Income Tax

Name:__________________________ Date:_________________________
Section:________________________ FINAL TAX
1. Harry wrote a song which became an international music sensation. Harry earned gross royalties of
P300,000 from a local recording studio. In addition, Harry received P500,000 gross royalty from foreign
distributors who sells Harry’s song. Compute the final withholding tax on Harry’s total royalties.

2. On February 18, 2010, Mr. Sirius Black received P36,000 cash dividends from Hogwartz Co., a resident
foreign corporation. Compute the final tax withheld on Mr. Black’s dividends

3. On July 1, 2010, Ron invested his P1,000,000 in a high paying time deposit in Hong Kong. The time
deposit pays interest of 15%. Compute the total final tax to be withheld from Ron’s interest income from
the deposit in 2010.

4. Cedric received the following prizes (in gross amount):

Boxing competition sanctioned by the Philippine

Olympic Committee P 400,000
Dancing competition sponsored by a company promoting
anti-rheumatic medicines 300,000
Body building competition from Stalone Foundation, USA 700,000

Compute the total final taxes on the above prizes.

5. Alohomora, Inc. will declare P2,000,000 dividends to its 1,000,000 outstanding common shares. 70% of
the alohomora shares were held by its only corporate shareholder and parent Alohomora Grand, Inc.
How much final income tax shall be withheld from the dividends?

6. Stupefy Company, a domestic corporation, reported the following dividend income during the 2010:

From domestic corporations, stock dividends P 200,000

From domestic corporations, property dividends 100,000
From domestic corporation, cash dividends 150,000
From foreign corporations, stock dividends 150,000
From foreign corporations, cash dividends 250,000
Total dividend income P 850,000

Compute the final tax from the above dividend income.

7. Hermione received the following items of gross income during 2010:

Prizes from dancing competition, Philippines P 7,500

Prizes from beauty pageant, Japan 50,000
Lotto winnings from the Philippines 200,000
Lotto winnings from Japan 400,000

Compute the total final income tax.

8. Minerva owns 20% of the capital and profits of a general professional partnership. The partnership
reported P500,000 profits in 2011. How much final tax will be withheld from Minerva?

9. Grindelwald Department Store conducted a sales promotion where customers purchases exceeding
P1,000 in one transaction shall be entitled to a ticket for a chance to win P500,000. Mr. Scamander won
the prize.

How much shall Grindelwald withheld from the grand prize winning?

10. Carlo, married, with two dependent children, received the following income:
Rent, Philippines P1,000,000
Rent, Hongkong 200,000
Interest, peso deposit, MBTC 100,000
Interest US$ deposit, BDO ($10,000 x P42) 420,000
Interest deposit, Hongkong (HK$10,000 x P5) 50,000

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 Prize (cash) won in a local contest 8,000
Prize (TV) won in a local lottery 50,000
PCSO/Lotto winnings 2,000,000
Prize won in contest in U. S. 300,000
Lotto winning in U. S. 100,000
Dividend, domestic co. 600,000

determine the total final tax assuming he is:

11. Lenovo, Inc., a resident foreign corporation, has earned the following income during 2018:
DIVIDEND INCOME FROM:
 Microsoft, a non-resident foreign corporation P500,000
 Intel, a resident foreign corporation 400,000
 Panday, a domestic corporation 300,000
INTEREST INCOME FROM:
 Current account, BDO 600,000
 Savings deposit, ABN-AMRO bank, UK 700,000
 FCDU deposits 800,000
ROYALTY INCOME from various domestic corporations 100,000

The total final tax on passive income for the taxable year is:

12. Lenovo, Inc., a resident foreign corporation, has earned the following income during 2018:
Dividend income from:
Microsoft, a non-resident corp. P500,000
Intel, a resident foreign corp. 400,000
IBM, a domestic corp. 300,000
Interest income from:
Current account, BDO 600,000
Savings Deposit, ABN-AMRO bank, UK 700,000
US Dollar deposit (FCDU)- BPI Makati 800,000
Royalty income from various domestic 100,000
Corporations

Additional information:
 The ratio of Microsoft’s gross income in the Philippines over worldwide income for the past three years
is 40%
 The ratio of Intel’s gross income in the Philippines over worldwide income for the past three years is
60%
 The ratio of IBM’s gross income in the Philippines over worldwide income for the past three years is
80%

How much is the total income tax expense of Lenovo?

13. In 2018, a domestic corporation declared and paid dividends to its shareholders as follows:
To Apol, a resident citizen P100,000
To Alex, a non resident citizen 100,000
To George, a resident alien 100,000
To Lj a non resident alien engaged in trade in the Philippines 100,000
To Francis, a non resident 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 non resident foreign corporation (with tax sparing) 100,000

How much final tax shall be held by the corporation?

a. P80,000 c. P85,000
b. P90,000 d. 95,000

14. Potter received the following income in the year 2018

a. Rent income, net of withholding 300,000

b. Prizes from the palarong pambansa 250,000
c. Prizes from Eat Bulaga Pera o Bayong 300,000
d. Dividends from domestic corporation
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 i. 60% of income came from the Philippines 90,000
ii. 45% of income came from the Philippines 180,000
e. Dividends from resident foreign corporation
i. 70% of income came from the Philippines 60,000
ii. 35% of income came from the Philippines 90,000
f. Dividends from Non Resident foreign corporation 100,000
g. Interest income from bank deposit
i. Local currency 20,000
ii. Foreign currency 35,000
h. Interest income from loan 19,000
i. Share in net income form a general professional partnership 120,000
j. Share in net income from a business partnership 300,000
k. Royalties from musical composition 180,000
l. Royalties from E books 80,000
m. Prizes from singing competition 6,000
n. Lotto winnings 6/45 1,000,000
o. Winnings from Jenra raffle 9,000
p. Winnings from Nepo raffle 30,000
q. Winnings from PCSO swertres 9,500
r. Winnings from Japan Sweepstake 30,000
Compute the final withholding tax if the taxpayer is a
1. Resident citizen
2. Non resident citizen
3. Resident alien
4. Non resident alien engaged in trade or business
5. Non resident alien not engaged in trade or business
6. Domestic corporation
7. Resident foreign corporation
8. Non resident foreign corporation

/etd