TAX-is an enforced proportionate contribution imposed upon persons, properties, businesses, rights, interests, privileges, transactions and acts

within the territorial jurisdiction of the

taxing authority exercise by the legislature for a public purpose and generally payable in money

-lifeblood of the government without which the government can neither exist nor fuction

individuals or transactions to raise money for public purposes.TAXATION.a process or act of imposing a charge by government authority on property. POWER OF TAXATION.as one of the inherent powers of the government it is the power to take property for the support of the government and for public purpose. .

D.the taxes which each person has to pay ought. Uniform and Equitable-the tax measure ought to be so construed as both to take out and keep out of the pockets of the people as little as possible. Just. to be certain and not arbitrary Convenient-the tax measure ought to be levied at the time and in the manner in which it is most likely to be convenient to the taxpayer who pays it. . over and above what it brings into the public treasury C. as respect to the time and manner of payment and the sum to be paid. Ability-to-Pay Principle-each subject of every state ought to contribute to the support of the government as nearly as possible in proportion to the revenue which they respectively enjoy under its protection B.FUNDAMENTAL PRINCIPLES OF TAXATION A.

Supreme 2. plenary . Unlimited 4. Comprehensive 3.SCOPE OF THE POWER OF TAXATION 1.

7. 3. 4. 6. 2. 8.OBJECTS OF TAXATION 1. tangible or intangible) Privileges . Businesses Interests Transactions Rights Acts Persons(natural or juridical) Properties(real or personal. 5.

Income-the amount of money or property received by a person or corporation within a specified time whether as payment for services. interests or profits from investment. .

Taxable.1. 2. .the amount of the income upon which the tax rate prescribed by law is applied to obtain the amount of income taxable Non-taxable-those excluded by law or treaty from taxation.

unless specifically excluded by the Tax Code GROSS INCOME-means Gross Sales less Sales Returns. discounts and allowances and cost of goods sold.all remunerations for services performed by an employee for his employer under an employer-employee relationship.COMPENSATION INCOME. . plus any income from investment and other incidental or outside operations or sources.

00 195.000.00 10.00 20.000. a single and official of a private corporation.000.000.000. received the following compensation from her employee: Salaries 13th month pay Productivity pay Loyalty Award 240.000.000.00 Loyalty Award 5.00 To compute the taxable compensation income: Salaries Gross benefits: 13th month pay 20.000.00-30.000.00 ---------- .00 50.000.00 245.00 5.000.00 Add: Gross Benefits (35.00 Gross Benefits 35.00 5.00) Gross Compensation Income Less: Personal Exemption Taxable Compensation Income 240.Juan.00 Productivity pay 10.000.000.000.000.

000.000.00 104.000.000.00 815.00 Gross Income 569.00 850.000.00 20.00 350.000.000.000.000.800.00 ---------- .00 79.000.00 850.000.00 20.000.00 35.000. Juan Dela Cruz revealed he summary of its income and expenses in 2011: Sales Sales returns and alowances Cost of sales Rent income (net of 5% witholding tax) Income on sale of capital asset To compute gross income: Sales Less: Sales Returns and Allowances Net Sales Less: Cost of Sales Gross Profit Add:Other Income Rent (79800*95%) Income on sale of capital asset 84.00 465.00 35.The first year of business operation of Mr.00 350.

Additional Exemption-pertains to his qualified dependent children .2 Kinds of Exemption: Personal Exemption-pertains to the taxpayer himself and is based on his status.

    Personal Exemption Married individuals Head of the family Single Legally separated individuals Provided.00 each per annum . no qualified dependents is uniformly pegged at 50.Personal Exemptions under RA 9504: (June 17.000.2008) A.

illegitimate):  Below 21 years old  Unemployed  Unmarried  Living with the taxpayer  Fully dependent upon him for chief support B.000.00 each maximum of four children . --now pegged at P25. legally adopted.Additional Exemption  From children (legitimate.

……… P8.500+20% of the excess over P70.000……………… P500+10% of the excess over P10.000 but not over P500.000 Over P70.000 Over P140.000+32% of the excess over P500.000……………………………………… 5% Over P10.000…………… P22.000……………… P2.000 Over P30.000 but not over P30.000 Over P500.000…………… P50.000 Over P250.000 .000 but not over P140.000+30% of the excess over P250.000…….000 ………………………………………… P125..NORMAL TAX RATE ON INDIVIDUAL TAXPAYERS Not over P10.000 but not over P250.500+15% of the excess over P30.500+25% of the excess over P140.000 but not over P70.

000.000.000.00 To compute the taxable compensation income: Salaries Gross benefits: 13th month pay 20.000.000.000.00 ---------- .000.00 Additional Exemption 50.000.00 Add: Gross Benefits (35.00 100.00 5.00 10.000.00 Loyalty Award 5.00 5.000.00 Gross Benefits 35.000.000.00 145.000.000.00 Taxable Compensation Income 240.Juan.000.00 20.00 Productivity pay 10.000.000.00-30. received the following compensation from her employee: Salaries 13th month pay Productivity pay Loyalty Award 240.00 245. a single with two qualified dependent children and an official of a private corporation.00) Gross Compensation Income Less: Personal Exemption 50.

00 --------- .250.00 Tax on Excess (145k-140k) * 25% Income Tax Due 22.00 23.000…………… P22.00 1.000 but not over P250.500.And to compute the pertinent tax due would be: Over P140.000 The tax on 140.750.500+25% of the excess over P140.000.

single.00 289.000.00 Gross Income Less: Deductible Expenses Income from business Less: Basic personal exemption Taxable Income 850.00 35.00 79.000.00 569.000.00 230.00 50.00 35.000.00 815.00 .00 339.000.000.000.000.000.00 20.000.000.00 230.00 ---------850.00 465.000.00 Income on sale of capital asset 20.000. revealed the summary of its income and expenses in 2011: Sales Sales returns and alowances Cost of sales Rent income (net of 5% witholding tax) Income on sale of capital asset Deductible expenses To compute gross income and taxable income Sales Less: Sales Returns and Allowances Net Sales Less: Cost of Sales Gross Profit Add:Other Income Rent (79800*95%) 84. Juan Dela Cruz.00 104.000.000.00 350.800.In the first year of business operation of Mr.000.00 350.000.000.

00 Tax on Excess (289k-250k) * 30% Income Tax Due 50.00 11.000 but not over P500.000.000 The tax on 250.000…………… P50.The pertinent income tax due would be: Over P250.00 --------- .000+30% of the excess over P250.700.00 61.700.000.

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