ReSA The Review School of Accountancy 3} wiel. No. 735-2807 & 734-3989 ‘TAXATION ‘TAMAYO/LIM/CAIGA/ MANUEL TK202: Scarces of Income 1. Classification of Income as to Sources 2. Income purely within ». Income purely without © Income partly within and partly without ratio of the gross income of the forsan corporation for the preceding 3 y22rs | Income partly within and partly without if the ratio is. prior to declaration of dividends | between 50% and 85% derived from Philippine sources) 1 Income purely without if rato is less than 50% er |. Gain on saie of real property ' g: Gain on sate of personal property | purchased in one country and sid in 3. Deductions of Taxpayers Whose Taxable Income Is From Philippine Sources Only Gross income within xx Less: Expenses, interest, losses and other desiuctions property allocated to income within 200 Ratable portion of unaltocated expences, interest, etc. (Philippine Gross Income/Total goss income x Unallocated expenses) me mK 0 Compute the tax due and payable assuming the above corporation: ‘a. Resident foreign corporation. ._ Nonresident foreign corporation. sources within and parity from sources without _ Income from transportation and other services rendered partly within and partly without the Philippines. Income from the sale of personal property produced in whole or in part by the taxpayer within and sold without the Philippines. Income from sake of personal property produced, in whole or in part by the taxpayer without and sold within the Philippines.ReSA: The Review School of Accountancy Page 2 of 2 Taxable income_x 2 ‘Value of property, within and without income within when independent factory | Add: or production price | __Taxable income x ___Gross sales, within ___ has not been 2 Gross sales, within and without established Income within 6. Exercises 2) A corporation manufactures goods in the Philippines, which are sold exclusively in foreign countries. ‘The following data are taken from the records of the corporation: Gross sales, without 5,000,000 | Gross income from sales, without Operating expenses Value of properties, Philippines | Value of properties, without | Determine the taxable income within and without. b. An individual taxpayer has the following data on income and expenses in 2018: 1) Gross income, Philippines, 2) Rent on building, Philippines, net of 5% withholding tax | 3) Rent on commercial building, USA 4) Interest income, debtor resides in Hongkong 5) Dividends from Ford Motors, foreign conpany, deciared in 2018 | Note: Gross income of Ford Motors follow: Within Without 2015 130,000 500,000 2016 400,000 100,000 2017 500,000 200,000 2018 350,000 150,000 6) Royalties received from Ford Motors for use of patents in USA 7) Dividend from Walmart Corp., USA, declared in 2018 Note: Gross income of Walmart for the preceding 2 years prior to dedaration of dividend follow: } within ‘Without 2016 400,000 600,000 2017 400,000 400,000 8) Gain on sale, Philippines, land located in Japan 9) Gain on sale, Philippines, car purchased in Japan 10) Expenses: ‘a) Business expenses, Philippines b) Depreciation building in Philippines ) Depreciation building in USA d) Expenses, sale of car in the Philippines ) Expenses, sale of land in the Philippines ) Unallocated expenses REQ: a. Classify income into income within ard income without. bb. Determine the taxable income assuming the individual taxpayer is: residing in his country.) 2) NRA-NETB, head of farniy. 3) Resident, married with two qualified dependent children, END THOT: "God gave each one of us talzats, it is up to us whether to bury them or to TAXATION - Source of Income (Batch 37) 1) NRA- ETB, single, (his country allows 40,000 personal exemption to single Filipinos not 3,000,000 2,100,000 300,000 600,000 20,000 ‘95,000 70,000 10,000 160,000 30,000 80,000 300,000 40,000 100,000 20,000 10,000 10,000 60,000 enrich them.”