Scribd
Upload
62 views2 pages

Tan Vs Del Rosario

The case questions the constitutionality of RA 7496, which implemented a simplified net income taxation scheme. Petitioners claim the law adversely affects them as taxpayers and that public respondents exceeded their authority. The court ruled that RA 7496 does not impose tax on professions differently and that uniformity only requires similar treatment for similarly situated taxpayers. It also clarified that partnerships are not income taxpayers, but that partners are taxed individually on their share of partnership profits. There is no distinction in tax liability between individual professionals and those in partnerships. Section 6 of Revenue Regulation No. 2-93 did not change the standing rule on deductions and did not intend unequal treatment of individual professionals versus those in partnerships.

Uploaded by

Jim
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
62 views2 pages

Tan Vs Del Rosario

The case questions the constitutionality of RA 7496, which implemented a simplified net income taxation scheme. Petitioners claim the law adversely affects them as taxpayers and that public respondents exceeded their authority. The court ruled that RA 7496 does not impose tax on professions differently and that uniformity only requires similar treatment for similarly situated taxpayers. It also clarified that partnerships are not income taxpayers, but that partners are taxed individually on their share of partnership profits. There is no distinction in tax liability between individual professionals and those in partnerships. Section 6 of Revenue Regulation No. 2-93 did not change the standing rule on deductions and did not intend unequal treatment of individual professionals versus those in partnerships.

Uploaded by

Jim
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 2

Tan vs.

Del Rosario

FACTS:

The consolidated cases question the constitutionality of RA 7496 or the Simplified Net
Income Taxation Scheme. Petitioners claim to be taxpayers adversely affected by the
continued implementation of the amendatory legislation. Petitioners also assailed
Section 6 of Revenue Regulations No. 2-93: that public respondents have exceeded
their rule-making authority in applying SNIT to general professional partnerships.

The Solicitor General agrees with the public respondents.

ISSUE:

Whether RA 7496 and RR Nos. 2-93 are unconstitutional.

RULING:

No. RA 7496 does not impose tax on single proprietorships and professionals
differently from the manner it imposes the tax on corporations and partnerships. Such
system of income taxation has long been the prevailing rule even prior to RA 7496.
Uniformity of taxation merely requires that all subjects or objects of taxation, similarly
situated, are to be treated alike both in privileges and liabilities.

Also, the Court clarifies that a general professional partnership is not itself an income
taxpayer. The income tax is imposed not on the professional partnership, which is tax
exempt, but on the partners themselves in their individual capacity computed on their
distributive shares of partnership profits as provided in Section 23 of the Tax Code.

There is no distinction in income tax liability between a person who practices his
profession alone or individually and one who does it through partnership with others in
the exercise of a common profession. Under the present income tax system all
individuals deriving income from any source whatsoever are treated in almost
invariably the same manner and under a common set of rules.

The phrase "income taxpayers" is an all embracing term used in the Tax Code, and it
practically covers all persons who derive taxable income. Partnerships no matter how
created or organized, are subject to income tax which, for purposes of the above
categorization, are by law assimilated to be within the context of, and so legally
contemplated as, corporations.

Section 6 of Revenue Regulation No. 2-93 did not alter, but merely confirmed, the
above standing rule as now so modified by Republic Act No. 7496 on basically the
extent of allowable deductions applicable to all individual income taxpayers on their
non-compensation income. There is no evident intention of the law, either before or
after the amendatory legislation, to place in an unequal footing or in significant
variance the income tax treatment of professionals who practice their respective
professions individually and of those who do it through a general professional
partnership.

You might also like