Dividends received by foreign corporations from domestic corporations are subject to a 15% final withholding tax if the foreign corporation's country allows credits for taxes paid in the Philippines. Tips received by waiters are subject to income tax. Excess cash advances on travel allowances must be reported as taxable income if not returned. The tax benefit rule applies to tax refunds but not recoveries of previously deducted bad debts. Government officials' representation and travel allowances and additional compensation allowances are taxable income. BIR employees and their first cousins cannot be tax informers. The maximum tax informers reward is P100,000. A revenue examiner can receive a reward for discovering tax evasion. Farming losses
Dividends received by foreign corporations from domestic corporations are subject to a 15% final withholding tax if the foreign corporation's country allows credits for taxes paid in the Philippines. Tips received by waiters are subject to income tax. Excess cash advances on travel allowances must be reported as taxable income if not returned. The tax benefit rule applies to tax refunds but not recoveries of previously deducted bad debts. Government officials' representation and travel allowances and additional compensation allowances are taxable income. BIR employees and their first cousins cannot be tax informers. The maximum tax informers reward is P100,000. A revenue examiner can receive a reward for discovering tax evasion. Farming losses
Dividends received by foreign corporations from domestic corporations are subject to a 15% final withholding tax if the foreign corporation's country allows credits for taxes paid in the Philippines. Tips received by waiters are subject to income tax. Excess cash advances on travel allowances must be reported as taxable income if not returned. The tax benefit rule applies to tax refunds but not recoveries of previously deducted bad debts. Government officials' representation and travel allowances and additional compensation allowances are taxable income. BIR employees and their first cousins cannot be tax informers. The maximum tax informers reward is P100,000. A revenue examiner can receive a reward for discovering tax evasion. Farming losses
Dividends received by foreign corporations from domestic corporations are subject to a 15% final withholding tax if the foreign corporation's country allows credits for taxes paid in the Philippines. Tips received by waiters are subject to income tax. Excess cash advances on travel allowances must be reported as taxable income if not returned. The tax benefit rule applies to tax refunds but not recoveries of previously deducted bad debts. Government officials' representation and travel allowances and additional compensation allowances are taxable income. BIR employees and their first cousins cannot be tax informers. The maximum tax informers reward is P100,000. A revenue examiner can receive a reward for discovering tax evasion. Farming losses
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FINAL ACTIVITY TRUE OR FALSE
1. Dividends received by a non-resident foreign corporation from domestic corporation are subject to the 15% final withholding tax, subject to the condition that the country which the non-resident foreign corporation is domiciled, shall allow a credit against the tax due from the non-resident foreign corporation taxes deemed to have been paid in the Philippines. 2. Tips received by waiters in restaurant are not subject to income tax because they are actually donations which are subject to donor’s tax on the customer. 3. Excess of cash advances on travel allowance of employees are taxable to them if not returned to their employer. 4. The “tax benefit rule” is applicable on tax refund but not on recovery of bad debts previously claimed as deduction from gross income. 5. The statutory taxpayer (not the person who shoulder the tax burden) is the proper person that has the personality to claim tax refund of indirect taxes erroneously paid. 6. Representation and travel allowances (RATA) of government officials are subject to income tax. 7. Additional compensation allowance (ACA) given to officials and employees of the government are considered part of taxable compensation income. 8. Employees of BIR are disqualified as tax informers. 9. First cousins of BIR employees are disqualified to become tax informers. 10. The maximum amount of tax that may be withheld by the BIR on tax informers is P100,000. 11. A revenue examiner of the BIR shall receive a tax informers reward if he discovers anomalous reporting of business transactions which led to the filling of a tax evasion case ad conviction of the tax evader. 12. Persons cultivating a farm for pleasure, the result of which is continual loss from year to year are regarded also as farmers. 13. A provision for bad debt which may be claimed as deduction from gross income for purposes of accounting are deductible also for tax purposes. 14. P200,000 received by a Filipina in transporting prohibited drugs from the Philippines to other countries as a drug mule is taxable in the Philippines. 15. A general professional partnership is taxable also as a corporation. 16. Return of capital is not subject to income tax, while income is subject to tax. 17. Under the realization test, stock dividends are not income subject to income tax on the part of the stock holder, because he merely holds more shares representing the same equity interest in the corporation that declared the stick dividends. 18. Under the economic benefit test any economic benefit to the employee that increases his network is taxable, whatever may have been the mode by which it is affected. 19. In a merchandising business, gross income means the total sales, less the cost of good sold, plus any income from investments and from incidental or outside operations or sources. 20. As a general rule, stock dividends are not part of the gross income of the stock holders because they are subject to final withholding tax.
