Exercise 9

Exercise 9 – 1: Identification.
Identify the classification of the following individuals

whether they are resident citizens (RC), non-resident citizens (NRC), resident aliens
(RA), non-residents aliens engaged in trade or business (NRA-ETB), non-residents
aliens not engaged in trade or business (NRA-NETB), in 2015.
1. Kristi, a Filipina who was born in Ilocos is now working as nurse in one of the
leading hospitals in Canada.
 NRC
2. Lawrence, a Japanese national, has been living and working here in the
Philippines since 1994.
 RA
3. Christian, a Filipino residing in Quezon City, visited Hong Kong for a three-day
leisure trip.
 RC
4. Edward, an American member of a famous international band, performed in a
two-day concert held in Cebu and Manila.
 NRA-NETB
5. Edwin, a Swedish national and a resident of Panama, stayed here in Philippines
from February 2015 to December 2015. He is working on a certain project for a
local company.
 NRA- ETB
Exercise 9 – 4: John and Erika both Filipinos, got married four years ago. John has his
own auto repair shop which generated revenues worth P720, 000 and incurred
expenses worth P246, 000 this year. Erika is an employee of a leading call center and is
earning P425, 000 a year. They now have three minor children and legally adopted, a
fourth who is also a minor.
1. How much is the basic personal exemption of John?

 P50, 000 a year
2. How much is the additional personal exemption of John?
 P100,000 per year
3. How much is the taxable income of John?
 P324, 000
4. How much is the income tax payable of John?
 P64, 800
5. How much is the basic personal exemption of Erika?
 P50, 000 a year
6. How much is the additional personal exemption of Erika?
7. How much is the total taxable income of Erika?
 P425, 000
8. How much is the total income tax that will be collected from Erika for the taxable
year?
 P50, 000
Exercise 9 – 7: Agua, who is married and supporting his father and two
dependent children, has the following income and expenses.
Wages from work P300, 000
Bonus from work P20, 000
Income from sideline P50, 000
Gross income from pastry business P130, 000
Expenses from sideline P44, 000
Expenses from pastry business P97, 000
1. How much is the total gross income?

 P500, 000
2. How much is the basic personal exemption?
 P50, 000
3. How much is the additional personal exemption?
4. How much is the taxable income?
 P359, 000
5. How much is the income tax due?
 P71, 800
Exercise 9 – 8: Basilio is married and has five dependent children. He has the
following information. Do as indicated.
Business income from the Philippines P2, 000, 000
Business expenses from the Philippines P300, 000
Business income from the US S40, 000
Business expenses from the US S6, 000
The exchange rate is P45: S1
1. He is a resident citizen.
a. How much is the total gross income?
 P3, 800, 000
b. How much is the basic personal exemption?
 P50, 000
c. How much is the additional personal exemption?
 P100,000
d. How much is the taxable income?
 P3, 080, 000
e. How much is the income tax due?
 P766, 000
2. He is a non-resident citizen.
 P2, 000, 000
 P50, 000
 P100,000
 P1, 550, 000
 P382, 500
3. He is a resident alien.
 P2, 000, 000
 P50, 000
 P100, 000
 P1, 550, 000
 P382, 500
4. He is a non-resident alien engaged in trade or business. There is no

reciprocity clause.
 P2, 000, 000
 0
 0
 P1, 550, 000
 P425, 00
5. He is a non-resident alien engaged in trade or business. There is a reciprocity

clause and the foreign country is giving a P40, 000 personal exemption to
Filipinos on foreign country.
 P2, 000, 000
 P40, 000
 0
 P1, 660, 000
 P415, 000
6. He is a non-resident alien engaged in trade or business. There is a reciprocity
clause and the foreign country is giving a P55, 000 personal exemption to
Filipinos on foreign country.

 P2, 000, 000
 P55, 000
 0
 P1, 645, 000
 P411, 250
7. He is a non-resident alien and not engaged in trade or business.

 P2, 000, 000
 0
 0
 P1, 700, 000
 P425, 000

Exercise 9

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Exercise 9

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Exercise 9 – 1: Identification.

Identify the classification of the following individuals

1. How much is the basic personal exemption of John?

1. How much is the total gross income?

4. He is a non-resident alien engaged in trade or business. There is no

5. He is a non-resident alien engaged in trade or business. There is a reciprocity

a. How much is the total gross income?

7. He is a non-resident alien and not engaged in trade or business.

a. How much is the total gross income?

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