SITUS OF TAXATION

FACTORS:
1. Subject matter or what is being taxed. He may be a person or it may be a
property, an act or activity;
2. Nature of the tax or which tax to impose. It may be an income tax, an
import duty or a real property tax;
3. Citizenship of a tax payer; and
4. Residence of the tax payer.
5. Source of the income
Situs of Persons
1. Residence Tax - tax where the person resides
2. Income Tax source of the income
3. Estate Tax - residence of the decedent at the time of his death
4. Donor's Tax - residence of the donor at the time of donation
5. Business. Occupation Tax - place where business is being operated,
occupation being practiced and transaction completed.
6. 6. Gratuitous transfer of property taxpayers residence or citizenship, or
location of the property.
Situs of Taxation of Property
1. Real Property- location of the property
2. Tangible personal property- location of the property
3. Intangible personal property- domicile or residence of the owner
Philippine Tax
Situs of taxation literally means place of taxation. The general rule is that the
taxing power cannot go beyond the territorial limits of the taxing authority.
General Principles of Income taxation
1. A citizen of the Philippines residing therein is taxable on all income derived
from sources within and without the Philippines;
2. A non resident citizen is taxable only on income derived from sources
within the Philippines;
3. An individual citizen who is working and deriving income abroad as an OFW
is taxable only on income from sources within
the Philippines Provided, that the OFW, who is a citizen of the Philippines and
who receives compensation for services rendered abroad
as a member of the complement of a vessel engaged exclusively in
international trade shall be treated as an OFW.
4. An alien individual, whether a resident or not of the Philippines, is taxable
only on income derived from sources within the Philippines.
5. A domestic corporation is taxable on all income derived from sources
within and without the Philippines; and
6. A foreign corporation whether engaged or not in trade or business in the
Philippines is taxable only on the income
derived from sources within the Philippines.
Situs is where the property is located pursuant to the principle of
lex rei sitae
. This applies whether or not the owner is a resident of the place where the
property is located.
This is so because the taxing authority has control over the property which is
of a fixed and stationary character.
The place where the real property is located gives protection to the real
property, hence, the owner must support the government of that place.
* It is taxable in the State where it has actual situs although the owner
resides in another jurisdiction.
* As stated above, lex rei sitae has also been adopted for tangible personal
property
* under Article 16 of the Civil Code
Lex rei sitae
This is a principle followed in fixing the situs of taxation of a property. This
means that the property is taxable in the State where it has its actual situs,

specifically in the place where it is located, even though the owner resides in
another jurisdiction.
Situs is the domicile of the owner pursuant to the principle of mobilia
sequuntur personam. This rule is based on the fact that such property does not
admit of any actual location and that such property receives the protection and
benefits of the law where they are located.
Mobilia sequuntor personam
* This Latin maxim literally means that the property follows the person. Thus,
the place where the owner is found is the situs of taxation under the rule that
movables follow the person. This is generally where the owner resides.