FAR EASTERN UNIVERSITY

INSTITUTE OF ACCOUNTS, BUSINESS AND FINANCE

Department of Accountancy

COURSE SYLLABUS

Course Code : TAX 2

Course Title : Income Tax and Withholding Tax on Wages

Course Credit : Three (3) units

Course Pre-requisite : ACT 3 & 4- Partnership and Corporation Accounting

Course Description : This introductory Taxation course is primarily concerned with income taxation. The objective is to develop a working
knowledge of the basic principles and rules of the income tax system as these apply to individuals, partnerships and
corporations. It covers an overview of the national tax system, and the income taxation of employees and unincorporated
businesses and incorporated businesses. It provides the students with knowledge of the capital gains tax, final tax on certain
passive income, and the year-end tax. Including the minimum corporate income tax, the normal tax, and the improperly
accumulated profits tax of corporations and withholding taxes. Tax forms are provided for specific topics discussed.

General Course : At the end of the course, students are expected to understand (the meaning of the words in) the provisions of the law on
Objectives income taxation and be adept in the practical application of the law.

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COURSE CONTENT

Week Learning Objectives Focal Points/ Topics Competencies Teaching Strategies Values Evaluative
Measures
1 At the of the session, the student is The main concerns are the Understanding Teamwork
expected: following: Planning and Cooperation
Organizing Expectations of both
1. To understand the importance 2. School and the students and the
of ACT27J03 for business administrative professor
students as a preparation for a policies and matters. Formulation of the
well rounded education. seat plan.
2. To know the requirements for 3. Overview of the Explain to the students
completing the course course. the manner of
1. To articulate higher own computing grades.
expectations from the course 3. Textbooks to be used
and the professor. in the course
1 At the end of the session, the student Understanding Teamwork
is expected: 1. Definition of Planning and Cooperation
Taxation, Taxes, Organizing Flexibility
1. To understand the general Income and Income Flexibility Lecture/Discussion
principles and concepts of taxation. Tax.
2. Nature of Taxation Exercises
2. To be able to distinguish income, 3. Basis of Taxation
taxation, taxes and income tax from 4. Importance of
one another. Taxation
5. Objectives of
Taxation
6. Process of Taxation

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Week Learning Objectives Focal Points/ Topics Competencies Teaching Strategies Values Evaluative
Measures
2 At the end of the session, the student Understanding Teamwork
is expected: 1. Principles of Sound Planning and Cooperation
Tax System Organizing Lecture/Discussion Flexibility Quiz 1
1. To know the principles of a 2. Inherent Powers of Flexibility
sound tax system. the State Exercises
2. To understand the inherent 3. Similarities and
powers of the state. Distinctions among
3. To apply correctly the the powers of the
principles and theory. State
4. To understand the scope of 4. Scope of Power of
the power of Taxation and Taxation .
limitations on the power of 5. Limitations on the
Taxation Power of Taxation
- Inherent
- Constitutional
3 At the end of the session, the student Understanding Teamwork
is expected: 1. Concept of Income Planning and Lecture/Discussion Cooperation
1. To know the concept of 2. Characteristics of Organizing Flexibility
income, characteristics of Taxable Income Flexibility Exercises
income as well as the 3. Categories of Income
sources of income. - Overview
2. To understand and know the -
distinctions between passive Compensation/Busin
income, capital gains and ess/professional
compensation, business, - Passive income
professional and other - Capital gains
income

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Week Learning Objectives Focal Points/ Topics Competencies Teaching Strategies Values Evaluative
Measures
4 At the end of the session, the student Income Tax on Individuals Understanding Teamwork
should be able to: 1. Fundamental Planning and Lecture/Discussion Cooperation Quiz 2
1. to understand the provisions of Concepts of Organizing Flexibility
the law on individual income Individual income Flexibility Exercises
taxation; taxation
2. To know the classifications of 2. General
individual taxpayers; and classifications of
3. to understand the terms and individual income
definitions in the provisions of taxpayers – RC,
the law on individual tax NRC, RA, NRAETB,
4. to be familiar with the sources NRANETB
and categories of income and 3. Sources of income
their applicable tax bases and 4. Tax bases and
tax rates for individuals applicable tax rates
of income derived by
individual taxpayers
5. Graduated/schedular
income tax rate for
individuals

5 At the end of the session, the student Income Tax for Individuals, Analytical Skills Lecture/Discussion Discipline
is expected: cont’n. Problem Solving Flexibility Quiz 3
1. to identify and categorize 1. Gross income Skills Exercises Transparency
each item of income; and 2. Compensation Decision Making Honest
2. to determine properly the income Skills
tax consequence of each 3. Business income
type of income 4. Professional income
5. Mixed income
6. Passive income –
interests, royalties,

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Week Learning Objectives Focal Points/ Topics Competencies Teaching Strategies Values Evaluative
Measures
winnings/prizes,
dividends
7. Capital gains – on
sale of real property;
on sale of shares of
stocks not traded in
the stock exchange

6 First Preliminary Examination

7 At the end of the session, the student 1. Allowable deductions Analytical Skills Discipline Fill up Form
is expected: from gross income of Problem Solving Discussion Flexibility 2316
individual taxpayers:Skills Transparency correctly.
1. to be familiar with the different - Business expenses,
Decision Making Illustrative applications Honest
items of deductions from personal exemptions,Skills
gross income of individual special deduction for Judgment
taxpayers health premium… Fill up Form 2316
2. Understand the meaning of (w/holding tax
single taxpayer, “head of the 2. Status of individual certificate)
family”, married, dependent taxpayers
and distinguish each type of 3. Rules on change of
individual according to status status as affecting
3. to be able to deduct the personal exemptions
allowed exemption accordingly
4. to fill up Form 2316
(withholding tax certificate)

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Week Learning Objectives Focal Points/ Topics Competencies Teaching Strategies Values Evaluative
Measures
8 At the end of the session, the student 1. Pro-forma for the
is expected: computation of Comprehensive Fill up
1. to apply the concepts of income tax of application Individual
individual income taxation to individuals ITR (BIR
specific situations 2. Computation of Forms
2. fill up Individual ITRs income tax if 1700, 1701,
taxpayer is single or 1701Q)
head of the family
3. Computation of Quiz 1
income tax of
husband and wife
9 At the end of the session, the student Income Tax on Corporations Analytical Skills Discussion Flexibility
is expected; 1. Definition of Problem Solving Transparency
1. To understand the definition of corporate taxpayers Skills Illustrative applications Cooperation Quiz 2
corporate taxpayers and 2. Classification of Decision Making
classify them accordingly. corporate taxpayers Skills Assignment –
3. Special corporations, Judgment Download corporate
2. To determine the proper tax their tax bases and ITR forms from BIR
consequence of each category tax rates website
of income 4. Three categories of
income subject to tax
3. To determine the applicable 5. Capital gains with
income tax rates capital gains tax
6. Passive income with
Final tax
7. Items subject to the
final tax and tax rates
8. Deductions allowed
on Corporations
9. Exempt corporations

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Week Learning Objectives Focal Points/ Topics Competencies Teaching Strategies Values Evaluative
Measures
10 At the end of the session, the student Income Tax on Corporations Analytical Skills Flexibility
should: 1. Income tax on Problem Solving Discussion Transparency Quiz 3
1. know the normal tax rates on business and other Skills Cooperation
corporations income Decision Making Illustrative applications Fairness
2. know and understand the 2. Normal tax rates and Skills Accountability
concept of MCIT, the meaning tax base Judgment Assignment -Fill up BIR
of MCIT gross income in the 3. MCIT – tax base, tax form 1702, 1702Q
case of merchandising, rate, when applied
manufacturing and service 4. Meaning of MCIT
concerns Gross Income
3. know when and how to apply 5. Excess MCIT carry-
the normal tax or MCIT on forward
business situations 6. Quarterly and year-
4. understand the meaning and end income tax
concepts of improperly 7. Improperly
accumulated earnings, and Accumulated
computation of IAET Earnings tax
5. be able to prepare/fill up
Corporate ITRs –
quarterly/annual

11 At the end of the session, the student Income tax on Partnerships Understanding Flexibility
should: 1. Definition and Analytical Skills Lecture/Discussion Transparency
1. define and classify classification of Problem Solving Cooperation
partnerships. for income tax partnerships. Skills Exercises Fairness
purposes. 2. Taxable income and Decision Making Accountability
deductions allowed Skills
2. be able to determine the 3. Share in the income Judgment
proper tax consequence of of a general
partnership income professional
partnership.

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Week Learning Objectives Focal Points/ Topics Competencies Teaching Strategies Values Evaluative
Measures
4. Computation of tax
due on taxable
partnerships.
12 Second Preliminary Examination

13 At the end of the session, the student Income tax on Estates and Analytical Skills Flexibility Quiz 1
should be able to: Trusts Decision Making Discussion Transparency
1. define and understand the 1. Definition and Skills Cooperation
different terminologies concept of taxable Judgment Exercises Fairness
estates Understanding Accountability
2. apply the concepts to business 2. Definition and
situations concept of taxable
trusts
3. compute the income tax of 3. Deduction and
taxable estates and trusts personal exemptions
allowed on estates
and trusts
4. Determination of
taxable income
5. Tax formula – taxable
estate and taxable
trusts; computation of
tax
6. Rules when there are
two or more trusts
with the same grantor
and beneficiary
7. Filing of return;
payment of tax;

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Week Learning Objectives Focal Points/ Topics Competencies Teaching Strategies Values Evaluative
Measures
penalty for late filing-

14 At the end of the session, the student 1. Gross income from Analytical Skills Discussion Flexibility
should be able to: farming – cash basis Problem Solving Transparency
1. be familiar with the terms and accrual basis of Skills Exercises Cooperation
related to income accounting Decision Making Fairness
2. understand the concepts of the 2. Income from lease Skills
different kinds of income agreements Judgment
3. determine the items excluded 3. Fringe benefits and
from gross income fringe benefit tax
4. apply the concepts to business 4. Taxable fringe
situations benefits – rules and
5. identify taxable and non- formulas
taxable fringe benefits 5. Non-taxable fringe
6. determine the proper tax benefits
consequence of the various 6. De minimis benefits –
items of compensation income with ceiling; without
7. apply the rules on taxability of ceiling
fringe benefits and de minimis
benefits on rank and file and
supervisory/managerial
employees

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Week Learning Objectives Focal Points/ Topics Competencies Teaching Strategies Values Evaluative
Measures
15 At the end of the session, the student Dealings in Property Understanding Discussion Flexibility Quiz 2
should be able to: 1. Ordinary assets vs. Analytical Skills Transparency
1. distinguish ordinary asset from capital assets Problem Solving Exercises Cooperation
capital asset 2. Ordinary gains and Skills
2. properly determine the tax losses
consequence of the 3. Capital gains subject
transaction involving sale or to capital gains tax –
exchange of properties real property and
3. analyze transactions and apply shares of stocks
the concepts and rules on 4. Other capital gains
individuals and corporations and losses
- Rules for corporations
- Rules for taxpayers
other than corporations
5. Net capital loss carry-
over – concepts and
rules
6. Tax formula
7. Installment reporting
of income – when
allowed
8. “Initial payments”;
“contract price”
9. Formulas on the
installment method of
reporting income
10. Lump sum payment
of capital gains tax
11. Installment payment
of CGT

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Week Learning Objectives Focal Points/ Topics Competencies Teaching Strategies Values Evaluative
Measures
12. Formulas on
installment payment
of CGT

16 At the end of the session, the student Income from whatever Understanding Discussion Flexibility
should be able to: sources Analytical Skills Cooperation
1. identify the other sources of 1. Cancellation of debt Exercises
income 2. Damage recovery
2. apply the concepts and rules 3. Prizes and awards
to business situations 4. Income from illegal;
sources
5. Bad debts recovery
6. Tax refund

17 At the end of the session, the student Procedures Presentation Flexibility

is expected to: 1. Taxable income and Skills Discussion Cooperation
1. be familiar with the procedures income tax – Analytical Skills
for proper determination of quarterly and year- Problem Solving Illustrative
taxable income and income end Skills examples/problems
tax of a taxpayer - Individual taxpayer
2. know the nature of tax credits - Corporate taxpayer
3. be familiar with other 2. Reconciliation of net
compliance requirements income per books
against taxable
income
3. Tax credit for foreign
income tax paid or
incurred
4. Filing of income tax
returns and payment
- who are required to file

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Week Learning Objectives Focal Points/ Topics Competencies Teaching Strategies Values Evaluative
Measures
- attachments to the ITR
- time and place of filing
and payment
Withholding taxes and the
Expanded w/holding tax
system – Corporate payee;
Individual payee
18 At the end of the session, the student Penalties and Remedies Understanding Discussion Flexibility Quiz 3
is expected to: 1. Civil penalties Cooperation
1. be familiar with the penalties 2. Criminal penalties Illustrative cases
against the taxpayer 3. Remedies of the
2. be familiar with remedies of state – assessment,
the state and of the taxpayer collection, distraint,
and their procedures levy
3. be familiar with the terms 4. Remedies of the
related to penalties and taxpayer
remedies - remedy against an
assessment
- remedy for tax
erroneously or illegally
collected

19 Final Examinattion

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Computation of Grades:

Computation of Periodic Grades

Class Standing
Average Quizzes (AQ)………………………………………………….…….30%
Class Participation (CP) ………………………………………………...…...10%
Major Examination (PEx/MEx/FEx) ………………………………………….……..60%
Total …………………………………………………………………….…………….100%

a. Determine 1st Preliminary Grade (1st PG)

1st PG = AQ(30%) + CP (10%) + PEx (60%)

b. Determine 2nd Preliminary Grade (2nd PG) and Midterm Grade (MG)

2nd PG = AQ(30%) + CP (10%) + PEx (60%)

MG = 1st PG (50%) + 2nd PG (50%)

c. Determine Final Period (FP) and Final Grade (FG)

FP = AQ(30%) + CP (10%) + PEx (60%)

FG = MG (50%) + FP (50%)

Passing Grade is 75% with an equivalent point of 3.0

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 Grade Point System

Descriptive
Grade Point System Equivalent
95 100% 1.00
92 94% 1.25 Superior
90 91% 1.50
88 89% 1.75 Very Good
85 87% 2.00
82 84% 2.25 Good
80 81% 2.50
78 79% 2.75 Fair
75 77% 3.00 Barely Satisfactory
Below 75% 5.00 Failure

Reviewed by: Approved by:

RAMIL N. BALDRES, CIA, CPA, MBA EARL JOSEPH M. BORGOÑA, CPA, MBA
Department Chair – Accountancy & Internal Auditing OIC Dean - IABF
Department

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