Taxation

Study lessons

1. 1

   General principles of taxation and the income tax framework

   The inherent and constitutional limits on the power to tax, situs and double taxation, how taxes are classified, and how gross income becomes taxable income under the NIRC as amended by TRAIN and CREATE.

   15 min
2. 2

   Transfer taxes and VAT: estate tax, donor's tax, and business taxes

   How estate tax and donor's tax work as a single flat 6% transfer tax under TRAIN, how VAT and percentage tax operate as business taxes, and the core administrative remedies available to the government and the taxpayer.

   15 min
3. 3

   Income taxation of individuals and corporations

   How the NIRC as amended by RA 10963 (TRAIN) and RA 11534 (CREATE) classifies taxpayers and taxes individual and corporate income, from gross income and fringe benefits to the optional standard deduction, capital gains tax, and final taxes.

   15 min
4. 4

   Tax remedies and administration

   The assessment process and prescriptive periods under the NIRC, the taxpayer's protest and appeal remedies before the BIR and the Court of Tax Appeals, and the government's collection remedies, refunds, and the powers of the Commissioner.

   15 min
5. 5

   Gross income, exclusions, and allowable deductions

   Build gross income under NIRC Sec 32, strip out the Sec 32(B) exclusions, and apply the Sec 34 itemized deductions and their requisites to reach taxable income.

   15 min
6. 6

   Passive income final taxes and the CMEPA reforms

   Apply the NIRC's final taxes on interest, royalties, dividends, prizes, and winnings, and know how RA 12214 (CMEPA) harmonizes the interest tax and cuts capital-market friction.

   14 min
7. 7

   Other percentage taxes and excise taxes

   Identify who pays the NIRC's other percentage taxes (Sec 116 to 127) and which goods bear specific or ad valorem excise taxes, and know when each tax is paid.

   14 min
8. 8

   Documentary stamp tax and local taxation

   Apply documentary stamp tax to documents and instruments, and compute local business tax and real property tax under the Local Government Code (RA 7160).

   15 min
9. 9

   VAT: output tax, input tax, and the VAT payable computation

   Register when the threshold is crossed, charge 12% output VAT on the right base, extract VAT from a VAT-inclusive price with the 12/112 fraction, claim creditable input VAT including the transitional and presumptive kinds, allocate unattributable input VAT across mixed transactions, and carry an excess input tax forward.

   20 min
10. 10

    VAT: zero-rated sales, exempt sales, importation, and refunds

    Separate a zero-rated sale from an exempt one by asking what happens to the input tax, tell an exempt transaction apart from an exempt person, build the landed cost base for VAT on importation, and run the two-year clock and the ninety-day clock on a refund of input tax attributable to zero-rated sales.

    19 min
11. 11

    Estate tax in depth: gross estate, deductions, and the net taxable estate

    Set the surviving spouse's share aside before anything else, build the gross estate from the decedent's interest and the transfers the law pulls back in, run the vanishing deduction through its four lines and its five-year schedule, claim the P5,000,000 standard deduction and the family home up to P10,000,000, and apply the flat 6%.

    21 min
12. 12

    Donor's tax in depth: gross gifts, exemptions, and the cumulative computation

    Establish the four requisites of a taxable donation, cumulate every gift within one calendar year before applying the single P250,000 exemption and the flat 6%, credit the tax already paid on earlier gifts, treat spouses as separate donors, and know when a sale for insufficient consideration becomes a gift.

    17 min
13. 13

    Corporate income tax: RCIT, MCIT, and NOLCO under CREATE

    Choose between the 25% and 20% regular rate by testing net taxable income against P5,000,000 and total assets against P100,000,000 excluding land, compute the minimum corporate income tax on gross income from the fourth taxable year, carry an excess MCIT forward for three years, and run a net operating loss through the three-year NOLCO window.

    20 min
14. 14

    Capital gains tax and the withholding tax system

    Apply the 6% capital gains tax to the higher of gross selling price and fair market value, tax the net capital gain on unlisted shares at 15%, keep listed shares out of income tax entirely, prorate the principal residence exemption by the unutilised portion, and separate a final withholding tax from a creditable one.

    19 min

Section practice test

5 test sets covering the whole Taxation section, 150 original questions with explanations. After you finish the lessons above, prove it here. Randomized every run.