ForeignCorp is a Country Y corporation that is not a bank; and is engaged in a USTB. The interest expense that is allocated to the ECI of ForeignCorp's USTB totals $25,000 in 2023, as determined under Reg. § 1.882-5. Of that amount, $18,000 is "branch interest," which is paid by the U.S. branch to Matthews, an unrelated Country Y nonresident alien. No tax treaty applies. Is the $18,000 of branch interest paid to Matthews portfolio income?
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- The following are the revenue items in the Income Statement of a domestic corporation for the year 2021:Interest income from bank deposit, Philippines, P40,000Yield from deposit substitute, Philippines, P80,000Interest income received from a depositary bank under EFCDS, Philippines, P60,000Interest income from bank deposit, USA, P400,000Interest on trade notes receivable, Philippines, P30,000Advance rent for 2 years, Philippines, P600,000Royalties, Philippines, P100,000Royalties, USA, P300,000Dividend received from domestic corporation, P150,000Dividend received from a foreign corporation, P350,000Prizes and winnings, Philippines, P400,000Refund of Philippine value-added tax, P100,000How much is the total final withholding taxes on passive income?Chapeau Company, a U.S. corporation, operates through a branch in Champagnia. The source rules used by Champagnia are identical to those used by the United States. For 2022, Chapeau has $9,600 of gross income: $5,760 from U.S. sources and $3,840 from sources within Champagnia. The $5,760 of U.S. source income and $3,360 of the foreign source income are attributable to manufacturing activities in Champagnia (foreign branch income). The remaining $480 of foreign source income is passive category interest income. Chapeau had $2,400 of expenses other than taxes, all of which are allocated directly to manufacturing income ($960 of which is apportioned to foreign sources). Chapeau paid $568 of income taxes to Champagnia on its manufacturing income. The interest income was subject to a 10 percent withholding tax of $48. Compute Chapeau's total allowable foreign tax credit in 2022. Note: Do not round any division. Round other intermediate computations to the nearest whole dollar amount. Total…Which statement is FALSE? * Interest income earned by a depositary bank under the Expanded Foreign Currency Deposit System from residents is subject to 10% final income tax. A PEZA-registered enterprise is non-taxable on its related activities. The income of an Offshore Banking Unit from forex transactions in the country is subject to regular income tax. None of the above All of the above
- Which of the following is true? A. Long term interest earned by a resident foreign corporation on its deposits in banks in the Philippines shall be subject to a 20% final tax. B. Long term interest earned by a resident foreign corporation on its deposits in banks in the Philippines shall be exempt from income tax. C. Long term interest earned by a resident foreign corporation on its deposits in banks in the Philippines shall be subject to regular income tax. D. None of the above. E. Individual and Corporate taxpayers must declare their intention to avail of the OSD in their annual income tax Return. F. The option to avail of the OSD shall be irrevocable for the whole taxable year. G. The option to avail of the OSD is applicable to taxpayers subject to regular income tax on their net income4) Brief, Inc., had a receivable from a foreign customer that is payable in the customer’s local currency. On December 31, 2020, Brief correctly included this receivable for 200,000 local currency units (LCU) in its balance sheet at $110,000. When Brief collected the receivable on February 15, 2021, the U.S. dollar equivalent was $120,000. In Brief’s 2021 consolidated income statement, how much should it report as a foreign exchange gain? a) $–0– b)$10,000 c) $15,000 d) $25,0007. An offshore banking unit had the following offshore banking transactions within the Philippines during the taxable quarter ending Sep. 30, 2021: Income With local commercial banks With domestic corporations With other offshore banking units With nonresidents 1,950,000 If the offshore banking unit can claim allowable deduction of P 2,830,000, how much is the offshore banking unit's income tax due? 2,280,000 912,000 1,200,000 3,400,000 4,700,000 O2,736,000 2,650,000
- An offshore banking unit had the following offshore banking transactions within the Philippines during the taxable quarter ending September 30, 2021:With local commercial banks- P3,850,000With domestic corporations - P3,400,000With other offshore banking units- P4,700,000If the offshore banking unit can claim allowable deduction of P2,830,000, how much is the offshore banking unit’s income tax due?1. On November 1, 2020, an entity acquired on account goods from a foreign supplier at a cost of $3,000. The accounts payable are paid on January 30, 2021. On December 1, 2020, an entity sold on account goods to a foreign customer at a selling price of $2,500. The accounts receivable is collected on February 28, 2021. The entity is operating in Philippine economy wherein the functional currency is the Philippine Peso. The following exchange rates are provided Buying spot rate Selling spot rate November 1, 2020 P40 P42 December 1, 2020 39 40 December 31, 45 45.5 2020 January 30, 2021 45.5 46 February 28, 2021 46 46.5 What is the carrying amount of monetary asset on December 31, 2020?XYZ Corp, has carried out transactions denominated in foreign currency during the financial year ended 31 October 2019 and has conducted foreign operations through a foreign entity. Its functional and presentation currency is the US dollar. XYZ purchased inventory from a foreign supplier for Euros 8 million on 31 July 2019, the trade payable was still outstanding and the inventory were still held by XYZ Corp. XYZ Corp sold its products to a foreign customer for Euros 4 million on 31 July 2019 and received payment for the products in euros on 31 October 2019. Additionally, XYZ Corp purchase investment property on 1 November 2018 for Euros 28 million. At 31 October 2019, the investment property had a fair value of Euros 24 million. The company uses the fair value model in accounting for its investment properties. XYZ would like advice on how to treat this transactions in the financial statement for the year ended 31 October 2019. Exchange rates Date Euro:$ Average Rate for Year to…
- Brief, Inc., had a receivable from a foreign customer that is payable in the customer's local currency. On December 31, 2020, Brief correctly included this receivable for 377,500 local currency units (LCU) in its balance sheet at $290,000. When Brief collected the receivable on February 15, 2021, the U.S. dollar equivalent was $301,200. In Brief's 2021 consolidated income statement, how much should it report as a foreign exchange gain? Multiple Choice $16,200 $27,400 $0 $11,200The Isle of Palms Company (IOP), a U.S.-based entity, has a wholly owned subsidiary in Israel that has been determined as having the Israeli shekel (ILS) as its functional currency. On October 1, 2019, the Israeli subsidiary borrowed 500,000 Swiss francs (CHF) from a bank in Geneva for two years at an interest rate of 5 percent per year. The note payable and accrued interest are payable at the date of maturity. On December 31, 2020, the Israeli subsidiary has the following foreign currency balances on its books: Interest expense CHF 25,000 Interest payable CHF 31,250 Note payable CHF 500,000 Relevant exchange rates between the Israeli shekel (ILS) and Swiss franc (CHF), and between the U.S. dollar (USD) and Israeli shekel (ILS) follow: ILS per CHF USD per ILS October 1, 2019 3.86 0.30 January 1, 2020 3.91 0.29 Average for 2020 3.95 0.27 December 31, 2020 4.02 0.25 Determine the Israeli shekel amounts at which the Swiss franc balances…If the nation in which the nonresident foreign corporation is domiciled permits a credit for taxes presumed paid in the Netherlands equivalent to 15%, dividend received from a domestic corporation by a nonresident foreign corporation shall be subject to a final tax of 15%.