Chapter oe Income Taxes for Corporations Corporation Defined The Corporation Code of the A general professional partnership. A persons forthe sole purpose of exercisin 1g their comr a The salient features and applicable taxes for gore me partnerships are discussed in Chapter 6. fee! 2. Ajoint venture or consortium: + Formed for the purpose of undertaking constuction prea pursuant to Presidential Decree (PD) No. 929 (dates 4 1976) to assist local contractors in achieving compet with foreign contractors by pooling their resoves Undertaking big construction projects, AA joint venture or consortium for engaging in petroleum geothermal and other energy operations pursuas ‘operating consortium agreement under a service con the government. 218 Jucone Ti Corporation undertaking by two oF my the dispostion tion. However, there are two ye jd In the Preceding page ay proggl ' Ajit venture of consortium forme struction projects is mot coneigeres x Code provided: as ses trate and ay one the afore "rec othe reed as taxob0 COFDO le 28 corpor rd paying aporopria renvenures prof Absent consort shal be 02" reporting af sare tthe, ions. 2 shall each be reg ycorne taxes on th ‘a noraxable corporation provided! + “The member foreign contractor is covered by a special license as contractor by the PCAB ‘The construction project is certified by the appropriate Tendering Agency (government office) that the project is a foreign financed/ intemnationally-funded project and that in al bidding is allowed under the Bilateral Agreement entered into by and between the Philippine Government and the foreign / intemational financing institution pursuant to the implementing rules and regulations of Republic Act No. 4566 otherwise known as Contractor's License Law. 219 Scanned with CamScannerEt Prcome Te JOINT STOCK COMPANIES and Jony : ‘ent stock companies are consuucy ents acting jointly. establish and oporate business NN" ® Grou rname, with an invested capital divided inte sere th, a ears a tercomsry te Paar ar acon shyt pea ca saan ee ue Accounts (cuentag Per He ‘Sta wh een ee nee a Seeman cnn oreo ae abarngin le, ans an Spreed upon.” They ao not subject to an cont Gerroctod. orally Or in wring pe MANY ann eS organizations which have substantially the salient ss%ationg. Soleo a“coporaion” Naty e8fentearen on come mat Tax Exempt Corporations, Unit Seton 50 oft Tor Co, oy cto ep cons occee ee na, ong ) Labor, agricultural or horticuty principally for profits _ by Mutual savings bank not having a capital stock rep ~ and cooperative bank without capital stock, oma resented mutual purposes and without pat" 9AM ad gga ci c) Abenefcary society, order or association, ope the lodge system, or a mutual aid association or a sac ye ee drcroaasociaton, or onaickcomortan reg en organizations oy @) Cemetery company owned and operated exclusi Cemetary co Clusvely forthe bey €) Non-stock corporation or association organized ized and exclusively for religious, chartable, sciente. lose oes purposes, or rehabillation of vetorans, no part of is net neonate shall belong or inure to the benefit of any member, organizer, cars ‘any specific person. {) Business league, chamber of commerce, or board of ade. organized for profit and no part ofthe net income of which inures ete benefit of any private stockholder or individual 9) Civic league or organization not organized for profit but opt exclusively for the promotion of social welfare. 220 Jucome Ties fo Corporations sonal instton ces fgiaioN 1 eon oe IMSUENC® company, mug inet YP Se or cooperate lepton cama ep, ay lol cHOTaCO, the income of mh fa Be Oe ond fos coleted fom set rosie ts expenses: a eof mae esociation OGaNZed and operated aga ‘marketing the products of ts members ogo of as os ences so acto ed trished by hem 7 sein the pec ttn spar Kind and carder te wy oft proper, elo Fin ets conduced pos, nee of such ncn, set by tox purposes, are classified as domestic (DC), for Jax (REC) and nonresident foreign corporations set on copoatio’ (°F rg corporations created orgnized mn "foreign corporation Isa corporation INREC), DOT er its laws. So aloes Funda may be a resident (engaged in business in the rcs at dome oration (nt engage In business Inthe Faigaes) © Toe corporations may alo be classified rape orators os discussed Inn page 238 income Tax Rate and Basis in Computing the Tax Due “te applicable income tax of a corporation depends on the type of ‘be tho corporation and the income subject to tax. Regular or ordinary Peome are generally subject to Normal or Regular Corporate Income Tax {RaIT of 30% as provided in Table 5-1 while “certain passive incomes’ ‘eved from Phiippine sources are subject to final withholding taxes (Table 52) and ‘capital gains’ on sale of shares of nonisted domestic cerporations as well as on the sale of real properties located in the fripors deed as capt ests are subject to capa gains tx 221 Scanned with CamScanner7 Domestic corporation porations are tana sources fn oo eT a 80 on nay taxable on their income derived from sere foreign = eon 22s wang ce corsa te Se me tax (NCIT eens are General. comestc and rostlent or normal or regular corporate inco, z income” during the tarable year teat Rone tax (MCIT) of 2% on gross came ie revere nim TB oes es MRTG Nea foreign corporation beginning on the toons uo" tomo 2 a6 wth only following the taxabla yoar in whey et 4") taxa «8 which such business operations of business Corporation” ®2 im in the Philppines shall pay & te each Pt engaged re mmepet tal Ba yen g reinsurance premiums). annuities, emer determinable annuities, periodic or casuah ne capital gains, except income subject 19 cans 7 esta aa tate toh gains. pro tal gains tas Government Owned and Cor ie u Ont: - mn “ an cop aterm! Onna and Contec prc cio ta Government. Under Section 27(C) of the Tas c) CS opt nes shall pay such tax rate of tax upon ther tars erence, Malayi8 upon corporations or associations engaged nana. Corres NaiaySI8 activity. except the following tax exempt GOCCs 42 cr. een bark ort + Government Service Insurance System (G55) ee * Social Security System (SSS) ca) Te capratonis a tome coe “ + Philippine Health Insurance Corporation (PHIC, cect ‘Answer: P109,500 co 7 5 + Philippine Charity Sweepstakes Office (PCSO)_ 7 Gross nce not Expenses, Philippines Canon Expenses, Malaysia Se. Corporations created by special laws or charters shal te based on the provisions of the specal law oF chat cena a Toru nme applicable to them, supplemented by the proviions of te end tata insofar as they are applicable. ene cers sit 2 es a ep . “come fom sources within and without he Priicpines . Ritbeciececnbon pot reargarecme tsa0 aan acl oe oa taronoron ae are wseelinbeswcedng esos Coe taro To 2 Weewainen poe names bec frtons 223 222 Scanned with CamScannerfo Perthions HE PERIOD WHEN A co, _awnG Tee 2.98 a amended ye ORTON cot Sect TONG, he taxable Yea" in wtich the yee) Foe ces 0 ‘the year in which the conoratign - USiNess Tecone lages for Cap smc Lit J Pru, is a resident corporation se8 © ye case BTN pl gon CF uP ced sal Dean which WS registered in May yeeS'ed ‘Anos Pca, Poippes—° P7500 cage ing in 2002 8 sha Sees Pippnes—_(150.00n) agg Fac ‘Taxable come 225,000 SP od BY \COME: fax i 085 IN , acre on ot ROSE T vGross INCOME” MEANS goss a 8S legs, case of wanes, noone Tax Ove iCMrances, ad cost of ods sol) iq ‘he copoatonsponresident corporation ris opis ess sales OU, coun al i cw is ‘of sale of son E 0 sor P30 1 comple 085 TIEN in ase of Sale Of sovices (RR ta ane f i me ice Param at eo ses cle tra on eh Imerestonbankdepost 29 oat OSS Ia ofthe tax code or toms subject ton “me edges Tog 2 pat Serpe, aieOM TOM anda xR 10% din the dotermination of gross non cone Tx Due oor one ence Mf oss toe To repeteainsste ome set og 8 2° rp i it wet eaane ton Pago oats cate Betecenptncor) Pca te ouPUTATION OF PORATE INCOME T/ Goss imum COR sales Discounts 7 (x) roveave roguations 2-08 a8 amended by 12-2007 prov Sales Retums and allowance ta) sauce Ceporaeincome Tax (CT) of wo pean lat cat son 8 memo Cn end of th taxablo yon (wher clon ie Goss ico e sca te. accountng por employed 's ipowed ee Seater income subject 10 Normal or Regular x Seer portions and resident fooigh corporations begin 9 Comoe tax fan a") taxable year immediately following the taxable year h wg Gross Income for MCIT Purposes tout avon commenced its business operations. ‘The MCT tay Nott rate imposed whenover no +The corporation has zero taxable income; oF SELEROF SERVICE: The corporation has negative taxable income; o Gots Recsts Pax + Whenover the “amount of MCIT is greater than tho el Sales scouts ) Corporate. income tax (RCIT) due from such cae Sas Reus and allowances ta) Hence, MCIT is akvays computed and compared Diet Cost f Senicas™ va ftartng on the fourth year of operations. The Nght a Ges heome 7 Should be tho tax due for tho taxable period Add. Oto income sujet to Nomal of Reglor x Coperata ox Goss eae fc MCIT Pu Ges Zuposes weir 228 225 Scanned with CamScannerAecone Ti “COST OF SALES (Seller of Goods): Invoice cost Import duties Freight Insurance Toa “COST OF SALES (Manufacture) Row materia used Direct Labor Factory overhead Frogh cost Insurance premiums Other production cost Total “DIRECT COST OF SERVICES: Salaries and Employee bene of persone and specialists dreclyrendeing the service Cost of facies arty uized in proving (eens and cose ies) er fret costs and expenses necessarly eben ee een Total Consitany the servis u ILLUSTRATION 2: Assume the foloning data or Hanaish Corpraton year of business operations): ee Grass Income, Phippnes | Exerses, Phoaes ‘an Gross Income, Malaysia Teq0n Expenses, Malaysia rant Interest on bank deposit son Determine the income tax due assuming the corporations: Case A: The corporation is a domestic corporation 4 Answer: P33,500 computed a flows Gross income, Pis. 8 Malaysia 1.675000 Expenses, Phils, & Malaysia 67000) Taxable income 500 CIT Rate eas RCIT/ Basic Tax mer Versus: 226 1.675.000 5 en Fae i ue (Higher) 33,s00 a te et Ane Ok ct gz attr fat oe ate P a abe iontleteh rae ae etowtnae nse ok GS a re exces or Serene (P2350 5 Pstn Foote no ep Oo POTS gat kyle omit 2 AB ete titel mY ihe : ee eae Fat eg te ns UOT 3s Re 3 oconot isa resident corporation 0 computed as flows: ston coy Ione P1088 | eam Pees | eenses, Pines ‘esti nome jaxRale srcome Tax D2 ct NT Rate wor income Tax Due (Higher) | oe re corporation snonresdent corporation | ees: ese pan a, (F375 000*F25000).2% NTT iol appeal to soesident comport "etcess MCIT OR MCIT CARRY-OVER ste income tax over the normal ward and credited (deducted) ing taxable years. porate ‘Any excess of the minimum corporat | coprae income tax shall be carried fo ‘ist the reguar income tax for the three succeed vied, that the normal tax should be higher than the minimum cor __Yixinthe year to which the excess MCIT is forwarded. 227 Scanned with CamScanner_— fucone Tags fr Coperaten Arceme Cave tro, apoRATE TAX DUE ‘RLUSTRATION 3: " - un nets tzabeyoor ‘Adon con bch commen peg ‘om tone data ny eitene ayant of UCIT aha 2086 7 " ara yd 18 income tax a5 preser Ges ene 2 sen ae Feiss FA Ot, NL Bettany tas Code, a8 atte. 1 tetncone tos) —“harygnl 2h) meget eT gyal ua 8 eos 8 me tax pay ‘208.0%, 4 for income tax, the tax dis Deen bar onl Na Mal tayo Answers ee Zep aa ey prensa 2016: P200,000 Fa ater which j et Be 2000030 owen aca ote! reese ty esate quater MCIT, 27 Broce nerr tt (Migher amouny an sn i of 30 RO srowed to be Credited. How Fe | na pl tte crore | norT: P24o,000 Fig 18 ig tO Ae ne MIT paid in ty RCM or Bastar ses ee ce ated against th azereny EIT Pats 2) fe al ya pled oar Tox Duspayabe (Higher amoung oft Be — Eneoss McIT 2017 Theos CIT he 2616 a rn inten wT er ee ea 2) Inca tax payable forthe second quater 3) name tax payable forthe tid quarter ‘© "Mie Opera Loss dig the yer ay ba cad om a 4) Aroualacoma tax payable cto expanses la craton tb et hoe wee atom ta year tha bss was ead. Such so peratrg Lass Carp Orc HOLCO), <4 RGIT and MCIT were nat amended under RA S86 TRAN be aes tet. ate a Ail Tax RCM), Mo tapers P88 ors ay aba ASE gap Replat Copel Tos FT, MEN es el : ig equate inctngercess MCT and 2018: P10,000 fearetses wae etm por years) re 35H Gress income 2018 7 exes | ‘Alona dedtons 2018 Homa ict Teves Excess Excess Netincoma — 28 awe ROT Wahbhelt MCT Witting lass:2017woLco™ ai | ning tne riot trot Pre Tava ncomo 2010 ain, | yer Yer Year fore Wy |e paongcn te.000 40000 e5000 20000 ROM or Basi Tor at | L “noom sooo 6000 wor (sau x23) rr | 5h Soom 200000 e000 Tox De (RCIThigher amoung Pan tom 9000 70000 Less: Excess MCIT | 2016. mer _ etme folowing: oar aan | INCOME TAX PAYABLE 2018 ra | 2) teeta pyte forte fa quater | 228 229 Scanned with CamScannerFicome -ANSWERSISOLUTIONS ‘Question #1: P80,000 com; Quarter tax due Higher REIT) Less: Excess withholding Taxes wiholsts quaner “Excess MOI preveus Income tax paidipayabie Ite canyo teres ie forte garorsbaseden eh | Question # 2: P460,000 com, | Quarterly tax due (Hi Less: Excess withhol Taxes wthhelo-t= an come tax pal 88 MCIT previous year Income tax paidipayabie ‘The cary ovr of exe tax dua the gr +The P6000 guane and 2° quan. The. RCT fort Wand 29. Question # 3: P140,000 computed 2s iolns her Mem) quarter Quarterly tax due (Higher-RCIT) | Less: 2eang3 and 2* qu 008s MCIT previous year payable | Question # 4: P330,000 computed as Quarterty tax due (Higher-RCIT) Less: Income tax payable “Rete tote expanaton m question #1 230 puted 3 flows: tax-previus year fom pets ear, Sonat puted 2 foows 19 Bx-previous year 142°? quar, gear igh ta ge wel! “, 8 Maing icp Taxes 3 f ete eat MCT tote ae suing te o year 460000 40,000 209 00002 S500 6000 + Pano S300 ooo = aot wand TO. payee! cas ONS ans 000 f 8 opr cats pling tax previous year bier paid-tor the first 3 quar ‘anes PT prvi yon ween : sain fe tas pai wo meee a se: ROME nance is aor 0 re erorate coe LOX on SFY mcnpeses on account of prolonges majeure Fa biness reverses, “prolonged rial esses fom 2 “po amt ce staged by tne employee wera fe wan a tana pera and the I ovmet bashes operations. RATIONS EXEMPT FROM MGIT Setewg corporations shal natbe subjected to MCIT Pia “| domeste Corporations an . cam eas ‘ sitory banks under the ‘an DUs) on thir income other depository banks under the foreign currency deposit syster. 231 Scanned with CamScannerJucome Caves Jor Cary Cosorations a Perition income 2x, “6708S Income” deve rine 72550 Gross Sales less Sales ratuns, geome » Seeraton crs . 2508 qivalt Sods sold. “Cost of Goods Solr shane Besitematonal camiers apie Sat ot 8° reat produce the merchant angge 8420 “For trading concer, Cost of Good oy B._ Offshore banking units (OBUs) 23 On os JI Regional Operating Headquarters (ROHS) os penser jacaliON. Te Goods sold, plus impor 238 Toco Oc of the 9 POM duties, : Ht ease Mt goods are in transi. (REEA and Bases Convrion Devon SMC Zap, » (cp, 9 neu come and Capital Gains Tax HES 2 ragulet Core subjected to porate OPTIONAL CORPORATE INCOME TAX (15% Gro 88 Income one on 1 fon ma The President. upon the recommendation of th g, ™) in a3 COPOTAN agsive INCOME’ may efectve January 1, 2000, alow ‘domenies Seely oy ot al OXON CGT) ad Corporations fo Be subjected to optional corporat 2 Tei ha 1 Get gas er ciated earings ta gross income. tae oF en 2 roe et Se 1 Derived From ct to Final Tax DC RFC NRFC | REQUISITES Allof the following conditions shall hav eto be. (of optional corporate tax: Be Salstied in tha ay 2 rato of 40% of come tx cea Product exinayereoy bar depos 20% 3h 3. AVAT effor of 4% of GNP and "H8! aX reve 1) eoeteereroncepstbsiive 2h a | 4 4.09 rato ofthe Consolidated Public Sector Finan Po 2 Yet borat tominstondandober 20% 20% ay | Pos, 4) Yel 5. The option to be taxed based on gross income shat yp. ) Yotr aangaments . ony to ems whose rato of costo sales to goss ae oak nce 6 ath | from all sources does not exceed 55%. Free, 5, erstincome derived rom depastony bank 15%" 75% Exempt deposit The election of th . veda expanded foreign cuency ott rnc aen taactonb me span cus} | Sesirtna 28 corporation is qualified under the scheme. Presented belon yn 6) Iie-corporatedvdends received from ameter iS a sans Computation of income tax payable based on 15% gross income as ames coporaton received by | SsiesRevenues : Sasha] Cost of salesiCost of direct services a) nae deed under expanded foreign currency deposit | Gross income i system BY DEPOSITORY BANKS Gross income tax rate 15% * From foign curtency transactions with Income tax due Por] nonresdents, OBUs inthe Philippines, local Exempl Less: Taxes withheld fo) ‘ommercal bank inclu branches of foreign banks Taxes paid - previous quarters in) Foreign! ‘ced Ss * From foreign currency loans granted to residents 10% ictiglev ome al Seen OBUS in the Phiipines and cher 232 ee’ Scanned with CamScannerPOSTINI Income Tages for ¢, i 2 dopository bank un 2 aerved Me expand AS 8 to, income from am ah | arreney transactions gig" fn | © nattraded in the local stock exchange, O° psn? bank inching branches gry Ca o gore tra ay Behe a | UNOER TRAIN LAW, beginning Jan.4,204@ OC wansact business with foeign ESF 16 ‘Tox Base: Net Capital gain merc opositsystom units ang ein | ToxRate ont banks under the expanded Fogg PoStary 15%, sateresot exempt fom all axon pxeppe hal be | ror vn 1.2018 fgnbaTk®—ffom such ansactons ae eet Pea, | Fist 00,000 capital gain . by the, Secretary of the Depa Amount in excess of P100,000 cap Finance, upon recommendation i | lo iy Moray Bom obey he [2 eth. poe int yer ny wens ye 1: React tage oy Interest 1 | buldings (Baie: Sling Price or Fir we 7 from Teens gancome fom foreign Value", whichever is higher) inal or curfency [68M FaNed by such dapoeat arartes sgn banks Under Said oxpandad,syseeeY Raa acea: 1S Te county where De NEC Sanaa a other iner residents other than offshore banking units fenton pehng coed bP eT or inthe Philippines or cis dogena gos "Wino to sparing: 20% to 1, ory Danks under the expanded syste “iste See as pote coon Anes “NC Mo hanes pp oe es Steen be it Pode [eae By 8 Corporate Co-Venturer | TexaveJont The respecte sharin the joint Venture Venture profs considered os dviong income recoived bya domestic | ‘corporat fom a domestic= | ‘corporation. Hence, it shall be tread {38 intecorporat dvdend which tax. ‘exempt (Refer to Table 52), | Tax-Exempt The respective share inthe joint dont Venture venture profi shall be included in the ‘computation ofthe corporate ventures taxable income subject to normal | ‘corporate income tax of 30%. 234 8 an ara fn Tose ake See Cert aa i —___taroayers tra 7 shallbe subject en percent (10%), toa final tax atthe rate terest Income Derived from Governmont Debt meta isged in Chapter 2, the Tax ‘85 amended, defined Pema de Oe i tic Indica! payee seagate ringer pursing of eciales 2 cho cpt fomestic fon - ses or the needs of their agent or dealer ‘domes comperaion Fpancing their own needs or the 9 Soya mami eat) ieee teas an series sateen al tax payed upon the orginal issuance of te dopost Seite “Goverment Debt insvumen. and. Secues, neksng Baeau of Teaury (BT?) 8ued insruments and seciies such 28 Tan ond (bond), Treasury bits (Ts) and Treasury nts, st econo as epoatsvbelitos respective of te number ences 235 Scanned with CamScannervmte Tees fo foro, pe eo ian 84h debt instumente oy, trased o* exchanged in the secondary markt Te etUtag coverage of deposi substitutes irospective ofthe pee 98 fain tee of eapeaton and therefor intrest income eee" oe Ses Be appieaBle fal withhoang oe eed te ae sbuttes a prescriesundor ho Tax Cogn" ppg ones a pnt roid By 3 branch offco 7 one mes HR ee ‘Stead fr romance wihout agen me Gira cansea seen gcc he mye te ncome 198 af the rato of 30% on Ts noe AS sig Prinanes. Sieh income its Ia rote, eluding remuneration for technical ee ge i emus ames, evant or Sur ase eve casual tins, rts income and sac emt each taxable yea om al sources within the Brae oa® ecaiveg ted For purposes of branch poft remittance, in efecto comecied with te conduct of ag sore Heme "I Phiippines are not considered branch profi 2° Dusingh ets accent et Nae tpron ote bans vac obese G8 om ng arses fom he busines acy wh in ele he aa final tax should exclude pros on activities rors M980. Tt Economic Zone Authoriy (PEZA), BSlered vit Php ILLUSTRATION 5: Ea eee CHEN Corporation (domestic ration) 7 ee compar Yes evn as tpg Srsstce fon ¢ . Mismkcn im Rent Income (gross of 5% withholding tx) a | Miscetanecus care Feo joan omens aon | ret tone fom ang dopant a | re eon um goer aan iret nee on FDU baamss Dividend income rm a domes orporaton _Duiend income frm a foreign corporation 236 toed eres uiedatacnty 20000 os ore eg nee tye ax pal ST a [ss p2,2904 ues", answer | fom Sette dg Prono an eames 260000 oe ea | tea a erg coatn "4 | pe rasa | eesgmeet | gage | Meira face 1 int on tae | Crate comer payments | Inc Tox Payble ton oaks tants ir cen + Rint socal sow iI ye eae i a cou | {ne TRAN La), CGT on shes shall oom be 155 capt gas aan erect als es een a ee sik Tne a ea bears er wmnesh » SES ces flegs ts cmt sta | Sragigenae leh ole tir anoat seen gcse ef at ante | «+ SEES pen ve Papas ior sco | | {axof 30% based on the income from such sae, + St att tel ck peony | 1 SSG Seiten enetonstn + Btieantns cies pase motion pone | 1 RRS as eRpreetuertsest sorte 27 Scanned with CamScanneran Ce fer c, ‘Question 2 Oven I Coorate's fal axon pag Ain + ewer: mputec ~~ “ . 2,500 computed as, follows: ome \ oe peter a Interest trom FCDU de, a 2 509 ; Question 3. Determine the corporation's otal capita se ¢ Answer: P150,780 computed as foto spe Sold directly to a buyer (capital asset), —) ‘Sale of real property in the Phil Prey ippines “hed ag rice o Farm value, whicheveris higher "= Capital Gain Tax (6% x 221 Tota capital gains tax final tax) Question 4: Determine the corporation’ total I final taxes + Ans anes : P213,250 (Add the ansi ‘SPECIAL CORPORATIONS Under the Tax Code, certain corporations are subje: ‘on their regular income instead of the normal 30%. These corporations are classified as special corporation, certain passive incomes and capital gains on sale of shares o! cara domestic corporations and real properties situated in the Philippines as, subject to applicable final withholding taxes and capital gains tax. asf2 case may be. 238 ‘profit hospital 10% on its net taxable income. Srorate income tax rate ‘pty educational in ch néeanoued by pate oye Deparment of Eeucaton (DepEd ‘Cotton Technical Educ she ease may De Higher Education (CHED), or nt Authority (TESDA) ‘ising laws and regulations. “Unrelated trade, business or other activity” is an activity which is not substentaly related to the exercise or performance of the school or hospas primary purpose or function such as but not limited to rental inare from available school spaces or facilities. 239 Scanned with CamScannerIrcone Voges for © for c examples of Related Income of PEs (RIC 4. 2 4) remo fom ton sand mace 22) 2) Income from hos rere _medical schoo iO een " Sreduatay es 2) come fom canteen stusted within the g i 4) Income fom bookstore situated wit me ‘Schac 2p, “a St cr gee icusTRATION: — — (ase A Rated income > Ure income S Bem Cl lesen etn yn ert fst 3 fos are big used for sop 082 beget aber ents Dung tena yes 2 YE ssi ane ons are on a Tuition fees 4 | lone Peete raling expenses. a Speraing expense 1300009 Determine the income tax due of Infotech = + Answer P350.000 (5-454) 10% a8 lated income < United ean Use sae dian casket Bet he an SPISIOON Detects mer en + Anoner P5000 00 2 aie 15tei9c30% + Thal books oi incom ducatonalinsttutons subject based on Special rules on Capital expe endures of Pro al institutions rictary Etec [The taxable income of a proprstary educational instituton sco in the same manner as an ordinary domestio coporaten Han asditon to allowable business expenses under the tax cade se educational institution, may, at its option elect either: + Todeduct expenditures otnernse considered as capital ose! ‘depreciable assets incured during the taxable year suchas eld expenditures forthe expansion of school faces or To capitalize such expenditure and claim deduction For ges for an alowance for deprecation there 240 Jacome Tages for Corporations aan sens ere Fe ag oe tine btn 2200) gn) 10% ‘eae et gop HSS a | acy. cere yox fh pet chine | oe ely | eeennes atte is Pee ran Sain ihren | vest exe om es os end | andr Scion 30, RC: fins eae | “respect fo income received by them as Bocctenincnn! mt Sco 30 RC The note teins Shem meaty Bana ch (hoa aor eistn tna on ta ow cat. arama ws on Pri Sarees. “random caret nse epson ane prope at nb Ps cath aes Oi/fEua csesspeccporos unless Urea enna (Us tighr ban ltaslcona 8 fo te sass pang PEL inthe rseig pages sant be apled a NSE and Cs ‘Tce rt Gorenert Cate (60) - Tha lowing se exente om parent te ‘Sr Crile stra, churches. parsonages ox covenants ape hee, roses. (eects an alas, bal, and improvements acy re, rd re ‘etl ear evetanl purses 2a Scanned with CamScannerJ Corseretions to qualify f0F exemption Under See sigments Must Be complieg weet 30 {SLMCD vs. Commissioner of 3957 dated June 3, 2011, the no, tes in order to be ent her Ino ope ha ‘haritable ins re the beni person, ments under Section he require ny of 's corporate purpose Nd such St Luke's, as a. 2X rate of 10% ‘orn wen Sty ea sana hace emo persons, education or religion, by as otherwise lessening the burden of g institutions provide for free ‘ps0 facto ented to tax exem (bighor: 308 ROT ZENIT the col ecaenstued again eve, it FT coe case eh ened aoa sano Arve income > elas income sept he ube a pode siemnne anes. ee Corporation duly orgenized ant Philippines. “Respondent” venue (CIR) vested with au the power to 2bate or cane the tax or any portion thereof appears to be unjustly ore eae scons copaan and el pops ne Pi st ct renglchosaies re dated a special xpoaios, Tree, geal ata JOE ewvet kane) whoper man ee eco) mai ERLE soft Lcd Govern Cots (LOC) Tre oteweg ae ees fon panel ne il py ta 6) Chiral Istiors,chaces, pasos 0 covers apt Ee, tet eteigm eis ed lod, bugs, Sd invents sk, Sniy trode mgas chara costa purposes et cessive assesed CIR assessed SLMCI petitoner is allege for under Section 30 of the Tax Code. 243 242 Scanned with CamScannerfor C, rs — national carers (resident foreign. corporat “ ia 18 Te al rate (ax rate lower than 2 590°, spect 2 ee tax treaty to which the Philippines 12 ©" xem! sis of 2PFproclty, such that an intemational ot eheome tx exemption t0 Philippine court Spemincome txmposed under the tax eeerol 2013) Con et 7 caries Carriers, gots Fe Code (Rag sprocity may be invoked by an international ‘ “Goss Beipnine Bilings Tax exemption” when is:Home a, sos: Hr evemplon o Phipne cates. The domeni com income fx tg exertion shal cover income taxes seg on? Covntry that may be imposed by the rel 14 Shall nog Sher types taxes that may be imposed by the relevant a0)" Pots ie at theta ows ofthe Home Country provi : fusinass fax, such aS gross sales tax, in respect o} busine cars shal nol be considered as valid a Ereopganinteratonal cae fom Philippine income oP teoprcly. Reciprocity requires that Philippine carers “fCT tinct {oho county of an international carrer are actually 2. Pe" enjoying thet taxexemption the a fore, f the from the Philippines in a continuous and uninterrupted fight, moc 8 the place of sale or issue and the place of payment Pech of thea dacuments. The gross revenue for passengers winoce cto gee the Philpines shal be the aclsl amoun dervod ‘or tae services for frst class, business class or economy class passe os case may be. on iis continuous and uninterrupted fight tfom ayes poitin the Philippines tots final destination in any port or panteFse county’, as reflected in the remitance area of the tax coupon fom, integral pat of the plane Ucket. For this purpose, the Gross Pig Bilings shal be determined by computing the monthly average rt al the tax coupons of plane tickets issued for the month per pin ie ‘estination, per class of passage (ie., frst class, business cas: ‘economy class) and per classification of passenger (i.e, au chi infant), and multiplied by the corresponding total number of pas flown forthe month as deciared inthe ight manifest. 244 Ieeome Liges for C, Hes foy Copserations = revenue for passengers whose tickets Te gisoss revere TOF PASSENge Tor feateges We ou thy reine Maes passage, as the case may bo, on a wean dass, ero gh fom any port oF point in the Prem and inte rt oF point of a foreign country shal eens, final Sage oso aerate established at the ne oh cA So agente dassfeation of passenger, tho data sy gig con face of nal destination. ation, a : philippine Bilings of International Sea Carriers, gross ne tr wal ging fone Pup °sage or “ORIGINATING FROM THE PHILIPPINES” shall nchute tho folowing 2F Where passengers, their excess baggage, cargo andi mt gh teommence their fight or voyage from any Philippine pc port or pont outside the Philippines Gnatered fights or voyages of passongers, thoir excoss baggage, ‘argo andlor mail originally commencing thei fighls or voyages fora any foreign port and whose stay in the Philippines is for more than forty fight (48) hours prior to embarkation save in cases vitiore the fight of the alplane belonging to the same ain company or the voyage ol the vessel belonging to the same international sea carrer failed to depart iin forty-eight (48) hours by reason of force majeure. CChattered fights of passengers, their excess baggage, cargo andlor mma originally commencing their fights or voyages from any Philippine porto any foreign port. 4) Where a passenger, his excess baggage, cargo andlor mal originally commencing his flight or voyage from a foreign port aligns o” /s discharged in any Philippine port and thereafter boards ori loaded on ‘nother airplane ovned by the same aifine company of vessel owned by the same intemational sea carter, the fight or voyage from the Priippines to any foreign port shall not be considered originating from ‘he Phiippines, unless the time intervening between arrival and ‘eparture of said passenger, his excess baggage, cargo andior mail tom the Philippines exceeds forty-eight (48) hours, except, however, nally 0 any other " 245, Rs Scanned with CamScannerot peoone Tage for Cary, f Pu, sn forty 2h (48) HOUTS is yy, cq rosenat wien the OY TEX avg, ro. 8 8) outs ot by ae Re oon terete od fo ad aera belongs oe a | - atte oe et Eason. vssel belongs ty 4 Sc] ree Oe re HNL VOVEDE TOT Me Phin A | ros Sa ae te Teed onignating from the gr] esses ve sic mes a conte pen Re oa x srvening per of Be le syssenget, his excess hay % ren #08 ae Saonage vnts or thes r@VaHGSLEG, oxchan sastat SOE enaonal aie shal be ina ori rine ad sal Be Subject to Grose gt 9 nec boarded ON an aitcrat frome srds a foreign destination. any oe pgpnes ovat fon excess baggage Which originates ous re goss et es and eesined tO any Paro = reg aco nON TT one actual revenue dives as ape] ed tase 09 gocuen forte #01 vance Bd ens caro ana al shall be Geisminai ges ree Sig om te cage terest. The amou ‘besos Tena be based on the amount appearing on thea SELaR Roetemine amet of Gacoute Grates yncs oe a erty ea Ss reports gererte ty ve 228 27 torent Ser (ATA GAS) for evay ba} SS agers of the monthly reports prepared by ta ek Fe OM tegen sales agets for cect csues ns perso Fla shal one ober hand ba determines tae Fe ee teams ne cargo mantestof the caries atu tip and transshipment is he case of the passengers passage documents or fight} ey wot @ port nthe Philippines and back, that portion of wie peranng to ba return tn to the Philippines shall not be included er 2 Gens Pope Blas. Inthe case of a fight that originates tor Prigaes bal vansshipment of passenger, excess baggage, carga alates dace lseuhere in another aircraft belonging to a dere some yan onsite BPRS er co mot ast arcary be Gross Philppine Bilings shall be determined based c: iter 0 be revenue comespnding to the leg flown from any part Prigpeas io ne port of transhipment 26 cone Tages or Corporations is interupted by force majeure resulting in ere 2 TS gr excess baggage. eight, cargo noses wpe 9aSSer Ee rated by anather ane company and 7 untry, the Gross Philippine Billings to ce f fight from the Philippines u ral 10 27, place IM 2 at portion of fit ott - ment 2 pased On Te eter ansshipren vote ON INTERNATIONAL CARRIERS ; sionalization of taxes on Intemational gotoy betind cara and RR 1-20" is 10 improve the The for in rism Industry by encouraging more Pe te CE ny omnes oe senese n ratte carte 1 TH gyctn ofintomation| plane and sip fares, ee the movement of goods and services and 3d investments [ded t0 facil ie oreign tourists 2 —qapaTRATION cHSEA Dubai yer x te cutent, anintematonal a carier proves teflon sis anspor of 258 cossreeits worse Gree recepts anspor orgs (Operating expenses ‘queston ts How much the income ax due? > Annet: P375,000 (PIM x 25%) eay netaiona og betas ctrecorcty (Question 2: How much is the income tax due assuring th caries sutject to a preferential tax rate of 1.5% on gross Piling bil eer an exising tax teat o international agreement? Answer: P225000 rawr 1s%) nei torsion using ete cae ent am ane aaa on eo > Answer il net Scanned with CamScannercome Tages for Cary - Pertti, ose, ap teratoral @ a giyssoies PID Get Ona caret en ss RE erage 2nd OP 2.000 049 iad Ces) cae ote og oy tn, f Stony tO pe yrme tte ee cnet ee et ,000,000 het team PSK) ore all 8) "st, ae salty ence ree ay gases ne PIES ss estes Pes a -acau fh ee tees ncaa. Bln ah 10.000 Stay et alsin Chia (Beng - Mana fight) oy Geek ses i Japan (Tokyo Mania fight) a est sales inte Piippnes (Mania ~LA) a, Gens cagars were TanstppedinTOROILR by — gaya | arate ane i Estat hers ding the fight Hania Toyo-Shrs, ToyotoLA-t5trs) Grosset sa88i9 LA, USAMA L.A) 1 essenger were tenshipped in Tokyo to LA. by ‘a eterentlae of same airline company + Estimated burs duig the fight ania to Tokyo rs; ToyyotoLA~15hrs) ‘ners, Pigs stn Cueston: How muchis the income tx de of Ar Jordan? -aswer.PE25,000 computed a oon: Grastetsaes inde Pipes Mania. Macaufigh) Prog Gs tletees in Ons ava. Bejng ight) 008 Gras tte ses nthe Pippnes ania -LA ah ania Teyp ely (24820) 290s Ges chet sas in USA Mala LA ight) Tell Goss Phippie”Blings Ine Tat Rte Income Tox Due Sona 248 Jacene Tage spor Capertion ; Gassiied a5: os a ey 5, Tas isha tan Rested Ico, ° ea net Us) jnits (OBUs) sasnr banking Uns OEY a brach sbinyofistecy Tofshore Bars ton localod in an Ofohore Fron! Cnt yin 828 OORorze bythe BS to arnt fs baring {ory whichis Guy rs in accordance with the provisions of PD. 1034 EE ee pear No. 1369. They do foreign eels at Ne ln banks, vere an exporters as fong as the funds are remited frm abroad freough the banking system. a ee main who aes 2 ronal Fars it eet es az Fats aprtons on foe bank ut be Pr “tee san oats Fobun 2,208 (080s are allowed to provide all traditional banking services to non residents in any currency other thari Philippine national currency. Banking transactions to residents are limited and restricted. Income Exempt From Tax: Income derived from: 4. nonresidents 2. Foreign currency transactions with local commercial banks; and 3. Foreign currency transactions with branches of foreign banks authorized by the Bangko Sentral ng Pilipinas (BSP) 4. Foreign currency transactions with OBUs in the Philippines Income Subject to 10% Final Tax: Interest income derived from foreign, currency loans granted to residents ot ons 10 residents other than OBUs of local 249 Scanned with CamScannerais tore ofret income. Ry his engaged in any of! ration and planning ‘coordination and business «, oe levg marol and sales promotion ‘personnel management “and development services And project ge, ‘support and maintenance oe : Secs. oF ane Feeds ser of yes ech? erie payments (0 ates watnoang ax (EWN) ipensation income subject duals oF corpor hat constitute an RHQ and an ROHQ? ‘an RHQ isan office whose purpose is to act as a ranch of a multinational company engaged gencpaly sewes as a supenision, commu {enter forts subsidiaries, branches, or affiliate frdoiher for'gn markets, and which doe: Phigpnes. An ROHA refers to a foreign business ent to deve income inthe Region and in ‘adminisvation and and procurement of raw aduisory services, marketing control and sales promoti personnel management, istic services and development services and product development, technical suppor ‘maintenance, data processing and communication, and bush evelopment. 250 cUMULATED EARNINGS TAX ‘orporations) is that then be liable to income tax th nee to them, they would incur ota in respect to tings and profits ofthe corporation. ‘accumulated earning “umblated earings taxis being ‘oration for the improper accumulation of Improper Nee property ae coro 1@ consequences, the s is due to some other causes, such as the use of for the reasonable needs of the business, such purpose would not generally make the accumulated or undistributed feemings subjact to the tax. However, if there is a determination that a has accumulated income beyond the reasonable needs of the accumulated earnings tax shall be imposed, accumulated earnings tax (IAET) is imposed on income earned starting January 1, 1998 by domestic corporations as defined under the Tax Code and which are Classified as ‘closely held corporations”. 'nsurance companies 251 Scanned with CamScannercose vp at east 0% of the outstanding capital stow wevombined voting power ofall classes of stock, entitled 4 Sees mdet By oF fF nol more than 21 gr tet ae oporaton a publ eld corporation. Domestic cr"? ies unde Copovations (BIR Ruling 025-02). ues in deternining whether or not @ corporation jg corporation: Family and Partnership ownership axable partnerships onsaxable joint venture nterpises registered With PEZA ang undoy Sint Development Act (BCDA) and Special gases my pets corporations The caer f 8 coMoraon TOF the purpg rare ce Hl carton ora Pu of a, ee Cong thy ox Paro? oant | cai Vote, forthe aforementioned definition Borat Fe, theretoratons nt! ‘4 Stock not owned by individuals: ‘Sock ovned drecty or indirectly by oF for estate or trust shall be considered as| shareholders, partners or beneficiaries, 8 corporation, | Foporiignat PrePonienata | Aa indviual shal be considered a8 owning ng ect of inde, by o for Fis tami. or 1, 9k oy | “Family of an individuaf'includes his brothers oY 330,000 4. 720,000 $2,000 SPECIAL, CORPORATIONS 415, An international air cartier doing business in the Philippines shall be subject to 4.3% percentage tax on gross receipts from cargo operations briginating in the Philippines only. b. 27% income tax on Gross Philippine bilings ony. Cath 3% percentage tax on gross receipt from cargo Dperations originating in the Philippines and 2 A% income tox on Gross Philppine bilings. 4. Notiner the 3% percentage tax on gross receipts from cargo Speratons originating inthe Philippines in the Philippines nor 2 ith income tax on Gross Philippine bilings. cxrporations 276 Scanned with CamScannerChapter t se the following data f {ata forthe nox two (2) questions: ines, an intemationat a nes ‘national ai carer showed the lowing gross Destination Gross receipts USA 8,000,000 nit 4,000,000 Phipines 3,750,000 ilippines 2,100,000 " ftom the Philippines to the shipped tothe United Kingdom. + 26% of alts revenues were from transport of cargoes and goods. 20. The Income tax payable for 2018 is ‘a. P127,500 ©. P170,000 », 150,000 4. P209,000 1. The total tax expense of Pacific Aitines in the Philppines for 2018 is 4 a. P187,500 ©. ie eines . P210,000 4. P260.000 . P1,800,000 . P3,000,000 carrier is an jonal carrior (a resident foreign the income tax due is ©. P1,800,000 . 3,000,000 income, P300,000 me from operations, P2,000,000 The correct branch remittance taxis: ‘a. PO ‘c. P375,000 . P300,000 d. P480,000 co 5 tax based on transport of passengers and goo Slatement f Tue Tue False False Statoment 2 Two False True False Se pal im Service Contractor and Subcontractor of the choices 278 Scanned with CamScannerEEE Chyter Exercises ~ Cops 4 Chap , : 24, nghore Banking Units (OBUS) ae 1x exEMAE OM incOMe erg Maser Exercises ~ Copperations from ith local commer vance Les . transactions al a 7a. adver ing Institute, an educational . \ Fowpramery a folowing data or curent taba year" Mtuton Powe Lon i Income fom ton ee, en eur 3,500,000 7 trom tren curency bona a School miscotanasce, s, nrarestincome dered Fi : Dividend incomes = 5 cass lant ony Domest arora Giant ony Foren espera” 200.000 Bent income (ret of 8% wthholsing tax) 4,900,000, income isnot from a related trade, busing, = perating expenses 000,000 wich fhe folowing Beare educational institution? 8a The Income tax payable ofthe schoo! i: a ty of Sees pe rosptal where medical raduates arg & Bi790,000 ©, 500,000 2 earn . P1550,000 @. 400,000 . 2. Aptvate educatona insttuton ey recogrizd by CHED has the : {olowng data forthe fiscal year ending acs 0 S018 “Tlton and cheese 5,000,000 a Rent income from canteen and bookstore: a0 concessionaire, net of wala tor Dividend from domestic corporation 500,000 ye Interest on bank depos net ot 16,000 ix DUTPOSES, | 3 * wees ay Operating expenses 4,500,000 ‘option ofthe schag During the year, the school constructed a 2 storey school building ‘costing P2.000,000. itis the schoof's policy to deduct this cost in full, during the taxable year. The income tax due and payable is 2. P152,500 ‘. P205,000 b. 496,000, 4. 500,000 the estimated Ide of the 2 09k + proprietary hospital had the following data for 2018: Gross receipts from patients and laboratory P8,500,000 Rental income net of 5% withholding tax 1,425,000 Hospital operating expenses 2,200,000 + income tax payable ofthe hospital for 2015 is: 3. P105,000 . P65, 000 . P120,000 €. P540,000, Mesigasig University is @ private educational institution had the feliowing data for 2018: Tuition fees 'P4,800,000 Rental income (net) 4,940,000, Total school expenses Scanned with CamScannerOM 7 soRATE INCOME TAX (MCIT) Me My 10 which of the SOOM Foakdony tng Manatee CORP 82. Tho MCIT shall NC porate income tax (MCIT) does not apply i ‘exempt rom income lax By vite of tag 53, The minimum com ard of Investment, “The corporation is | granted to it by the Bo | howays amma partnership » Thotamayor a : tonly ee c¢, Both Land I only Snir nor she minimum corporate income tax (MCIT) does not apply to a ns suspended by the Secretary of Finance due ‘rising from prolonged labor conparation Imposition wa a corporation's heavy losses dispute bb. Corporation Corporation is exempt from in holidays granted tai by the Br 4. Allof the above rises from a “prolonged labur dispute” means arising rom a stike staged by the employees which ‘sb (6) months within a taxable period. ‘ary shuldown of business in its inital year of operation; nie tax by virtue of tax of Investment; 35, Substantial lo a. Lose sted for more th The strike resulted to temp 6 operations. 4 282 ———— Aapter brerives Caperations a0. Force mane, ‘2. Acause de to tosige Bigatti 0 eterna by “et of Go & Armed conti wat fad d. Allof the atiove, ee 7 Logiimate “business roy sustained 2B. Foren esate cr ombezzomen Felt economic rearans a determined bythe Secretary of © Balhof the above 4. Nono of he above so the following data foc tho nox eight () quesbons: ‘A domestic corporation stated operat corpora aralons in year 2004, The following data on income taxes dung the years 208 2015 were made avalabe Year BasieTox “ ciT “Excess of MCIT over ‘Normal coms. * shall include substantial losses 2008 25.000 100,000 75,000 2009 130,000 150,000 20,000 2010 200,000 390,009 : 2011 7 300,000 300,000 2012 100,000 0,000, 2013 150,000 60,000 2014 = 8.000 40,000 32,000 2015 11000 0,000 49,000 DETERMINE THE FOLLOWING: 438. Income tax payable forthe year 2008 ‘a. 25,000 . P75,000 . 100,000 4. PO 39, Income tax payable for the year 2009 ‘a. P130,000 ©. P20,000 b. 150,000 d. PO 40, Income tax payable for the year 2010 ‘a, P200,000 . 105,000 b. P190,000 4. PO 41, Income tax payable forthe year 2011 ‘a, P300,000 . P105,000 Scanned with CamScannerhye Exervises Cope » 200,000 “nm «42, income tax payable for year 20% (105,000) 2 00000 an 4“ rernmageaite ern Oc 05,000 £ Fiahom “a Income tan pnyle forthe aaa 32.000 2 Peon 45. Income x payee for the e ex13000 #000 | rad improperly Accumulated Earnings Tex crt me 2 | 46 Thm reser gation te opion 10 bo taxed On Grose fears | provided " “te tax rate is 19% | ‘aa aot ett es oom gl Ani onal source des not exceed 55% | 11 ee eetevocoble for 3 consocutive years during which | eel aton’s qualfied under the scheme. | Only mustbe complied © I, I and Ill must be comply | Only and i must bo 6. None of the above compliod 447, One ofthe folowing is wrong. Which is it? The gross income taxa | carporation is: ‘a. Applicable to domestic corporations ‘Applicable to resident corporations ‘Applicable to non-resident corporations. May begin only baginning on taxable year 2000 a ina > 4 48, Gross income taxalion results to: ‘. Loss discretion on the part of tax evaminers '. Lower income tax revenues c. More graft and coruption 4. More complicated tax computations. aati, iis 204 hyper Exerises — Coperttives Which of the following statements about im; accumulated 49 Jommings tax is FALSE? a 2. sth nate ofa penalty t tre corporation for improperty ‘accumulating earnings. b. aims to deter the avoidance of tax on the part of the shareholders on earings received, Iundistbuted earnings are used for the reasonable needs of the business, such earnings is not subject to IAET. 4d, It shall not be imposed despite determination that a oiporation has accumulated beyond reasonable needs ofthe '50. Which ofthe folowing isfare prima facie instances of accumulation of profit beyond the reasonable needs of a business? 1. Investment of substantial earnings and profits of the ‘corporation in unrelated business or in shares or securities of Unrelated business, I. Investment in bonds and other noncurrent securities. Ill Accumulation of earings in excess of 100% of paid up capital, not otherwise intended for the reasonable needs of the business as defined. a. Fonly be. Land I only 651, Improperly accumulated earnings tax will not apply ifthe accumulation is for: |. Additional working capital 11, Expansion, improvements and repairs IIL, Debt retirement IV. Acquisition of related business, or the purchase of stock of & related business where subsidiary relationship is established II Ill and IV should be present Any two (2) of the conditions should be present ‘Any three (3) of the conditions should be present ‘Any of the conditions . only dd. t,land it ‘52, Which of the following statements about improperly accumulated ‘earnings tax is FALSE? a. Once a corporation is subjected to corporate income tax, the |AET ‘ean no longer be imposed. i corporate earnings are distributed to shareholders, such ‘earings shall not be subject to IAET. Shareholders are liable to income tax for corporate earnings received, b. Scanned with CamScannerporations Clr Exercives — Ce bp, Is required to fle an income tax return although not required 10 pay the Income tax Needs to fle only an information return and will not be required to pay the income tax 4, Needs fo file an information return and pay the income tax eating ‘porate earings shAronOKor gp ah amis: "ay Charter Fecovivs 7 4. Ifthore is no distribution of ‘not hablo for income tax 0” 8 ations is not subject 10 Income tax fitutions duly registered with the system developed to provide taxpayers particularly the non ing 5Y* i rs wih accassbe nd convenient sence IvoUgh €85Y ation of tax returns trig Lee ree eee me out Tax Exempt Corporations ‘Which ofthe following eorPoe 1. Propmotary educational ns opartment of education readquarters {in the Phiippines) of a mut. ma 4 ¢. BIR Forms a and control & Governmentowned snmentowned or contoled Corporaton, system developed and maintained by the BIR for electronically Including attachments, if any, and paying taxes due c. Profes Paiippine Amusement and Gamin vnronal Development Corporation fling tax returns, Ce fr: d, Allof the above ional Regulation Commission (PRC) i a. Large taxpayers: fn eiccl See eee B TREO rh corte ee pted by ote Economic Zone Authority (PEZA) and Bureau of Investments (eon) ‘None of the above ’ 4 re nex fourteen (14) questions are based on the following data: Tananiah Corporation provided the following data for calendar year ‘ending December 31, 2018: ($1-50) Philippines Abroad $40,000 son March 1, 2019. ‘The company ia reporting purposes starting Filing of income Tax Returns 28, 2014. When is the due date 56. A corporation started its operation decided to use fiscal year for financk March 4, 2013 and ending February al Income Tax Retin * income Tax Return Quarter Annu a uly 30, ‘Apil 15, 2014 6 July 30,2013 June 15, 2014 e hoy 30, 2013 ‘pil 30, 2014 fy Gross Income 4,000,000 “ uly 30, 2013 Dec 000 ° aa ember 31. 20 Deductions 2'500,000 $15,000 457. A.corpoation whi is included in exempt corporations under Secion Cesta $3000 30 of the National intemal Revenue Code (eg. organized and poral 3 61, Ntis a resident corporation, its income tax is: ‘operated for charitable purposes) which did not file its art . fore purposes) which did not fie its articles of naa Pet », P1,280,000 4. P525,000 ion and by-laws with the Bureau of internal Revenue: ‘2. 15 requited to fle an income tax roturn and pay the income 287 2668 Scanned with CamScanner. 300,009 @. 128.000 J, its income is © 300,000 ¢. 128,000 . 300,000 d. P128,000 spre a snes copotion DA 1 a 88 i co noes) ts come taxi: esa on eye prso.000 ©. P120,000 pPea00 4d. P85,000 ss vine proceding sumer, but the domestic corporation roterospial, sregard fax paid abroad) Is income taxis: fe 2 P2000 ©. P10,900 2 Pen000 4. P120.c00 {9 the coporaton is 8 non-stock educational institution which user fs eserves or income for educational & charitable pupos. ‘nea taxis a PO . P120,000 ® P730,000 d. 64,000 Tiga dometccorraton is income tax after ax crests 4 Pesand ‘c. 880,000 000 , P812,500 288 number but it opts to claim the tax paid abr road sme. its income taxis . P80,000 &. 910,000 pate ecucatonalinstuon ts income tax alr eet °7 fe. 275,000 & 125.000 & 180,000 asnow aoroft hota Rs nce tax ar tance seis 1 “pC 75,000 c. P275,000 & _pssz.009 &. P180,000 wis a resort coporton pls expanses win and SiS 74.4 Gp 000, unatocated (deregaré ongnat data on expenses). its hreame axis incorne *** PBOO,000 c. P480,000 & 320,000 6. P128,000 289 Scanned with CamScanner