Real Estate Laws And Taxation Flashcards
Is the inherent power of the sovereign State to raise money or revenue necessary to finance the functions and operations of the government.
Taxation
Constitutional Basis: Each local government unit shall have the power to create its own sources of revenues and to levy taxes, fees and charges subject to such guidelines and limitations as the COngress may provide, consistent with basic policy of local autonomy. Such TFC - taxes, fees and charges shall accrue exclusively to the local governments.
Section 5, Article X, 1987 Constitution
National Internal RRevenue Code of 1997, amended
RA 8424
Jan 1, 1998
TRAIN
Tax Reform for Acceleration and Inclusion
RA 10963
TRAIN
Jan 1, 2018
CREATE Law
Corporate Recovery And Tax Incentives for Enterprises
CREATE is RA_____
RA 11534
Apr 11, 2021
Ease of Paying Taxes
RA 11976
Jan 22, 2024
Taxes are essential and indispensable to the continued subsistence of the gov’t.
The Lifeblood Doctrine [in Taxation].
Situs in place of Taxation
Business Tax situs - where biz is conducted
Income tax situs on services - service fees are taxed where they are rendered
Income tax situs on sale of goods - in place of sale
Property tax situs - taxable in their location
Personal tax situs - in their place of residence
Interpretation of Tax Laws. When the language of the law is clear and categorical, there is no room for interpretation. There is only room for application. However, when taxation laws are vague, the _____________ is observed.
Doctrine of strict legal construction
Refers to any act or trick that tends to illegally reduce or avoid the payment of tax
Tax evasion / Tax dodging
Refers to any act that reduces or totally excapes taxes by any legally permissible means
Tax avoidance / Tax minimization
Modes of Transferring REal Property
Sale
Donation
Inheritance
Sale of property hwere the initial payments of which in the year of sale EXCEEDS 25% of the gross selling price. Considered as Cash Sale.
Deferred Payment
Sale of RP where the initial payments of which in the year of sale DO NOT EXCEED 25% of the gross selling price.
Installment plan
Examples of ordinary assets
- RP included in inventory for sale to customers
-RP acquired by banks thru foreclosures
-RP used in trade or business of TP
Properties shall AUTOMATICALLY be converted into CAPITAL ASSETS upon showing proof that the same have not been used in business for _____ years prior to consummation of the taxable transactions involving said properties
2 years
National Taxes in Sale of RP in Ordinary Assets
VAT
EWT
IT
DST
National Taxes in Sale of RP in Capital Assets
CGT
DST
Is a tax on consumption levied on the sale, barter exchange or lease of goods or properties…..
VAT
BIR Form for VAT
2550Q
VAT Rate
12% for good and services
When is the filing of VAT
25 days ff close of each taxable quarter or Apr25,July25,Oct25,Jan25
Vat due on the sale of lease of taxable good or properties by any VAT registered person
Output Tax
VAT Payable
Output Tax (the VAT due on the SALE by any registered person) - Input Tax ( Vat due from or PAID by a VAT registered person)
