GCRO Module 120 - 07 Computation of Tax

Quarterly Computation of Tax
Individuals a. Self-employed and professional

b. Estates and trust
Declaration this quarter:
Gross sales/revenue this qtr. xxxxx
Less: Total deductions this qtr. (itemized or optional) xxxxx
Taxable income this quarter P xxxxx
Add: Declaration previous quarters xxxxx
Gross sales/revenue P xxxxx
Less: Total deductions (for itemized deductions only) xxxxx
Total taxable income to date P xxxxx
Multiplied by tax rate: 5% to 32% [under Sec. 24 (A)(1)(c)]
then 20% to 35% [from Jan 1, 2018 to Dec. 31, 2022] %
Tax due 15% to 35% [Jan 1, 2023 onwards] P xxxxx
Less: Tax credits/payments
(current and previous quarter) xxxxx
Tax payable this quarter P xxxxx
General Course for Revenue Officers GCRO Module 120 Slide – 1
VER 2.0 – August 2018
Individuals: Graduated IT Rate (Starting January 1, 2018)
Sales/revenues/receipts/fees xxxxx
Less: Cost of sales/services (if availing itemized deductions) xxxxx
Gross income/(Loss from operation P xxxxx
Less: Allowable itemized deductions xxxxx
OR Optional standard deductions
Net income/(Loss) this quarter xxxxx
Add: Taxable Income/(Loss from previous quarter) xxxxx
Non-operating income xxxxx
Amount received/share in income by partner xxxxx
Total Taxable Income to date P xxxxx
Multiplied by tax rate: 20% to 35% [from Jan 1, 2018 to Dec. 31, 2022] %
Tax due 15% to 35% [Jan 1, 2023 onwards] P xxxxx
Individuals: For 8% IT Rate (Starting January 1, 2018)
Sales/revenues/receipts/fees xxxxx
Add: Non-operating income xxxxx
Total Income for this quarter P xxxxx
Add: Total taxable income/(loss from previous quarter) xxxxx
Cumulative taxable income/(loss as of this this quarter xxxxx

Less: Allowable reduction of P250,000 xxxxx
Total Income/ (Loss) to date P xxxxx
Multiplied by tax rate: 8% [Jan 1, 2018 onwards] %
Tax due P xxxxx

Individuals: Tax Credits/Payments (Starting January 1, 2018)
Total Taxable Income to date
Prior year’s excess credits xxxxx
Tax payments for the previous quarter xxxxx
Creditable tax withheld for the previous quarter xxxxx
Creditable tax withheld per BIR Form No. 2307 for this quarter xxxxx
Tax Paid in Return previously Filed (if amended return) xxxxx
Foreign tax credits (if applicable) xxxxx

Other tax credits (if applicable) xxxxx
Total Tax Credits/Payments P xxxxx

Tax Payable/(Overpayment): Tax due less total tax credits P xxxxx
Individuals: Penalties (Starting January 1, 2018)

Surcharge xxxxx
Interest xxxxx
Compromise xxxxx
Total Penalties P xxxxx
Total Amount Payable/(Overpayment):

Tax Payable/(Overpayment) plus Total Penalties P xxxxx

The gross income and deductions for the

fourth quarter shall be declared in the
Annual Income Tax Return to be filed on
or before April 15 of the following year.

Graduated IT with OSD
Starting January 1, 2018:
Gross Income ₱ xxxxx
Less: Allowable Deduction xxxxx
(Itemized or Optional)
Net Taxable Income ₱ xxxxx
Multiply by Tax Rate (0% to 35%) %
Income Tax Due: ₱ xxxxx
Less: Tax Withheld
(per BIR Form 2307)
Income Tax Payable: ₱ xxxxx
Note: Use BIR Form 1701A Annual Income Tax Return for Individuals Earning Income
PURELY from Business/Profession (Those under the graduated income tax rates with
Optional Standard Deduction (OSD) as mode of deductions OR those who opted to avail
of the 8% flat income tax rate) January 2018 version
8% Option
Starting January 1, 2018, for those availing of the 8% option:
Gross Sales ₱ xxxxx
Gross Receipts xxxxx
Total Sales/Receipts ₱ xxxxx
Less: Amount allowed as deduction
under Sec. 24(A)(2)(b) 250,000.00
Taxable Income: ₱ xxxxx
Tax Due: 8% of Taxable Income ₱ xxxxx
Note: Use BIR Form 1701A Annual Income Tax Return for Individuals Earning Income
PURELY from Business/Profession (Those under the graduated income tax rates with
Optional Standard Deduction (OSD) as mode of deductions OR those who opted to avail
of the 8% flat income tax rate) January 2018 version
Non-Individuals
a. Corporations – Quarterly income tax is computed as follows:
Gross Sales/revenues P xxxxx
Less: Cost of sales/service xxxxx
Gross Income P xxxxx
Add: Other non-operating and taxable income xxxxx
Total Gross Income P xxxxx
Less: Deductions xxxxx
Total taxable income this quarter P xxxxx
Add: Taxable income from previous quarter xxxxx
Multiplied by the tax rate (except MCIT Rate) %
Income tax other than MCIT P xxxxx
Less: Share of other agencies (RA 7916/8748) xxxxx
Minimum Corporate Income Tax P xxxxx
Non-Individuals
Tax Due:
Tax on transactions under regular rate
(normal IT or MCIT whichever is higher) P xxxxx
Less: Unexpired excess of prior year’s MCIT
over normal IT (deductible if the quarterly
tax due is the normal rate) xxxxx
Balance P xxxxx
Add: Tax due to the BIR on transactions
under Special Rate xxxxx
Aggregate Income Tax Due P xxxxx
Less: Tax Credits/Payments xxxxx
Tax still due ₱ xxxxx
Unless otherwise provided in the NIRC,

the tax is thirty percent (30%) on
taxable income effective January 1, 2009
or
two percent (2%) MCIT
whichever is higher.

b. Partnerships
1) General Professional Partnerships
Gross receipts this quarter P xxxxx
Less: Total deductions this qtr. xxxxx
(direct cost only or optional
deduction of 40%)
Add: Declaration previous qtrs.
Gross receipts P xxxxx
Less: Total deductions xxxxx
(direct cost only or optional
deduction of 40%)
Total taxable income previous qtr. P xxxxx
Total taxable income to date xxxxx
Income tax due EXEMPT
2) Individual Partner to the above general professional partnership
Net income of the general professional
partnership date P xxxxx
Multiplied by profit and loss/sharing ratios %
Distributive share of the partner
net income or net taxable income P xxxxx
Less: Personal and additional exemption
(P50,000 + P25,000/dependent x maximum of 4
[until Dec. 31, 2017]) xxxxx
Taxable Income multiplied by tax rate [5% to 32%
under Sec. 24(A)(1)(c) then 20% to 35% from
Jan 1, 2018 to Dec. 31, 2022] %
Tax due P xxxxx
Less: Tax credits/payments (current and previous qtr.) xxxxx
Tax due this qtr. P xxxxx
3) General Partnership
Gross sales/revenues P xxxxx
Add: Declaration of previous quarter:
Gross sales/revenues P xxxxx
Total taxable income previous quarter xxxxx
Multiplied by the tax rate 30%
Income tax due P xxxxx
Less: Tax payments/credits xxxxx
Income tax payable/refundable P xxxxx
Computation of Annual Income Tax
Individuals
a. Compensation earners
1) Resident citizens
Total gross compensation income from sources P xxxxx
within and/or outside the Phil. (all sources)
Less: Personal and additional exemptions premiums xxxx
on health/hospitalization insurance (if aggregate
income of husband and wife does not exceed
P250,000 [until Dec. 31, 2017])
Taxable compensation income P xxxxx
Multiplied by tax rates: 5% to 32% under
Sec. 24(A)(1)(c) then 20% to 35% from Jan 1, 2018
to Dec. 31, 2022] %
Tax due P xxxxx
Less: Tax withheld per BIR Form 2316 xxxxx
Tax payable (refundable) P xxxxx
Individuals
a. Compensation earners
1) Resident citizens

Gross Sales/Receipts ₱ xxxxx
Less: Cost of Sales xxxxx
Gross Income ₱ xxxxx
Less: Operating Expenses xxxxx
Taxable Income ₱ xxxxx
Tax Due:
On excess (Pxxxxx - P250,000) x 20%
to 35% ₱ xxxxx
2) Non-resident citizen
Total gross business income P xxxxx
from sources within the Phils. (all sources)
Less: Personal and additional exemptions
premiums on health hospitalizations
[until Dec. 31, 2017] xxxx
Taxable business income P xxxxx

Multiplied by tax rates: 5% to 32% %
[under Sec. 24(A)(1)(c)]
Tax due P xxxxx
Less: Tax withheld xxxxx

3) Non-resident alien engaged in business
Total gross compensation income P xxxxx
from sources within the Phils. (all sources)
Less: Personal (subject to reciprocity clause
[until Dec. 31, 2017) xxxx
Taxable compensation income P xxxxx

Multiplied by tax rates: 5% to 32% under
Sec. 24(A)(1)(c) then 20% to 35% from
Jan 1, 2018 to Dec. 31, 2022] %
Tax due P xxxxx
Less: Tax withheld xxxxx

4) Non-resident aliens not engaged in trade or business:
Gross income from sources

within the Philippines P xxxxx

5) Alien employed by RO and RA headquarters
of multinational corporation
Gross compensation income from
within the Philippines P xxxxx
Multiplied by graduated tax rate
(20% to 35%)* %
6) Aliens employed by offshore banking units
Gross compensation Income
received from w/in the Phils. P xxxxx
(20% to 35%)* _%

7) Aliens employed by petroleum service contractors
and subcontractors
Gross compensation received
from within the Philippines P xxxxx
(20% to 35%) [previously 15% preferential rate] %
Compensation Income ₱ xxxxx
Less: Non-taxable 13th Month
Pay and other benefits (max) xxxxx
Taxable Compensation Income ₱ xxxxx
Tax Due: ₱ xxxxx
On excess: (₱xxxxx – tax due) x 32% xxxxx
Total tax due ₱ xxxxx

Self-employed and professionals (until Dec. 31, 2017)
Annual computation of income tax:
Gross sales/revenue P xxxxx
(direct cost only or optional of 40%)
Net income P xxxxx
Less: Total exemptions (or
excess thereof over
compensation income) xxxxx
Net taxable income P xxxxx
Multiplied by tax rate - 5% to 32% %
[under Sec. 24(A)(1)(c) ]
Tax due P xxxxx
Less: Tax credits/payments xxxxx
Tax Payable/refund P xxxxx
Self-employed and professionals availing of 8% Option
(starting January 1, 2018)
Annual computation of income tax:
Total Sales P xxxxx
Less: Cost of Sales xxxxx
Less: Operating Expenses xxxxx
Taxable Income P xxxxx
Income Tax Due:

Tax due under graduated rates P xxxxx
Less 8% income tax previously paid xxxxx
Annual Income Tax Payable P xxxxx
c. Estates and Trusts (until Dec. 31, 2017)
Personal exemption of an estate or trust is Twenty
Thousand Pesos (20,000) only, while the tax rate is the
rate for individuals under Section 24(A)(1)(c) of the NIRC.
Computation of Income Tax is as follows:
Gross income P xxxxx
Less: Deductions (direct cost only
or optional deduction of 40%) xxxxx
Net income P xxxxx

Less: Exemptions (P20,000.00 only) xxxxx
Taxable income xxxxx
Multiplied by the tax rate in %
Sec. 24(A)(1)(c)
Income tax due xxxxx
Non-Individuals
a. Corporations
1.) Domestic Corporations - the computation of the income
tax due is as follows:
Regular Domestic Corporations:
Annual Computation of Income Tax
Gross income from sources
within and outside the
Philippines (all sources) P xxxxx
Less : Deduction from gross
income (all sources) xxxxx
Taxable net income P xxxxx
Multiplied by the tax rate 30 %
Minimum Corporate Income Tax (MCIT)
Gross income P xxxxx
MCIT due P xxxxx
Tax due or MCIT, whichever is higher
Less credit/payments P xxxxxx
Tax payable/refundable P xxxxxx
A minimum corporate income tax of two percent (2%) of the gross income
as of the end of the taxable year, is hereby imposed on a corporation,
beginning on the fourth taxable year immediately following the year in
which such corporation commenced its business operations, when
the minimum income tax is greater than the regular / normal income
tax computed at the end of the taxable year.

Any excess of the MCIT over the normal income tax as

Computed at the end of taxable year shall be carried
forward and credited against the normal income
tax for the three (3) immediately succeeding
taxable years.

• Non-regular Corporations
Proprietary Educational Institution
Gross income from

school operation P xxxxx
Less : Deduction from
gross income xxxxx
Taxable income P xxxxx

b. Foreign Corporations
Unless otherwise provided in the NIRC the rate of thirty
percent (30%) applies on the total income received from
sources within the Philippines.
1.) Resident Foreign Corporation
Gross income from Philippines

sources P xxxxx
Less: Deduction xxxxx
Taxable income P xxxxx

Minimum Corporate Income Tax (MCIT)
MCIT Due P xxxxx
A MCIT of two percent (2%) of the gross income as of the end of the
taxable year, is hereby imposed on a corporation, beginning on the
fourth taxable year immediately following the year in which such
corporation commenced its business operations,
when the minimum income tax is greater than the regular/normal income
tax computed at the end of the taxable year.

Any excess of the MCIT over the normal income tax as

computed at the end of taxable year shall be carried
forward and credited against the normal income
tax for the three (3) immediately succeeding
taxable years.

International Air Carrier – taxed at the rate of two and
one-half percent (2 1/2%) on their Gross Philippine Billings.
Gross Philippine Billings refers to the amount of gross
revenue derived from carriage of persons, excess
baggage, cargo and mail originating from the Philippines
in a continuous and uninterrupted flight, irrespective of
the place of sale or issue and the place of payment of the
ticket or passage document.

International Shipping. - ‘Gross Philippine Billings’ means gross
revenue whether cargo or mail originating from the Philippines
up to final destination, regardless of the place of sale or
payments of the passage or freight documents.
Computation of Tax:
Gross Philippine Billings P xxxxx

Multiplied by the tax rate 2½%
Tax due P xxxxx

2. Non-Resident Foreign Corporation
Gross income from

Philippine sources P xxxxx


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Quarterly Computation of Tax

Individuals a. Self-employed and professional

Cumulative taxable income/(loss as of this this quarter xxxxx

General Course for Revenue Officers GCRO Module 120 Slide – 3

Foreign tax credits (if applicable) xxxxx

Total Tax Credits/Payments P xxxxx

Declaration this quarter:

Total Amount Payable/(Overpayment):

General Course for Revenue Officers GCRO Module 120 Slide – 5

The gross income and deductions for the

General Course for Revenue Officers GCRO Module 120 Slide – 6

Unless otherwise provided in the NIRC,

General Course for Revenue Officers GCRO Module 120 Slide – 11

Starting January 1, 2018:

Taxable business income P xxxxx

General Course for Revenue Officers GCRO Module 120 Slide – 17

Taxable compensation income P xxxxx

General Course for Revenue Officers GCRO Module 120 Slide – 18

4) Non-resident aliens not engaged in trade or business:

Gross income from sources

General Course for Revenue Officers GCRO Module 120 Slide – 19

General Course for Revenue Officers GCRO Module 120 Slide – 20

General Course for Revenue Officers GCRO Module 120 Slide – 21

Income Tax Due:

Net income P xxxxx

General Course for Revenue Officers GCRO Module 120 Slide – 26

Any excess of the MCIT over the normal income tax as

General Course for Revenue Officers GCRO Module 120 Slide – 27

Gross income from

General Course for Revenue Officers GCRO Module 120 Slide – 28

Gross income from Philippines

General Course for Revenue Officers GCRO Module 120 Slide – 29

General Course for Revenue Officers GCRO Module 120 Slide – 30

Any excess of the MCIT over the normal income tax as

General Course for Revenue Officers GCRO Module 120 Slide – 31

General Course for Revenue Officers GCRO Module 120 Slide – 32

Gross Philippine Billings P xxxxx

General Course for Revenue Officers GCRO Module 120 Slide – 33

2. Non-Resident Foreign Corporation

Gross income from

General Course for Revenue Officers GCRO Module 120 Slide – 34

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