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Questions and Answers
What is the final withholding tax percentage applicable to withdrawals from a decedent's deposit account?
What is the final withholding tax percentage applicable to withdrawals from a decedent's deposit account?
How long after a decedent's death can withdrawals from their deposit account be made?
How long after a decedent's death can withdrawals from their deposit account be made?
What can the net proceeds from a decedent's deposited amount be used for after the withholding tax is deducted?
What can the net proceeds from a decedent's deposited amount be used for after the withholding tax is deducted?
What is the final withholding tax rate for interest income from tax-free covenant bonds?
What is the final withholding tax rate for interest income from tax-free covenant bonds?
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What is NOT deductible from the estate tax in relation to a decedent's withdrawal from their bank account?
What is NOT deductible from the estate tax in relation to a decedent's withdrawal from their bank account?
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In order to transfer titles of lands, which tax must be settled first?
In order to transfer titles of lands, which tax must be settled first?
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Which entity collects the estate tax that must be paid before transferring property titles?
Which entity collects the estate tax that must be paid before transferring property titles?
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What happens to the final tax withheld from a decedent's deposit account withdrawal in relation to other taxes?
What happens to the final tax withheld from a decedent's deposit account withdrawal in relation to other taxes?
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Who is primarily responsible for remitting the final tax withheld from an income payment?
Who is primarily responsible for remitting the final tax withheld from an income payment?
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Which of the following income types is exempt from final tax?
Which of the following income types is exempt from final tax?
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Which of the following must be reported in the income tax return?
Which of the following must be reported in the income tax return?
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What is the final tax rate typically applied to royalties earned by non-resident aliens not engaged in trade or business?
What is the final tax rate typically applied to royalties earned by non-resident aliens not engaged in trade or business?
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Which statement accurately describes the tax exemption for the first P10,000 of a prize?
Which statement accurately describes the tax exemption for the first P10,000 of a prize?
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Which income type is NOT subject to 10% final tax?
Which income type is NOT subject to 10% final tax?
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What is the maximum net cash reward for informing the BIR about tax violations?
What is the maximum net cash reward for informing the BIR about tax violations?
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What type of returns must be filed for quarterly remittance of final taxes?
What type of returns must be filed for quarterly remittance of final taxes?
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What is the deadline for submitting the Monthly Remittance Form of Final Income Taxes Withheld for a withholding made in the month of January?
What is the deadline for submitting the Monthly Remittance Form of Final Income Taxes Withheld for a withholding made in the month of January?
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Which form should be submitted on or before the 10th day after the month when the withholding was made from the amount withdrawn from a decedent's deposit account?
Which form should be submitted on or before the 10th day after the month when the withholding was made from the amount withdrawn from a decedent's deposit account?
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When is the Quarterly Remittance Return of Final Taxes Withheld on Interest Paid on Deposits due?
When is the Quarterly Remittance Return of Final Taxes Withheld on Interest Paid on Deposits due?
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What is the consequence of filing the Monthly Remittance Form of Final Income Taxes Withheld late?
What is the consequence of filing the Monthly Remittance Form of Final Income Taxes Withheld late?
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What amount is recorded as Interest Expense in the Books of Payor in Illustration 5.1?
What amount is recorded as Interest Expense in the Books of Payor in Illustration 5.1?
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According to the filing requirements, who is responsible for deducting and withholding taxes on income payments subject to Final Withholding Taxes?
According to the filing requirements, who is responsible for deducting and withholding taxes on income payments subject to Final Withholding Taxes?
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Which of the following reflects the correct filing method deadline for the Monthly Remittance Form of Final Income Taxes Withheld?
Which of the following reflects the correct filing method deadline for the Monthly Remittance Form of Final Income Taxes Withheld?
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What is the amount of Final Withholding Taxes Payable recorded in the Books of Payee in Illustration 5.6?
What is the amount of Final Withholding Taxes Payable recorded in the Books of Payee in Illustration 5.6?
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Study Notes
Final Withholding Taxes
- Withholding agents (payors) are responsible for deducting and withholding taxes on income payments subject to final withholding taxes.
- Final Withholding Taxes refer to taxes paid to the government immediately by the payor and represent the full payment of tax liability for the recipient.
- Final Withholding Tax Rate can vary depending on the type of income and the recipient's status. Different tax rates apply to interest income, royalties, prizes, dividends, and other income.
Final Withholding Tax Deadlines
- Form 0619F must be filed on the 10th day following the 11th-15th month in which the withholding was made depending on the taxpayer’s line of business.
- Form 0620 must be filed on or before the 10th day following the month when the withholding was made
- Form 1602Q must be filed on the last day of the month following the close of the quarter
Final Withholding Taxes on Decedent's Deposit Account
- Banks are required to withhold a 6% final tax on withdrawals from a decedent's deposit account.
- The withdrawal must be made within one year from the date of the decedent's death.
- Withheld tax is not creditable against the estate tax.
- The net proceeds, after tax, can be used to pay the estate tax.
Final Withholding Taxes on Tax-Free Covenant Bonds
- Interest income from tax-free covenant bonds is subject to a 30% final withholding tax.
- This applies to both individuals and corporate taxpayers.
Notable Exemptions and Final Tax Rates
- Prizes and Winnings exceeding ₱10,000 are subject to final tax.
- Royalties are subject to 20% final tax, whether active or passive.
- Dividends are generally subject to 10% final tax.
- Tax-free Covenant Bonds are subject to a 30% final tax.
- Interest Income on Deposits are subject to a final withholding tax based on specific rates for different categories of depositors, except for banks, non-bank financial institutions, and insurance companies.
- The payee is also referred to as the withholding agent.
- Income subject to final tax is not reported in the income tax return.
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Description
This quiz covers the essentials of final withholding taxes, including responsibilities of withholding agents and applicable tax rates for various income types. It also highlights important deadlines for filing relevant tax forms. Test your understanding of these key tax concepts.
