06/09/2023

Importance

TAXATION OF 1. Situs of income

INDIVIDUALS
2. Manner of computing tax
3. Treatment of passive incomes
4. Allowable deduction
5. Reference in Tax code

Source: PICPA SMMC: Maricris See, CPA

Factors affecting income taxes and

tax rates

1. Classification of the tax payer

2. Source of income
3. Type of income

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EXERCISE
Identify the individual

A resident alien the Philipines and abandoned his

residency thereof without any intention of returning.
● Resident alien
● Non-resident alien

EXERCISE EXERCISE
Identify the individual Identify the individual

An alien temporarily serves as executive manager of an A resident alien left the Philippines with a
airline in Manila. re-entry permit.
● Non resident engaged in trade or business ● Non resident alien
● Non-resident alien not engaged in trade or business
● Resident alien

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Non-resident Citizens ILLUSTRATION

A non-resident citizen who arrives in the Philippines at
ANY TIME during the taxable year to reside PERMANENTLY
in the Philippines shall be considered a non-resident for
the taxable year on which he arrives in the Philippines with
respect to income derived from sources abroad until the
date of his arrival in the Philippines. The same shall apply
to a resident who LEAVES anytime for the purpose/reason
of immigrant abroad or employment abroad on a
permanent basis
Petra, an OFW returned in the Philippines for GOOD in May 2021.
She shall be classified for 2021 taxable year as follows:
January to April 2021- non-resident citizen
From May 2021 onwards- resident citizen
ILLUSTRATION
Ana, a resident citizen, left the Philippines July 1 2021 to reside in U.S.
together with her family.
She shall be classified for 2021 taxable year as follows:
January to June 2021- resident citizen
From July 2021 onwards- non-resident citizen

Next Meetings
Sept 8,11,13 2023
1. Types of Income 10. Creditable vs Final Tax
2. Self Employed and Professionals 11. Income Tax Due of Married
3. Mixed Income Earner Taxpayers
4. Passive Income subject to FWT 12. Minimum Wage Earners
5. Final Withholding Tax 13. Senior Citizens, PWDs and Solo
6. Deposit Substitutes Parents
7. Pre-termination of Long Term 14. POGOs or OGLs
Debt 15. Quarterly Tax Returns
8. Capital Gains Tax 16. Filing of ITR
9. Taxable Income