Classification of Residence Situs of Income Gross Receipt/ Gross Capital Asset v Ordinary income v Revenue Expenditure

Taxpayers Income / Taxable (Net) Ordinary Asset Passive Income v Capital Expenditure
Income

Individual Meaning of residence: Situs of Income: Gross Receipt Capital Asset Ordinary income Capital Expenditure
- Citizen Gross Income
• Resident Net Income
• Non-Resident Individual Goods/Property Ordinary Asset Passive income Revenue Expenditure
- Alien (Ordinary
• Resident Corporation Services expense/Operating
• Non-Resident expense)

➢ Engaged in Trade or • Section 22 and 23, NIRC
• BIR Ruling No. 517-11,
Business
22 December 2011
➢ Not engaged in
• Sec. 25(A)(1), NIRC
trade or business • Garrison vs. Court of
Appeals, G.R. Nos. L-
Corporations 44501-05, 19 July 1990;
- Domestic • Ota vs. Commissioner
of Internal Revenue,
- Foreign CTA Case No. 3161, 21
• Resident March 1982
• Non Resident • BIR Ruling No. 079-89,
Trusts 18 April 1989
• CIR v. British Overseas
• Section 22, NIRC Airways Corp, 149 SCRA
395
• Sec. 23 and 42, NIRC ▪ Sec. 31, 32, 43 and 44, • Sec. 39 (A)(1), Tax • Revenue
• Wells Fargo Bank & NIRC Code; Memorandum Circular • Sec 24 and 26, NIRC;
▪ Sec. 36 - 38, Revenue
Union Trust Co. v. CIR, • SMI-ED Phil 77-2003 Sec 12 TRAIN Law
Regulations No. 2-40
G.R. No. 46720. June Technology Inc v CIR, • Revenue Regulations • CIR v General Foods,
28, 1940 (“RR 2”) GR No 175410, Nov 8-2018 G.R. No. 143672. April
• CIR v. British Overseas • CIR v. CA, GR No. 12, 2014 • CIR v Goodyear 24, 2003
Airways Corp, 149 124043, Oct 14, 1998 • Calasanz v CIR, GR. Philippines, G.R. No.
SCRA 395 • CIR v Citytrust No. L-26284, Oct 9, 216130, August 03,
• CIR v. Marubeni Corp., Investment, G.R. No. 1986 2016 (note references
G.R. No. 137377. 139786, Sep 27, 2006 and discussions in
December 18, 2001 • Soriano v CIR, G.R. No. footnotes)
• CIR v Baeir Nickel, G.R. 184450, January 24,
No. 153793, August 2017 (Third Issue only)
28, 2006