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A comprehensive overview of taxation in the philippines, focusing on estate tax, donor's tax, and value-added tax (vat). It includes detailed examples and calculations, illustrating the application of tax laws and regulations. Particularly useful for understanding the tax implications of estate planning, gift-giving, and business transactions in the philippines.
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Problem Solving
(P2.1) - Citizen/Resident - Family home in the Philippines: P8,000,000 - Parcel land of with vacation house in Malaysia: P5,000,000 - Farm land in the Philippines: P3,000,000 - Shares of stock of a DC: P2,000,000 - Shares of stock of a foreign corporation the entire business of which is in the Philippines, deposited in a bank safety deposit box in Malaysia: P500,000 - Receivable from a friend who has no property whatsoever: P300,000 - Life insurance with his estate as revocable beneficiary: P200,000 - Life insurance
True True True False True False False False True True False True True False False True True False True False
Vanishing Deduction: (P453,750)
Standard Deduction: (P5,000,000)
Family Home: (P2,000,000)
Medical Expenses (repealed under TRAIN Law): -
Death Benefits under RA4917: (P200,000)
Net Taxable Estate
Net Taxable Estate: P4,446,
True or False
True True True True False False True False True False True False True False True True True True True False
Multiple Choice
Supporting Computations (Multiple Choice)
Real property tax for the year 2017: P100, Notarized interest bearing promissory note: P100, Accrued interest on the promissory note at the time of death: P20,
P4.3 - Decedent: Non-resident Alien a) P1,621,396 b) P4,451,136 c) P3,346,964 d) P200,
P4.4 - Decedent: Resident Alien; Single a) Net Taxable Estate = P49,500, b) Estate Tax Due = P2,970,000 c) Net Taxable Estate = P31,066,098 d) Estate Tax Due = P1,860,
Real Property and Cash Received During
Marriage
Real property inherited during marriage from his father: P500, Real property given as gift by his uncle during marriage: P1,500, Land received as donation during marriage: P500, Cash income from the real property received as gift: P100, Total exclusive property: P2,600,
House built on the inherited land using communal fund: P900, Real properties acquired by the spouses during the marriage: P1,500, Claim against insolvent person: P50, Personal properties acquired during the marriage: P1,000, Total Community property: P3,450,
Estate Tax Computation
Total Net Estate before special deductions: P15,000, Less: Standard deduction: (P5,000,000) Net Taxable estate: P10,000, Estate tax rate: 6% Estate tax due: P600, Less: Estate tax credit Estate tax paid abroad: P200, Limit (P4/10 x P600,000): P240, Allowed (lower): P200, Estate tax payable: P400,
Total Net Estate before special deductions (Philippines only): P12,000, Less: Standard deduction: (P500,000) Net Taxable estate: P11,500, Estate tax rate: 6%
Estate tax payable (tax credit is not allowed to NRA decedents): P690,
Net Taxable Estate, world: P20,000, Estate Tax Due (P20M x 6%): P1,200, Estate tax credit: P570, Estate tax payable: P630, Limit 1 (Per foreign country): Canada: 8,000/20,000 USA: 2,000/20,000 x P1.2M = P120,000, Actual = P90,000, Allowed = P90, Limit 2 (all foreign countries): 10,000/20,000 x P1.2M = P600,000, Actual = P610,000, Allowed = P600, Allowed Tax Credit: P570,
Net Taxable Estate: P20,000, Estate Tax Due (P20M x 6%): P1,200, Estate tax credit: P300, Estate tax payable after tax credit: P900, Limit 1 (Per foreign country with tax payments only): Singapore: 5,000/20,000 x P1,200,000 = P300,000, Actual = P200,000, Allowed = P200, Japan: 2,000/20,000 x P1,200,000 = P120,000, Actual = P100,000, Allowed = P100, Limit 2 (all foreign countries including China): 10,000/20,000 x P1,200,000 = P600,000, Actual = P300,000, Allowed = P300, Allowed Tax Credit: P300,
Net Taxable estate: P7,474, Estate tax due: P448, Net Distributable Estate: P11,731, Gross Estate: P16,000, Deductions: P1,640,000 (Actual funeral expenses, judicial expenses, claims against the estate, unpaid Philippine income tax, loss due to theft, claim against insolvent person, TFPU) Vanishing Deduction: P486,
Donor's Tax
Abel: P800, Jen: P3,000, Gore: P250, Alexa: P100,
Less: Tax Exempt Gift: (P250,000) Net Taxable Gift: P250,
Donor's Tax Due @ 6% (#30): P15,
Net Gifts, May 31: P5,000,
PNG-April 1: P500, Cumulative Net Gift, May 31: P5,500, Less: Tax Exempt Gift: (P250,000) Net Taxable Gift: P5,250, Donor's Tax Due @ 6%: P315, Less: Donor's Tax Paid April 1: (P15,000) Donor's Tax Payable, May 31 (#31): P300,
Net Gifts of the Spouses, March 1: P500, Divide by 2 Net Gift, Mr. Mapagbihay, March 1: P250, Tax Exempt Gift: (P250,000) Taxable Net Gift, Mr. Mapagbigay: P Donor's Tax Due, Mr. Mapagbigay: P
Net Gifts of the Spouses, May 1: P400, Add: Prior Net Gift, March 1: P500, Cumulative Net Gift: P900, Divide by 2 Cumulative Net Gift, Mrs Mapagbigay: P450, Less: Tax Exempt Gift: (P250,000) Cumulative Taxable Net Gift: P200, Donor's Tax Due @ 6%: P12, Less: Donor's Tax Paid, March 1: P Donor's Tax Payable: P12,
Total Gifts of the Spouses (P1.1M/2): P550,000 each Less: Exempt Gifts: (P250,000) each Net Taxable Gift: P300,000 each Donor's Tax Due per Spouse @ 6%: P18,000 each Total Donor's Tax Due of the Spouses: P36,
Gross Gift-Jan. 24: P2,000, Mortgage Assumed by the Donee: (P500,000) Net Gift: P1,500, Less: Tax Exempt Gift: (P250,000)
Taxable Net Gift: P1,250, Donor's Tax Rate (TRAIN Law): 6% Donor's Tax Due/Payable: P75,
Net Gift-Nov. 30: P4,500, Net Gift-Jan. 24: P1,500, Cumulative Net Gift: P6,000, Less: Tax Exempt Gift: (P250,000) Taxable Net Gift: P5,750, Donor's Tax Rate (TRAIN Law): 6% Total Donor's Tax Due: P345, Less: Donor's Tax Paid-Jan. 24: (P75,000) Allowable Donor's Tax Credit: Limit = 4.5/6 x P345,000 = P258,750 vs. Actual = P400, Donor's Tax Due/Payable: P11,
CHAPTER 7 โ BUSINESS TAXES
CHAPTER 8 โ VALUE ADDED TAX
P8.1 Residential Units
Case A: Exempt
Sale of School Supplies: P1,680, Sale of Gift Items: P1,008, Sales Subject to Output VAT: P2,688, Output VAT: P288, Less: Input VAT on Purchases Directly Attributable to Vatable Sales: (P144,000) Input VAT on Purchases Attributable to Vatable and Nonvatable Sales: (P32,000) VAT Payable: P112,
Output VAT (P896,000 x 3/28): P96, Less: Input VAT P224,000 x 3/28: (P24,000) P112,000 x 3/28 x 80%: (P192) VAT Payable: P62,
(a) Total Input VAT: P69,948 (b) Output VAT: P64,821 - Less: Input VAT: (P69,984) - VAT Payable: (P5,163)
(a) P28,800 (b) P12,600 - Output VAT: P42,000 - Less: Input VAT on Importation: (P28,800) - Input VAT on Freight from Customs to Warehouse: (P600) - 1st Quarter VAT Payable: P66,000 - 2nd Quarter Excess Input VAT: (P59,000)
Output VAT (P336,000 x 12%): P40, Less: Input VAT on Purchases (P112,000 x 3/28): (P12,000) Transitional Input VAT: (P10,000) VAT Payable: P18,
(a) P3,400 (b) P80,000 - Output VAT (P800,000 x 12%): P96,000 - Less: Presumptive I.V (P85,000 x 4%): (P3,400) - Input VAT on Purchases: (P12,600) - VAT Payable: P80,
Output VAT (P672,000 x 3/28): P72, Less: Input VAT on Purchases: (P16,560) VAT Payable: P55,
Subject to Value Added Tax: P678, Subject to Percentage Tax (Amusement Tax): P504, Total Business Taxes: P1,182,
Output VAT based on Collections: P3,600, Less: Input VAT on Purchases: (P1,896,000) VAT Payable: P1,704,
Output VAT ((P4M โ 2.5M) x 12%): P180, Less: Input VAT (P800,000 x 12%): (P96,000) VAT Payable: P84,
Lot A: P3,000 + P3,000 = P6, Lot B: P24, Lot C: P4,800 + P2,400 = P7, VAT Payable: P31,800 + P5,400 = P37,
a) Output VAT September 2018: P360,000 b) Output VAT January 2019: P
Room Charges: P1,000, Laundry Services: P25, Food and Beverages: P1,500, Corkage: P15, Handling Charges: P4, Cake Shop Sales: P80, Total: P2,624, Output VAT for the Month: P314,
Supporting Computations/Explanations:
No. 12: "III" is exempt only if contribution per member is not more than P15,000.
No. 20: Output VAT (P2,805,500 + P1,524,000) x 12% = P519,540 Input VAT (P1,102,200 + P1,012,500) x 12% = (P253,746) VAT Payable: P265,
No. 21: Output VAT, 3rd quarter (P150,000 x 12%) = P18,000 Input VAT, 3rd quarter (P120,000 x 12%) = (P14,400) Deferred Input VAT โ Previous Quarter: (P6,000)
No. 27: **Letter "B" is no longer considered export sale upon the effectivity of the TRAIN Law.
No. 37: AR, July 1: P180,000 Billings, July-Sept.: P850,000 AR, Sept. 30: (P120,000) Collections: P910,000 Output VAT @ 12%: P109,200 Input VAT on Purchases @ 12%: (P57,600) VAT Payable: P51,
