Situational Problem No.

1:
Kathlyn, of Norwegian parentage went to the Philippines for a short lecture series wherein she
lectured about how to avoid bullying. The lecture series lasted for four weeks. The following
details pertain to Kathlyn’s lecture series in the Philippines:
Professional fees for lecture (P80,000 a week) P 320,000
Income from onsite bookselling 140,000
Travel expenses incurred, with receipts 120,000
Food and accommodation expenses incurred, with receipts 100,000
How much is Kathlyn’s Philippine income tax due?

ANSWER:

Professional fees for lecture (P80,000 a week) 320,000

Income from onsite bookselling 140,000
Gross Income 460,000
Tax rate 25%
Income Tax Due 115,000

*KAPAG NRA-NETB - isusugal sa 25%

Industrious as he is known, Arthur, a non-VAT registered resident citizen, works as a
government employee at daytime and accepts clients for accounting work after office hours. At
the same time, Arthur maintains a t-shirt printing shop to earn more. For the taxable year ending
December 31, 2021, Arthur earned the following amounts:
Taxable compensation income P 850,000
Gross receipts from accounting work 1,500,000
T-shirt printing shop
Gross sales 1,400,000
Cost of sales (800,000)
Gross income P 600,000
Operating expenses (400,000)
Net income P 200,000_
1. Assuming that the availment of the 8% income tax option is proper, how much is
Arthur’s income tax due?
2. How much is Arthur’s percentage tax due?

ANSWER:

1. Taxable Compensation Income 850,000 kapag mixed income earner

First 800,000 130,000
On the excess (850,000-800,000) * 30% 15,000
Income Tax on Compensation 145,000

Gross receipts from accounting work 1,500,000

Gross sales 1,400,000
Total Gross Receipts/Sales 2,900,000
Tax rate 8%
Income Tax on Businesses 232,000

Income Tax Due 377,000

2. 0

INCOME FROM BUSINESS/PROFESSIONAL 8%

MIXED INCOME EARNERS Hindi na magleless ng 250,000
kapag mixed income earner, hiwalay ang compensation income

hindi na magbabayad ng percentage tax due kapag subject na sa 8%

NOW: Percentage tax due is 1%
ANSWER:

1. Taxable Income - Philippine Cheetah 300,000

Taxable Income - Philippine Dolphin 200,000
Total Taxable Income 500,000

First 400,000 30,000

On excess (500,000 - 400,000) * 25% 25,000
Income Tax Due 55,000

2. 0

3. Gross receipts - Philippine Cheetah 4,000,000

Gross receipts - Philippine Dolphin 2,000,000
Total Gross receipts 6,000,000
Tax rate 3%
Percentage Tax Due 180,000

kapag non-vat, papalo ka sa OPT

PASSIVE INCOME
within the Philippines - FWT
outside - basic tax