Taxation Exam final

• Proceeds of life insurance

• Amount received by insured as return of premiums

• Gifts, bequests and devises

• compensation for injuries or sickness

• income exempt under treaty

• Miscellaneous items such us

-income derived by the foreign government

-income derived by the government or its political subdivisions

-Prizes and awards

-prizes and awards in sports competitions

-GSIS, SSS, Medicare and other benefits

-Gain from the sale of bonds, debentures, of other certificates of indebtedness

-Gains realized by the investor upon redemption of share of stock in a mutual fund company

Exclusion from gross income

Compensation income

means all renumeration for services performed by an employee for his employer under an employer-employee relationship, unless specifically excluded by the code

• there must be personal services actually rendered;

• payment has been made for such services;

• and amount paid was reasonable

requisites for taxability of compensation income

• salaries, wages, honoraria:

• bonuses;

• allowances (such as transportation, representation and entertainment, and the like):

• fringe benefits;

• pensions;

• and other income of a similar nature

kinds of compensation income

What is Passive income

Dividends, Royalties, Interest, Prizes

Situs of taxation l

literally means a place of taxation; the country that has power and jurisdiction to levv and collect the tax.

Presumptive income tax

refers to a scale of income taxes imposed in relation to a group of person's actual expenditure and the presumed income.

Composite income tax

is a tax consisting of a series of separate quasi-personal taxes, assessed on the particular source of income with a superimposed personal tax on the income as a whole.

Unitary income tax

is a single rate of income tax applied to incomes which are arranged and added together according to source