INCOME TAX: CHAP 1&2 (Quiz Reviewer) Flashcards
Occurs when illegal efforts are made to escape the payment of a tax
Tax Evasion
Powers not explicitly stated in the Constitution that allow the government to perform essential duties.
Inherent Powers
The legislative body responsible for imposing and collecting taxes in the State.
Congress
Refers to the advantage accruing from anything
Interest
That which may be felt or touched and are necessarily corporeal, either real or personal properties.
Tangible Properties
It is double taxation in its strict sense. It is prohibited because it comprises imposition of the same tax on the same property for the same purpose by the same state during the same taxing period.
Direct Duplicate Taxation
Paying the owner the full monetary equivalent of the property taken for public use
Just Compensation
the primary source of governmental revenue through compulsory levies on individuals or property?
Power of Taxation
The government allows absolute forgiveness or waiver of its right to collect what is due in order to give the tax evader who wishes to reform a chance to start anew
Tax Amnesty
The limitation that restricts the exercise of taxation power to within the geographical boundaries of the State
Territorial Jurisdiction
Enumerate the 3 inherent powers of the state.
The power of Eminent Domain
Power of Taxation
Police Power
Enumerate the objects of Taxation
- The People
- Properties
- Excise Object
Enumerate the justifications for the exercise of eminent domain
- Public purpose
- Due process of Law
- Just Compensation
- Necessity
Enumerate the stages in the exercise of Taxation
- Levy or Imposition
- Assessment and Collection
- Payment
- Refund
Enumerate the requisites of valid police measures
- Lawful Subject
- Lawful Means
Individuals whose business do not realize gross sales or receipts exceeding P100,000 in any 12-month period
Marginal Income Earner
Who is classified as an individual with a fixed place of abode in the Philippines but is not engaged in any business or profession?
Resident Alien
What do you call a Filipino citizen who earns income both from the Philippines and abroad but maintains a permanent home in the Philippines?
Resident Citizen
Name the individual who is a foreigner, earns income from sources within the Philippines, and stays in the country for more than 180 days within a taxable year?
Non-Resident Alien Engaged in Trade or Business
The tax rate applicable to a taxpayer earning solely from self-employment or practice of profession with gross sales below P3 million, at their option
8%
The threshold for VAT registration in the Philippines?
₱3,000,000
The percentage of business tax applicable to non-VAT taxpayers like nightclub owners.
18%
The entity responsible for collecting taxes in the Philippines.
Bureau of Internal Revenue (BIR)
The due date for the first installment payment of estimated tax
April 15
Law that provides tax incentives for Barangay Micro Business Enterprises
R.A.9178
Enumerate the three types of Non-Resident Alien taxpayers in the Philippines
- Non-Resident Alien Engaged in Trade or Business (NRAETB)
- Non-Resident Alien Not Engaged in Trade or Business (NRANETB)
- Employed by Offshore Banking Unit
Enumerate at least 5 kinds of fringe benefits taxable under the Philippine Tax Law
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.
List 5 allowable deductions for YouTubers as business expenses under the NIRC
- filming expenses (cameras, smartphones, microphone and other filming equipment);
- computer equipment;
- subscription and software licensing fees;
- internet and communication expenses;
- home office expenses (ex. proportionate rent and utilities expenses);
- office supplies;
- business expenses (e.g. travel or transportation expenses related to YouTube business, payment to an independent contractor or company for video editing, costume designer, advertising and marketing costs (cost of contests and giveaway prizes, etc.);
e-based contents shall generally as derived from sources without much proof, the income will be Philippines.
- depreciation expense; and
- bank charges and shipping fees
T or F
A non-resident citizen’s income from outside the Philippines is taxable in the Philippines.
FALSE
T or F
Income of a non-resident alien not engaged in trade or business is taxed at a flat rate of 25%.
TRUE
T or F
A non-resident citizen who has stayed abroad for over 183 days is exempt from income tax in the Philippines on foreign income.
TRUE
T or F
GCC can opt for the 8% income tax rate on his business income since his gross receipts do not exceed the VAT threshold.
TRUE
T or F
GBG would be subjected to a maximum tax rate of 24% on her YouTube earnings if she does not inform Google LLC of her residency in the Philippines.
TRUE
T or F
Mixed income earners can avail of the 8% income tax rate for both compensation and business Income.
FALSE
T or F
Non-operating income should be included in the computation of tax liabilities for businesses.
TRUE
T or F
The P250,000 deduction applies to both compensation income and income from business for mixed income earners. A taxpayer earning compensation income and owning a business with gross receipts exceeding P3 million is subject to VAT.
FALSE
T or F
Social media Influencers are exempt from business tax if their income is below P250,000.
FALSE
First installment due date
2nd installment due date
3rd installment due date
April 15
August 15
November 15
They are Entitled to 20% VAT discount on specified goods and services
Senior Citizens
Businesses exempt from income tax on operations
Barangay Micro Business Enterprise
What is the tax treatment for a Non-Resident Alien earning income from sources within the Philippines?
A. Taxed on all income, both within and without the Philippines.
B. Taxed only on income from sources within the Philippines.
C. Not taxable at all.
D. Taxed at a flat rate regardless of income source.
B. Taxed only on income from sources within the Philippines.
Which of the following is a characteristic of a Resident Citizen?
A. Permanently resides in the Philippines
B. Lives abroad permanently
C. Engaged in trade or business outside the Philippines
D. None of the above
A. Permanently resides in the Philippines
A Non-Resident Citizen is defined as:
A. A citizen who is physically present in the Philippines
B. A citizen residing abroad with the intention to stay permanently
C. A citizen who works in the Philippines for less than 183 days
D. None of the above
B. A citizen residing abroad with the intention to stay permanently
Which of the following best describes a Resident Alien?
A. A citizen of the Philippines.
B. An individual with no intention to return to their home country
C. An individual whose residence is within the Philippines but is not a citizen
D. A temporary visitor
C. An individual whose residence is within the Philippines but is not a citizen
Non-Resident Aliens are taxed only on income derived from:
A. All sources within and outside the Philippines
B. Sources within the Philippines
C. Sources outside the Philippines
D. None of the above
B. Sources within the Philippines
