BUISENESS MANAGEMENT
TAXES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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P22, 500
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13, 500
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9, 000
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45, 000
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Detailed explanation-1: -A foreign currency fixed deposit is a type of time deposit issued by banks to investors who would like to keep foreign currency for future use or hedge against foreign currency fluctuation. The money deposited in the FCFD account cannot be withdrawn until the agreed fixed term has expired.
Detailed explanation-2: -Gains and losses from foreign currency transactions will generally be taxable (or deductible) in the US or in a foreign country based on the applicable tax law.
Detailed explanation-3: -Under RA No. 8424, income earned by FCDUs/OBUs from foreign currency loans and/or transactions with non-residents and other FCDUs/OBUs is subject to 10% final tax based on the amount of the income. In 2004, the Government restored the tax exemption granted to FCDUs and OBUs when it enacted RA No. 9294.
Detailed explanation-4: -Interest income of FCDUs from foreign currency loans granted to residents other than OBUs or other FCDUs of depository banks shall be subject to 10% tax.