Professional Documents
Culture Documents
CORPORATION
TAX RATE
TAX BASE
BUSINESS INCOME
Domestic Corporation
1.
a. In General
b. Minimum Corporate Income Tax
c. Improperly Accumulated Earnings
2. Proprietary Educational Institution
a. In general
b. Gross Income from unrelated trade/business/ other
activity is more than 50% of the total gross income from
all sources
3. Non-stock, Non-profit Hospital
4. Non-stock Corporation/Association operated exclusively for
Charitable purposes
Income of whatever kind & character from any real/
personal property or any activity operated for profit
5. GOCC, Agencies & Instrumentalities
-Government Service Insurance System (GSIS)
-Social Security System (SSS)
-Philippine Health and Insurance Corporation (PHIC)
-Philippine Charity and Sweepstakes Office (PCSO)
-Local Water Districts
6. Power Sector Assets and Liabilities Management
Corporation
a. Sale of National Power Corporation generation assets &
real properties to winning bidders
b. Rental income from generation assets & real properties
before sale to winning bidders
c. Income from operations
7. National Government & LGUs
8. Mutual Life Insurance Companies
9. Homeowners Association
In general
Income and dues are used only for cleanliness, safety,
security, & other basic services
10. Recreational Clubs
11. Taxable Partnership
12. Exempt Corporation
13. General Professional Partnership
14. Corporation covered by Special Laws
30%
2%
10%
10%
30%
10%
Tax exempt
10%
Tax Exempt
Tax Exempt
30%
Tax Exempt
30%
30%
May be Tax Exempt if complied
all the conditions
30%
Tax Exempt
Rate specified under the special law
30%
2%
10%
2.50%
10%
15%
10%FT
30%
10%
30%
In General
Cinematographic Film Owner, Lessor, Distributor
Owner or Lessor of Vessels chartered by Philippine Nationals
Owner or Lessor of Aircraft, Machinery, & other Equipment
30%
25%
4.50%
7.50%
Gross Income
Gross Rentals/Lease/Charter Fees/Other Fees
Domestic/Resident Foreign
Non-Resident Foreign
20%FT
7.5%FT
30%FWT
20%CWT
-Part of Taxable Income and subject to 30% regular
tax
20%FT
Tax exempt
Tax exempt
15%FT
15%FT
10%FT
10%FT
Tax exempt
20%FT
10%FT
15%FT
10%FT (2009)
15%FT
10%FT
15%FT
Exempt
15%FT
Rate not exceeding 10%
Rate not exceeding 15%
Rate not exceeding 10%
15%FWT
Rate not exceeding 10%
15%FWT
Taxable as Income
TAXATION ON CORPORATIONS
TERMS:
Corporation- taxable partnerships
-joint-stock companies
-joint accounts
-associations
-insurance companies
Except: (tax exempt)
-general professional partnership
-joint venture/consortium formed for:
=Construction projects
=engage in Petroleum, Coal, Geothermal and other
energy operations under a service contract with the
government
Requisites for exemption:
1) For construction project
2) Involve in joining or pooling of resources by licensed local
contracts
-licensed as general contractor by PCAB
3) Local contractors are engaged in construction business
4) Joint Venture must be licensed by the Philippine Contractors
Accreditation Board (PCAB) of Department of Trade and
Industry (DTI)
*Joint Venture involving Foreign Contractors are non-taxable if:
1) foreign contractor is covered by a special license as contractor
by PCAB
2) Construction project is certified by the appropriate Tendering
Agency (government office)
3) Project is foreign-financed/internationally-funded and allowed
under Bilateral agreement
*Shall not include those who are mere suppliers of goods, services or
capital to a construction project
Domestic Corporation- created/organized in the Philippines
Foreign Corporation- not domestic
Resident Foreign Corporation- engaged in trade or business in the
Philippines
doing business
- soliciting orders, service contracts, opening offices, appointing
representatives or distributors domiciled in the Philippines
-stayed in the country for 180 days or more
-more than 180 days (Japan)
-more than 183 days (Thailand)
Does not include:
-investment by foreign entity in domestic corporation
-exercise of rights by the foreign investor
-foreign entity having a nominee director or officer to represent
its interest in domestic corporation
-appointing a representative/distributor domiciled in the
Philippines
Non-Resident Foreign Corporation- not engaged in trade or business
within the Philippines
Real Estate Investment Trust (REIT)- considered as a taxpayer engaged
in the real estate business
Cooperative- refers to autonomous and duly registered association of
persons, with a common bond of interest, who have voluntarily joined
together- to achieve their social, economic, and cultural needs and
aspirations by making equitable contributions to the capital required,
patronizing their products and services and accepting a fair share of the
risks and benefits, of the undertaking in accordance with universally
accepted cooperative principles.
IN GENERAL
Sales/Revenues/Receipts/
Fees
Cost of Sales/Services
GROSS INCOME
Other taxable income
TOTAL GROSS INCOME
Allowable Deductions:
OSD or Itemized
xx
(xx)
xx
xx
xx
xx
(xx)
REIT
Sales/Revenues/Receipts/
Fees
Cost of Sales/Services
GROSS INCOME
Other taxable income
TOTAL GROSS INCOME
Allowable Deductions:
OSD or Itemized
Dividends Paid/Declared
TAXABLE NET INCOME
xx
(xx)
xx
xx
xx
(xx)
(xx)
xx
TAXATION ON COOPERATIVES
Duly registered cooperatives which transact business:
1. With members only- exempt from paying taxes and fees
2. With both members and non-members
a. Cooperatives with accumulated reserves and undivided net
savings of not more than P10M
-EXEMPT from paying taxes and fees
b. Cooperatives with accumulated reserves and undivided net
savings of more than P10M
Business transactions w/members- tax exempt
Business transactions w/non-members- liable for:
i. Income tax
ii. Value Added Tax
iii. Percentage Tax- except sales by agricultural
cooperatives
Entitled to:
i. Limited/full deductibility of donations to duly
accredited charitable, research and educational
institutions and reinvestment to socio-economic
projects within the area of operation of such
cooperative
Passenger revenue
Cargo revenue
Salaries
Wages
Insurance expense
xx
(xx)
(xx)
xx
xx
xx
xx
xx
xx
xx
xx
xx
xx
(xx)
xx
Unregistered Activities
-subject to the regular internal revenue taxes
Exceptions:
The Secretary of Finance may suspend the imposition of MCIT upon
submission of proof by the applicant-corporation that sustained
Fire,
robbery,
theft/embezzlement, or for other economic reason.
xx
Gross Sales
xx
Sales Discounts
xx
Sales Allowances
xx
xx
xx
Sales Discounts
xx
Sales Allowances
xx
xx
Net Sales
xx
Net Sales
xx
Less: COGS/COGMS
xx
Less: COGS/COGMS
xx
xx
xx
Gross Income
xx
Gross Income
xx
Less: Deductions
xx
Net Income
xx
30%
Multiply by
2%
Normal Tax
xxx
MCIT
xxx
xx
xx
Sales Discounts
xx
Sales Allowances
xx
xx
xx
xx
Sales Discounts
xx
Sales Allowances
xx
xx
Net Receipts
xx
Net Sales
xx
xx
Less: COGS/COGMS
xx
Gross Income
xx
Gross Income
xx
Less: Deductions
xx
Multiply by
2%
Net Income
xx
MCIT
xxx
xx
30%
Multiply by
2%
Normal Tax
xxx
MCIT
xxx
Subject to
Income
10%
Taxable Income
10%
Taxable Income
Final Income
tax at 10%
Income from
Foreign Currency
Transactions
International Carrier
2.5%
Final Income
tax at 10%
Regional Operating
Headquarters
Firms that are taxed under a
special income tax regime
10%
Gross Philippine
Billings
Income from
Foreign Currency
Transactions
Taxable Income
xx
xx
xx
xx
1st
2nd
3rd
4th
NIT
100,000
120,000
250,000
200,000
MCIT
80,000
250,000
100,000
100,000
Taxes
W/held
20,000
30,000
40,000
35,000
Excess
MCIT
Prior
Years
30,000
100,000
120,000
220,000
250,000
330,000
330,000
MCIT
1st
2nd
3rd
Total
100,000
120,000
250,000
470,000
80,000
250,000
100,000
430,000
470,000
NIT
1st
2nd
3rd
4th
Total
100,000
120,000
250,000
200,000
670,000
80,000
250,000
100,000
100,000
530,000
ST
1
Quarter
100,000
670,000
nd
2
Quarter
330,000
3
Quarter
470,000
NIT
th
4
Quarter
670,000
10,000
10,000
10,000
10,000
20,000
20,000
30,000
20,000
30,000
20,000
30,000
40,000
40,000
230,000
40,000
35,000
40,000
230,000
30,000
70,000
30,000
400,000
70,000
505,000
165,000
xx
Quarter
2nd
Total
Excess
W/Tax
Prior
Year
10,000
NIT
Corporate Income
Tax Due
Less:
Taxes W/held
Prior Year
Taxes W/held 1st
Taxes W/held
2nd
Taxes W/held 3rd
Taxes W/held 4th
NIT Payments 1st
MCIT Payments
2nd
NT Payments 3rd
Excess MCIT Prior
Year
Total
Corporate Income
Tax Due
40,000
30,000
60,000
40,000
100,000
230,000
rd
80,000
xx
xx
xx
Xx
xx
xx
xx
xx
xx
xx
xx
xx
xx
10%
xxx
CO-OWNERS
Rules in Application of GIT:
liable to income tax after actual or constructive receipt of the
The option to be shall be available only to firms whose ratio of COS
income received from an estate that is not under any judicial
to Gross Sales/Receipts from all sources does not exceed 55%.
settlement
The gross income tax option by the corporation shall be irrevocable for 3
consecutive taxable years.
TRUST
agreement created by will
For Trading/Merchandising &
an agreement where title to property is passed to another (for
For Sale of Service
Manufacturing Concerns
conservation/investment with the income therefrom & ultimately
Gross Sales
xx
Gross Receipts
xx
the corpus/principal to be distributed in accordance with the
directives of the creator as expressed in the governing instrument)
Less: Sales Returns
xx
Less: Sales Returns
xx
an arrangement in which someones property/money is legally
Sales Discounts
xx
Sales Discounts
xx
held or managed by someone else
Sales Allowances
xx
xx
Net Sales
xx
Less: COGS/COGMS
xx
Gross Income
xx
Sales Allowances
Gross Income
xx
xx
xx
Multiply by
15%
Multiply by
15%
GIT Due
xxx
GIT Due
xxx
TRUSTOR/GRANTOR
a person who establishes trust
TRUSTEE
a person who manages the property for the benefit of the
son/daughter of the trustor
BENEFICIARY
a person who has equitable title to the property transferred to the
trust (including the possession and use of the property)
FIDUCIARY
the same rules in taxation of individuals apply
any person/corporation that holds in trust an estate of another
taxable income is computed similarly in the case of an individual
person/s (FOR TAX PURPOSES)
allowed a personal exemption of P50,000.00
persons/corporations that serve as trustees, executors, guardians,
income tax rates (GRADUATED TAX TABLE)
or administrators, receivers, or conservators
taxable year (CALENDAR YEAR)
required to file a declaration of estimated income (on/before April
PRE-TAX INCOME EARNED BY A TRUST
15)
may either be retained by the trust or distributed to the trusts
DEFINITION OF TERMS
beneficiary
ESTATE/INHERITANCE
IF RETAINED BY THE TRUST
properties, rights & obligations of a person (which are not
-income is taxed to the trust itself
extinguished by his death; and which have accrued since the
IF DISTRIBUTED TO THE BENEFICIARY
opening of the succession)
-trust is allowed a deduction in determining its taxable income
all things that a person owns
-the beneficiary includes the receipt of the distribution as taxable
things left by someone who has died
income(at individual level)
CURRENT INCOME EARNED BY TRUST
TAXABLE ESTATES
taxed on either the trust or the beneficiary (depends on which
WHEN AN INDIVIDUAL IS ALIVE
party has current possession of the income)
-income on his/her property (interest income on bonds, dividend income on
stocks, and rental income on an apartment complex) is taxed to that
individual
PARTNERS
CLASSIFICATIONS OF GENERAL PARTNERSHIP
GENERAL PROFESSIONAL PARTNERSHIP
-formed by persons for the sole purpose of
exercising their common profession
-no part of the income is derived from engaging
inany trade/business
GENERAL CO-PARTNERSHIP
- companiacolectiva
- considered as corporations (registered/not)
- partners are considered as stockholders
Sale of Services
Less: Cost of Services
Gross Income
Less: Deductions
40% OSD
Itemized
Distributable Net
Income
GPP
If OSD
xx
xx
xx
xx
--Pxx
GPP
If Itemized
xx
xx
xx
--xx
Pxx
PARTNER
Final Tax
Share of Partner in GCP (Net Income
after income tax of GCP x profit s
haring ratio)
Multiply by tax rate
xx
10%
xx
xx
xx
xx
PARTNER
GPP
If OSD
xx
------xx
xx
xx
xx
Pxx
GPP
If Itemized
xx
xx
xx
xx
xx
xx
xx
xx
Pxx
FINAL TAX
WITHHOLDING TAX
Tax Credits refers to amounts allowed as deductions from the tax due.
Types of Withholding Taxes
INTEREST ON BANK DEPOSITS
20%
Withholding Tax
Tax withheld from individuals receiving PURELY
on Compensation compensation income.
BOOK ROYALTIES
10%
Expanded
Prescribed only for certain payors and is
Withholding Tax
creditable against the income tax of the payee
for the taxable year.
GENERAL CO-PARTNERSHIPS
Final Withholding This constitutes the full and final payment of
profits distributed to partners are considered as dividends
Tax
the Income Tax due from the payee on the said
share of an individual partner in a taxable partnership is subject to
income.
a final tax of 6% (1998); 8% (1999); and 10% (2000)
Withholding Tax
Withholding tax withheld by government
on Government
bureaus, offices and instrumentalities,
PARTNERS DISTRIBUTIVE SHARE ON NET INCOME
Money Payments including GOCCs and LGUs before making any
equal to the partners distributive share of the net income by the
payments to private individuals, etc.
partnership for a taxable year after deducting the corporate
income tax
Withholding of Tax at source
share is included in the individual returns of the partners
1. Final Withholding Tax
(distributed/not)
The amount of income tax withheld by the withholding agent is
constituted as a full and final payment of the income tax due
from the payee on the said income.
IF THE PARTNERSHIP SUSTAINS AN OPERATING LOSS
The liability for the payment of the tax rest primarily on the payor
partners shall deduct their respective shares in the net operating
as a withholding agent.
loss from their individual gross income
In case of under-withholding, the deficiency tax shall be collected
from the payor/withholding agent.
COMPUTATION
The payee is NOT required to file ITR for the particular income.
2. Creditable Withholding Tax
Gross Income of GCP
xx
Intended to equal or at least approximate the tax due of the
Less: Expenses of GCP
xx
payee on the said income.
Net Income before Income Tax
xx
The payee is STILL required to file an ITR and/or pay the
Less: Income Tax (30%)
xx
difference between the tax due and tax withheld.
Net Income after Income Tax xx
Expanded Withholding Tax and Compensation Income are
creditable.
LOTTO WINNINGS
tax exempt
10
COMPUTATION OF WAGES
Monthly Minimum Wage= (SMW x Factor) 12 months
Factor of
Not paid on Saturdays and Sundays
261 days
313 days
365 days
392.5 days
TIME OF WITHHOLDING
Arises at the time an income is paid or payable, whichever comes first.
Payable the date the obligation become due, demandable
Tax on Compensation Level
and legally enforceable.
Add: Tax on Excess
Withholding Tax
EXEMPTION FROM WITHHOLDING
1. NGOs except GOCCS.
2. Person enjoying exemption from payment of income taxes.
a. Sales of real property by HLURB OR HUDCC where selling price do
not exceed 180,000 in Metro Manila and other highly urbanized
areas and 150,000 for other areas.
b. Corporation registered with BoI, PEPZ and SBMA.
c. GSIS, SSS, PHIC, LWD AND PCSO. However, income from real or
personal property shall be subject to a withholding.
d. General Professional Partnerships.
e. Engaging in petroleum, coal, geothermal and other energy
operations.
f. Local or resident supplier of agricultural products in their original
state.
-
1.
2.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
Incident of employment
Retirement benefits received
Amount received due to death, sickness or physical disability.
SS benefits and other similar benefits.
Paid for agricultural labor
For domestic services
Casual labor not in the course business
Payment for damages
Proceed of life insurance
Return of premium
Compensation for injuries or sickness
Income exempt under treaty
th
13 month and other not exceeding 30,000
Income not exceeding the SMW
Additional pay receive by MWE.
xxxx
xxxx
xxxx
xxxx
xxxx