I was informed by a “good Samaritan” that my reviewer “can be used” as a means of cheating during the major
exam. But since I have promised to give you a “reviewer” (hindi kodigo), I am sending these pointers instead so
that we can meet halfway.
PS. Don’t abuse the kindness of others. God bless you.
Pointers / Reviewer for Finals TAX 301
Income Tax for Corporations
Definition of Corporation
List and meaning of businesses/organizations taxable as a corporation
List and meaning of businesses/organizations NOT taxable as a corporation
Tax Exempt Corporations (look at our quiz)
Types of Corporations and how they are taxed
Regular Corporate Income Tax (Definition and Computation)
Minimum Corporate Income Tax (Definition and Computation)
Excess MCIT (Definition and Computation)
Relief from MCIT
Final Taxes on Passive Income and Capital Gains Tax (More on Computation)
Improperly Accumulated Earnings Tax (Definition and Objective)
Special Corporations
Offshore Banking Units
Income Tax for Partnerships
Definition of Partnership
General Professional Partnership (Definition and Computation)
Guidelines to be followed for GPP
General Co-Partnership (Definition and Computation)
Gross Income
Definitions
Valuation of income
Classification of Income
Taxable Income
Requisites for income to be taxable
Characteristics of Philippine Income Tax
Income Tax system
Situs of income
Inclusions and Exclusions from Gross Income
Compensation Income
Business Income (Tax Refund and Tax Benefit Rule)
Dividend Income
Grounds for Granting Tax Exemptions
Tax Exemption/Tax Amnesty/Tax Condonation
Sample Computations:
Computation for Corporations:
Gross income from
Sale of merchandise 11,000,000
Rent income (gross of 5% withholding tax) 1,500,000
Miscellaneous income 2,000,000
Operating expenses 8,300,000
Interest income from savings deposit 200,000
Interest income from government bonds 150,000
Interest income on FCDU bank deposits 100,000
Dividend income from a domestic corporation 125,000
Dividend income from a foreign corporation 50,000
Gain on sale of shares of a domestic corporation sold directly to a buyer 125,000
Gain on sale of real property in the Philippines held as investment. The
270,000
property was acquired at a cost of P 2,000,000
Gain on sale of real property abroad held as investment. The property was
acquired at a cost of P 3,000,000 200,000
Withholding tax on rent income 80,000
Income tax paid for the first 3 quarters of the year 125,000
RCIT Income Tax Payable
Gross income from
Sale of merchandise 11,000,000
Rent income (gross of 5% withholding tax) 1,500,000
Miscellaneous income 2,000,000
Dividend income from a foreign corporation 50,000
Gain on sale of real property abroad held as investment. The property was
acquired at a cost of P 3,000,000 200,000
Operating expenses (8,300,000)
Net Taxable Income 6,450,000
RCIT Rate 30%
Tax Due 1,935,000
Less:
Withholding tax on rent income (80,000)
Income tax paid for the first 3 quarters of the year (125,000)
Income tax payable 1,730,000
MCIT Income Tax Due
Gross income from
Sale of merchandise 11,000,000
Rent income (gross of 5% withholding tax) 1,500,000
Miscellaneous income 2,000,000
Total Gross Income 14,500,000
MCIT Rate 2%
Tax Due 290,000
Final Tax on Passive Income
Interest income from savings deposit 200,000 20% 40,000
Interest income from government bonds 150,000 20% 30,000
Interest income on FCDU bank deposits 100,000 15% 15,000
Final Tax on Passive Income 85,000
Computations for Partnership:
Professional fees (PF) 6,700,000
Professional expenses (PE) 3,300,000
Business revenue – trading (BR) 5,840,000
Business expenses – trading (BE) 2,920,000
Revenues (Both PF and BR) 12,540,000
Expenses (Both PE and BE) 6,220,000
Net Taxable Income 6,320,000
Tax Rate 30%
Net Income Tax Payable 1,896,000
Net Income after taxes 4,424,000
Dividends 1,106,000
Final tax rate 10%
Final tax withheld 110,600
A GPP provided the following information:
LYRIC Lyka Eric James Coco
Gross Income 10,000,000 6,500,000 6,200,000 7,500,000 8,000,000
Expenses (5,750,000) (3,750,000) (3,850,000) (4,350,000) (6,650,000)
Income subject to final taxes (net) 420,000
Proft/Loss Sharing 25% 25% 25% 25%
Net Income from Op of GPP 4,250,000 1,062,500 1,062,500 1,062,500 1,062,500
Net Income of the GPP 4,670,000 1,167,500 1,167,500 1,167,500 1,167,500
Total Taxable income 3,812,500 3,412,500 4,212,500 2,412,500
Gross Income – Expenses +
Gross Income – Expenses To get the taxable income of EACH partner:
Income subject to final taxes
lang if Net income from GI ni Partner – Expenses ni Partner + Share
if Net income of the GPP nya sa NI from Operations of GPP
Operations ang hinahanap
ang hinahanap
Paano makukuha ang sharei partner?
NI from Operations of GPP * Profit sharing %
(yung sa problem: 4,250,000 x 25%)
Computation for Gross Income
(Work back problem):
Given:
RCIT Tax due – 525,000
Expenses – 1,250,000
Compute for the Gross Income
RCIT Tax due/30% – 525,000 / 30% (dinivide para makuha ang Net Income)
Net Income - 1,750,000
Net Income + Expenses - 1,750,000 + 1,250,000 (Inadd para makuha ang gross income)
Gross Income = 3,000,000
Checking:
Gross Income 3,000,000
Less: Expenses (1,250,000)
Net Income 1,750,000
RCIT Rate 30%
RCIT tax Due 525,000
