General Principles

Question 1

What is the Completeness Test?

Answer 1

The law must be complete in all its essential terms and conditions when it leaves the legislature so that there will be nothing left for the delegate to do when it reaches him but to enforce.

Question 2

What is the sufficient standard test?

Answer 2

The law must fix a standard, the limits of which are sufficiently determinable, to which the delegate must conform in the performance of his functions.

Question 3

Elements of Eminent Domain

Answer 3

1. Enter private property
2. Must not be momentary
3. Under warrant or color of legal authority
4. Devoted to Public use
5. The use of the property must deprive owner of all beneficial enjoyment

Question 4

Inherent Limitations on Taxation

Answer 4

1. Public Purpose
2. International Comity
3. Inherently Legislative/not delegable
4. Government cannot be taxed
5. Territoriality/sitys

Question 5

What is a government instrumentality? It is:

Answer 5

1. Not integrated in the departmental framework
2. Vested with special functions or jurisdiction by law
3. Endowed with some if not all corporate powers
4. Administering special funds
5. Enjoying operational autonomy

It includes regulatory agencies, chartered institutions and GOCCs

Question 6

What is uniformity of taxation?

Answer 6

All taxable articles or kinds of property of the same classes shall be taxed at the same rate. A tax is uniform when it operates with the same force and effect in every place where the subject of it is found.

Question 7

What is the flexible tariff clause?

Answer 7

Congress may, by law, authorize the President to fix, within specified limits, and subject to such limitations and restrictions as it may impose, tariff rates, import and export quotas, tonnage and wharfage dues, and other duties and imposts within the framework of the national development program of the Government.

Question 8

Required vote of Congress to grant tax exemptions?

Answer 8

Majority of all members voting separately.

Question 9

What is the situs of real property tax?

Answer 9

Where the property is located, regardless of the residence of the owner.

Question 10

What is the situs of tax on tangible personal property?

Answer 10

Where the property is physically located although the owner resides in another jurisdiction

Question 11

What is the situs of intangible personal property?

Answer 11

Generally the domicile of the owner except:
1. Where the property has acquired business situs in another jurisdiction
2. When the law provides for the situs of the tax

Question 12

Considerations on situs of income tax

Answer 12

1. Nationality of tax payer
2. Residence
3. Source of income

Question 13

Situs of transfer tax

Answer 13

1. Location of property
2. Nationality of taxpayer
3. Residence of taxpayer

Question 14

Situs of business tax on sale of real property

Answer 14

Where the real property is located

Question 15

Situs of business tax on personal property

Answer 15

Where sale is consummated and perfected

Question 16

Situs of VAT for sale of property

Answer 16

The place where the transaction was made

Question 17

Sources of taxation

Answer 17

1. Constitution
2. Legislation, tax treaties and tax ordinances
3. Contemporaneous construction by executive or administrative officers
4. Administrative regulations and rulings or opinions of tax officials
5. Judicial Decisions
   Interpretation of American Courts

Question 18

Exemptions to liberal construction of tax exemptions

Answer 18

1. When the statute provides for liberal construction
2. In case of special taxes relating to special cases and affecting only special classes of persons
3. Exemptions refer to public property
4. Exemptions granted to traditional persons who are exempt such as religious, charitable, and educational institutions
5. Exemptions in favor of the government, political subdivisions or instrumentalities
6. Taxpayer falls within the purview of the exemption by clear legislative intent

Question 19

Exceptions to the non-retroactive application of tax rulings

Answer 19

1. Taxpayer misstates or omits material facts from his return or any document
2. Where the facts subsequently gathered by BIR are materially different form the facts on which the ruling is based
3. Where it is the court and not commissioner that declared null and void the BIR issuance
4. Taxpayer acted in bad faith

Question 20

Tax exemptions are irrevocable when:

Answer 20

1. The exemption was granted to private parties based on material consideration
2. Where the tax exemption is granted by the Constitution
3. Where the tax exemption is a special law, it will not be repealed by a general law unless there is a manifest intent to repeal or alter the special law

Question 21

Forms of escape from taxation

Answer 21

1. Shifting of tax burden
2. Tax avoidance
3. Tax evasion
4. Capitalization
5. Transformation
6. Transformation

Question 22

Elements of tax evasion

Answer 22

1. Ends to be achieved
2. Evil state of Mind
3. Unlawful course of action

Question 23

When may taxes be subject to offsetting?

Answer 23

1. When the determination of the taxpayer’s liability is intertwined with the resolution of the claim for tax refund or of erroneously/illegally collected taxes
2. Where both claims of the government and the taxpayer against each other have already become due, demandable, and fully liquidated

Question 24

Who may enter into compromise regarding tax in behalf of the government?

Answer 24

1. Commissioner of Internal revenue
2. Customs Commissioner