Professional Documents
Culture Documents
Natividad, Precious Anne G. - Assignment #2
Natividad, Precious Anne G. - Assignment #2
Individual Taxpayers
natural persons with income derieved from within the territorial jurisdiction of a taxing authority.
HOW DO WE CLASSIFY
INDIVIDUAL TAXPAYERS?
1. establishes to the satisfaction of the
commissioner of internal revenue the
fact of his physical presence abroad
CITIZENS with a definite intention to reside
therein.
-resident citizens
-non resident ex. immigrant in other countries.
physically not in the PH because they
are now a resident there, they are non
resident here.
ALIENS (FOREIGNERS)
2. citizen who leaves the PH during the
-resident alien taxable year to reside abroad, either as
-non resident alien an immigrant or for employment on a
permanent basis.
engage in trade
ex. calendar year (taxable year)
-non resident alien not immigrant or an employee permanently.
engage in trade 3. a citizen of the PH who works and
derives income from abroad and whose
employment thereat requires him to be
physically abroad most of the time.
WHO during the year.
ex. OFW/OCW. at least 183 days out of
ARE the country even of not continually, but
repeatedly.
NON People who likes to travel all the time are
not included.
RESIDENT
CITIZENS?
CITIZENS CLASSIFIED BOTH AS RESIDENT AND NON
RESIDENT IN ONE TAXABLE YEAR
SELF-EMPLOYED
RA10963 TRAIN Law
- "a sole proprietor who reports income earned from
self employment. S/he controls who he/she works for,
how the work is done and when it is done. It includes
professionals whose income is derived purely from the
practice of profession and not under an employer-
employee relationship."
PROFESSIONAL
a person formally certified by a professional body belonging to a
specific profession by virtue of haing completed a required course of
studies and/ or practice whose competence can usually be
measured against an establishment set of standards.
PURELY SELF-EMPLOYED
GROSS S/R P3M AND BELOW GROSS S/R MORE THAN P3M
Graduated rate Graduated rate
OR
8% Tax on gross sales/receipts
and other non-operating income
in excess of P250,000 in LIEU of
GR and Sec. 116
CAPITAL
ASSET PRINCIPAL
RESIDENCE
includes all other property held by
the taxpayer (whether or not RR 14-2000/ RR 13-99:
connected with his trade or the family home of the individual taxpayer.
business) not included in the it refers to the dwelling house, including the
definition of ordinary assets above. land on which it is situated.
2. Historical cost or adjsuted basis of the real property sold or disposed shall be carried
over to the new principal residence built or acquired.
3.BIR shall have been duly notified by the tax payer within 30 days from the date of sale or
disposition
4. the tax exemption can only be availed of once every 10 years
5. it is likewise required under RR 2:98 that the amount representing the 6% CGT must be
deposited under an Escrow Agreement.