Taxation
Taxation is a practice which the government is collecting money from its resident based on their income and to allocate it to government cost for its public services. As a resident of the Philippines, you are obligated to pay taxes in your country. However, it will be confusing on your part which taxes will you pay if you’re in a foreign country but a citizen of the Philippines. This is where Situs of taxation will take effect.
What is Situs of Taxation?
Basically, situs is the place of taxation. This helps the government agencies to classify needed actions and determine whether or not your income, property or any source will be taxable here in the Philippines. Basically, the state where the taxable individual has a situs have the power to levy taxes.
If you’ve gained income tax or any taxable sources within the Philippines the state have the right to collect tax either you are a resident or non-resident, citizen or non-citizen as long as you’re in the taxing jurisdiction.
The following are examples of Situs of Taxation:
Business Tax Situs
The place where the business is conducted is the place where it should be subject to tax. For example, if Marie's business is located in Marikina then, the situs of taxation will be in Marikina.
Income Tax Situs on Services
Service fees are subject to tax where they are rendered.
Income Tax Situs on Sale of Goods
The gain on sale is subject to tax in the place of sale.
Property Tax Situs
Properties are taxable in their location.
Personal Tax Situs
Persons are taxable in their place of business.
Reference: Income Taxation(2020 Edition)- Enrico Tabag CPA, MBA & Earl Jimson Garcia CPA, MBA
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