From sales to taxable income

3 quick questions. Pick an answer to see why.

1. A quarter's sales are ₱1,200,000 before VAT, cost of sales ₱600,000 and expenses ₱438,000. What's the net taxable income?

₱162,000 ₱600,000 ₱1,200,000

Sales − cost of sales − expenses: ₱1,200,000 − ₱600,000 − ₱438,000 = ₱162,000. Income tax is on that, not on sales.

2. Rent is ₱30,000 a month. Carla pays the landlord ₱28,500 and sends ₱1,500 to BIR as expanded withholding. How much rent does she deduct for the month?

₱28,500 ₱30,000 ₱1,500

The expense is the full rent. The ₱1,500 is part of it, paid to BIR on the landlord's behalf.

3. Shopee withheld ₱6,000 from Kuting Kitchen's payouts this quarter. Where does it go?

It's an expense, deducted from income It comes off the income tax due, as a credit It's ignored

Marketplace withholding is income tax paid in advance, backed by the platform's 2307. It reduces the tax, not the taxable income.

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