Beruflich Dokumente
Kultur Dokumente
Aranas)
By: RLB | DHB | TLD | RRM 1
I. TAXABLE
INDIVIDUALS
2012
2013
2014
BUT:
2014
a) Resident
citizen
→ Citizen
Arrival:
Dec
May
Article
4.
Section
1.
The
following
are
citizens
of
the
Philippines:
Jul Dec
31
Jul
31
31
1) Those
who
are
citizens
of
the
Philippines
at
the
time
of
the
adoption
y
2
31
of
this
Constitution;
2) Those
whose
fathers
or
mothers
are
citizens
of
the
Philippines;
3) Those
born
before
January
17,
1973,
of
Filipino
mothers,
who
elect
Stayed
Abroad
If
whole
period,
Arrived
on
Jul
31
BUT
if
arrived
on
May
31
Philippine
citizenship
upon
reaching
the
age
of
majority;
and
from
July
2-‐
Dec
he
was
abroad,
and
stayed
here
and
stayed
until
Dec
31;
4) Those
who
are
naturalized
in
accordance
with
law.
31:
then
NRC.
So
til
Dec
31:
since
letter
D
applies.
Stayed
outside
taxable
income
less
than
183
NRC
from
Jan
1-‐May30
→ Resident
for
182
days
only
will
be
those
days
ka
dire
sa
RC
from
May
31-‐Dec
31.
- most
of
the
time
for
the
calendar
year,
you
are
residing
here
in
the
thus
considered
derived
within.
Phil.,NRC
ka.
—HYBRID
RC
so
taxable
Letter
D
will
not
PERSONALITY—
Philippines.
within
and
apply
without
b) Non-‐resident
citizen
[section22(E),
NIRC]
i. a
citizen
of
the
Philippines
who
establishes
to
the
satisfaction
of
the
commissioner
the
fact
of
his
physical
presence
abroad
with
a
definite
intention
to
reside
therein
*Nota
Bene
→ to
the
satisfaction
of
the
commissioner:
you
have
to
inform
the
BIR
- The
measure
of
183
days
or
more
is
made
applicable
to
both
letters
C
and
D.
that
you
are
no
longer
residing
in
the
Philippines,
otherwise,
your
- Presumption
in
letters
C
and
D
is
that
the
citizen
resides
abroad
temporarily.
income
within
will
be
taxable.
- The
‘183
days’
can
either
be
continuous
and
aggregate.
ii. a
citizen
of
the
Philippines
who
leaves
the
Philippines
during
taxable
year
*Rationale
of
letter
D:
to
reside
abroad,
either
as
an
immigrant
or
for
employment
on
a
- If
there
is
no
Letter
D
class,
presumption
is,
for
that
year
(2014)
he
is
a
resident
citizen
for
permanent
basis
having
stayed
in
the
Philippines
more
than
183
days.
Thus
income
within
and
without,
is
→ self-‐explanatory
kay
permanent
basis;
return
to
the
Philippines
will
taxable.
BUT
since
we
have
letter
D,
income
within
the
Philippines
for
January
1
to
May
probably
for
vacation
purposes
nalang.
30
2014
(refer
above)
will
be
taxable
because
he
is
deemed
NRC.
iii. a
citizen
of
the
Philippines
who
works
and
derives
income
from
abroad
and
v. the
taxpayer
shall
submit
proof
to
the
commissioner
to
show
his
intention
whose
employment
thereat
requires
him
to
be
physically
present
abroad
of
leaving
the
Philippines
to
reside
permanently
abroad
or
to
return
to
and
most
of
the
time
during
the
taxable
year
reside
in
the
Philippines
as
the
case
may
be
for
purpose
of
this
section.
→ most
of
the
time:
Under
a
BIR
Regulation,
it
means
that
that
particular
→ Implementation
is
difficult
unlike
corporations
which
submit
records
citizen
stays
abroad
for
183
days
or
more
(not
more
than
183
days)
to
SEC.
during
a
calendar
year.
NOTE:
a
Filipino
employed
as
Philippine
embassy/consulate
service
iv. a
citizen
who
has
been
previously
condisered
as
a
non-‐resident
citizen
and
personnel
o
f
the
Philippine
embassy/consulate
is
not
treated
as
a
non-‐
who
arrives
in
the
Philippines
at
any
time
during
the
year
to
reside
resident
citizen,
hence
his
income
is
taxable.
permanently
in
the
Philippines
will
likewise
be
treated
as
a
non-‐resident
→ Overseas
Contract
Worker
or
Seafarer/Seamen:
not
considered
citizen
during
the
taxable
year
in
which
he
arrives
in
the
Philippines
with
permanent
employees
rather—contractual.
respect
to
his
income
dereived
from
sources
abroad
until
the
date
of
his
arrival
in
the
Philippines
c) resident
alien
→ previously
considered
as
a
non-‐resident
citizen:
→ A
person
not
a
citizen
of
Philippines
by
resides
in
the
Philippines
→ HYBRID
PERSONALITY
OR
DUAL
PERSONALITY
OF
A
TAX
PAYER
→ The
test
use
to
know
if
resident
alien
or
not
is
not
the
length
of
time
he
stays
here
but
the
fact
of
whether
he
is
a
mere
transient
or
has
a
definite
purpose/intention
of
staying
here
in
the
Philippines.
If
with
definite
purpose
of
staying
here,
resident
alien.
→ One
example:
kind
of
visa
applied
for
TAXATION 1 A.Y. 2014 - PART 3 (based on the syllabus and discussion of Atty. Aranas)
By: RLB | DHB | TLD | RRM 2
d) non-‐resident
alien
• If
you
are
an
officer
of
a
Multinational
corporation,
you
are
subject
to
a
1. NRA-‐Engaged
in
Trade
or
Business
special
tax
rate
of
15%
only.
IS
this
correct?
NO.
Must
qualify-‐-‐officer
of
a
a. Most
of
the
time,
he
has
a
transaction
here
in
the
Philippines.
RAHQ
or
ROHQ
of
a
multinational
corporation.
b. TEST:
stayed
here
for
more
than
180
days.
c. So,
if
non-‐resident
alien
stays
here
for
more
than
180
days
for
no
definite
On
the
gross
income
in
the
Philippines
of
aliens
employed
by
regional
purpose,
like
vacation
lang
si
manong,
then
NRA-‐ETB.
headquarters
15%
(RHQ)
or
area
headquarters
and
regional
operating
headquarters
(ROH),
offshore
banking
units(OBUs),
petroleum
service
2. NRA-‐Not
Engaged
in
Trade
or
Business
contractor
and
subcontractor
-‐ Not
much
of
a
difference
between
a
Resident
Alien
and
a
Non-‐resident
Alien
engaged
in
trade
or
business
-‐-‐because
they
are
both
taxable
only
for
income
earned
within
the
Philippines.
The
difference
would
matter
when
f) Estate
and
T
rusts
it
comes
to
personal
and
additional
exemptions.
→ Taxable
as
individuals
on
the
INCOME
of
the
estate
and
of
a
trust.
-‐ 180
days
or
more
–
either
continuous
or
aggregate
→ Example:
On
December
31,
2014,
G
died
and
left
certain
properties
behind–
for
the
e) special
employees
entire
year
of
2014
G
is
considered
as
an
individual
taxpayer,
resident
- called
as
such
because
they
are
subjected
to
a
different
rate,
special
rate
of
15
citizen
(classification).
During
the
time/period
of
transferring
the
%;
and
properties
to
the
heirs,
the
law
gives
persona/personality
to
the
estate
- Employed
by
special
corporations
(list
is
exclusive)
and/or
trust.
The
estate
is
treated
as
an
individual
prior
to
the
distribution
i. Regional
headquarters
(RAHQ)
of
multination
corporations,
defined
in
sec.
to
the
heirs
of
the
estate.
Being
treated
as
an
individual,
if
it
earns
an
22
income
or
a
fruit
then
it
will
be
subjected
to
income
tax.
But
the
estate
-‐ No
operations
in
the
Philippines,
does
not
earn
any
income
itself
is
subjected
to
estate
tax.
-‐ Only
for
supervision,
to
oversee
→ Can
avail
of
the
personal
exemption
of
P20,000
but
not
additional
exemptions.
ii. Regional
operating
headquarters
(ROHQ)
of
multinational
corporations,
→ Why
does
it
remained
at
P20,000?
defined
in
sec.
22
-‐ Before
the
tax
code
was
amended,
individuals
can
avail
personal
-‐ Has
operations
in
the
Philippines;
earns
an
income
in
the
Philippines
exemption
of
P20,000(single),
P25,000(head
of
the
family),
iii. Offshore
banking
units
P32,000(married).
The
estate
being
treated
as
a
single
individual
is
given
a
iv. Petroleum
service
contractors
personal
exemption
at
P20,000.
But
when
RA
9504
is
passed,
this
portion
tackling
about
estates
and
trusts
was
not
amended
so
being
a
tax
• Are
all
Filipinos
employed
by
these
Special
Corporations
are
considered
exemption-‐-‐
it
is
strictly
construed
against
the
taxpayer
and
liberally
in
special
employees?
favor
of
the
government.
Therefore
it
remained
at
P20,000.
-‐ GR:
employed
Alien
individual
(EXPATS),
occupying
managerial,
→ Who
will
report
the
income?
technical
and
supervisory
positions;
considered
as
Special
employee
-‐ Executor
or
administrator
will
have
to
file
the
return.
therefore,
subjected
to
15%.
-‐ EXC:
employed
Filipino,
2
conditions
must
concur:
II. INCOME
TAX
RATES
1. Occupying
managerial
AND
technical
positions.
2. No
other
alien
can
occupy
such
position
(other
than
the
For
individuals
Earning
Purely
Compensation
Income
and
Individuals
Engaged
in
Business
Filipino)
and
practice
of
profession
• Why
are
they
termed/called
Special
Corporations?
Amount
of
net
taxable
RATE
-‐ They
are
registered
here
in
the
Philippines
but
they
are
subjected
to
income
different
requirements
than
the
usual
procedure
for
incorporation
in
Over
But
not
over
the
Philippines.
The
special
tax
rate
is
termed
as
such
because
it
is
P10,000
5%
way
lower
than
the
usual
5%-‐32%
graduated
tax
rate.
P10,000
P30,000
P500
+
10%
of
the
excess
over
P10,000
• What
are
Multinational
Corporations?
P30,000
P70,000
P2,500
+
15%
of
the
excess
over
P30,000
-‐ Corporations
which
have
operations
internationally
or
in
an
international
level
P70,000
P140,000
P8,500
+
20%
of
the
excess
over
P70,000
P140,000
P250,000
P22,000
+
25%
of
the
excess
over
P140,000
P250,000
P500,000
P50,000
+
30%
of
the
excess
over
P250,000
TAXATION 1 A.Y. 2014 - PART 3 (based on the syllabus and discussion of Atty. Aranas)
By: RLB | DHB | TLD | RRM 3
P500,000
P125,000
+
32%
of
the
excess
over
! Commission
P500,000
in
200
and
onward
! Profit
sharing
! Monetized
vacation
and
sick
leave
Note:
when
the
tax
due
exceeds
P2,000.00,
the
taxpayer
may
elect
to
pay
on
two
equal
! Fringe
benefits
received
by
rank
&
file
employees
installments,
the
first
installment
to
be
paid
at
the
time
the
return
is
filed
and
the
second
! Hazard
pay
th
installment
15
of
the
same
year
at
on
or
before
duly
the
authorized
agent
bank
(AAB)
! Taxable
13
month
pay
and
other
benefits
within
the
jurisdiction
of
the
revenue
district
office
(RDO)
where
the
taxpayer
is
! Other
remunerations
received
froma
n
employee-‐employer
registered.
relationship
III. INCLUSIONS
(GROSS
INCOME
FOR
INDIVIDUALS)
• Fringe
benefit
tax
for
managerial
employees
is
not
included
as
1. Compensation
income
supplemental
compensation
because
it
is
subject
to
final
tax
–
Fringe
i. Definition
Benefit
Tax
-‐ Any
amount
or
including
the
cash
value
of
those
you
receive
in
kind
under
• Add
the
regular
and
the
supplemental
compensation
and
subject
it
to
an
ER-‐EE
relationship
(determine
ER-‐EE
relationship:
four-‐fold
test)
graduated
tax
rate
(5%-‐32%)
but
withhold
first
the
creditable
withholding
-‐ in
labor,
compensation
in
kind
is
not
allowed;
in
taxation
(since
nangwarta
tax
(gi-‐discuss
daw
before-‐means
of
collection
and
payment
of
ang
gobyerno)
we
still
consider
its
cash
value
to
be
reported
as
income
compensation
income
is
through
withholding….wako
kasabot)
subject
to
income
tax.
• Exclusion
–
P30,
000,
only
the
excess
of
the
P30,000
(nag.mention
pd
xa
nga
“except
for
overtime
pay”-‐-‐-‐dili
nako
ma.gets
if
excluded
pd
ang
COMPENSATION
in
KIND:
overtime
pay)
will
form
part
of
the
supplemental
income
added
to
the
a. Stock
Options
–
ER
offers
(ownership)
shares
of
stock
to
EE
regular
compensation
GR:
not
taxable
EXC:
if
there
is
a
difference
between
the
actual
consideration
paid
by
the
iii. Doctrine
of
cash
equivalent
employee
versus
the
FMV
of
the
stocks
–
there
is
a
gain
- if
you
are
paid
in
property
or
in
kind,
you
determine
the
cash
value
of
the
Ex:
FMV
–
100;
EE
is
allowed
to
purchase
it
@
10.
The
90
difference
is
payment
of
that
particular
property
or
payment
in
kind
and
that
value
will
subject
to
income
tax.
be
added
to
your
total
compensation
subject
to
income
tax
b. Properties
iv. Mode
of
compensation
income
collection/payment
-‐ the
cash
equivalent
of
the
properties
is
subject
to
income
tax
- Through
withholding
-‐ use
the
cash
equivalent
doctrine
- Pay
the
balance
as
you
file
the
tax
return,
compute
as
follows:
c. Promissory
Notes
Income
tax
due
P
GR:
taxable
at
the
amount
equivalent
to
the
face
value
of
the
PN
Less:
withholding
tax
EXC:
if
it
is
discounted,
the
amount
taxable
is
the
Discounted
Value.
Net
income
tax
due
P
*discounted
value
–
value
lower
than
the
face
value
e.i
indorsing
the
note
Ex:
Y
is
paid
a
PN
@
P10,000,
indorse
it
to
X
@
P9,000
(discounted).
*income
tax
due
–
for
the
whole
calendar
year
(January
1
–
December
The
actual
amount
received
by
Y
is
P9,000
–
the
discounted
value
–
31)
therefore
Y
is
taxable
@
P9,000
*withholding
tax
–
for
the
whole
year
*income
tax
due
must
be
equal
to
the
withholding
tax
so
that
net
d. Cancellation
of
Indebtedness
income
due
will
be
zero
(0).
This
only
happens
if
the
individual
-‐ taxable
as
income
if
debt
is
cancelled
because
a
service
is
rendered
by
taxpayer
is
a
pure
compensation
income
earner
with
one
employer.
the
employee.
NOTE:
Substituted
filing
if
income
tax
return
(“ITR”)
is
the
manner
by
which
ii. Kinds:
declaration
of
income
of
individuals
receiving
purely
compensation
income
the
a. Regular
compensation
–
includes
basic
salary,
fixed
allowances
for
taxes
of
which
have
been
withheld
correctly
by
their
employer’s
annual
representation,
transportation
and
others
paid
to
an
employee
information
return
(BIR
form
no.
1604-‐CF)
duly
stamped
received
by
the
BIR
may
be
considered
as
the
“substitute”
income
tax
return
(ITR)
of
the
employee.
b. Supplemental
compensation
–
Includes
payments
to
an
example
in
However,
said
the
employees
may
still
file
ate
his/her
option.
addition
to
the
regular
compensation
such
as
but
not
limited
to
the
- Income
Tax
Return
(BIR
Form
no.
1700)
–
if
the
taxpayer
files
it
following:
personally
! Overtime
pay
- Annual
Information
Return
(BIR
Form
no.
1604)
–
if
substituted
filling
! Fees,
including
director’s
fees
by
the
employer
TAXATION 1 A.Y. 2014 - PART 3 (based on the syllabus and discussion of Atty. Aranas)
By: RLB | DHB | TLD | RRM 4
-‐ technically,
rank
and
file
employees
do
not
receive
any
fringe
• Who
can
avail
substituted
filing?
benefits
because
when
we
talk
of
fringe
benefit,
it
is
given
on
- Employees
who
satisfies
all
of
the
following
conditions:
top
of
your
compensation
and
the
fringe
benefits
received
by
the
1) Receiving
purely
compensation
income
regardless
of
rank
and
file
employees
forms
part
of
their
compensation.
amount:
2) Working
for
only
one
employer
in
the
Philippines
for
the
• for
managerial
employees:
calendar
year
3) Tax
has
been
withheld
correctly
by
the
employer
(tax
due
Subject
to
final
tax
Fringe
benefit
(Fringe
Benefit
Tax)
equals
tax
withheld);
4) The
employee’s
spouse
also
complies
with
all
three
(3)
conditions
stated
above
compensation
5) The
employer
files
the
annual
information
return(BIR
Form
Subject
to
graduated
income
tax
No.
1604
–
CF)
6) The
employer
issues
BIR
Form
No.
2316
to
each
employee.
-‐ what
if
two
(2)
employers?
Substituted
filing
is
allowed,
but
at
the
end
of
the
year,
you
must
file
a
consolidated
ITR
personally.
• for
rank
and
file
employees:
-‐ if
employer
incorrectly
withheld
the
amount
due,
employee
will
not
be
guilty
of
tax
evasion.
You
look
into
the
reason
why
there
was
a
Compensation
difference
and
BIR
will
just
collect
the
deficiency.
+
Fringe
Benefit
-‐
for
married
individuals,
their
ITR
will
be
consolidated
at
the
end
of
Total
compensation
income
–
Subject
to
graduated
income
tax
the
year.
Reason:
one
is
for
the
additional
deduction;
the
additional
deduction
will
only
be
claim
once.
Husband
will
claim,
and
wife
will
2. Kinds
of
Fringe
Benefits
[HEVHIMEHEL}
also
claim
additional
deduction
–
as
a
rule,
only
one
can
claim….
a. Housing
ma.alkansi
si
BIR☺
CASE
ANNUAL
VALUE
Monetary
Value
of
v. Fringe
Benefits
of
BENEFIT
Benefit
(Monthly)
1. Definition
Employer
leases
50%
X
Monthly
rental
NIRC,
Section
33.
(B)
Fringe
Benefit
defined.
-‐
For
purposes
of
this
Section,
residential
property
for
paid
by
the
employer
the
term
"fringe
benefit"
means
any
good,
service
or
other
benefit
use
of
the
employee
-‐ The
50%
is
given
furnished
or
granted
in
cash
or
in
kind
by
an
employer
to
an
individual
under
the
regulation
employee
(except
rank
and
file
employees
as
defined
herein)
such
as,
but
as
a
sign
that
there
is
not
limited
to,
the
following:.
no
transfer
of
(1)
Housing;
ownership
from
the
(2)
Expense
account;
ER
to
EE
(3)
Vehicle
of
any
kind;
-‐ If
there
is
transfer
of
(4)
Household
personnel,
such
as
maid,
driver
and
others;
ownership,
then
the
(5)
Interest
on
loan
at
less
than
market
rate
to
the
extent
of
the
entire
amount
is
difference
between
the
market
rate
and
actual
rate
granted;
taxable
as
fringe
(6)
Membership
fees,
dues
and
other
expenses
borne
by
the
benefit
employer
for
the
employee
in
social
and
athletic
clubs
or
other
Employer
owns
5%
of
FMV
of
50%
x
Monthly
Value
of
similar
organizations;
(7)
Expenses
for
foreign
travel;
residential
property
land
the
benefit
which
was
assigned
to
improvements
(8)
Holiday
and
vacation
expenses;
an
officer
for
his
use
as
*Monthly
Value
=
(9)
Educational
assistance
to
the
employee
or
his
dependents;
residence
(no
transfer
Annual
Value
/12
mos.
and
(10)
Life
or
health
insurance
and
other
non-‐life
insurance
of
ownership)
premiums
or
similar
amounts
in
excess
of
what
the
law
allows.
Employer
purchases
5%
of
50%
x
Monthly
Value
of
residential
property
on
acquisition
cost
Benefit
installment
basis
and
excluding
→ ”
except
rank
and
file
employees
as
defined
herein”
allows
the
employee
to
interest
TAXATION 1 A.Y. 2014 - PART 3 (based on the syllabus and discussion of Atty. Aranas)
By: RLB | DHB | TLD | RRM 5
use
the
same
as
his
residence
Guidelines
in
valuation
of
Motor
Vehicles:
CASE
TRANSACTION
MONETARY
VALUE
of
Benefit
Purchases
residential
Acquisition
cost
of
FMV
property
and
transfers
whichever
is
higher
1
Purchase
the
motor
vehicle
in
the
Acquisition
Cost
the
ownership
to
the
name
of
the
employee
employee
Purchases
residential
FMV
of
CIR
and
FMV
of
2
Provides
the
employee
with
cash
for
Amount
of
cash
received
by
the
employee
property
and
transfers
Assessor,
whichever
is
the
purchase
of
a
motor
vehicle
in
ownership
thereof
to
higher
minus
the
cost
of
the
name
of
the
employee
his
employee
for
the
the
employee
latter’s
residential
use
3
Shoulders
a
portion
of
the
amount
of
Amount
shouldered
by
the
employee
at
a
price
less
than
the
the
purchase
price
of
a
motor
employer’s
acquisition
vehicle
in
the
name
of
the
employee
cost
4
Purchase
the
car
on
install
in
the
Acquisition
cost
(exclusive
of
interest)
*Exceptions:
name
of
the
employees
divided
by
5
years
I. Housing
privilege
of
officials
of
AFP,
Philippine
Navy
and
Philippine
Air
Force;
-‐ Take
note
wala’I
Philippine
National
Police
ha..
5
Owns
and
maintains
a
fleet
of
motor
Acquisition
cost
of
all
motor
vehicles
not
vehicles
for
the
use
of
the
business
normally
used
in
business
divided
by
5
II. A
housing
unit
which
is
situated
inside
or
within
the
maximum
of
of
the
employees
years
x
50%ount
of
rental
payment
for
fifty
(50)
meters
from
the
perimeter
of
the
business
premises
or
motor
vehicles
not
normally
used
in
factory.
business
x
50%
-‐ Exception:
wherein
the
EE
is
still
exempted
of
the
housing
6
Leases
and
maintains
a
fleet
of
Amount
of
rental
payment
for
motor
privileged
of
up
to
100
meters
if
ER’s
factory
is
hazardous.
motor
vehicles
for
the
use
of
the
vehicles
not
normally
used
in
business
x
business
and
the
employees
50%
III. Temporary
housing
for
an
employee
who
stays
in
a
housing
unit
7
The
use
of
yacht
whether
owned
and
Depreciation
of
yacht
at
an
estimated
for
three
(3)
months
or
less.
maintained
or
leased
by
the
useful
life
of
20
years
-‐ Applies
to
transient
EE,
like
he
is
in
Manila
for
training
etc.
employer
Atty
A:
take
note
that
other
than
compensation
income
is
what
we
call
as
fringe
benefit.
Compensation
income
is
subject
to
5%
to
32%
graduated
d. Household
personnel
income
tax
while
the
fringe
benefit
is
given
to
managerial
or
supervisory
e. Interest
on
loan
at
less
than
market
rate
EE
subject
to
fringe
benefit
tax
of
32%,
which
is
a
final
tax.
f. Membership
fees,
dues
and
other
expenses
borne
by
the
ER
in
social
athletic
clubs
or
similar
organizations
b. Expense
account
g. Expenses
for
foreign
travel
-‐ Refers
to
the
food,
grocery
or
other
representations
h. Holiday
and
vacation
expenses
i. Educational
assistance
to
the
EE
or
his
dependents
c. Vehicle
of
any
kind
j. Life
or
health
insurance
and
other
non-‐life
insurance
premiums
or
-‐ if
there
is
transfer
of
ownership
to
the
EE,
100%
of
the
value
is
similar
accounts
in
excess
of
the
law
allow
subject
to
fringe
benefit
tax
-‐ if
no
transfer
of
ownership,
50%
of
the
value
only
is
subject
to
FBT
-‐ what
you
need
to
remember
here
is
that
you
need
to:
# determine
first
if
the
EE
is
managerial
or
supervisory:
If
he
is,
automatic
subject
to
FBT
# next
you
need
to
determine
if
ownership
is
transferred
to
the
EE:
if
it
was
transferred,
then
the
entire
value
is
subject
to
FBT;
if
not
transferred,
only
50%
thereof.