MODULE 3 LESSON 1-2 Flashcards
the corporate tax in the country is , which is applied to all net incomes from the entire tax table sources
30%
for the highest income bracket
32%
The Philippines taxes its resident citizens on their
worldwide income
is governed chiefly by the Constitution of
the Philippines and three Republic Acts.
taxation in the Philippines
states that “the rule of taxation
shall be uniform and equitable” and that “Congress shall evolve a progressive system of
taxation”.
Article VI, Section 28 of the Constitution
Income of residents in Philippines is taxed progressively up to
32%
This income is taxed at progressive rates on gross income after deduction of personal and additional exemptions but without deductions for expenses
compensation income
This income, including dividends
and interest, is subject to tax at 7.5%
passive income
This income is taxed at progressive rates on net business income after deduction of certain specified expenses.
business income and professional income
both for domestic and resident foreign corporations is 30% based on net taxable income
corporate income tax rate
- is a corporate tax obligation paid by taxpayers engaged in trade or business activities in the Philippines. Employers withhold from the salary of their employees every month and each amount withheld serves as an advanced payment for the employer’s Income Taxes during the business year
withholding tax
of the gross selling price is imposed to all importation, sale, barter, exchange or lease of goods or properties and sale of services.
Value Added Tax (VAT) 12%
’ means the total amount of money or its equivalent that the purchaser pays or
is obligated to pay to the seller in consideration of the sale, barter or exchange of the goods
or properties, excluding the value added tax.
Gross selling price
is based on the taxpayer’s ability to pay. It imposes a lower tax rate
on low-income earners than on those with a higher income. This is usually achieved by
creating tax brackets that group taxpayers by income ranges.
progressive tax
is the rate at which an additional dollar of taxable income would be
taxed. It is part of a progressive tax system, which applies different tax rates to different
levels of income. As income rises, it is taxed at a higher rate (according to the bracket it falls
in).
Marginal tax rate
how to avoid tax refund
ST E P 1 : ESTIMATE NEXT YEAR’ S INCOME
ST E P 2 : ESTIMATE DEDUCTIONS
ST E P 3 : DETERMINE TAX
ST E P 4 : ADJUST WITHHOLDINGS
is an organization that receives deposits, honors checks drawn on those
deposits, and pays interest on them. Banks also make
loans and invest in securities.
bank
