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This document contains a series of tax cases involving individuals and businesses. It provides income amounts, deductions, and expenses to calculate taxable income and tax due. It asks the reader to determine things like: 1) The taxable income and income tax due for a husband and wife filing jointly using itemized deductions based on their various income sources and expenses. 2) The total tax a company must remit on behalf of an alien employee based on their salary, allowances, and other income. 3) The tax implications of various benefits and perks employers provide to employees like leave credits, subsidies, awards, and gifts. 4) How to calculate taxable income and credits using information about

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Angie S. Rosales
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234 views3 pages

Review Materials

This document contains a series of tax cases involving individuals and businesses. It provides income amounts, deductions, and expenses to calculate taxable income and tax due. It asks the reader to determine things like: 1) The taxable income and income tax due for a husband and wife filing jointly using itemized deductions based on their various income sources and expenses. 2) The total tax a company must remit on behalf of an alien employee based on their salary, allowances, and other income. 3) The tax implications of various benefits and perks employers provide to employees like leave credits, subsidies, awards, and gifts. 4) How to calculate taxable income and credits using information about

Uploaded by

Angie S. Rosales
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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PHILIPPINE TAXATION

REVIEW CLASS

CASE 1

A husband and wife, resident citizens, with one (1) qualified dependent child, had the following income and expenses for
the year 2018. The husband waived the additional exemption in favor of the wife.

Salary of the husband, net of PhP 50,000 withholding tax PhP 450,000
Sale of the wife, gross of PhP 60,000 withholding tax 600,000
Gross professional income, husband, gross of 15% withholding tax 1,500,000
Cost of services, husband 5,000
Expenses, practice of profession 300,000
Gross sales, wife 800,000
Cost of sales, wife’s business 300,000
Business expenses, wife 100,000
Gross rental income, lease of common property (Gross receipts, PhP 1,000,000) 700,000
Expenses, leased common property 200,000
Gross business income, Singapore (Gross Sales, PhP 800,000) 600,000
Business expenses, Singapore 150,000

Based on the above information and independent assumptions below, determine the following:

1. How much was the taxable income and income tax due of the husband and wife using itemized deduction?

CASE 2

An alien employee of an offshore banking unit has the following income for the Calendar Year 2017:

Salary received from offshore banking unit (OBU) PhP 10,000,000


Honoraria and allowances received from OBU 5,000,000
Interest income from domestic bank on his peso deposits 3,600
Capital gain from sale of shares in a domestic corporation 2,400

Based on the foregoing, determine the following:

2. Total tax due to be remitted by the employer of the alien employee


3. Total tax due to be remitted by the employer in CY 2018

CASE 2

An alien employee of an offshore banking unit has the following income for the Calendar Year 2017:

Salary received from offshore banking unit (OBU) PhP 10,000,000


Honoraria and allowances received from OBU 5,000,000
Interest income from domestic bank on his peso deposits 3,600
Capital gain from sale of shares in a domestic corporation 2,400

Based on the foregoing, determine the following:

4. Total tax due to be remitted by the employer of the alien employee


5. Total tax due to be remitted by the employer in CY 2018

CASE 3

During the year, as a means of promoting the health, goodwill and efficiency of his employees, employer A gave the
following to his non-rank and file employee B:

Monetized unused vacation leave of 15 days PhP 45,000


Rice Subsidy 24,000
Uniform and Clothing allowance 10,000
Achievement award for length of service in the form of tangible personal 15,000
property
Gifts given during Christmas and major anniversary celebrations 10,000
13th Month Pay 60,000

Based on the foregoing, determine the following:

6. Total excess de minimis benefits


7. Total tax exempt limit allowable to absorb the 13th month pay and other benefits

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8. Total tax exempt limit can be utilized after consideration of 13th month pay

CASE 4

A resident rank-and-file private employee has two (2) qualified dependent children at the beginning of 2018. He also
supports his father-in-law who is PWD and his uncle who is a senior citizen.

Salary, net of P73,443 withholding tax and mandatory deductions of P14,776 PhP 511,781
13th Month Pay 50,000
14th month pay 50,000
Rice subsidy (P1,500 x 12 months) 18,000
Uniform and clothing allowance 5,000
Monetized unused vacation leave credits (12 days) 28,800
Actual medical benefits 15,000
Christmas gift 10,000
Laundry allowance (PhP 400 x 12) 4,800
Employee achievement award (amount of cash given) 10,000
Benefits received by virtue of a collective bargaining agreement (CBA) and 11,000
productivity incentive schemes

Based on the foregoing, determine the following:

9. Total tax-exempt de minimis benefits


10. Taxable net income

CASE 5

During the year, ABC Corporation paid for personal expenses of Mr. J. dela Cruz amounting to PhP 68,000.

Based on the foregoing, determine the following:

11. Value of the fringe benefits


12. Monetary value of the fringe benefit
13. Grossed-up monetary value of the fringe benefit
14. Fringe benefit tax

CASE 6

Mr. John Juan, single, resident citizen and supporting a qualified dependent illegitimate son, has the following data for
year:

Gross sales of goods PhP 1,000,000


Sales returns and allowances 50,000
Cost of sales 300,000
Share in the net income of business partnership, 90,000
net of 10% withholding tax
Salaries of employees, net of P30,000 creditable 270,000
withholding tax
Value-added tax 100,000
Business permit and licenses 5,000
Community tax 10,000
Interest paid on business loan which has already 20,000
prescribed
Contributions to pension trust 50,000
(P20,000 covers past year’s cost)
Entertainment expenses 10,000
Interest expense 50,000
Research and development costs (deferred) 60,000
benefits realized starting July 1, 2011
Purchase of equipment (estimated life is 5 years, 50,000
acquired on October 1, 2011)
Fringe benefits expenses 68,000
Fringe benefits tax expense 32,000

Based on the foregoing, determine the following:

15. Total itemized deductions


16. Assuming Mr. Juan chooses optional standard deduction, how much is the taxable income?
17. Assuming Mr. Juan chooses optional standard deduction, how much is the taxable net income?
18. How much is the total creditable withholding tax that can be used against the total income tax payable?
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* * * END OF EXAMINATION * * *

Queen of the Most Holy Rosary, pray for us!

WELCOME TO THE PROFESSION CPA BY 2019

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