of the complement of a vessel engaged exclusively in the internationaltrade shall be treated as an overseas contract worker.
, whether a resident or not of the Philippines, istaxable only on income derived from sources within the Philippines.
is taxable on all income derived from sourceswithin and without the Philippines; and6] A
, whether engaged or not in trade or business inthe Philippines, is taxable only on income derived from sources within thePhilippines.
Income Taxation may be grouped into:
1)individual income taxation2)corporate income taxation
What are the
basic features of individual taxation
(S.P. F. E. M.)
Individual income taxation adopted the
Schedular system of taxation
Schedular System of Taxation
– is a system employed where the income taxtreatment varies and made to depend on the kind or category of the taxpayer’staxable income
(Tan vs. Del Rosario).
Characteristics of schedular system of taxation
:a)It gives or accords different tax treatment on the income of individual taxpayer.b)It classifies income.
(that under the individual taxation we adopted theschedular system of taxation)
[C, B, P, Dp, I, R, R, D, A, Pw, P, P]
Under Sec. 32(a), income may be categorized as follows:1)compensation income,2)business income,3)professional income,4)income derived from dealings in property,5)interest income,6)rent income,7)royalties,8)dividends,9)annuities,10)prizes,11)winnings,12)pensions, and13)partner’s distributive share from the net income of the generalprofessional partnership.
This is the manifestation that as far as individual income taxation,the income is categorized.
tax rates are progressive in character
. This is clear under Sec. 24(a). You will notice there that the tax base increases as the tax rate increases.
Modified gross income as regards compensation earner
. Modifiedbecause in determining the taxable compensation income, the only allowabledeductions are personal and additional exemption. You cannot deduct theallowable deductions under Sec. 34 from gross compensation income.But as regards those individual taxpayers that derived business, trade orprofessional income, we adopted the
net income system.
This is so because