Exercise 1

CJ, single, had the following data for 2018 taxable year:
Gross business income, Philippines P1,000,000 resident

Gross business income, USA 500,000 resident
Business expenses, Philippines 700,000
Business expenses, USA 430,000
Compensation income, Philippines 600,000 resident
Dividend income from a domestic corporation 50,000
Dividend income from a foreign corporation 40,000
Interest income from peso bank deposit- Philippines 20,000 resident
Interest income from bank deposits abroad 30,000
Interest income from FCDS deposits 40,000
Royalty income from composition 25,000
Raffle draw winnings 10,000 resident
PCSO winnings 200,000
Creditable withholding taxes on business income 125,000
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REQUIRED: 1. Determine the following assuming the taxpayer is a resident citizen:
a. Taxable net income
Gross business income, Philippines P1,000,000

Gross business income, USA 500,000
Business expenses, Philippines (700,000)
Business expenses, USA (430,000)
Compensation income, Philippines 600,000
Raffle draw winnings 10,000
Taxable net Income 1,050,000
b. Income tax payable

First 800,000 P130,000
In excess of P800,00 75,000
(250, 000 x 30%)
Tax due P205, 000
Less: CWT on business income 125,000
Income tax payable P80,000
c. Total final taxes on passive income

Dividend income from a domestic corporation (10%) 5,000
Interest income from peso bank deposit- Philippines (20%) 4,000
Interest income from FCDS deposits (15%) 6,000
Royalty income from composition (10%) 2,500
PCSO winnings (20%) 40,000
Total final taxes on passive income P57,500
d. Total income tax expense

Total final taxes on passive income 57,500
CWT on business income 125,000
Total income tax payable P262,500
2. Determine the following assuming the taxpayer is a nonresident citizen:

Taxable net income P910,000
First 800,000 P130,000

(110, 000 x 30%)
Tax due P163,000
Dividend income from a domestic corporation (10%) P5,000

Interest income from peso bank deposit- Philippines (20%) 4,000
Royalty income from composition (10%) 2,500
PCSO winnings (20%) 40,000
Net Income tax payable P38,000

Total income tax expense P214,500
3. Determine the following assuming that taxpayer is resident alien:

Taxable net income P1,005,000
First 800,000 P130,000

(205,000 x 30%)
Tax due P191,500
Dividend income from a domestic corporation 50,000 x 10% 5,000

Interest income from peso bank deposit- Philippines 20,000 x 20% 4,000
Interest income from FCDS deposits 40,000 x 15% 6,000
Royalty income from composition 25,000 x 10% 2,500
PCSO winnings 200,000 x 20% 40,000
Net Income tax payable P66,500

Total income tax expense P249,000
4. Determine the following assuming that taxpayer is nonresident alien engaged in trade or business:

Taxable net income P910,000

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CJ, single, had the following data for 2018 taxable year:

Gross business income, Philippines P1,000,000 resident

Gross business income, Philippines P1,000,000

b. Income tax payable

c. Total final taxes on passive income

d. Total income tax expense

Income tax payable P80,000

Gross business income, Philippines P1,000,000

b. Income tax payable

First 800,000 P130,000

c. Total final taxes on passive income

Dividend income from a domestic corporation (10%) P5,000

d. Total income tax expense

Net Income tax payable P38,000

Gross business income, Philippines P1,000,000

b. Income tax payable

First 800,000 P130,000

c. Total final taxes on passive income

Dividend income from a domestic corporation 50,000 x 10% 5,000

d. Total income tax expense

Net Income tax payable P66,500

Gross business income, Philippines P1,000,000

b. Income tax payable

c. Total final taxes on passive income

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