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Taxation Mod 1
Taxation Mod 1
Taxation Mod 1
Income Taxation 1
RIZAL TECHNOLOGICAL UNIVERSITY
Cities of Mandaluyong and Pasig
Study Guide
Content
• Learning Outcomes
• Topic Presentation
• References
Learning Outcomes
1. Classify the Individual Taxpayers in the Philippines, tax base, and sources of income.
2. Discuss on the three types of income
3. Familiarize on the Graduated Tax Table and be able to compute on the tax payable of an individual
4. Discuss the Self-Employed & or Professional and the applicable taxes
5. Compute the tax payable of Self-Employed & or Professional
6. Familiarize the tax rates on each type of Passive income
7. Explain the Final Withholding tax
Income Taxation 2
RIZAL TECHNOLOGICAL UNIVERSITY
Cities of Mandaluyong and Pasig
Topic Presentation
2.2. CLASSIFICATIONS:
• Resident Citizens
• Non-resident citizen
• Resident Alien
• Nonresident Alien Engaged in Trade/Business
• Nonresident Alien not Engaged in Trade/Business
2.2.3. Resident Citizens are those who are not classified as nonresident citizen.
2.2.4. Alien are foreign-born person who is not qualified to acquire Philippine citizenship by birth or after
birth.
a. Resident Alien (Sec. 22F of the Tax Code)
a.1. An individual whose residence is within the Philippines and who is not a resident
thereof.
Income Taxation 3
RIZAL TECHNOLOGICAL UNIVERSITY
Cities of Mandaluyong and Pasig
a.2. An individual who is actually present in the Philippines and who are not mere transient
or sojourners
a.3. An individual who lives in the Philippines with no definite intention as to his stay.
b. Nonresident Alien (Sec. 22G of the Tax Code)
b.1. An individual whose residence is not in the Philippines and who is not a citizen thereof.
b.2. Individual who come to the Philippines for the definite purpose, which in its nature may
be promptly accomplished.
b.3. An individual who are mere transients or nonresident
2.2.6. Nonresident Alien not Engaged in Trade/Business are those who are not classified as
above.
APPLICABLE TAXES AND TAX RATES depend on several factors such as but not limited to
a. Classification of taxpayers
b. Source of Income
c. Type of income
Income Taxation 4
RIZAL TECHNOLOGICAL UNIVERSITY
Cities of Mandaluyong and Pasig
Income Taxation 5
RIZAL TECHNOLOGICAL UNIVERSITY
Cities of Mandaluyong and Pasig
Figure 2.1.
B. Yield or any monetary benefit from de posit substitute. 20% 20% 25%
C. Yield or any monetary benefit from trust funds and similar 20% Exempt Exempt
arrangements.
D. Interest incomes received from a depositary bank under expanded 15%
Exempt Exempt
foreign currency deposit system. NRC=exempt
E. Interest Income from long-term deposit or investment. Exempt Exempt 25%
Income Taxation 6
RIZAL TECHNOLOGICAL UNIVERSITY
Cities of Mandaluyong and Pasig
Royalties
A. Royalties in General 20% 20% 25%
B. Royalties on books, as well as literary works and musical
10% 10% 25%
composition
Prizes
A. Not exceeding 10,000 Php Exempt Exempt 25%
B. Exceeding 10,000 Php 20% 20% 25%
Other Winning
A. Not exceeding 10,000 Php Exempt Exempt 25%
B. Exceeding 10,000 Php 20% Exempt 25%
Dividends
A. Cash and/or property dividends actually /constructively received
from domestic corp. or from joint stock co., insurance or mutual fund 10% 20% 25%
companies & ROHQ of multinational companies beginning Jan. 2000
B. Share of an individual in the distributable net income after tax of a
10% 20% 25%
PARTNERSHIP (OTHER THAN a GPP) beginning Jan.1, 2000
C. Share of an individual in the net income after tax of an Association,
a Joint Account, or a Joint Venture or Consortium taxable as a 10% 20% 25%
corporation, which is a member or a coventurer beginning Jan. 1, 2000
Income Taxation 7
RIZAL TECHNOLOGICAL UNIVERSITY
Cities of Mandaluyong and Pasig
Income Taxation 8