Olgpter 7 Fundamental Principles ‘axaton Deine Tosaon it the process of means Oy snc he tovroor (cepaent Ha) Mocpr ae ior” mong bey te pita) poses” ugone | pon ‘eet the ace wan foun ‘ert pupae of rsng revere cay Satna agont ae goverment {Sagfonon cat greet ord RorBasuere tise poner heron Therlr, “ary casatuoralpresion rmpndng tw Tass ower Yo tn sou ‘eae repeat ol pow Sooner ong tho crt a ents 24 tere gino ess power Foe roe ‘ages frm persons and propery teved 674" Teun‘) Bye in ay oe aie Oy goverment anda pubic needs Fondamental Pri ple Paro ane osc PUD mt ey pose mat oe vonage open whens 9a es wrens fect ze ne an ree, a gvemmon can un tacit St ea crag whch ctete ° reincome and eames of tases imposed fr rising revenues iin ates cote goverment (orsurotuay Campero) Irby pore feta a eas sxpzao he sore pimernion of Sate® pice pow] PY rept comin choca oF conivons enwsones by the mre mayo achieved sch 2. Secondary: Regubior Purpose, a) Proms of General Welfare 3) Reduein fSocralInalty ) Ecanomie Growh + exces tas for sn products sich a8 Eipates end accols. «+ ARtsoment tres for “amusement pieces AER'te' mont an cay clus, cocks and rocotoals Exonpins of Taxes rose Jesctmoans + ezeasing taxes in periods of prospety 12 Pee som "cub apandng power snd at tan. Stier Sonne + Grniag x ncowas "(0 ” ronole ‘Bites nough | fewponeer ndstes and encourage grown ‘ston crovaiinaises Fudanetal Praag a0 GEV comme oT ) ES oan wen | exten gromet ecnreocereae Stee aes Shemoman es | Stason o's nsdn whch td ath oe ecstasy Saar can ces eae” | | "NOV. vDEOGRAN, 151 SCRA200 | PONS we cet The toga Repuy Boat aso | Ingend 2 208 te ot Pe goss meet pyae toe | (pane The upon Cat uals ayo eg "atthe 3% also served rosary pupa to ashe toot epising be ve nds. pay Pe aren | pany te fag weno lea opty ht de leant erm ie tes J ‘THEORY and BASIS OF TAXATION Theory Authority LIFEBLOOD THEORY or NECESSITY THEORY The power of taxation proceeds upon the theory that he existence ‘governs a neces (Necessity theory’) Ae tates ia te case of Prat‘Guareny Co, ine» Commissioner 2 SCRA TTS), a power Prosisiod upon necossty. kaa necessary burden to preserve Te hte soverognty and a means fo give te Cizeny an army fo resist spptesion @ avy to defends shoes fom invasion, 9 oom of Servants a seve, pube improvements forthe enjoyment othe ez, Sand Tose which como wihin te Stale Terry and Toskies. ond rolecton which a governments suposed to pone Tne power of texaton 's essontat because the goverment can nothor exist nor onde without taxation. "Taxes are the ebiood of Pe fovernment and tho promet ard certain avait isan imperious need” {Liteblood Doctrine). The government cannct conve to perio He basic functone of serving and protecting He people snout means 12 pay ts expenses. Consequently, the slate fas the right to compel allt lezen and propery with imi to connbute,2 Fradanestal Prins 7 penton sa py a aetna, eng and gamishment, andor levy on fal decisions ofthe BIR on disputes ‘tecsorent, caves fed blo the CTA, and te sl of popey “dorado osmshea (RMO $2200), ©) Taxes cout not be the subject of compensation or sat of “Tes eannot bo rbjet to cel or compensation since am or taxoe i no ett orconact A dstngushanglesure oa {ae nat li computor rater tan a mai of Dargai ates auld bea suber a compensation or sto can ean give eo Ecrivsen and abuse, doping the goverment of utr ovr the ‘manna y uric oxpayers can rad ad Otel he an Lion. In e cate of Repub vs. Mambuao Lumber Co. (6 SCRA 622; Cater Phis =. COA208 SCRA 720), te no ac le se ocause he goverment end te lazoayer arena muti rear sd eof” ofeach oer An exceptan tote rule here boy the Sime th government ora te impayeragane! each the have ‘easy bocowe dua, domandoble and uly Igudated is te ease, ‘mpensaton lls face by operational aha bath obligor are ‘Sengushes to ther concurort ameunis (Gamage 9. Gatos, 8 Serna (RELATED RANA, GRTHTO, ret 10) cases he car of 2 reser sha at Gut Aer, | Pas ay Ta tran 20 su mets Oe | {38103 sue ete ese bl owned ty Kes eprops | yt goers bead be nin of aro he, fe PudbOOGD recent he esr assed ae 9 ‘Sd gon Fon 19 fo 1385, X an fa arena. ha totter peg Ns cane tm. ov bangs ‘be wed tee tes Polanco 15000000 hire by hes aay ten compre | {28 ana of P0000 we be gown cyan ‘spn oh pep. ese Fiadaneatel Praca State's Power to Tax NATUREICHARACTERISTICS o 1 cae om, aoe ren) en tne ponence a tonathnonapreon beesuse the sa hs the ce poet fo cama and erorce eden 8 i Fon The acpi wins jxisaeton. I lgelaven cnaractar. ae ‘The per tx fowing of oon paca ang exctaty legislate n nate, cannot be exeroae by he executve cr scl Seances ote govervran EXCEPTIONS fo non-deegation re: 2 'Delagaton ‘as proved torn e_ 1987 Constuion such as ‘Selopaon te Present under Sesion 28 Aol VI sat that tho Congress may autores, by iw, th Prosdent to fix within ‘ected ts and autor fo such ations ard Testictons as ra + tnoort and expo quacas 1 Temage and wharae dues ord her dites or mp witn te taewock fe national Aerebpmen' program oft governor by Delagaton loa government uns a provided under Secon 5, At Xot he Coratuton. The powet of eal goverment ornpose ‘stesand fess aay subject tothe atone whieh Congres ‘may rode, te former avg no meron owe 2 NATIONAL deat Lege inrare ough Logie nate fresh race es yeni tee! ergs ance Sere aes by ec Ingsatve tan 2 Fevdamertal Prinses LASER: Tn aca cateonpaag tb aot ow Be Soy feng ott came settee ANSWER: No Seo sma fun cer auld dena Len ate woe oe Cua arurs tive are) tems dente he ra ter a a aye mand tp ‘ea ass be dure Telnet tsar he vermetaoteeSe at {eunigusind dam uneh be none onane ot ae, lah oslo objects (subjects) of taxation The poner fo ak escent legate nature. Hara, the ‘onto sect tw ototlsubece of nation rate wih Congene The mater wit the congetanes of bo opaatay Hees Be 1) The subject cbect ob taxes 2 ‘The purpose of he nx a log a 83 publ pees 3) The amount orate tn 3) Kiger 5) Agportonment of he tax 6} Stir otaton 7) Themanrer, ans, ané agencies of actin ofthe tx. Frrdanaste Prince As pote - eee amore te Louie Seleanted power, may he hs NO, Cones caret bref ray Congess under he 1867 bois the power a he formers an? Selon what i exoressy ranted ‘The oly auttry contest «ong anita nee So er a a a ray pe esgic tate ee + aS ETE ee 1 ER me ttn tne ieee [RW wie Tae po om case Ceo or Rome te nas | ‘nrg gaa Ss ioe” "Pm ‘aia ‘spe ii om poe anger mee cs Sesetng eons ee ata exc win be agate shy a L {pana dori te anol 4. Iie sujet io Consttsional ad imran imatons ILLUSTRATIVE Th Cones, tr ruc Be ng ad A a case. so a he efit ‘eau haw oy am fn ‘etal te posto ado af an Re tae Senet. Ang, in psi mal wal l Sta ag pow lina oes Nah ___lnb i inden psn ana 8Fardancstal Principles to wo bears he buen: 3 Bs Blea or wnich e cemanded from te person who also shouksers tre burden of tax of tax which te faxpayor carck sit fo another Bie adeno init for tha payne of he a) 25 Wo 9s the Impact or burden of he tx fats on tw are person (eg. ncome ta, ae tax dono" tx). Indirect — tax whichis demanded tom one parson inthe expectation fa rlonion that he ehalndermty himeel at the. expan of Srother Those are taxes wherein te idence of or the Habit for the payment ofthe tax fats on one person ut te Durden ter wot can be sited or passes onto anather person (63. VAT. percentage tax, txcge tax on excisoable aces) Inthe case of Maced v Macarag (97 SCRA'777, an inde! tax is dened a8 one paid by 2 person Ww isnot arecty tale tert, and who may therefore shit or pace fon the tae archer person or ently, which Utley assumes the taxburdon, 4. Asta deleminaon of amount 1 Specfe~ lax of fred amcurt imposed by the head oF number. or by Some standard of weight or measurement (e.g excae Tax om cigars andiques) Ad valorem ~ ax of fred proportion of he value ofthe property with ‘respect o which te taxis asses8ed eg vat income ta, doncrs tae ‘rc atte tax) TABLE 15: SAMPLE COMPUTATION OF AD.Valorem and Specific Tax ADYALOREN TAX RATE Based on Net Rta leader) SFECHCTA rete 620 6 Faclanettal Principles 12 Constutonal Limitations 2) Ove ere rust be aval law and the measure shoud rot be tt confiscation of uncensclonble and unjst as 10 amour propery, Tax date must rol be stray 88 1 Fd n0 ot in the Conan. Tho power fax sou rt be rereh oppressive. or confscaloy.” The FMXabOn if aso ews a he night to notes an hearing, ul prtetn of owe "ponent pon Sate ese aie uncer Sonar crsstnces and coraons oth retested anttabiees mend. te doze Ses moire al persone or popaoes erent fac be Tc ras ought wae te some. What robs resin ogomnon ahh dass, eunst ‘some and thos cher Ae ong ae tere are raterol OF reasonable gronts to 30 cain, Corse ay you pana or Stes ot ted tnd ts sao tl eras of he reas ae set othe same fle end the aks Stnntve mparaty upon hem | RELATED Tita va (OR Ne 1274H Janay 20,1099) | case? Kilgremon An Grose Oder was sud pursuant io gut an a ay rces ay 1 bsresses feos win be "ecrdares” ! Be Side Ener ‘Spel Zoe, and eng nid revives ose who ve sn tbe fone ba ae sch "sed aes he Connor mht equ prac of ew eles 2) | Pe bsenave Oe? ANSWER | No. ql tno he clus sate asonbie | clsteain Cision, eval, mat ‘+ Reston stan ditions, | Begone oe pupae be av, Nb imi to esig condos ny, *+ Aap aualy al morbr of he sae dss. Firtanectel Pringle So rrr ere SPECI TAXON Charan "acted by ‘euoine bee the MS (etcudng nse ana VA) PES aden 4 Primary. Fiscal, or Revenue Pupose- at knposed ale Berea pueee of the govenmar. te, te ee ee Zovernment purposes (@.g. income tax, doncr’s tax and estate ten) 5 Secondary Regn, Spal or Sangean Pope ie aay fora specie pup, Leto acheve come foal a oo a! Woipece safabe' rote se scaled ey ers ‘certain duties on imports). eee 2 o graduation orate: * tery rece: oe wate eet ana of be above (Ad.valorem tax on distiled spits) ee © Peso eset wih ere wn aso bracket nereaees (e.g inte taxon neous te ‘ogres ~ tah th fate of wich doceoes os eh Sey At tourg abo. National = taxes imposed under the National inemal Revenue Code {commonly krawn 36 the. Tax Code) callected by the atonal goverment tough’ the Bureau of inna Reverce IR) and other naonal goverment agencies, Other nab! taxes other han thse eolecod by the BIR 8s provided funder special ans indude but not iied to + Customs dites + Taras on narcote drugs Special education fund taxes * Energy taxes on ara motorized watererat, and elecic ‘ower consumption + Sugar aajustmont axes ” Furdamental Principles z Seee 7 Tee a Sui drs bate ers ba | cdo e “acu tes an the tates rs | 2 hata iar wb ea tn cas a ‘htt gre snl ews Te Casson ‘ops ea al he reset hal eens win the sere. The rein, eng ie rates craig det to be acre eet far ea i | Ins they ve sry Weed an noes pen | sedeolasonn aired ©) Rule ol unfomsity ar oat in taaton “The i ef taraon shal be unload egutabe.* Wt equtes tam san ad operant Satna, e {akin evry place where the udact of ak fund oes ot however. equre abeokte. orate ecuaity unt a ‘reumstances, but subjects easenatleSastaton. For clssifeaton be valine falowng must concur Imus be tases sn sbstanal ancnan 4 ltmus apy btn present ad ure conions {Its be gamane to th purposes of te lw ‘+ lhmus spy equa tal rember of he sane css. RELATED PLOT GLOBE ad SHAT a case RA 7hze_povdes_ fr ocly of teanent of fe lelconmurctons iby cawol be 9 val! be fr PLDT 1 | li he sane xenon an pegs gan GLOBE 2 ‘SBR PLDT tot say stata eb sane oe GLOBE | ‘sd SMART ao provi rR phe commen Borg ‘et siminy suse, Sane eto smc He, no | "ono apes uot are. 4A progressive system of taxation means that tax laws shat place emphasis on srect taxes rathr than on indirect axe, wth ‘bit 1a pay 8 he principal erteron (Arce Vi, Sackon 28 of te CConsituton), Regressive tox rats refer to ‘tax rales. which ecreases as the tax base or bracket creases. Regressive lor ‘ates shoud be ciferntated fom a regressive system of twxation ‘which exists when there are more indirect taxes imposed then ‘deoct 3x08 aae abortel Pig penne ae a om moe pl and sea. Th 3 9 omens Se mara inate soe Tmt teh ep e405 bt roe eager a ecana ‘Grant of tx exemption No law granting ary 12x exemption (i, amnestes, ‘ondonations and refunds) shal be passed without bs 2nourrence of majety of al Members cf Congress 2 ‘rong separa snp be pamtinene oe 2. Veto of aporogritn reve, tity the Presset 5. eign er it The resaon shat Rave to boner no oy eg pion ates heme ean fariosa tomo tora ina pean, tv eign erga i, me {SO un veto Sant ae! ton Toa ity od ery et ign, ao an which he_does not objec. An tom in a bil eer, to ones sd ta he ony erations espa exapton for Dariclra, deta, the deine and severable pors ef Lees Fmmes ton eae by np ons Bilin udctaryeglaton an tn anil sot seed ventas vn oe semy aet an eceyed money dedestode a ssedpupone ‘Sreacnnes 3. Deigted ator of President to impose tt rats 1) Prion apetimaton frost, nant ‘moat ond eno estn nage and arog ee 6s Peston batons. Aicetas a ts of 0 delegated by Congress trough a. law {aubect. Io Congressons sts and restictons) wih the tamewort sock aot edvestons istutors gett nonstck ‘of national davelopment program. Eagar retin | scene coves 4 Nondmpaiment of the Supreme Court (SC) juisticion | eon, pen soars ‘Congress cannct take away ftom the, Supren® {ac andeuons des Gout tne power given toi bythe Gansttution as the fa | teirgssh ten ‘bor of fax cases. The Supreme Court shal have the ‘her actviy the conduct of whichis | eemgen be pecdeg folowing powers: Review, revise, reverse, mot. OF rested to Be axrese 0° perfomance | jose whcnperars ny ‘affrm on appeal or cortora, as the law or ihe Rules of by such educational sttaton of | Peoeay inh (Court may provide, fina udgments and orders of tower ‘tuations purposes or icons ours in al eases involve the logy of any tx impost, ‘assessment, or tol, or ary penaly Imposed In elon Taxation of ropetary" educational institutions — Propieary educatonalinsitutons, Including those ve cooperately ned, may likewise be ented to such exemptions A REVENUE BILLS shal originate exclusively fom the ‘House of Representatives Al appropiaon, revenue or tart bis, ils ‘authorizing an increase of the pubic debt, bils of local subject to he litatons provided by law including restrictions on ‘@idends and provisons for investment. Proprietary educational instutons and hospi which are non-proft shal pay a tx of tn Betcent (705) on their taxable Income, except for passive ‘pplication, and private bils shall orgnale exclusively in Incomes which are subject to diferent tax rates ag decussed in the House of Representatives, but the ‘Senate, may Chapa propose or concur with amendments, The Conetition ‘simply means that te iitative forthe fling of bis must 2 * 2 Fecdnertal Pincples Fenda Prac Demands Paiste support grant ses TO CONSIDER IN DETERMINING THE SITUS OF Factors 10 ¢% FaxaTION a, Subject mate (parson, property, or acy) 2. Natio oot © Gtaanaie a Derandet repiaann Paid br oust nates rope ‘runt s ose en el cnt Fesience ofthe taxoayer Souroe of reame Poco of ox Majoron ty 8 ow or Mab ep private ndividuals oF entities Serene arraen pines or occspaton being xed ‘TAX versus PENALTY cas Penaly is sanction imposed asa punishment fo vito ow SSS 2 ac deem inurous, me vlan of fax mey give ahve aopsa, FealPopety Loon ot pena | oon anti Pwd se tran | | range Dnt omer et ten enriches ots caste Sesgreo Bop cnt Panay amet sg revenue | Peg sa pati. apts raters: Sti st pac | ov sone ye gown May eran by he eet | ‘sy wit changes seein rene 1! Silt lospecttocrosuy tnt 2. TAX versus SPECIAL ASSESSMENT = deuduabedeae unhtnedsedondiet satay Spacil assessment i an enforced proportional cntbuton fm ican be Rae ee be eee uners of lands for special benetia’ recat tee pias eae neon tes Improvement." In Republic. Bacolod, 1TSCRAGI2 eons ‘assessment isa levy on property which dares same apecal Ceneat {rom the improvement. ts purpose isto fnanee such hoprovencer {hus accruing only to the owners thereot who, after a, way Tension rhe anscen bot pce tho assessment Pete hese | j | ame Bess Gaius Rene or cane he tags ect leo a poe apa, Proreny wens Pe tet eapeon npn | tis nota tax measure intended to raise revenues for the government because the proceeds thereot may be devoud to the specie purpose for which the assessment was authorises "AxosmoUsiED row oR TRS OF MPoSTS cm Sa see 1. TAK versus TOLL, sven ne eT Levied only on tan ol is 2 Sum of mens Not a personal ability of he person assessed oleate consis Based wholly on benefits (not necessany) of pubic nature Excopionl both as to time and pace ey fr the use of something, generally hich aid of he use ofa road, bridgeFaudinestal Priscses DOUBLE TAA enn, ie taratn refered Is rect dupiete Sc Re 1 aren yes et eee meer 3. Inthe same year or taxing peri i meerss iSeacs.. ‘Theres indict oubedpicate tein (Broad Sense - which ie set pated ye coat Hay fe sonatsdencrbed above ‘oars Unio to Unies Coste, cur Cont sone epety Bon rec due maton” Hower, someting not ovred. Such txaten shoul, whenever possi, led and provera. | LATED Wee VOR LULU SCRA — fase he Sipe Gut ba Bale i corsa ponte | zit ‘le tr ne Pres. How, st | ‘ne, reset ds tan el ste) when the same rope sted tice when shouldbe taed once provid 1 Sf Sat Gere tig mty 1 hn esr scene eget + bag tse et eyed tebesene torte | ‘rena ub goed {One sane property subj mater Fart sae purpose | | | | | Lt Fardanectal Presale, tome sme extent 6 gets sper ert sero {toy xe power eo Kinds of Examoion 2 Sars! mmo rm taxation which grat om th fret hich emanates rom + Satu, Inmunoe om taxation tegen, te ody stat. 1 Bois Contre recy gored eatin Inte ben parle persons proper, ahs are deemed * Slanptas heya unde fe scope teasing pons. aah Astoestene a 1 Tata. Conmots about mun 2 Paria One where a colocten of part of he taxis cispensed wn, PRINCIPLES GOVERNING TAX EXEMPTIONS. Exomptons fom laxaon are hy dfavored inlaw. He who cies an exemption must bo aie to juatiy his clan by te clearest ant of organic or sale law because tax exemplicns. aro nol resumed. ambiguous, there Is no fax exemption. He who caine {emetin should convincingly prove that he is exempted. Therefore, {3 sxompton must be sity constued. No law granting. any tak rempton shal be passed wihout the concurrence of majority ofa ‘members ef Congress ILLUSTRATIVE cases: [Rr odie afr, DOUBLETANATIN msg tr he sane [Bp sae igo sy ce, when cu oe and by. se ig achat sre papas an ite sae tog Inari ayo, res agn be eras on he gourd ba aed {ast cote oan. he rent he mayer seo No Theres of te mayer ist ated. The mponton a of dent ‘atre and ara The fd ata fein fate oF eee [MEANS OF AVOIOING OR MINING THE BURDEN OF TAXATION 1 Shiting ‘Sriting is tho transfer of the burden of a ax by the original payer or the one on whom the tax was assessed or impoued Ts sense (ise. Transterred.is not the payment of the tax bu the burden of he ‘2% Only indirect taxes may be shied dec taxes cannot be sifea \ permis Amnesty ti the genera o authority impose pen Violation of 2 revenue or tx tan foraeness or waiver of te Goverment way give tax evadors who wah chanco todo eo. ‘Ameesty involves immunity fom all criminal, cil and adninitratice liabites from nonpayment of tues 6. Captatzation Te reduction ne sling pice of come producing pxopry by an Mount equal oe cpinod va of auto nce Reeay boa bre purdiaser 7. Avoidance Tk avoidance is the tox saving device wihin the means sanctioned by aw. This method shoul be used oy the tapayer {201 fh and at arm's length. Tax evasion, on to other ores ‘scheme used outside of those lawful means which isnot acceniebe, Elements of Tax Evasion {Commissioner of internal Revenue, petitioner, vs. The Estate of Benin P. Toda, Jr, GAR. No. 147188, September 14,2008) 37, Feadenetel Priscsl, anon of Taxa ‘Gonptpiepurpoce is always Presume ihe tw er, ap Be a i ice BES ee ceemsiens Seema ete ete mat sy sant be » ee cay catia 5 Sots ee nite nn Rr ocioereecey ar be oe IEEE corte thee conde un eer oes _ Rept oera in cordance 0 RS Pain ang 19 2124 Unless I does ap RULE WHEN THERE IS DOUBT IN STATUTE OR LAW Ne prone propery bjt 1 taxation unless within the terms or pian mp of tng Sata. n avery ease of doubl. fx statues are Erséved acy apa the govermont and eral In 15V0" of the Speyer (Omran Get Lumber Corporation v" Consissoner of Inert Rerun, ot, 23 SORA 7,89) Tees, blog burdens, re noo be fesumod boyond wat the fate expresey and clearly declares {thea Prigpne Lite surance Company. eee. v. Court of Appeais, al, 288 SCRA 2 95). PROVISIONS GRANTING TAX EXENE TIONS brovons are constued sey against te taxpayer cleiming {2x exemon,” when a taxis unquestionably imposed, a. cain of {zit fom tax payments must be cleary shown and bosed on gue in te lw fo plano be mistaken. (Davao. Gulf Lumber Carerater) Manta Ect Company. Ver, 67 SCRASS1 APPLICATION OF Tax LAWS. Tax ws ae pospecve ind amount tt tn ven operation because the nature « 7 ae pebivideal Tagpagers an tte Piet ram yner_of Intrnal “i ete emcmae yar to reside abroed 2 Lames ne Popes anna ne mei 7 wr asanermar per eH ae helomenttret ou Re has trier reheat ave so outs 3 Ratan ce eos antes doy (19) FY {> tron nest tin sry ing am le ee rar ec aes be Pipes HP PS a ot desl acinar PAP. Scie nea oni rics oy, 28 atari ao Tete care os 218 tab yaaa SO Bsn mame ms hanes ees ear fon wets Ses | so | Spmteome Bates Ege srayteaen “Banco “Fie | Srihteeen “anos men | nt Halos sone a | Serene ee au Sesteme yOv(a6my) "Sean a Samoans Side ates) “Te a Bee Pua 00, Ny Taxpayers Suit iis one bru statte ane ts Mega ursement of pubic tings Soved fons acne ave loou stand 'o gueston the veiiy of tx meseren oe ‘expends f ube money In auch cases hy ae panes iene ‘who it be reed or beefs byw aval te Sat Ts weet ‘aes tao ony prone uly sete sta cas Pa {uci inert of prevnang telat experstrce ohne eS {eration ‘They may. tlre, “queton im We, pone ee Censttonaty of saute etng We epenau of pote hsbele hat is bona mesnopasty cra sabe nee fistete at eppropited by conan fala, tor orice, cobecton cf tues woud be hampered and tis may esa ert Beaiesion of imorant goverment incre, “ty Taseas Te omelc, “iis ony when an at complained ot which may mend leila enactment ofa stato, invaves te legal xperire a nle smonoy ta the socal lxpayery stay be howe, a | sabia Tagaen an Aaa ad ad ero mock tices, be nena > Saeer Perea "Seca i408) | L ‘rs ps 3.8 EON ‘mrss Contact Werter(OOWy Overseas Fpne Woe (OFW) | ___Ravene Regan 12011 dres OCs ot Fira tz q Ts rign Cures, conan rtrd to OPW wo ee \ sae ecro frei carey ass comers a racer Perel The coses snd wage 8 pao on MOONE ePaper Pere Trev sases ond wo \ SoBe are attorney eres pec be Popes. Mee. Sirs Sood os nawesow case tan prone, To be Sat aban Cir OF y rb regres sw, $S'Pempne Overseas Employes harnsron POEM) wh 8 a Srecons Enpoyert Cente OES) esas of snanen ae, Fina cans wo ote ‘Siren se ap ey oan eames Ovorase EmpoyranAinten (POEA) wi 2 vad ee men Cee (OE) wih Sere enecaion eee Ray or Senmars 890 esuec by te Marine Indusey Faery (WARN) rca eared by an OON or OF a rad in RR 1-201 at fe cae Sin cluy = oxenged en Pteine rene ak i sre tt id op NCE fet sere tr PORE) eeu oy arg an GF fer tunes vero yet Febery inthe Puppies reste 0 eee Resident cizan ofthe Philipines po tran tee ot anaes 8 none en cansiere eee! 2 fo 1X DUOeae = \ Andie Tagpaer ie Tacos and Tax Rates ee we gepend on several factors 0h 28 by, ‘erpyscni aces x nd ne oH cagstcaton of he taxpayer 2 Serco atmcone 1 Hypeatncone Cases tran propa sy inal tnoaye® becae reir eae ter zme Sevag HM SOURS win ‘ret cet pon rie oer ipayer are 0.0 2 0 tae Moeover, foie! txpayes tea tees ere rok engoged made” busiest caret mae bose on tee ‘fos came whe oes ars {Stal bused on ntincoe ‘Source of nome lig important to know the source of income for tox purposes ocome derive tom winin > wihou te Phlpptes) because as resident Stzens ave tate based on ther woséwice income hve others are jre Hethaene Wn Whe NRC RA NRMETE Netlcome Winery [Nuaeie "Goer ieene _wiineny ryres oF noowe Prone sce eran, area tro pes oacomes to income tax as follows: ani mend Cray air cae Farms see Sond ar Pile sures + Capital gains subject to capital gains tax mt ori tit fe re sp ont eae secant gn rea ieee ovetehen sprmenmmat Bis ieinten hres us ew Ber etree aoscecan ea “a cern | commie emer | emt ILLUSTRATION - COMPUTATION OF BASIC WEONE TAX DUE PURELY COMPENSATION NCOME EARNER 1)" Dame came das hata conpentaton Inca’ x26 s 240,000 divide Tagpayers passive incomes ssbiec 10 puasive ecees wt ithelcng tes are catin ps ‘tin te Phipps Sao Soe eS Tan Feseitactnd weer gree toa ences iene, meomes Seed from Pine souges wee fea ees toe meen : 1 See» oem pn ts et Shoe Reeerretae see sneagotae 3) Onerwienngs ne tax (CS Ince om sale of capital assets subject o capt My caplalgans om sale of hares ofstctsct Scometccoporaton at vaced nthe cal Sock excnange (See. 24(0) NRC}, an 2) Captalgain fon sale ore property nthe ropnes[Secton 24(0) NRC] sunmargof INCOME and tne Apgicable NCOME TAX me Gadaiechae™ Tae Regan pasive cme, Ps. “PF toting Ta Tale 22 ut ocr) > Catlins Tox Totten pb err ne ba nS ‘owe gael june ae etn cs ae ne rin 2 og natn 8 vc 7 Zeon Pages PSC Gessner rm cores 20000 Sooners me” kat Sunes ens, POD sane sins expenses. ana Ft seag aa Diearicae 6 orp mam ‘frame a0) Fain STS 2) ume etna a asummg fom ibang) nn omen Aas BuocD Ineon (an aon tude asc mal | ete [lem | {MPLOYED 8 /or PROFESSIONALS (SEP) Begrring 2018 up the elect a RA 10953 [ax or fr ectlaton ond igusion Law (TRAIN Law}, eguar roam f Sle {Ghed ond Professional (SEP) enouring rer tan 230 £00 na ‘Ei yea ul wih agree slesrocopisand ater non-oeraing reome ‘etosuading tho evisnd vat fresholsot #3 000000 ene have he onion (eat 0% taxon gras alesiecepts ard her operating income to 250,000 in LIEU cf the graduates coma ete and Duvrene {Srovear Section 116 of te Tex Coe Ha ee une RAO0 (TRAN Ln) a te pepo 0 Seema cr ny ors coe eel fon sng ese sn wen Th oe ase wo oneal om rad of ei 50 meres ornate 2 ists fon spt ‘eoren* rt pat money, a8 8 ars of ies oer ascent Basle sermarrrtenendes ti, Sabina, cw HS cre eso ° F.pebiideal Tegpepers ete oa a asa 2) panne re SEP ine proxi ne serene am guaan. i ac oS emulate et saeteremaataeh mene nomrees ‘Canpages of ts #2 and above, epee compton of Suiergareneeanasie 0% = 720400 ‘ASE: PURELY SEP whose grosses and ota 0n- ‘erg ince EXECEDe VAT Dsl of P0808, nome te ino ta ue sing te long for 2018 ‘Goes esee 000 Gontcanes (2250000 Sprang ereses (125000) Nettle income 1 S00.000 ase F30000 fi ———— | 7 execs ne Pisop00 | Neen 3t 9800000 me 0009, (rreanees 30), suo | 2 waste ec ton EP inp | ‘nearer Step cr et ‘mateo ech we eee Worse cen Become Seton sen wo atest ese >| case: ‘avant sae dain CREA is vat amp las es SEP Ee Pe, ‘on ncsomee tt artis “ae | panne) ramaraput tana armor 80 | | emp 080 6S | Papers settee om et nar Stet tt oo womens oe ws | yn Cnet ert OT mason sec een ei ncanarnt omen ane ecEnret Berge hen ten ett ametariooaeteneccet Gent meta | ere % % * Amor aso Team Tar Fist 400000 nae F000 hnoessoAci000 one (Piano 205) oe ee Weliideal Tagpegers Businass Tx: "Shot awe oS eee 3 Saag scree iiregaonat Eee cee ‘ASE: SEP GR GS B+ tw SEP is sujet oct ort Pesos at ope. The lowing la nee pve fr teal 2018 iss eis ez Coster aretseices (15000) Opersingespersee —_"rs0a0) Netincome rm Dame te alta ue of Peto scan ce we eB ‘Sane POR Trea Tax Ft 0000 rae Frevoas of 200 00cm (Pasa 25%), Busiees Tx: 3% CCT under Se. 117 uC = FEMA Total Dut Tha pera rapa TE {G Rebwng antares toate hy pirat eh i Saevernne e000 srs Parsa0 n | esses my mm Shissigetncae | ” ss 7 weerLy dedivideal Tagpages er 00ST coe avd tom goverit Ot | mri and secs) 142012 eens “depos eusmate” wo an otamstve rm of ic he man Sepsis, re “seat rev oe, ore resent, een eng pcan of ecevabl anche Sone OTe om nscs anos of a 200 del eee Song tam wen) more nua COTE Pea i aie themes cnr ot goverment dott ature sgn ot 7 08 ay win te coverage of Sept swbets Ft carat oferta or gratin, and teary respecte oy eal be ute! appeal asa ee sc nsrmerts and secur mesodng Breau Of Trea rere cad secrets os Tresor bonds (bonds) THeasy amr tole we cated co depoat subsites HS Pls ee ar soso re be ved of exchanged 0 he secondey | INTEREST INCOME FROM LONG-TERM DEPOSIT OR INVESTMENT ‘CERTIFICATES fEvaonced by cortteaos proscabed by BSP {Boved ont ta-z0%2 RUC 7.2015) en Tem pt mote ie Se Lace Ine rms ns ane mt siren gros vtess ante yur, aac abe Sere S nee rep) ln yo rbd hare ao carton aah Sh cpoer oo Sot deans F505 os oo ‘denominations as prescribes by BSP (RR 14-2012) ene ewsieCondins fr exemption The posi o ves annual cizo, a resident ten of & 2 fateen ten none Vt Dsess mba Prpones posts cr ivestnertcorficates should be unde: the samocf be dbl an ret unde eno mes capainentunt ofthc, he eBeaton ere Ropinaas asa swnsemarcen jeomemact ints emma Se Piensa rad ena 9 debivideal Tigpacen nc oMMER'S AEWA errowree Pesan navumiatin te dacovery of atone eee esac on eof meaad 09) cece tccon ois om arent ng Rv ie ey sr ieee ene sean ag tri eer ee er gente and wom information, ol yet in the io es taco Beer eS nr yaa Ei ere ener ee nas et Soomro oe hemor sony a Berea an ete ea poce OR) Sie meveiaceree tare va Saree eoe cana saat) oo tan Ser rae tec toe Goltente eens ore meee eee eee Seabee ans cacao Ercan clench pon sha et Soraae ere nema cpr tains meee rae Sire wena eran ees xaminrs, he Secretary of France or putes, agents or rowed, not, That he evar any of his deputies of agents omen srt nce rd reglatons aus by he Secret ol _itegdaons sss’ by te Soca of Pance, pon ecommendten seeollcatittcotenoneseeto gene SScS Reiner et Zee es aceon mae ee gs Cdn a The cash reward cad oo ENS ot inforees. shat foalwitaldng as Tike at ee |The provisions ube ome SENS of the forego ped le Sees Seen ts tang on [leo acaues te naan einen a es tg subect 1 income Yen percent iO%) eu ’ reece erereeee ten erence ree Iedeideall Tapagers 4) The long trm deposits or investments must bs fasved by banks ony tnd okby ofr inane ators 15) The longterm dopoats or nvestvonts must have 8 matuny perio’ of otis tan We (3) year, «) The longterm departs crinvesiments muithe in denominations of en hovsand petos (P1000) and oer denominations a=, may DS resorbed by be BSP. 17) Th lon.trm depen or ivestments shoud nat be terminated by te ginal wesior Before te fh (SP) year, cherise they shall Be ‘itjocied to fia tax rates of Se, 12s oF 20% on irre INCOM ‘Sominge a show in abo 23. 4) xcap hose spociealy enemtee by lw or regulations, any tne Freome such 20 gane ton tang, frign exchange ga ae ot BO ‘Covered by neem tax exemption. AMC 7.2015 dated March 6, 2018 rvies tha, for terest income uived by mecnduae nvesing 18 conmon or indvaduel Wat funds oF eet Ok management secouts to be exorgt rom income tax, the ‘Stoning oddone charectorasicontions must ALL be present: +) ‘Te investment of te inca vostor nthe common or india Tea "tund x investment management sceount mut be, actualy Tce oy te bank fore named nla at east fve (9), roca rtcrpton, The erm “bank refered tohersin ae banks ‘Sy temnaad es such byte Gangho Sera ng Pps: ne common or inca vost acount investment ment, accounts must. comply Mi Ne ceasraeene y Soctan 2(FF) ofthe MIRC of 1857, a amended, 05 ‘tal ae tne requtements menioned above “The underyng evesirents of 3) The common or invidial ust acount or vetment management The, commos 2 onto such undoing rvesent in contiwous and FFimerupled pero fx at aaa five (8) years mere peo jon rot angoged trade or business in the Prop, erst reame rected om ongdem depos or investment Herre sett a nal Winking Tax ate rata of wenty five percent (25%). rt toeign corporation interest income received fom mgr shal be subject oa Final Witoldng Tax ert (20%) pursuant to Section 28 () (1) of ever trest income om fng-erm Fornonreede longterm deposit or nest (FT) at tne rate of tty per the NIRG of 1067, a¢ mended, How a Iedivideal Taggacers 1 pcre Pnt gn & af eg 1208 one enn ws em (Sa of et poet fein he Pas. WoO elogPeecFariatvoin wm GAIN ON SALE OF ASSETS Property classification of an soso 38 eoause of the apecal tax rules on gains eRanges of coptal assets which donot apply 1 pa or onary is important “ind fosses fom ales oF gone a lsses from sxcnanges anges of ecinary asels Fr income tmaton paposes, reacted einer a2 rary oF capil assets. Under te ta ere sewace Da aterm aint sorebiegenr g pooner ern Real pee ure ode ones i Rute ain nec rbveness of e007 aver ponery nly sr and capi see ste! poo ecg rt eager orn eee ton a orang ase or vn ann tna ses recone ca 25 oy ts ose it ae 2 in on eo goer sul toe 3 sea cme Ose Tanjore Fax Cate arenededivilual Tegpaven Ce tncome Tax on Sale/BanecfExchange of Mesets it eae; "Sgt fee = | Sige "ce. Aime ae et. Bee amenity lee | tos sare pthc lind Sai Ek. = 5 Sot Bie EEL, « Re om STRATION — — sane ) Se nano oe wg cea os e100) | PURIETERY, enue onmare na, SSteabiase ne hesessenowls ne | creo 2) Gauge 200 ssc sont open see ta et (Gio) aiPiD ow see Testaes were sured x8) rats | spurs peste ‘Answer: PINIO0 comp sows Segre (2000 xP) ea;N0H0 Caneonoa sPi0y bon, | ant gan Pro | Fed CO a 1 CART GANS Tax Pa. | | 3) Geupe sol 200 has dos ones corperaton dey 8 | ‘ae ta P 00 peste. Theses wre cars see Shae wre acu ne Anowec: PO. The rersacton rede oo oss | Individual Tighicen _— eno citi soe (18) alten moy gates ne ange Or Sapoato) OTe! WN meee etree tt econ ato nw pong rescence, ANY pense Sette be “ccomentry so ye ar tee cormasn) sete Cosi 3 Fat of Seasons ‘rere gta saaton othe procoeds of sl of iposton he (reas tegen ponanas to reve ten resized Hor he Sle Spot sau caer cata ps ox 2 ews: a Sane pi Tete Paice x madeliaueat te ie oh rot” — Ges etg Si aioe shoe ‘he ton the uz pron sa pl win 30 doy Sbiatant Tomo pe 2. Tho hstreal costo” aust base ofthe rea propery 20d oF taped sa be cared ove Tobe new pela reson Ba OF The BR shal nave been dy noted bythe fvpayer within 30 days Femi at of nie pon Pour 9 rebod oun of 4. The ax erempson can cry be aval a ance every 10 yeas eve wae ie 288 reed Bere Dt Se: Pe ‘Abs sens nama ig te 84 foo ger seen te adn Trae an ayers chsh mantra nae n CN Pelvideal Tagpavers cm ne mare ‘tery ae evra ds ees aoe gD ‘oma properties forthe cue year or 1)" Siectapeedotindoes nt adates. Sty pet 'sPa0a0 a0: Te propery wer aan SPAM The pope eh ‘Si teagan et 560009. Te a ‘hat va fb propery was P5000). Te py ‘Segre re 3) ya a 9 PD. | | ;a | a | em an | o Serenade mn | eee seats | SSSR | Tateityonmnsmascapvet | Cvenon 2 Asuna oiettctin asc 7 was soldat | | Phtoncon ‘iatsnodbe Pesaro snout ep ansiacon Be reer? | “Aner P00 (PH) Cetipestmetrattenoniene mong | | ae gu nonce uae icy ns | | areata ee et tee aecia gaan Shokan ect cepe case RO-CETESSTUNEONOROED. AS Sa rd tna gio ae a aad hepapen mn acon he a aH mao Answer PO _ sold are apliable oly on + etic mentee cee a Seer ” Individual Tagpavers [MLUSTRATIONS SALE of PRINCIPAL RESIDENCE Pao. sent aw od eden nb erp ees) ‘ina Paapens nb ton aan Satara ‘eon too Fart ae ‘tomm0 Erperses oe se ‘sow Wega ane fl he perma le coy ae Fecienerstosvecion Cueston | Assoning Pe bu er rel me P00, toe mics be pene COT” P seee o Cneston 2. Aanaing Pte bua nee ea fx P08 ‘FORMAT IN COMPUTING TAXABLE INCOME |A. PURE COMPENSATION INCOME EARNER Cr amc pron eon aves oenon . Fem pay a an Popesann ree wenn Tana psc are = fe T0082) Pox enbue(Gasue _—_ = TEP crane wandog on cooer a Th Penn ig ew) CA oon Trecore 0 ORDUCTIN iW meme ernisame mene ee es ienece HIV PEE ~awaeueet \ 5 ir: Adivideal Tegpeger, ont rt tows i es wae ean eae ete, servces and rota ‘The most = Rio te nae ee a aoi6 a Bom “The duty 10 winolé and remit income taxes artes ky on instances requredby ows regaaton. Winholsng ax retum shallbe eg ‘anton, pat wicting agen’ lal residence or prince! place Bisnessr wnere tne wiinoiang agent i @ corporton, where Oe ‘pa sca moet. ecnton poe of al cpey suena wets a wiht tx sal be pln the RDO wire the property Slemes Cea wmmsro mea mab ean appease ‘ot aera telat sy ef he month folowing the cose of Fs 7 “3 be iLuerRATON i ca | ‘Are le eng poe wg ss 28 wal ‘onan oe gee Seton on SDE cana tocar | Siren so Pero cars sao nen er 240 oo ize | usin: ov ute caret paleo enghayen? wwe: BDI ang Campesstn rere fps on i 1 | i ee am pts ein dt 208 atts lay Fenatn0 - Serecennen eon oor mm ciao . ro vai a FA Sao os So s = wo B Seer meus eee am Seminar Sem suteey sos ee 425,000 ‘oat tainting: Tolan en spb besa z8 2 Tatas don pete ese ees 3. Taxable income of Kristin 2018 = ae Teme teoneoths Aacwex: (OPTS: GSH; (RURRIE, (ypAan gna seasons ana 100 0.00: iii prarcoas” P2009 ott ese am 100 sone te Pores Rome orpoymie ne BR ene ttnee@) 25000 act: Otro tr ppl eae ‘eine Pat cosa | Beiectraes coe 200 Town mone \ Tacos 2000919 e000 } ease ove FM | | soomsses) smo pses000 | |e remanent sm ina ‘oa vio _ top sag | ee Sac ” Individeal” Cagpayers non one (280 08) P10 ‘eters cater ns) 0 jy name PaO a "eal arse eae ax eane am of pen ‘Sten ce owns 12002) ‘0 ‘cee cut men P00 ooo Utne vere PO 21000 reese J eoeien essa e recone P2000) om ‘rst cngerslon nome uo s00 Dicer ae ome 290 so Feeson cus creo (A ioe creas eave 00090 seo (Bowne mane (20002) 30) aot Senior Citizens and Persons with Oisabiiies (D8) any, uit Sencar ns 740% rg rae som i nce ear apy he an 25 eye ee ee rourmle come oa Seno! ClanvPWO 9 Be ‘ail cletmeenon rece re ciies ara rina met rt RN ee fat he res onded under RRTO.2008 rane e mnimun wage eres ele: 10 Cape 18 wo. te agente arcu of goss come eared bye {ihe orale yor does ol exces P280.099 re Scan Sud ru har rbrequred oe cane ot Bale exe oe senPWD can stots eres Sh ane 20% tal wiholig taxon Ilr ncome am any cuTency Tone dost =k ep npotng lyon terest name tom 8 pony 2 Te 15 ntact org corey dpost eter (See Hepyn Tox ose 01Pedidos Uehara saaten Income in axcen of 90200 a im Sn Sonny we oy A099 oper of publ and Vale orn ee pe ehable winnckng Lt on ton eae 1% aategeang Jonuay 12018 Peat er Pesca Hoot (P8z000 per 10 2018) Otrerng este a sparc an nouns goss nce and WOE Be Be er wo ry uplesaw range wanna 03 ("AN aan ere ego rcatonio rent pay and oer Bnet, trrlation to MVE a roid under RR. 10-2008, an employes vivo mgavetlers atonal compeneaton” sch a8 commas, Mee ep tuneta, beets oven of alowable P30.000 (as [SRtod esto alowsrens snd cnr saab income other than Be ‘Sixicy rium way, overtime pay hoicay pay. righ si diferent, ‘Sik py ht at ey eee feng om oe oe a. re earings se rot exo rom neon tx and consequent (Clzedtabewinnedeg tx Howe” tne Supreme Court (SC) red at ratings tes cn Be Yaa tom RA USO nn age Ee La ee ey nied eral iRnsere mart tnoed gee pean eae eae Site cetoee re ree Rinaie eters owa worse one Ore rere es eevee SERRE eae tees meme i rs na fake ant na even 350 noc re ones on Wiad 10208 conn change nae Geren he fxegaig the toatment that an MINE recs Fer ow ore OF Bonuses and other Bena Si en Sackntne fg Pent Pm ‘ ave Hoge eeensePA S54. Thor ieaclearigve mien eee wm wae Tocoived by an MWE who eum 04 te strmeninns mangas of fing cae Hx rams are Banas aay Star inca Tan Corporations). Sy nome ig eo emia serene sueieere cad! Sarecsotreaes toate ea Saheim anoameacn won Fintan ana eo fing earl Ptumen ava ure October 1 famine cose oe srmaron 2 Seton teers CD wre ott ee mo mp a pn PN ‘ess wtng Sins FYE Th are pps ce oe Semcon bans a 20 Seeesrarei sary . nd tomefarrose ree _ 125000. me sim Oe Cr Twat weg ‘ors by mea neg mde tena nd paatw edvidad Tagparer st 9 at way, a me otc tm ‘eset pty oT ow crab ang och eran (Sis Gort epost ut sorter tee Wc Sle nae tae ot np ona onan Pat [pst nontatere e vos snr pam eto ney. A Sere ed mesg tle wat eon ron fw a POM Set rnaar nor cr ns py Mae ec eee Se Oe been een wc og ore enn be ‘See tanyeauerens enon naan tcp ies et dt whan ct ne pus oP cae [Ser amen me wu eae nae of be FOR FN Seta Smee Sonor 3 Fae roo sae I ould be note hat ne tet of he come tax exertion of uwes isto tee te lawsncome earner tom the bursen of ax. RA No hoe" ctner mors, he aw exempts om income axa the most Base Se ctor an employer recawes «he amount aforded fo the lowest aera by tne marae of tw nay. te egsatre gran 0 Fae errees.g empoyees mira eam by no longer demanding Pee ot atu hr tne operons of government Tha the i eo sod ara socal gabon The goverment. By way of Fee elon. altars morensed srg power te sect of HO wemting cas. ‘The Supreme Court nulited the provision of Revenue egulattns Wer 0008 [j) Sectors | and 3 instr ae ay aay Regulations wo. arly compansabon rncame tom the prvieye ofthe LES who 92 fave ey receve bonuses and oes compensation aan reer exceeding te statutory cating 0 P90 00D (as amended) ‘MWe witn ational “business” income unimum wope eamers receiving ober income such 35 income tom ne eotutltoe beans rete ef cero, erp cae ao ann adanon fo compensaton income oe nl exempted ect te ma endive ncome earned during Pe taxable year. Ths maison ener wap, vere pay. PREY Day. : aa ‘erode tua ntinaaning car py atl be exo Fem nae ak ‘rd consegventy © weno 10s Aeividal Tegpages pce tng income Tac Retin mn et a 2 Seite Eee eta Bate tr neces nae ak Siar afnet Sintnatere r eae fhtioa Saictaecatesasdtaateme Fer -Wit Payment Retums ree pte ent tere Son eierhe soe seer trees Et Servos annie amare meee Seen at mete Seeayaaemene rae Feo Poymer!” Return funda, tesk-evn, exp an 0 operation) File the ret wit he concemed Revorue Dit Olea (ROO) whore te tapoyeroegeteed however, "no peyment rem ae ‘Batbe scepied by ie ROO bul shat be a wt an AAB ot Callocton ‘Sreerbepurces Manipal easier inpbees whee tee ae 0 AABS, Irpeyment of necaenary erates Persons Required to le Income Tax Return 1) Indvidvls engaged in business andor praciee of prfesion regardoes of te results of oPea2s, 2 eats Getving. companaaton from to | more onglorers {ea ees any tne cg te tana yt 2) an ing compenanton ream, egardess of fe amour, ravers ewooyers ving he clans yor, tanether rom 2 angle oF as not ben wcrc (x 8 ateqarto te tw hae Sr rasan ream rl onan ue al i.Nore: Feteron Tax Rate Sp Wot yen or fe Seca employees uns: TRAN YANN, aa on er congestion mene INCOME DERIVED BY ALIEN NDIIOUALS EMPLOYED BY ai Enoloyees shal 94270 | St fast) oF RATO63 (Ta ae ate now set asia ee | SNE BY AEN gunners and Regional Opreing TetSesaners ftenaionl Companies. eae onenad 9 A 80) te Fins! weoing Tax of 15% on Gos Income Srey by see ndvada! ecsupang Ua oomical Peston a Rogues Revaqaress (ich or Region Opestna Reaaauaron ak) ane Rapeceiaine ofcosexablened ne Prapnes by ffutinatonlcongonee, thw sore toe Westman shal 90 © Fides enpoyea by RHO or RONG sf mulntond compares fegrdoxs of where oar an alonorecuve occupy be ‘SRepeston ped. atcuch Fina shall have the option be iin aewe hogs ca aa’ tone ae CBrpany as dened n Secon 260 on ox code means eye fSmor erty engaged tenainai aco win sites seesart ‘rbancn oes the Ass Pete Rogan ana oe! reign mates Filipinos, exercising the option be taxed a 5% preferential ale for occupying he sama managerl a echrical postion as thet ofan aie emijed RGF ROHG must met a the Toon 8) POSITION ANO FUNCTION TEST Must eupy managerial or technical positon and must ‘fercang sch uncon paring o sal positon. Unger "he option lobe subject 10 15% prelronial ax rate and © Thecovroeottinge brat axa independento oa ot Thus bere would instancs where a Fpneenloyee 8! 201 1 prea batay abe covered tax fr nol ing upervsoranaera erioe®. 2 Ted fal Cegpeye eqramnts in rtarfor a fstr chi to quay as dependent eermhen (1) yee age, 0" ovo wh Over eighiaen (1) pe oe atl tue ate oto” protect oneself souee, "acl, expolaton or decimation because os pyc (Phan ebay oF onaton and . Shutycepedet upon andlivng wit the ote parent © Unmare 4 Nelgomaty employes Attar paren stlbe sowed an aditons! exemption of 250 fer each qualded dapendert provided thatthe fal rumoer af dependents ncn’ foster chi, quaied 1 be ‘med 28 dapendert or whch addtional exemptions maybe ‘Seed shal nol exced fou). 35 provided Tor by RA $604 ‘Tne #25, asetoraoxemptonfors quad fostr chi thal ba aiowes ony f the patog of foster eave isa contac Dero a ass ane (1 nuabie year Te tong aden ems ner as uncer WA 0185: cauisacus yao . + oun hes bashes wee rca “Fe Pate lesan ay lancd yt SND ponds cae Yn Mo Be Pca Unde Fste Cae? Fhatetonngmey be poet ae Fei’ Creo rom for unde ge a tad np Scoot sical or any the fom Rati wl Specs nas: (4 Ahi whos arty members ae temporary eae + ERE wtcmamaces Steere cous eo econ » SESE eerie ‘eu whose adoption hes been csrupled,” 6 Tedivideal” “Cagpawers 1) COMPENSATION THRESHOLD TEST “Toa amooje mat ave ced oi fe raved nds acct of empoymert. tees toate sempensseet oem tins 97500 cl tv Consuche). Ponsee ae change he carceneton ncn soe carcngnten tune the eploes itnaquenty ecveng ess hae Cargaanten esi fie caenca yar amen cargos Pec. ‘ros compenseton ncaa ncaaes "NSE +See wen rw Noa ses sn ute omg Senet a ne nr come Gross compersaton shal net nue eet andr sparen ‘eres vale arr ond Ox mu aa. 9 excuusiry res The. Fp ManagetaiTachica! employee must_ be cexcushely wring forthe RNG or RON aes rope employee Shao sts constant «ouch parenna EUS ‘moans lunthaving one empuoyr a me (Offshore Banking Unit TArofsore banking unt (8) a earch of a mu-atoral Dank located in a fanaa anit ovey fem ashame coun. Refer ‘Chaper 3 for adziona scusene on OBUs”" An sar ees ‘Sroore ty an OB he Pippen ssc inl iting Fines employed ane ccsupyna manspetl a ec! posions ‘Smoove oceuzed by sans empyedty ese anor barking Petroleum conractrs an subcontractors vir aban nous who's a pomarert eet of sgn cour iat cys ana sangre rte Popes Ops an Se croc or by a frag sevice tebcontarr se eet scan oortors 0 he Pipes sel be lok 8 Fan gee (tare, ween ae a een perro and ar erouers sho teres Se eereeen rect fon such cortacr or sacononer onearore are ere rnin sal aoa epee Fes notre be sane ponte aso san amcbyed seston series convo ad sutconactr Pelivideal Tigpavers ™ Setvt ae tact scores coho yoimotcniditerorrasenng |. Kenta conn s minor tense baths boc leased ‘onrecoonaance rene ciay superman, or whose {See tan teon Samanea and 1 Kehadwiote nee ol pro protacton 2 assed by © ‘Socal Woneran Agency or DSWD, Provided tat ne cae of) (0h. () and the i ‘must nave n omy wing a apa fcr ana prow ot Wot tarourpeen SEES Rt ecmmmenmnnatn Sreaeah ee nea Tuveawess 3 MELE incon gr atone peor are ert ore « Ste ecco ce ree « EERSN ETE mewn 2 ERS eect owen nono Sa ae act snare sen weouce 19 be bf proved er the Foran leno cil 89 Foster Patent else must (be lopay ocumontegs possess lhe guofestons above Sates (8) have ‘ehted he Pippa le a east wel (12) conus monde et the be of he sppeaton a tw) undese Te maa such ‘residence uri be termnaion of lacement bythe OSD er exoraton lie ester Famiy Core Lense Fer puposes of determing onaruous resdenc, the en must rt ave spent more ban (Go) days ofthe at twee (12) month pero proto tho tng of re Sppicalos ousise fhe Prppees, end inen ery for mentotous uwAedivideal’ Tagpeye saxoavens NOT ENTITLED TO PERSONAL EXEMPTIONS. TRATES Olen ogee ade or unren when are n0 soca 2) Nonresigent lens nt ongagedin trade oF business. masrenore cut “in edu, at ong cee rg 27: "eee mea ee | { Bheae it ecgnaed aural wi common ow we | Hesannan we | 1 Hepieety eased omer mo. nanos | Hapomisohoarehly parc snctargwihtin | curt How mht ol snl cmp lua? [OS haar Pls eampte a ows | ‘become, peo Semorina) em | | | | geen eum | | Seeerescermes cee Sevan net ee Ripe mea mee sent tran gee ae | Sheri arcecten Fence ret a 1 Yn ed Transact otc ueson2: How mci al ‘MDE eBonmrce AMATI Ian assuning he ‘¢aawer PO a 120 Iedividead Tapas + inne een 1 RS tenner po Cueto wm ete ale eon Pen Taig 8 ‘ede czen “S Anane 7280000 corte soe. "Sessa Peeps sone Srazveome com Be wane Pores ry | pune st fra Eeemersor fs | Fo en coe) _ | cxesten 2 Assure te some daa in"Queston #1" ontept thatthe taxable Saran renee | te a anand, "Sosa Peres PHO Seat meme bond ato Eee Poss esta pene a ‘eg, ‘nate ese ao unr 3: How ues be abe came of Pen 17 suing ronvsde nce tog enpaebos © Aas one PES 600,000 orn Pare fae ee Mnbivdeal Tegpaoiy ETE 7 ei rsoc00 SSSprenunscanrbaors 00 Penn cron 40 Pagbgemresone 2400 ner er ion + Prmumspadon teaser mcs 6000 ‘rove tamouby he emp sat anc ee Ph pr meaty itor Haw mucin reane tone 20177 2 mer PKS Sacer Conemon eine reseom {S55 emacs ison, | ‘eam cosors faa) Pape croton fear) | Boers ewer su) Retort (zs) | acttnaneroptntengenins “By ‘one PIs | est Asue reson car Ousin ext a yes oer manne Answer: P2000 pends | ‘repertory "aR one ey a3 124 Mndividual” ‘Tigpawers — fs | cxrson 2 How mens eat ane cepa n201 ‘rss nem aasrnepnanon pean wm tan | nore | 1 hemumactynge ate etna coeelttetacegene om mo mate | « SeEAMpehecin aneeobegebenttt: Oa) ) unten & fase same cae "Ouston 5 eat hab ole te enwarde vere ower PRD S20 ane in home pa ty oro | [26 Sorensen | Pagbg certo Unon aie roc peraeal xin ‘hr enon ‘aioe 35Cluster a Fringe Benefit T3 sorte ogra cro tr Ste (ORC) Sm eine pons won 2 7 ete crear ame Oe wan ao seg cn TM Se Oye GOvETIMCN Agy, Si pee a = er oe ney fst Entegra sites St aise ee tara ear of ix voce, Hence, the Fringe Scarpa rita soa oe se ERUE te a st ag eae Dag a a eT) oa cen at pn yon ep ears a ores empbyerampoyee reatonsne. Unless sped nt 2 rab arch te remuneration oF sen oe om ca ty = SE re sn cape eee Sead eran te nee cre et mete ie) fees noung decor’ ees, the recty SIine some tine, an employes of the employercorporation; tan Bonuses and finge baefi except hese which are Subject 10 the fine bevels ar under Se. 33 ofthe Code taxable pensions and retroney pays and one ncone of 2 smlar nature constivte compensate Cn te citer hand, a"finge bonefiis any goods, sorvice or ar benef fumished or ranted by an employer in cash on kind nadir tobase Slane. in ator ts a form of pay which may be in te fom propery, seroes, cash or cash equivalent to supplomont a stated pay fr ihe peromance of serves. Under the ax code, fringe benefits sub! ‘ofinge benefit ax cover ony those inge benefits given or furnished 3 1s | ee Fang De ence 1 eng gon name me ay mrad spiny oro, fe sun es say aaa gee ec Fay) “Sao No Sete nq #1, oof rte sy eee of aborog ef seo, Ieee (ae re erate be nt rote es ag ee ‘fone acercongrston ane bee | SES et nt at a ian tana inents a ra ane pannel tes Pac tes oe mrs 3 po soc | tps egapesin he buses foe nant insurnce. Peer reat sd aca se pin BR vdeo part ate cone: our anon i el reseral epee, subse wm, sorely ana aero eoeses + Enc ee Mark uno Coty Sub which was aby ampojer brs acu, a Tare aware fbi wie Theta iets ara es ‘he nance. isa, pain urshed and pai |__enyetanperatn tne meter cerpany of Anercan sb 156 ‘Aste alec fe eal an tie, Aur én recive ror] ager o super Fringe Bench SCARS rate a nau incomes tule owen aon fe et a ‘Wesniovecssshown n'a 7 tx ray Jn accordance 2 ri asm pie oe bec be ly eee pe 2 fn empoyer, in cash on Rd, addon to tone aanee to oh Iravdval employee, ober tans rank ana le employee ‘The FBT is a final taxingosed on te employee wield by te ‘employer. computed at 35% (oegring January 1, 2018 & opon be fectvty of TRAIN Law) onthe grostetap monetary vaue (GUNN) ot the finge benef granted by he employers an egloyes wo tas 2 ‘manager or supenigoryposten. Beng 2a tan. the FA fe coleced ‘or witeld at source by the empeer. messing, athe fis eel rater than at the taxpayers level to facie tar aiinsralon. For one valuation of benefis i easier at te fens lave andthe protien of “alocatng benefits among inchs avoid. The Bureau of ters Revenue (BIR) has also 10 contend wih fewer corporat tx rts, 183 Computation of Fringe Bonet Tax ontario sae ore ta yc 2 epg mises Sead May pee pose Spies oot eee oe iinsmu nents ne colaaul conten FE Seema cesar ce Br Sereestacernrr swe ae oe ee oa 2 eae ae Santee ‘aFup Bag cemercn ae te 5% —— her, es and Paes rcases, oterie Kooyn 2 ened by he mpage Seger et te Sie Eee apea vara soe wand oe Spey eetecut a = sidered de minimis bono ot sone etd wana fx on compensaton income ct, errr and nar emp: eeeee re eae i ey ester ven ney ere tact, tt ae ae 5 aca a ech eae se eo oa Eom oie, ty ee eaten eet Secooeige ae teresa rss 2. Monetize ve of vacation and sick loave credits pai 0 govenet ccs and empoyaes ‘Compared fo emgloyees in the private sector. payment # monetized unused “vacation and sick" leave ces ¥ govemnant efcasiompeyees regardless of the numbe days habe exempt fom taxon compensation income 160 Frige Boake jc ian sat See sa ese ee ory a ay Seemann et : oi eis for endear a cD ed oes i te scart te +r erg 0! ne some veUreme et carne ura Se pt ews repented response mrances BATA) gy Feet Sr neers Ae cian ck Sir sera een la eae Shoe rer, eaten st ce ago reo 8 ft scat ic eying md ei oe Erbin aes oo eat romaine om Sia sees Se rai ae tan onary, Soo Slevaee Scrap nom wn ae 8 Sei cael ne sono othe acta ces Communion Aowance omaionce woman, stware) gue ercye ae fein tom ge beret or a at Srpumaten ene bask at ommaneaon lowe Sera ‘Squadby ne ntre the pet anloyee nd eared n= ‘SReessanecancs oe eanwersnc ad bere 1 i ea een my sexe meee ner Shen tt mcaeng Pi000pr aru, ‘anodes nt me eh conte > ey Sa ass 1 Lindy allowance nt exces P30 gr Cees oes ‘Siero omcy raoo ha Me of sarin Stavune wounaraememtee tsrcoeding 0,000 under an wtlned wee sn sch cnt ‘Seema nie ng as ene HN WN ome 8. Gite given cung Chivinas and mujer annerry clans rat ‘exceeding #5000 pet erye per anon O65) 4. Daty meal atowance fr ovr work and nghitveyed si ret fxceecng 25% of th tale minum wage on po eon os ‘rvied ech benefit gven on sccun et Overee wok er Shen lemoloyees on nitrarerad sim (The gt of not sen, oie wat 2 strana ‘Shou be ec anes RCS, None, a as leg Kens by Pe enpoye be enpejers aee am we {ste tr be ‘ata ceed Pe ene Wea one, Ine pasar ae Stout ies whe genset Be eno 16 iain atee a _ eae nce ty te employer a) Peete erat Sect arp erated foun r4 sei wt #28. apy || Se aa| | A or tad ven be eth ne re yan oe ope) et BR || 4 ts preateue oom cm a aca Dewmge be Pro Ds ony erty ae 2 mousse mee a 5 one ert ete? 5 henge bet xe? {P Moaaows Geass engl rte mon? £ Setareny renee rovsen tbe aor ene? oe | unt rae et oo) ie cena Sez soutee |" vce trast he ropa : a snot erat oma one ra Seb ments | errr ate vat Eau} ea || reso many abe ra) ras 5 1 Frgebewtac ae Finger a hye ae Ducts ye employer the year 168 fp bod, eine ween eee econo Sn emo neh 8 See (rage 88). ina eae rare cto Peete, [Se nse cS ete re etseraes PHT pe conenene oF MNGHINS ty, «ih bo toa many P'S) sage re batt of Se om a. Some oe sone aon arena rer ana een Ferrel nassa brat is me so tenet Soest yo. tod Page 170 nin chaper ead variety es se oo wee lig ot etre fa" ay of Metin beets wee stoning he ond of eo calendar quater in wid ‘ride erect m pa, onemia te owes foro ton oy ver boom Whe aus caer 2 = ae “F Ananers MNT cmp a es se ene en We ct Sc nde tarts | fs laonelnyslteerb ttt ea ror man de pe ‘oot nn osc a ot | Incompa stes saecs pi Hel n ‘on teen gos ane a tes e e be arash rnaig set R38). Te inal ery br ba meh be ave spoon nh gor ‘wverreaon sae (Frgrtewttoonse cr | Fogo tereftia eer 128 ree censuses A 21 Fine bene 60 ' \ \ mone coe nnntcistroePe ucanncanen Co-vanurhy Eater “Le, fred err "LSTRATION + te tang | |Site erntcom mn ie Question f inseam a ae pret it caer ernie SS — _s resident cizen roa did leaving an yay el cc he 2 eng roe pone rie re an eeyeragurnescittasa ert ei, ho aa enue busines be Se an epg 20 Aion Ma Beaty pxGaea psco0m00 hay yomom "2200%00 Soman movo0 20000 Stapw oes aes oot rvs ees Ione tes no ea coomento ct? © Me Teoma angi tren me cmvoonts, | | 5 asia et ets rans sera ove | ‘stor 2. Asuning Noy was ale secre a arin and reeset ‘Site any genet he ea aegis enptownaintot ot anet a c-omeoip oman | Ase Ne [eee fee ee 192 anson 2 How mc sane ple EN tn | | Pn SA sta me ATMS) Pearse eget eet 0 ee Ue Concent (25.00 she ae nonin tee rereetnane So Emm oe rene ane sane te xscape) aoe, nava) ge et SSG Ste: CER tower nado fo he ws a SSnce earn th sit rc of sll the cee Sean ae ctid cg eyo ary pe. ‘ere Se te Seed (ato Show 8 spec Sau) # Sctrntlon fre ete wate are, However. Such amet ‘ore doth thal be ncdet ne Steno of be at ‘came it eaocebenoy 196 lh i ty t he ncaa ct he SEmTRat snot mene oe SENTRA Gnas om, com tr t Contin Houmas Z “P heanesramnagataeo n anter \ ‘Mose nte traeie Pd Sobor be ear a} aim =e | ‘ueson Hos mah ene int Aen Soar Panag meat Aen EY | ‘watson TAO eeepc Pt eat eee ‘Rem a aus br Smart == INCOME TAX OF AN ESTATE nce toc ofan tat est the tae ‘on ncome reconed by te ese tg [ion of aomisbaten or sear An ene amass the propery i, (Refer fo Volume ?~ Busnes ard Tins Toes) 168 Art watt mine eae {eaten [eso (Os Mowe 1,27, Jan a Ca ed ning wi py | S0D1000 eh ta Pm, one sop wea | oan posts dig etal mem The nt ene 2 ‘Sots 0 2500000 hut wt td es wees be i ‘zc ers eh ig lw ber ee nein hee ened A to one et ‘ver and are peg pees PON ung 01, Fer rts et 2D en Be | ec, Reet one nae owmn ee onperaon rane bore are ‘00 Bisex omnes eam isis ianitsae cesta seeseemeateeeeeney) ‘9 Aage a Po fst | tether See aati | mE See nmentoentaiges |_| pete eens a . rete te ae ara in Beet ase | rere ese st ee fe one een he cme ne a ts Beets te mrateares sich 3 Ti Tle ane Seie berebeares mouse ee a ae, te eciave sar the ret Soros ane = “ro deus of 2 Ne ne) tem \ sab paseo fn ‘ame of east Beaty onc ton of aston ft Wa Are sore, nee Pe pereaes al [etene) snot te toned 262 fat sco en nat nme ene eee ge ed = cman ort ener ol street, Soe hater ema ate tevaig con (See 8110} NRCI ‘te bonoficaries, Uncer the Tat Cade andar essen Secon tien Sit Soa caer compete os ome Mote ws by Di Te pine. ‘applied i corre the —s Income of an estas, oo —_— ws eth cee a atte Saar . a cs taxable income of a trust. Hence, the Trust's taxable income is thevse ‘fiduciary tothe beneficiaries. aie ‘computed in the same manne’ as an individual taxpayer. except fal Fy ‘+ A trust where the income is accumulated for the benef of ‘basic personal exemption allowed Is limited only to P20,000 (Section &2 unborn or unascertined parson cr persona with covvingent [NIRC} Tho mde lo based on tho grated rates proved une lores ‘Section 24(A) of the Tax Code as shown in Table 2-2 of Chapler (A trust where the income collected by a guardian ofa inant is Se ee er a mening owen a (i raha Sa purposes. A trust is 10 ‘the calendar year as its accousiny = he Income, We at the Giaceation of ftectary, sy se fardiaboh ‘ (eased hntacece command abe dang Se a nso PLO) pas. (Estate) aa ia |? Eevee ima erance Neon | 1 Mente do aca a aeranganygt Sn ZS es ar i. Recetas) | ERT ot ee na Se ae SSA aes age | SES | gueatcemer oe SE to Seales Bice $B \ Ts Ta ident rm domesiccapenie ie 8 ‘sre Sodio = Se | Se apm, ete = L juapgable _ 430,000 ‘Royalty, books sso 7500 i en ae ke Fring of ncome Tax Returns stot osm HON pe ng He an yin ty at Saeeoce cone sat ar et Sucton OO NRC) ~ hot inematerentes eR” ay ge mene Ses eo a See iy 2 Executorsadminitrators: ig, x 2 Recaes ai. eae) BEN she 2 Gorcenmes nee od (2mm et ery rn 2 Eta a cops adro ny ea me or ne ere ee Feces, ceabe can coe wee cee nrnon tate mum ed by nites Pom al ta ets oa she cea vaio oe at rs Scene com Maeeeetonte Segoe ae ‘oe et 2 “+ Duly authorized city or municipal Treasurer in which the taxpayer nied a Se pps sane meceocrniiee Btmee ~ cia jay en gd ate shares, Se ee erceoe eager a ane sn peta one ‘ot teen Srey om atl etree os oe er pa at reo rote, owing rea ner Secon 91 receive by em a such ceo ee sone a se ees til eam Sn aac aig it sk pean y | peptone map sony eter ncn, ring 8 » ert cea outst arnal OUerzaon eyeing Sette ome mani oseoconanr arora cae Ssincsy npiyes pong ere pment He, SBE sree ky te memo ch erat crn copomon oe Sonnoe 4) omy cgay cd ad pert exo he et ) Nonstect exponen or essen organized and print cechavey fo relgous,thariae, senile theta of ena ues, aban ct rans. no par ofits et ncaa ret {al eg ornate ihe ore fay member, panzer. fie say speck person, oe Besse leoaie carbs of commerce, or board of rade. rt rarest ano part he et income of whch ies BP bene fay pint olor india 2) Cie eau o gata on not organized fr proft but operated kan reread fo rt Ou pm 20 ee RPORATE NCOME TAX snes £38 a5 orandod by 122007 Bovey fe to To be parcert (oe wt | "ceponeicoe we sarcent 2) of oa, min an Yat wher rear orc | | farce ian flonra e trabe yon togn (0 tennatbsess operators. The CIT sa ‘netoere| + Te cepa tebe income Mebane as rept tae noo: oF ence’ be arcu of MEIT grater han the re pe Fron ix (RCI) ue fom such” capo vn MrT any canputed and corared to RG {srg cote um ya of eperatons, The ger anovt ‘hate ata ear tale poed ~ teat sencta ce Seine ance 1 Asante ee Captions \ omeowr 2 eRe et a sie cee ete Sey ma ine ae nan stags se ee iy Famers trom erne neem ene eee ie ager fre pager es pete ss Income Tax Rate and Bois in Computing te Tax Doe “he splealeneon a tein apr eee the the coporaten and ener soe Rape ay ince are general sue! Nore Regd Caps cna Tt (RT) oF 30% os prondes Tabet we ‘epee wee {ere tom Pippin sores ese fea wmetng tus ToDe 52} and "coptal gion sae cf shen of none donee Corporatons as nel a on te se of reo owes eae o 9 Fhiippnes ast at expla asset se 1 apt es (Tae 53). Prcne ass 5 208 ef Copan — ST Et sn i Sr AST ISO Wi cg qene remeron een cr i nee mney nd tees immense Sito by POET ang toners COMPUTATION oF af Fo pepe Mowe ea a mt eg Tarte can oora ‘COMPUTATION OF Mon: SELEROF cos ‘rensoe Seton me Seen Za a 68 Oe ne 2 Soran SOME Rend ee Si nm NP SELLEROF sea ‘Grose rs ‘Ses acs tn See una sons e Diet Ct sencer™ ot ‘ed Oe mene oe Nam Rind Capen ib (Ge bee MOTs = wet : a as