Jamesolamin, Phoebe Nicole Y.

2019-02864
BSBA OM 2-1 CBM 0003-1

CHAPTER 2: Individual Taxpayers

2-1. Classification of Taxpayers

1. Resident Citizens (RC)

2. Resident Citizens (RC)
3. Resident Citizens (RC)
4. Nonresident aliens not engaged in trade or business (NRA-NETB)
5. Nonresident aliens (NRA)
6. Resident aliens (RA)

2-2. Determination of Applicable Tax

TAX TYPE TAX RATE

1. FWTx 20%
2. FWTx 7.5%/ 15% TL
3. BTx Tax Table
4. FWTx 20%
5. Exempt -
6. BTx Tax Table
7. BTx Tax Table
8. BTx Tax Table
9. BTx Tax Table
10. BTx Tax Table
11. FWTx 20%
12. FWTx 10%
13. FWTx 20%
14. BTx Tax Table
15. BTx Tax Table
16. FWTx 20%
17. FWTx 20%
18. BTx Tax Table
19. Exempt -
20. FWT 20%
 21. FWTx 25%
22. BTx Tax Table
23. Exempt -
24. FWTx 25%
25. FWTx 20%
26. FWTx 20%
27. FWTx 10%
28. BTx Tax Table
29. BTx Tax Table
30. FWTx 20%
31. FWTx 25%
32. CGT 5%&10%/15%
33. Exempt Sub. to OPT
34. BTx Tax Table
35. BTx Tax Table

2-3. Determination of Income Tax Due/Payable

1. a. Exempt
b. Exempt
c. Income Tax Due = P130,000
d. P746, 000
Computation for letter d:
Tax Due:
1st P2,000,000 P490,000
Excess over P2M = (P800,000 x 32%) 256,000
Total P746,000

2. Income Tax Payable = P95,000

Computation:

Gross sales P2,800,000

Cost of sales (1,200,000)
Operating expenses (650,000)
Taxable net income P950,000
Tax Due:
1st P800,000 P130,000
Excess over P800,000M = (P150,000 x 30%) 45,000
 Tax Due P175,000
Less: CWT (80,000)
Income Tax Payable P95,000

3. Income Tax Payable = P124,000

Computation:

Gross sales P2,800,000

Less (250,000)
Balance subject to 8% tax P2,550,000
x 8%
Tax Due P204,000
Less: CWT (80,000)
Income Tax Payable 124,000

4. Income Tax Payable = P215,000

Computation:
Gross sales P2,800,000
Rental income 400,000
(P380,000/95%)
Cost of sales (1,200,000)
Operating expenses (650,000)
Taxable net income P1,350,000
Tax Due:
1st P800,000 P130,000
Excess over P800,000M 165,000
= (P550,000 x 30%)
Tax Due P295,000
Less: CWT (80,000)
Income Tax Payable P215,000

5. The 8% optional tax is not applicable because the total of the gross sales and other
operating income exceeded the revised vat threshold of P3,000,000.

6. Income Tax Payable = P222,500

Computation:

Gross receipts P4,000,000

Cost of direct services (1,800,000)
Other operating expenses (825,000)
Taxable net income 1,375,000
Tax Due:
1st P800, 000 P130,000
Excess over P800,000M = 172, 500
 (P575,000 x 30%)
Tax Due P302,500
Less: CWT (80,000)
Income Tax Payable P222,500

7. The 8% optional tax is not applicable because the gross receipts exceeded the
revised vat threshold of P3,000,000.

8. Income Tax Payable = P212,000

Computation

Compensation income P1,400,000

Gross sales 2,800,000
Cost of sales (1,200,000)
Operating expenses (650,000)
Taxable net income P2,350,000
Tax Due:
1st P2,000,000 P490,000
Excess over P2M 112, 000
= (P350,000 x 32%)
Tax Due P602,000
Less: CWT
On compensation income (310,000)
On business income (80,000)
Income Tax Payable P212,000

9. The 8% optional tax is applicable because gross sales did not exceed the revised vat
threshold of P3,000,000. Computation for the income tax payable:

Gross sales 2,800,000

X 8%
8% Tax on sales P224,000
ADD: Tax due on compensation income
1st P800,000 P130,000
Excess over P800,000
= (P600,000 x 30%) 180,000 310,000
Tax Due P,000 P534,000
Less: CWT
On compensation income (310,000)
On business income (80,000)
Income Tax Payable P144, 000
2-9. Capital Gains Tax
1. P6M x 6% = P360,000
2. ZV P2.2M vs. SP of P2.5M; CGT = P2.5M x 6% = P150,000;
SP = Cost + Gain
3. Unutilized Proceeds = none; the proceeds were fully utilized; CGT = P0
4. Unutilized Proceeds = P5M x 20% = P1M; CGT = 1/5 x 6M x 6% = P72,000

True of False
1. True
2. False

Multiple Choice
1. D
7. D
19. B
25. A
30. D
31. D
37. D