M3 PT 2 Flashcards
theory and basis of taxation
- reciprocal duties of protection and support
- benefits received principle
aspects of taxation
- levy
- collection
- allocation
the government protects the welfare of its people in return, the people support the government
reciprocal duties of protection and support
taxes are used for the benefit of the public
benefits received principle
tax laws, specifying the object and amount of taxation are enacted
levy
the tax laws are implemented and administered
collection
distributing to various government sector and program
allocation
principles of a sound tax system
- fiscal adequacy
- theoretical justice
- administrative feasibility
revenues should be sufficient to defray expenditures
fiscal adequacy
taxes are proportionate to the taxpayers ability to pay
theoretical justice
tas laws can be implemented efficiently and effectively, avoiding necessary inconvenience and confusion
administrative feasibility
employers are required to withhold taxes on employees, means that the salaries received as “take-home pay” is already net of the related income tax
withholding tax
income earned without actively working for it
passive income
subject to final tax
passive income
interest income from bank deposit
20% tax rate
interest income from foreign currency deposit
15% tax rate
royalties except on books as well as other literary works and musical compositions
10% tax rate
prizes and winnings exceeding 10,000
20% tax rate
cash on property dividends
10% tax rate
a partner’s share in the after tax profit of a partnership (except a general professional partnership)
10% tax rate
how much is the annual registration fee for every separate place of business
500
business taxation
annual registration
Value-Added tax (VAT)
Percentage Tax
Excise Tax
imposed on any person who is in the ordinary course is business, sells, barters, exchanges, leases goods or properties/ renders servicess
value-added tax (VAT)
a tax imposed on the consumption of goods or services in the philippines
consumption tax
tax based on sales price
sales tax
it can be shifted or passed on to the buyer
indirect tax
tax rate of 250,000 and below
none
tax rate of 250,000 to 400,000
15% over 250,000
tax rate of 400,000 to 800,000
22,500 + 20% excess over 400,000
tax rate of 800,000 to 2m
102,500 + 25% excess over 800,000
above 2m to 8m
402,500 + 30% excess over 2m
above 8m
2,202,500 + 35% excess over 8m
