‘TAXATION, "| incnnduas wo are nat pines ~~) Non-resident alien | The Review School of Accountancy Tel, No, 735-9807 & 734-3989 ‘TAMAYO/LIM/CAIGA/MANUEL ‘TX.504: INCOME TAX CINDIVIDUALS, ESTATES AND TRUSTS) Susie finan 1) Those who are crutns ofthe Pip Constitution (on February 2, 1987); 2) Those whose fathers or mothers are zens ofthe Pipines; 3) Those bom before January 17, 1973 of Fipno mothers who eect Pstppine [preening a ithe ie ofthe adoption ot the 1) A cen ofthe Pippin who establishes t the ststacnon ofthe Commissioner te fad of his physcal presence abroad wth a definite intention to reside theron; 2) A aazen of the Phppines who leaves the Philppines dunng the taxable year to reside ‘abroad, ether 2s an immigrant or for employment ona permanent bass; 3) A ctizen of the Philppines who works and derves Income (rom abroad and whose trometer eur hm to be psy preset abo nob ne rege year, 4) A ctizen who has been previously consdered as non-resident citren and who ares the Piipnes at anytime ding the tarabe yea to reside permanent i the Plippnes shal ‘hence be Weated as 2 non-resident ctizen fr the taxable year in which he aries in the | hutppines with respect to his income denved from sources abroad unt the date of is arma} Inthe Phippines; 5) The taxpayer shall subma proof to the Commision to show his Intention of leaving the ‘Phiippines to rede permanently abrozd orto retum to and resce inthe Pippin as the irae igs eee 1) "Resort sen: 2}. Nonesient lending business nthe Pipes 3)_Non-redent ten oot ding busines inte Pines. ' “ent whose restence win te Plppines and wh soa bien ee 1) An ae who ves he Ptpines wh no det tenon a3 ois ay, 2) One who comes to the Pippin fo a dfints purpose which ns nature woud equie a] extended say and otha ene makes is ame temporary i he Phpines, akhough may bbe is intention tal times to retum to Ns domi aba | 3) An abe who has ecqured resdence nthe Pulpnes retains NS status as such unt he __—sbandons the same and fom the Pappas, = “individual whose resdece Is not wahin the PiSpines and wo & note Gian thecon | 1 One who comes tothe Pippnes for a define purpose which in is nature may be promtiy ‘accomgished 2) A eon-resdent alen individual who shall come to the Philppines and stay therein for an Segre proto mare hn 189 days dreary eda er Sal be dered 9 ro inte vagina eGo business in the Pil "The terr taxable income’means the pertinent items of g ‘speciied in the To Cade, less deductions If any, authorized or such types of income by the Tax Code or other specialiws. a) Tse: 2504) 0), 4 $1e.25.(0) Tse. 2400) TX-501ReSA: The Review School of Accountancy Page 2 of 6 4, Rates of Tax on Taxable Income of indivioual 3. ettective Jonuary 1, 2038 Over | But nt over ' 750,000, P2500 soo 00° j woeco | teoe00 | 1s. Zeo0.000 | 1 2900)000 ano.c0o | 800,900 } 1. effective January 1, 2023, Ie oale income pyc red individuals, whether chen, resdent cr ronresdent. aliens, | compensation, shall fle a retum for the taxable yen to sclude the income of both spouses, but where tt i | | impracticable for the spouses to fhe one return, cach spuase may fle a separate return of income but the returns 50 | ‘led shal be consolidated bythe Bureau fr urpozes af venicaton fo te taxable year. (See. 51 (0)} For morted indwiduas, the husband and wife, subject othe prowsion of Secton 51(0) hereof, shall compute | separately ther individual income tx based on thelr respuct total taxable income, 1 any income cannot be defintely atributed to ot entified as income exctuswely eamed or realized by eter of | the spouses, the same shal be divided equally between the spouses forthe purpose of determining ther respectve | taxable income, Minimum Wage Earners___ Se —_ ‘The term “minimum wage earner” shall ero a woriGr ia be private sector paid the satutery minimum Wade, for to an employee in the jblle sector with compersaton income of not more than the statutory minimum wage tm the non-agncultural sector where he/she \sessigned, | Minimum wage earners shailbe exert from the payment of income tax on their taxable income. “The hoday pay, overtime pay, night shit ferential pay, and hazard pay received by such minwmum wage earners shall likewise be exempt from income wx. . Individuals Earning Pu Hocome . . Indias earring purty compensavon ingore Sn Be Wied babi onthe graduated core tx ates above, {._Setf-Employed Individuals and/or Professionals Sell-employed individuals and/or professionals shal av 2. graduated income tax rate on taxable nce oF '. an eight percent (834) tax on gross sales or goss receipts and other Non-operating income in excess of TWO | hundred fifty thousand pesos (P250,000) n leu of the graduated income tax rates and the percentage tax {___under Section 116 ofthis Code. 9 Mixed Income Earners of elecaes TF) Allincome from Compensation ——_____| Graduated 2) All Income from Business or Prachce fof Profession S) If Total Gross Sales andfor Gross "| Graduated income tax fates above (Section 24 A), or Receipts and Other _ Non- Operating Income Oo Not Exceed | ight percent (8%) income tax based on gross sales or gross the VAT Threshold recepts and other non-operating income @.Aeu af he asus ‘acunetaratetunder Secon and epee arin eeonL ; ‘ace ante asad, sks the troayer sigs the 1° Quarts Return of he trae yar the | ; tein te cede Pe econe tw, Ue age Bal be cote aeg i tia ae sr en oem | | ‘mended, and ‘sucheecbon shal be eevcaie. He shal ao be tbl to i Innes aLRgSA: The Review School of Accountancy Page 3 of 6 {he fotoing cannot ava of the 8% ncome ie Fate opi 4.8 VArregserodtanpayes regards ofthe gos salesects | 1 Tapayrs no ae sje! to Other Peceiage Taxes under Tete V of the fax Code, a amended excep thse stjct under Secbon 116 Of thesame Tite strove share ton cas | ces eons! oll aves (G) i of er | 1) eta Gros ies anor Gaon | If ataninedutogagnentoaieyes atapayersesias orients exceeded ‘crs snd Oter Non Operating te VAT tres (3,00 000.0), hese sl tomatic be steed te Iva taveed the VAT Trek! | graduneaesundrSecion24(AK2)a)theTaxCodeasamended | i 1 ‘noon AT regteedtaxpye who tial opted to avait the 8% opbonbut as i ‘iceded the VAT teshald diving the able year, sh be ste to 3% | ‘Percentage Tax onthe fst F3,000,00.00 of his/her ross sles/recepts under i ‘Secon 116 he Tat Cade, as amended, wethout poston ofan pest i ‘payments UnelymadecnthetlovingonbwtentheWvesbasreaced, | i | 1 The excess of vette satbesubjectoVAT prospec andthe B%ncome taxprevinatypail sabe ceed tothe Ince Tax Due under the graduated | 24AX2)(ofthe Tax Cade, 35 ‘5. Optional Standard Deductions (OSD) for Individual Taxpayers ‘3. In leu of the deductions alowed (temized), an indivdual subject to tax under Section 24, oer than a nonresident aben, may lec a standard deduction nan amount not exceeding forty percent (40%) of his gross sles ‘or grossreceipt, as the case maybe. '. Unless the taxpayer signifies in his return his intention to elect the optional standard deduction, he shal be | considered as having avaled himself of the temized deductions alowed. ‘cA individual who ts ented to and aimed. forthe optonal standard deduction shall not be required to submit ‘with his tax return such financial statements otherwise required underthe Tax Code. |. The said individual shall keep such records pertalning to his aross sles or gross receipts. 6 vercaes _ i, C80, ror ‘erloymert. For 201, Me. CSO earedatatalarabecompensaton come ofP1,060,000.00. How rauch & his mene tx abity? He EQ operates comer sare wes rs botoepng Soees ter lens. In 208 her ros ses amounted 19 P800,000 0, m ded ae ecegs tom bocce secs! P,000 08 Ske akeay sede intertonto betanedateiincometaxraterter 1 quaterretur, How much is thence tax laity forthe yer? cH. EQ ebove eedto sty her tenton tbe ted nme tx rate on goss ss mer Quarter Ine Tax Reta, and she icumed cist of sales and epeating expenses aneurin to PEDDOE0.00 and 72000000, respecte atta 00.0, How mach inet? 4 ML HRU operates» comenence se wile sh oles toticenng Serees ther ces. In 2018, ber goss ses ‘ourted 7,909.00, aon toherosreepttrmbaokieepngserrcesefP00 0000. errecrdadcstl ‘goods sald and operating expenses wore P,325,000.00 and 320,000.02, repectve. ueston 1. How much s Ms MRUS tarable income and income tax due she optedto ava the OSO? 2 Can he aval ofthe 8% option? | 23 How much berncoetaxiabity ste sgnesherintentontobetaxedat income tatrateiner 1 (Quarter return? fn 2018, Mr. MAG, a Fnencl Comrie f AB Company, eae annualompensabonofP,S00,000 0) nce! 13 month and ther beefs the amount of 120,000.00 tut net of mandabry cortrbutons to SSS and Prancath Adelromenplogentncane,beowsacomerionetre ios sales, 0,00. scotland ‘opeating expenses are F,00,000.00 and ECC,000.00, respecivey, and with aoroperaing income of 100,000.00 (Question | ~ How much is histaxdvefr20184 heopedtobtaxedat eight percent(8%)incometarrateot hs H ‘rossalestorhisincoefrom business? 2 ~ How ch ister cuefr 208i hedidraontor the ight percent (8%) moome tax based on gross salesreceits and eter non operating income? | 1 1 i | {A husbond and wife, resident cttzens, with one (1) qualified dependent cid, had the folowing lnm an expense forthe yar 208. The bond waived esol exemption ave ot ‘Salary ofthe husband, net of 50,000 wtfoting tax eamon | Salary ofthe wie, gros of P8000 wholing tax 00,000 Gros proessioal nome, husband, grossa 15% wanking tax vsooe00 | Cost of serves, husband i __-Bepenees, practice of profession ce ‘Estates and Trusts (Batch 37)