Professional Documents
Culture Documents
Mr. Barvilla, a taxpayer, had the following data for taxable year 2009: He received
gross compensation income of P 520,000 from Iloilo Domestic Airlines as a pilot. He is
married with three qualified dependent children. His wife stays at home, taking care of
the children. The family decided to secure health, hospitalization, and insurance
premium of P 10,000 for the year.
Compute for the income tax due assuming Mr. Barvila, the taxpayer, is a: (a) resident
citizen, (b) non-resident citizen, (c) resident alien, (d) non-resident alien engaged in
business, and (e) non-resident alien not engaged in business.
For letters (c), (d), and (e) assume that Mr. Barvilla is an American citizen, and his
country allows a Filipino citizen working in their country a basic personal exemption of P
45,000 for married individuals and an additional of P 10,000 per dependent.
Answer:
93,500
ITD = P
ITD = P 117,500
Notes:
There is no allowed deduction for health & hospitalization insurance premium
because the gross family income exceeded P 250,000
If the only source of income is within the Philippines, the tax due on whether the
taxpayer is a resident citizen, non-resident citizen, and resident alien will be the
same
The Non-resident alien engaged in business is entitled to Basic Personal
Exemption, P 50,000 or the exemption offered in his/her country, whichever is
lower
The Non-resident alien not engaged in business is subject to 25% final tax on
gross income
Mr. Paulma, single parent, with a qualified child, and a non-resident citizen who works in
Taiwan as the operations manager of a manufacturing firm has the following information:
Gross Income
Compensation income
Gross income from
business
Business expenses
Other income
360,000
150,000
250,000
30,000
120,000
40,000
Philippines
72,000
110,000
120,000
5,000
16,000
Japan
0
30,600
30,300
10,000
0
600,000
Compute for: (1) Income tax due, (2) Final tax, and (3) Capital gains tax.
Answer:
50,000
Notes:
A resident citizen is taxable for income both within and without
Other income is subject to normal tax (schedular tax rates)
The interest income on a bank deposit is subject to 20% final withholding tax for a
resident citizen
The capital gains tax is equal to 6% of the selling price or fair market value,
whichever is higher
Mr. Wong, married, with two dependent children, is a citizen of China & is currently
residing in the Philippines. He had the following data on income from within and outside
the Philippines for the taxable year 2009:
Dividend from a domestic corporation
Dividend income from a foreign corporation
(Philippines)
Capital gain on sale of inherited land in the
Philippines (SP: 5M)
Nat income from business (Japan)
Net income from business (Philippines)
40,000
25,000
250,000
500,000
300,000
Compute for: (1) Income tax due, (2) Final tax, and (3) Capital gains tax.
Answer:
250,000
20,000
120,300
10,000
Mr. Sarmiento also paid P 25,000 for insurance premium on health and hospitalization.
Compute for the income tax due assuming Mr. Sarmiento, the taxpayer, is a: (a) resident
citizen, (b) non-resident citizen, (c) resident alien, (d) non-resident alien engaged in
business, and (e) non-resident alien not engaged in business.
For letters (c), (d), and (e) assume that Mr. Sarmiento is a Japanese citizen, and his
country allows a Filipino citizen working in their country a basic personal exemption of P
50,000 and an additional of P 10,000 per dependent.
Answer:
(a) 560,000 + 250,000 250,000 120,300 + 20,000 + 10,000 50,000 =
P 419,700 (TI)
Income Tax Due = P 100,910
(b) 560,000 250,000 + 20,000 50,000 = P 280,000 (TI) ITD = P 59,000
(c) Same as (b), P 59,000
(d) Same as (b), P 59,000
(e) 560,000 + 20,000 = P 580,000 x 25% = P 145,000 (final tax)
Notes:
Only a resident citizen taxpayer is taxable on income both within and without
A non-resident alien not engaged in business is subject to 25% final withholding
tax on gross income within
Mr. Honorario sold to a direct buyer, shares of stocks of Magnesium Corp, a domestic
corporation, held as capital asset. The selling price was P 250,000 and the cost of the
property to the seller was P 100,000. Compute for the capital gains tax.
Answer:
P 250,000 100,000 = P 150,000 (CG)
= P 10,000
Mr. Alelis sold his shares of stocks of Pepito Corp, a domestic corporation, held as
capital asset, thru the facilitation of Mr. Broker, the broker, upon payment of P 15,000.
The shares were purchased for P 150,000 and the related expenses of the purchase were
P 12,000. Compute for the capital gains tax assuming that the selling price is P 450,000.
Compute for the capital gains tax.
Answer:
(1) NRC
260,000
(50,000)
(25,000)
185,000
(2) NRAEB
260,000
(34,000)
226,000
(3) NRANEB
260,000
-
P 33,750
P 44,000
P 65,000
Mr. Lim, an unmarried surgeon with two qualified children, presented his quarterly data
for 2009.
Sales
Cost of Sales
Operating
Expenses
First Q
350,000
120,000
20,000
Second Q
105,000
290,000
90,000
Third Q
335,000
100,000
20,000
Fourth Q
350,000
110,000
20,000
1st Q
P 350,000
120,000
2nd Q
P 455,000
410,000
3rd Q
P 790,000
510,000
4th Q
P 1,140,000
620,000
Gross Profit
Operating
Expenses
Net Income
Personal
Exemption
Net
Taxable
Income
230,000
20,000
45,000
110,000
280,000
130,000
520,000
150,000
210,000
-
(65,000)
-
150,000
-
370,000
100,000
210,000
(65,000)
150,000
270,000
40,000
25,000
56,000
(40,000)
(40,000)
(40,000)
P 40,000
(40,000)
(15,000)
16,000
Notes:
Quarterly income tax liability is computed on a cumulative basis
A negative income tax still due is actually a tax refund
o However, in actual practice, no refund is given on a quarterly basis
The basic and personal exemptions are only deducted on the 4 th quarter
cumulative taxable income
Mr. Rubinos, a businessman from Iloilo City, married and with a child, presented his
quarterly data for 2009. He is engaged in selling fruits.
Sales
Cost of Sales
Operating
Expenses
First Q
250,000
150,000
60,000
Second Q
245,000
130,000
50,000
Third Q
235,000
120,000
60,000
Fourth Q
250,000
110,000
40,000
2nd Q
495,000
280,000
215,000
110,000
3rd Q
730,000
400,000
330,000
170,000
4th Q
980,000
510,000
470,000
210,000
40,000
-
105,000
-
160,000
-
260,000
75,000
40,000
105,000
160,000
185,000
4,000
15,500
27,500
33,750
(4,000)
(15,500)
(27,500)
4,000
11,500
12,000
6,250
Sales
Cost of Sales
Gross Profit
Operating
Expenses
Net Income
Personal
Exemption
Net
Taxable
Income
Mrs. Diesca is employed as a sales manager. Her husband is unemployed for three
years now. They have four children; the eldest is 25 years old, and the second is 20.
Compute for the income tax payable / refundable for the taxable year 2011 given the
following information:
Monthly Salary
Monthly Allowance
Annual Commission
Withholding Tax
P 18,000
3,000
120,000
60,000
Answer:
Gross Income
Basic Personal Exemption
Additional Exemption
Net Taxable Income
Income Tax Due
Withholding Tax
Tax Refundable
P 372,000
(50,000)
(75,000)
247,000
49,250
(60,000)
P 10,750
Notes:
Gross Income = [(18,000 + 3,000) x 12 months] + 120,000 = P 372,000
Only three children are qualified dependents (Age < 21)
The wife is entitled to the additional personal exemption since the husband is a
non-income earner
The withholding tax is deducted to the Tax Due to arrive at the Income Tax Payable
/ refundable
Ms. Chan, a neurologist, single and with a dependent father, presented his quarterly
data for 2009.
Sales
Cost of Sales
Operating
Expenses
Interest Income
from Bank
Deposit
Honorarium
Gain on sale of
land (CA), SP 2M
First Q
350,000
120,000
Second Q
285,000
120,000
Third Q
335,000
110,000
Fourth Q
350,000
110,000
20,000
190,000
20,000
20,000
2,000
5,000
20,000
15,000
5,000
20,000
600,000
1st Q
P 350,000
120,000
230,000
20,000
2nd Q
635,000
240,000
395,000
210,000
3rd Q
970,000
350,000
620,000
230,000
4th Q
1,320,000
460,000
860,000
250,000
Expenses
Operating
Income
Other Income
Personal
Exemptions
Net
Taxable
Income
Income Tax Due
Quarterly
Payments
Tax Still Due
210,000
185,000
390,000
610,000
15,000
-
15,000
-
20,000
-
40,000
50,000
225,000
200,000
410,000
600,000
43,750
37,500
98,000
157,000
(43,750)
(43,750)
(98,000)
43,750
(6,250)
54,250
59,000
Notes:
Quarterly tax liability is computed on a cumulative basis
Honorariums are subject to normal tax (schedular tax rates)
A dependent parent is not a qualified dependent for income tax purposes
Interest income from bank deposit is subject to 20% final withholding tax, and is
therefore not part of taxable income subject to normal tax
The sale of land held as a capital asset is subject to 6% Capital Gains Tax on the
selling price or fair market value, whichever is higher; therefore, the gain on sale
is not part of taxable income subject to normal tax
Ms. Demegillo, single with a dependent mother, and a businesswoman, presented her
quarterly data for the year 2009. (Assume there is a tax credit of P 10,000 accumulated
in 2008)
Sales
Cost of Sales
Operating
Expenses
Interest
Income
(N/R)
Misc. Income
First Q
250,000
100,000
60,000
Second Q
585,000
110,000
180,000
Third Q
490,000
190,000
100,000
Fourth Q
310,000
160,000
120,000
10,000
2,000
15,000
8,000
5,000
5,000
5,000
1st Q
250,000
100,000
2nd Q
835,000
210,000
3rd Q
1,325,000
400,000
4th Q
1,635,000
560,000
Gross Profit
Operating
Expenses
Operating
income
Other Income
Personal
Exemption
Taxable Income
150,000
60,000
625,000
240,000
925,000
340,000
1,075,000
460,000
90,000
385,000
585,000
615,000
15,000
-
17,000
-
37,000
-
50,000
50,000
105,000
402,000
622,000
615,000
15,500
95,600
164,040
161,800
(15,500)
(95,600)
(164,040)
(10,000)
5,500
80,100
68,440
(2,240)
Quarterly
Payments
Tax Credit
Tax Still Due
Notes:
Interest income on notes receivable and miscellaneous income are included in net
taxable income subject to normal tax (schedular tax rates)
A tax credit is a tax refund on the previous year, and subsequently deducted to
the Tax Due of the current year to arrive at the Tax Still Due (Tax Liability)
~ FIN ~