Taxation Flashcards
It means laying a tax through which the government generates income to defray its expenses. It is a way to raise funds for government programs and services that benefit Filipino citizens.
Taxation
The imposition of taxes is done by law through ?
the Bureau of Internal Revenue.
two types of taxes
National and Local
These are paid to the government through the Bureau of International Revenue.
Its system is based upon the National Internal Revenue Code of 1997 or the Republic Act no. 8424, otherwise known as teh Tax Reform Act of 1997, as amended.
National taxes
tax imposed on gains that may have been realized by a seller from the sale, exchange, or other disposition of capital assets located in the PH, including pacto de retro sales (a sale with a condition for repurchase) and other forms of conditional sale.
Capital Gains Tax
a tax on documents, instruments, loan agreements, and papers evidencing the acceptance, assignment, sale, or transfer of an obligation, rights, or property incident thereto
[Evident on documents like bank promissory notes, deed of sale, and deed of assignment on the transfer of shares of corporate stock ownership. ]
Documentary Stamp Tax
a tax on a donation or gift. It is also a tax imposed on the gratuitous transfer of property between two or more persons who are living at the time of transfer.
[It is based on a graduated schedule of tax rate. ]
Donors Tax
tax on the right of the deceased person to transmit his/her entire state to lawful heirs and beneficiaries at the time of death and on certain transfers which are made by law as equivalent to testamentary disposition
[It is not a tax on property; it is imposed on the privilege of transmitting property upon the death of the owner]
based on a graduated schedule of the tax rates.
Estate Tax
tax on all annual profits made from property ownership, profession, trades or offices. It is also a tax on a person’s income, emoluments, profits, and the like.
Income Tax
Difference of Individual income tax and Corporate income tax
Individual income tax is based on graduated schedule of tax rate
Corporate income tax is based on a fixed rate prescribed by the tax law or special law.
a business tax imposed on persons or entities who sell or lease goods, properties, or services in the course of trade or business whose gross annual sales or receipts do not exceed the amount required to register as VAT-registered payers.
Usually based on a fixed rate, and paid monthly by businesses or professionals - however, some special industries and transactions pay this tax on a quarterly basis.
Percentage Tax
a business tax imposed and collected from the seller in the course of trade or business on every sale of properties (real or personal), lease of goods or properties (real or personal), or vendor of services
An indirect tax, thus it can be passed onto the buyer, causing the increase of prices of most goods and services bought and paid by consumers. VAT returns are usually filed and paid monthly and quarterly.
Latest law on taxation: RA 9337 signed on May 24, 2005, by President Gloria Arroyo is known as the “expanded value-added tax” or the EVAT Law.
Value Added Tax
A tax imposed on goods manufactured or produced in the PH for domestic sale or consumption or any other disposition. It is also imposed on things that are imported.
Excise Tax
the tax withheld from individuals receiving purely compensation income arising from an employer-employee relationship.
This tax is what employers withheld in their employee’s compensation income and remit to the government through the BIR or authorized accrediting agent.
Withholding Tax on Compensation
→ is prescribed only for certain payors like those withheld on rental income and professional income.
Expanded Withholding Tax
