Practice question
Why does describing creditable withholding as an advance collection mechanism matter when identifying the income being taxed?
- The underlying income tax remains the recipient’s tax; collection at source does not create a separate kind of income
- Withholding converts every payment into tax-exempt income
- The recipient ceases to have income
- The payment becomes government income before it is earned
- The payor becomes the beneficial owner of the recipient’s earnings
Legal references
- CIR v COMELEC, G.R. Nos.244155 and247508, May11,2021 MAIN: https://lawphil.net/judjuris/juri2021/may2021/gr_244155_2021.html MAIN discussion of advance collection and the withholding-agent distinction.
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