By: Garry S. Pagaspas, CPA Court of Tax Appeals (CTA) division has denied the application for refund of donor’s tax alleged to have been erroneously paid by spouses on the transfer of a condominium unit to a common child in relation to the court decision declaring their marriage null and void. In a decision of a Regional Trial Court (RTC) in Makati City sometime November 2015, it declared the marriage of spouses as null and void, and approved the “Agreement on Custody and Support and Liquidation, Dissolution, and Separation of the Property Regime”. In furtherance of the agreement, former spouses executed a Deed of Donation for the transfer of a condominium unit in favor of their common child and paid donor’s tax totaling PhP760,800.00 (each of them paying PhP380,400.00 donor’s tax in respective BIR Form Nos. 1800) for the issuance of the Certificate Authorizing Registration and transfer of the title
2018 Bar Examinations Civil Law November 11, 2018/ 8:00 A.M to 12 N.N. I Sidley and Sol were married with one (1) daughter, Solenn. Sedfrey and Sonia were another couple with one son, Sonny. Sol and Sedfrey both perished in the same plane accident. Sidley and Sonia met when the families of those who died sued the airlines and went through grief-counseling sessions. Years later, Sidley and Sonia got married. At that time, Solenn was four (4) years old and Sonny was five (5) years old. These two (2) were then brought up in the same household. Fifteen (15) years later, Solenn and Sonny developed romantic feelings towards each other, and eventually eloped. On their own and against their parent’s wishes, they procured a marriage license and got married in church. Is the marriage of Solenn ad Sonny valid, voidable, or void? (2.5%) If the marriage is defective,
2018 BAR EXAMINATION TAXATION LAW November 11, 2018/2:00P.M. to 6:00 P.M. I KM Corporation, doing business in the City of Kalookan, has been a distributor and retailer of clothing and household materials. It has been paying the City of Kalookan local taxes based on Sections 15 (Tax on Wholesalers, Distributors or Dealers) and 17 ( Tax on Retailers) of the Revenue Code of Kalookan City (Code). Subsequently, the Sangguniang Panglusod enacted an ordinance amending the Code by inserting section 21 which imposes a tax on “Businesses Subject to Excise, Value-Added and Percentage Taxes under the National Internal Revenue Code (NIRC),” at the rate 50% of 1% per annum on the gross sales and receipts on persons “ who sell goods and services in the course of trade and business,” KM Corporation paid the taxes due under Section 21 under protest, claiming that (a) local government units could not impose a
2018 BAR EXAMINATIONS LABOR LAW November 4, 2018/2:00 P.M. – 6:00 P.M. I Narciso filed a complaint against Norte University for the payment of retirement benefits after having been a part-time professional lecturer in the same school since 1974. Narciso taught for two semesters and a summer term for the school year 1974-1975, took a leave of absence from 1975 to 1977, and resumed teaching until 2003. Since then, his contract has been renewed at the start of every semester and summer, until November 2005 when he was told that he can no longer teach because he was already 75 years old. Norte University also denied Narciso’s claim for retirement benefits stating that only full-time permanent faculty, who have served for at least five years immediately preceding the termination of their employment, can avail themselves of post-employment benefits. As part-time faculty member, Narciso did not acquire permanent employment status
2018 BAR EXAMINATIONS POLITICAL AND INTERNATIONAL LAW November 4, 2018 / 8:00 A.M. – 12:00 N.N I. Congress enacted a law to provide Filipinos, especially the poor and the marginalized, access and information to a full range of modern family planning methods, including contraceptives, intrauterine devices, injectibles, non-abortifant hormonal contraceptives, and family planning products and supplies, but prohibited abortion. To ensure its objectives, the law made it mandatory for health providers to provide information on the full range of modern family planning methods, supplies and services, for schools to provide reproductive health education, for non-governmental medical practitioners to render mandatory 48 hours pro bono reproductive health services as a condition to Philhealth accreditation, and for couples desiring to marry to attend family planning seminar prior to the issuance of marriage license. It also punishes certain acts of refusals to carry out its mandates. The spouses Aguiluz, both Roman Catholics, filed
By: Garry S. Pagaspas, CPA Documentary stamp tax (DST) in the Philippines is generally, a tax imposed on the exercise of certain rights to enter into specific transactions, acts, and deeds relative to business or dealings or properties as manifested by related documents and papers. These are imposed under Sections 173 to 201, Title VII of National Internal Revenue Code of 1997 (RA 8424), as last amended by Republic Act No. 10963 or Tax Reform for Acceleration and Inclusion (TRAIN) Package I that has been effective January 1, 2018. Tax reforms on documentary stamp tax (DST) in the Philippines under TRAIN or RA 10963 is implemented by Revenue Regulations No. 4-2018 (RR 4-2018) dated December 19, 2018 and effective 15 days from publication at the Official Gazette or at a newspaper of general circulation. RR 4-2018 has been published at the Manila Bulletin last January 18, 2018 and its 15th
By: Deeryl Jade L. Bantilan Philippines has its own distinctive rules related to employment as compared to other countries. Philippines adopts a pro-labor policy relative to labor protection and guaranteed security of tenure. In the Philippines, employers cannot just simply terminate employees, unless, for just and authorized causes as enumerated in the Labor Code of the Philippines, and upon the prescribed due process in terminating employee in the Philippines in contrast to foreign countries where their rules allow employment at will of employer. Violation of such security of tenure could mean illegal dismissal that may entail liability for backwages, reinstatement, damages, and other monetary award. This article would discuss the 6 common employee classification as to security of tenure in the Philippines for your easy reference on termination of employer-employee relationship in the Philippines. 1. Probationary Employment in the Philippines Probationary employment in the Philippines is like a tentative employment
By: Ivan Marx Olarte, CPA On September 5, 2018, the Bureau of Internal Revenue (BIR) issued Revenue Memorandum Circular (RMC) No. 75-2018, which highlights the mandatory requirement of a Letter of Authority (LOA) during tax assessments. This RMC specifically refers to a Supreme Court ruling from the case of “Medicard Philippines, Inc. vs. the Commissioner of Internal Revenue.” On the aforementioned case, the BIR issued Preliminary Assessment Notice (PAN) and later, a Formal Assessment Notice (FAN) to Medicard for deficiency VAT. However, a Letter of Notice (LN) is issued instead of an LOA. In the Supreme Court ruling, it has clearly differentiated the LN from an LOA. Specifically, the Court pointed out the three major differences between the two: An LOA is specifically required under the National Internal Revenue Code (NIRC) prior to an examination of a taxpayer. An LN is a mere notification to the taxpayer that there is
By: Ivan Marx Olarte, CPA The Philippine economy is composed of more than 90% of micro and small enterprises. Like the bigger businesses, these smaller entities are mandatory as well to submit financial reports to the tax authorities and other applicable government agencies like the Securities and Exchange Commission (SEC). However, the struggle of complying with the required financial reporting standard has been there for quiet long, causing these smaller businesses to just ignore the requirements rather than comply due the complex nature of the available financial reporting frameworks. To recognize the significant contributions of these business players, the standard setting bodies in the Philippines developed a more simplified and more tailored standards to meet the financial reporting needs of small entities, these standards promote easier application of accounting concepts to specific business transactions. Through the joint efforts of the Financial Reporting Standards Council (FRSC), the Board of Accountancy (BOA),
By: Ivan Marx Olarte, CPA The year 2019 is drawing near. Comes with the change of year is the change in the accounting for leases through the implementation of International Financial Reporting Standards (IFRS) 16. This is a new accounting standard superseding the old standard for leases, International Accounting Standards (IAS) 17. Issues on Old Standard IAS 17 requires companies to identify whether they have substantially all the risks and rewards related to the leased asset and accounts for the transaction either as a finance lease or an operating lease in accordance with this assessment. Finance lease requires companies to recognize a leased asset and lease liability measured at the present value of the minimum lease payments. Payments will be recognized in two ways: as payment of interest on lease liability and reduction of the lease liability. Depreciation expense is also recognized related to the leased asset. Operating leases
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