11. 12. 13. 14. 15. 16. 1?. 13. 19. 22. 21- 22. 23. 2*- 25. 2B. 2?. The share from the net income of a joint venture organized abroad is subject to 19% final withholding tax. Income distribution from taxable estates and trusts is an inclusion in gross income subject to regular tax by the heir or beneficiary. The recovery of past deduction must be reverted back to gross income of taxpayers using the cash basis. The recovery of bad debts need not be reverted back to gross income of taxpayers using cash basis. The recovery of deduction from an exempt year is subject to tax. General professional partnerships are not exempt from regular tax but are subject to final tax and capital gains tax. An indebtedness cancelled by the creditor out of mercy is an income to the debton When there is a net loss in the period the deduction is takenr the subsequent recovery of the deduction will not have any tax benefit. The refund or recovery of non-deductible taxes shall not be reverted back to gross income- The loss of the partnership can be claimed by the partners as deduction in their income tax return, The accounting period of the taxpayer has a direct impact upon the amount of gross income to be reported. The power of the CIR to redistribute income and expense includes the power to impute income between affiliated enterprises. The situs of taxation has an impact on the extent of the reportable gross income. Creditable withholding taxes are added back to the amount of reportable gross income. The output VAT must be included as part of the gross income of VHT taxpayers. The requirement to revert back to gross income the amount of withheld taxes applied only to VAT taxpayers. Generally, all times of income NHA-HETE and HRFCs from the Philippines are inclusions in gross income subject to final tax. The taxpayer must enter into an advanced pricing agreement with the BIR for its cross-border transfer pricing with associated enterprises. Transfer pricing between associated enterprises must be made at arWs length- The transfer pricing regulations apply only to cross-border transfers of goods and services between associated enterprises. Corporations under the direct and indirect control of the same controlling individual or corporation are associated enterprises. Under the accrual basis of accounting, items of gross income are reported in the period they are received. Basically, transfer pricing adjustment is needed when the income reported for Philippine taxation is understated