\}) ReSA /z} The Review School of Accountancy ‘Tel. No. 735-9807 & 734-3989 > TAXATION TAMAYO/LIM/CAIGA/MANUEL Topic BEFORE TRAIN I UNDER TRAIN (Starting January 3, 2018) Individual Taxpayers | | Rates of Taxon Taxable Income of Individuals, | S¥to 32% (09% to 35% with P250, 10.0% Rate of Tax on Income of Purely Self-Employed | No provision Self-employed individuals andjor professionals shal have the Individuals and/or Professionals Whose Gross Sales or ‘option to: Gross Recelpts and Other Non-operating Income Do 1)_avall of an eight percent (896) tax on gross sales or gross es Not Exceed the Value-addedTax(VAT) Threshold receipts and other non-operating Income In excess of Two hundred fifty thousand pesos (P250,000) Inte of the ‘) graduated Income tax rates above and )_the percentage tax under Section 116 ofthis Code. Rate of Tax for Mixed Income Earners. Case 1 (-AlLincome from Compensation No provision ‘Gredusted Income tax rates above All Income from Business or Practice of ‘No provision Rates prescribed under Subsection (A)(2)(a) of this Section on Profession (IfTotal GrossSalesand/orGross taxable income, or Receipts and Other Non-operating Income Do Not Exceed the VAT Threshold) | 2) thepercentagetaxunder Sectiori 116 of this Code. Md nt aval of thee taxon gross sales gos reets 2) graduated income tax rates and VAT, if VAT-registered | Case? ‘All Income from Compensation No provision " ‘Graduated income tax rates above All Income from Business or Practice of Profession | No provision Rates prescribed under Subsection (A)(2)(a) of this Section. (CifTotal Gross Sales and/or Gross Receipts and Other Non-operating Income Exceed the VAT Threshold) ‘No option to avail the 8% tax on gross sales or gross receipts | Subject to VAT whether registered or registrablee ReSA: The Review School of Accountancy | Minimum Wage Earner (Pure Compensation Income Earner) Minimum Wage Earner With Other Sources of Income _| graduated income tax rates (frst P250,000 is 0%) Minimum Wage Salary is exempt from income tax | 13" month and other benefits. in excess of P80,000 subject to | Minimum Wage Salary is exempt from income tax (Other business income is subject to Income tax | graduated income tax Page 2 of 6 Minimum Wage Salary is exempt from income tax | 13" month and othe sin excess of P90,000 subject to | (first P250,000 is 0% Minimum Wage Salary 's exempt from income tax ‘Other winnings received by resident or citizen | Philippine Charity Sweepstakes and Lotto winnings received by residents or citizens ‘Subject to 20% final tax - other winnings (except Philippine Charty ‘Sweenstakes and Lotto winnings), Exempt from final tax ubject to 20% final tax except Ten thousand pesos | (000) or less from Phi which shall be exe ‘Other winnings received by non-resident alien [eogaged In trade or business and Lett winniage migaged in trade or est een al p business _ Interest income received by bank under the expanded foreign currency deposit “system. ‘Capital Gains from Sale of Shares of Stock not Traded in the Stock Exchange _ | Subject to 2 ¢ | Final tax at the rates: Not over P100,000. sane 5% On any amount in exc | of P100,000 10% Subject to 20% final tax -other winnings (except Philippine Charity ‘Sweepstakes and Lotto winnings); ‘Exempt from 20% final tax me tax at the rate of seven and one-half percent | (7 12%) of s rest income Subject to 20% Charity Sweepstak Exempt from 20% final tax (ful TRAIN ad pot change te (4596) of such interestinmne Fnal tax atthe rateof fifteen percent (15%) | Preferential tax treatment on individuals and certain | entities Section 25 (C), ( refer to alien individuals employed by RHQs (or ROHQs, Offshore Banking Units and Petroleum Service Contractor ‘and Subcontractor ~ subject to 15% final tax on gross income received from their employer. and Exchange Commission _(S Exempt GOCCs TAXATION: COMPARISON OF OLD AND NEW (INCOME TAX) Philippine Charity Sweepstakes Office (PCSO) is exempted from income tax | Local water district not included (exempted under a special law) | Philippine Charity Sweepstakes Office (PCSO) is removed among the tax-exempt Local water district now included among tax-exempt GOCCs TX-000 (3)ReSA: The Review School of Accountancy Page 3 of 6 Interest income derived by a domestic corporation from a depository bank under the expanded foreign currency deposit system ‘Subject to & final income tax at the rate of seven and one-half percent (7 1/2%) of such interest income ‘Subject to a final income taxat the rate of fifteen percent (15%) of such interestincome. Interest income derived by a resident foreign corporation from a depository bank under the expanded foreign currency deposit system | Subject to a final income tax at the rate of seven and one-half percent ‘Subject to a final income tax at the rate of seven and one-half | Percent (7 1/296) of such interest income ‘Capital gains tax from sale of shares of stock by domestic corporation Fral tax atthe rateof fifteen percent (15%) Capital Gains from Sale of Shares of Stock Not Traded in the Stock Exchange by Resident Foreign ‘Corporation and Non-Resident Foreian Corporation Final tax at the rates: Not over P100,000...-..nn (On any amount in excess 13" Month Pay and Other Benefits is subparagraph shall not exceed ‘Imposition of Final Tax on Fringe Benefits ‘A final tax of thirty-four percent (34%) effective January 1, 1998; percent (32%) effective January 1, 2000 and thereafter _ thirty-three percent (33%) effective January 1, 1999; and thirty-two ‘OSD of general professional partnership and the partners 'No provision ‘A general professional partnerst ‘comprising such partnership may: ‘deduction only once, elther by | partnership or the partners com, Premium Payments on Health and/or Hospitalization Insurance of an Individual Taxpayer taken by the taxpayer for "The amount of premiums not to exceed Two thousand four hundred pesos (P2,400) per family or Two hundred pesos (P200) a month paid | hospitalization Insurance as a deduction from his gross income: Provided, That said family has @ ‘No longer allowed as deduction ‘Allowance of Personal Exemption for individual | Taxpayer. Not required to file 1TR TAXATION: COMPARISON OF OLD AND NEW (INCOME TAX)ReSA: The Review School of Accountancy Pages of ITR No provision SubstitutedFilingofincomeTax Returns by Tf proviion Employees Receiving Purely Compensation | Income. Page 4 of 6 paper form or electronic form, and shall lowing information: and information; \come tax due and payable. taxpayers: receiving purely Compensation income, regardless of amount, from only one employer in the Philippines for the calendar year, the income tax of which has beenwithheldcorrectlybythe saidemployer(taxdue equals tax withheld) shailnotbe Fequiredtofilean annual income tax return, The certificate of withholding iledby therespective ‘empioyers, duly stamped'received’ bytheBIR, shallbe | tantarnount tothesubstitutedfilingofincometaxreturnsby ic: employees.” ‘Number of pages of Corporate FTR_ No provision — 1@ Income tax feturn shal Consist of a maximum of four (4) ages in paper form or eectron:c form, be fled by the president pal officer, shall be sworn to by sSurer oF assistant treasurer, af ing information’ rmation; \come from services rendered, except income subject to fin (3) Allowable deductions under this Code; (4) Taxable income as defined in Section 31 of this Code; and "(5) Income tax due and payable. Provided, That the foregoing provisions shall not affect the Implementation of Republic Act No. 10708 or TIMTA. TAXATION: COMPARISON OF OLD AND NEW (INCOME TAX) TX-000 (3)ReSA: The Review School of Accountancy Page 5 of 6 Installment of Payment. - When the tax due is in excess of Two thousand pesos (P2,000) ‘When the tax due Is in excess of Two thousand pesos (P2,000), the taxpayer other than a corporation may elect to pay the tax In two (2) ‘equal installments in which case, the first instaliment shall be pal the time the return is fled and the second installment, on or before July.15 following the close of the calendar year. If any installment is ‘not paid on oF before the date fixed for its payment, the whole amount of the tax unpaid becomes due and payable, together with the delinquency penalties. excess of Two thousand pesos (P2,000), the any installment yyment, the. becomes due and payable toget Rate of withholding tax beginning January 1, 2019 No provision | notmorethan fifteen percent Returns and Payment of Taxes Withheld at Source. - "The return for final withholding tax shall be filed and the payment made within twenty-five (25) days from the close of each calendar quarter, while the retum for creditable withholding taxes shal be flled ‘and the payment made not later than the last day of the month following the close ofthe quarter during which withholding was made ding taxes shall be filed jment made not later than the last day of the month ‘close of the quarter during which withholding was Declaration of Income Tax for Individuals under Sections 24 and 25(A) of constitutes the sole source salaries, wages and other fixed or determinable income, shall make and file a declaration of his estimated income for the current taxable year ‘on or before April 15 of the same taxable year his estimated Income for the current taxable year onor before May 15ofthesametaxable year. Return and Payment of Estimated Income Tax by Individuals. “The amount of estimated income as defined in Subsection (C) with respect to which @ declaration is required under Subsection (A) shall be paid In four (4) Installments. The first installment shall time of the declaration and the second and ‘August 15 and November 15 of the current . fourth installment shall be paid on or before April 15 of the following calendar year when the final adjusted income tax return is due to be fled, id at the | be paid on or before May 15 of the following cale when the final adjusted income taxreturn isdue to be fled. ‘Keeping of Books of Accounts Til corporations, companies, partnerships or persons required by law to pay internal revenue taxes shall keep a journal and a ledger or their e i 41). Those whose quarterly sales, earnings, receipts, or output do not =" simplified. set_ of determined any time of the year: | TAXATION: COMPARISON OF OLD AND NEW (INCOME TAX) Tx-000 (3) &)ReSA: The Review School of Accountancy Page 6 of 6 ‘Accountants and their income tax returns accompanied with 2 ‘accomplished Account Information Form (AIF) which shall contai ‘Simplify business registration Issuance of Receipts or Sales or Commercial Invoices Sale or transfer of merchandise or for services rendered valued at Twenty-five pesos (P25.00) or more, ‘of merchandise or for servicesrendered valued at One hundred pesos (P100) or more, | Interest. There shall be assessed and collected ‘unpaid amount oF tax, interest at the rate of twenty percent | ' i Deficiency Interest Packie ‘ssuanceofa noticeandcemandby smal Revenue, whichever comes END THOT: “Do not settle for just being good, be the best you can be.” ~ Tamthewise 6 TAXATION: COMPARISON OF OLD AND NEW (INCOME TAX) TX-000 (3)