THE CPA LICENSURE EXAMINATION SYLLABUS

TAXATION
(50% of Business Law and Taxation)
(Effective October 2006 Examination)
This subect tests the candidates! conce"tua# $now#ed%e and "roficienc& in the "ractica# a""#ication of
the
basic "rinci"#es of taxation as the& re#ate to accountin% "ractice' The em"hasis is on the a""#ication of
the theor&
and "rinci"#es in so#vin% tax "rob#ems' (andidates are ex"ected to $now) understand and be ab#e to
a""#& the #aws
on income tax) business taxes (va#ue*added and "ercenta%e taxes)) estate tax) donors tax) as we## as
+evenue
+e%u#ations and (ourt of Tax ,""ea#s and -u"reme (ourt decisions'
(andidates shou#d $now the tax rates for com"utin% taxes) exce"t for the fo##owin% where the tax rates
wi##
be %iven.
- schedu#ar income tax rates for individua#s
- schedu#ar estate tax rates/ and
- schedu#ar donor!s tax rates'
Each examination wi## contain a minimum of 25 and maximum of 05 mu#ti"#e choice 1uestions a##ocated
to
the different subect areas) as indicated be#ow'
2'0 3rinci"#es of Taxation and its +emedies
2'2 4ature) sco"e) c#assification) and essentia# characteristics
2'2 3rinci"#es of sound tax s&stem
2'0 Limitations of the "ower of taxation (inherent #imitations and constitutiona# #imitations)
2'5 6ifferences between taxation and "o#ice "ower
2'5 6ifferences between taxation and eminent domain
2'6 -imi#arities amon% taxation) "o#ice "ower and eminent domain
2'7 Tax evasion vs' tax avoidance
2'8 -ites9"#ace of taxation
2': 6oub#e taxation (direct and indirect)
2'20 Taxes
a' Essentia# characteristics
b' (#assification
c' Tax vs' other char%es (to##) s"ecia# assessment) #icense fee) debt)
2'0 3owers and ,uthorit& of the (ommissioner of ;nterna# +evenue under -ection 5 to 7) Tit#e 2 of the
Tax (ode
0'0 ,uthorit& of the (ommissioner to (om"romise Tax 3a&ments) ,bate or (ance# Tax Liabi#it& and
+efund or
(redit Taxes
5'0 Tax +emedies
5'2 +emedies of the %overnment (-tate)
a' 6efinition) sco"e) "rescri"tive "eriod
b' ,dministrative remedies (tax #ien) com"romise) #ev& and distraint)
c' <udicia# actions (civi# or crimina#)
5'2 +emedies of the tax"a&er
a' 3rescri"tive "eriods
b' ,dministrative remedies
2' ,%ainst an assessment ("rotest) re1uest for reinvesti%ation)
2' +e1uest for refund or credit of taxes (recover& of erroneous#& or i##e%a##&
co##ected taxes) forfeiture of cash refund and tax credit)
5'0 Ex"anded urisdiction of the (ourt of Tax ,""ea#s (#imited to urisdiction)
5'0 ;ncome Tax
5'2 Tax"a&er and tax base
a' ;ndividua#s
2' (#assification (citi=ens) a#iens) "ure com"ensation income earner) "ure business
or "rofessiona# income earner) mixed income earner)
2' Basic and "ersona# exem"tions
The CPA Licensure Examination Syllabus
Taxation / page 2
0' 3remium "a&ments for hea#th and9or hos"ita#i=ation insurance
5' Tax on a#iens em"#o&ed b& re%iona# o"eratin% head1uarters of mu#tinationa#s)
offshore ban$in% units) "etro#eum service contractor or subcontractor
b' (or"orations
2' (#assification (domestic and forei%n)
2' ;ncome taxes
(a) +e%u#ar cor"orate income tax
(b) >inimum cor"orate income tax
(c) O"tiona# cor"orate income tax
(d) ;m"ro"er#& accumu#ated earnin%s tax
0' -"ecia# cor"orations
(a) 6omestic ("ro"rietar& educationa# institution) non*"rofit hos"ita#s)
%overnment owned or contro##ed cor"oration) etc')
(b) +esident forei%n (internationa# carriers) offshore ban$in% units) re%iona#
o"eratin% head1uarters of mu#tinationa#s) branch "rofits remittances)
(c) 4on*resident forei%n (#essors of e1ui"ment) aircraft and machiner&/
owners of vesse#s chartered b& 3hi#i""ine nationa#s) #essor) distributor
or owner of cinemato%ra"hic fi#ms)
c' 3artnershi"s (%enera# "rofessiona# "artnershi"s and business "artnershi"s)
d' <oint ventures (exem"t and taxab#e)
e' Estate and trust (exem"t and taxab#e)
5'2 ?ross income
a' ;nc#usions in the %ross income (com"ensation for services) income derived from business)
trade "ractice of "rofession) %ains derived from dea#in%s in "ro"ert&) interest) rents)
ro&a#ties) dividends) annuities) "ri=es and winnin%s) "ensions) "artner!s distributive share
from the net income of the %enera# "rofessiona# "artnershi"/ other income inc#udin%
s"ecia# "rob#ems such as mer%ers and conso#idation) transfers to contro##ed cor"oration)
wash sa#e)
b' Exc#usions from %ross income
c' 3assive income subect to fina# tax
d' (a"ita# %ains tax on sa#e of rea# "ro"ert& c#assified as ca"ita# asset and the a""#icab#e
documentar& stam" tax (inc#udin% exem"tion from the ca"ita# %ains tax)
e' (a"ita# %ains tax on sa#e of shares of stoc$ not throu%h the #oca# stoc$ exchan%e and the
a""#icab#e documentar& stam" tax
f' @ina# income tax on frin%e benefits (inc#udin% exem"tions)
5'0 6eductions from %ross income
a' ;temi=ed deductions
b' ;tems not deductib#e
c' O"tiona# standard deduction
5'5 ,ccountin% "eriods (ca#endar &ear) fisca# &ear) short accountin% "eriod)
5'5 ,ccountin% methods (cash) accrua#) insta##ment method) deferred "a&ment method) #um" sum or
outri%ht method) annua# or s"read out method) "ercenta%e of com"#etion method) networth method
of determinin% taxab#e income)
5'6 Tax return "re"aration and tax "a&ments (venue and due dates)
a' +e%u#ar fi#in% (inc#udin% substituted fi#in% of return and e#ectronic fi#in%)
b' Lar%e tax"a&ers and non*#ar%e tax"a&ers
c' ;ncome tax credits (#oca# and forei%n)
d' 3a&ment of taxes in insta##ment
2' (a"ita# %ains tax
2' Tax due exceeds 32)000'00
5'7 Aithho#din% taxes (at source) ex"anded or creditab#e withho#din% tax) fina# withho#din% taxes and
withho#din% tax on %overnment "a&ments)
6'0 (om"#iance +e1uirements
6'2 ,dministrative re1uirements (re%istration) issuance of recei"ts) "rintin% of recei"ts)
6'2 ,ttachments to the income tax return) inc#udin% (3, certificate) "er 4;+( re1uirement
6'0 Bee"in% of boo$s of accounts and records) inc#udin% re"ort of inventories
6'5 3rescri"tive "eriod of boo$s of accounts and other accountin% records
The CPA Licensure Examination Syllabus
Taxation / page 3
7'0 Transfer Taxes
7'2 Estate taxes
a' ?ross estate
b' 6eductions a##owed to estate (ordinar& and s"ecia# deductions)
c' Tax credit for estate tax "aid to a forei%n countr&
d' @i#in% of estate tax returns) "a&ment of estate tax re1uirements
e' ,ttachments to the estate tax return) inc#udin% (3, certificate
7'2 6onor!s tax
a' ?ross %ift
b' Exem"tion of certain %ifts and other deductions from %ross %ift
c' Tax rates in %enera# and when the donee is a stran%er
d' @i#in% of donor!s tax returns) "a&ment and re1uirements
8'0 Ca#ue ,dded Tax
8'2 C,T *subect transactions
a' -a#e of %oods or "ro"erties (actua# sa#es) deemed sa#es) =ero rated sa#es)
b' -a#e of services and #ease of "ro"erties (actua# sa#es or #ease) =ero rated sa#es)
c' ;m"ortation
8'2 C,T exem"t transactions
8'0 ;n"ut va#ue added taxes
a' 3assed*on C,T
b' Transitiona# C,T in"ut
c' 3resum"tive C,T in"ut
d' Aithho#din% C,T (creditab#e and fina#)
e' Excess C,T in"ut in "revious return
8'5 +efund of C,T in"ut (=ero rated sa#es) "urchase of #and and ca"ita# %oods)
8'5 (om"#iance re1uirements (invoicin%) returns and "a&ment of va#ue added tax/ "ower of the
(ommissioner to sus"end business)
:'0 3ercenta%e Taxes
:'2 Tax"a&er) tax base and tax rates
:'2 Tax on "ersons exem"t from va#ue added tax (annua# %ross sa#es or recei"ts do not exceed
3550)000'00)
:'0 Tax on domestic or internationa# carrier (inc#udin% exem"tions)
:'5 Tax on franchise
:'5 Overseas communications tax (inc#udin% exem"tions)
:'6 Tax on ban$s and non*ban$ financia# intermediaries "erformin% 1uasi*ban$in% functions
:'7 Tax on other non*ban$ financia# intermediaries
:'8 Tax on #ife insurance
:': Tax on a%ents of forei%n insurance com"anies
:'20 ,musement taxes
:'22 Tax on winnin%s
:'22 -toc$ transaction tax
:'20 +eturns and "a&ment of "ercenta%e tax (re%u#ar and e#ectronic fi#in%)
20'0 (ommunit& Tax (com"utation of basic) additiona# and o"tiona# communit& tax for individua#s and
cor"orations and the maximum amount due)
22'0 ,dditions to Tax
22'2 -urchar%es (#ate fi#in%9"a&ment) wron% venue) wi##fu# ne%#ect) fa#se or fraudu#ent returns)
22'2 ;nterests (on deficienc&) on de#in1uenc&) on extended "a&ments)
22'0 (om"romise "ena#ties) amount to be s"ecified in the "rob#em'