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    Final Tax Withheld by The Corporation

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    Rosemarie Cruz
    The document discusses tax withholding requirements for dividends paid to various entities. It provides an example calculation showing the total final tax to be withheld of P90,000. It also contains questions about income tax obligations of joint venture partnerships and co-venturers.

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    Final Tax Withheld by The Corporation

    Uploaded by

    Rosemarie Cruz
    6 views4 pages
    The document discusses tax withholding requirements for dividends paid to various entities. It provides an example calculation showing the total final tax to be withheld of P90,000. It also contains questions about income tax obligations of joint venture partnerships and co-venturers.

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    Final Tax withheld by the corporation

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    The document discusses tax withholding requirements for dividends paid to various entities. It provides an example calculation showing the total final tax to be withheld of P90,000. It also contains questions about income tax obligations of joint venture partnerships and co-venturers.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    6 views4 pages

    Final Tax Withheld by The Corporation

    Uploaded by

    Rosemarie Cruz
    The document discusses tax withholding requirements for dividends paid to various entities. It provides an example calculation showing the total final tax to be withheld of P90,000. It also contains questions about income tax obligations of joint venture partnerships and co-venturers.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 4

    .

    In 2018, a domestic corporation declared and paid dividends to its shareholders as follows:

    To Apol, a resident citizen P100,000


    To Alex, a nonresident citizen 100,000
    To George, a resident alien 100,000
    To LJ, a nonresident alien engaged in trade in the Philippines 100,000
    To Francis, a nonresident alien not engaged in trade in the Philippines 100,000
    To Chen, a domestic corporation 100,000
    To a resident foreign corporation 100,000
    To a nonresident foreign corporation (with tax sparing) 100,000

    How much final tax shall be withheld by the corporation?


    a. P80.000 c. P85.000
    b. P90.000 d. P95.000

    ❖ Answer: B
    ToApol(P100,000x10%) P10,000
    To Alex (P100,000 x 10%) 10,000
    To George (P100,000x 10%) 10,000
    To LJ (P100.000 x 20%) 20,000
    To Francis (P100,000 x 25%) 25,000
    To Chen, domestic corporation (exempt) -
    To a resident foreign corporation (exempt) -
    To a nonresident foreign corporation (P100,000 x 15%) 15.000
    Total POO,000

    37. The share of a co-venturer corporation in the net income after tax of a joint venture or consortium taxable
    as a corporation is
    a. Subject to final withholding tax of 20%
    b. Subject to regular corporate income tax of 30%
    c. Subject to capital gains tax
    d. Exempt from income tax
    ati<his

    * SHARE W JV’s NET INCOME DERIVED FROM A:


    - Taxable JV = treated as dividend income from domestic corporation, therefore,
    exempt. It is treated as inter-corporate dividend.
    ■ Tax Exempt JV = treated as ordinary income; not treated as dividend income.

    38 The share of a con-venturer corporation in the net income of a tax-exempt joint venture or consortium
    is:
    a. Subject to final withholding tax of 20%
    b. Subject to regular corporate income tax of 30%
    c. Subject to capital gains tax
    d. Exempt from income tax

    ❖ Answer: B
    SHARE IN JV’s NET INCOME DERIVED FROM A:
    ■ Tax Exempt JV = treated as ordinary income; not as dividend income. Hence, subject to regular corporate income
    tax of 30%

    (Jse the following data for the next five (5) questions:
    ABC Company and DEF Company formed a joint venture. They agreed to share profit or loss in the ratio of
    70% and 30%, respectively. The results of operations of the joint venture as well as the co-venturers are as
    follows:
    Joint Venture ABC Co. DEF Co.
    Gross Income P5,000,000 3,000,000 2,000,000
    OPEX 3,000,000 2,000,000 1.500.000
    39. The income tax payable of the joint venture is
    a. P0 c. P300.000
    b. P150,000 d. P600.000

    ❖ Answer: D
    £□ Income Tax Payable = TNI x 30%; ITP = P2M x 30% = P600.000

    40. The total income tax payable of ABC Co. is:


    a. P0 c. P300.000
    b. P150.000 d. P600.000

    Answer: C
    LU Refer to the solution provided in the next question.
    LU The co-venturer s share in the income of the joint venture is treated as intercorporate dividends, hence, non-taxable.
    ABC’s share in JV’s Nl after tax = (P2M - RCIT of P600.000) x 70% = P980.000.

    LU
    DIVIDEND INCOME:
    Tax From To
    °C DC
    Exempt; inter-corporate dividend
    °C RFC Exempt; inter-corporate dividend
    °C NRFC With Tax Spanng = 15%: without = 30%
    Oertora.(iMS

    41. The total income tax expense of DEF Co. is:


    a. PO c. P570.000
    b. P150,000 d. P750.000

    ❖ Answer: B
    Solution:
    Joint Venture ABC Co. DEF Co.
    G Income P5,000,000 P3,000,000 P2,000,000
    Expenses (3M0M0) (2,000,000) (1,500,000)
    TNI P2,000,000 P1,000,000 P500.000
    NCIT 30% 30% 30%
    Tax Due P600.000 P300.000 P150.000
    LJ Income Tax Expense = Basic Tax + FWT on passive income + CGTs. Since there are no income subject to FWT and CGTs in the problem,
    income tax expense is equal to income tax due.

    42. Assume the joint venture (JV) is a tax-exempt JV, its income tax payable is
    a. PO c. P300.000
    b. P150,000 d. P600,000

    ❖ Answer: A

    43. Assume the joint venture is tax exempt, the total income tax expense of ABC Co. is:
    a. P150.000 c. P300.000
    b. P330.000 d. P720.000

    ❖ Answer: D

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