Chapter 8 Flashcards
Generally, proceeds from a life insurance policy is exempt from RIT. What is the exception?
When the amounts are held by an insurer under an agreement to pay interests thereon, the interest payments are taxable.
Are proceeds of life insurance by a corporation for its officers taxable?
Also exempt
Are proceeds of property insurance contracts taxable on RIT?
Yes only to the extent of the tax basis of the property lost or destroyed. The excess is taxable.
Generally gifts, bequests, and devises or descent are not taxable. When can it be taxed?
The value of the actual things are not taxable but income derived from these properties are taxable.
Gifts vs Exchange
261
Gifts vs Bequest vs Devise/Descent
Gift - given without consideration
Bequest - gift of personal property
Devise - gift of real property
Are employment gratuities exempt from RIT?
No since it is in exchange of services rendered
Is the transfer of property by the employer to managerial or supervisory employees subject to RIT?
No it is subject to fringe benefit tax
When an accident happens in a workplace, you are paid moral damages, reimbursement for hospital dues, and your supposed salary for 2 weeks that you would have had worked for if there was no accident. Which of these are taxable?
Only the lost salary since when you receive such salary without the accident you still would have paid income tax for it.
Who may avail the exemption under the Retirement Benefit under RA 4917?
1-10-50-RPBP
261
To be exempt under RA 4917, what kind of retirement benefit plan should it be?
a trusteed plan
Retirement benefit under 4917 vs under 7641
261-262
What are the requisites to be exempt under separation or termination? (2)
262
Are back wages or illegal deductions repaid by the employer upon termination also exempt?
No they are taxable
Is terminal leave pay or the commutation of accumulated unused leave credits also exempt?
No they are taxable
How can the availment of tax exemption on separation or termination be done?
Request for a ruling to certificate of tax exemption from the BIR filed at the RDO where the employer os registered
Who can the avail of tax exemption on separation or termination be done?
The employee or his heirs
USVA meaning
United States Veterans Administration
SSS benefits are under RA?
RA 8282
GSIS benefits are under RA?
8291
GSIS meaning
Government Service Insurance System,
Is the income derived by the government and its apolitical subdivisions from any public utility or exercise of essential government function also exempt?
Yes
Are GOCCs taxable as regular corporations?
Yes since they are commercial in nature
What is the general rule on the taxability of government agencies and instrumentalities? What is the exception?
GR: Not taxable because of public service nature
XPTN: When they engage in income-producing naturally proprietary activities
Requisites to be exempt under religious, charitable, academic, and literary prizes and awards (2)
265
Requisites to be exempt from prizes and awards in Sports Competitions (3)
265
Generally mandatory employee contributions are exempt. How about voluntary contributions?
Taxable
New name of tag-ibig
Home Development Mutual Fund
This is a contributor’s voluntary retirement account established from qualified contributions of the contributor and or his employer for the sole purpose of being invested in qualified PERA investment products.
PERA
PERA meaning
Personal Equity Retirement Account
OFWs are allowed to contribute to a PERA account up to how much? How about non OFW?
OFW - up to 200,000
Non OFW - up to 100,000\
per year basis
When employers contribute to its employees PERA accounts, could this be considered in lieu of contribution to SSS and other related benefits?
No
PERA contributors are allowed to claim how many percent of their pERA contributions as tax credit against any internal revenue taxes?
5%
Is investment income in PERA accounts exempt?
Yes
Is the interest earned in sales of bonds, debentures, and other indebtedness also exempt?
No, only the gain
This is an open-end and close-end investment company as defined under the Investment Company Act
Mutual Fund Company
MGB meaning
Mines and Geosciences Bureau
These are Filipino citizens who have organized themselves as an individual miner licensed by MGB
Registered small scale miner
This is aka People’s Small-Scale Mining Act
RA 7076
These are persons engaged in the business of buying and selling gold that have complied with the BSP’s gold trader accreditation procedures
Accredited traders
This refers to any gold hoarders, traders, or buyers other than BSP and accredited gold tratders
Black market
This is the co-production, joint venture, or mineral production sharing agreement between the government and small-scale mining contractor
Small scale emining contract
Who can avail the exemption on the sale of gold?
SSMs and gold traders registered with the BSP
Are unregistered SSMs and gold traders also exempt?
No
BMBE Act is aka?
RA 9178
Who fixes the minimum wage?
RTPWPB or the Regional Tripartite Productivity Wage and Productivity Board
This is an allowance paid to both public and private health workers directly catering to in contract with COVID-19 patients for every month they are serving
COVID-19 Special Risk Allowance
This is a compensation given to temporary Human Resources Health serving in the front line during the state of emergency due to COVID
Actual Hazard duty Pay
This is a business entity or enterprise engaged in the production, processing or manufacturing of products or commodities, including agro-processing, trading and services, whose total assets including those arising from loans but exclusive of the land on which the business entity’s office, plant, and equipment are situated, do not exceed P3,000,000.
BMBE or barangay micro-business enterprise
Can a BMBE who is a branch orsubsidiary of a large company be exempt?
No
