Taxation Flashcards
The laying of 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 Filipinos.
It has been defined by several national and local laws.
Taxation
What organization imposes taxes through law?
Bureau of Internal Revenue (BIR)
How are taxes imposed?
- Taxes are proportionate to citizen’s ability to pay.
- It is levied on paying persons, properties, business transactions, privileges, and benefits.
It is a type of tax that are paid to the government through the BIR.
National taxes
Law where the national taxation system is based on
National Internal Revenue Code of 1997 / Tax Reform Act of 1997
R.A. No. 8424
Nationa 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 Philippines. This includes pacto de retro sales (and other forms of conditional sale.)
Capital Gains Tax
National tax on documents, instruments, loan agreements, and papers evidencing the acceptance, assignment, sale, or transfer or an obligation, rights, or property incident thereto.
Evident on documents like bank promissory notes, deed of sale, and deed of assignment on transfer of shares of corporate stock ownership.
Documentary Stamp Tax
National tax on a donation or gift. Imposed on the gratuitous transfer of property between two or more persons who are alive at the time of transfer.
Donor’s Tax
National tax on the right of the deceased person to transmit their estate 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 a tax imposed on the privilege of transmitting property upon death of the owner–it is not a tax on property.
Estate Tax
National tax on all annual profits made from property ownership, profession, trades, or offices. A tax on a person’s income, emoluments, profits, and the like.
Income Tax
Individual income tax vs. 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 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 taxpayers.
Percentage taxes are usually based on a fixed rate. Usually are paid monthly by businesses or professionals; some special industries and transactions pay percentage tax on a quarterly basis.
Percentage Tax
It is an indirect tax, thus, it can be passed on to the buyer, causing the increase of prices of most goods and services bought and paid by consumers.
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 vendors of services.
Value-Added Tax (VAT)
Known as the “expanded value-added tax” or the “E-VAT” law
RA 9337
National tax imposed on goods manufactured or produced in the Philippines for domestic sale or consumption or any other disposition.
Also imposed on things that are imported.
Excise Tax
