1. Taxpayer shows the following taxes incurred and paid during the taxable period:

6% Capital gains tax	P50,000
Special assessment on real property	20,000
Business license	45,000
Documentary stamp tax	13,000
Cedula	650

How much is deductible as tax expense from gross income?

a. P128,650

b. P78,650

c. P58,650

d. P58,000

2. A domestic corporation shows the following for the year 2021:

Taxable income - Philippines	P15,000,000
Taxable income - foreign country	5,000,000
Quarterly income tax payments - Philippines	2,500,000
Income tax paid - foreign country	1.800,000

Requirement 1:

If the income tax paid in the foreign country is not used as tax credit, how much tax expense is allowed as an item of deduction from the gross income of the taxpayer?

a. Zero

b. P1,800,000

c. P2,500,000

d. P4,300,000

Requirement 2:

If the income tax paid in the foreign country is used as a tax credit, how much is the foreign tax credit which may be claimed by the taxpayer?

a. 1,250,000

b. 1,500,000

c. 1,666,667

d. 1,800,000

Answer rating: 100% (QA)

The detailed answer for the above question is provided below For question 1 To find the deductible t... View the full answer