The following exemptions are allowed by law (R.A. 9504 effective July 6, 2008) to be deducted from net income:
Basic Personal Exemption - per taxpayer : P50,000.00
Additional Exemption for each qualified dependent child (maximum of 4) : P25,000.00
Showing posts with label accounting for taxes. Show all posts
Showing posts with label accounting for taxes. Show all posts
Friday, March 1, 2013
Monday, February 25, 2013
When is Business Tax Payable
The Business Tax either the Percentage Tax or Value Added Tax is payable on or before the 20th of the following month.
Thursday, February 21, 2013
Income Tax
Definition:
An Income Tax is imposed based on the net income of the business.
A Net Income is determined by deducting the Cost of Sales or Services and Allowable Operating Expenses from Gross Sales or Gross Receipts of the business during a taxable period.
Illustrative Formula:
Gross Sales / Gross Receipts
Less: Cost of Sales / Cost of Services
Equals: Gross Margin or Gross Income
Less: Operating Expenses (Allowable)
Equals: Net Income
Net Income
Multiply by: tax rate
Equals: Income Tax
Less: Quarterly Income Tax Paid
Equals: Income Tax still due and payable
An Income Tax is imposed based on the net income of the business.
A Net Income is determined by deducting the Cost of Sales or Services and Allowable Operating Expenses from Gross Sales or Gross Receipts of the business during a taxable period.
Illustrative Formula:
Gross Sales / Gross Receipts
Less: Cost of Sales / Cost of Services
Equals: Gross Margin or Gross Income
Less: Operating Expenses (Allowable)
Equals: Net Income
Net Income
Multiply by: tax rate
Equals: Income Tax
Less: Quarterly Income Tax Paid
Equals: Income Tax still due and payable
Sunday, February 17, 2013
Percentage Tax
Definition:
Percentage Tax is the tax imposed on the gross receipts of non-vat registered business owner and is usually subject to 3% tax rate.
Percentage Tax is the tax imposed on the gross receipts of non-vat registered business owner and is usually subject to 3% tax rate.
Wednesday, February 13, 2013
VAT or Value Added Tax
Definition:
A VAT business transaction is subject to 12% tax rate.
Output VAT vs Input VAT
Output VAT is the 12% tax from the VATable sales or gross receipts of the VAT Registered business owner.
Input VAT is the 12% tax from the VATable purchases, disbursements or expenses made by the business owner.
The Input VAT is deducted from the Output VAT to get the net VAT payable.
Illustrative Formula:
Output VAT
Less: Input VAT
Equals Net VAT Payable
A VAT business transaction is subject to 12% tax rate.
Output VAT vs Input VAT
Output VAT is the 12% tax from the VATable sales or gross receipts of the VAT Registered business owner.
Input VAT is the 12% tax from the VATable purchases, disbursements or expenses made by the business owner.
The Input VAT is deducted from the Output VAT to get the net VAT payable.
Illustrative Formula:
Output VAT
Less: Input VAT
Equals Net VAT Payable
Saturday, February 9, 2013
Business Taxes
Definition:
It is the tax that are imposed on the gross receipts or sales in the ordinary course of business transactions during a taxable period.
Classification:
It is the tax that are imposed on the gross receipts or sales in the ordinary course of business transactions during a taxable period.
Classification:
- VAT or Value Added Tax
- Percentage Tax
Tuesday, February 5, 2013
Accounting for Taxes
For Philippine Taxation, Taxes that must be complied with by business owners are classified as follows:
1. Business Taxes
2. Income Taxes
1. Business Taxes
2. Income Taxes
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