De-Duck-Duck
ABC Company is assessed by the BIR with deficiency taxes on income tax and documentary stamp taxes. Interest expense on unpaid tax from income tax is P50,000 while interest expense on unpaid tax from documentary stamp tax is P20,000. ABC Company earned P10,000 from interest income from bank deposits.
How much is the deductible interest expense?
P20,000
Interest from income tax is nondeductible because income tax is nondeductible expense.
Interest income from bank has no bearing to interest arbitrage on interest from unpaid taxes.
B is a manager of X Corp and receives the following benefits:
a. Grocery allowance of P5,000
b. Life insurance premium of P3,000
How much is FBT?
5,000 + 3,000 = 8,000 /65% x 35% = 4,307.69
ABC Company taxable year ended on January 31, 2024. When is the annual income tax return (BIR Form 1702) filing deadline?
May 15, 2024
X Corp. incurs the following expenses:
a. Rent expense of P20,000
b. Repairs expense of P50,000
How much is the withholding tax expense?
20,000 x 5% = 1,000
50,000 x 2% = 1,000
Total = 2,000
On November 5, 2024, ABC Company received final notice of assessment from BIR to pay assessment tax for VAT and IT deficiency 15 days from date of receipt of final assessment notice. ABC Company paid using BIR Form 0605. When is the last day for ABC Company to pay the assessed taxes?
November 20, 2024
15 days from November 5, 2024
R Inc. reviewed the following uncollectibles from its customers for 2024:
a. Customer A of 2,000
b. Customer B of 3,000 but 1,000 was reversed as collectible
c. Customer C of 5,000 but 2,000 was collected in 2025
As of 2024, how much is the deductible bad debts?
2,000 + (3,000 - 1,000) + 5,000 = 9,000
2,000 recovery will be considered on the date recovered in 2025
C is the VP of D Corp. and receives the following benefits for 1 year:
a. Clothing allowance of P10,000
b. Local travel allowance of P100,000
c. Lease of condo unit of P360,000
How much is FBT for the year?
100,000 x 100% /65% x 35% = 53,846.15
360,000 x 50% /65% x 35% = 96,923.08
TOTAL = 150,769.23
123 Inc. withholds from its lessor 5% tax on rent and 10% from its individual consultant's professional fee and 15% from Y Consulting Corp.'s professional fee. 123 Inc. is a manual filer of tax returns. When is the deadline to submit and remit the taxes withheld for the transactions that happened in October 2024?
November 10, 2024
Z Inc. incurred the following expenses:
October 11 - Lawyer's fee of P50,000 as individual practitioner
November 3 - Bookkeeping fee of P30,000 as individual practitioner
The lawyer and bookkeeper has a sworn statement that each individual gross income for the year will exceed P3,000,000. How much is the expanded withholding tax expense to be filed and remitted on November 2024?
50,000 x 10% = 5,000
T Company is supposed to file and pay its taxes from the final assessment notice via electronic filing and payment system (eFPS) today. eFPS is down. Can T Company file the tax on another day?
No
L Corp., a manufacturing company, incurred the following losses in 2024:
a. loss from warehouse fire of P100,000; P30,000 is covered by insurance
b. loss from destroyed factory building due to typhoon of P500,000; P100,000 compensated by govt aid
c. loss from damaged goods of P50,000
Of the losses, L Corp. notified the BIR within 45 days from the happening of the incident for the loss from fire and typhoon.
How much is the deductible loss?
100,000 - 30,000 = 70,000
500,000 - 100,000 = 400,000
TOTAL = 470,000
*Loss from damaged goods not reported to BIR = Disallowed
E is the CEO of P Corp. and receives the following benefits:
a. Lease of a car from a fleet of vehicles - P120,000 per car per year
b. Company owned yacht for exclusive use of E - P20,000 depreciation expense per year
c. Car under the name of the employee where P Corp paid in installment for 5 years - P500,000 acquisition cost
How much is the FBT for 1 year?
120,000 x 50% = 60,000
20,000 x 12 months = 240,000
500,000 / 5 = 100,000
TOTAL MONETARY VALUE = 400,000
TOTAL FBT = 215,384.62 (400,000 /65% X 35%)
D Company Inc. is preparing for the computation of employee bonuses and taxes for 2024. When is the deadline for D Company Inc. to file the annual withholding tax return (BIR Form 1604-C) for calendar year 2024?
January 31, 2025
Mr. A, NRA-ETB, earned the following income for November 2024:
a. Interest from bank - P5,000
b. Interest from FCDU - P3,000
c. Interest from long-term deposit pre-terminated on the 3rd year - 4,000
d. Rent income inclusive of VAT and withholding - P10,000
How much is the total tax to be withheld from Mr. A?
5,000 X 20% = 1,000
3,000 X 0% = 0
4,000 X 12% = 480
10,000 / (1.12-.05) = 467.29
TOTAL = 1,947.29
P Realty Corp. has no enough cash funds to pay for its assessed deficiency tax but has unused land asset. What can P Realty Corp. do?
V Corp. has P1 million sales and incurred the following expenses for 2024:
a. R&D of P100,000 capitalized and depreciated for 3 years
b. Representation and entertainment expense of P20,000.
c. Cost of PWD facility improvement of P50,000
How much is the deductible expense for 2024?
120,000 / 3 years = 40,000
20,000 - (1,000,000 x 1% limit = 10,000) = 10,000
50,000 + (50,000 x 50% = 25,000) = 75,000
TOTAL = 125,000
J is the division head of Q Inc. and receives the following benefits for November 2024:
a. Temporary housing of P3,000 per month
b. Educational assistance for J's daughter under competitive scholarship of P120,000 for a year
c. Round trip first class ticket for foreign travel of P100,000
How much is FBT for the month of November?
100,000 x 30% = 30,000 / 65% x 35% = 16,153.85
N Inc., a domestic corporation, earned the following passive income:
a. Interest from bank deposits for month-ended October 2024 from A Bank Inc.
b. Royalty on October 5, 2024 from B Inc.
Assuming manual filing, when is the deadline for A Bank Inc. and B Inc. to file and pay the final withholding tax to the BIR?
November 10, 2024
M Inc., a DC top withholding agent, incurred the following expenses:
a. Interest income from dollar deposits from B Bank Inc. - P5,000
b. Royalties from Tech Corp. - P10,000
c. Purchases of goods from Y Inc. - P15,000
Tech Corp., Y Inc. are VAT-registered suppliers. How much is total withholding tax expense?
5,000 x 20% = 1,000
10,000 /1.12 x 20% = 1,785.71
15,000 / 1.12 x 1% = 133.93
TOTAL = 2,919.64
LMN Inc. pays taxes via manual filing. Where will LMN Inc. go if the tax payable is P100,000? BIR office or the Bank?
if not more than P20,000 - BIR
if more than P20,000 - Authorized Agent Bank