27. Lenovo, Inc.

, a resident corporation, has earned the following income during the year:
DIVIDEND INCOME FROM:
■ Microsoft, a non-resident foreign corporation p 500,000
■ Intel, a resident foreign corporation (ratio of Philippine 400,000
income over world income for the past 3 years is 40%)
■ Panday, a domestic corporation 300,000

INTEREST INCOME FROM:

■ Current account, BDO 600.000
• Savings deposit, ABN-AMRO bank, UK 700.000
 • FCDU deposits 800,000
ROYALTY INCOME from various domestic corporations 100,000

The total final tax on passive income assuming the taxable year is 2017:
a. P200.000 c. P328.000

b. P260.000 d. P1,088,000

❖ Answer: A
/nterest income - 8D0 (P600,000 x 20%) P120,000
Interest income, FCDU deposits (P800,000 x 7.5%) 60,000
Royalty income from various domestic corp. (P100,000 x 20%) 20,000
Total Final Taxes on passive income P200,000
UI Dividend income received by a foreign corporation (assuming the situs of the dividend is Philippines) from foreign
corporations (resident or nonresident), is subject to basic income tax or regular corporate income tax (RCIT). • £□ The
dividend income from Microsoft is considered income derived abroad. The dividend from Intel (ratio < 50%) is
considered income derived abroad. CJ A dividend from Panday, a DC is tax exempt (inter-corporate dividend). LJ The
interest income from a bank deposit abroad is considered income abroad, subject to basic tax but only if received by
resident citizen or domestic corp.

33. Assume the same data in the immediately preceding number, except that the taxable year was 2018. The
total final tax on passive income for 2018 should be:
a. P200.000 c. P328.000
b. P260,000 d. P1,088,000

❖ Answer: A
Interest income - 8DO (P600,000 x 20%) P120.000
Interest income. FCDU deposits (P800.000 x 7.5%) i 60.000
Royalty income from various domestic corp. (P100.000 x 20%) 20.000
Total Final Taxes on passive income derived from Phil, sources P200.000

£□ The tax rate for interest income from FCDU received by RFCs was retained at 7.5% under the TRAIN Law.
O NOTE: Amendment of the NIRC under the TRAIN Law is limited to DC only

34. Lenovo, Inc., a resident foreign corporation, has earned the following income dunng 2018:
Dividend income from:
■ Microsoft, a non-resident corporation Intel, a resident P500.000
foreign corporation Panday, a domestic corporation 400,000
300,000
Interest income from:
Current account, BDO
600,000
Savings deposit, ABN-AMRO bank, UK US dollar deposit
700,000
(FCDU)- BPI Makati Royalty income from various domestic
800,000
corporations
100,000
 Additional information:
in thp PhiliDoines over worldwide income
The ratio of Microsoft's gross income in the rnnippir
for the past three years is 40%^ phiiiooines over worldwide income for The ratio of Intel's
gross income in the Philippines
in the Philippines over worldwide income
the past three years is 60%. The ratio
of Panday’s gross income for the past
three years is 80%.
How much is the total income tax expense of
Lenovo
a. P200.000 c
- P320.000
b. P400.000 d
- P272.000

*** Answer' D
US Income Tax Expense = RCIT ♦ Final Taxes on Passive Incomes + CGTs