SW- Oct 10, 2023 20 pts

Corporation
Assume the following data from ABC Corp.
Amount Sources
Gross income from hongkong 2,000,000.00 w/out
Gross income from U.S 4,000,000.00 w/out
Gross income, Philippines 5,000,000.00 w/in
Gross income, Taiwan 3,000,000.00 w/out
14,000,000.00
Compute the total gross income of ABC Corp if :
a. it is a domestic corp 14,000,000.00 (all sources)
b. it is a foreign corp. 5,000,000.00 within only

Rates of tax of Corp

Domestic- 25% or 20% based Net taxable income
RFC- 25% based on Net taxable income
NRFC-25% based on gross income

A B C
Toal Assets 90 M Total assets250M or Total Assets 110M
Total assets 50M
Domestic corp
Gross sales 25,000,000.00 500,000,000.00 25,000,000.00
Less Cost of Sales 15,000,000.00 350,000,000.00 15,000,000.00
gross income 10,000,000.00 150,000,000.00 10,000,000.00
less allowable deduction 7,000,000.00 100,000,000.00 7,000,000.00
Income from operation 3,000,000.00 50,000,000.00 3,000,000.00
Add other income 1,000,000.00 20,000,000.00 1,000,000.00
Net Taxable income 4,000,000.00 70,000,000.00 4,000,000.00
Multiply by RCIT rate 20% 25% 25%
Tax due 800,000.00 17,500,000.00 1,000,000.00

Requirements to use 20% rate:

1. Taxable income not exceeding 5Million
2. Total assets not exceeding 100 M

Normal Tax MCIT

Gross sales xx Gross sales xx
Less Cost of Sales xx Less Cost of Sales xx
gross profit from sales xx gross profit from sales xx
Add other gross income xx Add other gross income
Gross Income xx Gross Income xx
Less Deductions xx Less Deductions
Net Taxable income xx Net Taxable income
Multiply by rate 25% or 20% Multiply by rate 2%
Tax due xx Tax due xx

MCIT is 1% effective July 1, 2020 until June 30, 2023

MCIT is 2% effective July 1, 2023 and onwards
 Normal Tax MCIT
Gross sales 120,500,000.00 Gross sales 120,500,000.00
Less Sales Returns & Allow Less Sales Returns & Allow
Sales Discounts Sales Discounts
Net Sales 120,500,000.00 Net Sales 120,500,000.00
Less Cost of Sales/COGMS 80,500,000.00 Less Cost of Sales/COGMS 80,500,000.00
gross profit from sales 40,000,000.00 gross profit from sales 40,000,000.00
Add other gross income Add other gross income
Gross Income 40,000,000.00 Gross Income 40,000,000.00
Less Deductions 28,500,000.00 Less Deductions
Net income 11,500,000.00 Net Taxable income
Multiply by rate 25% Multiply by rate 1%
Tax due 2,875,000.00 Tax due 400,000.00

Note
1. other gross income are items of gross income in Sec 32(A) nos.3-11
2. Effective July 1, 2020 rate of RCIT is 25% or 20%
3. MCIT effective July 1, 2020 until June 30, 2023 is 1%
4. MCIT effective July 1, 2023 is 2%
5. compare the normal tax vs MCIT, tax due is whichever is higher

Normal Tax MCIT

Gross sales xx Gross sales xx
Less Sales Returns & Allow xx Less Sales Returns & Allow xx
Sales Discounts xx Sales Discounts xx
Net Sales xx Net Sales xx
Less Cost of Sales/COGMS xx Less Cost of Sales/COGMS xx
gross profit from sales xx gross profit from sales xx
Add other gross income xx Add other gross income xx
Gross Income xx Gross Income xx
Less Deductions xx Less Deductions xx
Net income xx Net Taxable income xx
Multiply by rate 25% or 20% Multiply by rate 1%
Tax due xx Tax due xx
 For Taxable year 2022, the company’s 5th year of operations, the records of PBA Corp., a domestic corp
Gross sales P 120,500,000.00
Cost of sales 80,500,000.00
Operating expenses 28,500,000.00
The total assets of the corporation amounted to P120,000,000 excluding the land on which the office bu
Compute the following:
a. Net sales 120,500,000.00
b. Gross income 40,000,000.00
c. Minimum corporate income tax 400,000.00
d. Income tax due
of PBA Corp., a domestic corporation, shows the following data:

he land on which the office buildings stand amounting to P10Million.

Domestic Corp.

Normal Tax MCIT

Gross sales 80,500,000.00 Gross sales 80,500,000.00
Less Sales Returns & Allow Less Sales Returns & Allow
Sales Discounts Sales Discounts
Net Sales 80,500,000.00 Net Sales 80,500,000.00
Less Cost of Sales/COGMS 60,500,000.00 Less Cost of Sales/COGMS 60,500,000.00
gross profit from sales 20,000,000.00 gross profit from sales 20,000,000.00
Add other gross income Add other gross income
Gross Income 20,000,000.00 Gross Income 20,000,000.00
Less Deductions 15,500,000.00 Less Deductions
Net income 4,500,000.00 Net Taxable income
Multiply by rate 25% Multiply by rate 1%
Tax due 1,125,000.00 Tax due 200,000.00

Note
1. other gross income are items of gross income in Sec 32(A) nos.3-11
2. Effective July 1, 2020 rate of RCIT is 25% or 20%
3. MCIT effective July 1, 2020 until June 30, 2023 is 1%
4. MCIT effective July 1, 2023 is 2%
5. compare the normal tax vs MCIT, tax due is whichever is higher
For Taxable year 2022, the company’s 6th year of operations, the records of JOYEN Corp., a domestic corporation, shows the

Gross sales P 80,500,000.00

Cost of sales 60,500,000.00
Allowable deductions 15,500,000.00

The total assets of the corporation amounted to P105,000,000 excluding the land on which the office buildings stand amounti
Compute the following:
a. Net sales 80,500,000.00
b. Gross income 20,000,000.00
c. Minimum corporate income tax 200,000.00
d. Income tax due 1,125,000.00
estic corporation, shows the following data:

ffice buildings stand amounting to P10Million.

Non Resident Foreign Corp
1. In General, Rate of tax is 25% based on gross income
effective January 1, 2021
interst
dividends
rents
royalties
salaries
premium
annuities

2. Non resident cinematographic Film owner, lessor or distributor, 25% of gross income

gross income 2,000,000.00

rate 25%
Income tax due 500,000.00

3. Non resident owner or Lessor of vessels chartered by Philippine Nationals, 4 1/2 % of gross rentals

Gross income 50,000,000.00

rate 4.50%
Income tax due 2,250,000.000

4.. Non resident owner or Lessor of aircraft, machineries and other equipment, 7 1/2 % of gross rentals

Gross income 50,000,000

rate 7.50%
Income tax due 3,750,000.00

5. Interest on foreign loans , FWT 20% on the amount of interest on foreign loans

6. Intercorporate dividends, FWT 15% on the amount of cash or property dividends received from a domestic corp.

Dividends 5,000,000.00
rate 15%
Income tax due 750,000.00

7. Capital gains from sale of shares of stocks not traded in the stock exchange, FWT 15% on net capital gains realized.

Selling Price 10,000,000.00

Cost 8,000,000.00
Gain 2,000,000.00
Rate 15%
CGT 300,000.00
omestic corp.

gains realized.
Resident Foreign Corp
1. In General, rate of income tax is 25% of the Taxable Income.
Normal Tax MCIT
Gross sales 80,500,000.00 Gross sales 80,500,000.00
Less Sales Returns & Allow Less Sales Returns & Allow
Sales Discounts Sales Discounts
Net Sales 80,500,000.00 Net Sales 80,500,000.00
Less Cost of Sales/COGMS 60,500,000.00 Less Cost of Sales/COGMS 60,500,000.00
gross profit from sales 20,000,000.00 gross profit from sales 20,000,000.00
Add other gross income Add other gross income
Gross Income 20,000,000.00 Gross Income 20,000,000.00
Less Deductions 15,500,000.00 Less Deductions
Net income 4,500,000.00 Net Taxable income
Multiply by rate 25% Multiply by rate 1%
Tax due 1,125,000.00 Tax due 200,000.00

Note
1. other gross income are items of gross income in Sec 32(A) nos.3-11
2. Effective July 1, 2020 rate of RCIT is 25% or 20%
3. MCIT effective July 1, 2020 until June 30, 2023 is 1%
4. MCIT effective July 1, 2023 is 2%
5. compare the normal tax vs MCIT, tax due is whichever is higher

2. International Carrier, 2 1/2% based on Gross Philippine Billings

a. International Air Carrier, 2 1/2% based on Gross Philippine Billings.

Gross Philippine billings 200,000,000.00

rate 2.50%
Income Tax due 5,000,000.00

b International Shipping 150,000,000.00

rate 2.50%
Income tax due 3,750,000.000

3.Tax on Branch Profit Remittances, 15% based on profits earmarked for remittance

Total Profit 500,000,000.00

Earmarked for remittance 200,000,000.00

Earmarked for remittance 200,000,000.00

15%
Income tax due 30,000,000.00
4. Regional or Area headquarters - Not subject to Income tax
Regional Operationg Headquarters of Multi National Companies, 10% of Taxable Income

5. Capital gains from sale of shares of stocks not traded in the stock exchange, FWT 15% on net capital gains realized.

Selling Price 10,000,000.00

Cost 8,000,000.00
Gain 2,000,000.00
Rate 15%
CGT 300,000.00

6. Intercorporate dividends received by RFC from a domestic corp, NOT subject to tax
For Taxable year 2022, the company’s 6th year of operations, the records of Rechel Corp., a resident foreign corpo

Gross sales P 80,500,000.00

Cost of sales 60,500,000.00
Allowable deductions 15,500,000.00

The total assets of the corporation amounted to P85,000,000 excluding the land on which the office buildings stand
Compute the following:
a. Net sales 80,500,000.00
b. Gross income 20,000,000.00
c. Minimum corporate income tax 200,000.00
d. Income tax due 1,125,000.00
pital gains realized.
orp., a resident foreign corporation, shows the following data:

ich the office buildings stand amounting to P10Million.

quiz 10 26/23

1.Qual Airlines is a resident foreign corporations, engaged in international air carrier which has a
gross Philippine billings amounting to P250 Million and Philippine expenses amounting to
P20Million. Compute the income tax due thereon.

Gross Philippine billings 250,000,000.00

Multiply by rate 2.50%
Income tax due 6,250,000.000

2. ABC Corp. is anon resident foreign, engaged in leasing vessels. Manny Pacman, filipino citizen,
leased the vesselfor P45Million. Compute the tax due thereon.

Gross rental 45,000,000.00

Multiply by rate 4.50%
Income tax due 2,025,000.000