Podcast
Questions and Answers
How is a general partnership typically treated for tax purposes?
How is a general partnership typically treated for tax purposes?
- As a corporation (correct)
- As a limited partnership
- As a non-profit organization
- As a sole proprietorship
What is a characteristic of a joint venture?
What is a characteristic of a joint venture?
- It is created for a specific purpose. (correct)
- It does not require separate charters.
- It is similar to a general partnership.
- It is a long-term business entity.
Which of the following entities is NOT classified under non-resident foreign corporations?
Which of the following entities is NOT classified under non-resident foreign corporations?
- Joint stock companies
- Insurance companies
- Partnerships (correct)
- Joint ventures
In the Philippines, what are foreign corporations with no presence called?
In the Philippines, what are foreign corporations with no presence called?
What do non-resident foreign corporations primarily engage in?
What do non-resident foreign corporations primarily engage in?
What distinguishes joint ventures from partnerships?
What distinguishes joint ventures from partnerships?
What tax treatment is generally applied to limited partnerships in the Philippines?
What tax treatment is generally applied to limited partnerships in the Philippines?
What must be in place for Nivea Philippines to pay royalties to Nivea Germany?
What must be in place for Nivea Philippines to pay royalties to Nivea Germany?
What type of income is subject to graduated rates?
What type of income is subject to graduated rates?
Who issues licenses to joint ventures and contractors in the Philippines?
Who issues licenses to joint ventures and contractors in the Philippines?
What must a foreign contractor possess to be recognized under the Philippine law?
What must a foreign contractor possess to be recognized under the Philippine law?
What criterion must be met for a construction project to qualify as internationally funded?
What criterion must be met for a construction project to qualify as internationally funded?
How does an individual's taxable income affect their tax rate?
How does an individual's taxable income affect their tax rate?
What is a critical step in calculating tax due for businesses?
What is a critical step in calculating tax due for businesses?
Which of the following is NOT specified as an allowable expense?
Which of the following is NOT specified as an allowable expense?
How is the income of individuals engaged in energy operations treated for taxation under the government contract?
How is the income of individuals engaged in energy operations treated for taxation under the government contract?
What type of income is taxed regardless of its source in the Philippines?
What type of income is taxed regardless of its source in the Philippines?
Which income tax is applicable to individuals earning from passive investments in the Philippines?
Which income tax is applicable to individuals earning from passive investments in the Philippines?
Which partnership income amount is considered the tax base for each partner?
Which partnership income amount is considered the tax base for each partner?
What does the acronym NRA-NETB stand for in relation to taxable income?
What does the acronym NRA-NETB stand for in relation to taxable income?
For which type of taxpayer does the Philippines tax base depend significantly on legality and registration?
For which type of taxpayer does the Philippines tax base depend significantly on legality and registration?
What is the implication of being a resident citizen (RC) for income taxation in the Philippines?
What is the implication of being a resident citizen (RC) for income taxation in the Philippines?
Which of the following tax principles applies to individuals in the Philippines regarding their share in partnership profits?
Which of the following tax principles applies to individuals in the Philippines regarding their share in partnership profits?
What example is provided as passive income in the context of the Philippine tax system?
What example is provided as passive income in the context of the Philippine tax system?
What classification does Carmela fall into if she goes back to the United States on October 1?
What classification does Carmela fall into if she goes back to the United States on October 1?
What occurs if Carmela's total stay in the Philippines is less than 180 days in a taxable year?
What occurs if Carmela's total stay in the Philippines is less than 180 days in a taxable year?
If Allan stayed in the Philippines for 180 days to construct a tower, what is his status?
If Allan stayed in the Philippines for 180 days to construct a tower, what is his status?
What is true about Carmela's salary if she is employed as an auditor in the Philippines but worked for an Australian company?
What is true about Carmela's salary if she is employed as an auditor in the Philippines but worked for an Australian company?
What could indicate that a non-resident alien intends to reside abroad temporarily?
What could indicate that a non-resident alien intends to reside abroad temporarily?
What does it mean if a non-resident alien is classified as NRA-NETB?
What does it mean if a non-resident alien is classified as NRA-NETB?
Which of the following situations would classify an individual as a Non-Resident Alien Engaged in Trade or Business (NRA-ETB)?
Which of the following situations would classify an individual as a Non-Resident Alien Engaged in Trade or Business (NRA-ETB)?
What is the significance of the aggregate period of stay for non-resident aliens?
What is the significance of the aggregate period of stay for non-resident aliens?
What is the status of Carmela regarding her residency in the Philippines?
What is the status of Carmela regarding her residency in the Philippines?
How many days did Chase stay in the Philippines for her business convention?
How many days did Chase stay in the Philippines for her business convention?
What is the classification of Chase's residency after her visit lasting more than 180 days?
What is the classification of Chase's residency after her visit lasting more than 180 days?
What does the term 'beneficial owner' refer to in the context provided?
What does the term 'beneficial owner' refer to in the context provided?
What occurs to the income earned from a property held in trust?
What occurs to the income earned from a property held in trust?
If individuals co-own an undivided thing, how are they treated for tax purposes?
If individuals co-own an undivided thing, how are they treated for tax purposes?
What indicates a 'definite purpose' in relation to business conventions?
What indicates a 'definite purpose' in relation to business conventions?
Why would the title transfer to another person not imply actual ownership?
Why would the title transfer to another person not imply actual ownership?
Study Notes
Non-Resident Alien (NRA)
- NRA-ETB (Non-Resident Aliens Engaged in Trade or Business)
- Stayed for more than 180 days in a taxable year.
- Have business income in the Philippines.
- NRA-NETB (Non-Resident Aliens Not Engaged in Trade or Business)
- Stayed for 180 days or less in a taxable year.
- Have no business income in the Philippines.
Taxpayer Categories
- Resident Citizen (RC)
- Pays taxes on all income, regardless of source.
- Non-Resident Citizen (NRC)
- Pays taxes on income earned within the Philippines.
- May have lived abroad for 180 days or more in a taxable year.
- Has intentions to go back abroad permanently.
- Resident Alien (RA)
- Pays taxes on income earned within the Philippines.
- Has not resided abroad for 180 days or more in a taxable year.
- NRA-ETB
- Pays taxes on business income earned in the Philippines.
- NRA-NETB
- Pays taxes on passive income earned in the PH.
Entities Treated As Individuals
- Co-ownership
- Two or more individuals own an undivided thing.
- Income earned from the co-owned property is declared individually by each owner.
- Partnership
- Profits gained by the partnership are automatically distributed to partners.
- Each partner declares their share of the partnership income individually for tax purposes.
- Trust
- Title of property is transferred to another person, but the actual owner is the beneficiary who receives the benefits derived from the property.
- All income earned by the property under trust is subject to income tax paid by the trust.
Taxable Income Sources for Non-Resident Aliens
- NRA-NETB
- Subject to tax on their gross income from the Philippines.
Applicable Income Taxes and Rates (Individuals)
- Basic Income Tax
- Final Withholding Tax on Passive Income
- Applies to investments where you do not actively participate in earning income, such as dividends.
- Capital Gains Tax
Taxable Income Sources for Corporations
- Domestic Corporation
- Corporations or entities created in the Philippines.
- Subject to corporation income tax rate.
- Non-Resident Foreign Corporation (NRFC)
- Foreign corporations not engaged in trade or business in the Philippines with incidental transactions.
- Subject to tax on their gross income from the Philippines.
- Non-Resident Foreign Corporation (NRFC) Engaged in Petroleum, Coal, Geothermal and other Energy Operations
- Subject to income tax on their net income from the Philippines.
- Allowed to deduct allowable expenses.
Other Entities
- Joint-Stock Companies
- Joint Accounts
- Associations
- Insurance Companies
- Joint Ventures (except if exempt)
- Generally taxed as a corporation.
- Taxed on their net income from the Philippines.
Graduated Rates
- Tax rate varies depending on the taxable income earned.
- Applies to individuals, not corporations.
- Allowable expenses can be deducted from gross receipts to calculate net income.
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Description
Test your knowledge on the different taxpayer categories in the Philippines, including Non-Resident Aliens (NRA) and Resident Citizens. This quiz covers the definitions and tax obligations related to each category, helping you understand the nuances of taxation in the country.
