Tax Types of Tax

Topics: Taxation in the United States, Taxation, Income Pages: 18 (5014 words) Published: June 19, 2013
Tax
Description

Income Tax is a tax on a person's income, emoluments, profits arising from property, practice of profession, conduct of trade or business or on the pertinent items of gross income specified in the Tax Code of 1997 (Tax Code), as amended, less the deductions and/or personal and additional exemptions, if any, authorized for such types of income, by the Tax Code, as amended, or other special laws.

Types of Income Tax

Personal Income Tax (PIT) is a direct tax levied on income of a person. A person means an individual, an ordinary partnership, a non-juristic body of person and an undivided estate. In general, a person liable to PIT has to compute his tax liability, file tax return and pay tax, if any, accordingly on a calendar year basis.

Corporate income tax is a tax based on the income made by the corporation. The corporation begins with Federal Taxable Income from the federal tax return. The tax rate is 6.25 percent for tax years beginning on or after September 1, 1993. Corporate income tax is paid after the end of the taxable year based on the income made during the year. The due date for most corporations is the 15th day of the fourth month after the close of the taxable year.

*Who Are Required To File Income Tax Returns

Individuals

Resident citizens receiving income from sources within or outside the Philippines

* employees deriving purely compensation income from 2 or more employers, concurrently or successively at anytime during the taxable year * employees deriving purely compensation income regardless of the amount, whether from a single or several employers during the calendar year, the income tax of which has not been withheld correctly (i.e. tax due is not equal to the tax withheld) resulting to collectible or refundable return * self-employed individuals receiving income from the conduct of trade or business and/or practice of profession * individuals deriving mixed income, i.e., compensation income and income from the conduct of trade or business and/or practice of profession * individuals deriving other non-business, non-professional related income in addition to compensation income not otherwise subject to a final tax * individuals receiving purely compensation income from a single employer, although the income of which has been correctly withheld, but whose spouse is not entitled to substituted filing * marginal income earners

* Non-resident citizens receiving income from sources within the Philippines * Aliens, whether resident or not, receiving income from sources within the Philippines * Corporation shall include partnerships, no matter how created or organized. * Domestic corporations receiving income from sources within and outside the Philippines * Foreign corporations receiving income from sources within the Philippines * Estates and trusts engaged in trade or business

*Annual Income Tax For Individuals Earning Purely Compensation Income (Including Non-Business/Non-Profession Related Income) and For Marginal Income Earners

Tax Form

BIR Form 1700 - Annual Income Tax Return (For Individual Earning Purely Compensation Income Including Non-Business/Non-Profession Related Income)

Documentary Requirements

1. Certificate of Income Tax Withheld on Compensation (BIR Form 2316) 2.  Waiver of the Husband’s right to claim additional exemption, if applicable 3.  Duly approved Tax Debit Memo, if applicable

4.  Proof of Foreign Tax Credits, if applicable
5.  Income Tax Return previously filed and proof of payment, if filing an amended return for the same taxable year

Procedures
1.  Fill-up BIR Form 1700 in triplicate.
2.  If there is payment:

* Proceed to the nearest Authorized Agent Bank (AAB) of the Revenue District Office where you are registered and present the duly accomplished BIR Form 1700, together with the required attachments and your payment. * In places where there are no AABs, proceed to the...
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Tax Avoidance and Tax Evasion Essay
  • Offshore Tax Havens Essay
  • Essay about Tax Types
  • Income Tax Essay
  • State and Local Tax Outline Essay
  • To Tax or Not to Tax Essay
  • Tax Requirements Essay
  • To Tax Or Not To Tax Essay

Become a StudyMode Member

Sign Up - It's Free