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Chapter 13 Principles of Deductions 4
Chapter 13 Principles of Deductions 4
o Gains realized between related parties are taxable, but losses are
non-deductible.
c. Income distribution by
o Under the new rule established by RR6-2018, the BIR held that
expenses w be deductible even if the withholding tax, surcharge
including interest of such withholding is paid at the time of audit
investigation or reinvestigation. This reversal of the previous
rule that no deduction is allowed even if the withholding tax and
penalties is subsequent paid.
o For income payments exempt from withholding tax such as salary
payments minimum wage earners, the taxpayer must comply
with certain document requirements of the BIR.
1. Surcharge
2. Interest
3. Compromise Penalty
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NON-DEDUCTIBLE EXPENSES