FABM2 Principles of Taxation Q2 M17 PDF

FABM2 SENIOR HIGH SCHOOL Self- Learning Module 17 Quarter 2 Principles of Taxation  RECAP Problem Solving. Direction. Compute for th...

FABM2 SENIOR HIGH SCHOOL Self- Learning Module 17 Quarter 2 Principles of Taxation  RECAP Problem Solving. Direction. Compute for the gross taxable and tax due of the mixed-income earner. 1. Taxpayer A has taxable compensation of P959,688.00 and P1,500,689.00 taxable income from his business. How much is his total income tax due? 2. Taxpayer B availed the 8% income tax rate where her taxable income in business is P2,396,000.00, and her tax due on her compensation is P390,000.00. How much are her tax due on business and her total income tax due on compensation and business? LESSON The principles of taxation served as the basis of taxation and who must be taxed. According to the National Internal Revenue Code of 1997 (NIRC1997) as amended by the TRAIN LAW, under II, General Principles, Sec. 23, General Principles of Income Taxation in the Philippines. Except when otherwise provided in this Code, states that: A) A citizen of the Philippine residing therein is taxable on all income derived from sources within and without the Philippines; - A Citizen or Resident Citizen of the Philippines who has a permanent place of residence to which he or she plans or intends to return whenever he or she leaves the country for business or pleasure. B) A non-resident citizen is taxable only on income derived from sources within the Philippines; - A Non-resident Citizen of the Philippines are those who: established the fact of physical presence in a foreign country with the intention to live therein; left the country to live in other country, either as an immigrant or for employment on a permanent basis; who works and gain income from other country and whose employment requires him to be physically present in the country where he or she is working during the taxable period. C) An individual citizen of the Philippines who is working and deriving income from abroad as an overseas contract worker is taxable only on income from sources within the Philippines: Provided, that a seaman who is a citizen of the Philippines and who receives compensation for services rendered abroad as a member of the complement of a vessel engaged exclusively in international trade shall be treated as an overseas contract worker; D) An alien individual, whether a resident or not of the Philippines, is taxable only on income derived from sources within the Philippines; Who are considered Alien? Resident Alien an individual whose residence is within the Philippines and who is not a citizen. Nonresident Alien an individual whose residence is not within the Philippines and who is not a citizen. E) Domestic corporations are taxable on all income derived from sources within and without the Philippines; and Domestic Corporations created or organized in the Philippines or under its laws. These corporations are subject to tax on its income gained from its international business. Some of the Domestic Corporations: Philippine Long Distance Telecommunication (PLDT), Manila Electric Company (MERALCO), Jollibee Food Corp. F) A foreign corporation, whether engaged or not in trade or business in the Philippines, is taxable only on income derived from sources within the Philippines. Foreign Corporation is a corporation that is not domestic. This corporation is subject to taxes on income gained in the Philippines. Some Foreign Corporations in the Philippines: McDonald, Kentucky Fried Chicken, Starbucks  Table 1 shows the figure of active Domestic and Foreign Corporation, both Stock and Non-Stock https://www.sec.gov.ph ACTIVITIES Activity No. 1. Essay. Manny Pacquiao, a politician and at the same time professional boxer, pays his income tax from his compensation as a senator. And after every fight, win or lose, he pays his taxes too. Which of the General Principles of Income Taxation in the Philippines is he covered? Explain your answer.