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Financial Management and Tax Overview

The document provides an introduction to financial management including definitions from various sources. It discusses that financial management is the practice of handling a company's finances to allow it to be successful and compliant with regulations. It also discusses that financial management is a managerial activity concerned with planning and controlling a firm's financial resources. The document then provides details on the tax environment in the Philippines, outlining corporate income taxes, personal income taxes, and the applicable tax rates.

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168 views6 pages

Financial Management and Tax Overview

The document provides an introduction to financial management including definitions from various sources. It discusses that financial management is the practice of handling a company's finances to allow it to be successful and compliant with regulations. It also discusses that financial management is a managerial activity concerned with planning and controlling a firm's financial resources. The document then provides details on the tax environment in the Philippines, outlining corporate income taxes, personal income taxes, and the applicable tax rates.

Uploaded by

zci.edupgm
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd

Introduction to Financial

Management:

Tax Environment
Types of Business
What Is Financial
Management?
The practice of handling a company’s finances hence allowing it to be successful and in compliance with regulations.

A managerial activity that is concerned on the planning and controlling the firm’s financial resources.

“Financial management is concerned with the efficient use of an important economic resource, namely, capital
Solomon
funds.”

“Financial management is the operational activity of a business that is responsible for obtaining and effectively
J. L. Massie
utilizing the funds necessary for efficient operation.”

Weston & Brigham “Financial management is an area of financial decision making harmonizing individual motives & enterprise goals.”

Howard & Upton “Financial management is the application of the planning & control functions of the finance function.”

“Financial management is the area of business management devoted to the judicious use of capital & careful
J. F. Bradley
selection of sources of capital in order to enable a spending unit to move in the direction of reaching its goals.”
Tax Environment

Corporate Income Taxes Personal Income Taxes

 Also called “company tax” or “corporation


tax”.
 Taxes that are paid directly by businesses to
the government on their earnings.  Also called “individual income tax”.
 Applied to the following:  Taxes paid directly by individuals to the
 Corporations originated in the country government on their personal income
(small, medium, and large)
coming from monthly salaries and
 Corporations running a business inside the
country. wages.
 Those foreign enterprises that has  Applied to the following:
permanent establishment in the country.  Self-employed individuals
 Corporations that are residents for tax  Full-time employees
purposes inside the country
Tax Environment
Philippines Corporate - Taxes on corporate income

Income CIT rate (%)


In general, on net income from all sources. 25

On net income from all sources of domestic corporations with total assets not exceeding 100 million Philippine
20
pesos (PHP) and total net taxable income not exceeding PHP 5 million.

Minimum corporate income tax (MCIT) on gross income, beginning in the fourth taxable year following the year of
2 (1% from 1 July 2020 to 30 June
commencement of business operations. MCIT is imposed where the CIT at 25% is less than 2% MCIT on gross
2023)
income.

Proprietary educational institutions and hospitals that are non-profit, on net income if gross income from unrelated 10 (1% from 1 July 2020 to 30 June
trade, business, and other activities does not exceed 50% of the total gross income from all sources. 2023)

Non-stock, non-profit educational institutions (all assets and revenues used actually, directly, and exclusively for
Exempt
educational purposes) and other non-profit organizations.

Source: Philippines - Corporate - Taxes on corporate income ([Link])


Tax Environment
Philippines Individual - Taxes on personal income
Beginning 1 January 2023:

Taxable income (PHP) Tax on column 1 (PHP) Tax on excess (%)


Over Not over

0 250,000 - 0

250,000 400,000 - 15

400,000 800,000 22,500 20

800,000 2,000,000
102,500 25

2,000,000 8,000,000
402,500 30

8,000,000
2,202,500 35

Source: Philippines - Individual - Taxes on personal income ([Link])


Thank you!!!

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