Kinds of Taxpayer

Question 1

How do you calculate in Income Tax Model?

Answer 1

Gross Income - Allowable Deductions = Net Taxable Income
Net Taxable income leads into
Tax Due - Tax Credit = Tax Payable

Question 2

What is a “Person” according to the Sec. 22 A Tax code?

Answer 2

An Individual, Trust, Estate, or Corporation

Question 3

What is a “Citizen”?

Answer 3

-Those who are Citizens of the Philippines at the time of adoption of the 1987 Constitution
-Those whose father/mother are citizens of the Philippines
-Those born before Jan 17, 1973 of Filipino Mothers who chose Philippine Citizenship upon reaching the age of Maturity
-Those naturalized by the law

Question 4

What are the conditions for residency of citizen?

Answer 4

If they have spent more than 183 days outside the Philippines they are a non resident citizen (assuming no intention was given)

Question 5

Refers to the total value of all assets and liabilities left by an individual death

Answer 5

Estate
(Its treated like a person till the heirs receive the property)

Question 6

What are the 2 kinds of trusts?

Answer 6

Revocable
-Cancellable at any time, so trustor gets taxed but not the trust
Irrevocable
-Cannot be cancelled, so trust can get taxed

Question 7

What are the 2 kinds of estates?

Answer 7

Judicial (settled through courts, there’s a will and testament)
-Estate is Taxable
Extra Judicial (settled through agreement between parties)
-Estate is non taxable, but heirs are

Question 8

What is BIR under?

Answer 8

Bureau of Internal Revenue is under the supervision and control of the Department of Finance

Question 9

Who is the current Commissioner of Internal Revenue

Answer 9

Romeo Lumagui

Question 10

What are the 2 situations where government can compromise on the tax liability of taxpayers?

Answer 10

Insolvency and Bankruptcy
Excessive Assessments