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UNIT 12
TAXATIONSession 6
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Topics Review of Last session
Test of baseline knowledge
Relevant and allowable expenses Charges on income
Payments to charities
Tax free allowances Tax rates
Payment dates
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Reviewof Last s
ession
Reviewof Last s
ession
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Test of baseline
knowledge
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Relevant and allowable expenses
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Deductions from Gross Income - Individual
Itemized Deductions (see section 34)
Optional standard deduction (40%)
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Deductions from Gross Income -Corporate
Business Expense
Interests
Taxes
Losses
Bad debts
Depreciation
Depletion
Charitable contributions
R& D Pension contributions for employees
Special deductions
Deductions allowed by laws
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Charges on income
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Expenses Charged to IncomeExpenses Charged to Income
Cost of Goods SoldCost of Goods Sold
Cost of SalesCost of Sales
Expenses AllowedExpenses AllowedExemptions for individualsExemptions for individuals
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Payments to charities andother contributions
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Charities
individual contribution to Charity should not
exceed an amount ten percent (10%) of net
income
Corporate contribution to Charity should notexceed an amount five percent (5%)
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Government
education,
health,
youth and sports development, human settlements,
science and culture, and
in economic development
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Accredited NGOs
(1) scientific, research, educational, character-building and
youth and sports development, health, social welfare,
cultural or charitable purposes
(2) not later than the 15th
day of the third month(3 no case to exceed thirty percent (30%) of the total
expenses; and
(4) The assets of which, in the even of dissolution, would
be distributed to another nonprofit domestic corporation
organized for similar purpose or purposes,
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Contribution type
Cash
In-kind
Asset
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Tax free allowances
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Allowances
Lif e Insurance Proceeds
Value of Property acquir ed through inher itance
Retir ement Benef it
Pr izes and awards through NGOS Chr istmas Bonus, 13th month, productivity bonus,
(maximum of Php30,000)
Gains from sale of r etir ement of bonds
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Tax rates - Individual
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TAX TABLE
If Taxable Income is Tax Due is: If Taxable Income is : Tax Due is:
Not over P10,000 5%
Over P10,000 but
not over P30,000
P500 + 10% of the
excess over P10,000
Over P140,000 but
not over P250,000
P22,500 + 25% of the
excess over P140,000
Over P30,000 but
not over P70,000
P2,500 + 15% of the
excess over P30,000
Over P250,000 but
not over P500,000
P50,000 + 30% of the
excess over P250,000
Over P70,000 but
not over P140,000
P8,500 + 20% of the
excess over P70,000Over P500,000
P125,000 + 34% of the
excess over P500,000
Note : Effective January 1, 1999, the maximum rate will be changed to 33% and 32% on
January 1, 2000.
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Tax dates -
Individual
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Filing
The income tax return with a tax payable shall be filed
with any Authorized Agent Bank (AAB) of the Revenue
District Office
In places where there are no AABs, the return shall befiled with the Revenue Collection Officer or duly
Authorized City or Municipal Treasurer.
The returns of the taxpayers shall be filed on or before
the fifteenth (15th) day of April of each year covering
income for the preceding taxable year.
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Payment
Upon filing this return, the total amount payable shall be
paid to the AAB where the return is filed.
When the tax due exceeds P2,000.00, the taxpayer may
elect to pay in two equal installments, the first installmentto be paid at the time the return is filed and the second,
on or before July 15 of the same year.
AAB machine validation is also OR
Overwithholding of income tax on compensation due to
the fault of the employee shall be forfeited in favor of the
government.
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Topics for Research
Bases of assessment
Adjustments of profits and losses
Disallowed expenses
Tax Losses
Capital expenses and allowances
Tax Forms
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Requir ed
Complete r elevant
documentation and
r eturns
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