Income Tax In General Flashcards
Tax Code of___^
1997
Tax on person’s income, emoluments, profits arising from property, practice of profession, conduct of trade or business less deductions
Income Tax
3 Income Tax Systems
Global - subjected to a tax at fixed rate
Schedular - the various types/items of income (compensation, business income, income from profession) subjected to schedules characterized by graduated tax rates
Semi-schedular or Semi-global –Partly global or partly schedular
The Philippine Income Tax System
Semi-schedular System
Partly Global partly Schedular
TorF? Income tax is an excise tax
T
TorF? Income tax is a personal Tax
F. Excise Tax!
5 Characteristics of PH Income Tax
- National tax as to taxing authority
- General Tax as to purpose
- Excise tax as to subject matter
- Progressive as to rate
- Direct as to incidence
3 Tests In Determining When Income is Taxable
- Realization Test - Accrual
- Claim of Right Doctrine -
- All Event Test
Accounting Periods for Individual and Corporation?
Individual - Calendar Perion ONLY!
Corporation - EITHER Calendar or FY
Recognition Method for Long Term Construction Contracts?
Percentage of Completion Only
The Situs of Interest Income is ____ of the debtor
Residence
Dividends are considered WITHIN the PH if received from?
- Domestic Corporation
- Foreign Corporation - should be more than 50% of GI are earned within. Otherwise, WITHOUT!
Situs of Services is where____
Performed
Situs of:
Rentals and Royalties is where the property_____
Sale of Real Property
Located
Situs of Personal Property:
Where sold.
If Produce in the PH - partly within and without
NOT required to file an income tax return for the particular income or include the same in the computation of his taxable income subject to regular income tax
FWT
In____, the income received by the payee is to be included in his gross income subject to normal income tax, and the tax withheld is a credit from income tax due
Creditable Withholding Tax (CWT)
-Advance Tax Payment by taxpayer on the annual tax
Remember, Schedular/Graduated rates parin nag tax sa income na yan (like compensation). Kasi pag Final Tax, di na dapat kasama sa GI nya
The full and final payment of income tax due
Final Withholding Tax (FWT)
Explain Income Tax Due vs. Payable
Tax Due xx
Less: Withholding Tax xx
Creditable Tax xx
=Tax Payable (Refundable)
If a taxpayer intends to dispute the validity of a local tax ordinance the correct remedy is to appeal it with the?
a. Secretary of Justice
b. Court of Tax Appeals
c. Local Board of Assessment Appeals
d. Regional Trial Court
Secretary of Justice
TorF?
In determining the situs of taxation, the subject matter of the tax is not to be considered at all.
In a gratuitous transfer of property, situs is the taxpayers residence, citizenship or location of the property
False, True
Note:
The separation, due to the economic situation, is one which is beyond the employees’ control, hence excluded from gross income and not subject to income taxation. The age of the employee, and his years of service does not matter
From ICPA
A suit filed by a taxpayer questioning the constitutional of a law on the theory that the expenditure of public funds of the government for the purpose of administering an unconstitutional law constitutes a misapplication of such funds
derivative or representative suit
TorF?
The basis of or rationale for taxation explains the reason why a State may impose taxes.
The theory of taxation explains why there is a need to impose taxes
True
True
TorF?
There is no constitutional limitation if Congress will pass a law subjecting the AFP to taxation.
True
A person may be imprisoned for
non-payment of VAT
failure to pay the community tax
non-payment of capital tax
failure to pay a debt
non-payment of VAT
The 30% income tax is increased to 35% by the Congress for the purpose of raising revenue to be used for national road expansion project near Sabong Corporation, a private corporation. Is the exercised of the taxing power unconstitutional?
No, because it is exercised directly for public purpose and the benefit to a private entity is only incidental
