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    Income Taxation Chapter 2

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    Jasmine Olay
    This document summarizes key concepts related to income taxation in the Philippines. It outlines the different types of taxpayers - resident citizens, resident aliens, non-resident citizens, non-resident aliens engaged in business/trade, and non-resident aliens not engaged in business/trade. It also defines the different types of income - ordinary/regular income and passive income. Finally, it provides an overview of the applicable tax rates and tables for different types of income and taxpayers.

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    © All Rights Reserved
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    Income Taxation Chapter 2

    Uploaded by

    Jasmine Olay
    665 views5 pages
    This document summarizes key concepts related to income taxation in the Philippines. It outlines the different types of taxpayers - resident citizens, resident aliens, non-resident citizens, non-resident aliens engaged in business/trade, and non-resident aliens not engaged in business/trade. It also defines the different types of income - ordinary/regular income and passive income. Finally, it provides an overview of the applicable tax rates and tables for different types of income and taxpayers.

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    This document summarizes key concepts related to income taxation in the Philippines. It outlines the different types of taxpayers - resident citizens, resident aliens, non-resident citizens, non-resident aliens engaged in business/trade, and non-resident aliens not engaged in business/trade. It also defines the different types of income - ordinary/regular income and passive income. Finally, it provides an overview of the applicable tax rates and tables for different types of income and taxpayers.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    665 views5 pages

    Income Taxation Chapter 2

    Uploaded by

    Jasmine Olay
    This document summarizes key concepts related to income taxation in the Philippines. It outlines the different types of taxpayers - resident citizens, resident aliens, non-resident citizens, non-resident aliens engaged in business/trade, and non-resident aliens not engaged in business/trade. It also defines the different types of income - ordinary/regular income and passive income. Finally, it provides an overview of the applicable tax rates and tables for different types of income and taxpayers.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 5

    Income Taxation Chapter 2 Taxpayer Tax base Source of

    Resident citizen of the Philippines (RC)- Taxable


    considered a resident citizen for tax purposes Income
    -taxable on their net income derived RC Net Within
    from sources within and without the PH Income AND
    without
    Alien- foreign-born person who is not qualified to NRC, RA, Net Within
    acquire Philippine citizenship by birth or after birth NRA-ETB Income ONLY
    NRA- Gross Within
    Resident Alien(RA)-individual whose residence is NETB Income ONLY
    within the Philippines and who is not a citizen
    thereof. NRC= Nonresident Citizen
    -actually present in PH and who are not *OFW are classified as nonresident
    mere transient or sojourners 1 citizens for tax purposes- income earned
    -lives in PH with no definite intention as outside PH exempted from PH tax;
    to his stay venture or any property in PH subject to
    -taxable only on their net income derived income tax
    from Philippines sources

    Types of Income
    Non-resident aliens(NRA)-individual whose 1. Ordinary or Regular Income-income
    residence is not in the PH and who is not a citizen such as: (subject to graduated tax
    thereof table--basic or normal tax)
    -come in PH with definite purpose  compensation income
    -taxable only on their net income derived (salaries or wages)
    from Philippines sources  business income
     income from practice of
    profession
    Non-resident aliens engaged in business and  income from sale and/or
    trade(NRA-ETB)- more than 180days during the dealings of property
    taxable year and/or aliens who have business  miscellaneous income
    income in the PH  passive income other than
    -if stays less than 180 days or not deriving those subject to final tax
    business income in PH—considered as 2. Passive Income-subject to final
    nonresident alien not engaged in trade or withholding taxes (derived from PH
    business sources)
    -taxable only on their net income derived  Interest Income
    from Philippines sources  Dividend Income
     Royalties
     Prizes
    Non-resident alien not engaged in business and  Other winning
    trade(NRA-NETB)- subject to 25% income tax on
    gross income
    Type of Applicable
    -passive income such as dividend income
    Income Tax
    is not considered as income derived from
    Regular Graduated Table
    trade or business
    Income Rate 2-2
    -taxable only on their gross income
    derived from Philippines sources Passive Final Table
    income, Withholding 2-3
    PH tax
    Capital Capital Table
    gains Gains Tax 2-4
    (subj to
    1 Temporary stay CGT)
    Self-employed & or Professionals (SEP)
    -regular income of the Self-Employed and Professionals (SEP) amounting to more than P250,000 in a taxable
    year but with a gross sales/receipts and other operating income not exceeding the revised VAT Threshold of
    P3,000,000 shall have the option to of 8% tax on gross sales/receipts and other operating income in excess of
    P250,000

    Final Withholding Tax


    -a kind if tax which is prescribed on “certain income” (interest income, dividends, royalties, prizes, and
    winnings) derived from PH sources and is not crditable against the income tax due of the payee on income
    subject to regular rates of tax for the taxable year
    - payee received the income net of applicable tax—amount held by the agent (payor) is constituted as full and
    final payments--- liability for payment of the tax rests primarily on the payor as a withholding agent

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