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Philippine Corporate Tax Overview

The document discusses various taxes that may be imposed on corporations under Philippine income tax laws. It notes that a nonresident foreign corporation shall pay a tax equal to 30% of gross income received from all sources within the Philippines. Additionally, corporations may be subject to minimum corporate income tax, passive income tax, and capital gains tax. Passive incomes are subject to separate final withholding tax rates and are excluded from taxable income computation. Dividend income received by a domestic corporation from another domestic corporation is exempt from tax as an inter-corporate dividend. Interest income from long-term bank deposits of at least 5 years is exempt from tax for domestic corporations but not for nonresident foreign corporations.

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59 views3 pages

Philippine Corporate Tax Overview

The document discusses various taxes that may be imposed on corporations under Philippine income tax laws. It notes that a nonresident foreign corporation shall pay a tax equal to 30% of gross income received from all sources within the Philippines. Additionally, corporations may be subject to minimum corporate income tax, passive income tax, and capital gains tax. Passive incomes are subject to separate final withholding tax rates and are excluded from taxable income computation. Dividend income received by a domestic corporation from another domestic corporation is exempt from tax as an inter-corporate dividend. Interest income from long-term bank deposits of at least 5 years is exempt from tax for domestic corporations but not for nonresident foreign corporations.

Uploaded by

Rosemarie Cruz
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd

18.

Which of the following corporations shall pay a tax equal to thirty percent (30%) of the gross
income received during each taxable year from all sources within the Philippines^
a. Domestic corporation
b. Resident foreign corporation
c. Nonresident foreign corporation
d. None of the'choices
❖ Answer: C

19. Aside from the ordinary corporate income tax of 30%, what other tax(es) may be imposed on
corporations under the Philippine income tax laws?
a. Minimum corporate income tax c. Capital gains tax
b. Passive income tax d. All of the above

❖ Answer: D

Passive Incomes subject to FWT; Capital Gains subject to CGTs


20. Statement 1: Passive incomes are subject to separate and final tax rates. Statement 2: Passive
incomes are included in the computation of taxable net income from from business operations of a
corporation.

A. B. C. D.
Statement 1 True False True False
False False True
Statements True
❖ Answer: C
Statement 2 is False. The liability of the taxpayer for passive incomes subjected to final withholding taxes is already P0 because the taxes withheld already
constitute final and full payment of the applicable tax. Therefore, such income shall not be included anymore in the determination of “taxable income”
subject to regular corporate income tax. Consequently, such income shall be excluded in the ITR of the corporation.

21. The following passive income received by a domestic corporation shall be subject to 20% final
withholding tax, except:
a. Interest income from peso bank deposit
b. Yield from deposit substitutes
c. Dividend income from another domestic corporation
d. Royalties
❖ Answer: C

24. Interest income on bank deposit or investment with maturity period of at least five (5) years received by a
corporation is subject to:
Domestic Res. Foreign Corp,
Non-resident Foreign Corp.
. 20%
a. 20% 30% Exempt Exempt Exempt
Exempt
b. Exempt
20%
c. 20%
Exempt
d. 20%

DIVIDEND INCOME:
From To Tax
DC DC Exempt; inter-corporate dividend
DC RFC Exempt; inter-corporate dividend
DC NRFC With Tax Sparing = 15%; without = 30%

Answer: A
l-J The exemption of interest income from long-term bank deposit or investment is not
applicable to corporations and NRAs-NETB

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