new course outline - transfer and business tax

FAR EASTERN UNIVERSITYINSTITUTE OF ACCOUNTS, BUSINESS AND FINANCE

Department of Accountancy & Internal Auditing

Far Eastern University

VisionGuided by the core values of Fortitude, Excellence and Uprightness, Far Eastern University aims to be a

university of choice in Asia

MissionCommitted to the highest intellectual, moral and cultural standards, it strives to produce principled and competent graduates. It nurtures a service-oriented and environment conscious community which seeks

to contribute to the advancement of the global society.

Quality Policy Far Eastern University is committed to providing quality educational services. Each person is expected to

do the job right the first time with the intention of consistently satisfying the requirement of our students, other members of FEU community, and external parties. Under any given circumstances we

shall adhere to all the requirements and standards for continuous improvement and effectiveness of the quality management systems.

Institute of Accounts, Business and Finance

VisionFar Eastern University – Institute of Accounts, Business and Finance (IABF) envisions itself

to be the preferred business school in Asia.

MissionThe Institute of Accounts, Business and Finance is committed to produce principled and competent

business graduates, espousing Fortitude, Excellence and Uprightness. IABF will promote community engaged, service-oriented individuals who will shape and build strong organization in the future.

COURSE OUTLINE AND TIME FRAME

Course Code : BUS & TRN Course Title : Business and Transfer TaxCourse Credit : 3 unitsCourse Prerequisites : Fundamentals of Accounting, Part 2

Faculty : e-mail Address :

Day/Time/Room : ____________________

A. COURSE DESCRIPTION and management. The theories and principles of organization and

It is a three-unit course is primarily concerned with the business and transfer taxation. The objective is to develop a working knowledge of the basic principles and rules of the transfer and business tax system as these apply to certain types of taxpayers. It covers an overview of the basic succession, the estate and donor’s taxes, which aims to provide the students with knowledge of the concept of disposition or conveyance of property through succession and donation. On the other hand, the business taxes cover the consolidated value added tax and percentage taxes only as these relate to the engagement in trade or business or the practice of profession. Tax forms are provided for specific topics discussed.

B. COURSE OUTCOMES

At the end of this course, the learner is expected to:1. recognize the basic principles and concepts of the transfer tax system;2. describe the provisions of the law, rules and regulations governing estate and donor’s tax and the

business taxes for individual and non-individual taxpayers in general;3. discuss the characteristics of succession and donation;4. demonstrate awareness of the nature of the estate and donor’s taxes and the business taxes;5. comply with the reportorial requirements of the appropriate government agencies;6. relate the different tax rates on each taxable estate or donation;7. manage the filing of the prescribed BIR forms or returns; 8. observe the prescribed periods and deadlines in the filing of the returns and payment of taxes; and9. exemplify fortitude, excellence and uprightness through proper reporting of gross estate/donation

and/or allowable deductions and payment of the correct taxes.

Week Topic Planned Activities

1 Course Orientation and Policies, Standards, Guidelines (PSG) Discussion

2-3I. Basic Succession

A. Definition and BasisB. Nature of Transfer TaxesC. Kinds of SuccessionD. Elements of SuccessionE. HeirsF. Legitime and Free PortionG. Table of LegitimesH. Testacy and IntestacyI. Order of Intestate SuccessionJ. Determination of Blood RelationshipK. WillsL. Kinds of WillsM. Probate of a WillN. Foreign WillsO. Institution of HeirP. Causes for Disinheritance

Discussion/ Recitation of pertinent provisions of the Civil Code of the Philippines

Quiz

Case study

Preparation and submission of notarial will

3-4 II. Transfer TaxesA. Estate taxes (RR 2-2003)

a. Concept and Nature of Estate Taxb. Classification of Decedentc. Gross estated. Deductions allowed to estate

i. Ordinary deductionsii. Special deductions

Discussion/ Recitation of Revenue Regulations No. 2-2003 and the corresponding provisions set forth in the Tax Code

Quiz5-6 a. Capital of surviving spouse

b. Concept and Nature of Deductionse. Basis of valuation of propertiesf. Real and Personal Property

iii. Tangibleiv. Intangible (Rule on Reciprocity)

g. Property relationsh. Situs of Taxationi. Exemption of certain acquisitions and

transmissionsj. Tax credit for estate tax paid to a foreign

countryk. Notice of Deathl. Filing of estate tax returnsm. Payment of estate taxn. BIR Form 1801o. Attachments to the estate tax return, including

CPA certificate

CODAL REFERENCE: Sections 84 to 97 of the National Internal Revenue Code

Discussion/ Recitation of the relevant provisions of the Family Code of the Philippines

Quiz

Case analysis

Preparation of applicable BIR Forms

PRELIMINARY EXAMINATIONS7-8

9-10

11-12

B. Donor’s tax (RR 2-2003)a. Nature of donationb. Classifications of Donorc. Kinds of Donationd. Requisites of a Valid Donatione. Formalities of Donationf. Gross giftg. Deductions from gross gifth. Relative vs. Strangeri. Exemption of certain giftsj. Basis of valuation of giftsk. Void Donationsl. Tax rates in general and when the donee is a

strangerm. Filing of donor’s tax returns, payment and

Discussion/ Recitation of Revenue Regulations No. 2-2003 in relation to donation and the Tax Code provisions on donor’s tax

Quiz

Preparation of

requirements (BIR Form 1800)CODAL REFERENCE: Sections 98 to 104 of the National Internal Revenue Code

applicable BIR Forms

MIDTERM EXAMINATIONS

13

14-15

III. BUSINESS TAX

Concept of Business Tax (Overview)

Types of Business Taxes

Definition, Nature and Characteristics

A. Value Added Tax (RR 16-2005, 2-2007, 4-2007)a. VAT -subject transactionsb. Sale of goods or properties (actual sales,

deemed sales, zero rated sales)c. Sale of services and lease of properties (actual

sales or lease, zero rated sales)d. Importatione. VAT exempt transactions

i. Senior Citizenf. Input value added taxesg. Passed-on VATh. Transitional VAT inputi. Presumptive VAT inputj. Withholding VAT (creditable and final)k. Excess VAT input in previous returnl. Refund of VAT input (zero rated sales, purchase

of land and capital goods)m. Deferred vs. Installment paymentn. Registration and Complianceo. Effect of Non-Registrationp. Optional registrationq. Cancellation of registrationr. Compliance requirements

i. Invoicingii. Returns and payment of value added tax

iii. Power of the Commissioner to suspend business

iv. Consequences of erroneous issuance of VAT official receipt/invoice


Discussion/ Recitation of Revenue Regulations No. 16-2005, 4-2007, et al in relation to Republic Act No. 8424 as amended by Republic Act No. 9337.

Quiz


16B. Percentage Taxes

a. Taxpayer, tax base and tax rates Discussion/

17-18

b. Tax on persons exempt from value added tax (annual gross sales or receipts do not exceed Php 1,919,500.00)

c. Tax on domestic carrier or international carrier (including exemptions

d. Tax on franchisee. Overseas communications tax (including

exemptions)f. Tax on banks and non-bank financial

intermediaries performing quasi-banking functions

g. Tax on other non-bank financial intermediariesh. Tax on life insurancei. Tax on agents of foreign insurance companiesj. Amusement taxesk. Tax on winningsl. Stock transaction taxm. Returns and payment of percentage tax (regular

and electronic filing)


C. Additions to Taxa. Surcharges (late filing/payment, wrong venue,

willful neglect, false or fraudulent returns)b. Interests (on deficiency, on delinquency, on

extended payments)c. Compromise penalties, amount to be specified

in the problemCODAL REFERENCE: Sections 247 to 252 of the National

Internal Revenue CodeD. Tax Remedies

a. Remedies of the governmentb. Definition, scope, prescriptive periodc. Administrative remedies

i. tax lienii. compromise

iii. levyiv. distraint

d. Judicial actionsi. civil

ii. criminale. Remedies of the taxpayerf. Prescriptive periodsg. Waiver of statute of limitationsh. Against an assessment (protest, request for

reinvestigation)i. Appealj. Request for refund or credit of taxes (recovery

Recitation of Revenue Regulations No. 16-2005 pertaining to Donor’s tax

Quiz


Discussion and recitation of Revenue Regulations No. 12-99, as amended by Revenue Regulations No. 18-2013

of erroneously or illegally collected taxes, forfeiture of cash refund and tax credit)

CODAL REFERENCE: Sections 202 to 210, 217 to 224, 228 to 230 of the NIRC

IV. Powers and Authority of the Commissioner of Internal Revenue

A. Power to Interpret Tax Laws and to Decide Tax Cases

1.Exclusive and Original Jurisdiction2.Exclusive Appellate Jurisdiction

B. Power to Obtain Information, and to Summon/Examine, and Take Testimony of Persons

1.To Examine Books, Paper, Records2.To Obtain Information From Any Person3.To Summon the Person Liable or Any Other

Persona. Sub Poena Duces Tecumb. Sub Poena Ad Testificandum

4.To Take Testimony5.To Cause Revenue Officers to Make a

Canvass and Make Inquiries Concerning Persons Liable

C. Power to Make Assessments and Prescribe Additional Requirements for Tax Administration and Enforcement

1.To Examine Returns and Determine the Tax Due

2.Best Evidence Obtainable3.To Conduct Inventory-taking, Surveillance

and to Prescribe Presumptive Gross Sales and Receipts

4.To Terminate Taxable Period5.To Prescribe Real Property Values6.To Inquire into Bank Deposit Accounts7.To Accredit and Register Tax Agents8.To Prescribe Additional Procedural or

Documentary Requirements

D. Authority of the Commissioner to Delegate PowerException: Powers That Cannot Be Delegated:

1. To recommend the promulgation of rules and regulations by the Secretary of Finance

2. To issue rulings of first impression or to reverse, revoke or modify any existing

ruling3. To compromise or abate any tax liability4. To Assign or Reassign Internal Revenue

Officers


ADDITIONAL READING:

A. Community Tax (computation of basic, additional and optional community tax for individuals and corporations and the maximum amount due)

a. Concept and Nature of Community Taxb. Classification of Taxpayers Subject to

Community Taxc. Individuals Exempted from Community Taxd. Components of Community Taxe. Basic Amountf. Additional and Optional Community Taxg. Penalties

B. Expanded Jurisdiction of the Court of Tax Appeals (limited to jurisdiction)

Discussion and recitation of the Local Government Code as regards the community tax

FINAL EXAMINATIONSUBMISSION OF REFLECTION ESSAY

C. REQUIRED READING (TEXTBOOK) Rex B. Banggawan (2015). Business and Transfer Taxation. Baguio City: Real Excellence Publishing

D. SUGGESTED READINGS AND REFERENCESEnrico Tabag and Earl Garcia (2014). Transfer and Business Taxation. Manila: Good Dreams PublishingEdwin Valencia and Gregorio Roxas (2013-2014). Transfer and Business Taxation. Baguio City: Valencia Educational SupplyNick Aduana (2012). Transfer and Business Taxation. Manila: C & E PublishingHector de Leon (2013). Transfer and Business Taxation. Manila: Rex Printing Company Inc.National Internal Revenue Code (Codal) Manila: Rex Printing Company Inc.

F. COURSE REQUIREMENTS

1. Assignments 2. Attendance3. Class Participation4. Quizzes5. Preliminary Exam – 6. Midterm Examination – 7. Final Examination –

G. EVALUATION AND GRADING SYSTEM1. COMPUTATION OF PERIODIC GRADES

CLASS STANDING 50.00% Average Quizzes (AQ) 60% Class Participation (CP) 40%MAJOR EXAMINATION (PEx/MEx/FEx) 50.00%TOTAL 100.00%

2. COMPUTATION OF 1ST PRELIMINARY GRADE (1ST PG)1ST PG = {[AQ (60%) + CP (40%)] 50%} + [PEx (50%)]

3. COMPUTATION OF 2ND PRELIMINARY GRADE (2ND PG) AND MIDTERM GRADE (MG)2ND PG = {[AQ (60%) + CP (40%)] 50%} + [MEx (50%)]MG = 1ST PG (1/3) + 2ND PG (2/3)

4. COMPUTATION OF 3RD PRELIMINARY GRADE (3RD PG) AND FINAL GRADE (FG)3RD PG = {[AQ (60%) + CP (40%)] 50%} + [FEx (50%)]FG = MG (1/3) + 3RD PG (2/3)

5. TRANSMUTATION OF FINAL GRADE (FG)

OLD GRADING SYSTEM

FINAL GRADE POINT SYSTEM DESCRIPTIVE EQUIVALENT

94.50 – 100.00 1.00Superior

91.50 – 94.40 1.2589.50 – 91.40 1.50

Very Good87.50 – 89.40 1.7584.50 – 87.40 2.00

Good81.50 – 84.40 2.2579.50 – 81.40 2.50

Fair77.50 – 79.40 2.7575.00 – 77.40 3.00 Barely SatisfactoryBelow 75.00 5.00 Failure

NEW GRADING SYSTEMFINAL GRADE LETTER GRADE QUALITY POINT95.50 – 100.00 A 4.091.50 – 95.40 B+ 3.588.50 – 91.40 B 3.084.50 – 88.40 C+ 2.581.50 – 84.40 C 2.077.50 – 81.40 D+ 1.575.00 – 77.40 D 1.0Below 75.00 F 0.0

H. CLASSROOM POLICIES Policy on Attendance

There are no excused absences. According to the rules of the Commission on Higher Education, every student is required to attend no less than 80% of all class periods in a given subject to earn the corresponding units. Twenty percent (20%) of the periods are deemed more than sufficient to take care of emergencies such as illness or death in the family, and similar circumstances.

Students are required to attend class punctually and regularly. A student who absents himself due to illness must submit a physician’s certification of his illness, or if absent for some reasons, he must present an excuse letter from his parents or guardian. Any student who accumulates more than the maximum number of absences tolerated in a given subject disqualifies himself from earning any unit of it, and causes himself to be dropped automatically from the classes with a final mark of 5.00 (Failure).

Policy on Academic Integrity

Anchored on the core values of Fortitude, Excellence and Uprightness, Far Eastern University (FEU) believes that its students, administration, faculty and staff should demonstrate academic integrity at all times. Academic integrity means that the members of the entire academic community adhere to the fundamental values of honesty, hard work, originality, respect and responsibility. FEU students are expected to always adhere to the highest standards of academic excellence.

FEU students are expected to demonstrate beliefs, attitudes and behaviour ‘s associated with academic honesty. Thus, all acts of academic dishonesty in FEU are not tolerated. Academic dishonesty comes largely in two forms: cheating and plagiarism. It is considered a major offense subject to disciplinary actions if students cheat or plagiarize their work.

Cheating is broadly defined as getting unauthorized help on an assignment, quiz or examination. The following are considered as acts of cheating:

Copying from another student during a test or examination, with or without his/her knowledge; Allowing another student to copy his/her work; Using unpermitted notes during a test or examination; Having in one’s possession written notes or electronic devices during a test or examination; Getting questions or answers from someone else who has already taken a test or examination; Turning in work done by someone else; Taking a test or examination for another student; Writing or providing an assignment for another student.

Plagiarism is another form of academic dishonesty. All FEU students are expected to turn in work that is a product of their own efforts, study and research. Thus, copying work of others (in whole or in part) and claiming it as one’s own is considered an act of plagiarism. A work is also plagiarized if the student did not properly cite or acknowledge the sources or references for his/her work. One must remember that plagiarism is identified not through intent but through the act itself. The following are considered acts of plagiarism:

Repeating someone else’s words verbatim without acknowledgement; Presenting someone else’s ideas without acknowledgement; Paraphrasing, translating, or summarizing someone else’s ideas without acknowledgement;

Improperly acknowledging of sources, as with incomplete/imprecise documentation; Having one’s work done by someone else or having one’s work substantially revised by someone

else.

Policy on Non-Solicitation of Funds

All official fees of the University are collected through the Cash Department. Students should not pay any additional fees such as those for tickets, entrance fees, transportation fees, hand-outs, readings, quizzes or tests to any faculty or staff member of the University.

I. CONSULTATION HOURS

A faculty member must be available for at least one (1) hour per week for consultation. Areas of concern for consultation shall be limited to academic matters. Deficiencies on absences and tardiness, uniform related, faulty grievances and other related disciplinary issues shall be under the care of the office of student affairs through the student discipline.

DAY/S TIME ROOMFaculty Consultation Room

Prepared by: Reviewed by:

MR. VICENTE C. GUDANI MR. RAMIL N. BALDRESAssistant Program Head, Instruction Program Head, Internal Auditing

Reviewed by: Noted by:

MR. EARL JOSEPH M. BORGONA MR. GERALD L. VILLARProgram Head, Accountancy Associate Dean

new course outline - transfer and business tax

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