Transfer Tax & Business Tax

Property

Embraces everything which is or may be the subject of ownership, includes not only ownership and possession but also the right of use and enjoyment for lawful purposes.

Owner

Is the person in whome the ownership, dominion or title of property is vested.

Ownership

Is the exclusive right of posessing, enjoying, and disposing of a property.

Modes of Acquiring Ownership

   1. Occupation, 

   2.  Intellectual Creation,

   3.  Donation,

   4.  Succession, and

   5.  Prescription.

Occupation

Things appropriable by nature may be acquired by occupation. When ownership is acquired by occupation, the property seized has no known owner.

Intellectual Creation

By intellectual creation, the composer owns his musical, compositions while the author owns his literary, legal, historical, scientific or other work.

Donation

Is an act of liberality whereby a person disposes gratuitously of a thing or right in favor of another who accepts it.

Succession

Is a mode of acquisition by virtue of the property, rights and obligations to the extent of the value of the inheritance, of a person are transmitted through his death to another.

Prescription

One acquires ownership and other real rights through the lapse of time in the manner and under the conditions laid down by law.

Transfer Tax

Is any kind of tax that is levied on the transfer of ownership or title to property from one entity to another. Imposed when there is legal requirement for registration of the transfer.

Gratuitous Transfer

When there is no consideration for the transfer.

Onerous Taxes

When consideration is received such as sale, barter or exchange are subject to business taxes.

Succession and Donation

Two of the five modes of acquiring ownership as enumerated in the Civil Code.

Concept and Nature of Transfer Taxes

Estate tax is levied on the transmission of property from a prior decedent to his heirs.
Estate encompasses the totally of assets and liabilities a decedent owns and owes at the time of his deaths.
Estate and donor;s taxes are excise taxes.