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Module 2 Income Tax Questions andAnswers A+Solutions
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Module 2 Income Tax Questions andAnswers A+Solutions
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Module 2 Income Tax QuestionsandAnswers A+Solutions
defined as a tax on all yearly profits arising from property, professions, trades or offices,
or as a tax on a person's income, emoluments, profits and the like. - ANS-INCOME TAX
a direct tax on actual or presumed income of taxpayers during the taxable year. -
ANS-INCOME TAX
The features of the Philippine Income Tax Law are: - ANS-*It is a direct tax
*It is a progressive tax
*The Philippines has adopted the most comprehensive system of imposing income tax
by adopting the citizenship principle, the residence principle and the source principle.
*The Philippines follows the semi-schedular or semi-global system of income taxation.
Criteria in imposing Income Tax: - ANS-1. CITIZENSHIP OR NATIONALITY PRINCIPLE
2.RESIDENCE OR DOMICILE PRINCIPLE
3. SOURCE OF INCOME PRINCIPLE
There are 3 Income Tax Systems: - ANS-1. Global Tax System
2. Schedular Tax System
3. Semi-schedular or semi-global Tax System
In this system, the total allowable deductions as well as personal and additional
exemptions are deducted from the gross income to arrive at the net taxable income
subject to the graduated income tax rates regardless if compensation income or passive
income
All items of gross income, deductions, and personal and additional exemptions were
declared in one income tax return and one set of tax rates were applied on the net
taxable income - ANS-GLOBAL TAX SYSTEM
This is the tax system used by the Philippines until 1981 - ANS-GLOBAL TAX SYSTEM
Net Taxable Income = - ANS-GLOBAL TAX SYSTEM - [Gross Income - (Deductions +
Exemptions)]
, This system was adopted under B.P. 135 - ANS-SCHEDULAR TAX SYSTEM
In this system, the different types of incomes are subject to different sets of graduated
or flat income tax rates
The applicable tax rates will depend on the classification of the taxable income and the
basis could be gross income or net income
Separate income tax return is filed by the recipient of the income for the particular type
of income received
No income tax return is filed by the recipient of a passive income subject to final
withholding tax since the withholding agent is responsible for the filing of the withholding
tax return and payment of final tax to the BIR - ANS-SCHEDULAR TAX SYSTEM
All compensation income, business or professional income, capital gain, passive
income and other income not subject to final tax are added together to arrive at the
gross income
After deducting the sum of allowable deductions as well as personal and additional
exemptions, the taxable income is subjected to one set of graduated tax rates (for
individuals).
With respect to incomes not subject to final withholding tax, the computation of the
income tax is 'global. However, passive incomes subject to final tax and capital gains
remain subject to different set of tax rates and covered by different tax returns. -
ANS-SEMI-SCHEDULAR OR SEMI-GLOBAL TAX SYSTEM
This was adopted by the Philippines on 1986 through E.O.37 -
ANS-SEMI-SCHEDULAR OR SEMI-GLOBAL TAX SYSTEM
Gross Income =
Taxable Income =
Taxable Income x Graduated Tax Rate - ANS-SEMI-SCHEDULAR OR SEMI-GLOBAL
TAX SYSTEM - [Compensation Income + Business Income + Capital Gain + Passive
Income (which were not subject to a final tax rate)]
[Gross Income - (Deductions +Exemptions)]
is any person subject to tax imposed by Title II (Income Tax) of the Tax Code (NIRC). -
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