e su)<ect to an excise tax1 shall )e la)elled1 )randed or $ar;ed 3d5 The conditions to )e o)served )y revenue officers respecting the institutions and conduct of legal actions and proceedings 3e5 The conditions under &hich goods intended for storage in )onded &arehouses shall )e conveyed thither1 their $anner of storage and the $ethod of ;eeping the entries and records in connection there&ith1 also the )oo;s to )e ;ept )y Revenue Inspectors and the reports to )e $ade )y the$ in connection &ith their supervision of such houses 3f5 The conditions under &hich denatured alcohol $ay )e re$oved and dealt in1 the character and 7uantity of the denaturing $aterial to )e used1 the $anner in &hich the process of denaturing shall )e effected1 so as to render the alcohol suita)ly denatured and unfit for oral inta;e1 the )onds to )e given1 the )oo;s and records to )e ;ept1 the entries to )e $ade therein1 the reports to )e $ade to the Co$$issioner1 and the signs to )e displayed in the )usiness or )y the person for &ho$ such denaturing is done or )y &ho$1 such alcohol is dealt in 3g5 The $anner in &hich revenue shall )e collected and paid1 the instru$ent1 docu$ent or o)<ect to &hich revenue sta$ps shall )e affixed1 the $ode of cancellation of the sa$e1 the $anner in &hich the proper )oo;s1 records1 invoices and other papers shall )e ;ept and entries therein $ade )y the person su)<ect to the

I. Taxation II. Taxes III. Sources of Tax Law

tax1 as &ell as the $anner in &hich licenses and sta$ps shall )e gathered up and returned after serving their purposes 3h5 The conditions to )e o)served )y revenue officers respecting the enforce$ent of Title III i$posing a tax on estate of a decedent1 and other transfers $ortis causa1 as &ell as on gifts and such other rules and regulations &hich the Co$$issioner $ay consider suita)le for the enforce$ent of the said Title III 3i5 The $anner in &hich tax returns1 infor$ation and reports shall )e prepared and reported and the tax collected and paid1 as &ell as the conditions under &hich evidence of pay$ent shall )e furnished the taxpayer1 and the preparation and pu)lication of tax statistics 3<5 The $anner in &hich internal revenue taxes1 such as inco$e tax1 including &ithholding tax1 estate and donor=s taxes1 value2added tax1 other percentage taxes1 excise taxes and docu$entary sta$p taxes shall )e paid through the collection officers of the Bureau of Internal Revenue or through duly authori>ed agent )an;s &hich are here)y deputi>ed to receive pay$ents of such taxes and the returns1 papers and state$ents that $ay )e filed )y the taxpayers in connection &ith the pay$ent of the tax' !rovided1 ho&ever1 That not&ithstanding the other provisions of this Code prescri)ing the place of filing of returns and pay$ent of taxes1 the Co$$issioner $ay1 )y rules and regulations1 re7uire that the tax returns1 papers and state$ents that $ay )e filed )y the taxpayers in connection &ith the pay$ent of the tax. !rovided1 ho&ever1 That not&ithstanding the other provisions of this Code prescri)ing the place of filing of returns and pay$ent of taxes1 the Co$$issioner $ay1 )y rules and regulations re7uire that the tax returns1 papers and state$ents and taxes of large taxpayers )e filed and paid1 respectively1 through collection officers or through duly authori>ed agent )an;s' !rovided1 further1 That the Co$$issioner can exercise this po&er &ithin six 305 years fro$ the approval of Repu)lic Act No. 90.0 or the co$pletion of its co$prehensive co$puteri>ation progra$1 &hichever co$es earlier' !rovided1 finally1 That separate venues for the +u>on1 ?isayas and @indanao areas $ay )e designated for the filing of tax returns and pay$ent of taxes )y said large taxpayers. #or the purpose of this Section1 Alarge taxpayerA $eans a taxpayer &ho satisfies any of the follo&ing criteria 3(5 ?alue2Added Tax 3?AT5. 2 Business esta)lish$ent &ith ?AT paid or paya)le of at least 6ne hundred thousand pesos 3!(4414445 for any 7uarter of the preceding taxa)le year 3*5 "xcise Tax. 2 Business esta)lish$ent &ith excise tax paid or paya)le of at least 6ne $illion pesos 3!(144414445 for the preceding taxa)le year 3,5 Corporate Inco$e Tax. 2 Business esta)lish$ent &ith annual inco$e tax paid or paya)le of at least 6ne $illion pesos 3!(144414445 for the preceding taxa)le year and 3.5 Bithholding Tax. 2 Business esta)lish$ent &ith &ithholding tax pay$ent or re$ittance of at least 6ne $illion pesos 3!(144414445 for the preceding taxa)le year. !rovided1 ho&ever1 That the Secretary of #inance1 upon reco$$endation of the Co$$issioner1 $ay $odify or add to the a)ove criteria for deter$ining a large

I. Taxation II. Taxes III. Sources of Tax Law

taxpayer after considering such factors as inflation1 volu$e of )usiness1 &age and e$ploy$ent levels1 and si$ilar econo$ic factors. The penalties prescri)ed under Section *.: of this Code shall )e i$posed on any violation of the rules and regulations issued )y the Secretary of #inance1 upon reco$$endation of the Co$$issioner1 prescri)ing the place of filing of returns and pay$ents of taxes )y large taxpayers.

Revenue Adm n !trat ve "rder (&'(3

Revenue 2emorandum C r)u/ar 2('83 3 Notice1 !u)lication and "ffectivity of Internal Revenue Tax Rules and Regulations1 issued )y then Co$$issioner Bienvenido A. Tan1 Cr. on Culy *.1 (8:0.5

Art. 7* C v / Code Art. 9. +a&s are repealed only )y su)se7uent ones1 and their violation or non2 o)servance shall not )e excused )y disuse1 or custo$ or practice to the contrary. Bhen the courts declared a la& to )e inconsistent &ith the Constitution1 the for$er shall )e void and the latter shall govern. Ad$inistrative or executive acts1 orders and regulations shall )e valid only &hen they are not contrary to the la&s or the Constitution. 3/a5

BIR Rulings o Se)!. 4* 243* %IRC

SEC. &4. Aut+or t, of "ff )er! to Adm n !ter "at+! and Ta4e Te!t mon,. 2 The Co$$issioner1 Deputy Co$$issioners1 Service Chiefs1 Assistant Service Chiefs1 Revenue Regional Directors1 Assistant Revenue Regional Directors1 Chiefs and Assistant Chiefs of Divisions1 Revenue District 6fficers1 special deputies of the Co$$issioner1 internal revenue officers and any other e$ployee of the Bureau thereunto especially deputi>ed )y the Co$$issioner shall have the po&er to ad$inister oaths and to ta;e testi$ony in any official $atter or investigation conducted )y the$ regarding $atters &ithin the <urisdiction of the Bureau.

SEC. 243. %on'Retroa)t v t, of Ru/ n0!. 2 Any revocation1 $odification or reversal of any of the rules and regulations pro$ulgated in accordance &ith the preceding Sections or any of the rulings or circulars pro$ulgated )y the Co$$issioner shall not )e given retroactive application if the revocation1 $odification or reversal &ill )e pre<udicial to the taxpayers1 except in the follo&ing cases' 3a5 Bhere the taxpayer deli)erately $isstates or o$its $aterial facts fro$ his return or any docu$ent re7uired of hi$ )y the Bureau of Internal Revenue

I. Taxation II. Taxes III. Sources of Tax Law

3)5 Bhere the facts su)se7uently gathered )y the Bureau of Internal Revenue are $aterially different fro$ the facts on &hich the ruling is )ased or 3c5 Bhere the taxpayer acted in )ad faith. D. Tax- Revenue 6rdinances ". Tax Treaties #. Case +a&s 3SC-CA-CTA5

%. +egislative @aterials