Since 1977

TAX TABAG
First Preboard Set A October 2019

1. Gross receipts for amusement tax shall include all the 7. The following are exempt from the VAT, except.
following except one. Which one is it? a. Sale of 1 sack of rice. c. Sale of pet food
a. Income from television, radio and motion picture b. Sale of lechon manok d. Sale of newspaper
rights;
b. Income from sales of tickets; 8. In every case of doubt, laws granting tax exemption
c. Income from sales of food and refreshments within shall be construed.
the amusement place. a. Strictly against the government and the taxpayer.
d. Income from sales of food and refreshments b. Liberally in favor of the government and the
outside the amusement place. taxpayer.
c. Strictly against the government and liberally in
2. Which of the following statements is not correct? favor of the taxpayer.
a. Without a business pursued in the Philippines d. Liberally in favor of the government and strictly
(except importation) by the taxpayer, value added against the taxpayer.
tax cannot be imposed.
b. “In the course of trade or business” means the 9. Which of the following restrictions on the power of
regular conduct or pursuit of a commercial or an
taxation recognizes that the country’s tax laws shall
economic activity, including transactions incidental
thereto, by any person regardless of whether or not be applied to the property of foreign government?
not the person engaged therein is a non-stock, a. Doctrine of international comity
non-profit private organization or government b. Taxation is inherently a legislative function
entity. c. Due process of law
c. Services rendered in the Philippines by a non- d. Equal protection of law
resident foreign person shall be considered as
being rendered in the course of trade or business 10. One of the following does not result to output tax:
even if the performance is not regular. a. Domestic sale of goods;
d. None of the above b. Cash receipt on sale of services rendered in the
Philippines
3. Which of the following shall be subject to vat? c. Export sale of goods;
I. Any person who exchanges or leases goods or d. Cash receipt on sale of services rendered outside
properties in the ordinary course of trade or of the Philippines.
business.
II. Any person who renders service in the ordinary 11. The Value-added tax is not an/a:
course of trade or business. a. Direct tax c. excise tax
III. Any person who imports goods. b. Indirect tax d. ad-valorem tax
IV. Any person who transfers real property classified
as capital asset for insufficient consideration. 12. Rosauro is a Certified Public Accountant (CPA) who is
a. I and II only c. I, II and III only currently employed as the Chief Financial Officer (CFO)
b. I, III and IV only d. All of the above of a large conglomerate. He regularly earns a total
salary of Php11, 990,000 from his employment. In
4. Fortune Corporation, importer and exclusive Philippine addition, he earns professional fees of Php250,000
distributor of Fortune cigarettes from Brazil. Fortune from his personal clients. Considering the foregoing, he
Corporation is subject to the business tax of: regularly receives an amount totaling to
I. Excise tax Php12,240,000 annually.
II. Value added tax The business tax liability of Rosauro shall be:
III. Other Percentage tax a. 3% Other Percentage Tax
a. II only c. I and III only b. b. 12% VAT
b. I and II only d. I, II and III c. c. Excise tax
d. d. Amusement tax
5. LJ, Incorporated is one of the dealers of Fortune
cigarettes in the National Capital Region. LJ is subject 13. Which statement is correct?
to business tax of a. Zero rated sale and effectively zero rated sales are
I. Excise tax the same.
II. Value added tax b. A person whose sales or receipts do not exceed
III. Other Percentage tax Php3,000,000 is exempt from VAT and OPT.
a. II only c. I and III only
c. A person who issues a VAT invoice being non-vat
b. I and II only d. I, II and III
registered is nevertheless subject to VAT on the
6. In the case of importation of goods, who shall be liable said transaction.
to vat? d. Entity which are exempt from income tax are also
a. Importer, whether an individual or corporation, exempt from VAT.
and whether or not made in the course of his trade
or business. 14. Three of the following are subject to the value-added
b. Importer, only if made in the course of trade or tax. Which is the exception?
business. a. Sales or importation of pet foods.
c. Both “a” and “b” b. Sale by a non- VAT registered person who issued a
d. Neither “a” nor “b” VAT receipt thereon.

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c. Receipts from leasing of residential units with a 22. Statement 1: If the VAT is not billed separately, the
monthly rental of P15,000 per unit. Whereby the VAT shall be determined by multiplying the gross
lessor has 50 units for lease. selling price including the amount intended to cover
d. Importations by persons who are not VAT the tax by the factor 12/112.
registered. Statement 2: If the VAT is billed erroneously, the VAT
shall be determined by multiplying the gross selling
15. Felix Buck, at his residence, regularly sells wines, price including the tax billed erroneously by the factor
whiskies and cigarettes which he has imported from 12/112.
Russia. He is liable for the payment of the following a. True; True c. False; False
taxes: b. True; False d. False; True
a. Excise tax, VAT and OPT.
b. Excise tax, VAT and income tax. 23. Salipawpaw Airlines , a domestic corporation plying
c. VAT, OPT and income tax. domestic routes, had the following gross receipts
d. Excise tax, income tax and amusement tax. (exclusive of tax) for the month ended April 2018:
Carriage of Passenger P4,500,000; Carriage of
16. Statement 1: Banks are subject to the VAT on its CargoP7,000,000. The business tax for the month
interest income. ended April 2018 is:
Statement 2: Resident international carriers are a. P1,380,000 c. P0
subject to the 0% VAT on its gross Philippine billings b. P345,000 d. P135,000
on flight originating from the Philippines to a foreign
destination. 24. Based on the immediately preceding number,
a. Both statements are correct. assuming Salipawpaw’s gross receipts came from
b. Both statements are incorrect. international flights. The business tax for the month of
c. Only the first statement is correct. April 2012 is:
d. Only the second statement is correct. a. P1,380,000 c. P0
b. P345,000 d. P135,000
17. 1st Statement - In case of VAT exempt goods sold
locally to a VAT registered customer, the VAT due on 25. The following are subject to the VAT, except:
such product shall be allowed as input VAT creditable a. Sale of electricity;
against output VAT of the said customer. b. Sale of Petroleum products
2nd Statement – Export sale by a VAT registered c. Sale of rice
person shall be subjected to the 0% VAT. On the other d. Sale of dog food
hand, export sale by a non-VAT registered person shall
be VAT exempt and subject to the 3% other 26. The following transactions are transactions exempt
percentage tax. from the VAT, except:
a. True, True c. False, False a. Sale of Philippine Daily Inquirer
b. False, True; d. True, False b. Medical service rendered by a doctor;
c. Service rendered under an employer-employee
18. Aileen, a VAT registered person, bought garments from
relationship;
CUA Corp., likewise a VAT registered person. She
bought the goods from CUA Corp at Php90,000 and d. Sale of 1 sack of rice
she was able to export the said goods at a sale price of
Php100,000. Both amounts given are exclusive of the 27. The following transactions are subject to the Value-
VAT. The output VAT on Aileen’s export sale is: added tax, except:
a. Php1,200 a. Domestic carrier by land with respect to their gross
b. Php12,000 receipts from the transport of passengers .
c. Php0, because it is subject to 0% VAT; b. Domestic carrier by air and sea on their gross
d. Php0, because exempt. receipt from their transport of passengers from
one place in the Philippines to another place in the
19. Statement 1: All taxpayers who are exempt from the Philippines.
VAT are required to pay 3% percentage tax c. Domestic carrier by air and sea on their gross
Statement 2. Sale of life insurance by a person who is receipt from their transport of passengers from
VAT registered is subject to the VAT. one place in the Philippines to another place
a. True, true c. False, true outside of the Philippines.
b. True, false d. False, False d. Domestic carrier by land with respect to their gross
receipts from the transport of cargoes and goods.
20. Queenie Ripot operates a sari-sari store whose annual
gross receipts is P2,500,000. She opted not to register 28. The sale of the following real properties are exempt
under the VAT system: from the VAT except:
Statement 1: Her sales are subject to the 12% output a. Residential lot, held for sale in the ordinary course
VAT. of business, sold for P1,000,000
Statement 2: She can claim input VAT credit arising b. Residential house and lot, held for sale in the
from her purchases from VAT suppliers. ordinary course of trade, sold for P2,500,000
a. True, True; c. False, False; c. Sale of real property used in the ordinary course of
b. True, False; d. False, True business.
d. Sale of real property not primarily held for sale in
21. Ram is a professional entertainer who frequents town the ordinary course of business.
fiestas throughout the Philippines as his usual gig. His
annual gross receipts never exceeded Php3,000,000. 29. Frostee Night Club and Videoke operates daily, from
He is liable to pay the following taxes. 1. Income Tax dusk till dawn. It had the following gross receipts for
2. 3% Other percentage Tax 3. 12% VAT the 1st quarter of 2019: Cover Charge P100,000; Food
a. 1 only c. 1, 2 and 3 and drinks P750,000; Bar Fines P800,000. The
b. 1 and 2 d. 1 and 3 business tax payable is:

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EXCEL PROFESSIONAL SERVICES, INC.

a.P49,500 c. P198,000 38. If the decedent is married under the conjugal

b. P297,000 d. P495,000 partnership of gains, vanishing deduction shall be
chargeable against?
30. Based on the immediately preceding number, Frostee a. Exclusive Properties
Night Club opted to register under the VAT system. b. Conjugal Properties
The business tax payable is: c. Either Exclusive Properties or Conjugal Properties
a.P49,500 c. P198,000 d. Neither Exclusive nor Conjugal Properties
b. P297,000 d. 495,000
The next four (4) questions are based on the data
31. Sebastian Vettel, a professional race car driver, sold provided below:
1,000 shares of stocks of ABA Rice Mill Inc., a Mr. J. Chavez died leaving the following properties:
domestic corporation, to his teammate Kimi for Rest house in Cebu, acquired before
P85,000. The stocks had a cost to him of P100,000. marriage 6,000,000
The tax on this transaction shall be. Income from rest house in Cebu 600,000
a. P0 c. P425 Condominium in Davao, brought to
b. P600 d. P10,200 marriage by wife 3,600,000
Income from condominium in Davao 360,000
32. Based on the immediately preceding number, Town house in Quezon City, acquired
assuming Sebastian Vettel sold the shares of stocks during marriage 10,500,000
through the Philippine Stock Exchange. The tax on the Income from town house in Quezon
transaction is: City 1,050,000
a. P0 c. P425 Car, inherited by wife during marriage
b. P510 d. P10,200 (the decedent provided in his Will
that it shall form part of the common
33. Amounts received for overseas dispatch, message, or properties of the spouses) 1,300,000
conversation originating from the Philippines are Jewelry, acquired during marriage for
subject to: exclusive use of the wife 200,000
a. 3% franchise tax.
b. 10% overseas communication tax. 39. How much is the conjugal properties under Conjugal
c. 2% franchise tax. Partnership of Gains?
d. 12% value-added tax. a. P12,510,000 c. P18,510,000
b. P22,310,000 d. P23,610,000
34. The following sale of services are not exempt from the
VAT, except: 40. How much is the gross estate under Conjugal
a. Services of banks, non-bank financial Partnership of Gains?
intermediaries performing quasi-banking functions, a. P12,510,000 c. P18,510,000
and other non-bank financial intermediaries. b. P22,310,000 d. P23,610,000
b. Services rendered by doctors of medicine duly
registered with the professional Regulatory 41. How much is the community properties under Absolute
Commission. Community of Property?
c. Services rendered by lawyers duly registered with a. P12,510,000 c. P18,510,000
the Integrated Bar of the Philippines. b. P22,310,000 d. P23,610,000
d. Foreign artist performing in a one night concert in
the Philippines. 42. How much is the gross estate under Absolute
Community of Properties?
35. Statement 1: In the absence of marriage settlements a. P12,510,000 c. P18,510,000
executed before the marriage, the property b. P22,310,000 d. P23,610,000
relationship between husband and wife shall be
governed by local custom and by the provisions of 43. Statement 1: The right to succession is effected at the
law, respectively. time of transfer of the decedent’s property or rights to
Statement 2: Claims against insolvent persons may be the heir.
charged against exclusive property Statement 2: Ana is the surviving spouse of Jose. Her
a. Only statement 1 is correct share in their community property is classified as her
b. Only statement 2 is correct exclusive property and shall form part of the
c. Both statements are correct decedent’s distributable estate.
d. Both statements are incorrect a. Only statement 1 is correct
b. Only statement 2 is correct
36. One of the following is a conjugal property of the c. Both statements are correct
spouses
d. Both statements are incorrect
a. That which is brought to the marriage as his or her
own
b. That which each acquires during the marriage by The next eight (8) questions are based on the following
inheritance data:
c. The fruits of an exclusive property On February 25, 2017, Mr. and Mrs. Salomon donated
d. That which is purchased with the exclusive their conjugal land worth P500,000 to their three sons,
property of the wife on account of marriage to one of them who got
married 5 months ago.
37. One of the following is not a community property of
the spouses On June 9, 2017, they also donated to the child of Mrs.
a. Property inherited by the husband before marriage Salomon by first marriage, jewelry worth P75,000 on
b. Winnings in gambling account of marriage more than a month after the
c. Fruits of property inherited during the marriage donation.
d. Fruits of property inherited before the marriage

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Finally on December 25, 2017, they donated to the 54. Which of the following is not subject to the 10% tax on
nephew of Mr. Salomon a building worth P750,000, 40% winnings?
of which was co-owned by their Kumpare who agreed to a. Winnings in horse races
the donation and executed the necessary documents b. Prize received by an owner of winning race horses
donating his share. c. Winnings from double, forecast/quinella and trifecta
44. The donor’s tax due on the February 25, 2017 donation bets
should be: d. None of the choices
a. P14, 000 for Mr. & Mrs.
b. P3, 600 each for Mr. & Mrs. 55. Which of the following is not subject to the 3% common
c. P4, 000 each for Mr. & Mrs. carrier’s tax?
d. P5, 750 each for Mr. & Mrs. a. Cars for rent or hire driven by the lessee
b. Transportation contractors, including persons who
45. The donor’s tax due on the February 25 assuming the transport passengers for hire
calendar year is 2018: c. Domestic carriers by air for the transport of
a. P14,000 for Mr. & Mrs. passengers
b. P3, 600 each for Mr. & Mrs. d. Domestic carriers by land for the transport of
c. P4, 000 each for Mr. & Mrs. passengers
d. P0 for each spouse
56. What is percentage tax?
46. The donor’s tax due on the June 9, 2017 donation is:
a. Tax imposed on person or business whose annual
a. Mr. – P0; Mrs. – P1, 875
sales or receipts do not exceed P3,000,000 per year.
b. Mr. – P11,250; Mrs. – P4,700
b. Inherent power of the state to extract a proportional
c. Mr. – P11,250; Mrs. – P1,100
enforced contribution.
d. Mr. – P11,250; Mrs. – P1,875
c. Tax imposed for special purposes.
47. The donor’s tax due on the June 9 assuming the calendar d. Tax imposed upon persons liable to pay directly or
year is 2018: bound to pay the tax.
a. Mr. – P2,250 for each spouse
b. Mr. – P11,250; Mrs. – P4,700 57. Which of the following franchise grantees is subject to the
c. Mr. – P11,250; Mrs. – P1,100 franchise tax?
d. Mr. – P11,250; Mrs. – P1,875 a. Franchise on radio and/or television broadcasting
companies the annual gross receipts in the preceding
48. The donor’s tax due on the December 25, 2017 for Mr. & year exceed P10,000,000.
Mrs. are: b. Franchise on gas and water utilities.
a. Mr. – P9, 875; Mrs. – P13, 500 c. Franchise on toll road operations.
b. Mr. – P67, 500; Mrs. – P67, 500 d. PAGCOR and its licensees and franchisees.
c. Mr. – P9, 000; Mrs. – P13, 500
d. Mr. – P9, 000; Mrs. – P67, 500 58. Which of the following statements is wrong? Where a
taxpayer’s gross receipts in a twelve-month period does
49. The donor’s tax due on the December 25 assuming the not exceed P100,000
calendar year is 2018: a. He is not required to register his business name with
a. Mr. – P9, 875; Mrs. – P13, 500 the Bureau of Internal Revenue.
b. Mr. – P67, 500; Mrs. – P67, 500 b. He is not subject to value-added tax.
c. Mr. – P13,500; Mrs. – P13, 500 c. He is not subject to the percentage tax.
d. Mr. – P9, 000; Mrs. – P67, 500 d. He is not subject to any internal business tax.

50. The donor’s tax due for their Kumpare on December 25, 59. Which of the following is subject to the 0% gross receipt
2017 is: tax?
a. P90,000 c. P0 a. Gross receipt on interest, commissions and discounts
b. P6,000 d. P30,000 from lending activities and income from financial
leasing.
51. The donor’s tax due for their Kumpare on December 25 b. Dividends and equity shares in net income of
assuming the taxable year is 2018 is: subsidiaries.
a. P90,000 c. P0 c. Royalties, rentals of property, real or personal, profits
b. P18,000 d. P3,000 from exchange and all other items treated as gross
income in the tax code.
52. Statement 1: A donation can be both a part of the gross d. Net trading gains with the taxable year on foreign
gift of the donor and a taxable income to the donee. currency, debt securities, derivative and other similar
Statement 2: A donation may be exempt from donor’s financial instruments.
tax but not necessarily a deduction from the donor’s gross
income. 60. A VAT taxpayer has the following data for a particular
a. Only statement 1 is true quarter during the current year:
b. Only statement 2 is true Sale of shares of stocks held as
c. Both statements are true inventory P1,000,000
d. Both statements are false Sale of shares of stocks held as
investment 500,000
53. Statement 1: If on any one date, there is a donation by Cost of the shares sold (shares held
one donor to his relative and another one to a stranger, as inventory) 300,000
there will be two (2) separate donor's tax return to be Cost of shares sold through local stock
filed. exchange
Statement 2: In donor's tax, no extension of time for (shares held as investment) 600,000
filling the donor's tax return is allowed. How much is stock transaction tax?
a. Statement 1 is correct, while Statement 2 is wrong a. P7,500 c. P1,500
b. Statement 1 is wrong, while Statement 2 is correct b. P3,000 d. P0
c. Bothe Statements are correct
d. Both Statements are wrong

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