Various Income

Taxes & Income

Tax Returns Forms
Group 3
Ortega Angel Duterte
Dela Cruz Argonsola
Marquez Agustin
Objectives
To know what is an Income Tax.
To determine its payers.
To learn a short history.
To distinguish the various kinds of
Income Taxes.
To be able to determine what are the
Tax Returns Forms.
 Defining Income Tax
tax levied by a government directly on
income, especially an annual tax on
personal income. Annualchargelevied on
both earned income
(wages,salaries,commission) and unearned
income (dividends,interest,rents).
Note; The purpose and principles applied to
the Income Tax are the same with that
applied to Basic Taxation(Previous
Reporters).
 Income Tax Payers
Payers are divided into 2 namely:
Corporation Income Tax

levied onprofits(net earnings) of

incorporated firms.
Personal Income Tax

Levied on incomes of individuals, households,

partnerships, and sole-proprietorships.
 Short History
The first federal income tax was
imposed in the 1860s when the
government was in desperate need of
money to fund the Civil War. Years later,
in response to various court rulings
declaring the income tax
unconstitutional, Congress passed the
16th Amendment to the U.S.
Constitution. The amendment, which
took effect in 1913, specifically
authorizes direct taxes on income and is
the basis for the federal income tax
Various Income Taxes
 Personal Income Tax
The best-known income tax is the tax that is paid
on personal income. Personal income can include
wages, interest income and dividends. In the U.S.,
the personal income tax is a progressive tax,
meaning that the more money you make the
higher percentage of your income you will pay in
taxes. For example, in 2009 the first $8,350 of
taxable income is taxed at a 10 percent rate, while
income over $372,950 is taxed at a 35 percent tax
rate.
 Capital Gains
Capital gains or losses are income or losses
that you incur from investments in property or
goods. The rate capital gains are taxed at
depends on whether they are long-term or
short-term capital gains. Long-term gains are
those that you get from investments you have
held for at least a year. Long-term gains are
usually taxed at a maximum of 15 percent.
 Corporate Income Taxes
Companies that make a profit in the U.S. are
responsible for paying income taxes. According
to the Tax Foundation, the combined federal
and state corporate taxes in the U.S. are 39.1
percent in 2009, one of the highest rates in the
world. Since individuals who receive dividends
from these companies have to pay taxes on
the dividends as well, some feel that dividends
are unfairly subjected to double taxation.
 Social Security and Medicare Taxes
Know together as FICA, or Federal Insurance
Contributions Act, taxes, your pay is subject to
Social Security and Medicare taxes. For individuals
who are employed by an employer, these taxes
are split between the employer and the employee.
For 2009, the Medicare tax is 2.9 percent so the
employer and the employee each pay 1.45
percent. The Social Security tax is 12.4 percent so
the employer and employee each pay 6.2 percent.
The Social Security tax is only charged on the first
$106,800 of your income.
 Self-employment Taxes
If you are self-employed, you are responsible for
paying the total Social Security and Medicare taxes
on your income instead of splitting these taxes with
your employer, so you are responsible for paying
the entire 15.3 percent. There are two taxes breaks
associated with self-employment taxes. First, the
15.3 percent is only charged on 92.35 percent of
your income. Second, half of what you pay in self-
employment taxes is deductible from your taxable
income when you pay your personal income tax.
13 Income Tax Returns Forms
 BIR FORM 1700
Annual Income Tax Return for Individuals
Earning Purely Compensation Income
(Including Non-Business/Non-Profession
Income)
Description
This return shall be filed by every resident citizen
deriving compensation income from all sources, or
resident alien and non-resident citizen with respect
to compensation income from within the Philippines,

 BIR FORM 1701

Annual Income Tax Return for Self-Employed
Individuals, Estates and Trusts
Description
BIR Form No. 1701 shall be filed by individuals who are
engaged in trade/business or the practice of profession
including those with mixed income (i.e., those engaged
in the trade/business or profession who are also earning
compensation income) in accordance with Sec. 51 of the
Code, as amended. The annual income tax return
summarizes all the transactions covering the calendar
year of the taxpayer.
 BIR FORM 1702 EX
Annual Income Tax Return for Use ONLY by Corporation,
Partnership and Other Non-Individual Taxpayer EXEMPT
under the Tax Code, as Amended, {Sec. 30 and those
exempted in Sec. 27(C) and Other Special Laws, with NO
Other Taxable Income
Description
This return shall be filed by a Corporation, Partnership and Other
Non-Individual TaxpayerEXEMPTunder the Tax Code, as
amended[Sec. 30 and those exempted in Sec. 27(C)]and
other Special LawsWITH NO OTHER TAXABLE INCOMEsuch as
but not limited to foundations, cooperatives, charitable
institutions, non-stock and non-profit educational institutions,
General Professional Partnership (GPP) etc.
 BIR FORM 1707 A
Capital Gains Tax Return for Onerous Transfer of
Shares of Stocks Not Traded Through the Local
Stock Exchange
Description
This return is filed by a natural or juridical person,
resident or non-resident, who is not exempt under
existing laws for the sale, barter, exchange or other
onerous disposition intended to transfer ownership of
shares of stocks in domestic corporation classified as
capital assets, not traded through the local stock
exchange.
 BIR Form No. 1701Q
Quarterly Income Tax Return for Self-employed
Individuals, Estates, and Trusts (Including
Those with both Business and Compensation
Income)
Description
This return shall be filed in triplicate by the following
individuals regardless of amount of gross income:
1) A resident citizen engaged in trade, business, or
practice of profession within and without the
Philippines.
2) A resident alien, non-resident citizen or non-
resident alien individual engaged in trade, business or
practice of profession within the Philippines.
3) A trustee of a trust, guardian of a minor,
executor/administrator of an estate, or any person
acting in any fiduciary capacity for any person, where
such trust, estate, minor, or person is engaged in
trade or business.
 BIR Form No. 1702-MX
Annual Income Tax Return for Corporation,
Partnership and Other Non-Individual with MIXED
Income Subject to Multiple Income Tax Rates or
with Income Subject to SPECIAL/PREFERENTIAL
RATE
Description
This return shall be filed by every Corporation,
Partnership and Other Non-Individual Taxpayerwith
MIXED Income subject to MULTIPLE INCOME TAX
RATES or with income subject to
SPECIAL/PREFERENTIAL RATE.
 BIR Form No. 1702-RT
Annual Income Tax Return for Corporation, Partnership
and Other Non-Individual Taxpayer Subject Only to
REGULAR Income Tax Rate
Description
This return shall be filed by Corporation, Partnership and other
Non-Individual TaxpayerSubject Only to REGULAR Income
Tax Rate of 30%.Every corporation, partnership no matter
how created or organized, joint stock companies, joint
accounts, associations (except foreign corporation not engaged
in trade or business in the Philippines and joint venture or
consortium formed for the purpose of undertaking construction
projects or engaging in petroleum, coal, geothermal and other
energy operations), government-owned or controlled
corporations, agencies and instrumentalities shall render a true
and accurate income tax return in accordance with the
provisions of the Tax Code.
 BIR Form No. 1702Q
Quarterly Income Tax Return for
Corporations, Partnerships and Other Non-
Individual Taxpayers
Description
This return is filed quarterly by every corporation,
partnership, joint stock companies, joint accounts,
associations (except foreign corporation not
engaged in trade or business in the Philippines
and joint venture or consortium formed for the
purpose of undertaking construction projects or
engaging in petroleum, coal, geothermal and other
energy operations), government-owned or
controlled corporations, agencies and
 BIR Form No. 1703
Annual Income Information Return for Non-
Resident Citizens / OCWs and Seamen (for
foreign-sourced income)
Description
This information return is filed in triplicate by
Non-resident citizens and Overseas Contract
Workers (OCWs), including qualified Filipino
seamen, on income derived from sources
abroad.
An individual citizen of the Philippines who is
working and deriving income from abroad as an
overseas worker is taxable only on income from
sources within the Philippines. Income from
sources within the Philippines should be filed in
either Form 1700 or Form 1701.
 BIR Form No. 1704
Improperly Accumulated Earnings Tax Return
Description
This form is to be filed by every domestic corporation
classified as closely-held corporation except banks and other
non-bank financial intermediaries, insurance companies,
taxable partnerships, general professional partnerships, non-
taxable joint ventures and enterprises duly registered with
the Philippine Economic Zone Authority (PEZA) under R.A.
7916, and enterprises registered pursuant to the Bases
Conversion and Development Act of 1992 (R.A. 7227), and
other similar laws, shall render a true and accurate tax return
in accordance with the provision of the Tax code.
 BIR Form No. 1706
Capital Gains Tax Return for Onerous Transfer of Real
Property Classified as Capital Asset (both Taxable and
Exempt)
Description
This return is filed by all persons (natural or juridical)
whether resident or non-resident, including Estates and
Trusts, who sells, exchanges, or disposes of a real property
located in the Philippines classified as capital asset as
defined under Sec. 39 (A)(1) of RA 8424 for the purpose of
securing a Tax Clearance Certificate to effect transfer of
ownership (title) of the property from the seller to the buyer.
However, filing of the return is no longer required when the
real property transaction involves the following:
- it is not classified as a capital asset
- not located in the Philippines
- disposition is gratuitous
- disposition is pursuant to the Comprehensive Agrarian
Reform
To be filed with the RDO having jurisdiction over the place
where the property being transferred is located.
 BIR Form No. 1707
Capital Gains Tax Return for Onerous Transfer of
Shares of Stocks Not Traded Through the Local
Stock Exchange
Description
This return is filed by a natural or juridical person,
resident or non-resident, who is not exempt under
existing laws for the sale, barter, exchange or other
onerous disposition intended to transfer ownership of
shares of stocks in domestic corporation classified as
capital assets, not traded through the local stock
exchange.
 BIR Form No. 1707-A
Annual Capital Gains Tax Return for Onerous
Transfer of Shares of Stock Not Traded Through
the Local Stock Exchange
Description
This return is filed by every natural or juridical person,
resident or non-resident, who is not exempt under
existing laws for sale, barter, exchange or other
disposition of shares of stock in a domestic corporation,
classified as capital assets, not traded through the local
stock exchange.

Thank You for

Listening