National Taxes

Kinds of taxes under existing laws: 1. National taxes 2. Local taxes Kinds of national internal revenue taxes: 1. Income tax 2. Estate & donors tax 3. Value-added tax 4. Other percentage taxes

National Internal Revenue Taxes

5. Excise taxes on other goods 6. Documentary stamp taxes 7. Other taxes as are or hereafter may be imposed & collected by the Bureau of Internal Revenue National Taxes imposed by special laws: 1. Customs duties 2. Travel tax 3. Energy tax 4. Private motor vehicle tax

Income Tax

1. Income all wealth which flows into the taxpayer other than mere return of capital 2. Income tax is a tax on a persons income, profits & the like in one taxable year. It is imposed on progressive or graduated rates 3. Gross income- all income but not including exempt income & income subject ot final tax 4. Taxable income is gross income less the deductions allowed by law including allowable personal & additional exemptions

Income Tax
Incomes subject to final tax: 1. Royalties- prizes, other winnings, interest from bank deposits, yield from money market, or yield from trust funds 2. Cash or property dividends received from corporations 3.Net capital gains from sales of shares of stock not traded through stock exchange 4. Capital gains from sale of real property

Allowable Deductions from Gross Income

1. Corporations, businesses & partnerships: a. ordinary & necessary trade, business or professional expenses b. taxes c. losses d. bad debts e. depreciation f. depletion g. charitable & other contributions h. research & dev.expenditures i. pension trust contributions of employees

Allowable Deductions on Gross Income

2.

Compensation earners a. personal b. additional exemptions C. premiums not to exceed 2,400 per family on health & hospital insurance of the individual taxpayer provided that the gross income doesnot exceed P250,000 per year

Amounts of Personal & Additional Exemptions

1. P50,000- for single, or married individual judicially decreed as legally separated with no qualified dependents 2.P50,000 for married individual or a total of P100,000 for both husband & wife 3. P 50,000 for unmarried individual who is head of the family depending upon him for support 4. P 25,000 for every child not exceeding four children

Definition & Scope of Head of the Family

1. A head of the family is an individual who actually supports & maintains in one household one or more individuals who are closely connected with him by blood relationship, relationship by marriage or by adoption 2. It also includes an unmarried or legally separated man or woman with one or both parents, one or more brothers & sisters, one or more legitimate , recognized natural or legally adopted children living & dependent upon him for chief support

Computation of Individual Income Tax

1.

Resident citizens 2. Non-resident citizens & OFWS only income derived from sources in the Philippines 3. Resident aliens 4. Non-resident aliens-only income derived from the Philippines

Individuals Required to File Income Taxes:

1. Every resident citizen regardless of the source of income within or outside the Philippines 2. Every non-resident citizen & resident alien as to their income from sources within the Philippines 3. Every non-resident alien engaged in trade or business or in the exercise of his profession in the Philippines, as to his income from sources within the Philippines

Individuals Not Required to File Income Tax Return

1. An Individual whose gross income doesnot exceed his total personal & additional exemptions except if engaged in business or profession regardless of the amount of gross income 2. An individual earning from a single employer pure compensation income not exceeding P60,000 the income tax on which has been correctly withheld by the employer are no longer required to file annual income tax returns

Individuals Who Should File Income Tax Returns

1. Those who do not derive income purely from compensation 2. Those whose pure compensation income exceeds P240,000 3. Those who derive compensation income from two employers even if it doesnot exceed P240,000 4. An individual whose income consists solely of interests, prizes, roylaties etc. 5. An individual exempt from tax under the tax law

Kinds of Taxes
1. Estate Tax tax on the right of the deceased person to transmit his estate to his lawful heirs or beneficiaries 2. Inheritance tax- tax on the right of the heirs to receive the estate of the deceased person It is no longer imposed. Integrated with estate tax 3. Gift tax- imposed on the transfer without consideration of property or money between two or more persons who are living at the time of transfer

Kinds of Taxes

4.Value-added tax- percentage tax imposed on every sale, barter, exchange, or lease of goods & services in the course of trade or business & on every importation of goods whether or not in the course of business or trade based on gross selling price or value or the gross receipts, payable by the seller, transferror, lessor or importer. It is a privelege tax

Kinds of Taxes
5. Percentage taxes- taxes based on certain percentage of the gross selling price or gross value in money of goods sold, bartered, exchanged or imported or gross receipts or earnings derived by a person engaged in sales or services 6. Excise tax- imposed on specified goods manufactured or produced in the Philippines for domestic sale or consumption or for any disposition & on goods imported to the Philippines

Kinds of Taxes

Kinds of excise taxes: a. Specific tax- imposed om weight, volume, capacity,length, number or any other physical unit of measurement b. Ad Valorem based on selling price or specified value of the article Documentary stamp tax- tax on documents, instruments & papers evidencing the acceptance or assignment 8. Customs duties- taxes levied by the government on the importation or exportation of goods in & out of the country

Kinds of Taxes
9. Travel tax10. Energy Tax- tax imposed in view of the need to: a.Discourage uneconomic consumption of fuel b. To support economic development 11. Private motor vehicle tax