Income tax- tax on the net income or the entire income realized in one taxable year, levied upon corporate and individual incomes in excess of specified amounts net of certain deductions and exemptions provided by law.
Nature and purposes of income tax
1. It is a national tax or one imposed by the national government under the National Internal Revenue Code;
2. It is an excise tax because it is imposed on the right to generate or receive income through labor, capital and others, and not or persons or property;
3. It is a direct tax since it is imposed on the person who is personally bound to pay the tax, a burden he cannot shift to another
4. Income tax is a general tax because it is primarily intended to provide large amounts of revenue to the government and secondarily to offset the regressive sales and consumption taxes, and to mitigate the evil of inequalities in the distribution of wealth;
5. It is progressive because the tax rate increases as the tax base increases.
General Principles of Income taxation in the Philippines
1. A citizen of the Philippines residing therein is taxable on all income derived from sources within and without the Philippines;
2. A non resident citizen is taxable only on income derived from sources within the Philippines;
3. An individual citizen who is working and deriving income abroad as an OFW is taxable only on income from sources within the Philippines Provided, that the OFW, who is a citizen of the Philippines and who receives compensation for services rendered abroad as a member of the complement of a vessel engaged exclusively in international trade shall be treated as an OFW.
4. An alien individual, whether a resident or not of the Philippines, is taxable only on income derived from sources within the Philippines.
5. A domestic corporation is taxable on all income derived from sources within and without the Philippines; and
6. A foreign corporation whether engaged or not in trade or business in the Philippines is taxable only on the income derived from sources within the Philippines.
Nature and purposes of income tax
1. It is a national tax or one imposed by the national government under the National Internal Revenue Code;
2. It is an excise tax because it is imposed on the right to generate or receive income through labor, capital and others, and not or persons or property;
3. It is a direct tax since it is imposed on the person who is personally bound to pay the tax, a burden he cannot shift to another
4. Income tax is a general tax because it is primarily intended to provide large amounts of revenue to the government and secondarily to offset the regressive sales and consumption taxes, and to mitigate the evil of inequalities in the distribution of wealth;
5. It is progressive because the tax rate increases as the tax base increases.
General Principles of Income taxation in the Philippines
1. A citizen of the Philippines residing therein is taxable on all income derived from sources within and without the Philippines;
2. A non resident citizen is taxable only on income derived from sources within the Philippines;
3. An individual citizen who is working and deriving income abroad as an OFW is taxable only on income from sources within the Philippines Provided, that the OFW, who is a citizen of the Philippines and who receives compensation for services rendered abroad as a member of the complement of a vessel engaged exclusively in international trade shall be treated as an OFW.
4. An alien individual, whether a resident or not of the Philippines, is taxable only on income derived from sources within the Philippines.
5. A domestic corporation is taxable on all income derived from sources within and without the Philippines; and
6. A foreign corporation whether engaged or not in trade or business in the Philippines is taxable only on the income derived from sources within the Philippines.
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