MANAGEMENT

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BUISENESS MANAGEMENT

TAXES

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
Bank of Manila a domestic corporation has the following data for the taxable year:Regular Banking Unit:Interest Income from loans P10, 000, 000Interest Income from peso deposit Bank of Phil. Islands P1, 000, 000Dividend Income from various domestic corporations P1, 500, 000Foreign Currency Deposit Unit:($1 = P40)Interest Income from loans to residents $50, 000Interest Income from loans to nonresidents $12, 500Additional Information:The bank has total operating expenses of P12, 000, 000. How much is the normal income tax for the year?
A
P600, 000
B
P400, 000
C
P500, 000
D
P0
Explanation: 

Detailed explanation-1: -Interest on bank savings, time deposits, deposit substitutes, and money market placements received by domestic or resident foreign corporations from a domestic corporation are subject to a final tax of 20%, while interest income derived from FCDU deposits is subject to a final tax of 15%.

Detailed explanation-2: -What is the LRS remittance limit? LRS allows Indian residents to freely remit up to USD $250, 000 per financial year for current or capital account transactions or a combination of both. Any remittance exceeding this limit requires prior permission from the RBI.

Detailed explanation-3: -For resident and non-resident aliens engaged in trade or business in the Philippines, the maximum rate on income subject to final tax (usually passive investment income) is 20%. For non-resident aliens not engaged in trade or business in the Philippines, the rate is a flat 25%.

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