TAX RIGHTS AND REMEDIES by Victorino C. Mamalateo Book Summary
Chapter 8 Filing of Income and Withholding Tax Returns Deogracias Natividad INTRODUCTION
Justice Learned Hand: “Anyone may so arrange his affairs that his taxes shall be low as possible, he is not bound to choose that pattern which best pays the treasury. Everyone does it, rich and poor alike, and all do right, for nobody owes any public duty to pay more than the law demands.” Yutivo and Sons Hardware vs. CTA: “While the taxpayer has the legal right to eliminate or reduce his tax liability, it is assumed that he follows lawful means.” Tax evasion vs. Tax Avoidance “A man approaches a river which can be crossed by two bridges: one a toll bridge and the other, a free bridge. If he follows the toll bridge and fails to pay the toll, this is tax evasion. If, however, he crosses by way of free bridge, this is tax avoidance.” avoidance.” INCOME TAX
A. INDIVIDUALS
The The foll follow owin ing g are are requ requir ired ed to file file an income tax return in duplicate: (a) Every Every Filipino Filipino citizen citizen residing residing in the Philippines on his income from all sources; (b) (b) Ever Every y Filipi lipino no citi citiz zen resid esidin ing g outs outsid ide e the the Phil Philip ippi pine nes s on his his inco income me deri derive ved d from from sour source ces s within the Philippines; Philippines; (c) Every alien residing in the Phil Philip ippi pine nes s on inco income me deri derive ved d from sources within the Philippines; (d) Every Every non-re non-resid sident ent alien alien engage engaged d in trad trade e or busi busine ness ss or in the the exe exercis rcise e of prof profe essio ssion n in the Philippines, on his income derived from sources within the Philippines;
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MARRIED INDIVIDUALS who do not derive income from purely compensation income shall file a SINGLE return to include the inc income ome of both oth spous ouses. es. Wh Whe en it is IMPRACTIC IMPRACTICABLE ABLE,, each spouse may file a sepa separa rate te retu return rn but but the the same same shal shalll be CONSILIDATED by the BIR. Income Income of UNMAR UNMARRIE RIED D MINORS MINORS derive derived d from the property received from a living parent ent SHALL BE INC INCLU LUDE DED D IN THE THE RETURN OF THE PARENT, except: (1) Donor’s Donor’s tax has been been paid on such such property (2) When the transfe transferr of such property property is exempt from donor’s tax PERSON PERSON UNDER UNDER DISABILITY DISABILITY or unable unable to make his own return, maybe made by his duly AUTHORIZED AGENT or REPRESE ESENTAT NTATIV IVE E or othe otherr PERSON CHARGED WITH THE CARE OF HIS PERSON OR PROPE PROPERTY RTY – the latte latterr shall shall assum assume e resp respon onsi sibi bili lity ty for for erro errone neou ous, s, fals false e or fraudulent returns. Person Persons s acting acting in FIDUCI FIDUCIAR ARY Y CAPACI CAPACITY TY shall render in duplicate a return of the income of the person, trust or estate for whom or which they act. The return shall be unde underr oath oath that that he has has suff suffic icie ient nt knowledge of the affairs of such person, trust or estate and that the same is to the best of his knowledge, true and correct. The The fact fact that that an indi indivi vidu dual al’s ’s name name is signed signed to a filed filed retur return n shall shall be PRIMA PRIMA FACIE evidence for all purposes that the return was actually signed by him. Individuals NOT REQUIRED to file a return: (a) (a) Indi Indivi vidu dual al wh whos ose e gros gross s inco income me does not exceed hid total personal and and addi additi tion onal al exem exempt ptio ions ns for for dependents EXCEPT citizen or alien engaged in business or practice of profession within the Philippines (b) (b) Indi Indivi vidu dual al with ith resp respec ectt to pure pure comp compen ensa sati tion on inco income me,, deri derive ved d from sources within the Philippines, Philippines, the the inco income me tax tax wh whic ich h has has been been correctly withheld, EXCEPT in case of two or more employers at any time during the taxable year AND
4-C AY 2009-2010 [United, we STAND; Divided, we FALL ]
