Mr. and Mrs. Dela Cruz, both CPA's and residents of the Philippines, with 5 minor children.

Had the
following data for taxable year 2015:

Salaries, wife P150,000

Bonus (13th month pay), wife 42,000
Professional Fees, (net of 10% withholding tax) 450,000
Expenses – Practice of profession (15% nondeductible) 120,000
Rental income (net of 5% withholding tax 190,000
Rental expenses 80,000
Other income, husband (20% non-taxable) 80,000
The taxable income of Mr. Dela Cruz is:

a. P173,000 c. P266,000

b. P275,000 d. P234,000

• Answer: A

38. The taxable income of Mrs. Dela Cruz is:

a. P371,000 c. P419,000

b. P359,000 d. P410,000

• Answer: B

As a rule, the following individuals are liable for final income tax equal to 15% of their gross
compensation income prior to 2018 taxable year, except

a. An alien employee of an Offshore Banking Unit

b. An alien employee of Petroleum Service Contractors and Subcontractors

c. An alien employee of Regional, or Area Headquarters of Multinational Companies

d. An alien employee of a Resident Foreign Corporation

• Answer: D

Statement 1: Prior to 2018 taxable year. SAEs as well as SFES of regional or area headquarters
established in the Philippines by multinational companies shall be subject final tax of 15% on their gross
compensation income in the Philippines.

Statement 2: Generally, a nonresident alien not engaged in trade or business is subject to 25%
creditable withholding tax on their gross income in the Philippines.

a. Only statement 1 is correct

b. Only statement 2 is correct

c. Both statements are correct

d. Both statements are incorrect

• Answer: D