Professional Documents
Culture Documents
REVIEW
Materials: Review Outline
Table
Review Questionnaires
References References
1. Banggawan 1. Banggawan
2. Urbano 2. Urbano
3. Reyes 3. Reyes
4. Valencia 4. Valencia
5. Ampongan (Textbook and Reviewer) 5. Ampongan (Textbook and Reviewer)
6. Tamayo (Reviewer) 6. Tamayo (Reviewer)
7. Reviewers from review schools like CPAR 7. Reviewers from review schools like CPAR
and RESA and RESA
PRELIM TOPICS
1. General Principles
2. Individual Taxation
Basic Tax (5 32%)
Income Subject to Final Tax
Capital Gain taxes on 2 particular transactions
3. Gross Income
Exclusion
GENERAL PRINCIPLES
a. Stages of Taxation
b. Inherent Powers of State
c. Constitutional and Inherent Limitations
d. Sound Tax System
e. Elements of Taxation
f. Classification of Taxation
g. Escape from Taxation
h. Powers of Commissioner
i. Others
BASIC TAX
*salaries, net income from other businesses and other income not subject to final tax, capital gain
Problem: The husband had the following data on income. The taxpayer is married with three
dependent children. Net income of the wife is P1,000,000.
Net income from business in the Philippines
Salary received in abroad
Other income in the Philippines
a. Compute the income tax due if resident citizen _____________
b. Compute the income tax due if non-resident alien engaged in business in Phil ____________
FINAL TAX
1. Interest income under expanded foreign currency deposit system 7.5 %
2. Interest income on any currency bank deposit, yield, or other monetary 20%
benefits from a deposit substitute, trust fund or similar arrangement
3. Prizes exceeding 10,000 20%
4. Other winnings except lotto/PCSO 20%
5. Royalty income other than books, literary works or musical composition 20%
6. Royalty income from books, literary works and musical compositions 10%
7. Dividend income from a domestic corporation or joint stock, insurance, or 10%
mutual fund, and the regional operating headquarters of a multinational
company or share in distributable net income after tax of a partnership
Problem: An individual taxpayer, resident citizen, received the following data on income:
Annual Salary P362,300
Interest income from Banco de Oro 23,200
Dividend income from domestic corporation 32,600
Share in net income from general professional partnership 25,100
Interest on notes receivable 6,000
Other employment income 34,800
How much is the total final taxes in passive income? ____________
Answer: P 9,060.00
Problem:
On August 15, 2015, Mr. Cruz sold a 500 square meter residential house for P3,000,000. The
house was acquired in 2002 for P2,000,000. On the date of sale, the fair market value of the house
as shown in the real property declaration was P2,500,000 and the assessors value amounted to
P2,200,000. The zonal value was P7,000 per square meter.
GROSS INCOME
Gross Income means all income derived from whatever source, including (but not limited to the
following) items:
1. Compensation for services in whatever form paid, including but not limited to fees, salaries,
wages, commissions, and similar items
2. Gross income derived from the conduct of trade or business or the exercise of a profession;
3. Gains derived from dealings in property
4. Interests
5. Rents
6. Royalties
7. Dividends
8. Annuities
9. Prizes and Winnings
10. Pension
11. Partners distributive share from the net income of the general professional partnership
Taxable Income Gross Income less deduction and or personal and additional exemption
Deduction (Midterm)
1. Expenses in general
2. Interest
3. Losses
4. Tax Credit
5. Bad Debts
6. Depreciation
7. Others
Problem: An employee received the following compensation and benefit during 2015:
Gross compensation income P800,000
th
13 month pay 70,000
14th month pay 60,000
Production incentive pay 8,000
KINDS OF TAXPAYER
A. Individual
Employee
Engaged in Business
Personal and Additional Personal
Exemption
1. Resident Citizen PE + APE
2. Non-resident Citizen PE + APE
3. Resident Alien PE + APE
4. Non Resident Alien engaged in PE only
business
5. Non Resident Alien not engaged in None
business
6. Special Alien Taxpayer None
*Note: Resident or Citizen qualified for
both PE and APE
Personal Exemption
Single or Married 50,000
Change of Status
REMINDERS:
1. Ready your heart for the departmental exam. Passing rate: Low! It hurts. STUDY HARDER!
2. Always be careful with the rules (tax is a law) to be applied and with the numbers. BE
OBEDIENT!
3. READ. READ. READ. READ. SOLVE. SOLVE. SOLVE. Do your best and PRAY!
Prepared by:
Rosslyn Dayrit, ATLAS Active Member