Example for Slide #42 

Diego, A resident Filipino, has a 2018 taxable income in Japan of 350,000 on which he paid
income tax of 15,000. He has no income in the Philippines. If the foreign income tax is claimed
as a tax credit, what will be his income tax due after deducting the tax credit?

Philippine Income Tax on 350,000 20,000

Less: Tax Credit

Limit: (350/350 x 20) 20,000

Actual 15,000

Allowed 15,000

Income Tax Still Due: 5,000

Example for Slide # 47 

Gabriela, a resident citizen, has the following data on his net income and income taxes for the
year 2018:

Sources of Income Taxable Income Foreign Income Tax Paid

Philippines 480,000 -

Japan 192,000 25,000

Taiwan 96,000 30,000

Total 768,000 55,000

A. Philippine Income Tax for 768,000 122,000

B. Allowable Tax Credit

Limitation 1
Japan
Limit: (192/768 x 122) 30,500
Actual: 25,000
Allowed: 25,000

Taiwan
Limit: (96/768 x 122) 15,250
Actual: 30,000
Allowed: 15,250

40,250

Limitation 2

Limit: (288/768 x 122) 45,750

Actual: 55,000

Allowed: 45,750

C. Philippine Income tax Still Due

Philippine Income Tax (a) 122,000
Less: Tax Credit 40,250
Income Tax Still Due 81,750