Practice question
An eligible corporation validly elects maximum OSD. Its stipulated Section 32 gross income isP 3,000,000 and gross sales areP 5,000,000. What is its OSD?
- P 2,000,000 because sales always govern
- P 3,000,000 because gross income is entirely deductible
- P 1,200,000 based on gross income
- P 800,000 based on the difference between sales and income
- P 0 because corporations cannot elect OSD
Legal references
- NIRC Section34(L), as amended by RA10963: https://elibrary.judiciary.gov.ph/thebookshelf/showdocs/2/80559
- RA9504, Section3: https://lawphil.net/statutes/repacts/ra2008/ra_9504_2008.html
- RR16-2008, Sections3–4 (individual and corporate OSD bases): https://elibrary.judiciary.gov.ph/thebookshelf/showdocs/10/43850
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