Practice question
A taxpayer has ordinary income subject to regular income tax and a separate item stipulated to be fully and correctly subjected to final tax. The taxpayer proposes crediting that final tax against the regular tax as though it were expanded creditable withholding, while leaving the final-taxed item under its separate regime. No provision authorizes the proposed cross-credit. Is this proper?
- No; the final tax on the separately taxed income is not automatically a credit against unrelated regular income tax
- Yes, every withholding is freely transferable to every tax
- Yes, final means refundable on demand
- Yes, provided the taxpayer calls it an expense
- No, because creditable withholding itself is always prohibited
Legal references
- NIRC Sections57–58, as amended by RA11976: https://elibrary.judiciary.gov.ph/thebookshelf/showdocs/2/96948
- PSE v. Secretary of Finance, GR213860, July5 2022, main decision: https://lawphil.net/judjuris/juri2022/jul2022/gr_213860_2022.html
- CIR v. COMELEC, GR244155 and247508, May11 2021, main decision: https://lawphil.net/judjuris/juri2021/may2021/gr_244155_2021.html
- CIR v. G&W Architects, GR246026, April21 2026, main decision: https://elibrary.judiciary.gov.ph/thebookshelf/showdocs/1/70567
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