UNIT 12

TAXATION Session 5

Topics Review of Last session Test of baseline knowledge Sources of Income of an individual Cash In- kind Trading Investment/ Savings
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Review of Last session

Test of baseline knowledge

Sources of Income of an individual Cash

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Sources of Income - Cash

Employment, Sole Proprietor business, Buy and Sell trade Exercise of profession Prizes

Sources of Income of an individual- In- kind

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Sources of Income In Kind

Sole Proprietor business, Buy and Sell trade Exercise of profession Prizes

Sources of Income of an individual- Trading

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Sources of Income - Trading Stock Trade - Direct Stock Trade - PSE Real Property Sale

Sources of Income of an individual- Investment/ Savings

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Sources of Income Investment/ Savings

Savings - interest Investment dividends Investment - royalties

Tax Rates

Sources of Income per Tax Code

Taxable income from employment, business, trade and exercise of profession including casual gains, profits, and prizes of PhP10,000 or less Non-resident aliens are taxed at 25% of gross income from sources within the Philippines if their stay within the country does not exceed 180 days in the calendar year. Aliens who are employed by regional or area or regional operating headquarters of multinational corporations, representative offices- income tax at 15%

Sources of Income per Tax Code

Net capital gains realized during each taxable year from the sales of shares of domestic stocks not traded in the Philippine Stock Exchange (PSE) are taxed at the rate of 5% on the first PhP100,000 gains and 10% on the excess over PhP100,000. For domestic shares listed and traded in the PSE, the tax is 1/2 of 1% of the gross selling price or gross value in money of the shares of stock sold. Capital gains on sale of real property are taxed at 6% of gross selling price or fair market value, whichever is higher. Passive income items like interest, dividends, royalties, prizes and other winnings are also taxed at different rates.

Topics for Research

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Relevant and allowable expenses Charges on income Payments to charities Tax free allowances Tax rates Payment dates

Required
Calculate taxable amount and the tax payable for employed, self-employed individuals, and advise on payment dates

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