Law

• International law is a body of rules and principles that govern the relations between states and other international actors.
• Dr. Cedric Val R. Naranjo, CPA, is the Chairman of the Accountancy and Finance Department at the University of San Jose - Recoletos.
• Director’s Fees are not subject to Business Tax even if the Director is not an employee of a corporation.
• Transfer taxation includes types of transfers such as bilateral transfers, sale, barter, exchange, unilateral transfers, donation, succession, and complex transfers.
• The nature of transfer taxes can be privilege tax, ad valorem tax, proportional tax, national tax, direct tax, fiscal tax, and others.
• Transfer taxpayers and their extent of taxation can be residents or citizens for global transfers, non-resident aliens for Philippine transfers.
• Types of properties include real properties, tangible personal properties, and intangible personal properties.
• Estate tax is an excise tax.
• Revocable transfers are transfers of possessions over property during the lifetime of the decedent, but not transfer of ownership over said property.
• Transfer in contemplation of death includes donations made which are motivated by the thought of death.
• The items to be included and excluded in the gross estate depend upon the citizenship and/or residence of the decedent.
• Excise tax on the right of transmitting property at the time of death and on the privilege that a person is given in controlling to a certain extent the disposition of his property to take effect upon death.
• Intangible personal properties include franchise which must be exercised in the Philippines, shares, obligations or bonds issued by any corporation or sociedad anonima organized and constituted in the Philippines, shares, obligation or bonds issued by any foreign corporation, and shares or rights in any partnership, business or industry established in the Philippines.
• Decedent’s interest refers to the value of any interest in property or rights in favor of the decedent on or before his death which was accrued and received only after decedent’s death.
• Gross estate consists of the totality of the value of all property of the decedent at the time of his death, whether real or personal, tangible or intangible, wherever situated.
• Estate tax model can be single or married decedent.
• Transfer under general power of appointment (GPA) enables the holder of such power to do with the property anything which he could do as if the property were his own.
• Reciprocity in transfer taxation is illustrated by the example of a decedent who left properties in Italy, the Philippines, and other countries.
• Inheritance includes all the property, rights, and obligations of a person which are not extinguished by his death.
• The rights to the succession are transmitted from the moment of the death of the decedent.
• Capital is the exclusive property of the husband.
• By marriage settlement executed before the marriage, the property relations can be determined.
• Absolute community of properties shall commence at the precise moment that the marriage is celebrated and any stipulation, express or implied, for the commencement of the community regime at any other time shall be void.
• Conjugal partnership of gains shall commence at the precise moment that the marriage is celebrated and any stipulation, express or implied, for the commencement of the community regime at any other time shall be void.
• The regime of absolute community is applicable for marriages on August 3, 1988 and onwards.
• Paraphernal is the exclusive property of the wife.
• Conjugal partnership of gains is applicable for marriages prior to August 3, 1988.
• Communal or conjugal properties are owned by both spouses (equally).
• In the case of property classification, exclusive properties are owned before marriage, conjugal properties are derived during/after marriage, and exclusive properties for exclusive use of either spouse are also identified.
• Exclusive properties are owned separately by the husband and wife.
• Personal Equity and Retirement Account (PERA) assets of the contributor are part of the gross estate for married decedent.
• Local customs, as per Art. 74 of the Family Code, can determine the property relations.
• In the case of absolute community of properties, administration and enjoyment shall belong to both spouses jointly.
• The gross estate for a married decedent includes the exclusive property of the deceased and communal/conjugal properties.
• In the case of conjugal partnership of gains, administration and enjoyment shall belong to both spouses jointly.
• Amusement taxes are imposed at a rate of 30%.
• Pawnshops and non-stock Savings and Loan Associations are subject to a Gross receipts tax based from gross receipts on interest, commissions, discounts and all other items treated as gross income under the Tax Code.
• The tax rate for non-bank financial intermediaries not performing quasi-banking functions is 5%.
• Money changers are subject to a Gross receipts tax based from gross receipts on interest, commissions and discounts from lending activities; income from financial leasing; dividends and equity shares in net income of subsidiaries; royalties, rentals of property, real or personal, profits from exchange and all other items treated as gross income under the Tax Code; and net trading gains within the taxable year on foreign currency, debt securities, derivatives and other similar financial instruments.
• Agents of foreign insurance companies (fire, marine or miscellaneous insurance) are subject to a tax rate of 4%.