Income Taxation for Individuals

Flashcards covering key concepts related to income taxation for individuals.

RA 8424

National Internal Revenue Code governing taxation in the Philippines.

RA 12214

Capital Markets Efficiency Promotion Act, amended to improve capital market operations.

EOPTA

Ease of Paying Taxes Act aimed at simplifying tax compliance for taxpayers.

NRC

Non-resident Citizen, a Filipino citizen living or working abroad.

RC

Resident Citizen, a Filipino citizen residing in the Philippines.

RA

Resident Alien, a foreign national residing in the Philippines.

NRA

Non-Resident Alien, a foreigner not residing in the Philippines.

Fringe Benefits Tax (FBT)

A tax on the value of fringe benefits provided to employees.

Final Withholding Tax

A tax withheld at the source, which serves as a final tax on income.

De Minimis Benefits

Minor benefits provided to employees, exempt from taxation under certain limits.

13th Month Pay

Extra compensation required by law to be given to employees, exempt up to ₱90,000.

Minimum Wage Earner (MWE)

Employee whose income does not exceed the statutory minimum wage.

Graduated tax rates

Tax rates that increase as the taxable amount increases.

Creditable Withholding Tax

Tax withheld from payments which can be credited against total tax due.

Business Income

Income earned from trade, profession, or business activities.

Passive Income

Income earned from investments, not actively involved in business.

Exempt Income

Income that is not subject to income tax.

Taxable Income

Income subject to taxation after allowable deductions.

Taxpayer Size Classification

Classification based on gross sales or receipts for tax compliance.