Question & AnswerQ&A (Commonwealth Act No. 117)
The additional income tax rate imposed on individuals with net income exceeding P10,000 but not exceeding P30,000 is 1% per annum.
If a corporation, joint-stock company, partnership, or association is formed to prevent the imposition of additional tax by accumulating profits instead of distributing them, a tax of 25% is levied on the undistributed accumulated profits for each taxable year, in addition to other taxes.
There is a basic exemption of P2,000 plus an additional P2,000 if the filer is a married man or woman with a spouse not legally separated, or an unmarried individual supporting certain dependents under 21 years old. An additional exemption of P500 is allowed for each legitimate or recognized dependent child under 21 or incapable of self-support.
Married persons, whether citizens or aliens, can file one consolidated return covering the income of both spouses. If impracticable, separate returns may be filed but must be consolidated for tax purposes.
Failure to pay tax or file a return results in a fine between P40 and P2,000, imprisonment of up to six months, or both. Filing a false or fraudulent return with intent to evade tax may lead to a fine up to P4,000, imprisonment up to one year, or both.
Corporations must submit verified returns of dividends or profits paid or credited, including names and addresses of stockholders, paid-up capital, numbers of shares owned, tax years, gains, and certified financial statements such as balance sheets and profit and loss statements.
Income derived from dividends subject to the normal tax is included in the computation for the additional income tax imposed under the law.
The maximum additional income tax rate for net income exceeding P2,200,000 is 36% per annum.
Yes, nonresident aliens are entitled to personal exemptions equivalent to those allowed by the income tax law of their home country to Filipino citizens not residing there, but not exceeding the amount allowed for residents of the Philippines.
Income tax returns must be filed on or before March 1 of each year for the gross income of the preceding taxable year by every person of lawful age with gross income of P2,000 or more.