Income Taxation 6

Front 1

An artificial being created by operation of law, having the right to succession and the powers, attributes and properties expressly authorized by law or incident to its existence.

Back 1

Corporation

Front 2

A blank has a juridical personality separate and distinct from each of the stockholders.

Back 2

Corporation

Front 3

Corporations organized under the Philippine Laws.

Back 3

Domestic Corporations

Front 4

Corporations organized under the law of foreign country.

Back 4

Foreign Corporations

Front 5

Those foreign corporations engaged in trade or business within the Philippines or having an office and place of business therein.

Back 5

Resident Foreign Corporations

Front 6

Those foreign corporations not engaged in trade or business within the Philippines.

Back 6

Non-resident Foreign Corporations

Front 7

The blank shall include income derived from sales within and outside the Philippines while the blank whether resident or non-resident, shall include income derived from sales within the Philippines only.

Back 7

Gross income of a Domestic Corporation

Gross income of Foreign Corporation

Front 8

Interest on bank deposits or deposits substitutes derived by a domestic and resident foreign corporation with local banks and branches of foreign banks authorized to do business in the Philippines which subject to final tax of blank.

Back 8

20%

Front 9

Interest on foreign currency deposits under the expanded foreign currency system is subject to final tax blank.

Back 9

7.5%

Front 10

The gross income of a domestic corporation shall include interest income earned within and outside the Philippines while the blank to a resident and non-resident corporation shall include interest earned in the Philippines only.

Back 10

Interest Income Taxable

Front 11

The blank shall include rental earned on properties located within and outside the Philippines while the blank shall include rental on properties located in the Philippines only.

Back 11

Rent Income Taxable to a Domestic Corporation

Rental Income Taxable to a Foreign Corporation

Front 12

The blank shall include royalty income exercisable outside the Philippines (royalty income received within the Philippines is subject to final tax) while blank is not included in the gross income of a foreign corporation.

Back 12

Royalty Income Taxable to a Domestic Corporation

Royalty Income

Front 13

Prizes and winnings received by a domestic corporation shall be part of the gross income whether derived within and outside the Philippines but not including prizes received in the Philippines exceeding blank and winnings from blank.

Back 13

P10, 000

PCSO and Lotto

Front 14

If the stock is not listed in the stock exchange - a final tax not over P100, 000 is at blank rate.

Back 14

5%

Front 15

If the stock is not listed in the stock exchange - a final tax over P100, 000 is at blank rate.

Back 15

10%

Front 16

Blank shall be taxable 100% regardless of the holding period.

Back 16

Capital Gain

Front 17

Capital gain shall be taxable by blank regardless of the holding period.

Back 17

100%

Front 18

In the case of foreign corporation, the blank located in the Philippines, except those subject to final tax shall be part of the gross income.

Back 18

Gain Realized on the Sale of Property

Front 19

An amount equal to 40% of the gross income of the taxpayer maybe deducted from the gross income.

Back 19

Optional Standard Deduction

Front 20

This deduction can be claimed at the option of the taxpayer even without complying with the requirements imposed on the itemized deductions.

Back 20

Optional Standard Deduction

Front 21

Optional Standard Deduction - An amount equal to blank of the gross income of the taxpayer maybe deducted from the gross income.

Back 21

40%

Front 22

The taxpayer may deduct, in lieu of the optional standard deduction, specific item of expenses authorized to be deducted and actually incurred by the taxpayer.

Back 22

Itemized Deductions

Front 23

An expense may be considered blank if it is normally incurred in the conduct of a business.

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Ordinary Business Expense

Front 24

An expense may be considered blank if the operations of the business will significantly be affected if the expense is not incurred.

Back 24

Necessary Business Expenses

Front 25

Blank to be deductible must be incurred away from home and in the pursuit of the taxpayer's trade or business.

Back 25

Traveling Expenses

Front 26

Blank by the taxpayer for use in the business may either be recognized as expense at the time of the purchase or at the time it was actually used or composed, depending on the method of accounting being used by the taxpayer.

Back 26

Material and Supplies Purchased

Front 27

Blank paid for the use if the property belonging to another is deductible, if it meets the requirements for deduction.

Back 27

Rental expense

Front 28

Blank in the form of loan to the lessor, option money for the property or security deposit shall not be recognized as expense at the time it was paid.

Back 28

Advance Payment of Rental

Front 29

Blank is taxable income to the lessor abd is deductible expense of the lessee at the period payment was actually received or made.

Back 29

Prepaid expense

Front 30

Interest paid or incurred within the taxable year on money borrowed in connection with trade or business or in the exercise of one's profession, is deductible from the gross income.

Back 30

Interest Expense

Front 31

Blank beginning January 1,1998

Back 31

41%

Front 32

Blank beginning January 1,1999

Back 32

39%

Front 33

Blank beginning January 1, 2000

Back 33

38%

Front 34

Blank beginning November, 2005

Back 34

42%

Front 35

Blank beginning January, 2010

Back 35

33%

Front 36

A minimum tax of blank of gross income shall be imposed on domestic and resident corporation beginning on the fourth taxable year immediately following a year in which the business started operations.

Back 36

2%

Front 37

The blank is 2% of the gross income of the corporation at the end of the year.

Back 37

Minimum Corporate Income Tax

Front 38

The Minimum Corporate Income Tax is blank of the gross income of the corporation at the end of the year.

Back 38

2%

Front 39

Blank means gross sales less returns, discounts and cost of goods sold.

Back 39

Gross Income

Front 40

Blank includes all business expenses directly incurred to produce the merchandise to bring them to their present location and use.

Back 40

Cost of Goods Sold

Front 41

For trading or merchandising concern, blank means the invoice cost of goods sold, plus import duties, freight in transporting the goods to the place where the goods ate actually sold, including insurance while the goods are in transit.

Back 41

Cost of Goods Sold

Front 42

For a manufacturing concern, blank means all costs of production of finished goods such as raw materials used, direct labor and manufacturing overhead, freight costs, insurance premiums and other costs incurred to bring the raw materials to the factory or warehouse.

Back 42

Cost of Goods Manufactured and Sold

Front 43

For sale of services, blank means gross receipts less sales returns, allowances, discounts and cost of services which cover all direct costs and expenses necessarily incurred to provide the services required by the customers and clients.

Back 43

Gross Income

Front 44

Blank means amounts actually or constructively received during the taxable year.

Back 44

Gross Receipts

Front 45

The blank is paid on an annual basis and quarterly basis. The rules are governed by Revenue Regulations No. 12-2007.

Back 45

Minimum Corporate Income Tax

Front 46

The Minimum Corporate Income Tax is paid on an annual basis and quarterly basis. The rules are governed by blank.

Back 46

Revenue Regulations No. 12-2007

Front 47

Any excess of the MCIT over the normal income tax may be carried forward on an actual basis and be credited against the normal income tax for blank.

Back 47

3 immediately succeeding taxable years

Front 48

Any amount paid as excess minimum corporate income tax should be recorded in the corporation's books as an asset under the account title blank.

Back 48

Deferred Charges - MCIT

Front 49

The minimum corporate income tax shall apply only to domestic and resident foreign corporations who are subject to the normal income tax rate of blank.

Back 49

30%

Front 50

All domestic and resident foreign corporations covered by the minimum corporate income tax shall pay the income tax computed under the minimum corporate income or the normal corporate income tax whichever is higher.

Back 50

Tax Due and Payable

Front 51

The secretary of Finance may suspend the application of the minimum tax on any corporation which suffers losses on account of labor dispute, force majeure or because of legitimate business reverses.

Back 51

Suspension of the Tax Application

Front 52

Blank shall mean the difference between the net sales and cost of goods sold for merchandising and manufacturing companies while blank of a service company shall be the difference between gross receipts, returns and discounts and cost of services.

Back 52

Gross Income

Front 53

Blank shall include direct cost and expense in rendering the service such salaries and wages including benefits of personnel, consultants and specialists directly rendering the service; cost of facilities directly used in providing service like depreciation or rental of equipment and supplies used.

Back 53

Cost of Services

Front 54

Blank shall be the difference between gross sales and sales returns, allowances and sales discounts.

Back 54

Net Sales

Front 55

Every corporation organized for the purpose of avoiding the income tax with respect to their stockholders by permitting profict fo accumulate instead of being distributed shall be taxed at blank at the improperly accumulated income.

Back 55

10%