Ad Majorem Dei Gloriam

TaxRev 09.17.18 Montero Meeting#10 1:29:12- 01:54:28.000

 It has to be more than P 3 Million for it to be graduated.

 Q If the 3M threshold has been exceeded. Given that the tax previously paid shall be considered as tax credits,
does the previous tax credits for the period where P 3M has not been exceeded apply also during the time the P
3M threshold has been exceeded? Will the tax basis or percentage be applied to the previous? It should.
Because the tax credit is based on the initial income for which you already paid for. Hence, it should retroact.
 Before the TRAIN law it was just easy. Now you have to ask the question of how much the gross is.
 Q: As to benefits given by the employer, will it be taxable if it is in excess of the P90,000 allowable deductions?
The first thing to look at is what your position is. If you are a rank and file, it forms part of computation
income. So there is a disadvantage to rank and file. But of course this is what the BIR ruling only states. But
under the TRAIN law, it can be included as a fringe benefit.
 Personal and additional exemptions are obliterated by the TRAIN.
 Non-resident aliens engaged and Non-resident aliens not engaged.
 For Non-resident aliens not engaged, all of their income is taxed at 25% except (I) capital gains on sale of real
property and (II) capital gains on shares of stock. How about interest income for long term deposits more than
5 years? 25%. It is an income. There is no provision which excludes it from taxation.
 For Non-resident aliens engaged, they are taxed differently for (I) FCD purposes and (II) dividend income
because it is taxed at 20% for non-resident aliens engaged in trade or business and (III) cinematographic
income. BUT rates shall not be asked in the exam. In real life though, it is the one usually asked by clients.
 Who knows tax equalization? This applies to non-residents transferring from one country to another.
Essentially, it means that if you are transferring from one jurisdiction to another, there shall be an arrangement
that ensures that you will be subjected to the same amount of tax in the home country. The reason is that there
should not be any financial difficulty or windfall in transferring from one jurisdiction to another. Essentially, it
is a contractual arrangement.
 GPP and Joint Consortium. Both not subject to income tax since the partners under which are taxed on a
graduated basis. All other partnerships outside the two are taxable. Draw the line between the taxable and non-
taxable partnerships.
o Three levels (I) the way that you would tax the partnership (GPP and Joint Consortium shall not be
taxed. Other than the two, tax using corporate rate of tax! But why need to have a rule on OSD
specific for GPP if they are not taxable? Because taxable income of GPP must still be determined.)
(II) the way that you would tax the distribution shares (equivalent to distribution of dividends so
default is at 10%. Actual or constructive definition. For taxable partnership, 10% is a final tax whereas
for a non-taxable partnership, is it subject to a creditable withholding tax under the Rules) and (III)
the way the individual partners shall be taxed (For GPP, partner receiving share shall treat it as
income tax. But for taxable partnerships, the recipient has no longer an obligation.)