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INCOME TAXATION > CHAPTER 2 BOOK-BASED > Flashcards

CHAPTER 2 BOOK-BASED Flashcards

1
Q

Social media influencers derive their income from the following sources:

A
  1. YouTube Partner Program
  2. Sponsored Social And Blog Posts
  3. Display Advertising
  4. Becoming a Brand Representative/Ambassador
  5. Affiliate Marketing
  6. Co-creating Product Lines
  7. Promoting Own Products
  8. Photo And Video Sales
  9. Digital Courses, Subscriptions, e-books
  10. Podcasts and Webinars
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2
Q

YouTube Partner Program - this allows an influencer to make money from–

A

a. advertising revenue - the influencer gets ad revenue from display, overlay, and video ads.

b. channel membership - the influencer makes recurring monthly payments in exchange for special perks that he/she/it offers.

c. merch shelf - followers can browse and buy official branded merchandise from the influencer’s watch pages.

d. super chat and super stickers - followers pay to get their messages highlighted in chat streams. e.

e. YouTube Premium Revenue - the influencer gets a part of a YouTube Premium subscriber’s subscription fee when followers watch his/her/its contents.

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3
Q

Youtube Partner program allows an influencer to make money from:

A
  • advertising revenue
  • channel membership
  • merch shelf
  • super chat and super stickers
  • YouTube Premium Revenue
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4
Q

An influencer features a product or concept he/she/it is paid to promote.

A

Sponsored Social and Blog Posts

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5
Q

Influencers also have the ability to earn money passively through this. Here, the ad is similar to radio commercials because it interrupts the program.

A

Display Advertising

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6
Q

The influencer would promote the products on his/her/its social media account in exchange for free products from the brand.

Some brands may pay an additional fee for every piece of content or conversion the influencer creates or drives.

A

Becoming a Brand Representative/Ambassador

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7
Q

In this type of arrangement, an affiliate marketer for the brand or the influencer would be provided with a unique link or code that will be used for tracking his/her conversions. For every conversion resulting from the said link or code, the influencer will earn a commission.

A

Affiliate Marketing

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8
Q

A brand would partner with an influencer to co-create products for their brand and the latter, in turn, gets paid based on a certain percentage of the profits.

A

Co-creating product lines

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9
Q

The influencer may come up with his/her own line of products.

A

Promoting own products

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10
Q

Influencers may create and sell frame-worthy pictures, high-quality videos, or the rights over them as well.

A

Photo and Video Sales

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11
Q

Influencers sell digital products.

A

Digital courses, subscriptions, e-books

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12
Q

These may include sponsored ads that generate money or the influencer may charge a small fee to access the content.

A

Podcasts and Webinars

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13
Q

Fringe Benefits include the ff:

A

a. Housing;

b. Expense account;

c. Vehicle of any kind;

d. Household personnel (maid, driver, etc…);

e. Interest on loan at less than market rate to the extent of the difference between the market rate and actual rate granted;

f. Membership fees, dues and other expenses borne by the employer for the employee in social and athletic clubs or other similar organizations;

g. Expenses for foreign travel;

h. Holiday and vacation expenses;

i. Education assistance to the employee or his dependents; and

j. Life or health insurance and other non-life insurance premiums or similar amounts in excess of what the law allows.

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14
Q

The following shall be considered CITIZENS of the Philippines:

A
  • Those who are citizens of the Philippines at the time of the adoption of the Feb. 2, 1987 Constitution;
  • Those whose *fathers or mothers are citizens of the Philippines;
  • Those born before Jan. 17, 1973, the date of the adoption of the 1973 Constitution, of Filipino mothers, who elect Philippine citizenship upon reaching the age of majority; and
  • Those who are naturalized in accordance with law
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15
Q

a Filipino citizen who permanently resides in the Philippines.

A

Resident Citizen

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16
Q

A citizen of the Philippines who establishes to the satisfaction of the Commissioner the fact of his physical presence abroad with a definite intention to reside therein.

A citizen of the Philippines who leaves the Philippines during the taxable year to reside abroad, either as an immigrant or for employment on a permanent basis.

A citizen of the Philippines who works and derives income from abroad and whose employment thereat requires him to be physically present abroad most of the time during the taxable year. “Most of the time” is interpreted to mean presence abroad for at least 183 days during the taxable year (BIR Ruling 128-99, Aug. 18, 1999).

A citizen who arrives in the Philippines at any time during the taxable year to reside permanently in the Philippines shall likewise be treated as this for the taxable year in which he arrives in the Philippines with respect to his income derived from sources abroad until the date of his arrival in the Philippines.

  • The taxpayer shall submit proof to the Commissioner to show his intention of leaving the Philippines to reside permanently abroad or to return to and reside in the Philippines, as the case may be.
A

Non-Resident Citizen

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17
Q

An individual whose residence is within the Philippines and who is not a citizen, thereof. He is one who is actually present in the Philippines and who is not a mere transient or sojourner. But residence does not mean mere physical presence. An alien is considered a resident or a non-resident depending on his intention with regard to the length and nature of his stay.

A

Resident Alien

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18
Q

An individual whose residence is not within the Philippines and who is not a citizen thereof.

A

Non-Resident Alien

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19
Q

It refers to a non-resident alien who shall come to the Philippines and stay for an aggregate period of more than one hundred eighty (180) days during any calendar year.

A

Non-Resident Alien Engaged in Trade and Business (NRAETB)

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20
Q

It refers to a non-resident alien who shall come to the Philippines and stay for an aggregate period of one hundred eighty (180) days or less during any calendar year.

A

Non-Resident Alien Not Engaged in Trade and Business (NRANETB)

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21
Q

In general, means all remuneration for services performed by an employee for his employer under an employer-employee relationship, unless specifically excluded by the Code.

The name by which the remuneration for services is designated is immaterial. Thus, salaries, wages, emoluments and honoraria, allowances, commissions (e.g. transportation, representation, entertainment and the like); fees including director’s fees, if the director is, at the same time, an employee of the employer/corporation; taxable bonuses and fringe benefits, except those which are subject to the fringe benefits tax under Sec. 33 of the Code and the allowable “de minimis” benefits; taxable pensions and retirement pay; and other income of a similar nature constitute compensation income.

A

Compensation Income

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22
Q

Individuals whose source of income is purely derived from an employer-employee relationship.

A

Compensation Income Earners

23
Q

An individual performing services under an employer-employee relationship. The term covers all employees, including officers and employees, whether elected or appointed, of the Government of the Philippines, or any political subdivision thereof or any agency or instrumentality.

A

Employee

24
Q

It refers to an employee holding neither managerial nor supervisory position as defined under existing provisions of the Labor Code of the Philippines, as amended.

A

Rank and File Employee

25
Q

Any person for whom an individual performs or performed any service, of whatever nature, under an employer-employee relationship. It is not necessary that the services be continuing at the time the wages are paid in order that the status of _______ may exist. Thus, for purposes of withholding, a person for whom an individual has performed past services and from whom he is still receiving compensation is an “________.”

A

Employer

26
Q

It exists when a person for whom services were performed (employer) has the right to control and direct an individual who performs the services (employee), not only as to the result of the work to be accomplished but also as to the details, methods and means by which it is accomplished. An employee is subject to the control of the employer not only as to what shall be done, but how it shall be done. It is not necessary that the employer actually exercises the right to direct or control the manner in which the services are performed. It is sufficient that there exists a right to control the manner of doing the work.

A

Employer and Employee Relationship

27
Q

It means any good, service or other benefit furnished or granted in cash or in kind other than the basic compensation, by an employer to an individual employee (except rank and file employee as defined herein) such as, but not limited to the following:

a. Housing:
b. Expense account;
C. Vehicle of any kind;
d. Household personnel, such as maid, driver and others;
e. Interest on loan at less than market rate to the extent of the difference between the market rate and actual rate granted;
f. Membership fees, dues and other expenses borne by the employer for the employee in social and athletic clubs or other similar organizations;
g. Expenses for foreign travel;
h. Holiday and vacation expenses;
i. Education assistance to the employee or his dependents; and
j. Life or health insurance and other non-life insurance premiums or similar amounts in excess of what the law allows.

A

Fringe Benefits

28
Q

It refers to a worker in the private sector who is paid with a statutory minimum wage (SMW) rates, or to an employee in the public sector with compensation income of not more than the statutory minimum wage rates in the non-agricultural sector where the worker/employee is assigned. Such statutory minimum wage rates are exempted from income tax. Likewise, the exemption covers the holiday pay, overtime pay, night shift differential pay, and hazard pay earned by this.

A

Minimum Wage Earner (MWE)

29
Q

It refers to an individual whose business does not realize gross sales or receipts exceeding P100,000 in any 12-month period.

A

Marginal Income Earner

30
Q

An individual earning compensation income from employment, and income from business, practice of profession and/or other sources aside from employment.

A

Mixed Income Earner

31
Q

It refer to Filipino citizens employed in foreign countries who are physically present in a foreign country as a consequence of their employment thereat. Their salaries and wages are paid by an employer abroad and are not borne by any entity or person in the Philippines. To be considered as an this, they must be duly registered as such with the Philippine Overseas Employment Administration (POEA), with a valid Overseas Employment Certificate (OEC)

Seafarers or seamen are Filipino citizens who receive compensation for services rendered abroad as a member of the complement of a vessel engaged exclusively in International trade. They must be duly registered as such with the POEA with a valid OEC and Seafarers Identification Record Book (SIRB) or Seaman’s Book issued by the Maritime Industry Authority (MARINA) (Revenue Regulations 1-2011, Feb. 24, 2011).

A

Overseas Contract Workers (OCWs) or Overseas Filipino Workers (OFWs)

32
Q

A sole proprietor or an independent contractor who reports income earned from self-employment. S/he controls who s/he works for, how the work is done and when it is done. It includes those hired under a contract of service or job order, and professionals whose income is derived purely from the practice of profession and not under an employer-employee relationship.

A

Self-employed

33
Q

A person formally certified by a professional body belonging to a specific profession by virtue of having completed a required examination or course of studies and/or practice, whose competence can usually be measured against an established set of standards. It also refers to a person who engages in some art or sport for money, as a means of livelihood, rather than as a hobby. It includes but is not limited to doctors, lawyers, engineers, architects, CPAs, professional entertainers, artists, professional athletes, directors, producers, insurance agents, insurance adjusters, management and technical consultants, bookkeeping agents, and other recipients of professional, promotional and talent fees.

A

Professional

34
Q

It refers to the total amount of money or its equivalent representing the contract price, compensation, service fee, rental or royalty, including the amount charged for materials supplied with the services, and deposits and advance payments actually or constructively received during the taxable period for the services performed or to be performed for another person, except returnable security deposits for purposes of these regulations. In the case of VAT taxpayer, this shall exclude the VAT component.

A

Gross Receipts

35
Q

It refers to the total sales transactions net of VAT, If applicable, reported during the period, without any other deduction.

However, it is subject to the 8% income tax rate option that shall be net of the following deductions:
- Sales returns and allowances for which a proper credit or refund was made during the month or quarter to the buyer for sales previously recorded as taxable sales; and
- Discounts determined and granted at the time of sale, which are expressly indicated in the invoice, the amount thereof forming part of the gross sales duly recorded in the books of accounts. Sales discount indicated in the invoice at the time of sale, the grant of which is not dependent upon the happening of a future event, may be excluded from the gross sales within the same month/quarter it was given.

A

Gross Sales

36
Q

It refers to the pertinent items of gross income specified in the Code, less deductions, if any, authorized for such types of income by the Code or other special laws.

A

Taxable Income

37
Q

It refers to the ceiling fixed by law to determine VAT registrable taxpayers. It is currently set at three million pesos (P3,000,000) and the same shall be used to determine the income tax liability of self-employed individuals and/or professionals under Sections 24(A)(2)(b) and 24(A)(2)(c)(2) of the Tax Code, as amended.

A

VAT Threshold

38
Q

This shall mean a branch established in the Philippines by multinational companies and which headquarters do not earn or derive Income from the Philippines and which act as supervisory, communications and coordinating center for their affiliates, subsidiaries, or branches in the Asia- Pacific Region and other foreign markets.

A

Regional or Area Headquarters (RHQs)

39
Q

This shall mean a branch established in the Philippines by multinational companies which are engaged in any of the following services: general administration and planning; business planning and coordination; sourcing and procurement of raw materials and components; corporate finance advisory services; marketing control and sales promotion; training and personnel management; logistic services; research and development services and product development; technical support and maintenance; data processing and. communications; and business development.

A

Regional Operating Headquarters (ROHQS)

40
Q

In connection with offshore banking, shall mean funds in foreign currencies which are accepted and held by an Offshore Banking Unit or Foreign Currency Deposit Unit in the regular course of business, with the obligation to return an equivalent amount to the owner thereof, with or without interest.

A

Deposits

41
Q

This shall mean an alternative form of obtaining funds from the public (the term ‘public’ means borrowing from twenty (20) or more individual or corporate lenders at any one time) other than deposits, through the issuance, endorsement, or acceptance of debt instruments for the borrowers own account, for the purpose of relending or purchasing of receivables and other obligations, or financing their own needs or the needs of their agent or dealer. These instruments may include, but need not be limited to bankers’ acceptances, promissory notes, repurchase agreements, including reverse repurchase agreements entered into by and between the Bangko Sentral ng Pilipinas (BSP) and any authorized agent bank, certificates of assignment or participation and similar instruments with recourse: Provided, however, that debt instruments issued for interbank call loans with maturity of not more than five (5) days to cover deficiency in reserves against deposit liabilities, including those between or among banks and quasi-banks, shall not be considered as deposit substitute debt instruments.

A

Deposit Substitutes

42
Q

It refers to the conduct of banking transactions whereby any person, whether natural or juridical, may deposit foreign currencies forming part of the Philippine international reserves, in accordance with the provisions of R.A. 6426 entitled “An Act Instituting a Foreign Currency Deposit System in the Philippines, and For Other Purposes.”

A

Foreign Currency Deposit System (FCDS)

43
Q

It refers to that unit of a local bank or a local branch of a foreign bank authorized by the Bangko Sentral ng Pilipinas (BSP) to engage in foreign currency-denominated transactions, pursuant to the provisions of R.A. 6426, as amended. Local bank shall refer to a thrift bank or a commercial bank organized under the laws of the Republic of the Philippines. Local branch of a foreign bank shall refer to a branch of a foreign bank doing business in the Philippines, pursuant to the provisions of R.A. 337, as amended.

A

Foreign Currency Deposit Unit (FCDU)

44
Q

It refers to the conduct of banking transactions in foreign currencies involving the receipt of funds principally from external and Internal sources and the utilization of such fund pursuant to Presidential Decree 1034 as implemented by Central Bank (now Bangko Sentral ng Pilipinas (BSP)) Circular 1389, as amended.

A

Offshore Banking System

45
Q

This shall mean a branch, subsidiary or affiliate of a foreign banking corporation which is duly authorized by the BSP to transact offshore banking business in the Philippines in accordance with the provisions of Presidential Decree 1034 as implemented by Central Bank (now BSP) Circular 1389, as amended.

A

Offshore Banking Unit (OBU)

46
Q

______ is not a place but the property, activity or service that produced the income

A

Source of income

47
Q

Individuals earning purely compensation income shall be taxed based on the _______________

A

graduated income tax rates

48
Q

_______ arises from self-employment or practice of profession

A

Business Income

49
Q

A _______ is an official document issued by the BIR, through the International Tax Affairs Division (ITAD), that certifies the tax residency of a certain taxpayer in the Philippines.

A

Tax Residency Certificate (TRC)

50
Q

To date, the Philippines has ____ valid and effective tax treaties

A

43

51
Q

Any payments from YouTube through any other agreement between the content creator and YouTube will be treated as _________ starting June 1, 2021

A

royalties

52
Q

Royalties derived by a resident of the Philippines may be taxable in the US but such tax shall _________ of the gross amount of royalties.

A

not exceed 15%

53
Q

Individuals exempt from income tax

A

-Non-resident citizen
-Overseas Contract Worker, including Overseas Seaman
-Barangay Micro Business Enterprises
-Expanded Senior Citizens and Expanded Solo Parents
-Personal Equity and Retirement Account

54
Q
A

INCOME TAXATION (13 decks)

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