Ch. 3B Situs Rules Flashcards
Differentiate situs of income vs source of income
The situs of income is the place of taxation of income. It is the jurisdiction that has the authority to impose tax upon the income. Source of income pertains to the activity or property that produces the income.
Where is the situs for interest income?
Debtor’s residence
Where is the situs for royalties?
Where the intangible is employed
Where is the situs for rent income?
Location of the property
Where is the situs for service income
Place where the service is rendered
Situs for the gain on sale of personal property (domestic securities)
Presumed earned within the Philippines
Situs for the gain on sale of Other personal Properties
earned in the place where the property is sold
Situs for the gain on sale of real property
earned where the property is located
Situs for dividend income from domestic corporation
Presumed earned within
Situs for dividend income from foreign corporation
situs depends on pre-dominance testx
Explain the pre-dominance test
Seeing the ratio of the Philippine gross income over the world gross income of the foreign corporation in the three-year period preceding the year of dividend declaration, or for such part of the period as the corporation has been existence is
a.) At least 50% comes from Philippine gross income, then the portion of the dividend is earned within
b.) If less than 50%, the entire dividends is deemed earned abroad
Situs for merchandising income
earned where the property is sold
Situs for manufacturing income
earned where the goods are manufactured and sold
