TAX 2017 BAR Qs
TAX 2017 BAR Qs
SMZ, Inc. is a VAT-registered enterprise engaged in Vanderful, lnc.'s income tax return for taxable year
the general construction business. HP 2015 showed an overpayment due to excess
International contracts the services of SMZ, Inc. to creditable withholding taxes in the amount of
construct HP lnternational's factory building ₱750,000.00. The company opted to carry over the
located in the Laguna Techno Park, a special excess income tax credits as tax credit against its
economic zone. HP International is registered with quarterly income tax liabilities for the next
the Philippine Economic Zone Authority (PEZA) as succeeding years. For taxable year 2016, the
an ecozone export enterprise, and, as such, enjoys company's income tax return showed an
income tax holiday pursuant to the Special overpayment due to excess creditable withholding
Economic Zone Act of 1995. taxes in the amount of ₱1,100,000.00, which
included the carry-over from year 2015 in the
SMZ, Inc. files an application with the Bureau of amount of ₱750,000.00 because its operations
Internal Revenue (BIR) for the VAT zero-rating of resulted in a net loss; hence, there was no
its sale of services to HP International. However, application for any tax liability. This time, the
the BIR denies SMZ, lnc.'s application on the company opted and marked the box "To be
ground that HP International already enjoys refunded' in respect of the total amount of
income tax holiday. ₱1,100,000.00.
Is the BIR correct in denying SMZ, lnc.'s Vanderful, Inc. now files in the BIR a claim for
application? Explain your answer. (6%) refund of unutilized overpayments of
₱1,100,00.00. Is the claim meritorious? (4%)
II.
Wreck Corporation is a domestic corporation
engaged in the business of importing, refining and IV.
selling petroleum products. During the period
from September 1, 2014 to December 31, 2014, On the basis of a warrant of seizure and detention
Wreck Corporation imported 225 million liters of issued by the Collector of Customs for the purpose
Jet A-1 aviation fuel and paid the excise taxes of enforcing the Tariff and Customs Code, assorted
thereon. Seventy-five percent (75%) of the total brands of liquor and cigarettes said to have been
volume of aviation fuel imported were actually illegally imported into the Philippines were seized
sold to international carriers of Philippine and from a store operating in a Freeport zone. The
foreign registries for their use or consumption store owner moved for the quashal of the warrant
outside of the Philippines in the period from on the ground that the Collector of Customs had
November 1, 2014 to December 31, 2014. Wreck no jurisdiction to enforce it within the Freeport
Corporation did not pass on to the international zone.
carriers the excise taxes it paid on the importation
of petroleum products. Should the motion to quash be granted? (3%)
Under RA 10701, buyers of private vehicles are (b) Is the reimbursement received by
required to pay a transport tax equivalent to 5°/o Calvin from SPRC subject to tax? Explain
of the total purchase price per vehicle purchased. your answer. (2.5%)
RA 10701 provides that the Land Transportation
Office (LTO) shall not accept for registration any
new vehicles without proof of payment of the 5%
transport tax. RA 10701 further provides that
existing owners of private vehicles shall be VIII.
required to pay a tax equivalent to 5% of the
current fair market value of every vehicle
registered with the LTO. However, RA 10701 On April 30, 2015, Daryl resigned as the
exempts owners of public utility vehicles and the production manager of 52nd Avenue, a television
Government from the coverage of the 5% studio owned by SSS Entertainment Corporation.
transport tax. 52nd Avenue issued to her a Certificate of
Withholding Tax on Compensation (BIR Form No.
2316), which showed that the tax withheld from
A group of private vehicle owners sue on the her compensation was equal to her income tax due
ground that the law is unconstitutional for for the period from January 2015 to April 30,
contravening the Equal Protection Clause of the 2015.
Constitution.
A month after her resignation, Daryl put up her
Rule on the constitutionality and validity of RA own studio and started producing short films. She
10701. (5%) was able to earn a meager income from her short
films but did not keep record of her production
expenses.
Is Daryl qualified for substituted filing for taxable and collection of taxes? Explain your
year 2015? Explain your answer. (3%) answer. (3%)
XVII.
San Juan University is a non-stock, non-profit
educational institution. It owns a piece of land in
Caloocan City on which its three 2-storey school
buildings stood. Two of the buildings are devoted
to classrooms, laboratories, a canteen, a bookstore
and administrative offices. The third building is
reserved as dormitory for student athletes who
are granted scholarships for a given academic year.
XVIII.
(a) Differentiate outright smuggling from technical
smuggling. (3%)