Taxation (Income Taxation)

05 Task Performance
Final Taxes on Passive Income (5 items x 10 points)

Compute for the final income tax due given the following scenarios on passive income.

Mark Remus has the following data on his passive income the current year:

Philippine Abroad

Interest income from long-term peso bank deposits P 45,000 P 25,000

Interest income from long-term Foreign Currency

Deposit Unit (FCDU) deposits P 50,000 P 60,000

Royalties from books P 20,000 P 30,000

Royalties from computer programs P 20,000 P 40,000

Winnings from an electronic raffle during Smart

Communication’s 50th Anniversary(chosen randomly by the
network using Smart subscribers’ sim card numbers) P 10,000 P-

Dividend income from a domestic corporation P 27,000 P 13,000

Dividend income from a foreign corporation P 33,000 P 22,000

Requirements:

1. Assuming that Mark is a resident citizen, compute for his total final income taxes from his
passive income.
Answer:
Income interest: peso bank deposit (P45,000 x 20%) P9,000
Income interest: FCDU deposit (50,000 x 15%) P7,500
Total final income taxed P 16,500

2. Assuming that Mark is a resident alien, compute for his total final income taxes from his passive
income.
Answer:
Philippines
Royalties from books P50,000
Royalties from computer programs P20,000
Total final income taxes P70,000
Abroad
Royalties from books P60,000
Royalties from computer programs P30,000
Total final income taxes P90,000
3. Assuming that Mark is a non-resident citizen, compute for his total final income taxes from his
passive income.
Answer:

4. Assuming that Mark is a non-resident alien engaged in trade or business, compute for his total
final income taxes from his passive income.
Answer:

5. Assuming that Mark is a non-resident citizen alien not engaged in trade or business, compute for
his total final income taxes from his passive income.
Answer:
It depends. The interest income from such investment is subject to income tax (final tax) if
peregrinated before the five-year maturity. However, the interest income therefrom shall be
exempted from tax withdrawn upon maturity.