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3. BLT 2(2018)-C (LEC) Income and Business Taxation > Chapter 2 > Flashcards

Chapter 2 Flashcards

1
Q

What are the classifications of Individual taxpayers

A
  1. Resident Citizens
  2. Non-resident Citizen
  3. Resident Alien
  4. Non-resident Alien
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2
Q

Stays abroad 183+days out of the taxable year

A

Non-resident Citizen

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3
Q

Stays in the PH 183+ days out of taxable year

A

Resident Citizen

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4
Q

Stays in the PH in a permanent basis

A

Resident Alien

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5
Q

Stays more than 180 days

A

NRA - ETB

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6
Q

Stays less than 180 days

A

NRA - NETB

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7
Q

Aliens emplyed by offshore banking units and petroleum contractor/subcontractor

A

Subject to 15% final tax

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8
Q

Aliens employed by regional/area headquarters and regional operating headquarters or multinational companies

A

Subject to 15% final tax

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9
Q

Income means all wealth, which flows into the taxpayer other than as a mere return of capital

A

Corporation

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10
Q

Earns income through compensation by employment as well as business or professional income.

A

Mixed Income Earner

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11
Q

total amount of money are equivalent represented by contract, price, compensation, service fee, rental, royalty, deposit including advance payments actually or constructiv3ly received during the taxable period

A

Gross Receipts

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12
Q

Total sales transactions net of VAT, if applicable reported during the period without other deductions

A

Gross Sales

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13
Q

Ceiling determined by law to determine a VAT regiesterd taxpayer

A

3 million

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14
Q

Pertinent items of Gross Income specified under the Tax Code Less Deductions and exemptions (if any)

A

Taxable Income

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15
Q

Types of Income

A
  1. General Income (subject to 5-32%)
  2. Special Income (Subject to final tax)
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16
Q

The Thrre General Income

A
  1. Compensation Income
  2. Business Income
  3. Income from Profession
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17
Q

Special Income

A
  1. Interests, royalties, prizes, and other winnings subject to final tax
  2. Cash and property dividends (except stock dividends)
  3. Capital gains from sale of
    - Real Property
    - Unlisted shares of stock
    - Listed shares of stock
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18
Q

Income Taxation under the NIRC

A
  1. Net Income Tax/Taxable Income
  2. Gross Income Tax
  3. Final Income Tax
  4. Fringe Benefit Tax
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19
Q

Includes earnings freom investments and other ventures that require minimal supervision or effort such as income generated from interests, dividends, royalties, and payments from rental property.

A

Passive Income

20
Q

Passive Income of Individual Citizens and Resident Aliens

A
21
Q

What is the Passive Income Tax Rate of:

Interests from currency deposits, trust funds, and deposit substitutes

A

20%

22
Q

What is the Passive Income Tax Rate of:

Royalties (on books as well as literary and musical compositions)

A

10%

22
Q

What is the Passive Income Tax Rate of:

Royalties (in general)

A

20%

23
Q

What is the Passive Income Tax Rate of:

Prizes (P 10K or less)

A

Graduated income tax rates

24
Q

What is the Passive Income Tax Rate of:

Prizes (Over P10K)

A

20%

25
Q

What is the Passive Income Tax Rate of:

Winnings, (except PCSO and Lotto) amounting P10 K or less

A

20%

26
Q

What is the Passive Income Tax Rate of:

Winnings (From PCSO and Lotto amounting to 10K or less)

A

Exempt

27
Q

What is the Passive Income Tax Rate of:

Interes Income from a Depository Bank under the Expanded Foreign Currency Deposit System

A

15%

28
Q

What is the Passive Income Tax Rate of:

Cash and/or property dividends received by an individual from a domestic corporation/joint stock company / insurance or mutual fund companies / regional operating Headquarter of multinational companies

A

10%

29
Q

What is the Passive Income Tax Rate of:

Share of an individual in the distributable net income after tax

A

10%

30
Q

What is the Passive Income Tax Rate of:

Capital gains from sale, exhange or other disposition of real property located in the PH classified as capital asset

A

6%

31
Q

What is the Passive Income Tax Rate of:

Net capital gains from sale of shares of stock not traded in the stock exhange

A

15%

32
Q

What is the Passive Income Tax Rate of:

Interest Income from long-term deposit or investment (4 years to less than 5 years)

A

5%

33
Q

What is the Passive Income Tax Rate of:

Interest Income from long-term deposit or investment (3 years to less than 4 yrs)

A

12%

34
Q

What is the Passive Income Tax Rate of:

Interest Income from long-term deposit or investment (less than 3 years)

A

20%

35
Q

Allowable Deduction - Prior to Train Law (From Compensation Income)

A

50K Personal Exemptions
25K addtnl. per child up to 4 child

36
Q

Allowable Deduction - Under Train Law (From Compensation Income)

A
  • 50K Personal Exemptions (no longer applies)
  • 25K addtnl. per child up to 4 child (no longer applies)
37
Q

Who are exempt from filing ITR?

A
  • Minimum wage earner (not exceeding 250K)
  • Whose income is subject to financial withholding tax
  • those who are eligible under substituted filing
38
Q

Criteria for Deductions

A
  1. Related to the business or profession
  2. Supported by substantiated documents
  3. Not contrary to law, public morals, policy and order
  4. Reasonable in amount
  5. Complied with withholding tax requirements
39
Q

Exclusions from Gross Income

A
  1. Life Insurance
  2. Amount received by insured as return of premium
  3. Gifts, bequests, and devises
  4. Compensation for Injuries or Sickness
  5. Income exempt under treaty
40
Q

True or False

Income from such property, gifts, bequests, devise or descent from any property in cases of transfers of divided interest shall be excluded in Gross Income.

A

False

Income from such property, gifts, bequests, devise or descent from any property in cases of transfers of divided interest shall be “INCLUDED” in Gross Income.

41
Q

True or False

If such amounts of insurance are held by the insurer under an agreement to pay interest thereof, the interest payments shall be included in Gross Income

A

True

42
Q

Allowable Deductions must be supported by documents such as ______________

A

Official Receipts, sales invoice, etc, that are registered with the BIR.

43
Q

True or False

No withholding means no deduction

A

True

44
Q
A

3. BLT 2(2018)-C (LEC) Income and Business Taxation (5 decks)

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