8/9/2019 15658774 Answers BAR Taxation 2005

1/11

2OO5 DA.REXAMINAfIOIT

a) Descrlbe the power or laarion. May a legislaftebod' cna.t lsws ro *e Eve.',,st!' rionalpovlslon granlhg s.td body h. power fla,l,l Maytaesb.tlrsobjectol*!oll.rcompensllon?!1 Can m ds.ssnenr aor lo.al * be rhesubjdr ofs, r'olr orconpensanona8alnslanmljudlmen(fors sunotILonct blahcdby he qDay.ag!hst thc ocalgovemm.ntrhal ntndefi.asoe ? Explatn.dl Is a d.ndd.y td a*$nent a brr to o clah forru retund d tlx Rdrc) Explatn.e) Is thc appr@al of lne murt srttrng as prob.t. or.sbt. *illen.nl 6!n, r.qulEdoolle.ironof.stat tax? Explarn. (r0%)

al rh. pos.r or.urdotr l] Ih.t4 u rttrlbut. or.sov.rdgtrry. ^rov.rclgtrty, trF Pow.r to tuu Dll.d tr ltr l[t., rcrnoyl.ddtlg in tb vclt nducno rimrB, 3o h.t s.cuity.cdist rt, .b!!. rs o b. rourdonly t thc r..ron.lbntt oJtncLgkhtu. whlch n!os.srh . rd on rh. con.r\u.rcy 'no ere to pay ir . IMac.dnCe.buh@mati6^or Aitlturt Atthont! | Marc6, 26r

Bchg u &h.s!t po*.r, rhc l.gislalu'. can.nocthss r. rd3. r.ycru.J 4n rtrnout ih. grar. or saldpow.r tn th. con.ttirdon, Ir mlst b. noted thatCoctltutlomlldddoturchtlrglo thcpo{roatqatlo!do not op.nt. & gr.nts ot tb. pow.r or rd,llon io lhcov.mm.nt, hli h.tcld m.E

8/9/2019 15658774 Answers BAR Taxation 2005

2/11

rpotr . Do*r shlch sourd dh.$14 b' Pdctlc'trv.itlo"ti-n, tc-tq co*tt.uttondltiniidttoE re27

tl xo. rd.3 c.$ot b. lh. .ubj.ct of "t_ofi q".-.io"*r" r"' tI'. rou"-tos ..sn.: (r)tr" e orart ' . "ar toa'**m.*a-tcunot b. crst.tl h 6.r.lv tric ru6 4tcgorv { otuuvobllt.iloc: (21 rbc rpPuc.bl. r.s d' l prlrclpl"dd;mld.&D s tcutrr,!ot!.c..t t vco@' r';rch; uA l3l FUbr. poort t. b.(s 3!!"n'd r r}.tnr.crltv dd ltrd.p.nd.lcc ore"-'uic,, ttt"nlutoo l,"nLr conpdrq/ 4 ACRA 622o&?).

Hmr.r, tn. odli.tlo io F r.t. u4 ur'.@!ycr'. cld4 ag.rnlr tL gp*@!i G bott d'rdedcmddeble. s P.u .. ti v 0qut.l.i.4 ooEp.4.!o"tax.. Dlcc. be op.r.dotr of rlu sd both ohlta'tlor e.nln4;'rb.d ro th.lr co.cffint sours lDonhlD

u'cdrtkos, a scR]t 4/r3 (196311

.l tto. Tu.t ud d.ht. ar. oadtfcrcd n'tc trdchrr..t.r: h.nc., tro ..nofl dblllatloB is alow'd Theon.of lb. tdPlv.rdrbgf'om trs. whil. .h. not.v judgn.r. !g.ln3r rb 'roscmo.nr it d obuSrtion isii3 &oo @!hct rbcrhcr;!orc{ - tn!'r.d. h*o*h'r.n.ur rhat rhe rwo obrtsarios.t oftor l.crl compcncstio' lFEn'id u 'nr'medlaiP,DD.trare c.un. 162 srtu\ 753 tt9AA)1,Ir lronlruh...h.localrdtetrt.D.lr dd th' onarlud!m..t d. both oi.rdu., dcEMd'bl. e r.u forrvn."ia*.a -"v r.rofl or .od!.n.'(io' b. dro*.dtDof,rneo ,adrftd, a scr.a 443 (rs63)l

d) No,A3rg.n.rarr .,ddc0cis no! r r'd b. aldo for td rcfuir.t tr.rc.tlt.It t3lodc.xy rpFop.l.t.: b@r, .hrr |I tl. d.ncboct ru.;.Bd.nr i3 tJrc.dy 6nar' rh . cod4l3sion.r .hoddlo t Srsnt th. clolm ul..s rh. tarpav.r prvt rn '

dndcacy, !u.dr., no td r.fondortu cr..tti *tn b.g'rnt.d r, lorg .r trrrc b p.ndlng r d.nd.nc, td.3t...DcDt for tb. .D. tuiht. p.rtod. To .pud a tdr.fud or c crcdt. d.sprk thc .!lst.!c. of d.fici.rcyn...g.m.nt for tt. rM. rslbl. pdiod i. d .b.uititysnd ! por&itt h c6nc.p.uar.ff.en.ltl.d to a.efund ud at.hc rah. trme b lt.bl. for Ila d.ndcacy a.r.rb.Dr. rr od.r Lo votdoulttp[cttyof rultr, lr L,6glc..lly D.c.!.rry.trd r.glxy.ppFrnskrb.. th. k.tr. of d.llct rcy rq ca.in nr b. sorftdiointry si(h ih. rur.rr's ctdn for ru r.rud, toor r.ludabl.. tcm u.cr,citlrurtunki^gcotp. andc'rA,23ascRA34aIr994)l

.) xo.Iac.pproyd oftb. coun,t rilg rnrr.b.r.,k no. r Eed ory aqurFm.n. rr thc cou.cdo! ol..trt. t& or tb. .ontnry. u t.i Scctton 94 or tb.NrRC, lt t. tb. DFhri. or ,.rdcmnt coun whtch l.106l.l.l.! to .nttortr. tn. .r.curor or llaU.ral.d&llltr-tor of th. d.c.rtdr't .rrnr.. to d. e. Eydt lttbltn .ie lo ot trry hr....rcd l! $. Ft.tc.rDl... . q.rtl6..tlod fto! tb. comlsstold oah.didL.v.nu. flEt tlr. ..td. tr n.. b..! pard b .hom.lMa@3 E o, couft .t Appedts, 273 scnA 47 (re97l.

lr ) Expldn bdcny vherhcr h. fotb{nn! rcns ap{J lncome ronlreteigibl CarnandhB mn.rTropdauonol prop.nylcl Tdes pard d subsequennvetundcdd) Rc@cry fbaddebb previouslyhallcdofii.) Gfrolh.saLofaauscdforpeMnatpuqrc.

8/9/2019 15658774 Answers BAR Taxation 2005

3/11

snootg?tD:tlYaFERjr. d n b tu.f,l., Tt Lr tDD.cr. tu.!'l@&tdutolrrt lds rbr.t e.e.b.t lir'chd.. hc.d rncric batr d r0.Irl. (6d. r2{al,

b) T.!brc. Tt.F 1.. Elrdtd a.i!, lot.t lud.d by lN, rc.llx.t .ri ol . cL*d &d c.EpLt.d.ttuBtl6, Cdu Aoo d..ll4t h pFD.rty e !.n otgtos l@r. |a.c. 321.Q(3), nq.cl rtd.tEdr., ttalddrni.Le d.Gd rI d.dfttlo 6!& arld I'MC e tdlL tic!.dt .qultr' rto!.r.n ht cnt b tt dt6t oa ttl!.oE. t! t r.nt d dd ddhcdo. .o. l4lqolIRC).lttotrM!b.tt.:!.lrtr ch N rc!.!!@!d rdcdoctbn nld ts! Lc@, t,.- h6e ta, .toot'.tr d.l ..t^tc t4i d Dot t|aDL eld F,!!rLd.4 Rao!.rrdt dd.Dt rlrrolrt.tdt d0|' L ..IDr. b tlc dtda of h@. as Do.!r d.ddd.dBo@, (se r.{Dlr). nnq..) oah o! ti. ..1. or. @ u.il l|r D.m!.tpEpo... r. ru.hr.. Thl. || . d! d.rtfd &oD de.lhtrr! trc!.rtysbt h L Drt of thc tc!.t.! . irp.. tnco'r.(s..,5:llA)13),NRq.rldi..D.t.ddgrlq stehd.dbyLr.Edt nona.f.cl*dDnmpt t dt@nd.

{2., Srab ud db.u$ brr.oy wh.rhd rhc fonoe,trgcs my bc cdmprcmr3d or Bay not b. compemrs.d:E) Dclhquent scNunillb, CaduddadhlnrstrauErrot si. alt rl*@cot6. nn.r,"*

8/9/2019 15658774 Answers BAR Taxation 2005

4/11

r. Mysdyicpo d 6. that the ctty'. plm to .!sctm ordinuce tlat rtll tolosc a!.h spechr r.Yy on td.iuds re 'ot l.gdryspcklly bncfitd by ! plblic woit. prol.ctr orlmprov.mnt. tudcd by th. .lty goy.mb.rL (sc. 2ao,Local Govmme Codel.that befor th. clty couc courd .!.ct d ori0'Ec.imlostlg a specr,r bvy, rt shdr.orduct . lublic h.artrgthrcorilottryhv rlg lh. otu.B oft}. E .lprop.ltyro b. sIfectd or the pcBoE havlrg lcta.l tlir.t thcrcb$tothe.r!t.edpla..thercof uilafordtn btrsth.opporrulty to :pi3r u!lr p6ttloF or obl.ctt@reradve to th. pto!o..d .!dlrdc.. (6c. 242, kclr

I woulit ldvlr fte lot om.F th.t th. tD!..ttlo! ttvalid b.aus. a ctty, even lf tt 16otrbld. M.tb Mutlr,may lerT u ufual tq on ftne rod. at th. r.t. lot.rcdhgnY pcrcert l5%l orp'opr y td. (scc,236. Lo6l Govt. Coile) I wodd'lkcq,lsc adllsc then tnat the rciob, regud$3 orlutl seg, in sby p.opi althortties, thc oh.shipofehich hae .encE, who snal !e Itablc for(lastpar., sec. 23?, tbld.l

Flnally.I wolrd ddvis hm to conettud or placeinlrovemert3 o, thcir idre )ind' by naking varuneeiloiatton. tn tl! ldd t(s.c, rse(h), ibidJwodd mt he strlject to the ad valor.m td o! ldre rdds,

Nak: nte special LeDlt c.lene.l tJ in theprcbLemmiqht betnteryteted bq the *mi^ec n\ tua uaqs: I t) AnaaatbnalAdmrole rd on dr rdnds s. 236. r,ac)d: 14ste.iot teaa b!1,..r couern,n?d untu rs?.. 2r0 rccl rhb b s, b406e

b'. . , . . .@n.Jo]L td". \ 'ptrh bdh imp'srbro/arr 6S,! 41J1:.,slkel P ""- t'an, ollatesanrs susaes@-au'su..s sholl.l b giuPn f,l

(2 ) a) slate and expla,' the basN or duoabler'a[! .f3n rmpodedarticle sub]ed b a,r ad laloum tdb) Distinguish countenailing dul, IIoh

SUGGES"EDa swERi2, a,) Thc h8l3 of dutluble value ol d tmpon.dd cr. sublect to e ad mloren ta udd thc tsxf udc$romr co.t. i. it' tidsactlon vahe. (s.c. 2or (A),

T.rtll dd cutoaa cod.. .e d.!d.d by R.a No. 9 r35)-rsu.t r.lu. codd lot b. d.i.mln.d, thn tn. rouosrtrg'dus 3r b bo ulr]lnd rn tbv.ru. ofld.!.lcal*oo& (s.ca,20r l3), rb;djsc.. u. c.r,C,A,O. No. 4 2oo4l;.TEsactlon vstu. or similu goods(sc.2ot lc l lbid.r s.c.lI. D, r, c.A,o, No.4'2oo4).(s.c, II, E, 1. c,A,o, No, 4'2oo4):comput.d v.,ru. (s.c, n, F,1, c.A.o. N6. r.2oo4o) andF lracr v!r!. (sc.2or I),6rd.)

subj.ctto atrsdYarorentu !trhe goods whe. sold ror.xpdt to th. Phlxppt!.r, rdlust.d by gddinE cnain cost

prycbb ror $c hpond good3 sc,2o1(A), rarrn andcustomr cod., as Mcrir.d by R.A No. 9135) rf suchvalu.codd not b. dct.rntn.d, in.D th. ronostrgvsrrcs

8/9/2019 15658774 Answers BAR Taxation 2005

5/11

idnrtcalgoods{s.c,2or {o ibid; sec. u, c r,c.a.o No4'20041:T.ansa.do! varueof s mtlar goo& {s.c 20 r lc),Ibld,r a.c, n, D.r. C-A-o. No. 4'2oo4)r D.ducttv. v.ircls.c.1r, E.r. c.ao. o. a.2oo4)rcomPut.d v.Iu. ls.clI, r, r, c.ao. No, 1'2oo4o)md rfoubacrvaruc{scc 20

2, b.) coDtcnailhg duty |3 a dlty lD!.r.d ltr u.d or .ttlDlt.d .noat oft!. subeiily or houty or suhv.utron ,rut.d by thcror.ign coutry on th. prodlctlon, Euutrctlr. or.4omtio! rnto th. Phtlippln4 of uy dlclc l|rcly{otrjure u tndstry It tt. PllxPPb.. .r r.tId orcolrld.nhly Ettd th. .3hhu3hDc.t or.uch ildatry.(s.cttotr 3o2, r3'rfrud cotoD cod.]. o! tL. orb.rhud. Drprng Dutt ts ! dtrty l.Yl.d on tDDo.t..r 8oo.l.'h.r. lt appcs lh.t p.cl6c 8.d or cL! of ror.ll.dlct. le b.lng tnpon.d tlto or sld or L |lrdy .o r,. oIdl! tnc Pbtrr!9rnB at . p.tc. l.' thd rb f.lr ede.{s.dron 3o1, Tdif dd cG.on3 cod.),

{3 J Ja.ob slierseFlnga5yeartoufofdutyasmllrbryaGche ir Jalcia retumed o hePh'lipphcsbdnche Mthh,m his personai lTectsncludhea ptBonrl codpllcr rnda.ar. \! ouldJacobbc tabl. or a\

s, No, ecobqdnb..ftmpt..l provld.d t. complt.scc. ro5 orth. Tsrtff ud

No. Jrco! tr .nttrl.d to thc tu !tr.t duty-fi.clmponattotr ofhir p.r.o!ar cfi.ct3, p.Bord ompur.rmd cu provtd.d th. rono*.tng r.quir.m.nt. dc m.t:

pnor to ih. r.c.lpt by th. muppl!. elssto! or.oDld6tch Jahrt! of .r.cob . rcc.ll o'd.rih) Thc cd le rcrtsl.r.d l! ltacob nu.rcl Ttr. .rrm4ton 3hcx eDplyd) Tn. .rcmprton srEx rpply to tt. aggr.gar.hold err.cb {itrcludirg thcpcm!alcobput.r)lot.:c..drngtljrtypd.ltE(3o%lof th. rotd amosr rec.tv.d by .tacobae e.idy ddallowuccr dutrg hte .eeidnm.nt tn ltaLda, but not rol.) .t.coD out lot hav .va!.il of tl!. .:.dDtro!fou y.4. 0..t !r,. s.c,106, T.rtff u'r cubd coir.)

ryllt sraG$rh l6ons rhe Ld usLnenroltn. followingh rhc pr.panto. ofsnual inc

a) P:_oc.eds rxre insurdce re3s rrevdabl. bcncucisry:bl t3s monthpay ard de minmis benefils:c) Drddeds rald by a domesrc corporauonIrom {' )anoln.rdon.su..orporairon: and (iira rore{nd) hterest ondcposits iL\ (i)BPlFmily Bak;and lu )a localofrshorebanbngunkofr fodgnbank;.) I ncone r.allzcd from s.le ol li) capi |3l dsets Iand ln )ordlnaryssers. {5%l

rl Th. proc..dr of {t Insudcc rcc.lvrt by rtr nor ro b. rpott.d rtr

aa) th. cd must hcve b*n o

8/9/2019 15658774 Answers BAR Taxation 2005

6/11

tllc 'fiu.l t!.om. tuEt@., t.cr@ tn.y e.:.radcdlrem go.r ln.om6, T!1. llnrt of re.tpt ilo.. lot nn*tthln th. dcanido! of h.om. - _ang u.d&h @hlchlous i^to ttc tatpa!2f orlr.f than a tuf. ...un eJ.api.ar",ah..r$uac.t..ohp.aatorylD! u.,tLrccelpt ti o.*ly co$tdcrc.l n r r.t|n or dpttd.(s4tior 32@xr), rnq rldd !. "rinidad. r*r Phlr, ?3

b) rstmolttpayt *clud.dt6hthcgE..rrcoruforrDco66 t& !urpo.$ to th. .:i.nt ofP9o,ooo.oo. Aryercca. v||t b. ladual.d tr tb. 9rc5 tncod. p.r lrloE.tu ftE s prn oI gro- coDrMttd hc.r.. (s.c.

De ntdn&t.mntr e @{eDr.nbt.t@.db,Th.y u. nd ro b. EDort lt ln thc ln oe tr r.tdb$s. th.t u. td d.Ept, rh.y e dro .r.Dpt &ontlc tEpo.ttlo! of th. ftt!3. b6.6t. tu, (a.0. as(c).c) Dlrld.ad. '.e!ftd bt. doD6trc corpodtlEfrom dorh.r alod..iic corDo..tlm !E not Nble! tod..led t! lf,c tncon.rc ctcn, 1s... 27 (Dll!), MRc).DM{rGnik r.c.ivd by r dometttc corp.tatlon frcma foretc! co.pordon r3.ubj.iom prn olth. gc' incom., Th.a l. !o tar.rcdptingtrds .yp. of dldil.ld rrob Incon. tr- {sccttob 32 (7l.

dl ltrt.r.st otr dcporlt srlb BPI Fanny Bdk t3 apa$iv. lncohc subj.ct to . nnol Ethholdhg lu ratc ol20% tb. hr.-st o! rt !o.lt rtth a rocrr off3tor.h'nllns ult ofr forclgr bhL |3 r pG'iE Incoa. subj.ctto r fild ertbhordrr tr r... of 7,5 , (s... 2.(B)lr),ralRc). 86.l rntcr.st in.oE.t c noi t. 6c d.clEd Gpd or go.r tncon. tn tr!.ln.l {l) C.n.nny, tncomc rediz.d from th. 6d1. olcrpird !.rct' a6 not to b. rcpo*d ln tb. tncomc td

Etd u tl.y !. .rr.rdt .u!j.ct t nrd ta.. (..prt rgstff tu .! Ed proD.ny &d.iu!' of3.o.rd, wh.! cto D. !.pod.d l! tn @u.l hcom. td t.tu c tL.capli.l adot d.dv.d f!@ th. alblGttlon ot c.ptt.lss.t. otl.! ihu E.l trep.nt or .hc. ol .r*tt l!il.m.'trc corDondo'l'hlch .n lot NbJ.Ct to nn.r0! r!cd. tlrjlzd n@ rb...rc of ordrr.tt GcaL t!ru. oit rb. .d.l h.oDc .[.I bc n clEd rr th.dru.l lncom. turtu. Tb.hcoE co!.thrt.r.tm.rtncod. d.rrvc.l ftom trr. .ordlct or tnd. or b6los or. gd! it.dhd nrd d..Ilot r! Der.rty. 13.c,32 al2)(2.)a) siate rhc condtuoN rcqftd by th.Td cod.bforc h. CorEls3loD..oftnLhal F{erenuc o!ld luthortril'c atund d cndn ofta...ron ouslyor rllegally dvd.

. bl D.vfhholdr't 6genthav.lhc rgrrtb [r.u aPprqto fd rs r!turd? ErPlain {5%)

2. ..) ri. @rdnr6. F:{l) . rrut.! cldr f.r r.fud b nl.d hy rhhrpry.. erlh rh. Cobai.rlo!.r ot l.t.d.rR.ftlG, {Sd. 2()4, NIRO:(21 .h. clrlE lor r.rud mEt b. . c.t.8o.icd

it.Dud lor r.tmbq.6.!r. lBem4o !. c.rrectot4trnr.hidt Rffiu4 6? Phn.e6lreso)lil3l trE cr.ro rot F6:rd or tu ct (utEutt.OIcd rrth ttc or t!. sult ottM..dlrl ii.rcioa r6t DGoFi.nc.d rr 6tr'ln&|! 2 Fd 6oD &r. ot t.tD.!t ol ihc tu orp6.li' na!!d.s or Ey .!!.F.Elrt c.u& (s.c.tze. Nttcl.

8/9/2019 15658774 Answers BAR Taxation 2005

7/11

12, h,J td, A rnnholdt!3.3.!t.no[ld b..llo*.dto cl.lm lu b r.fru.r, b.csa. ud.r trr. hr .rtll .3.!tl. th. on. rl. L hdd |lrlrc for dr ytolartor ol arr.wtttholdtlg tE lre .rhuLl .!c! vlolatlon ooc*le.mBL\sl.re.oJintzmat R@ tev. wa.lerPhlll!,l'@,rra. 160 scRA 670, {rea8), Futhcnor., 8rnc. !.sltbholdht at !t Ir e.dc pdad.tlt lt bl. to d.l|!ot.trddthnold uy tdudd scctL! 6s{.) otth. Ta c.d6.It l. lEp.r.dE tnrt h. bGcoltftr.r.d tt. !up.t.! fo! drl.t.l lnt.nti dal purpo.r. Thq, by uy sroubL.tedud. .rct !cno!.noEllt hc Elrrd.d - . r.tty rhl.rcr.t to brt!3 .dt tor ..noil .l tua lcomt d.n .et 'r.trrrot RM. o.F@ts .nd &tfrL Phlllpl,rtENaurl@anhg cotto.ddn @n cra roa acRA tr7,tr99llt,

A dpayd Farv.d a r.x d.ll.tocy .33emt ot Pr.2 Mrllro! froa |h. alSftm.ndrrgpatmntvfit'ln rod!t.dh.M*. tr wuld ond't}mugh surnnBryEn.dtc!, Th.raxpayd rcqu6..d for a Eonstddtion sladng ncgound.rh.rclo.. lnstadof @lvtg$eEqucstforrercrdddo(s.Lure to $. l{patriMav this do! of thc Cmmrsslon.r of Intemal

or the t*p!ye. io enuile btn la aDpcal o the coud ot TdApplrs? D.cide !.trh reasons. (5%)

v.., fi. .. d of th. comrnsrbo.r of htGE.lR.v.nuc lB .l..m.d s dlrsr of tn. r.qucrt fo!r..o!!ld.htto! .t tn. t.r!aFr, thu .ltrdtng l hrorpp.d to thc cra Th. Nodc. sE thc onry n.!otr..r.cclv.il by tn. t!:pay.! ud ttl co.t.rt ed t..orrupport. th. th.ory tlsr it q3 rn. DI4. lhd rctrc!.rdrng th. rcqu$! lor r.coErd.rutror, ar. v..y d.ol rh. nodc. h.l.at.d tblt rt

6.lrs" rhr.h b.or tlrr th. idprt.! r prcp.rtL. ri!b. .ubjcct.it to tt. d.nd.rctr..so.!t, rau, b d. d.ddcd c$G, th. a!!frECout.d.dthst tn Fi"r otrc. B.fm S.lru. t..llndd..r'tonoltLEcoEEkrron.ro'th.rkpur.d.re...@ntlcIR !, Eabra culturdl corp,,361 scRA 7r (2ootl,

No, !h. Fh.r No c. B.for s.rzur. do.. nolconrttut. . d.ltal of tn. rcqert for r.con.ld.r.tlotr,.d to coh. .ut wtr! |d.cl.lo! cl.dly .trttng th.ldcb ud tn. Ir- ulor *bl.ttIt l. bccil uil rh.t trr. rd. co!'tlrutc. . trl&crrbn. IR.lEu.i.glnrtlo{No- 12'99,IEpt.Mtllaq.G. 226. NIRC,. n c.fut m.Eryb. trpn!.r r6i &.|..ruc. oa.w.rurotD|tabrodLvt, lcIR !, unid!grdrpltrlrco.p- laSACRAtrT, (r99oD srrc.tt tr!.r@aL. t !o! .d.G t ls!.d .n..d o( . rv.rua dDLE ba air kvr, rlrh @ @ an.r tlL dll6..dd -.i6-a !c 6lida.d 6 . ".dd or.t 9rot6t.YI

oar ro,whoLcn.E dtrlhctEdingbusln6s.cntt$t dro h,3 acdntant thc papmdon of hrs ncon. b rctumand lh. paymdt ot th. d due. Thc acmuntmt ntd .falsulld taxr.tumby lnderd*ldiE lne sa16md (ffis61lrltrh. .xpense deducdoro by Dmno.h Dalrb [able for ine deficrsncy ax and rhcrpnaltrcsrhcreon? whar b thc rab rty lf my. of the sccounrarl?

Y.!, Dullo t. tl.bL for th. d.trcldcy tu .. w.ll ..lo! tb. d.Oct@y irt E t, Hoev.!, h. L ro! ll.tL totL. fnud t.lrlttt c.s. th. Goutut d.d t tondt!. UDltl orbL r hodtt. A.G.cdy Eo.ct t.Ibl.t&orc D.t orly b. fdt.. 6{r lot!6....rt1r t!.udul.!t sl.E tt rDFE tld .h. r.iu.n

8/9/2019 15658774 Answers BAR Taxation 2005

8/11

f,r' ror trclG.t ht thc tarpry.r ltudf but by nt..e.dtur. ae4dr4ry. th. 5o96.@b.!9. for nrud@nrd !.t t lDEo..d. lrar u- cl , !a gcRA 7r9,on th. oth.. lrud, t!. rccocrtEinany nabb lor vtoldto! .f thc Tu codc *h.! h.lgktfied th. td r.tM by ud..dccl.dEa ih. &1. udov.r.tdrng th. .I!.!.. at.ductto!', (4.., 267, NIRcr. rDutry . rccoutd! ir . c.rti6cd ltib|lc A.codtdt. hirc.tl6r. { CPA .n jl .ltoutlqlly b. Erct at orcuelcd r9o..6!vlcttor.

vhtch r.qulrcd ho.pllzla{on for 3 montns. Folo$dng!godatios uth ftc aerh. dd ,13 n.tEr, m a@m.nl}6 Echcd undd r}). tm3 0t whLl| JR Ms oar.t rh.IoUoNbg mounl3: PsOO,OOO.0Oor h|s ncpltarhdoniP25O, OOO.OO3 do.ar dMagca: P30O, OOO.0Oor loss ofin.om. dunng t}l. p.rrod of rls llaFcnt arl r.upemtron.In addfidn, JR rccctved tson hrs .mPloyer ihe dounr dfF2o0,o0o.O0rpEEendng$e esh equlvdlent f hls .mcdwh'ch. dby, orthe mountd hc Kdv.d de subj*tto hcm. tax? Exple. (536)

SI,GCESf,ED ,,'S'Tf.R;flt. uour of P200.000,oo !!.t JR rc..F.n &d}r: .Dplor.. r. rubj..t to rncoo. tu .rc.pt th. aon t.qolvdot of t.! {ro} d.F urt[lr.d v.cltlo! LrF@.llt' rbt L t !o! !lrd.. rtbout. of vqd6

.lLDlq of .i6t laE @da. rhlch u. pdd to dot. t-.@dtrt.!ep-.-do!le.c-2.?a{AIr,rrt{o.24rai- ooa!.d tt nn n . rc2ooo).11!. 6oBtr tt.t Jl Ec.t*d lto- th. .l!l|. 6crclud.d tr.D afr.r rn .nc ud !.r .ubjcct to hcM.tu b.c.u. !t.y c coDp6&t1otr for p.Mlal l!lur..!!fi.r.al d@ u lcclaLlt .. ftIl .. aeaa.. r.c.tv.d !.! r6dt ore .3r..h.nt (n4.rlrdo!) oDrccout of 3uc!rEju'i.'. (5... 32(8)(4), NRc).IX

compdy A dddscondnulng I@s.6 :!nd to t.mhar. th. senlcca of lt..nplotee, Undd tn. kbo. Cod., chployccs who acseparated {ton .cFlcc fq $ch cau& are eluUed to amttus oaonc-h8rf m n pay fo! dc.y yd ol seM.c.Compsy A pnd tI. .qullLnt of oD. honlh pay for 4..yy@ ot &drE sd $. c$h .qurvd.nt of unus.d va@uondd sr.-l tc.q e @non bdEllrs.

vtrAn ht.mauon t alrlne vrrth no randhg rghts h tnPhjlttprn.s sold trckels h the Ph,lrpprn.s lo. ar'trcm such eals ofd.kt6considered t:Eblc hcome of the s.rd ,rt mauonal aL

canlerfiomPhtlpplDcaourcesund.rth.TaCod?Explah.

No.wnn tlF tl.t.ta c.olith.r.br t!. tni.hetrolddrline. thle k ro! cdrtag. or p.non.i .rce$ boggsg.,cddo and mall not orlgbathg rrom rh. Phttlppln.sbcclE. ttr. a.rrun. hBno rcndrngrigrrt. h th. PhiliDphea.ThG ncom. froD $c uI. ol ttcL.b rl .ct!r!y tlc gD...3. ol P.ruor3, .rcc-b.geic, .itgo ud D.jl rod t[.u incoD. froa P lppt!. .oea oDtt if t !. Olglrt.rtd!at.. froB !b. Pbi(pph.s h . .o.!ta!oE ud$lnt.npr.d qrght, ln.s!.cdv. ofth. plrc. ofprym.ntot th ttck t or Fr$ag. docd.nr, (4.c. 23[a](s)lr),NIRcl. Accoratlntly, tb. hcon. m.ntlo!.d b trot d.dv.dlroE PhtlpplD. &e.r,

1'IIrJR Es a pas*ng.r or r *lrn. thal cmshed Hn.d *dous physkarhjud.s

8/9/2019 15658774 Answers BAR Taxation 2005

9/11

Ar..uch b.e06 @bl. &d subl.d bqlhhoBrng rqundcr th. Tq Cod.? Derd. r'lth (.e6. (5%lsuooEsraD xgr,Efl

TL. ..Frrl@ ta.!r. E ltl bt c6D.!t a ro ttdproy... @ ach.Ld tod 9!n l!c.u h.La t a!.!..'E ol bd.dt CE. a. o!'royd rf,.G E lc..r6E t.{t!|t.d .le to ..!6 h.rMd tf,.lr @rt&r(scc a2FIOO), nRO. tt dtlrlt r.dL.lf,u.6e!h-. c &d ua.dj..t ao r6brdhg iu @d- t!. ta

ITh. Ro|M C.thotc Cntld! ow . ?'lErrF tot |n Ibu rn TNrlacplorn6. Thc othh .td. dd Dtd.Ih Fn4 Nupr.d by th. chuElr .nd { 6kt llE @!dn dd.by a rchool run b, th. ChUEI r.t lt tlE ethatm .tdrby $ft Mrdd ribulhm6r4 drrk lh. Er oa uE

pdp.rry. ln pardcubr tn. mnhctdh .d., t tdL dMay h. churh .I'rn lar mpuon on rh. .ndn bnd?trecrdcdrh ltes. 16)

SUCCES]rED]YSTEN:Iro. Tic tbnl@ ot ah. hld 4cupr.d ud 4d D,E chucn, .oEll !d.clo6l ru bt rn. cn@f, a.rcnDt &@ Ed prepc.ri au.. rLIr. ah. !onb! ot ih.rud dD|.d br .ollcrcl|l ..rrblr.!!.!r. ud tb.Dottio!. rhlcl tr &U., rc .sbJ..r to Fd D.op..ry as...ab. _u..9.- ot tn. !reD.r.y e.t .ot th. -om.t htD" l.tL a.t rolltna bctor rh.tn r or .ot tL. tFFnt ttutl., lrrng car.r d E PhltapptB 4 I,c.. a39

XIAr !I.n .Dploy.. of ft. Asru Dd.lopDcnr Bek(ADBIwho Is ..Unng sn has ott r.d !oscu hls cd toyo!

whrchh. tnp.n.d tq-f6 to. htsp.Eonal u*. Th. pdvltcg.ot dcmptlon rrch t.x re g@td to qudlrl.d D.rsnar s.und.r lh. ADB ch.n.r whrch ls KSntzcd by th. taautl'oduc5. ltyou deld. to Duhh4 rhc w, G th. 3.1c3ubl.cr ro t6r? Errt.in. (5%)SIGGESTED illslPdRi

Y.., ta. .rr. i.!Dl.cr .o ru. 3c.do! ro? (Btor !n.NrRCp.ovta..ii.t "h tn. c& of tr,&cc tr[oddo!ol aood. 16.0 a!. PdtltDb.. by D.tu6. .!dtlc. dra.!clc. .t.dt. lroE tr rhcr. rkt tood. c.uDequ.ntrt .olrl. aruf.ftd or .tchu8.d h thcPnUlttl6.. .o ro!..rcap. pcFo6r or aurl6, rh.9&[.*F, rd.r.ttg d Eclpl.!.r .n..u h. 6uld*dtb.laponctth@ol,rno.h.!t |l.Dictorertnt.E telG r! @.cD rDDdrtr.n".We rlQ qutd^ @ t b. oue@. dc @tae.atrA.t tdr!|'eaLrDdck itutEqa,4llcatl^qt ah. !!ablo. Ct rrt VAt ,tu, n lt sgrartdanalrott, .^s. o,u d!!6 .rtorl b. dm.fr .'dld

EIR lehDon.td, Amd.d.ruaof aU.S.ooplny In rh. Pl lppltus unur h. rdrFd r! 1999Ht cd. b nk. t}). Phll,pplne.o nuch tllar folowine hisrdPn.n'. h. derd.d ro .p.nd .l'. Eer of hE hL rn $Lounrry. H. appx.d for dd $.t chnr.d a pfmdmtRsd?nt 3b.u3 rh. foldhgy.d h thespnngof2oi)4. wh "accrlonrnC OrlMdo. Flodda.USA.h. surd.d r h.darrackand dr.d. A| rhc fu oah|3d.ath, h. hn tn. rolodngproFni.s lo l bar* dcp..rts *tn ctrrbln* M.xar' d!Crub6r* Orl.ndo, Florda: {br.6trDE h OrLndo, noddal(.) a condohrduE ur t rn M.hd; tdt3hr* ofsrmk h thrPhulpph..ub.ldiary otrh. U.S,Cmpdy rh.rc he *ork dil.) .hG of.lc! l' ss Mgu.l cdp. md PLyt t0 shaE!ollto.k rn ore.y worl.i h nond.: t!, u.s. @s!ry bonds:.nd l8!Pre..d. rtw r Ut lBufu* policy $u.d by a u.s.

8/9/2019 15658774 Answers BAR Taxation 2005

10/11

\thrch or !h. loEgohg a.*(! sh3rl be licllded ln thctdable gGs celat. h the Phulp9lncs? Explarn. {5%)SI'OdESITD TIVSFEfu

B.t4rtudddtofth.lhlllpDtn ..tth.tlb.of Dt.d..th. tle dlos .rt.t. of R.r$ D.!.ld .h.r, tlctuitc .llhl. prop.tty. Frl d FFo!.I. t lirbr. o! htEdbr.,rLc|tcr .ltrt d .t th. tlD. of u. d..tL (6etto! 46,MAq.aaE, th.t ||orirg.rdrhlrlh&.lt! .t !.DLIrs 6tlt. b th. I'rdtppt!..:d hdtir.lortt qlthcltlbelru.Ltl ud qt r,&Lh) ! rc.ti@ h d..d., rtdli.:cl . coliobhrl[ lnli b &.lrdl4 rnu.. or .t@t t! th. ra!&'d!. .rbMrlr alttc U,s, c@poy rlcrc nc Frt dl.) 3h@. h au Mra!.I corD, .!d PutTlt ahd.. of rb.r ta Dhr.y world t! rt rtdrr dddJ U.stF..rry 6dd.Tn. prcc..& G6 . |lL l!@c. pouct l]EGd hy. u,a, corporrtro! b,tnelurl.d a pan ot th. 9or. ..t.r.ol Rdp! Dotullr. r tft. ddun.tlotr ol trr. b.!.nch.y t.!.v.caDrc o! te.pccdv of th. ndu6 of d!.lglratro!, tltb. d..lgut.d hc!.6.1.ty l. .nhc' tnc ..trtc, th.d.cub or dbtrlrtntor. It rtrc d..lgMt .t D...6.lrrtor o' r.tlLt.rnror adth. tl.slglstto! t. trevocrblc, th. !.....d. .hrrr norlod pd qI hl. gros srst., (3.cd@ e6 (E),nRc).

XItrJosl ag..d to *l his condohbilu unx toJ.s fo. P2.5 Mrllron.Ai th. tlhe ofth.3al. the propertyhad a zonar

vdlueuIP2.oM ' , n.Upon$. adv(.oI- . r . orsu.Enr lhcparuesdcreed to.rc.ut. two deedsotsarc, onc hdlcaunc rh.4n.rvarue orrr! oMtlud* rhc *thng p'frrd rheoth-shoq4 rlF hf s.uhd prtlc ot P2 5 M hon. Tfi. t4' oneukanta'ledh.(aprblge\,4 rcr..m unnarhrde.d o,..r" n oMnc 'le zond valueol Pl rr MJLon4q th. sFung

acdon rtrkm by 1rE padtG. (5%tSUGCESTED ATTI9!/ENJ

The crpibl g.lnrruduor rh. sai. aha! bc r'sr.dm tnc.crud E.B'g prleolPl5d h! wu.t r. nlShd.hu .t. m.r rd!. of t !. pb!6r. lE6tron 2a(D)(t).nlRC), t!. doc@.lart *up ru d rL .oneyd@ ottcrl tropdry 3h.! !Lst.. h. b.!.d or th. htth.r v.t!..(s.c. r9. NIRC), A.cddhgry, r d.nch!.y c./t.r !dn!t.r ud dobd.lt.rt .t@! tu rr. du. fton Jor.r pr@alE !0%.!Elr.{drDD.rx. o!. f..ud!r. FtM.Eorh it *t od Ll. tu sE n.ei * cnsbditItrbl. for id .v..16n. Fdq lr b .h.r thlt tn. th&crcqut.lte fa.rd. to coett ur. t.* Mrton d. tr...rt,vrr: {I) th. .!d to b. .chid.d ehicn b th. p.rr.trr or|.'r rhd that hon !y th.m !o b. t.gdry du.r t2t d.cconDuyrlg .t.tc o{dird rbbn b.ril. L b.d frnh,dr|ull or d.[b.nt. uit not mcrcry rcctdclt.lr rd (3] I.ouE. or mtlo! whlch l. unr.wf'J. I@ u. E ra.. oJrBcnrgnoP. Toda, Jr,,43a 6CRA 29O 2OO4L

(r ) Mr.E mrn, a..sldeDl fouam city,b a ceftndPlbl r. Ac@unt nr' Lqryer clgag.d ln rhepractjcco hts twoptuleosrons,H. ha! hrb Dtu ofic. lll Mal

8/9/2019 15658774 Answers BAR Taxation 2005

11/11

It

l

3l May M.Ir[ Crty. wh.rc h. has hrs ha]n onc.,Equlr. him topayh|3pDf.$ronal h s a lawy.l? Eir?laL.b) May0u@. crry, sn@ hc h6 hrs 6rd6e dd*r|m hc arsopact|G hb M pmr6sroG, 60and hlm forrh. Daymt of hl! pbf*tonar h 6 a cPA md a law..?

SUCCESTED|IVSTERJ., o. Itt. r.El! r. arm th. oEttd to p|y .ltt.rlrth.cltyrn.Fh.pre ...hb!tut&lonra.rcb.m.lr!d.. hL td!.t!d o8o. h @. n prcdc.. hl.prord.tor h ..v...I plr..l ft. pre!..lold tr pltd ... l.Yy6i rn Po|. Crtt. . !r&. v!@ h. pFct!.o nr.pret $lo!, rtlt dt|lL lto to Dtutle hti Dlol..lo! tnuy t ut of an. Pblllppb.. rftnort h.tna .nbl.ci.d tody oth.r u.lo!.r 6r b.d tE,ll@*, c G. nor aL!r..tic. .f.ocn lnt rlo!. (se. r39 rr Et tl@ ao rtr.

hc.l c-v.ru.!t C.d.).b- xo. 1!. pF ...lo..l t r.t rlnct rdorryoGfor .arr r--hL r.r od th. !.yDdt rh.D 1,. 6td..tth.r tn ab. .19 rh.r. h. prrcttce lrL ptofd.ld orrh.r bq n.rnt.h. hl. piilclprl o6c.. Tn dty otE.id.!c. cdDot Equrrc.lto .o ply br5 pFf..ioD.ltu.'. (s... r39hEl.do!ros.(21 In 1995, he BIRnledbeforebe DeDtue orJusdce DGJIa cnmhd conpbrnr aeailsia erpora0on rd

lts otlcds for.ll.g.d daslon of tues. nle compl.lntvassupporred by { swom .tatenent ol rheshMg rhe @mputauonor rhe L{ )rabilitjca ot the edngtaxpayer. Th. corloBron nled a moron !o disnn* $.ctuhal doBplaht on tn. ground \at thcrehas b..n, asy.t,no assssm.nroflb ra uabrutyhenc., hcd,nrElmptarf,rd th mbon 04 tl'. g@nd*'ar r as.sn.!t orth. td dcndcn y of th.orpoEdon 13not a prciondl0or ro th. mhg of a dtdnar ompraht andtharhay4nr.th.jor allld,itofth.BIRtuNmay

nr or tn. lar LabJty of orIs the ruungofth. DoJ coF.cr? Elplah l5%)

(2) Y.,. rL.En gofrh. DoJ r! d.ny'bs rh. motrorls .or..L rt ! leu@c or rnc d.Acbn.y drcsDdirottc. p-lor to prer..dto! l. !o! !.c....ry b.caa. tlr.Lcrr ol rh. c!r. .!d !l.t !h. crlB. of ddto trcomplctc 3bc. rb! elol.tor h.. hoEbgly ud qlt&rlltlu.d ! frardultrI Erlm *fitr lrt.lt to.v&r./d.L!r !rut or.rr ofnt tu, lursdD u, cuL.t ., s7 scP; a72(rrao)I. wh.i r. rnvory.d b.* r. tur rh. cou.ctro! oft&. but r ctlEb.l tro.4tto! lo. vlohdo! of |!.N.tton r lrt.mrl R.voe Cod.,

E.Etd, arrcc6bnd66 ra.r .!. lobr .6'L'n otl! toa -Fr-- .n .irt rt .oaDot.rrd .f b!l@ar6os'n66rddcdoL lr loaa.@trit t ut odrr..b. rllrtqtoFltst lcn&tu cern srqr &D@Iop@tcorp.,36lcR rroaGgg{rI.Ar .t@dt b.am.r rdb.to tfci.Ip.yd.dhg thrt tt. uout th.!.o! L .l[. u . tdud .o .l!hg. dcD.ld aor tl. p.lm.trt tb.Eor.l.|lhan!ro Clgo & Clgorcra. Wg. Co. u. c.rlector, ro5

2l