You are on page 1of 3

TAXAONE FORMULAS AND TABLES Tax Cash Basis

Cash income xxx


Chapter 3: Introduction to Income Taxation
Collection for future services-advances xxx
Selling price 500 Total Return Total Gross Income xxx
Less: Deductions
Cost (value of inventory forgone) 300 Return OF Capital Cash Expense xxx
Mark-up (Gross income) 200 Return ON Capital Amortization of 2015 pre exp xxx
Total deductions xxx
Income Situs Rules Net Income xxx
Types of Income Place of Taxation (situs)
1. Interest Income Debtor’s residence Selling Price
2. Royalties Where the intangible is employed Cash received/receivable xxx
3. Rent income Location of the property Fair Market Value of property receivable xxx
4. Service Income Place where the service is Mortgage or any indebtedness assumed (xxx)
rendered Selling/Contract Price xxx
5. Gain on sale of properties Percentage of Completion Method
a. Personal property Contract price xxx
 Domestic properties – presumed earned in Multiply by: % of completion xx%
the PH. Construction revenue xxx
 Other personal Properties -place where the Less: Construction revenue in prior year xxx
property is sold Construction revenue in this year xxx
b. Real property – earned where the property is Less: Expense during the year xxx
located Construction gross income xxx
6. Dividend income from Spread out Method Formula
a. Domestic Corporation – presumed earned within Cost of improvement x Excess useful life over lease term
b. Foreign Corporation – depends on pre-dominance Useful life of the improvement
test
The pre-dominance test Crop year basis
 At least 50% of the portion of the dividend Proceeds from harvest xxx
corresponds to Philippine Gross Income Less: Cropping Expenses
 Less than 50%, the entire dividends receive is Incurred Last year (xxx)
earned abroad Incurred this year (xxx)
c. Non-Resident Foreigner – earned abroad Farming Gross Income xxx

7. Merchandising Income – earned where the property is Penalties for Late Filing or Payment of Tax
sold 1. Surcharge
a. 25% of the basic tax for failure to file or pay
8. Manufacturing Income – earned where the goods are
deficiency tax on time
manufactured and sold
b. 50% for willful neglect to file and pay taxes
Chapter 4: Income Tax schemes, Accounting Methods *willful neglect when tax payer receives a notice
and Periods
2. Interest – 20% per annum considering the ff. periods
Tax Accrual Basis
Delay Period Factor
Cash income xxx
For everyday of delay No. of Days/365
Accrued income xxx
For every month of delay No. of Months/12
Collection for future services-advances xxx
For every year of delay 1
Total Gross Income xxx
Less: Deductions
3. Compromise penalty
Cash Expense xxx
Accrued Expense xxx
Amortization of 2015 pre exp xxx
Total deductions xxx
Net Income xxx
Taxability of Stock Dividends
Chapter 5: Final Income Taxation
 Normally, Stock dividends are exempt from
Non-resident person not engaged in General Final income tax
trade or business tax rate  Except when there is a subsequent redemption or
NRA-NETB 25% cancellation of stock issues;
NRFC 30%  And if it leads to a substantial alteration of
ownership in the corporation
PASSIVE INCOME SUBJECT TO FINAL TAX

Interest Income from local banks Tax Sparing rule to NRFCs


Recipients NRFCs shall be subject to a 15% final tac in dividend
Source of Interest income Individuals Corporation income of 30% general final tax If the country of domicile
Short term deposits 20% 20% of the NFRC credits against the NFRC’s tax due
Long term deposits/invest Exempt 20%
Historical dividend tax rates
Other applications of the final tax on interest Source Final Tax
1. Deposit Substitute Earnings before Jan 1,1998 Exempt
2. Government Securities Earnings from 1998 6%
3. Money Market placements Earnings from 1999 8%
4. Trust Funds Earnings from 2000 and thereafter 10%
5. Other investments evidenced by certificates
prescribed by BSP Entities taxable as corporations are subject to 10% tax
1. Real Investment Trusts
Tax on pre-termination of long term deposits of 2. Business Partnerships
individuals 3. Taxable Associations
Holding Period Final Tax 4. Taxable joint ventures
Less than 3 years 20% 5. Taxable co ownerships
3 years to less than 4 years 12%
4 years to less than 5 years 5% Royalties
5 years or more 0% Recipients
Source of passive royalties Individuals Corporation
Foreign currency deposit w/ foreign currency depository Books, literary works, and 10% Final 20% Final
bank musical compositions tax tax
Taxpayer Individuals Corporation Other sources 20% Final 20% Final
Residents 7.5% 7.5% tax tax
Non-Residents Exempt Exempt
Prizes
o Joint accounts on forex deposits; 50% exempt 50% Recipients
entitled to 7.5% final tax Source of taxable prices Individuals Corporation
Prices exceeding P10,000 20% Final
Regular tax
Interest Income subject to regular tax tax
1. Lending activities Prices not exceeding
Regular tax Regular tax
2. Investment in bonds P10,000
3. Promissory Notes
4. Foreign Sources, back or non-bank (applies to Winnings
winnings/prices/etc.) Recipients
5. Penalty for legal delay Types of winnings Individuals Corporation
PSCO or lotto winnings Exempt Exempt
Dividend Tax rules Other winnings, in general 20% Final
Recipient of dividend Regular tax
tax
Source of dividends Individuals Corporation
Domestic Corporation 10% Final tax Exempt Tax informers Reward
Foreign Corporation Regular tax Regular tax Whichever is lower
Note: 1. 10% of revenues or surcharges or fees recovered
1. A NRA-ETB is subject to a 20% and NRA-NETB to a 25% final and or fine or penalty imposed and collected
tax on dividend 2. 1,000,000
2. A NRFC is not exempt but with 30%
Corporate Bonds
Bond investor
Individuals Corporation
Tax on Interest income on 30% Final
Regular tax
tax free corporate bonds tax
Note: The final tax applies to all individuals, regardless of
classification

Exceptions to the General Final Tax on Non-Resident persons


not engaged in trade of business in the Philippines

NRA-NETB NRFC
General Final Tax Rate 25% 30%
Exceptions:
1. Capital Gain on sale of 5%-10% 5%-10%
domestic stocks directly to buyer Capital Capital gains
gains tax tax
2. Rentals of cinematographic 25% of 25% of
films and similar works rentals rentals
3. Rentals of vessels 25% of 4.5% of
rentals rentals
4. Rentals of aircrafts,
25% of 7.5% of
machineries, and other
rentals rentals
equipment
5. Special aliens (special 15% of
employees gross
income N/A
from
employer
6. Lotto and PCSO Winnings Exempt Exempt
7. Interest Income under the
Exempt Exempt
foreign currency deposit system
8. Interest on foreign loans N/A 20%
9. Dividend Income 15% if
25% sparing rule
is applicable
10. Tax on corporate bonds 30 % 30%

Deadline and place for manual filing

The return shall be filed and the tax shall be paid or before
10th day of the following month