INCOME AND WITHHOLDING WITHHOLDING TAXES Atty. Vic Vic C. Mamalateo Mamalateo May 12-13, 2011
UPCOL
• INCOME TAX (TITLE II, NIRC)
BASICTAX BASICTAX PRINCIPLES PRINCIPLES • LIFEBLOOD THEORY – Taxat!" # t$% &'(%) %x%*+t!", t$% %x%+t!" – I" a#% !. /!'t, tax "!*% !& /#a((! /%/'t!"# a"/ tax &%/t#
• Tax%# a&% *+!#%/ y (a %, NIRC4, $(% ."a"a( a!'"t" a&% a#%/ !" %"%&a((y a%+t%/ a!'"t" #ta"/a&/# I" a#% !. !".(t %t%%" tax &'(%# a"/ a!'"t" &'(%#, t$% .!&*%& #$a(( +&%5a(
INCOME TAX • INCOME TAX – Tax !" a(( y%a&(y +&!.t# a&#" .&!* +&!+%&ty, +&!.%##!"#, t&a/%# !& !..%#, !& a# a tax !" a +%&#!"6# "!*%, %*!('*%"t#, +&!.t# a"/ t$% (7% (Fisher v. Trinidad) – I"!*% tax # a /&%t tax !" taxa(% at'a( !& +&%#'*%/ "!*% &!## !& "%t4 !. a tax+ay%& &%%5%/, a&'%/ !& &%a(8%/ /'&" t$% taxa(% y%a&
• 9ITHHOLDIN: TAX – It # "!t a" "t%&"a( &%5%"'% tax 't a *!/% !. !((%t" "!*% tax " a/5a"% !" "!*% !. t$% &%+%"t !. "!*% t$&' t$% +ay!& !. "!*% ;NOTE< S% 21, NIRC %"'*%&at%# 5a&!'# "t%&"a( &%5%"'% tax%#= – T$%&% a&% 2 ty+%# !. t$$!(/" tax%#, "a*%(y< 14 ."a( t$$!(/" tax) a"/ 24 &%/ta(% t$$!(/" tax, "('/" %x+a"/%/ t$$!(/" tax
FEAT>RES OF INCOME TAX • It # a /&%t tax • It # a +&!&%##5% tax, #"% t$% tax a#% "&%a#%# a# t$% tax &at% "&%a#%# It # .!'"/%/ !" t$% a(ty t! +ay !. tax+ay%& • P$( a/!+t%/ t$% *!#t !*+&%$%"#5% #y#t%* " *+!#" "!*% tax • P$( .!((!# t$% #%*-(!a( !& #%*-#$%/'(a& "!*% tax #y#t%* • It # !. A*%&a" !&" D%#!"# !. >S tax a't$!&t%# $a5% +%'(a& a"/ +%&#'a#5% %..%t# .!& t$% P$(
INCOME TAX SYSTEMS • GLOBAL TAX SYSTEM – – – – –
C!*+%"#at!" "!*% "!t #'?%t t! F9T B'#"%## a"/@!& +&!.%##!"a( "!*% Ca+ta( a"# "!t #'?%t t! F9T Pa##5% "5%#t*%"t "!*% "!t #'?%t t! F9T Ot$%& "!*% "!t #'?%t t! F9T
• SCHEDULAR TAX SYSTEM – – – –
C!*+%"#at!" "!*% #'?%t t! F9T Ca+ta( a"# #'?%t t! F9T Pa##5% "5%#t*%"t "!*% #'?%t t! F9T Ot$%& "!*% #'?%t t! F9T
• T$% P$(++"%# a/!+t%/ t$% #%*-(!a( !& #%*-#$%/'(a& tax #y#t%* Et$%& t$% (!a( !& #$%/'(a& #y#t%*, !& !t$ #y#t%*#, *ay a++(y !" "!*% !. a tax+ay%& • Y!' a++(y t$% #$%/'(a& tax #y#t%* !"(y $%" t$% "!*%, a" !& +&!.t # #'?%t t! F9T
FINAL 9ITHHOLDIN: TAX • I"!*% +ay*%"t # (#t%/ " S% A4, NIRC, a# #'?%t t! F9T • F9T t$$%(/ y t$% +ay!& !. "!*% %, 20 F9T !" "t%&%#t "!*% !" a"7 /%+!#t#4 &%+&%#%"t# F>LL +ay*%"t !. "!*% tax /'% !" #'$ "!*% !. t$% &%+%"t • I"!*% +ay%% !& &%+%"t !. "!*%4 /!%# "!t &%+!&t "!*% #'?%t%/ t! F9T " $# "!*% tax &%t'&", a(t$!'$ "!*% # &%.(%t%/ " $# a'/t%/ ."a"a( #tat%*%"t# .!& t$% y%a& H!%5%&, $% # "!t a((!%/ t! (a* a"y tax &%/t !" "!*% #'?%t%/ t! F9T • 9t$$!(/" a%"t +ay!& !. "!*%4 .(%# t$% t$$!(/" tax &%t'&", $$ "('/%# t$% F9T /%/'t%/ .&!* t$% "!*% !. +ay%%, a"/ +ay# t$% tax t! t$% BIR T$%&% # "! C%&t.at% !. Tax 9t$$%(/ ##'%/ t! "!*% +ay%% • N! C%&t.at% !. Tax 9t$$%(/ BIR F!&* 2304 # atta$%/ t! t$% "!*% tax &%t'&" !. &%+%"t !. "!*% %a'#% $% /!%# "!t (a* a"y tax &%/t " $# tax &%t'&"
CRITERIA IN IMPOSING INCOME TAX
• Citizenshi !in"i#e – F!& F(+"! t8%"# a"/ /!*%#t !&+!&at!"#, $! a&% %"tt(%/ t! P$(++"% !5%&"*%"t +&!t%t!" $%&%5%& t$%y a&% #t'at%/
• Resi$en"e !in"i#e – F!& a(%" "/5/'a(# a"/ .!&%" !&+!&at!"#
• S%&!"e !in"i#e – F!& a(%" "/5/'a(# a"/ .!&%" !&+!&at!"#
TYPES OF INCOME TAX • • • • • • • • • • • • • • •
1 2 3
:&a/'at%/ "!*% tax !" "/5/'a(#) N!&*a( !&+!&at% "!*% tax !" !&+!&at!"# RCIT4) M"*'* !&+!&at% "!*% tax !" !&+!&at!"# MCIT4) S+%a( "!*% tax !" %&ta" !&+!&at!"# %, +&5at% %/'at!"a( "#tt't!"#) .!&%" '&&%"y /%+!#t '"t#) "t%&"at!"a( a&&% Ca+ta( a"# tax !" #a(% !& %x$a"% !. '"(#t%/ #$a&%# !. #t!7 !. a /!*%#t !&+!&at!" (a##.%/ a# a a+ta( a##%t) Ca+ta( a"# tax !" #a(% !& %x$a"% !. &%a( +&!+%&ty (!at%/ " t$% P$(++"%# (a##.%/ a# a a+ta( a##%t) F"a( t$$!(/" tax !" %&ta" +a##5% "5%#t*%"t "!*%#) F"a( t$$!(/" tax !" "!*% +ay*%"t# *a/% t! "!"-&%#/%"t# "/5/'a( !& !&+!&at!"4) G F&"% %"%.t tax FBT4) 10 B&a"$ +&!.t &%*tta"% tax BPRT4) a"/ 11 Tax !" *+&!+%&(y a'*'(at%/ %a&""# IAET4
FORM>LA • • • • • • • •
GLOBAL SYSTEM
:&!## #a(%# L%##< C!#t !. #a(%# :&!## "!*% L%##< D%/'t!"# PAE .!& "/4 N%t taxa(% "!*% M'(t+(%/ y a++(a(% &at% &a/'at%/ !& .(at4 • I"!*% tax /'% • L%##< C&%/ta(% 9T • Ba(a"%
• SCHEDULAR SYSTEM • :&!## #%((" +&% !& .a& *a&7%t 5a('%, $$%5%& # $$%& t*%# a++(a(% tax &at% Tax /'% &%a( +&!+%&ty4 • :&!## #%((" +&% (%## !#t !& a/?'#t%/ a## Ca+ta( a" t*%# a++(a(% tax &at% Tax /'% #$a&%# !. /!* !&+4 • :&!## "!*% t*%# a++(a(% &at% Tax /'% +a##5% "5 "!*%) "!*% +a/ t! "!"-&%#/%"t +%&#!"4
INDS OF TAXPAYERS •
INDIJID>AL, "('/" %#tat% a"/ t&'#t – CITIKEN
• R%#/%"t RC4 – T''#e %n *%!#$*i$e in"%+e • N!"-&%#/%"t – **&a"t, +%&*a"%"t !&7%&, OF9 #%a*%"4 – ALIEN
• R%#/%"t • N!"-&%#/%"t – E"a%/ " t&a/% !& '#"%## *!&% t$a" 10 /ay# " t$% P$(4 – N!t %"a%/ " t&a/% !& '#"%## 10 /ay# !& (%## #tay " P$(4
•
CORPORATION, "('/" +a&t"%&#$+ – DOMESTIC DC4 – T''#e %n *%!#$*i$e in"%+e – FOREI:N • R%#/%"t %, P$( &a"$ !. .!&%" !&+!&at!"4 • N!"-&%#/%"t – TEST FOR TAX P>RPOSES<
•
La !. "!&+!&at!" R>LE< A(( tax+ay%&# a&% tax%/ !"(y !" "!*% .&!* #!'&%# t$" t$% P$(, %x%+t RC a"/ DC
PARTNERSHIPS • EXEMPT • :%"%&a( +&!.%##!"a( +a&t"%&#$+ :PP4 • !"t 5%"t'&% '"/%&ta7" !"#t&'t!" at5ty !& %"%&y-&%(at%/ at5t%# t$ !+%&at" !"t&at t$ t$% !5%&"*%"t • TAXABLE • Pa&t"%&#$+#, "! *att%& $! &%at%/ !& !&a"8%/ • R>LES< – I. taxa(%, +a&t"%&#$+ # tax%/ (7% a !&+!&at!" – I. taxa(% +a&t"%&#$+ /%&5%# "%t "!*% /'&" t$% y%a&, t$% %"t&% "%t "!*% # /%%*%/ &%%5%/ y t$% +a&t"%&# " t$% y%a& t a# %a&"%/ y t$% +a&t"%&#$+ – I. :PP a/!+t# t%*8%/ /%/'t!"# /'&" t$% y%a&, +a&t"%&# *'#t '#% t%*8%/ /%/'t!"# /'&" t$% #a*% y%a&
RESIDENT FOREI:N CORPS • TAXABLE< RCIT BPRT – O&/"a&y &a"$ !. a .!&%" !&+!&at!" " t$% P$(< -. x "%t "!*% .&!* #!'&%# t$" t$% P$( • PEKA- SBMA-&%#t%&%/ &a"$ !. .!&%" !&+!&at!" # %x%*+t .&!* 1 BPRT – R%!"a( !+%&at" $%a/'a&t%&# ROH4< /-. x "%t "!*% .&!* #!'&%# t$" t$% P$( – O..#$!&% a"7" '"t OB>4 a"/ .!&%" '&&%"y /%+!#t '"t FCD>4 [ING Bank Manila v. CIR] < /-. x &!## "t%&%#t "!*% !" .!&%x (!a" t! &%#/%"t# – F!&%" "t%&"at!"a( a&&%&# y a& !& at%&< 012. x :PB – F!&%" !"t&at!& !& #'-!"t&at!& %"a%/ " +%t&!(%'* !+%&at!"# " t$% P$(< 3. x &!## "!*% .&!* #!'&%# t$" t$% P$(
• EXEMPT< N!t %"a%/ " t&a/% !& '#"%## " t$% P$( – R%+&%#%"tat5% !..% – R%!"a( $%a/'a&t%&# RH4
OINT JENT>RE • Le'se %4 !%e!ties &n$e! "%++%n +'n'5e+ent •
•
T$&%% ##t%&# !&&!%/ *!"%y .&!* t$%& .at$%& a"/ !'$t t%"ty-.!'& 24 +%%# !. &%a( +&!+%&ty t$at t$%y (%a#%/ t! 5a&!'# t%"a"t# .!& !5%& ..t%%" y%a&# a"/ /%&5%/ &%"ta(# t$%&%.&!* T$%y a++!"t%/ t$%& &!t$%& t! *a"a% t$%& +&!+%&t%# a"/ t! !((%t a"/ &%%5% &%"t# T$% !'&t &'(%/ t$at a taxa(% +a&t"%&#$+ a# .!&*%/ T$%&% %&% #%&%# !. t&a"#at!"# $%&% +%tt!"%&# +'&$a#%/ t%"ty-.!'& (!t#, #$!" t$at t$% +'&+!#% a# "!t (*t%/ t! t$% !"#%&5at!" !. t$% !**!" .'"/ !& %5%" t$% +&!+%&t%# a'&%/ y t$%* T$% $a&at%& !. $at'a(ty +%'(a& t! '#"%## t&a"#at!"# %"a%/ " .!& t$% +'&+!#% !. a" a# +&%#%"t T$% +&!+%&t%# %&% (%a#%/ !'t t! t%"a"t# .!& #%5%&a( y%a&# M!&%!5%&, t$% t%&* !&+!&at!"Q "('/%# !&a"8at!"# t$at a&% "!t "%%##a&(y +a&t"%&#$+#Q " t$% t%$"a( #%"#% !. t$% t%&* a# %(( a# +a&t"%&#$+#, "! *att%& $! &%at%/ !& !&a"8%/ T$# 'a(.y" %x+&%##!" (%a&(y "/at%# t$at a ?!"t 5%"t'&% "%%/ "!t % '"/%&ta7%" " a"y !. t$% #ta"/a&/ .!&*#, !& " !".!&*ty t$ t$% '#'a( &%'&%*%"t# !. t$% (a !" +a&t"%&#$+#, " !&/%& t$at !"% !'(/ % /%%*%/ !"#tt't%/ .!& +'&+!#%# !. t$% tax !" !&+!&at!"# (Evangelista vs. Collector !"# $hil. !%").
•
9$%" a .at$%& a"/ #!" +'&$a#%/ a (!t a"/ '(/", %"t&'#t%/ t$% a/*"#t&at!" !. t$% '(/" t! a" a/*"#t&at!& a"/ /5/%/ %'a((y t$% "%t "!*%, t$%&% # a taxa(% +a&t"%&#$+ (Re&es vs. Co''issioner #% CR !*+)
OINT JENT>RE • Ins&!'n"e %%# %! "#e'!in5 h%&se • A" "#'&a"% +!!( !& (%a&" $!'#%, !*+!#%/ !. 1 "!"-(.% "#'&a"% !&+!&at!"#, $!#% &!(% a# (*t%/ t! t# +&"+a( .'"t!" !. a((!at" a"/ /#t&'t" t$% # a&#" .&!* t$% !&"a( "#'&a"% a*!" t$% #"at!&%# t! t$% t&%aty !& t$% *%*%&# !. t$% +!!( !" t$%& a(ty t! a#!& t$% # %/%/ a# %(( a# t$% +%&.!&*a"% !. "/%"ta( .'"t!"#, #'$ a# &%!&/#, *a"t%"a"%, !((%t!" a"/ '#t!/y !. .'"/#, a"/ $$ // "!t "#'&% !& a##'&% a"y  " t# !" "a*%, a# t&%at%/ a# a +a&t"%&#$+ !& a##!at!" #'?%t t! tax a# a !&+!&at!" • A&t(% 1 !. t$% C5( C!/% &%!"8%# t$% &%at!" !. a !"t&at !. +a&t"%&#$+ $%" t! !& *!&% +%&#!"# "/ t$%*#%(5%# t! !"t&'t%, *!"%y, +&!+%&ty, !& "/'#t&y t! a !**!" .'"/, t$ t$% "t%"t!" !. /5/" t$% +&!.t# a*!" t$%*#%(5%# It# &%'#t%# a&% *'t'a( !"t&'t!" t! a !**!" #t!7, a"/ a ?!"t "t%&%#t " t$% +&!.t# (FIC, Ins-rance Cor et al. vs. Co''issioner G.R. No. !!#/01 2an. #1 !***).
OINT JENT>RE •
•
A5!ee+ent t% +'n'5e 'n$ %e!'te +ine $en%+in'te$ 's 6P%*e! %4 Att%!ne78
P$(%x M"" C!&+!&at!" %"t%&%/ "t! a" a&%%*%"t /%"!*"at%/ a# P!%& !. Att!&"%y t$ Ba'! :!(/ M"" C!&+!&at!" t! *a"a% a"/ !+%&at% t$% (att%&6# *"" (a* I" *a"a" t$% +&!?%t, P$(%x *a/% a/5a"%# !. a#$ a"/ +&!+%&ty T$% *"% #'..%&%/ !"t"'" (!##%# &%#'(" " P$(%x6# t$/&aa( a# *a"a%& a"/ %##at!" !. *"% !+%&at!"# • A C!*+&!*#% t$ Dat!" " Pay*%"tQ a# %x%'t%/ y t$% +a&t%#, $%&% Ba'! :!(/ a/*tt%/ t# (a(t%# t! P$(%x a"/ a&%%/ t! +ay t$% #a*% • P$(%x &!t% !.. " t$% !!7# t$% &%*a"" !'t#ta"/" "/%t%/"%## !. Ba'! :!(/ y $a&" a +!&t!" !. t$% a*!'"t t! a((!a"%# a"/ &%#%&5%# t$at %&% #%t '+ " 1G1 a"/ a +!&t!" t! t$% 1G2 !+%&at!"# T$% a*!'"t a((!at%/ t! 1G2 a# /%/'t%/ .&!* t$% 1G2 &!## "!*% a# (!## !" #%tt(%*%"t !. &%%5a(%#Q • T$% BIR /#a((!%/ t$% /%/'t!" .!& a/ /%t a"/ a##%##%/ P$(%x /%.%"y tax%# %a'#% t$% a/5a"%# a&% P$(%x6# "5%#t*%"t " a +a&t"%&#$+ t$ Ba'! :!(/ .!& t$% %x+(!tat!" a"/ /%5%(!+*%"t !. t$% *"%
OINT JENT>RE • T$% t!ta(ty !. t$% &'*#ta"%# a"/ t$% #t+'(at!"# " t$% +a&t%#6 a&%%*%"t "/'ta(y (%a/ t! t$% !"('#!" t$at a +a&t"%&#$+ a# .!&*%/ %t%%" t$% +a&t%# • First , t /!%# "!t a++%a& t$at Ba'! :!(/ a# '"!"/t!"a((y !(at%/ t! &%t'&" t$% a/5a"%# *a/% y P$(%x '"/%& t$% a&%%*%"t • econd , t$% Tax C!'&t !&&%t(y !#%&5%/ t$at t a# '"(7%(y .!& a '#"%## !&+!&at!" t! (%"/ $'"/&%/# !. *((!"# t! a"!t$%& !&+!&at!" t$ "%t$%& #%'&ty "!& !((at%&a( !& a #+%. /%%/ %5/%"" t$% t%&*# a"/ !"/t!"# !. #'$ (!a"# T$% +a&t%# a(#! // "!t +&!5/% .!& a #+%. *at'&ty /at% .!& t$% a/5a"%# t! %!*% /'% a"/ /%*a"/a(%, a"/ t$% *a""%& !. +ay*%"t a# '"(%a& • Third , t$% #t&!"%#t "/at!" t$at P$(%x a# a +a&t"%& # t$% .at t$at t !'(/ &%%5% 0 !. t$% "%t +&!.t# a# !*+%"#at!"Q '"/%& t$% a&%%*%"t ($hile3 Mining Cororation vs. Co''issioner G.R. No. !%+!+0 r. !/ #""+)
SO>RCES OF INCOME • •
•
• • • • •
Inte!est – I"t%&%#t .&!* #!'&%# t$" P$( a"/ "t%&%#t !" !"/# a"/
!(at!"# !. &%#/%"t#, !&+!&at% !& !t$%&#% Di9i$en$ – F&!* /!*%#t !&+!&at!" a"/ .&!* .!&%" !&+!&at!", '"(%## (%## t$a" 0 !. &!## "!*% !. .!&%" !&+!&at!" .!& 3 y%a&# +&!& t! /%(a&at!" !. /5/%"/# a# /%&5%/ .&!* #!'&%# t$" t$% P$(, " $$ a#%, a++(y !"(y &at! !. P$(-#!'&% "!*% t! &!## "!*% .&!* a(( #!'&%# Se!9i"es – P(a% $%&% #%&5%# a&% +%&.!&*%/, %x%+t " a#% !. "t%&"at!"a( a& a&&%& a"/ #$++" ("%# $$ a&% tax%/ at 2 !" t$%& :&!## P$( B(("# R%5%"'%# .&!* t&+# !&"at" .&!* t$% P$( a&% !"#/%&%/ a# "!*% .&!* #!'&%# t$" t$% P$(++"%#, $(% &%5%"'%# .&!* "!'"/ t&+# a&% t&%at%/ a# "!*% .&!* #!'&%# !'t#/% t$% P$(++"%# Rent'#s 'n$ !%7'#ties – L!at!" !& '#% !. +&!+%&ty !& +&!+%&ty &$t " P$( S'#e %4 !e'# !%e!t7 – L!at%/ " t$% P$(++"%# S'#e %4 e!s%n'# !%e!t7 – L!at%/ " t$% P$(++"%# G'in 4!%+ s'#e %4 sh'!es %4 st%":s %4 ' $%+esti" "%!%!'ti%n # AL9AYS t&%at%/ a# "!*% .&!* #!'&%# t$" t$% P$(++"%# Othe! int'n5i#e !%e!t7 – Mo4ilia se5--nt-r ersona' (e.g. a" .&!* #a(% !. #$a&%# !. #t!7# !. a .!&%" !&+!&at!"4
:ROSS INCOME • SALE OF :OODS • :&!## Sa(%# • L%##< C!#t !. Sa(%#< • B% I"5%"t!&y P'&$a#%# T!ta( a5a(a(% .!& #a(% - E"/" "5%"t!&y C!#t !. Sa(%#
• :&!## "!*% • T*%# 2 • MCIT
• SALE OF SERJICES • :&!## R%5%"'% • L%##< C!#t !. S%&5% • !"##t" !. a(( /&%t • !#t# a"/ %x+%"#%#
• :&!## "!*% • T*%x 2 • MCIT
INCOME • INCOME *%a"# a#$ !& t# %'5a(%"t !*" t! a +%&#!" t$" a
#+%.%/ +%&!/, $%t$%& a# +ay*%"t .!& #%&5%#, "t%&%#t !& +&!.t .&!* "5%#t*%"t It !5%&# a" /%&5%/ .&!* a+ta(, .&!* (a!&, !& .&!* !t$ !*"%/, "('/" a" .&!* #a(% !& !"5%&#!" !. a+ta( a##%t#
• R%t'&" !. a+ta( # %x%*+t .&!* "!*% tax Ca+ta(, (a!&, !& +&!+%&ty # t$% t&%%) "!*% # t$% .&'t Ca+ta( # t$% .'"/, "!*% # t$% .(! !. .'"/ • T! % taxa(%, t$%&% *'#t % "!*%, a" !& +&!.t) a" # &%%5%/, a&'%/ !& &%a(8%/ /'&" t$% y%a&) a"/ t # "!t %x%*+t .&!* "!*% tax '"/%& t$% C!"#tt't!", t&%aty !& (a – M%&% "&%a#% " t$% 5a('% !. +&!+%&ty /!%# "!t !"#tt't% taxa(% "!*% It # "!t y%t &%a(8%/ /'&" t$% y%a& – T&a"#.%& !. a++&%at%/ +&!+%&ty t! t$% %*+(!y%% .!& #%&5%# &%"/%&%/ # taxa(% "!*%
TEST IN DETERMININ: INCOME • R%a(8at!" t%#t – T$%&% *'#t % #%+a&at!" .&!* a+ta( !. #!*%t$" !. %x$a"%a(% 5a('% %, #a(% !. a##%t4
• C(a* !. &$t /!t&"% – CIR 5 a5%&, 1GG SCRA 2 a"7 %&&!"%!'#(y +a/ 1 M, "#t%a/ !. 1,0004
• E!"!* %"%.t t%#t – St!7 !+t!" 5%" t! t$% %*+(!y%%
• I"!*% .&!* $at%5%& #!'&% – A(( "!*% "!t %x+&%##(y %x%*+t%/ .&!* "!*%, &&%#+%t5% !. 5!('"ta&y !& "5!('"ta&y at!" !. tax+ay%& " +&!/'" "!*%
NAT>RE OF INCOME • COMPENSATION INCOME – Ex#t%"% !. %*+(!y%&-%*+(!y%% &%(at!"#$+
• B>SINESS AND@OR PROFESSIONAL INCOME – NO %*+(!y%&-%*+(!y%% &%(at!"#$+
• CAPITAL :AIN – R%a( +&!+%&ty " t$% P$( a"/ #$a&%# !. #t!7 !. /!*%#t !&+!&at!" – Ot$%& #!'&%# !. a+ta( a"
• PASSIJE INJESTMENT INCOME – I"t%&%#t, /5/%"/, a"/ &!ya(ty "!*%
• OTHER INCOME – P&8%# a"/ """# – A(( !t$%& "!*%, a" !& +&!.t "!t !5%&%/ y t$% a!5% (a##%#
COMPENSATION INCOME • C!*+%"#at!" "!*% .a((" t$" t$% *%a"" !. #tat't!&y *"*'* a%QSM94 '"/%& RA G0, %..%t5% '(y , 200, a# *+(%*%"t%/ y R%5%"'% R%'(at!"# N! 10-200 /at%/ '(y , 200, #$a(( % %x%*+t .&!* "!*% tax a"/ t$$!(/" tax • H!(/ay +ay, !5%&t*% +ay, "$t #$.t /..%&%"ta( +ay, a"/ $a8a&/ +ay %a&"%/ y M"*'* 9a% Ea&"%& M9E4 #$a(( (7%#% % !5%&%/ y t$% a!5% %x%*+t!", +&!5/%/ t$at a" %*+(!y%% $! &%%5%#@%a&"# a//t!"a( !*+%"#at!" #'$ a# !**##!"#, $!"!&a&a, .&"% %"%.t#, %"%.t# " %x%## !. t$% a((!a(% #tat't!&y a*!'"t !. P30,000, taxa(% a((!a"%# a"/ !t$%& taxa(% "!*% !t$%& t$a" t$% SM9, $!(/ay +ay, !5%&t*% +ay, $a8a&/ +ay a"/ "$t #$.t /..%&%"ta( +ay #$a(( "!t %"?!y t$% +&5(%% !. %" a M9E a"/, t$%&%.!&%, $#@$%& %"t&% %a&""# a&% "!t %x%*+t .&!* "!*% tax a"/ t$$!(/" tax •
COMMISSION INCOME •
•
C!**##!"# +a/ .!& *a&7%t" #%&5%# &%"/%&%/ a&!a/ .!& a P$(++"% !*+a"y # !"#/%&%/ .!&%"-#!'&% "!*% T$% #!'&% !. t$% "!*% # t$% +&!+%&ty, at5ty !& #%&5% t$at +&!/'%/ t$% "!*% P(a% $%&% #%&5%# a&% &%"/%&%/ /%t%&*"% taxat!" T$% .at t$at &%+%"t !. !**##!" "!*% # P&%#/%"t a"/ *a?!&ty #t!7$!(/%& !. t$% P$(++"% !*+a"y /!%# "!t a(t%& t$% #!'&% !. "!*% T$%&% a&% !"(y t! ay# y $$ t$% P&%#/%"t a"/ !t$%& *%*%&# !. t$% B!a&/ a" % &a"t%/ !*+%"#at!" a+a&t .&!* &%a#!"a(% er die's< 14 $%" t$%&% # a +&!5#!" " t$% y-(a# .x" t$%& !*+%"#at!") a"/ 24 $%" t$% #t!7$!(/%&# a&%% t! 5% t t! t$%* I. "!"% !. t$%#% !"/t!"# a&% +&%#%"t, !**##!" "!*% a""!t % a't!*ata((y att&'t%/ t! +%tt!"%&6# +!#t!" " t$% !*+a"y (2-liane Baier6Nickel vs. CIR GR No. !1/7"1 Fe4. !0 #""7)
•
D!'*%"t# .ax%/ t! P$(++"% !*+a"y %a&" "#t&'t!"# a# t! #8%#, /%#"# a"/ .a&# t! % '#%/ " ."#$%/ +&!/'t# a"/ #a*+(% #a(%# !&/%&# &%(ay%/ t! (%"t# a&!a/ a&% "!t %"!'$ t! #$! #%&5%# %&% +%&.!&*%/ a&!a/ Sa/ /!'*%"t# *'#t #$! t$at "#t&'t!"# !& !&/%&# &+%"%/ "t! !"('/%/ !& !((%t%/ #a(%# " :%&*a"y (CIR v. Baier6Nickel GR No. !170*7 -g #* #""/)
ONSHORE AND OFFSHORE INCOME • C!"#t&'t!" a"/ "#ta((at!" !&7# %&% #'!"t&at%/ a"/ /!"% " t$% P$(++"%# y a P$( !&+!&at!") $%"%, "!*% # .&!* #!'&%# t$" t$% P$(++"%# • H!%5%&, #!*% +%%# !. %'+*%"t a"/ #'++(%# .!& NDC +&!?%t a"/ a**!"a #t!&a% ta"7# a"/ &%.&%&at!" '"t# %&% !*+(%t%(y /%#"%/ a"/ %""%%&%/ " a+a" A(( #%&5%# .!& t$% /%#", .a&at!", %""%%&" a"/ *a"'.at'&% !. *at%&a(# a"/ %'+*%"t '"/%& a+a"%#% Y%" +!&t!" %&% *a/% a"/ !*+(%t%/ " a+a") $%"%, %x%*+t .&!* P$( "!*% tax • S%&5% "!*% .&!* t'&"-7%y !"t&at !" a +&!?%t " t$% P$( # /5#(% (CIR v. Mar-4eni Cor GR No. !70700 8ec !+ #""!).
:ROSS PHIL BILLIN:S • INTERNATIONAL AIR AIR CARRIER • O" !'t!'"/ t&+< F($t .&!* P$( t! .!&%" /%#t"at!", "!*% # t&%at%/ a# .&!* P$(++"% #!'&%#) $%"%, #'?%t t! 2 !" :PB – C!"t"'!'# a"/ '""t%&&'+t%/ .($t – I. t&a"#$+*%"t !. +a##%"%& " a"!t$%& !'"t&y !" a"!t$%& .!&%" a&("% ta7%# +(a%< :PB tax a++(%# !"(y !" a('!t +!&t!" !. &%5%"'% !" P$(++"% (% P$( t! .!&%" !'"t&y4
• O" "!'"/ t&+< F($t .&!* .!&%" !'"t&y t! t$% P$(, "!*% # t&%at%/ a# .&!* .!&%" #!'&%#) $%"%, %x%*+t .&!* P$( "!*% tax
• INTERNATIONAL SHIPPIN: LINE • F&!* P$( t! ."a( .!&%" /%#t"at!"< %"t&% "!*% # taxa(%, %5%" . t&a"#$+*%"t !. a&!%# t!!7 +(a% " a"!t$%& !'"t&y • F&!* .!&%" !'"t&y t! P$(< %x%*+t
CAPIT CAPITA AL :AINS :AINS • 3 TYPES OF CAPITAL :AINS – Ca+ta( a" .&!* #a(% !. &%a( +&!+%&ty (!at%/ " t$% P$( – Ca+ta( a" .&!* #a(% !. #$a&%# !. #t!7# !. a /!*%#t !&+!&at!" – Ot$%& ty+%# !. a+ta( a"#
• Sa(% !. &%a( +&!+%&ty (!at%/ " t$% P$( – S%((%& # "!t %"a%/ " &%a( %#tat% '#"%## • T$% (a +&%#'*%# t$at t$% #%((%& &%a(8%# a +&!.t .&!* #a(% !. a+ta( a##%t) $%"%, /%#+t% t$% (!## .&!* #a(%, #%((%& $a# t! +ay t$% C:T
SALE OF REAL PROPERTY • T$% tax a#% # &!## #%((" +&% !& .a& *a&7%t 5a('%, $$%5%& # $$%& • A++(y t$% a+ta( a"# tax, . t$% #%((%& # a &%#/%"t t8%", a" a(%" "/5/'a( &%#/%"t !& "!"-&%#/%"t4, !& a /!*%#t !&+!&at!" • I. t$% #%((%& # a .!&%" !&+!&at!" &%#/%"t !& "!"-&%#/%"t4, t$% a##%t " t$% P$( # a a+ta( a##%t, 't t$% a" .&!* #a(% # #'?%t t! t$% (!a( tax #y#t%* !. taxat!" • I. t$% &%a( +&!+%&ty # (!at%/ a&!a/, t$% a" .&!* #a(% # %x%*+t .&!* P$( "!*% tax, '"(%## t$% #%((%& # a &%#/%"t t8%" !& a /!*%#t !&+!&at!" • I. t$% #%((%& # a &%#/%"t t8%" a"/ a+ta( a##%t # t$% +&"+a( &%#/%"% !. t$% #%((%&, #%(( %&, t$% #a(% *ay % %x%*+t .&!* t$% C:T, +&!5/%/ t$at t$% !"/t!"# +&!5/%/ .!& " t$% (a a&% !*+(%/ t$ y t$% #%((%&
SALE OF REAL PROPERTY • S%((%& # a +%&#!" %"a%/ " &%a( %#tat% '#"%## – R%a( +&!+%&ty # a" !&/"a&y a##%t) $%"%, a"y a" #%((" +&% (%## !#t !& a/?'#t%/ a##4 .&!* #a(% # tax%/ '"/%& t$% (!a( tax #y#t%* – T$% t&a"#at!" # #'?%t t! t$% %x+a"/%/ t$$!(/" tax, #'$ tax t! % t$$%(/ y t$% 'y%& !. t$% +&!+%&ty a"/ &%*tt%/ t! BIR T$% t$$!(/" tax # &%/ta(% aa"#t t$% "!*% tax !. t$% #%((%& – T$% a+ta( a"# tax !" t$% t&a"#at!" # "!t a++(a(% t$%&%!"
SALE OF SHARES OF DOMESTIC CORPORATION • S%((%& # a /%a(%& " #%'&t%# – D%a(%& " #%'&t%# # a +%&#!" &%'(a&(y %"a%/ " t$% 'y a"/ #a(% !. #%'&t%# .!& $# !" a!'"t H% #%((# +&!+%&ty a"/ (!!7# at +&!.t# .&!* #a(% !. #$a&%# !& #%'&t%# A #t!7&!7%& # a *//(%*a" %t%%" t$% #%((%& a"/ 'y%& !. #t!7# !& #%'&t%# H% # a #%((%& !. #%&5%# a"/ $# "!*% # !**##!" – S$a&%# a&% !&/"a&y a##%t# !. #%((%&) #%((" +&% (%## !#t !& a/?'#t%/ a## %'a(# a") a" .&!* #a(% # #'?%t t! (!a( tax #y#t%* !. "!*% taxat!" – T&a"#at!" "5!(5" (#t%/ #$a&%# t&a/%/ " (!a( #t!7 %x$a"% # "!t !5%&%/ y S% 12A4, NIRC #t!7 t&a"#at!" tax4, y %x+&%## +&!5#!" !. (a
SHARES OF DOMESTIC CORPORATION • S%((%& # a" "5%#t!& $! # "!t a /%a(%& " #%'&t%# – I. #$a&%# a&% (#t%/ a"/ t&a/%/ " a (!a( #t!7 %x$a"%, a++(y !. 1 #t!7 t&a"#at!" tax !" &!## #%((" +&% !& &!## 5a('% " *!"%y Sa(% # %x%*+t .&!* "!*% tax – I. #$a&%# a&% (#t%/ 't "!t t&a/%/ " a (!a( #t!7 %x$a"% !& !5%&-t$%-!'"t%&4, !& t$% #$a&%# a&% '"(#t%/, t$% "%t a+ta( a" #%((" +&% (%## !#t !& a/?'#t%/ a##4, . a"y, # #'?%t t! t$% a+ta( a"# tax !*+'t%/ a# .!((!#< • !" .&#t P100,000 "%t a+ta( a") a"/ • 10 !" a"y a*!'"t " %x%## !. P100,000
SHARES OF DOMESTIC CORPORATION – C:T &%t'&" # .(%/ t$" 30 /ay# .&!* /at% !. #a(% E5%&y #a(% *'#t % !5%&%/ y a #%+a&at% C:T &%t'&" a"/ t$% tax +a/ '+!" .(" !. t$% &%t'&" – A(( t&a"#at!"# /'&" t$% y%a& a&% !"#!(/at%/ a"/ t$% a""'a( &%t'&" #$a(( % .(%/ "!t (at%& t$a" A+&( 1 !. t$% .!((!" y%a&, 't !"(y !"% P100,000 # #'?%t t! a"/ t$% a(a"% !. "%t a+ta( a" .!& t$% y%a& # #'?%t t! 10 – N%t a+ta( a" T!ta( a+ta( a"# .&!* #a(%# !. #$a&%# !. /!*%#t !&+!&at!" /'&" t$% y%a& (%## t!ta( a+ta( (!##%# /'&" t$% #a*% y%a&
OTHER CAPITAL ASSETS • INDIJID>AL – I. a+ta( a##%t # (!"-t%&* $!(/" +%&!/ # !5%& 12 *!"t$#4, !"(y 0 !. a" # #'?%t t! "!*% tax, '#" t$% (!a( tax #y#t%* – I. a" # #$!&t-t%&*, 100 !. a" # #'?%t t! "!*% tax '"/%& t$% (!a( tax #y#t%*
• CORPORATION – R%a&/(%## !. $!(/" +%&!/, t$% %"t&% a" !& (!## # taxa(% !& /%/'t(%
INTEREST INCOME • TYPES OF INTEREST INCOME – S'?%t t! F9T< I"t%&%#t "!*% !" a"7 /%+!#t#, /%+!#t #'#tt't%#, t&'#t a"/ !t$%& #*(a& a&&a"%*%"t# • 20 F9T – +%#! /%+!#t t$ a"7 • F9T – .!&%" '&&%"y /%+!#t t$ OB>@FCD>
– NOT #'?%t t! F9T 't #'?%t t! (!a( tax #y#t%*< A(( !t$%& "t%&%#t "!*% !& ."a"" "!*% "!t !5%&%/ a!5% – Ex%*+t "!*%< • L!"-t%&* /%+!#t !& "5%#t*%"t y%a&# !& *!&%4 y "/5/'a(# " t$% .!&* !. t&'#t .'"/#, /%+!#t #'#tt't%#, IMA a"/ !t$%& "5%#t*%"t# +&%#&%/ y BSP
– Taxa(% "!*%< • P&%.%&%"ta( tax &at% – P&%-t%&*"at!" !. (!"-t%&* /%+!#t y "/5/'a( < 20, 1- (%## t$a" 3 y&#) 12< 3 y&#-(%## t$a" y&#) < y&#-(%## t$a" y) a"/ "t%&%#t !" .!&%" (!a" 204 • R%'(a& tax &at% – A(( !t$%& a#%#
TAX ON OB>@FCD> • F"a( tax !" "t%&%#t "!*% .&!* (!a"# t! &%#/%"t !&&!%& # a /&%t (a(ty !. FCD> • Fa('&% !. (!a( !&&!%& t! t$$!(/ a"/ &%*t t$% ."a( t$$!(/" tax /!%# "!t %x%*+t OB>@FCD> !" !"#$!&% "t%&%#t "!*% (ING Bank v CIR #""1) • T$% t$$!(/" a%"t-!&&!%& *ay a(#! % a##%##%/ /%.%"y t$$!(/" tax a# +%"a(ty .!& .a('&% t! t$$!(/ (RCBC v. CIR CT Case #""%)
DIJIDEND INCOME • RE>ISITES FOR DIJIDEND DECLARATION – P&%#%"% !. +!#t5% &%ta"%/ %a&""# – N! +&!$t!" t! /%(a&% /5/%"/ " (!a" a&%%*%"t – D%(a&at!" !. /5/%"/ y B!a&/ !. D&%t!&#
• TYPES OF DIJIDENDS – Taxa(% • Ca#$ /5/%"/ • P&!+%&ty /5/%"/
– Ex%*+t • St!7 /5/%"/ %x%+t $%" t$%&% # $a"% " +&!+!&t!"at% "t%&%#t a*!" #t!7$!(/%&#, !& t$%&% # #'#%'%"t a"%((at!" !& &%/%*+t!" !. #$a&%# /%(a&%/ a# #t!7 /5/%"/, $$ # %##%"ta((y %'5a(%"t t! a#$ /5/%"/4
•
NOTE< L'/at" /5/%"/ &%+&%#%"t# /#t&'t!" !. !&+!&at% a##%t# t! #t!7$!(/%&# :a" .&!* #'&&%"/%& !. #$a&%# a&% t&%at%/ a# !&/"a&y "!*%
DIJIDEND INCOME • I"t&a-!&+!&at% /5/%"/< Ex%*+t .&!* tax – C!&+!&at!" +ay" /5/%"/< D!*%#t !&+!&at!" – R%+%"t !. /5/%"/< A"!t$%& /!*%#t !&+!&at!" !& &%#/%"t .!&%" !&+!&at!"
• D5/%"/ +a/ t! "!"-&%#/%"t .!&%" !&+!&at!" – C!&+!&at!" +ay" /5/%"/< D!*%#t !&+!&at!" – R%+%"t !. /5/%"/ • F!&%" $%a/ !..% *a7%# /&%t "5%#t*%"t " P$( !*+a"y< 1 F9T !" &!## /5/%"/ "!*% • P$( &a"$ !. .!&%" !&+!&at!" *a7%# "5%#t*%"t " P$( !*+a"y< Ex%*+t .&!* "!*% tax
– Tax-#+a&" +&!5#!" • I. !'"t&y !. &%#/%"% !. t$% .!&%" !&+!&at!" /!%# "!t *+!#% "!*% tax !" /5/%"/ +a/ y a /!*%#t !&+!&at!", *+!#% 1 F9T !"(y
DIJIDEND INCOME •
•
9$(% t$%&% # t&a"#.%& !. t$% #$a&%# !. #t!7@#%'&t%# t! t$% B!&&!%& +'&#'a"t t! t$% S%'&t%# B!&&!" a"/ L%"/" SBL4 A&%%*%"t, t$% L%"/%& &%ta"# %&ta" &$t# a&'" t! t$% #$a&%# !. #t!7@#%'&t%# (%"t, #'$ a# t$% &$t t! &%%5% a#$, #t!7 /5/%"/# !& "t%&%#t $$ t$% B!&&!%& # !(%/ t! *a"'.at'&% !& &%*'&#% t! t$% L%"/%& /'&" t$% !&&!" +%&!/ T$%#% a#$, #t!7 /5/%"/# !& "t%&%#t $$ t$% B!&&!%& # &%'&%/ t! *a"'.at'&% !& &%*'&#% t! t$% L%"/%& a&% !t$%&#% &%.%&&%/ t! a# UMa"'.at'&%/ D5/%"/# !& B%"%.t#U T$% L%"/%& *ay (7%#% &%ta" 5!t" &$t# !5%& t$% (!a"%/ #$a&%# !. #t!7@#%'&t%# $(% " t$% +!##%##!" !. t$% B!&&!%&, . *'t'a((y a&%%/ '+!" y t$% +a&t%# R%%+t !. t$% Ma"'.at'&%/ D5/%"/# !& B%"%.t#Q #$a(( "!t % a taxa(% "!*% !. t$% L%"/%& #"% t ?'#t &%+&%#%"t# /5/%"/#@!t$%& %"%.t# t$at t$% (%"/%& !'(/ $a5% &%%5%/ $a/ t$% #$a&% "!t %%" (!a"%/ +'&#'a"t t! SBL a&%%*%"t H!%5%&, t$% +ay*%"t !. #'$ a*!'"t y t$% B!&&!%& #$a(( "!t % a tax /%/'t(% %x+%"#% O" t$% !t$%& $a"/, t$% &%%+t !. a#$ /5/%"/ .&!* t$% ##'" !*+a"y y t$% B!&&!%& !& B'y%& #$a(( % #'?%t t! t$% +&!5#!"# !. %x#t" (a# %, ."a( t$$!(/" tax !. 10 !" &!## /5/%"/ +a/ t! a t8%"4
OTHER INCOME • In"%+e 4!%+ 'n7 s%&!"e *h'te9e! • T$% !&/# "!*% .&!* a"y #!'&% $at%5%&Q /#(!#%# a (%#(at5% +!(y t! "('/% a(( "!*% "!t %x+&%##(y %x%*+t%/ .&!* t$% (a## !. taxa(% "!*% '"/%& !'& (a# ( Madrigal vs. Ra99ert& s-ra: Co''issioner vs. B,C) T$% !&/# "!*% .&!* a"y #!'&% $at%5%&Q # &!a/ %"!'$ t! !5%& a"# !"t%*+(at%/ $%&% T$%#% !&/# /#(!#% a (%#(at5% +!(y t! "('/% a(( "!*% "!t %x+&%##(y %x%*+t%/ t$" t$% (a## !. taxa(% "!*% '"/%& !'& (a#, &&%#+%t5% !. t$% 5!('"ta&y !& "5!('"ta&y at!" !. t$% tax+ay%& " +&!/'" t$% a"# (G-tierre; vs. Collector CT Case /1 -g. 7! !*11)
•
A"y %!"!* %"%.t t! t$% %*+(!y%% $at%5%& *ay $a5% %%" t$% *!/% y $$ t # %..%t%/ # taxa(% T$'#, " #t!7 !+t!"#, t$% /..%&%"% %t%%" t$% .a& *a&7%t 5a('% !. t$% #$a&%# at t$% t*% t$% !+t!" # %x%&#%/ a"/ t$% !+t!" +&% !"#tt't%# a//t!"a( !*+%"#at!" "!*% t! t$% %*+(!y%% (Co''issioner vs. 'ith 7#% <.. !00)
EXCL>SIONS • • • • • •
L.% "#'&a"% +&!%%/# A*!'"t &%%5%/ y "#'&%/ a# &%t'&" !. +&%*'* :.t#, %'%#t# a"/ /%5#%# C!*+%"#at!" .!& "?'&%# !& #7"%## I"!*% %x%*+t '"/%& t&%aty R%t&%*%"t %"%.t#, +%"#!"#, &at't%# – RA 1 y&# 0 y a"/ RA G1 10 y&# 0 y • I"t%&%#t "!*% !. %*+(!y%% t&'#t .'"/ !& a&%/t%/ &%t&%*%"t +(a" # %x%*+t .&!* F9T (CIR v. GC= Retire'ent $lan #"0 CR %+0)
– A*!'"t &%%5%/ a# a !"#%'%"% !. #%+a&at!" %a'#% !. /%at$, #7"%## !& !t$%& +$y#a( /#a(ty !& .!& a"y a'#% %y!"/ t$% !"t&!( !. %*+(!y%%
• M#%((a"%!'# t%*# – I"!*% !. .!&%" !5%&"*%"t – I"!*% !. !5%&"*%"t !& t# +!(ta( #'/5#!"# .&!* a"y +'( 't(ty !& %x%&#% !. !5%&"*%"ta( .'"t!"
INCOME OF RETIREMENT F>ND •
COA a((%%/ t$at DBP # at'a( !"%& !. t$% t&'#t .'"/ a"/ t# "!*% %a'#%< – DBP *a/% t$% !"t&'t!" t! t$% F'"/ – T&'#t%%# !. t$% F'"/ a&% *%&%(y a/*"#t&at!&# – DBP %*+(!y%%# !"(y $a5% a" "$!at% &$t t! t$% F'"/
•
•
•
DBP &%#+!"/%/ t$at t$% T&'#t%%# &%%5%/ a"/ !((%t%/ "!*% a"/ +&!.t .&!* t$% F'"/ a"/ t$%y *a"ta"%/ #%+a&at% !!7# .!& t$at +'&+!#% T$% +&"+a( a"/ "!*% (( "!t &%5%&t t! DBP, %5%" . t&'#t # #'#%'%"t(y *!/.%/ !& t%&*"at%/ SC &'(%/ t$at t$% %"%.a&%# !. t$% F'"/ a&% t$% DBP !..a(# a"/ %*+(!y%%# $! (( &%t&% It # "!t a(ay# "%%##a&y t$at t$% %"%.a&%# #$!'(/ % "a*%/ !& %5%" % " %x#t%"% at t$% t*% t$% t&'#t # &%at%/ " $# .a5!&, +&!5/%/ t$%y a&% #'..%"t(y %&ta" !& /%"t.a(% T$% Sa(a&y L!a" P&!&a* // "!t t%&*"at% t$% t&'#t t! t$% F'"/6# t&'#t%% T$at t$% DBP B!a&/ !. D&%t!&# !".&*# t$% a++&!5a( !. t$% SLP y t$% F'"/6# t&'#t%%# /!%# "!t *a7% t$% .'"/ +&!+%&ty !. DBP (8B$ v. C, #""%)
EXCL>SIONS • M#%((a"%!'# t%*# – P&8%# a"/ aa&/# • I" &%!"t!" !. &%(!'#, $a&ta(%, a&t#t, (t%&a&y a$%5%*%"t, %t H% // "!t %"t%& !"t%#t a"/ # "!t &%'&%/ t! &%"/%& #'#ta"ta( .'t'&% #%&5%#4 • :&a"t%/ t! at$(%t%# " (!a( a"/ "t%&"at!"a( #+!&t# !*+%tt!"#, #a"t!"%/ y t$%& "at!"a( #+!&t# a##!at!"#
– 13t$ *!"t$ +ay a"/ !t$%& %"%.t# '+ t! P30,0004 – :a"# .&!* #a(% !. (!"-t%&* y%a&# a"/ 1 /ay4 !"/#, /%%"t'&%# a"/ !t$%& %&t.at%# !. "/%t%/"%## – :a"# .&!* &%/%*+t!" !. #$a&%# " *'t'a( .'"/
:AIN 5 INTEREST •
:a"# a""!t "('/% "t%&%#t, #"% t (%a&(y &%.%&# t! a"# .&!* t$% #a(% !. !"/#, /%%"t'&%# a"/ !t$%& %&t.at%# !. "/%t%/"%## 9$%&%a# t$% t%&* a"#Q "('/%# "t%&%#tQ " t# %"%&a( #%"#%, t$# &'(% a""!t % a++(%/ t! S%t!" 32B444 !. t$% Tax C!/% " t$% #+%. #%"#% S%t!" 32A4 !. t$% Tax C!/% /%."%# &!## "!*%Q a"/ t # (%a& t$at t$%&% # a /#t"t!" %t%%" a"# /%&5%/ .&!* /%a("# " +&!+%&tyQ a"/ "t%&%#t#Q :a"# &%a(8%/ .&!* t$% #a(% !& %x$a"% !& &%t&%*%"t !. !"/#, /%%"t'&%# a"/ !t$%& %&t.at% !. "/%t%/"%##Q !'(/ .a(( '"/%& t$% at%!&y !. a"# /%&5%/ .&!* /%a("# " +&!+%&tyQ O" t$% !t$%& $a"/, "t%&%#t#Q !'(/ "('/% "t%&%#t .&!* !"/#, /%%"t'&%# a"/ !t$%& %&t.at% !. "/%t%/"%## O"(y t8%"#, &%#/%"t a(%"# a"/ "!"-&%#/%"t a(%"# %"a%/ " t&a/% !& '#"%## a&% %x%*+t .&!* "!*% tax !" "t%&%#t .&!* (!"-t%&* /%+!#t !& "5%#t*%"t O" t$% !t$%& $a"/, /!*%#t a"/ &%#/%"t .!&%" !&+!&at!"# a&% #'?%t t! a 20 ."a( tax !" #'$ "t%&%#t I. C!"&%## "t%"/%/ t! %x%*+t "t%&%#t .&!* !"/#, /%%"t'&%# a"/ !t$%& %&t.at%# !. "/%t%/"%## '"/%& S%t!" 32B444 !. t$% Tax C!/%, t !'(/ $a5% /!"% #! " (%a& a"/ #+%. t%&*# (Nion =i9e Ins-rance Co'an& vs. Co''issioner CT Case No. /!%# Fe4 % #""#) A.t%& a((, %x%*+t!"# a&% !"#t&'%/ #t&t(y aa"#t t$% tax+ay%& a"/ (%&a((y " .a5!& !. t$% !5%&"*%"t
8E MINIMI BENEFITS • EXEMPT 8E MINIMI BENEFITS, RE:ARDLESS OF RECIPIENT RAN AND FILE, OR MANA:ERIAL OR S>PERJISORY4 • a M!"%t8%/ '"'#%/ 5aat!" (%a5% &%/t# !. +&5at% %*+(!y%%# "!t %x%%/" t%" 104 /ay# /'&" t$% y%a& a"/ t$% *!"%t8%/ 5a('% !. (%a5% &%/t# +a/ t! !5%&"*%"t !..a(# a"/ %*+(!y%%#) • M%/a( a#$ a((!a"% t! /%+%"/%"t# !. %*+(!y%%# "!t %x%%/" P000 +%& %*+(!y%% +%& #%*%#t%& !& P12 +%& *!"t$) • R% #'#/y !. P1,0000 !& !"% 14 #a7 !. 0-7 &% +%& *!"t$ a*!'"t" t! "!t *!&% t$a" P1,0000) • / >".!&*# a"/ (!t$" a((!a"% "!t %x%%/" P,00000 +%& a""'*) • % At'a( y%a&(y *%/a( %"%.t# "!t %x%%/" P10,00000 +%& a""'*) • . La'"/&y a((!a"% "!t %x%%/" P30000 +%& *!"t$) •
8E MINIMI BENEFITS •
• • • •
E*+(!y%%# a$%5%*%"t aa&/# %, .!& (%"t$ !. #%&5% !& #a.%ty a$%5%*%"t, $$ *'#t % " t$% .!&* !. a ta"(% +%&#!"a( +&!+%&ty !t$%& t$a" a#$ !& .t %&t.at%, t$ a" a""'a( *!"%ta&y 5a('% "!t %x%%/" P10,00000 &%%5%/ y t$% %*+(!y%% '"/%& a" %#ta(#$%/ &tt%" +(a" $$ /!%# "!t /#&*"at% " .a5!& !. $$(y +a/ %*+(!y%%#) $ :.t# 5%" /'&" C$&#t*a# a"/ *a?!& a""5%&#a&y %(%&at!"# "!t %x%%/" P,00000 +%& %*+(!y%% +%& a""'*) F(!%&#, .&'t#, !!7#, !& #*(a& t%*# 5%" t! %*+(!y%%# '"/%& #+%a( &'*#ta"%# %, !" a!'"t !. (("%##, *a&&a%, &t$ !. a ay, a y, %t4) a"/ ? Da(y *%a( a((!a"% .!& !5%&t*% !&7 "!t %x%%/" t%"ty-.5% +%&%"t 24 !. t$% a# *"*'* a% T$% a*!'"t !. /% *"*#Q %"%.t# !".!&*" t! t$% %(" $%&%" +&%#&%/ #$a(( "!t % !"#/%&%/ " /%t%&*"" t$% P30,00000 %(" !. !t$%& %"%.t#Q +&!5/%/ '"/%& S% 3244%4 !. t$% Ta Tax C!/% H!%5%&, . t$% %*+(!y%& +ay# *!&% t$a" t$% %(" +&%#&%/ y t$%#% &%'(at!"#, t$% %x%## #$a(( % taxa(% t! t$% %*+(!y%% &%%5" t$% %"%.t# !"(y . #'$ %x%## # %y!"/ t$% P30,00000 %(" A"y a*!'"t 5%" y t$% %*+(!y%& a# %"%.t# t! t# %*+(!y%%#, $%t$%& (a##.%/ a# de 'ini'is %"%.t# !& .&"% %"%.t#, #$a(( !"#tt't% a# /%/'t(% %x+%"#% '+!" #'$ %*+(!y%&
EXEMPT EXEMPT ASSOCIATIONS ASSOCIATIONS •
The phrase “any of their activities conducted for profit” does not qualify the word “properties.” --- T$% +$&a#% +$&a#% a"y !. t$%& at5t%# at5t%# !"/'t%/
.!& +&!.tQ /!%# "!t 'a(.y t$% !&/ +&!+%&t%#Q +&!+%&t%#Q T$# *a7%# "!*% .&!* t$% +&!+%&ty !. t$% !&a"8at!" taxa(%, &%a&/(%## !. $! t$at "!*% # '#%/ – $%t$%& .!& +&!.t !& .!& (!.ty "!"-+&!.t "!"-+&!.t +'&+!#%# T$'#, t$% "!*% /%&5%/ .&!* &%"ta(# !. &%a( +&!+%&ty !"%/ y t$% Y!'" !'" M%"6# C$&#ta" A##!at!" !. t$% P$(++"%#, I" (YMCA), %#ta(#$%/ a# a %(.a&%, %/'at!" a"/ $a&ta(% "!"-+&!.t !&+!&at!", # #'?%t t! "!*% tax T$% &%"ta( "!*% a""!t % %x%*+t%/ !" t$% #!(ta&y 't '"!"5"" &!'"/ t$at #a/ "!*% # "!t !((%t%/ .!& +&!.t 't # *%&%(y "/%"ta( t! t# !+%&at!" T$% (a /!%# "!t *a7% a /#t"t!" 9$%&% t$% (a /!%# "!t /#t"'#$, "%t$%& #$!'(/ % /#t"'#$ B%a'#% tax%# a&% a&% t$% (.%(!!/ !. t$% "at!", t$% C!'&t $a# a(ay# a++(%/ t$% /!t&"% !. #t&t "t%&+&%tat!" " !"#t&'" tax %x%*+t!"# YMCA YMCA # %x%*+t .&!* t$% +ay*%"t +ay*%"t !. +&!+%&ty tax%# !"(y 't "!t "!*% tax%# %a'#% t # "!t a" %/'at!"a( "#tt't!" /%5!t" t# "!*% #!(%(y .!& %/'at!"a( +'&+!#%# T$% t%&* %/'at!"a( %/'at!"a( "#tt't!"Q $a# a'&%/ a %((-7"!" %((-7"!" t%$"a( *%a"" >"/%& t$% E/'at!" At !. 1G2, #'$ t%&* &%.%&# t! #$!!(# T$% #$!!( #y#t%* # #y"!"y*!'# t$ .!&*a( %/'at!" $$ &%.%&# t! t$% $%&a&$a((y #t&'t'&%/ a"/ $&!"!(!a((y &a/%/ (%a&""# !&a"8%/ a"/ +&!5/%/ y t$% .!&*a( #$!!( #y#t%* a"/ .!& $$ %&t.at!" # &%'&%/ " !&/%& .!& t$% (Co''issioner vs. (%a&"%& t! +&!&%## t$&!'$ t$% &a/%# !& *!5% t! $$%& (%5%(# (Co''issioner Co-rt o9 eals and >MC o9 o9 the $hils. G.R. No. !#%"%7 ,ct. !% !**+)
DED>CTIONS • INDS OF DED>CTIONS – It%*8%/ D%/'t!"# – O+t!"a( Sta"/a&/ D%/'t!"# – S+%a( D%/'t!"#
• ITEMIKED DED>CTIONS – – – – – – – – – –
B'#"%## %x+%"#%#, "( &%#%a&$ a"/ /%5%(!+*%"t I"t%&%#t# Tax%# L!##%# Ba/ /%t# D%+&%at!" D%+(%t!" C$a&ta(% !"t&'t!"# C!"t&'t!"# t! +%"#!" t&'#t H%a(t$ !& $!#+ta(8at!" +&%*'*
DED>CTIONS • B>SINESS EXPENSES • • • • • • • • • • • • •
1 T$% %x+%"#% *'#t % !&/"a&y a"/ "%%##a&y) 2 Pa/ !& "'&&%/ /'&" t$% taxa(% y%a&) 3 I" a&&y" !" !& $$ a&% /&%t(y att&'ta(% t! t$% /%5%(!+*%"t, *a"a%*%"t, !+%&at!" a"/@!& !"/'t !. t$% t&a/%, '#"%## !& %x%&#% !. +&!.%##!") S'++!&t%/ y a/%'at% "5!%# !& &%%+t#) N!t !"t&a&y t! (a, +'( +!(y !& *!&a(# O+%&at" %x+%"#%# !. a" ((%a( !& '%#t!"a(% '#"%## a&% /%/'t(%, 't %x+%"#%# !. a" "$%&%"t(y ((%a( "at'&%, #'$ a# &%&y a"/ +&!t%t!" +ay*%"t#, a&% "!t T$% tax &%'&%/ t! % t$$%(/ !" t$% a*!'"t +a/ !& +aya(% # #$!" t! $a5% %%" +a/ t! t$% BIR
DED>CTIONS • A" %x+%"#% # !&/"a&yQ $%" t !""!t%# a +ay*%"t, $$ # "!&*a( " &%(at!" t! t$% '#"%## !. t$% tax+ay%& a"/ t$% #'&&!'"/" &'*#ta"%# • A" %x+%"#% # "%%##a&yQ $%&% t$% %x+%"/t'&% # a++&!+&at% !& $%(+.'( " t$% /%5%(!+*%"t !. tax+ay%&6# '#"%## !& t$at t$% #a*% # +&!+%& .!& t$% +'&+!#% !. &%a(8" a +&!.t !& *"*8" a (!## • PG M +a/ " 1G .!& a/5%&t#" a +&!/'t a# #ta%&" "'&&%/ t! &%at% !& *a"ta" #!*% .!&* !. !!/(( .!& t$% tax+ay%&6# t&a/% !& '#"%## !& .!& t$% "/'#t&y !& +&!.%##!" !. $$ t$% tax+ay%& # a *%*%&Q • :!!/((Q %"%&a((y /%"!t%# t$% %"%.t a&#" .&!* !""%t!" a"/ &%+'tat!", a"/ %..!&t# t! %#ta(#$ &%+'tat!" a&% a7" t! a'#t!" !. a+ta( a##%t# T$%&%.!&%, %x+%"#%# &%(at%/ t$%&%t! a&% "!t '#"%## %x+%"#%# 't a+ta( %x+%"/t'&%# (CIR vs. General Foods $hi. GR No. !%7/0# r. #% #""7).
DED>CTIONS • TEST OF REASONABLENESS OF BON>S • T$%&% # "! .x%/ test 4%! $ete!+inin5 the !e's%n'#eness %4 ' 5i9en %n&s 's "%+ens'ti%n T$# /%+%"/# '+!" *a"y .at!&#, !"% !. t$%* %" t$% a*!'"t a"/ 'a(ty !. t$% #%&5%# +%&.!&*%/ t$ &%(at!" t! t$% '#"%## • Ot$%& t%#t# #'%#t%/ a&% +ay*%"t *'#t % *a/% " !!/ .at$, t$% $a&at%& !. t$% tax+ay%&6# '#"%##, t$% 5!('*% a"/ a*!'"t !. t# "%t %a&""#, t# (!a(ty, t$% ty+% a"/ %xt%"t !. t$% #%&5%# &%"/%&%/, t$% #a(a&y +!(y !. t$% !&+!&at!", t$% #8% !. t$% +a&t'(a& '#"%##, t$% %*+(!y%%6# 'a(.at!"# a"/ !"t&'t!"# t! t$% '#"%## 5%"t'&%, a"/ %"%&a( %!"!* !"/t!"# • H!%5%&, " /%t%&*"" $%t$%& t$% +a&t'(a& #a(a&y !& !*+%"#at!" +ay*%"t # &%a#!"a(%, t$% #t'at!" *'#t % !"#/%&%/ a# a $!(% O&/"a&(y, "! #"(% .at!& # /%#5% (C.M. ?oskins @ Co. Inc. vs. Co''issioner =6#%"1* Nov. #+ !*/*: $aci9ic Banking Cor. vs. Co''issioner CT Case !//0 ,ct #* !*0").
•
B!"'#%# t$at a&% !'t-a"/-!'t .t#,Q a&% &att'/% a"/ a&% "!t /%/'t(%
DED>CTIONS • L%a( a"/ a!'"ta"t6# .%%# .!& +&!& y%a&# %&% "!t ((%/ " !&&%#+!"/" y%a&# 1G-1G4 It a# +a/ y tax+ay%& " #'%%/" y%a& 1G4 $%" t a# ((%/ y t$% (ay%& a"/ a!'"ta"t Tax+ay%&# '#%# a&'a( *%t$!/ !. a!'"t" • A&'a( !. "!*% a"/ %x+%"#% # +%&*tt%/ $%" t$% a(( %5%"t# t%#tQ $a# %%" *%t T$# t%#t &%'&%# 14 .x" a &$t t! "!*% !& (a(ty t! +ay, a"/ 24 t$% a5a(a(ty !. &%a#!"a(y a'&at% /%t%&*"at!" !. #'$ "!*% !& (a(ty It /!%# "!t, $!%5%&, /%*a"/ t$at t$% a*!'"t !. "!*% !& (a(ty % 7"!" a#!('t%(y) t !"(y &%'&%# t$at a tax+ay%& $a# at t# /#+!#a( t$% ".!&*at!" "%%##a&y t! !*+'t% t$% a*!'"t t$ &%a#!"a(% a'&ay, $$ *+(%# #!*%t$" (%## t$a" a" %xat !& !*+(%t%(y a'&at% a*!'"t • M!&%!5%&, /%/'t!" ta7%# t$% "at'&% !. tax %x%*+t!") t *'#t % !"#t&'%/ #t&t(y aa"#t t$% tax+ay%& (Co''issioner vs. Isa4ela C-lt-ral Cororation G.R. No. !0##7! Fe4. !# #""0)
DED>CTIONS • E"t%&ta"*%"t, a*'#%*%"t a"/ &%&%at!" %x+%"#%# a&% #'?%t t! (*tat!" – !. "%t #a(%# .!& #%((%&# !. !!/# – 1 !. "%t #a(%# .!& #%((%&# !. #%&5%# • C(' /'%# .!& *%*%&#$+ " #!a( !& at$(%t ('# t! +&!*!t% '#"%## !. !&+!&at!" +a/ y t$% !&+!&at!" a&% /%/'t(% .&!* &!## "!*% H!%5%&, t$%y (( % t&%at%/ a# .&"% %"%.t# #'?%t t! FBT !" t$% +a&t !. t$% %*+(!y%& FBT +a/ y %*+(!y%& # /%/'t(% a# '#"%## %x+%"#% !. t$% !&+!&at!" • R%"ta( %x+%"#%# "('/% (%a#%$!(/ a'&%/ .!& '#"%## +'&+!#%# a"/ !#t !. *+&!5%*%"t# "t&!/'%/ y (%##%% t! % a((!at%/ !5%& t$% t%&* !. t$% (%a#% R%a(ty tax%# +a/ y (%##%% .!& '#"%## +&!+%&ty # +a&t !. &%"ta( %x+%"#%#
DED>CTIONS • Di!e"t%!8s ;ees – I. "!t !..%& !& %*+(!y%% !. !&+!&at!", &%+!&t t a# !t$%& "!*% #'?%t t! 10 E9T – I. /&%t!& # a(#! a" !..%& !. t$% !&+!&at!", a++(y C9T !" !*+%"#at!" "!*% '+!" t$% /&%t!&6# .%%#, t!%t$%& t$ #a(a&%# • C%++issi%n In"%+e – I. t$%&% # "! %*+(!y%&-%*+(!y%% &%(at!"#$+ %t%%" &!7%& a"/ +ay!& !. "!*%, t&%at t a# '#"%## "!*% #'?%t t! 10@1 E9T – I. t$%&% # %*+(!y%&-%*+(!y%% &%(at!"#$+, !**##!" "!*% # t&%at%/ a# +a&t !. C9T !" !*+%"#at!" "!*%
DED>CTIONS •
INTEREST EXPENSE
• • • • • • • • • • • • • • • • •
1 2 3
T$%&% *'#t % a 5a(/ a"/ %x#t" "/%t%/"%##) T$% "/%t%/"%## '"!"/t!"a( !(at!" t! +ay4 *'#t % t$at !. t$% tax+ay%&) T$% "t%&%#t *'#t % (%a((y /'% a"/ #t+'(at%/ " &t") T$% "t%&%#t %x+%"#% *'#t % +a/ !& "'&&%/ /'&" t$% taxa(% y%a&) T$% "/%t%/"%## *'#t % !""%t%/ t$ t$% tax+ay%&V# t&a/%, '#"%## !& %x%&#% !. +&!.%##!") T$% "t%&%#t +ay*%"t a&&a"%*%"t *'#t "!t % %t%%" &%(at%/ tax+ay%&# a# *a"/at%/ " S%t!" 3B4244, " &%(at!" t! S%t!" 3B4, !. t$% Tax C!/%) T$% "t%&%#t # "!t %x+&%##(y /#a((!%/ y (a t! % /%/'t%/ .&!* t$% tax+ay%&6# &!## "!*% %, "t%&%#t !" "/%t%/"%## t! ."a"% +%t&!(%'* !+%&at!"#4) a"/ T$% a*!'"t !. "t%&%#t /%/'t%/ .&!* &!## "!*% /!%# "!t %x%%/ t$% (*t #%t .!&t$ " t$% (a I" !t$%& !&/#, t$% tax+ay%&6# !t$%&#% a((!a(% /%/'t!" .!& "t%&%#t %x+%"#% #$a(( % &%/'%/ y .!&ty-t! +%&%"t 24 !. t$% "t%&%#t "!*% #'?%t%/ t! ."a( tax %""" N!5%*%& 1, 200 '"/%& RA G33, a"/ t$at %..%t5% a"'a&y 1, 200G, t$% +%&%"ta% #$a(( % t$&ty-t$&%% +%&%"t 334 [ec. 7%(B)(!) NIRC]
DED>CTIONS • De4i"ien"7 %! $e#in<&en"7 inte!est – D%.%"y !& /%("'%"y "t%&%#t !" '"+a/ tax%# # "!t /%/'t(% a# tax, 't tax+ay%& # a((!%/ t! /%/'t t$% #a*% a# "t%&%#t
• Inte!est eense %n "'it'# een$it&!es – At t$% !+t!" !. t$% tax+ay%&, "t%&%#t %x+%"#% !" a+ta( %x+%"/t'&% "'&&%/ t! a'&% +&!+%&ty '#%/ " t&a/%, '#"%## !& %x%&#% !. +&!.%##!" *ay % /%/'t%/ " .'(( " t$% y%a& "'&&%/, !& *ay % t&%at%/ a# a+ta( %x+%"/t'&% #'?%t t! a*!&t8at!" H!%5%&, tax+ay%& a""!t (a* "t%&%#t %x+%"#% !t$ a# /%/'t!" a"/ +a&t !. !#t !. a##%t
DED>CTIONS • TAXES • • • • • • •
1 Pay*%"t# *'#t % .!& tax%#) 2 Tax%# a&% *+!#%/ y (a '+!" t$% tax+ay%&) 3 Tax%# *'#t % +a/ !& a&'%/ /'&" t$% taxa(% y%a& " !""%t!" t$ t$% tax+ay%&6# t&a/%, '#"%## !& +&!.%##!") a"/ Tax%# a&% "!t #+%.a((y %x('/%/ y (a .&!* %" /%/'t%/ .&!* t$% tax+ay%&6# &!## "!*%
DED>CTIONS • T$% !&/ tax%#Q *%a"# tax%# +&!+%& a"/ "! /%/'t!" #$!'(/ % a((!%/ .!& a*!'"t# &%+&%#%"t" "t%&%#t, #'&$a&% !& +%"a(t%# I"t%&%#t !" tax%# # "!t /%/'t(% a# tax%#, 't a# a" t%* !. "t%&%#t • F"%# a"/ +%"a(t%# .!& 5!(at!"# !. (a a&% "!t /%/'t(% a# tax%# • O"(y t$% +%&#!" '+!" $!* tax%# a&% *+!#%/ *ay (a* t$%* a# /%/'t!", %x%+t< 14 Tax%# '+!" a" "/5/'a( '+!" $# "t%&%#t a# #$a&%$!(/%& !. !&+!&at!" $$ a&% +a/ y !&+!&at!" t$!'t &%*'&#%*%"t) a"/ 24 C!&+!&at% !"/# !& !t$%& !(at!"# !"ta"" a tax-.&%% !5%"a"t (a'#%, t$% !&+!&at!" +ay" t$% tax !& a"y +a&t !. t .!& #!*%!"% %(#% (ec. +" RR #)
DED>CTIONS • DEDUCTIBLE TAXES – A(( tax%#, "at!"a( a"/ (!a(, +a/ !& a&'%/ /'&" t$% y%a& " !""%t!" t$ t&a/%, '#"%## !& %x%&#% !. +&!.%##!" # /%/'t(% Exa*+(%#< +&!.%##!"a( tax, /!'*%"ta&y #ta*+ tax, !t$%& +%&%"ta% tax, %x#% tax, &%a( +&!+%&ty tax, %t
• NON=DEDUCTIBLE TAXES – 1 P$(++"% "!*% tax
•
– 2 F!&%" "!*% tax – 3 E#tat% a"/ /!"!&6# tax%# – S+%a( a##%##*%"t# !" &%a( +&!+%&ty – E(%t& %"%&y !"#'*+t!" tax '"/%& BP 3 – JAT F!&%" "!*% tax +a/ *ay % &%/t%/ aa"#t t$% P$( "!*% tax /'%, #'?%t t! (*tat!" %, F%/%&a( "!*% tax !. M Pa'a!4
DED>CTIONS • LOSSES ( Rev. Regs. No. !#600 and Rev. Regs. No. !"60*) • • • • • • • • • • • •
1 T$% (!## *'#t % t$at !. t$% tax+ay%&) 2 T$% (!## # at'a((y #'#ta"%/ a"/ $a&%/ !.. t$" t$% taxa(% y%a&) 3 T$% (!## # %5/%"%/ y a (!#%/ a"/ !*+(%t%/ t&a"#at!" .x%/ y /%"t.a(% %5%"t# !& $%" "#'&a"% &%!5%&y a# /%."t%(y %#ta(#$%/4) T$% (!## # "!t (a*%/ a# a /%/'t!" .!& %#tat% tax +'&+!#%#) T$% (!## # "!t !*+%"#at%/ .!& y "#'&a"% !& !t$%&#%) I" t$% a#% !. a" "/5/'a(, t$% (!## *'#t % !""%t%/ t$ $# t&a/%, '#"%## !& +&!.%##!", !& "'&&%/ " a"y t&a"#at!" %"t%&%/ "t! .!& +&!.t t$!'$ "!t !""%t%/ t$ $# t&a/%, '#"%## !& +&!.%##!") a"/ I" t$% a#% !. a#'a(ty (!##, t $a# %%" &%+!&t%/ t! t$% BIR t$" .!&ty-.5% /ay# .&!* /at% !. !'&&%"% !. t$% (!##
DED>CTIONS • Ba/ D%t T$%!&y – L!## .&!* t$%.t !& %*%88(%*%"t !'&&" " t$% y%a& a"/ /#!5%&%/ " a"!t$%& y%a& # /%/'t(% " t$% y%a& " $$ #'#ta"%/ H!%5%&, $%&% t$% tax+ay%& $a/ "! *%a"# !. /%t%&*"" t$% at'a( /at% !. %*%88(%*%"t, a (!## a# #'#ta"%/ " t$% y%a& !. /#!5%&y – T$% &'(% # "! *!/.%/ y t$% a/ /%t t$%!&y,Q $$ $!(/# t$at #"% %*%88(%*%"t &%at%# a /%t!&-&%/t!& &%(at!"#$+, a (!## # /%/'t(% a# a/ /%t " t$% y%a& t$% &$t !. &%!5%&y %!*%# !&t$(%##
• NOLCO – N%t !+%&at" (!## !. !"% y%a& *ay % a&&%/ !5%& a"/ /%/'t%/ .&!* &!## "!*% .!& t$% "%xt #'%%/" 3 y%a&#, +&!5/%/ t$at "! #'#ta"ta( $a"% " t$% !"%&#$+ !. t$% '#"%## !& %"t%&+&#% "!t (%## t$a" 4 ta7%# +(a%
DED>CTIONS • BAD DEBTS • • • • • • • • • • •
1 T$%&% *'#t % a" %x#t" "/%t%/"%## /'% t! t$% tax+ay%& $$ *'#t % 5a(/ a"/ (%a((y /%*a"/a(%) 2 T$% #a*% *'#t % !""%t%/ t$ t$% tax+ay%&V# t&a/%, '#"%## !& +&at% !. +&!.%##!") 3 T$% #a*% *'#t "!t % #'#ta"%/ " a t&a"#at!" %"t%&%/ "t! %t%%" &%(at%/ +a&t%# %"'*%&at%/ '"/%& S% 3B4 !. t$% Tax C!/% !. 1GG) T$% #a*% *'#t % at'a((y $a&%/ !.. t$% !!7# !. a!'"t# !. t$% tax+ay%& a# !. t$% %"/ !. t$% taxa(% y%a&) a"/ T$% #a*% *'#t % at'a((y a#%&ta"%/ t! % !&t$(%## a"/ '"!((%t(% a# !. t$% %"/ !. t$% taxa(% y%a&
DED>CTIONS • I" t$% a#% !. a"7#, t$% BSP t$&' t$% M!"%ta&y B!a&/ #$a(( a#%&ta" t$% !&t$(%##"%## a"/ '"!((%t(ty !. t$% a/ /%t# a"/ a++&!5% " &t" t$% &t" !.. !. a/ /%t# .&!* t$% !!7#, t$!'t +&%?'/% t! t$% CIR6# /%t%&*-"at!" !. t$% !&t$(%## a"/ '"!((%t(ty !. /%t# • I" "! a#% #$a(( a &%%5a(% .&!* a" "#'&a"% !& #'&%ty !*+a"y % &tt%" !.. .&!* tax+ay%&6# !!7# a"/ (a*%/ a# a/ /%t /%/'t!", '"(%## #'$ !*+a"y $a# %%" /%(a&%/ (!#%/ /'% t! "#!(5%"y !& .!& a"y #*(a& &%a#!" y t$% I"#'&a"% C!**##!"
DED>CTIONS • TAX BENEFIT R>LE – T$% tax+ay%& # !(%/ t! /%(a&% a# taxa(% "!*% a"y #'#%'%"t &%!5%&y !. a/ /%t# " t$% y%a& t$%y %&% !((%t%/ t! t$% %xt%"t !. t$% tax %"%.t %"?!y%/ y t$% tax+ay%& $%" t$% a/ /%t# %&% &tt%" !.. a"/ (a*%/ a# /%/'t!" .&!* &!## "!*% – It a(#! a++(%# t! tax%# +&%5!'#(y /%/'t%/ .&!* &!## "!*% 't $$ %&% #'#%'%"t(y &%.'"/%/ !& &%/t%/ y t$% BIR H% $a# t! &%+!&t "!*% t! t$% %xt%"t !. t$% tax %"%.t /%&5%/ " t$% y%a& !. /%/'t!"
DED>CTIONS •
DEPRECIATION
• •
1 T$% a((!a"% .!& /%+&%at!" *'#t % &%a#!"a(% ; 2 It *'#t % .!& +&!+%&ty a&#" !'t !. t# '#% " t$% t&a/% !& '#"%##, !& !'t !. t# "!t %" '#%/ t%*+!&a&(y /'&" t$% y%a& ; 3 It *'#t % $a&%/ !.. /'&" t$% taxa(% y%a& .&!* t$% tax+ay%&6# !!7# !. a!'"t#) D%+&%at!" #$a(( % !*+'t%/ !" t$% a## !. $#t!&a( !#t !& a/?'#t%/ a## 9$(% ."a"a( a!'"t" a((!# !*+'tat!" a#%/ !" a++&a#%/ 5a('%, &%!5%&y !. "5%#t*%"t .!& tax +'&+!#%# #$a(( % (*t%/ t! $#t!&a( !#t
• •
D%+&%at!" .!& t$% y%a& C!#t (%## #a(5a% 5a('% /5/%/ y t$% %#t*at%/ '#%.'( (.% "'*%& !. y%a !. t$% a##%t B!!7 5a('% !. t$% a##%t C!#t !& a/?'#t%/ a## (%## a'*'(at%/ /%+&%at!"
DED>CTIONS • CHARITABLE CONTRIB>TIONS • 1 T$% $a&ta(% !"t&'t!" *'#t at'a((y % +a/ !& *a/% t! t$% P$(++"% !5%&"*%"t !& a"y +!(ta( #'/5#!" t$%&%!. %x('#5%(y .!& +'( +'&+!#%#, !& a"y !. t$% a&%/t%/ /!*%#t !&+!&at!" !& a##!at!" #+%.%/ " t$% Tax C!/%) • 2 It *'#t % *a/% t$" t$% taxa(% y%a&) • 3 It *'#t "!t %x%%/ 10 "/5/'a(4 !& !&+!&at!"4 !. t$% tax+ay%&6# taxa(% "!*% %.!&% $a&ta(% !"t&'t!"# $%t$%& /%/'t(% " .'(( !& #'?%t t! (*tat!"4) • It *'#t % %5/%"%/ y a/%'at% &%%+t# !& &%!&/#) a"/ • T$% a*!'"t !. $a&ta(% !"t&'t!" !. +&!+%&ty !t$%& t$a" *!"%y #$a(( % a#%/ !" t$% a'#t!" !#t !. #a/ +&!+%&ty (ec. 7%(?) NIRC) T$% (*tat!" # *+!#%/ t! +&%5%"t a'#% !. /!"at" +a"t"# a"/ !t$%& 5a('a(% +&!+%&t%# a"/ (a*" %x%##5% /%/'t!"# t$%&%.&!*
DED>CTIONS • D1 Oti%n'# St'n$'!$ De$&"ti%n • P&5(%% # a5a(a(% !"(y t! t8%"# !& &%#/%"t a(%"# a# %(( !&+!&at!"# #'?%t t! t$% &%'(a& !&+!&at% "!*% tax) t$'#, "!"-&%#/%"t a(%"# a"/ "!"-&%#/%"t .!&%" !&+!&at!"# a&% "!t %"tt(%/ t! (a* t$% !+t!"a( #ta"/a&/ /%/'t!" • Sta"/a&/ /%/'t!" # !+t!"a() %, '"(%## tax+ay%& #".%# " $#@t# &%t'&" $#@t# "t%"t!" t! %(%t t$# /%/'t!", $%@t # !"#/%&%/ a# $a5" a5a(%/ !. t$% t%*8%/ /%/'t!"#) • S'$ %(%t!" $%" *a/% y t$% 'a(.%/ tax+ay%& # &&%5!a(% .!& t$% y%a& " $$ *a/%) $!%5%&, $% a" $a"% t! t%*8%/ /%/'t!"# " #'%%/" y%a)
DED>CTIONS •
•
• •
A*!'"t !. #ta"/a&/ /%/'t!" # (*t%/ t! 0 !. tax+ay%&6# &!## #a(%# !& &%%+t# " t$% a#% !. a" "/5/'a(4 !& &!## "!*% " t$% a#% !. a !&+!&at!"4 I. t$% "/5/'a( # !" t$% a&'a( a## !. a!'"t" .!& $# "!*% a"/ /%/'t!"#, OSD #$a(( % a#%/ !" t$% &!## #a(%# /'&" t$% y%a& I. $% %*+(!y# t$% a#$ a## !. a!'"t", OSD #$a(( % a#%/ !" $# &!## &%%+t# /'&" t$% y%a& It #$!'(/ % "!t%/ t$at !#t !. #a(%# !& !#t !. #%&5%# #$a(( "!t % a((!%/ t! % /%/'t%/ .&!* &!## #a(%# !& &%%+t# A %"%&a( +&!.%##!"a( +a&t"%&#$+ :PP4 *ay (a* %t$%& t$% t%*8%/ /%/'t!"# !& " (%' t$%&%!., t$% OSD a((!%/ t! !&+!&at!"# " (a*" t$% /%/'t!"# " a" a*!'"t "!t %x%%/" 0 !. t# &!## "!*% T$% "%t "!*% /%t%&*"%/ y %t$%& t$% t%*8%/ /%/'t!" !& OSD .&!* t$% :PP6# &!## "!*% # t$% /#t&'ta(% "%t "!*% .&!* $$ t$% #$a&% !. %a$ #$a&% # t! % a#%&ta"%/ P&!!. !. at'a( %x+%"#%# # "!t &%'&%/) $%"%, $% # "!t a(#! &%'&%/ t! 7%%+ !!7# !. a!'"t# a"/ &%!&/# t$ &%#+%t t! $# /%/'t!"# /'&" t$% y%a&
DED>CTIONS • NON=DEDUCTIBLE ITEMS • •
• •
•
1 P%&#!"a(, (5" !& .a*(y %x+%"#%#) 2 A"y a*!'"t +a/ !'t .!& "% '(/"# !& .!& +%&*a"%"t *+&!5%*%"t#, !& %tt%&*%"t# *a/% t! "&%a#% t$% 5a('% !. a"y +&!+%&ty !& %#tat% T$# S'#%t!" #$a(( "!t a++(y t! "ta"(% /&((" a"/ /%5%(!+*%"t !#t# "'&&%/ " +%t&!(%'* !+%&at!"#, $$ a&% /%/'t(% '"/%& S'#%t!" :4 14 !. S%t!" 3 !. t$# C!/% 3 A"y a*!'"t %x+%"/%/ " &%#t!&" +&!+%&ty !& " *a7" !!/ t$% %x$a'#t!" t$%&%!. .!& $$ a" a((!a"% # !& $a# %%" *a/%) !& P&%*'*# +a/ !" a"y (.% "#'&a"% +!(y !5%&" t$% (.% !. a"y !..%& !& %*+(!y%%, !& !. a"y +%&#!" ."a"a((y "t%&%#t%/ " a"y t&a/% !& '#"%## a&&%/ !" y t$% tax+ay%&, "/5/'a( !& !&+!&at%, $%" t$% tax+ay%& # /&%t(y !& "/&%t(y a %"%.a&y '"/%& #'$ +!(y L!##%# .&!* #a(%# !& %x$a"%# !. +&!+%&ty %t%%" &%(at%/ +a&t%#
PERSONAL EXEMPTIONS • RA 2< a" 1, 1GG • S"(% a"/ %#tat% !& t&'#t – P20,000 • H%a/ !. .a*(y – P2,000 • Ma&&%/ – P32,000 • F!& %a$ $(/, "!t t! %x%%/ – P,000
• RA G0< '(y , 200G • I"/5/'a(, $%t$%& #"(%, HOF, !& *a&&%/ – P0,000 • F!& %a$ $(/, "!t t! %x%%/ – P2,000 • La %x%*+t# "!*% !. *"*'* a% %a&"%&# a"/ "&%a#%# OSD .&!* 10 t! 0 !. &!## #a(%# !& &%%+t#, .!& "/5/'a(#, a"/ !. &!## "!*%, .!& !&+!&at!"#
PERSONAL EXEMPTIONS • St't&s='t=the=en$=%4=the=7e'! !&#e • Stat'#-at-t$%-%"/-!.-t$%-y%a& &'(%Q $$ *%a"# t$at $at%5%& # t$% #tat'# !. t$% tax+ay%& at t$% %"/ !. t$% a(%"/a& y%a& #$a(( % '#%/ .!& +'&+!#%# !. /%t%&*"" $# +%&#!"a( a"/ a//t!"a( %x%*+t!"# %"%&a((y a++(%# A $a"% !. #tat'# !. t$% tax+ay%& /'&" t$% taxa(% y%a& %"%&a((y %"%.t#, 't /!%# "!t +&%?'/%, $* T$'#, . $% *a&&%# at t$% %"/ !. t$% y%a&, $% #$a(( % %"tt(%/ t! +%&#!"a( %x%*+t!" !. P32,000@P0,000 I. a $(/ # !&" at a"y t*% /'&" t$% a(%"/a& y%a&, %5%" !" t$% (a#t /ay !. t$% y%a&, t$% tax+ay%& # %"tt(%/ t! (a* $# $(/ a# a /%+%"/%"t %"tt(" $* t! /%/'t a//t!"a( %x%*+t!" !. P,000@P2,000 .!& t$at y%a& O" t$% !t$%& $a"/, . !"% !. $# 'a(.%/ /%+%"/%"t $(/&%" /%# /'&" t$% y%a&, t$% (a !"#/%&# t$at t$% $(/ /%/ !" t$% (a#t /ay !. t$% y%a&) $%"%, $% # %"tt(%/ t! (a* t$% .'(( a*!'"t !. a//t!"a( %x%*+t!" !. P,000@P2,000 .!& t$% /%%a#%/ $(/ .!& t$% y%a&
TAX BASES AND RATES • COMPENSATION INCOME
• FRIN:E BENEFITS
• :&!## !*+%"#at!" "!*% (%## PAE t*%# &a/'at%/ &at%# • :&!## !*+%"#at!" "!*% !. %*+(!y%%# !. RH, ROH, OB>@FCD>, a"/ +%t&!(%'* !"t&at!&# t*%# 1 • :&!##%/-'+ *!"%ta&y 5a('% !. .&"% %"%.t# t*%# taxa(% &at% t*%# 32 FBT
TAX BASES AND RATES • B>SINESS AND@OR PROFESSIONAL INCOME – C!&+!&at!"# #%% .!&*'(a !++!#t% $%&%4 – I"/5/'a(#< • T$%&% # "! MCIT • D%/'t a++(a(% PAE • A++(y &a/'at%/ &at%# !. t! 32 • Pay IT !" t! %'a( "#ta((*%"t#, +&!5/%/ a*!'"t # *!&% t$a" P2,000
• • • • •
:&!## #a(%# L%##< C!#t !. #a(%# !& #%&5%# :&!## "!*% M'(t+(%/ y< 2 MCIT
• • • • • • •
:&!## "!*% L%##< D%/'t!"# N%t "!*% M'(t+(%/ y< 3 RCIT L%##< C9T Ba(a"%
TAX BASES AND RATES • CAPITAL ASSETS •
A REAL PROPERTY IN THE PHILIPPINES
• •
•
•
B SHARES OF STOCS OF DOMESTIC CORPORATION
•
•
•
C OTHER CAPITAL ASSETS
C!"#/%&at!" !& FMJ, $$%5%& # $$%& t*%# C:T Sa(% !. +&"+a( &%#/%"% # %x%*+t .&!* C:T, +&!5/%/ !"/t!"# a&% #at#.%/
L#t%/ a"/ t&a/%/ " (!a( #t!7 %x$a"%< :SP t*%# !. 1 St!7 t&a"#at!" tax L#t%/ 't t&a/%/ !5%& t$% !'"t%& !& '"(#t%/ #$a&%#< :&!## #%((" +&% (%## !#t !& a/?'#t%/ a## Ca+ta( a" !& (!## t*%# @10 C:T I"('/% " (!a( tax #y#t%*, 't (!"t%&* a+ta( a" !& (!## #$a(( % taxa(% !& /%/'t(% !"(y at 0 t$%&%!.
TAX BASES AND RATES • PASSIJE INCOME • A I"t%&%#t
• 20 F9T +%#! /%+!#t4 a"/ /%+!#t #'#tt't% • F9T .!&%" %x$a"% /%+!#t4 • L!"-t%&* /%+!#t# y%a&# !. *!&%4 !. "/5/'a(#< %x%*+t • Ot$%&#< :(!a( #y#t%*
• B D5/%"/
• 10 F9T – Ct8%" • 20 F9T – R%#/%"t a(%" %"a%/ " t&a/% • 2 F9T – NRANE • 0 -- DC RFC • 3, '"(%## tax #+a&" +&!5#!" a++(%# -- NRFC
TAX BASES AND RATES • C R!ya(ty
•
• •
10 F9T – !!7#, (t%&a&y !&7# a"/ *'#a( !*+!#t!"# t8%"4 20 F9T – %"%&a( &at% NRAE, DC RFC4 2 F9T – NRANE 3 F9T – NRFC
•
NRFC
•
• D R%"ta( "!*%
– 2 x &!## "!*%< NR "%*a .(* !"%&, (%##!& !& /#t&'t!& – 2 x &!## "!*%< NR !"%& !& (%##!& !. 5%##%(# – x &!## "!*%< NR (%##!& !. a&&a.t, *a$"%&%# a"/ !t$%& %'+*%"t
BRANCH PROFIT REMITTANCE TAX • B&a"$ +&!.t !. t$% P$( &a"$ '#%/ a# a//t!"a( a+ta( "5%#t*%"t !. t$% .!&%" $%a/ !..% " t$% P$(++"% &a"$, +'&#'a"t t! t$% &%'&%*%"t# !. t$% Bangko entral ng $iliinas , # !"#/%&%/ a# +&!.t !"#t&'t5%(y &%*tt%/ a&!a/ • B&a"$ +&!.t &%*tta"% tax BPRT4 a++(%# "!t !"(y $%" t$% +&!.t # at'a((y &%*tt%/ 't a(#! $%" #'$ +&!.t # !"#t&'t5%(y &%*tt%/ t! t$% $%a/ !..% a&!a/ (ING Bank Manila Branch vs. CIR CT Case No. /"!0 Mar. !! #""#)
• BPRT /!%# "!t a++(y !" +&!.t# &%*tt%/ y a" %"t%&+&#% &%#t%&%/ t$ PEKA !& SBMA a"/ !t$%& .&%%+!&t 8!"%# • Tax a#% !. BPRT # t$% a*!'"t !. +&!.t %a&*a&7%/ .!& &%*tta"% t! t# $%a/ !..% a&!a/
NAT>RE OF ASSET • ORDINARY ASSET
• I"5%"t!&y . !" $a"/ at %"/ !. taxa(% y%a& • St!7 " t&a/% $%(/ +&*a&(y .!& #a(% !& .!& (%a#% " t$% !'&#% !. t&a/% !& '#"%## • A##%t '#%/ " t&a/% !& '#"%##, #'?%t t! /%+&%at!" • R%a( +&!+%&ty '#%/ " t&a/% !& '#"%##
• CAPITAL ASSET S% 3A4
• A(( !t$%& a##%t#, $%t$%& !& "!t '#%/ " t&a/% !& '#"%##, !t$%& t$a" t$% a!5% a##%t#
ORDINARY 5 CAPITAL ASSETS • 9$! # #%((%& !. a##%tW – P%&#!" # $at'a((y %"a%/ " &%a( %#tat% '#"%## • P&%#'*+t!" !& +&!!. $%" $at'a((y %"a%/ " &%a( %#tat% '#"%## • -t&a"#at!" &'(% – P%&#!" # "!t $at'a((y %"a%/ " &%a( %#tat% '#"%## • Nat'&% !. a##%t #!(/W – I. t .!&*# +a&t !. #t!7 +&*a&(y .!& #a(% !& t # %" '#%/ " t&a/% !& '#"%##, !&/"a&y a##%t – Ot$%&#%, a+ta( a##%t
ORDINARY 5 CAPITAL ASSETS • T7e %4 "'it'# 'sset s%#$> – I. CA # '#%/ a# +&"+a( &%#/%"% !. #%((%& $! # a t8%" !& a(%" $! &%#/%"t !& "!"-&%#/%"t 't %"a%/ " t&a/% " t$% P$(, #a(% # %x%*+t .&!* C:T, +&!5/%/ !t$%& !"/t!"# a&% +&%#%"t – Ot$%&#%, #a(% # taxa(% • T' 'se, t' !'te, 'n$ 5'in %! #%ss 4!%+ s'#e – CA (!at%/ " t$% P$( – C:T) CA (!at%/ a&!a/ – :(!a( tax #y#t%* Ba## # FMJ !& :SP, $$%5%& # $$%& S%((%& +ay# t$% C:T, 't 'y%& /!%# "!t t$$!(/ t$% F9T – I" OA, tax a#% # "%t "!*% a"/ &at% !. tax /%+%"/# !" $%t$%& #%((%& # "/5/'a( !& !&+!&at!") t # #'?%t t! E9T +&!5#!"#
ORDINARY 5 CAPITAL ASSETS • C%st %! '$?&ste$ 'sis &%n s&se<&ent s'#e – T$# # "!t *at%&a(, . a##%t #!(/ # a+ta( a##%t, %a'#% tax a#% # :SP@FMJ, $$%5%& # $$%& – T$# # *+!&ta"t, . a##%t #!(/ # !&/"a&y a##%t, %a'#% tax a#% # "%t "!*% • D%n%!8s t' %n s'#e 4%! ins&44i"ient "%nsi$e!'ti%n – I. CA, "! /!"!&6# tax /'% – I. OA, t$%&% # /!"!&6# tax /'% +%& S% 100, NIRC • ;i#in5 %4 t' !et&!n – I. CA, t$" 30 /ay# .&!* /at% !. #a(% – I. OA, t$" @0 /ay# .&!* (!#% !. 'a&t%&
EXCHAN:E OF PROPERTY • GENERAL RULE
– T$% %"t&% a" !& (!## #$a(( % &%!"8%/ • EXCEPTIONS@
– N! a" !& (!## #$a(( % &%!"8%/ at t$% t*% !. t$% t&a"#at!" !" tax-.&%% %x$a"%# !. +&!+%&ty '"/%& S% 024, NIRC< – a M%&%& !& !"#!(/at!" – Ex$a"% !. +&!+%&ty .!& #$a&%# !. #t!7#, a# a &%#'(t !. $$, $% t!%t$%& t$ .!'& !t$%&# a"# !"t&!( !. t$% !&+!&at!"
ACCO>NTIN: METHODS • Ca#$ *%t$!/ • A&'a( *%t$!/ – A(( %5%"t# t%#t) a*!'"t# &%%5%/ " a/5a"% a&% "!t t&%at%/ a# &%5%"'% !. t$% +%&!/ " $$ &%%5%/ 't a# &%5%"'% !. .'t'&% +%&!/# " $$ %a&"%/ (Manila Mandarin ?otels vs. CIR CT Case No. 1"%/ Mar #% !**0)
• I"#ta((*%"t #a(%# – Sa(% !" t$% "#ta((*%"t +(a" • I"ta( +ay*%"t# /! "!t %x%%/ 2 !. :SP
– D%.%&&%/ +ay*%"t #a(%, "!t !" t$% "#ta((*%"t +(a" • I"ta( +ay*%"t# %x%%/ 2 !. :SP
• P%&%"ta% !. !*+(%t!" • C&!+ y%a& *%t$!/
FILIN: OF TAX RET>RN • S>BSTIT>TED FILIN: OF ITR< N! "/5/'a( "!*% tax &%t'&" .!& t$% y%a& (( % .(%/ y t$% %*+(!y%% !"%&"%/, a"/ t$% %*+(!y%& # t$% !"% t$at .(%# t$% &%t'&" .!& $* – A++(%# !"(y t! "/5/'a(# – 9t$ !"(y !"% 14 %*+(!y%& – 9$! !&&%t(y t$$!(/# t$% "!*% tax !" !*+%"#at!" "!*% +a/ t! t$% %*+(!y%% a"/ &%*t# t$% #a*% t! t$% BIR
• S'#tt't%/ .(" !. &%t'&" /!%# "!t a++(y $%" t$% !"/t!"# a!5% a&% "!t *%t, #'$ a# $%" t$% "/5/'a( $a# a4 t! !& *!&% %*+(!y%&#, 4 *x%/ "!*%#, !&&%t 9T a# "!t /%/'t%/ .&!* !*+%"#at!" "!*%, %t
FILIN: OF TAX RET>RN • I"/5/'a( /%&5" *x%/ "!*%, !& +'&%(y '#"%##@ +&!.%##!"a( "!*%, !& !t$%& "!*% *'#t .(% $# 'a&t%&(y "!*% tax &%t'&"# BIR F!&* 100 4 a"/ a""'a( "!*% tax &%t'&" BIR F!&* 100 4 a# .!((!#< • • • • • • •
P%&!/ 1 R%t'&" 2 R%t'&" 3 R%t'&" A""'a( R%t'&"
D'% Dat% .!& F(" R%t'&" A+&( 1 !. #a*% y%a& A''#t 1 !. #a*% y%a& N!5%*%& 1 !. #a*% y%a& A+&( 1 !. t$% .!((!" y%a&
FILIN: OF TAX RET>RN • A /!*%#t !&+!&at!" a"/ &%#/%"t .!&%" !&+!&at!" #$a(( .(% 'a&t%&(y !&+!&at% "!*% tax &%t'&" BIR F!&* 102 4 a"/ a""'a( !&+!&at% "!*% tax &%t'&" BIR F!&* 102 a# .!((!#< • • • •
•
•
1 R%t'&" 2 R%t'&" 3 R%t'&" A""'a( R%t'&"
May 31 !. #a*% y%a& A''#t 31 !. #a*% y%a& N!5%*%& 30 !. #a*% y%a& A+&( 1 !. t$% .!((!" y%a& . !" a(%"/a& y%a&4, !& 1t$ /ay !. t$% .!'&t$ *!"t$ .!((!" t$% (!#% !. t$% .#a( y%a& . !" .#a( y%a&4
C!*+'tat!" !. t$% 'a&t%&(y a"/ a""'a( tax &%t'&"# !. "/5/'a(# %x%+t t$!#% &%%5" +'&%(y !*+%"#at!" "!*%4 a"/ !&+!&at!"# #$a(( % *a/% !" t$% cumulative asis) %, &!## "!*% a"/ /%/'t!"# a&% !"#!(/at%/ a"/ t$% "!*% tax (a(ty # !*+'t%/ !" t$% !"#!(/at%/ "%t "!*%, a"/ t$% "!*% tax%# +a/ .!& t$% +&%%/" 'a&t% a&% &%/t%/ aa"#t t$% !"#!(/at%/ "!*% tax /'%
9ITHHOLDIN: TAX • A" "!*% +ay*%"t # #'?%t t! t$% e'n$e$ *ithh%#$in5 t', . t$% .!((!" !"/t!"# !"'&< • a A" %x+%"#% # +a/ !& +aya(% y t$% tax+ay%&, $$ # "!*% t! t$% &%+%"t t$%&%!. #'?%t t! "!*% tax) • T$% "!*% # .x%/ !& /%t%&*"a(% at t$% t*% !. +ay*%"t) • T$% "!*% # !"% !. t$% "!*% +ay*%"t# (#t%/ " t$% &%'(at!"# t$at # #'?%t t! t$$!(/" tax) • / T$% "!*% &%+%"t # a &%#/%"t !. t$% P$(++"%# (a(% t! "!*% tax) a"/ • % T$% +ay!&-t$$!(/" a%"t # a(#! a &%#/%"t !. t$% P$(++"%#
9ITHHOLDIN: TAX •
EXEMPT ;ROM EWT
•
1 Nat!"a( !5%&"*%"t a"/ t# "#t&'*%"ta(t%#, "('/" +&!5"a(, ty !& *'"+a( !5%&"*%"t# a"/ 4aranga&s, %x%+t !5%&"*%"t-!"%/ !& !"t&!((%/ !&+!&at!"#) 2 P%&#!"# %"?!y" %x%*+t!" .&!* +ay*%"t !. "!*% tax%# +'&#'a"t t! t$% +&!5#!"# !. a"y (a, %"%&a( !& #+%a(, #'$ a# 't "!t (*t%/ t! t$% .!((!"< a Sa(%# !. &%a( +&!+%&ty y a !&+!&at!" $$ # &%#t%&%/ t$ a"/ %&t.%/ y HL>RB !& H>DCC a# %"a%/ " #!a(8%/ $!'#" +&!?%t $%&% t$% #%((" +&% !. t$% $!'#% a"/ (!t !& !"(y t$% (!t /!%# "!t %x%%/ P10,000 " M%t&! Ma"(a a"/ !t$%& $$(y '&a"8%/ a&%a# a"/ P10,000 " !t$%& a&%a#) C!&+!&at!"# &%#t%&%/ t$ t$% BOI, PEKA, a"/ SBMA, %"?!y" %x%*+t!" .&!* "!*% tax '"/%& EO 22, RA G1, a"/ RA 22) C!&+!&at!"# $$ a&% %x%*+t .&!* "!*% tax '"/%& S%t!" 30 !. t$% Tax C!/%, #'$ a# :SIS, SSS, PHIC, PCSO, a"/ PA:COR) / :%"%&a( +&!.%##!"a( +a&t"%&#$+#) a"/ % !"t 5%"t'&%# !& !"#!&t'* .!&*%/ .!& t$% +'&+!#% !. '"/%&ta7" !"#t&'t!" +&!?%t# !& %"a" " +%t&!(%'*, !a(, %!t$%&*a( a"/ !t$%& %"%&y !+%&at!"# . I"t%&"at!"a( a&&%&# y a& !& at%&4 #'?%t t! 2 :&!## P$( B(("#
• •
• • • • •
9ITHHOLDIN: TAX • •
1 P&!.%##!"a( .%%# .!& #%&5%# &%"/%&%/ y "/5/'a(#) a"/ +&!.%##!"a( %"t%&ta"%&# a"/ at$(%t%#, a"/ /&%t!&#< – –
• •
I. &!## "!*% .!& '&&%"t y%a& %x%%/# P20,000 I. &!## "!*% .!& '&&%"t y%a& /!%# "!t P20,000
- 10 - 1
3 R%"ta( "!*% – – – – – – –
•
- 10 - 1
2 I. &%+%"t !. +&!.%##!"a( .%%#, ta(%"t .%%#, %t # a ?'&/a( +%&#!"< – –
•
I. &!## "!*% .!& '&&%"t y%a& %x%%/# P20,000 I. &!## "!*% .!& '&&%"t y%a& /!%# "!t P20,000
R%a( +&!+%&t%# P%&#!"a( +&!+%&t%# !. P10,000 +%& +ay*%"t) P10,000 #$a(( "!t a++(y $%" a'*'(at%/ &%"ta( t! #a*% (%##!& %x%%/# !& # &%a#!"a(y %x+%t%/ t! %x%%/ P10,000 t$" a y%a& P!(%#, #at%((t%# a"/ t&a"#*##!" .a(t%# B((!a&/#
-
- - -
9ITHHOLDIN: TAX • • • • • • • • • •
• • • • •
:&!## +ay*%"t# t! &%#/%"t "/5/'a(# a"/ !&+!&at% "%*at!&a+$ .(* !"%&#, (%##!&#, !& /#t&'t!&# :&!## +ay*%"t# t! !"t&at!&# I"!*% /#t&'t!" t! %"%.a&%# I"!*% +ay*%"t# t! %&ta" &!7%&# a"/ a%"t# I"!*% +ay*%"t# t! +a&t"%&# !. %"%&a( +&!.%##!"a( +a&t"%&#$+#< I. &!## "!*% .!& '&&%"t y%a& %x%%/#P20,000 I. !t$%&#% G P&!.%##!"a( .%%# +a/ t! *%/a( +&att!"%&# – I. &!## "!*% .!& '&&%"t y%a& %x%%/#P20,000 – I. !t$%&#% 10 :&!## a//t!"a( +ay*%"t# t! !5%&"*%"t +%&#!""%( .&!* *+!&t%&#, #$++" a"/ a&("% !*+a"%#, !& t$%& a%"t# 11 O"%-$a(. !. &!## a*!'"t# +a/ y a"y &%/t a&/ !*+a"y " t$% P$(++"%#
-
2 1 10
- 1 - 10 - 1 - 10
- 1 -
1
9ITHHOLDIN: TAX • • • • • • • • • • • • • • • • • • • •
12 I"!*% +ay*%"t# *a/% y a"y T!+ 20,000 C!&+ S'++(%& !. !!/# S'++(%& !. #%&5%# 13 I"!*% +ay*%"t# *a/% y !5%&"*%"t t! t# (!a(@&%#/%"t #'++(%& !. !!/# a"/ #%&5%# !t$%& t$a" t$!#% !5%&%/ y !t$%& &at%# !. t$$!(/" tax%# S'++(%& !. !!/# S'++(%& !. #%&5%# 1 C!**##!"# !. "/%+%"/%"t a"/ %x('#5% /#t&'t!&#, a"/ *a&7%t" a%"t# !. !*+a"%# 1 T!((" .%%# +a/ t! &%."%&%# 1 Pay*%"t# *a/% y +&%-"%%/ !*+a"%# t! .'"%&a( +a&(!& 1 Pay*%"t# *a/% t! %*a(*%&# 1 I"!*% +ay*%"t# *a/% t! #'++(%&# !. a&'(t'&a( +&!/'t# 1G I"!*% +ay*%"t# !" +'&$a#%# !. *"%&a(#, *"%&a( +&!/'t# a"/ 'a&&y &%#!'&%# 20 MERALCO &%.'"/ t! '#t!*%&# 9t$ at5% !"t&at# 9t$ t%&*"at%/ !"t&at#
- 1 - 2
- 1 - 2 -
10 1 1 1
- 10 - 2 - 32
REF>ND • A tax+ay%& *'#t /! t! t$"# t! % a(% t! #'%##.'((y *a7% a (a* .!& t$% tax &%.'"/ !. t$$!(/" tax !" !*+%"#at!" "!*%< a4 /%(a&% t$% "!*% +ay*%"t# t &%%5%/ a# +a&t !. t# &!## "!*% a"/ 4 %#ta(#$ t$% .at !. t$$!(/" • T$% a*!'"t# !. t!ta( tax%# t$$%(/ .!& %a$ &%/'"/a"t %*+(!y%%# a""!t % 5%&.%/ aa"#t t$% S'**a&y !. :&!## C!*+%"#at!" a"/ Tax%# 9t$$%(/ .!& 1GG /'% t! t$% .at t$at t$# #'**a&y %"'*%&at%# t$% a*!'"t# !. "!*% tax%# t$$%(/ !" +%& /#t&t@a&%a a## T$% S:J %&t.at!" a""!t % a++&%at%/ " PLDT6# .a5!& a# t$% !'&t# a""!t 5%&.y #'$ (a* B%#/%#, t$% /!'*%"t# .&!* $$ S:J t&a%/ t$% A(+$a L#t t! t$% M!"t$(y R%*tta"% R%t'&"# !. I"!*% Tax%# $a5% "!t %%" +&%#%"t%/ t! t$% !'&t, a"/ t$# # .ata( t! PLDT A(#!, t$% a#$ #a(a&y 5!'$%&# .!& t$% &a"7 a"/ .(% %*+(!y%%# /! "!t $a5% a7"!(%/*%"t &%%+t# ($=8T v. CIR GR !10#/% 2an 7! #""+)
REF>ND •
R%'#t%# !. (a* .!& &%.'"/ a&%< – C(a* a# .(%/ t$" 2 y%a&# '"/%& S% 230, NIRC) – I"!*% '+!" $$ tax%# %&% t$$%(/ %&% "('/%/ " t$% &%t'&" !. t$% &%+%"t) a"/ – Fat !. t$$!(/" # %#ta(#$%/ y a !+y !. #tat%*%"t BIR F!&* 1314 /'(y ##'%/ y +ay!& t$$!(/" a%"t4 t! +ay%%, #$!" a*!'"t +a/ a"/ a*!'"t !. tax t$$%(/ (RR /6+1)
•
•
CTA .!'"/ a!5% &%'#t%# %&% #at#.%/ F"/"# !. .at# !. CTA a&% %"tt(%/ t! &%at %$t a"/ (( "!t % /#t'&%/ !" a++%a(, '"(%## t # #$!" t$at t$% (!%& !'&t !**tt%/ &!## %&&!& " t$% a++&%at!" !. .at# Fa('&% !. &%#+!"/%"t t! "/at% t# !+t!" " t# a""'a( ITR t! a5a( t#%(. !. %t$%& tax &%.'"/ !& tax &%/t # "!t .ata( t! t# (a* .!& &%.'"/ – S% , NIRC !..%&# t! !+t!"#< &%.'"/ !& tax &%/t T$% !+t!"# a&% a(t%&"at5% a"/ t$% $!% !. !"% +&%('/%# t$% !t$%& H!%5%&, " P$(a* A##%t Mt 5 CIR, t$# C!'&t &'(%/ t$at .a('&% t! "/at% a $!% (( "!t a& a 5a(/ &%'%#t .!& &%.'"/, #$!'(/ t$# !+t!" % $!#%" y t$% tax+ay%& (at%& !" T$% &%'&%*%"t # !"(y .!& t$% +'&+!#% !. %a#" tax a/*"#t&at!", +a&t'(a&(y t$% #%(.-a##%##*%"t a"/ !((%t!" a#+%t#
REF>ND •
Fa('&% !. &%#+!"/%"t t! +&%#%"t " %5/%"% t$% 1GG ITR # "!t .ata( t! t# (a* .!& &%.'"/ – CTA /%"%/ (a* .!& 1GG tax &%/t !. PERF %a'#% t .a(%/ t! #'*t t# 1GG ITR – PERF atta$%/ t# 1GG ITR t! t# *!t!" .!& &%!"#/%&at!" T$% ITR # +a&t !. t$% &%!&/# !. t$% a#% a"/ (%a&(y #$!%/ t$at "!*% tax%# %&% "!t (a*%/ a# tax &%/t " 1GG – T%$"a(t%# #$!'(/ "!t % '#%/ t! /%.%at #'#ta"t5% &$t#, %#+%a((y t$!#% t$at $a5% %%" $%(/ a# a *att%& !. &$t – T$% CA6# &%(a"% !" R'(% 132, S% 3 !. R'(%# !. E5/%"% # *#+(a%/ T$# +&!5#!" #$!'(/ % ta7%" " t$% ($t !. RA 112) +&!%%/"# t$%&%" #$a(( "!t % !5%&"%/ #t&t(y y t%$"a( &'(%# !. %5/%"% – N! !"% #$a(( '"?'#t(y %"&$ !"%#%(. at t$% %x+%"#% !. a"!t$%& T$# a++(%# "!t !"(y t! "/5/'a(# 't t! t$% Stat% a# %(( I" t$% .%(/ !. taxat!" $%&% t$% Stat% %xat# #t&t !*+(a"% '+!" t# t8%"#, t$% Stat% *'#t (7%#% /%a( t$ tax+ay%&# t$ .a&"%## a"/ $!"%#ty T$% $a&#$ +!%& !. taxat!" *'#t % t%*+%&%/ t$ %5%"$a"/%/"%## (CIR v. $ERF Realt& Cor. GR !/77%1 2-l& % #""+)
REF>ND • Tax &%.'"/# !& &%/t# a&% "!t .!'"/%/ +&"+a((y !" (%#(at5% &a% 't !" t$% (%a( +&"+(% $$ '"/%&(%# a(( 'a#-!"t&at#, a$!&&" a +%&#!"6# '"?'#t %"&$*%"t at t$% %x+%"#% !. a"!t$%& T$% /y"a* !. %&&!"%!'# +ay*%"t !. tax .t# t! a t%% t$% +&!t!ty+ 'a#-!"t&at, $$ !5%&# "!t !"(y *#ta7% " .at 't a(#! *#ta7% " (a T$% !5%&"*%"t # "!t %x%*+t .&!* t$% a++(at!" !. sol-tio inde4iti I"/%%/, t$% tax+ay%& %x+%t# .a& /%a(" .&!* t$% !5%&"*%"t, a"/ t$% (att%& $a# t$% /'ty t! &%.'"/ t$!'t a"y '"&%a#!"a(% /%(ay $at t $a# %&&!"%!'#(y !((%t%/ (CIR v. Fort-ne To4acco Cor GR !/0#0% 2-l& #! #""+).
