SPOTTING THE RIGHT ISSUES

AND ANSWERING THE BAR

EXAMS
Reginald L. Laco
July 5, 2020 (Sunday)
1:00p.m. - 3.00p.m.
 Outline
• Schedule for Formal Bar Review
• Preparation for Answering the Bar Exam
• Answering Different Types of Bar Questions
• Secrets on How to Pass and to Top the Bar Exam
 Schedule for Bar Review
Section 14 Rule 138 provides that in order that a candidate may be
deemed to have passed his examinations successfully, he must
have obtained a general average of 75 percent in all subjects. The
minimum grade of 50% per bar subject is no longer required.
Statistically More Statistically Less Important Bar
Important Bar Subjects Subjects
Bar Subject Bar Weight Bar Subject Bar Weight
Political Law 15% Labor Law 10%
Civil Law 15% Taxation Law 10%
Mercantile Law 15% Criminal Law 10%
Remedial Law 20% Legal Ethics 5%
Total 65% Total 35%
 Schedule for Bar Review
Hypothetical Bar Results Number One
Bar Subject Bar Grade Weight Grade Weighted
Average
Political Law 70 15% 10.5%
Civil Law 70 15% 10.5%
Mercantile Law 70 15% 10.5%
Remedial Law 70 20% 14%
Labor Law 80 10% 8%
Taxation Law 80 10% 8%
Criminal Law 80 10% 8%
Legal Ethics 80 5% 4%
Ordinary Average 100% GWA = 73.5% (But
= 75% (Suppossedly Passer) Retaker)
 Schedule for Bar Review
Hypothetical Bar Results Number Two
Bar Subject Bar Grade Weight Grade Weighted
Average
Political Law 80 15% 12%
Civil Law 80 15% 12%
Mercantile Law 80 15% 12%
Remedial Law 80 20% 16%
Labor Law 68 10% 6.8%
Taxation Law 68 10% 6.8%
Criminal Law 68 10% 6.8%
Legal Ethics 68 5% 3.4%
Ordinary Average 100% GWA = 75.8% (But
= 74% (Suppossedly Retaker) Passer)
 Schedule for Bar Review
Hypothetical Bar Results Number Three
Bar Subject Bar Grade Weight Grade Weighted
Average
Political Law 80 15% 12%
Civil Law 90 15% 13.5%
Mercantile Law 80 15% 12%
Remedial Law 95 20% 19%
Labor Law 85 10% 8.5%
Taxation Law 20 10% 2%
Criminal Law 40 10% 4%
Legal Ethics 80 5% 4%
Ordinary Average 100% GWA = 75% (But
= 71.25% (Suppossedly Passer)
Retaker)
 Schedule for Bar Review
Suggested Bar Review Schedule for 5-month (150 days) Formal Bar
Review based on Statistical Weight under Rule 138
Statistically More Statistically Less Important Bar
Important Bar Subjects Subjects
Bar Subject Bar Weight Bar Subject Bar Weight
Political Law 15% (22 days) Labor Law 10% (15 days)
Civil Law 15% (22 days) Taxation Law 10% (15 days)
Mercantile Law 15% (22 days) Criminal Law 10% (15 days)
Remedial Law 20% (30 days) Legal Ethics 5% (9 days)
Total 65% (96 days) Total 35% (54 days)
 Schedule for Bar Review
Suggested Bar Review Schedule for 5-month (150 days) Formal Bar
Review based on Statistical Weight under Rule 138
First Round of Bar Review (November 2021 Bar Exam)

Bar Subject Schedule Bar Subject Schedule

Remedial Law June 1 - June 20 Labor Law Aug.5 - Aug.14
Civil Law June 21 - July 5 Taxation Law Aug.15 - Aug.24
Mercantile Law July 6 - July 20 Criminal Law Aug.25 - Sept.3
Political Law July 21 - August 4 Legal Ethics Sept.4 - Sept.8
 Schedule for Bar Review
Suggested Bar Review Schedule for 5-month (150 days) Formal Bar
Review based on Statistical Weight under Rule 138
Second Round of Bar Review (Mirror Schedule for November 2021 Bar
Exam)
Bar Subject Schedule Bar Subject Schedule
Legal Ethics Sept.9 - Sept.11 Taxation Law Oct.7 - Oct.11
Remedial Law Sept.12 - Sept. 23 Civil Law Oct.12 - Oct.19
Criminal Law Sept. 24 - Sept.28 Labor Law Oct.20 - Oct.27
Mecantile Law Sept.29 - Oct.6 Political Law Oct.28 - Nov.6
 Schedule for Bar Review
Suggested Bar Review Schedule for 5-month (150 days) Formal Bar
Review based on Statistical Weight under Rule 138
Third Round of Bar Review (Preweek)

Bar Subject Schedule Bar Subject Schedule

Labor Law Oct.20 - Oct.27 Criminal Law Nov. 15 - Nov. 16
(1st week of Bar) (3rd week of Bar)
Political Law Oct.28 - Nov. 6 Mercantile Law Nov. 17 - Nov. 20
(1st week of Bar) (3rd week of Bar)
Taxation Law Nov. 8 - Nov. 9 Legal Ethics Nov. 22
(2nd week of Bar) (4th week of Bar)
Civil Law Nov. 10 - Nov. 13 Remedial Law Nov. 23 - Nov. 27
(2nd week of Bar) (4th week of Bar)
 Schedule for Bar Review
Suggested Bar Review Schedule for 2020 Bar Graduates assuming
the 2020 Bar Exam will be scheduled on November 2021 Bar Exam

Advanced Bar Review Schedule

Bar Subject Schedule Bar Subject Schedule

Remedial Law July 1 - Aug. 31 Taxation Law Jan. 16 - Feb. 25
2020 2021
Civil Law Sept. 1 - Oct. 15 Criminal Law Feb. 26 - Aprl 5
2020
Mercantile Law Oct. 15 - Nov. 30 Labor Law April 6 - May 15
2020 2021
Political Law Dec. 1, 2020 - Jan. Legal Ethics May 16 - May 31
15, 2021 2021
 Preparation for Answering the Bar Exam
• Traditional Bar Exam (Handwritten Essay Exam)
– Improve your handwriting through daily practice
• Multiple Choice Questions (MCQs) Type Bar Exam
– Master the art or process of elimination
• Computerized Bar Exam
– Improve your typewriting skills
 Answering Different Types of Bar
Questions
• Definition Type of Question
– Pure Definition Type of Question (1-2 points)
– Explanation Type Question (3-5 points)
• Enumeration Type of Question
• Comparison or Distinction Type of Question
• Case Type of Question
– One-Issue Case-Type of Question
– Two or more Issues Case-Type of Question
– Decision Type of Question
– Recommendation Type of Question
 Answering Different Types of Bar
Questions
Definition Type Question
Pure Definition Type Question (1-2 points)
Question: Define Marriage (1 - 2 points)
Answer: Article 1 of the Family Code of the Philippines defines marriage as a
special contract of permanent union between a man and a woman entered into
in accordance with law for the establishment of conjugal and family life. It is the
foundation of the family and an inviolable social institution whose nature,
consequences, and incidents are governed by law and not subject to stipulation,
except that marriage settlements may fix the property relations during the
marriage within the limits provided by this Code.
 Answering Different Types of Bar
Questions
Definition Type Question
Pure Definition Type Question (1-2 points)
Question: Define Contract of Partnership (1 - 2 points)
Answer: Article 1767 of the New Civil Code of the Philippines provides that by the contract
of partnership two or more persons bind themselves to contribute money, property, or
industry to a common fund, with the intention of dividing the profits among themselves.Two
or more persons may also form a partnership for the exercise of a profession.
Answer: The New Civil Code of the Philippines defines contract of partnership as a
contract whereby two or more persons bind themselves to contribute money, property, or
industry to a common fund, with the intention of dividing the profits among themselves. It
may also be formed by two or more persons for the exercise of a common profession.
 Answering Different Types of Bar
Questions
Definition Type Question(3-5 points)
Question: Explain Trust Fund Doctrine (3 - 5 points)
Answer: Based on jurisprudence, the honorable Supreme Court articulated that
trust fund doctrine means that capital stock, property and other assets of a
corporation constitute a fund from which creditors have a right to look for
satisfaction of their claims. The doctrine finds its basis upon the need to
preserve the assets and capital of the corporation for the protection of creditors,
who are preferred over stockholders in the distribution of corporate assets.
Thus, corporate creditors have a right to assume that the assets of the
corporation shall not be used to purchase its own shares, or dividends be
declared when the corporation is insolvent.
 Answering Different Types of Bar
Questions
Under this doctrine, corporations are not allowed to declare dividends in the
absence of unrestricted retained earnings. Furthermore, corporations cannot
reacquire its own shares of stocks and place them in treasury without
appropriation of retained earnings. Moreover, corporations are not generally
allowed to issue shares of stocks below its par value. This doctrine prohibits the
issuance by corporation of watered stocks which overstate the corporation's
assets and capital and understate its liabilities. The main purpose of this
doctrine is to protect the creditors of the corporation since the doctrine of
separate personality and limited liability rule attributes of corporation place the
corporate creditors in a disavantageous position when going after the separate
assets of stockholders in case of corporate insolvency.
 Answering Different Types of Bar
Questions
Enumeration Type of Question
Question: Enumerate the taxes claimable as allowable deductions
from gross income (5%)
Answer: Under the National Internal Revenue Code of the Philippines, the following
taxes may be claimed as allowable deductions from gross income:
1. Real Property Taxes;
2. Local Taxes except amusement tax on cinemas;
3. Documentary Stamp Tax;
4. Excise tax on production on excisable products; and
5. Custom Duties
 Answering Different Types of Bar
Questions
Enumeration Type of Question
Question: Enumerate the taxes which are not claimable as
allowable deductions from gross income (5%)
Answer: Under the National Internal Revenue Code of the Philippines, the following
taxes may not be claimed as allowable deductions from gross income:
1. Estate Tax;
2. Donor's Tax;
3. Value Added Tax whether Input VAT or Output VAT for VAT Registered
Taxpayer;
4. Income taxes including ordinary income tax, capital gains tax and final
withholding tax; and
5. Stock Transaction Tax
 Answering Different Types of Bar
Questions
Comparison or Distinction Type Question
Question: Compare or Distinguish Voidable Contract and
Void Contract (5%)
Answer: The following are the distinctions between Voidable Contract and Void
Contract:
1. As to validity, voidable contract is valid and binding until annulled while void
contract is invalid and therefore not binding.
2. As to essential elements of contract, in voidable contract all essential elements
are present although there is defect in the consent while in void contract, one or
more of the essential elements are lacking.
3. As to legal remedy available to injured party, annulment of contract is applicable
to voidable contract while declaration of nullity is applicable to void contract.
 Answering Different Types of Bar
Questions
4. As to prescriptive period of legal remedy, action for annulment of voidable contract
prescribes in four years, except in the case of contract of marriages which prescribes in
five years, while action for declaration of nullity of void contract does not prescribe
although may be barred by estoppel.
5. As to assailment by a third person, voidable contract cannot be questioned by a third
person while void contract can be questioned by a third person directly affected by it.
6. At to capability of ratification, voidable contract can be ratified by the proper party
injured party while void contract cannot be ratified but its declaration of nullity may be
barred by estoppel in exceptional cases.
 Answering Different Types of Bar
Questions
Case Type Question (One Issue Type Question)
Question: On January 1, 2020, Kim Chi orally sold a specific house and lot to Bold
Sinners at a price of P1,000,000. On the date of oral agreement, Bold Sinners paid an
arras money amounting to P100,000. They orally agreed that the balance of the price
will be paid on July 1, 2020 which is also the agreed date of delivery of the house and
lot. On July 1, 2020, Bold Sinners tendered to Kim Chi the balance of P900,000 cash
which is refused by the latter on the ground that the contract of sale is unenforceable.
This prompted Bold Sinners to file an action against Kim Chi for exact fulfillment of
contract of sale with prayer for execution of notarized deed of sale upon payment of the
price. Kim Chi answered the complaint by filing a motion to dismiss on the ground that
the oral contract of sale is unenforceable under State of Fraud. Is the oral contract of
sale of specific house and lot between Kim Chi and Bold Sinners unenforceable?
Explain. (5% - 10%)
 Answering Different Types of Bar
Questions
Case Type Question (Single Issue Type of Question)
Answer: (Four - Paragraph Format)
I. 1st Paragraph (Conclusion Paragraph)
II. 2nd Paragraph (Legal Basis Paragraph)
III. 3rd Paragraph (Application of Law to Relevant Facts Paragraph)
IV. 4th Paragraph (Fallo or Dispositive Portion Paragraph)
 Answering Different Types of Bar
Questions
1st Paragraph (Conclusion Paragraph)
No. The oral contract of sale of specific house and lot
between Kim Chi and Bold Sinners is not unenforceable
because partially executed oral contract of sale of real
property is beyond the ambit of Statute of Fraud.
 Answering Different Types of Bar
Questions
2nd Paragraph (Legal Basis Paragraph)
Article 1403 of the New Civil Code of the Philippines provides that an agreement for the sale of
real property or interest therein that does not comply with Statute of Fraud is unenforceable.
Based on jurisprudence, the honorable supreme court enunciated that the the purpose of the
statute is to prevent fraud and perjury in the enforcement of obligations depending for their
evidence on the unassisted memory of witnesses by requiring certain enumerated contracts and
transactions to be evidenced by a writing signed by the party to be charged. It was not designed
to further or perpetuate fraud. Accordingly, its application is limited. It makes only ineffective
actions for specific performance of the contracts covered by it; it does not declare them
absolutely void and of no effect. As explicitly provided for in the above-quoted paragraph (2),
Article 1403 of the New Civil Code of the Philippines, the contracts concerned are simply
"unenforceable" and the requirement that they or some note or memorandum thereof be in
writing refers only to the manner they are to be proved. It goes without saying then, as held in
the landmark cases, that the statute will apply only to executory rather than executed contracts.
Partial execution is even enough to bar the application of the statute.
 Answering Different Types of Bar
Questions
3rd Paragraph (Application of the Law to Relevant
Facts Paragraph)
Applying the suitable law to the relevant facts of the case, it is respectfully
submitted that the oral contract of sale of house and lot is enforceable because
it is partially executed. On the date of oral agreement, the buyer has already
paid a downpayment of P100,000 to the seller which bars the application of
Statute of Fraud to the case. Since the contract of sale is enforceable, the seller
shall be obliged to accept the valid tender of payment of P900,000 by the buyer.
Furthermore, the seller shall be compelled to execute the notarized deed of sale
necessary for the processing of the transfer of certificate of title from the seller
to the buyer.
 Answering Different Types of Bar
Questions
4th Paragraph (Fallo or Dispositive Portion Paragraph)
Wherefore, based on the foregoing, the motion to dismiss the complaint filed by
the respondent-seller shall be denied for lack of merit. Instead, the prayer of the
complainant-buyer for the execution of notarized deed of sale shall be granted.
 Answering Different Types of Bar
Questions
Case Type Question (Two or More Issues Type of
Question)
During 2020, Saint Michael Corporation (SMC), a dometic corporation operating as a
conglomerate, donated P500M cash to University of San Pedro Calungsod (USPC), a
nonstock nonprofit educational institution. USPC used the P500M cash for construction
of a 10-storey building. The 1st floor and 2nd floor of the said building are being leased
out to commercial establishments while the 3rd floor is being used as administration
offices of USPC. The remaining seven floors are being used as library, study area,
class rooms, audio-visual rooms and sport gymanium of USPC. For the taxable year
ended December 31, 2020, USPC reported tuition fee revenues from students and
rental income from commercial establishments. The tuition fee revenues from students
are used to support the operating expenses of the educational institution while the
rental income is used to finance scholarship of students.
 Answering Different Types of Bar
Questions
The Commissioner of Internal Revenue assessed USPC for unpaid income tax
on its revenues and unpaid value added tax on its services. The City Assessor
also assessed USPC for unpaid real property tax on the newly constructed
building. USPC filed a formal protest on the final assessment notices issued by
BIR Commissioner and City Assessor. The Commissioner of Internal Revenue
assessed SMC for unpaid donor's tax on the P500M donation to USPC and
disclaimed the allowable deduction from gross income claimed by SMC on
donation for charitable purposes. SMC filed a formal protest on the final
assessment notice issued by BIR Commissioner.
 Answering Different Types of Bar
Questions
Based on the facts of the case, answer the following
questions:
1) Is the newly-constructed 10-storey building of USPC subject to real property
tax? (1-2%)
2) Are the tuition fee revenues and rental income of USPC subject to income
tax? (1-2%)
3) Are the tuition fee revenues and rental income of USPC subject to value
added tax? (1-2%)
4) Is the P500M cash donation by SMC to USPC subject to donor's tax? (1-2%)
5) May SMC claim as allowable deduction from its gross income the P500M
cash donation to USPC? (1-2%)
 Answering Different Types of Bar
Questions
Answer
1) Only the 1st and 2nd floors but not the 3rd to 10 floors of the 10-storey building of USPC are subject
to real property tax because Section 28, paragraph 3 of Article VI of the 1987 Constitution of the
Republic of the Philippines provides that charitable institutions, churches and personages or convents
appurtenant thereto, mosques, non-profit cemeteries, and all lands, buildings, and improvements,
actually, directly, and exclusively used for religious, charitable, or educational purposes shall be
exempt from taxation. It is very clear from the facts of the case that only the 3rd to 10th floors are
actually, directly and exclusively used for educational purposes by USPC because these floors are
utilized as library, study area, class rooms, audio-visual rooms and sport gymanium of the university.
The intended use of the rental income from 1st and 2nd floors of the building for scholarship of
students is irrelevant because the criteria of the 1987 Constitution for exemption from real property
tax are the actuality, directness and exclusivity of the land, building and improvement for educational
purposes. The leasing of 1st and 2nd floors to commercial establishments is clearly a commercial aim
but not educational purpose. Therefore, the criteria for tax exemption from real property tax of 1st and
2nd floors of the 10-storey are not clearly met.
 Answering Different Types of Bar
Questions
Answer
2) No. The tuition fee revenues and rental income of USPC are exempted from income tax
because Section 4 paragraph 3 Article XIV of the 1987 Constitution of the Republic of the
Philippines provides that all revenues and assets of non-stock, non-profit educational
institutions used actually, directly, and exclusively for educational purposes shall be exempt
from taxes and duties. It is very clear from the facts of the case that the tuition fee revenues
and rental income of USPC, a nonstock nonprofit educational institutions, are actually,
directly and exclusively used for educational purposes because they are utilized not only to
support the operating expenses of the educational institution but also to finance the
scholarship of its students. It is only incumbent upon the nonstock nonprofit educational
institution to prove that all its revenues, whether educational revenue or other income, are
actually, directly and exclusively used for educational purposes but it is no longer required
to prove that not more than 30% of its revenues are for administrative purposes because
that criterion is not required by the 1987 Constitution.
 Answering Different Types of Bar
Questions
Answer
3) Only the rental income but not the tuition fee revenues of USPC is subject to value added tax
because the National Internal Revenue Code of the Philippines provides that value added tax shall be
levied, assessed and collected on gross receipts derived from the sale or exchange of services,
including the use or lease of properties in the ordinary course of business but the said Tax Code
exempts from value added tax educational services rendered by private educational institutions, duly
accredited by the Department of Education (DEPED) and the Commission on Higher Education
(CHED), and those rendered by government educational institutions. It is very clear from the Tax
Code that only educational services revenues including tuition fees revenue of an educational
institution are exempted from value added tax but not the rental income in the ordinary course of
business of an educational institution. The 1987 Constitution only exempts all the revenues of
nonstock nonprofit educational institution from income tax but not necessarily from value added tax.
Therefore, although rental income of USPC, a nonstock nonprofit educational institution is exempted
from income tax, such rental income in the ordinary course of business is still subject to value added
tax.
 Answering Different Types of Bar
Questions
Answer
4) No. The P500M cash donation by SMC to USPC is exempted from donor's tax because the
National Internal Revene Code of the Philippines provides that gifts in favor of an educational
and/or charitable, religious, cultural or social welfare corporation, institution, accredited
nongovernment organization, trust or philanthrophic organization or research institution or
organization are exempt from donor's tax: Provided, however, That not more than thirty percent
(30%) of said gifts shall be used by such donee for administration purposes. Section 4
paragraph 4 of Article XIV of the 1987 Constitution of the Republic of the Philippines provides
that subject to conditions prescribed by law, all grants, endowments, donations, or contributions
used actually, directly, and exclusively for educational purposes shall be exempt from tax. The
conditions imposed by the Congress under the Tax Code is that not more than 30% of gifts to
educational institution shall be used by such donee for administrative purposes. It is very clear
from the facts of the case that only 30% or 3 out of the 10 floors of the 10-storey building are
used for administrative purposes. Therefore, SMC may claim exemption from donor's tax for
such P500M gift to USPC subject to substantiation requirements under implementing rules and
regulations of the Tax Code.
 Answering Different Types of Bar
Questions
Answer
5) Yes. SMC may claim as allowable deduction from its gross
income the P500M cash donation to USPC because the National
Internal Revenue Code of the Philippines provides that donations
to accredited nongovernment organizations subject to the
requirements of the Tax Code are deductible in full from the
gross income to arrive at the taxable income.
 Answering Different Types of Bar
Questions
The Tax Code enumerated the following requirements to be
considered an accredited nongovernment organizations:
(1) Organized and operated exclusively for scientific, research, educational, character-building and youth and sports
development, health, social welfare, cultural or charitable purposes, or a combination thereof, no part of the net income of which
inures to the benefit of any private individual;
(2) Which, not later than the 15th day of the third month after the close of the accredited nongovernment organizations taxable
year in which contributions are received, makes utilization directly for the active conduct of the activities constituting the purpose
or function for which it is organized and operated, unless an extended period is granted by the Secretary of Finance in
accordance with the rules and regulations to be promulgated, upon recommendation of the Commissioner;
(3) The level of administrative expense of which shall, on an annual basis, conform with the rules and regulations to be
prescribed by the Secretary of Finance, upon recommendation of the Commissioner, but in no case to exceed thirty percent
(30%) of the total expenses; and
(4) The assets of which, in the even of dissolution, would be distributed to another nonprofit domestic corporation organized for
similar purpose or purposes, or to the state for public purpose, or would be distributed by a court to another organization to be
used in such manner as in the judgment of said court shall best accomplish the general purpose for which the dissolved
organization was organized.
 Answering Different Types of Bar
Questions
Assuming all the requirements enumerated by the Tax Code
are complied with by USPC for accreditation, SMC may fully
claim as allowable deduction from its gross income the said
P500M donation to USPC. Assuming USPC is not properly
accredited by BIR, SMC may still claim the said P500M
donation to USPC as allowable deduction from gross
income but subject to limitation or ceiling of not exceeding
five percent (5%) of SMC's taxable income derived from
trade or business before the deduction of the said P500M
donation.
 Answering Different Types of Bar
Questions
Decide Type of Question:
Tom Pitt is an american citizen residing in Manila City. He died intestate leaving several
properties including house and lot in Makati City; condominium unit in Florida, USA; investment
in shares of stocks of Apple USA Incorporated, a nonresident foreign corporation; and
investment in bond securities of Globe Incorporated, a domestic corporation. The Commissioner
of Internal Revenue of the Philippines subjected to estate tax all the abovementioned properties
of Mr. Tom Pitt. However, the court appointed administrator of the estate of Tom Pitt protested
the assessment made by the Commissioner of Internal Revenue of the Philippines with regard
to the condominium unit located in Florida USA and investment in shares of stocks of Apple
USA Incorporated. The administrator contended that questioned properties of the estate are
exempted from estate tax because they are located outside the Philippine territory and that the
corresponding estate tax on such properties have been paid in USA that will result to double
taxation. Decide on the contentions of the estate administrator. (5 points)
 Answering Different Types of Bar
Questions
Answer
It is respectfully submitted that the contentions of the estate administrator are untenable
because a resident of the Philippines are taxable for his estate regardless of location. The
National Internal Revenue Code of the Philippines provides that the the value of the gross
estate of the decedent shall be determined by including the value at the time of his death of all
property, real or personal, tangible or intangible, wherever situated: Provided, however, that in
the case of a nonresident decedent who at the time of his death was not a citizen of the
Philippines, only that part of the entire gross estate which is situated in the Philippines shall be
included in his taxable estate. Based on this provision, the basis for taxability of the estate of the
decedent is either his citizenship or his residency.
 Answering Different Types of Bar
Questions
As to the first contention of the administrator, it is devoid of merit because the decedent Mr. Tom
Pitt was a resident of the Philippines. As such, all his properties, regardless of location, are
subject to estate tax in the Philippines.

As to the second contention of the administrator, it is also without legal basis because double
taxation, whether direct or indirect, is not absolutely prohibited by the 1987 Constitution.
Assuming direct double taxation is contrary to substantive due process of law for being
oppressive and confiscatory, the case at bar does not involve a direct double taxation but
instead indirect double taxation because there are different taxing states involved. In order to
reduce the impact of this indirect double taxation, the Tax Code allows the claiming of tax credit
on the estate tax paid in other countries for properties located outside Philippine Territory
subject to limitations and substantiation requirement under the implementing rules and
regulations of the Tax Code.
 Answering Different Types of Bar
Questions
Recommend Type of Question:
Universe Robin Incorporated (URC) is a domestic corporation engaged in the
manufacturing of food products. One of its best selling beverage juice drinks is
Smart C3. The Commissioner of Internal Revenue assessed URC for the
following taxes: (1) excise tax on production of Smart C3; (2) value added tax
on the sale of Smart C3; and (3) corporate income tax on gross profit from sale
Smart C3. On the other hand, the City of Sta. Rosa assessed URC for the
following local taxes: (1) real property tax on its manufacturing plant of Smart
C3 and (2) business tax on the sales of Smart C3 made in Sta. Rosa. If you are
the legal counsel of URC, what legal advice will you recommend to minimize the
impact of the above mentioned multiple taxation?
 Answering Different Types of Bar
Questions
Answer:
If I am the legal counsel of URC, I will recommend the availment of
the following tax avoidance schemes legally permitted under the
National Internal Revenue Code of the Philippines:
1) As regards the excise tax, real property tax and local tax, URC
may claim them as allowable deductions from gross income in
order to reduce the taxable income that will be subjected to 30%
corporate income subject to substantiation requirements of the
implementing rules and regulations of the Tax Code.
 Answering Different Types of Bar
Questions
2) As regards the value added tax, URC may shift the
output value added tax to its buyers since it is an indirect
tax. Afterwards, upon the filing of value added tax return,
URC may claim the applicable input value added tax as
tax credit from the related output value added to arrive at
the net value added tax due subject to substantiation
requirements of the implementing rules and regulations
of the Tax Code.
 Answering Different Types of Bar
Questions
3) As regards the corporate income tax, URC may legally minimize its income
tax by reducing its taxable income through proper claiming of allowable
deductions from its gross income. URC may either avail of optional
standard deduction equivalent to 40% of its gross income or itemized
deductions as enumerated in the Tax Code. In case URC availed of the 40%
optional standard deduction, it can still claim the cost of sales as allowable
deduction from its gross income because the 40% optional standard
deduction for a corporation is only in lieu of other itemized deductions but
not of cost of sales. The advantage of the said option is that the corporation
is no longer required to substantiate the 40% optional standard deduction
although it must keep records pertaining to its gross income. On the other
hand, in case URC availed of the itemized deductions option, it is required to
substantiate and justify every deduction reported in its corporate income tax
return.
 Answering Different Types of Bar
Questions
Multiple Choice Question: (Objective Type)
Which of the following income from within of a resident-citizen
is subject to schedular or ordinary income tax of 20%-35%?
A. Gain from sale of shares of stocks of domestic corporation by a
nondealer of securities
B. Illegal Income from sale of illegal drugs
C. Interest Income from one-year time deposit in a bank
D. Proceeds from life insurance obtained by the decedent to insure
his life
 Answering Different Types of Bar
Questions
Multiple Choice Question: (Application Type)
A restaurant corporation orally sold and delivered a specific milk tea
ordered by a minor at a price of P500. After consuming the specific milk
tea, the minor refused to pay the agreed price. Which of the following
statements is correct?
A. The contract of sale is void because the buyer is a minor who is suffering from absolute
incapacity.
B. The restaurant corporation may file an action for annulment of this voidable contract of
sale.
C. The restaurant corporation cannot collect the price from the minor because an oral contract
of sale of movable at a price of at least P500 is unenforceable within the ambit of Statute of
Fraud.
D. The minor or his parents are required to pay a reasonable price because the subject matter
specific milk tea, a food, is considered a necessary.
 Secrets on How to Pass and Top the Bar
• Have Faith in God (Always Pray)
• Have Self-Discipline in Studying (Focus, Determination and
Sheer Will)
• Have the Bar Exam Syllabus as your Guide (Outline your Bar
Schedule on the basis of topics enumerated in the Bar Exam
Syllabus)
• Have Self-Confidence and Humility (Be Optimistic but accept
your mistakes and limitations)
• Have Mamba Mentality (Do not settle for less. Always aim for
the best but pray and study the hardest.)
Good Luck and God Bless