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UP – FA1 – FM3 – 01
Module 16
Lesson Title: Regular Income Taxation
A. LESSON PREVIEW/REVIEW
Identification:
1. Compensation is the total cash and non-cash payments that you give to an
employess in exchange for the work they do for your business?
2. Fringe benefit this is means any good, service or other benefit furnished or
granted by an employer in cash or in kind, in addition to basic salaries to
employees.
3. FBT this is computed using a rate is 35% and the gross-up factor in
computing the grossed-up monetary value of the fringe benefit is 65%.
4. Capital asset this refer to all real properties held by a taxpayer, whether or not
connected with his trade or business, and which are not included among the real
properties considered as ordinary assets.
5. Ordinary asset refer to all real properties that maybe used in for business or
normal course of business.
Problem Solving:
An employer gave an educational assistance to one of its magers amounting
P78,000.00 that is seen to benefit the company’s growth.
Taxable fringe benefits 78,000
Multiply by: Gross up rate 65%
Grossed up monetary value 50,700
Multiply by: Tax rate 35%
Fringe benefit tax
P17,74
What I Know Questions: What I Learned
5 What
it is I Know you’re
when Chart 1 When do you say Reducing the number
reducing the amount of deductions what comes of something
something into mind?
Special deductions lost 2 What are the ordinary Ordinary deductions
incurred in acquiring and special deductions common and accepted
treasury shares you know? to a special trade or
business
4. Briefly explain to each other Net Operating Loss Carry Over (NOLCO) The
Net Operating loss of the business or enterprise for any taxable year
immediately preceeding the taxable year.
Module 19
Lesson Title: Regular Income Taxation
A. LESSON PREVIEW/REVIEW
Enumeration: Give at least five (5) itemized allowable deduction for income tax
purposes
Bad debts Amortizations
Charitable contributions
Commissions
Depletion
Essay:
1. Explain the application of Net Operating Loss Carry Over
The net operating loss of the business or enterprises for any taxable year
immediately preceeding the current taxable year, which had not been
previously offset as deduction from gross income shall be carried over as
dedcution from gross income for the next 3 consecutive taxable years
immediately following the year of such loss.
2. From the list of taxpayers metioned in, how are they taxed?
Pure compensation income earners - tax due is computed using the
update income tax table Business
income earners - tax due is computed using the updated
income tax table or preferential rate of 8%
Mixed income earners- tax due is computed using the updated income tax
table for compensation income and prefferential rate of 8%
Module 20
Lesson Title: Regular Income Taxation
A. LESSON PREVIEW/REVIEW
Enumeration:
Problem solving:
Problem #1: An individual taxpayer who earns purely business sources reported net
income of P650,000. Included in the reported net income is P50,000 gain on sale of
equipment previously used in the business. The business also total expenses for the
year amounting to 200,000. The taxpayer signifies his intention to be taxed using
optional standard deduction.
Required: (1) compute the tax due
650,000
+ 50,000
700,000
-200,000
500,000
x 40%
Tax due= P200,000
Problem #2: An individual taxpayer has a compensation income of P450,000 for the
taxable year. 13th month and other benefits amounted to P50,000. In addition, he
also has a business with reported net income of P850,000. The business also total
expenses for the year amounting to 200,000. The taxpayer signified his intention to
be taxed using optional standard deduction.
Required: (1) compute the total tas due
850,000
+450,000
1,300,000
-
50,000
1,350,000
- 200,000
1,150,000
x40%
Tax due= 460,000
A. LESSON PREVIEW/REVIEW
Problem Solving:
Ms. TP operates a convenience store while she offers bookkeeping services to her
clients. In 2018, her gross sales amounted to 800,000, in additio to her receipts from
bookkeeping services of P300,000. She already signified her intention to be tax at
8% income tax rate in her 1st quarter.
Required.
1. Compute the taxpayer’s due.
800,000
+300,000
1,100,000
- 250,000
850,000
x8
% Income tax due=
68,000
2. Assuming the taxpayer did not signify her intention to be taxed at 8%.
Compute the tax due. The cost of sales and operating expenses amounted to
P600,000 and P200,000, respectively.
600,000
+200,000
800,000
- 250,000
550,000
x8%
Tax due = 44,000
5. Share to one another what you understood on Tax OBUs, RHQs and ROHQs of
multinational companies.
The computatio of the taxable income of OBUs shall include items of gross
income subject to regular tax from withi the Philippines less deductions
directly attributable and common expenses reasonably allocable thereto.
RHQs are exempt from income tax since they are merely administrative offices
which serve as a supervision, communication, and coordination center of
subsidiaries, branches or affiliates of their home office. They do not earn
income. ROHQs are subject to income tax at 10% of taxable income. Contrary
to RHQs. ROHQs are allowed to derive income on their services to their
affiliates, subsidiaries or branches of their home office or parent company in
the Philippines. RHQs and ROHQs are exempt from all kinds of local taxes, fees
or charges imposed by a local government unit, except real property tax on
land improvements and equipment
Module 23
Lesson Title: Corporate Income Taxation - Regular Corporations
A. LESSON PREVIEW/REVIEW
Essay and explanation:
1. For tax purposes list and explain each other the general classification of
corporations
A. Domestic Corporations
B. Resident foreign corporation
C. Non-resident foreign corporation
3. What are foreign corporations and explain their taxability in the Philippines A
foreign corporation is subject to tax only on income from Philippine
sources.
A. LESSON PREVIEW/REVIEW
Esaay and explanation:
1. For tax purposes list and explain each other the general classification of
corporations
A. Domestic Corporations
B. Resident foreign corporation
C. Non-resident foreign corporation
3. What are foreign corporations and explain their taxability in the Philippines A
foreign corporation is subject to tax only on income from Philippine
sources.