BUISENESS MANAGEMENT
TAXES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Philippine air, a domestic corporation engaged in local and international operations has the following data for the current year:Gross income and expenses from international operations, P10, 000, 000 and P4, 000, 000, respectively. The income tax due of the corporation is
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P150, 000
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P250, 000
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P1, 800, 000
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P3, 000, 000
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Explanation:
Detailed explanation-1: -A domestic corporation is taxable on its worldwide income. However, a foreign corporation, whether engaged or not in trade or business in the Philippines, is taxable only on Philippine-sourced income.
Detailed explanation-2: -Foreign income A Philippine (domestic) corporation is taxed on its worldwide income. A domestic corporation is taxed on income from foreign sources when earned or received, depending on the accounting method used by the taxpayer.
Detailed explanation-3: -Minimum corporate income tax (MCIT) on gross income, beginning in the fourth taxable year following the year of commencement of business operations. MCIT is imposed where the CIT at 25% is less than 2% MCIT on gross income.
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