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CHAPTER 9 regular income tax:

REGULAR INCOME TAX: 1. Business income exempt from income


INCLUSION IN GROSS INCOME tax
2. Business income subject to special tax
ITEMS OF GROSS INCOME regimes
-is a broad category pertaining to all items 3. Business income subject to final tax
of income subject to taxation, namely:
1. Gross income subject to final tax Gains from Dealings in properties
2. Gross income subject to capital gains -the gains or lossed in dealing in ordinary
tax assets are subject to regular income tax
3. Gross income subject to regular tax -dealings in capital assets other than
domestic stocks and real properties are
ITEMS OF GROSS INCOME also subject to regular tax
SUBJECT TO REGULAR TAX *a net capital loss is not an item of
1. Compensation for services in whatever deduction against gross income
form paid
2. Gross income from the conduct of Interest income
trade, business or excercise of a profession -refers to interest income other than
3. Gains derived from dealings in passive interest income subject to final tax
properties
4. Interests Rents
5. Rents -arises from leasing properties of any kind
6. Royalties -it is a passive income but is not subject to
7. Dividends final tax under the NIRC, hence, is subject
8. Annuities to regular tax
9. Prizes and winnings
10. Pensions Royalties
11. Partners distributive share from the -active royalty income and royalties
net income of general professional earned from sources outside the
partnership Philippines are subject to regular income
tax
Compensation for services in whatever
form paid Dividends
-technically pertains to types of employee -pertains to divideneds declared by
benefits that are subject to regular tax foreign corporations

Gross income from the conduct of


trade, business or excercise of a
profession
-income from any trade or business, legal
or illegal and whether registered or
unregistered

Business income which are exempt or are


subject to special tax regimes should not
be included in the gross income subject to