ALCANTARA, JUSTINE P.

BAMA 203

1. ENUMERATE THE SOURCES OF INCOME AND ITS TAXABILITY

Sources of Income
Income maybe derived from:
a) Sources Within the Philippines
b) Sources Outside the Philippines
c) Sources Party Within and Party Outside the Philippines

Income from Sources Within the Philippines

⎯ comprises earnings from within the Philippines territory
Income Taxpayer
⎯ Resident citizen and domestic corporation are taxable
⎯ Non-resident, Alions and Foreign Corporation are taxable

Income from Sources Outside the Philippines

⎯ earnings coming from sources outside the Philippines or income derived from foreign countries.
Income Taxpayer
⎯ Resident citizen and domestic corporation are taxable
⎯ Non-resident, Alions and Foreign Corporation are non taxable

Income Partly Within and Partly Outside the Philippines

⎯ earnings from sources partly within and partly outside the Philippines includes gains, profit and
income.
Income Taxpayer
⎯ Resident citizen and domestic corporation are taxable
⎯ Non-resident, Alions and Foreign Corporation are partly taxable

2. GIVE EXAMPLE OF EACH SOURCES OF INCOME.

➢ Income from Sources Within the Philippines
Examples are:
a. Compensation for labor or service derived from Philippine sources
b. Interest on bonds , notes deposits and the like earned in the Philippines
c. Dividends declared received from domestic corporations
d. Rentals and royalties from property located within the Philippines
e. Gains, profit and income from sale of real property as well as from personal property in the
Philippines.

➢ Income from Sources Outside the Philippines

Examples are:
a. Compensation for labor or service rendered by overseas contract workers
b. Interest on bonds , notes deposits and the like earned abroad
c. Dividends received from nonresident foreign corporations
d. Rentals and royalties from property located outside the Philippines
e. Gains, profit and income from sale of real property as well as from personal property in the
Philippines.
➢ Income Partly Within and Partly Outside the Philippines
Gains, Profit and Income are derived from:
a. Transportation or other services rendered partly within and outside of Philippines
b. Dividend received from a domestic corporation and foreign corporation