Enabling Assessment: Fundamental Principles of Taxation

Question 1
 Substituted filing of income tax returns is a manifestation of which principle of a sound
tax system?
Response: Administrative Feasibility
Score: 2 out of 2 Yes

Question 2
 Eminent domain and police power:
Response: Both do not involve the taking of money.
Score: 2 out of 2 Yes

Question 3
 Which of the following doctrine or theory is called the "Doctrine of Symbiotic
Relationship"?
Response: Benefits-Received Theory
Score: 2 out of 2 Yes

Question 4
 The inherent powers of the government are primarily _____ in character.
Response: Legislative
Score: 2 out of 2 Yes

Question 5
 Which of the following inherent powers of the government has the most tangible
equivalent compensation?
Response: Eminent Domain
Score: 2 out of 2 Yes

Question 6
 All of the following are inherent powers of the government, except:
Response: Anti-Terrorism
Score: 2 out of 2 Yes

Question 7
 Tax evasion is:
Response: Also known as tax dodging, and is the illegal way of not paying taxes.
Score: 2 out of 2 Yes

Question 8
 Which of the following statements is true?
Response: There is imprisonment for non-payment of taxes, but there is no
imprisonment for non-payment of debt.
Score: 2 out of 2 Yes

Question 9
 Which stage of execution is being carried out by the Executive Department?
Response: Assessment/Collection
Score: 2 out of 2 Yes

Question 10
 The House of Representatives is composed of 300 district and party-list
representatives. 200 attended the session dated June 5, 2020. On that particular
session, House Bill No. 3902, which grants tax exemption for tall people, was voted
upon. Assuming that the exemption is provided, how many votes are required to pass
the bill?
Response: 151 votes
Score: 2 out of 2

Enabling Assessment: Taxation of Individuals

Question 1
 The graduated income tax rates for individuals shall apply to all of the following, except:
Response: Those who are allowed to avail the 8% flat rate of income tax.
Score: 2 out of 2 Yes

Question 2
 Which of the following is incorrect?
Response: A revocable trust is a taxable entity.
Score: 2 out of 2 Yes

Question 3
 Which of the following is incorrect on the classification of citizens under the Philippine
Constitution?
Response: Those born after January 17, 1973 of Filipino mothers who elected Filipino
citizenship upon reaching age of majority
Score: 2 out of 2 Yes
Question 4
 All of the following are included in compensation income, except:
Response: Business income
Score: 2 out of 2 Yes

Question 5
 A non-resident alien engaged in trade or business is taxable on his/her:
Response: Income within the Philippines
Score: 2 out of 2 Yes

Question 6
 Which of the following is incorrect about Optional Standard Deduction (OSD)?
Response: The purpose of the OSD is to make the BOC's audit a little less complex
since the it need not go through all the documents evidencing, and necessary to support
itemized deductions.
Score: 2 out of 2 Yes

Question 7
 Robert Downey, an American actor, was contracted by a Philippine television company
to do a project in the Philippines. He arrived in the country on January 4, 2021 and
returned to America four weeks later upon completion of the said project. What is
Robert Downey's classification?
Response: Non-resident alien not engaged in trade or business
Score: 2 out of 2 Yes

Question 8
 All of the following statements are correct, except:
Response: Active income generated without any active conduct.
Score: 2 out of 2 Yes

Question 9
 Which of the following is not an applicable rule with regard to the option to be taxed at
8% flat income tax rate?
Response: If the taxpayer is a mixed-income earner, i.e. he/she earns compensation
income too, the first P250,000 treated as non-taxable is applicable.
Score: 2 out of 2 Yes

Question 10
 Which of the following statements is correct?
Response: An alien who has acquired residence in the Philippines retains his status as
such until he abandons the same or actually departs from the Philippines.
Score: 2 out of 2

1st Midterm Summative Assessment

Question 1
 All of the following statements are true regarding the legislative branch of the
government, except:
Response: It is the branch of the government in charge with the collection of taxes.
Score: 2 out of 2 Yes

Question 2
 Which of the following entities will least likely exercise the power of eminent domain?
Response: Piston
Score: 2 out of 2 Yes

Question 3
 Which of the following inherent powers of the State is inferior to the constitutional right
of non-impairment of obligation of contracts?
Response: Taxation Power
Score: 2 out of 2 Yes

Question 4
 What is the primary purpose of taxation power?
Response: To raise revenues for the expenses fo the state
Score: 2 out of 2 Yes

Question 5
 What is the nature of tax laws?
Response: They are civil in nature
Score: 2 out of 2 Yes

Question 6
 When the House and Senate version of a tax bill has difference, who will reconcile the
differences?
Response: Through a Bicameral Conference Committee
Score: 2 out of 2 Yes
Question 7
 Which of the following constitutional rights is mainly violated by a tax law enacted for
whereby its proceeds will be used to rehabilitate a private corporation under financial
distress?
Response: Right to due process
Score: 2 out of 2 Yes

Question 8
 The Bureau of Internal Revenue is under the supervision of:
Response: Department of Finance.
Score: 2 out of 2 Yes

Question 9
 These are issuances that provide directives or instructions, prescribe guidelines and
outlines processes, operations, activities, workflows, methods and procedures
necessary in the implementation of stated policies, goals, objectives, plans and
programs of the BIR in all areas of operations, except auditing.
Response: Revenue Memorandum Orders
Score: 2 out of 2 Yes

Question 10
 In this type of tax, non-payment is constitutionally exempted from imprisonment.
Response: Poll tax
Score: 2 out of 2 Yes

Question 11
 Which of the following is classified as a local tax?
Response: Professional Tax
Score: 2 out of 2 Yes

Question 12
 Which refers to the government’s necessity for funding?
Response: Theory of taxation
Score: 2 out of 2 Yes

Question 13
 Section 244 of the Tax Code provides that the _____________ shall promulgate all
needful rules and regulations for the effective enforcement of the provisions of the Tax
Code.
Response: The Secretary of Finance, upon the recommendation of the Commissioner
of Internal Revenue.
Score: 2 out of 2 Yes

Question 14
 Which of the following is not an example of local tax?
Response: Documentary stamp tax
Score: 2 out of 2 Yes

Question 15
 This principle means that taxes are what we pay for a civilized society.
Response: Doctrine of symbiotic relationship
Score: 2 out of 2 Yes

Question 16
 Under the 1987 Philippine Constitution, which has the power to create its own sources
of revenues and to levy taxes, fees and charges subject to such guidelines and
limitations as the Congress may provide?
Response: Each local government unit
Score: 2 out of 2 Yes

Question 17
 The President of the Philippines and the Prime Minister of Canada entered into an
executive agreement in respect to credit facility to the Philippines from Canada. The
agreement stipulated that interest on loans granted by private Canadian financial
institutions in the Philippines shall not be subject to Philippine income taxes. Based on
the facts given, what basic characteristic of taxation has been violated?
Response: Legislative in character
Score: 2 out of 2 Yes

Question 18
 Which of the following is the effect of the principle of international comity in taxation?
Response: Foreign governments cannot collect taxes from the Philippine government
Score: 2 out of 2 Yes

Question 19
 What principle of taxation requires no arbitrariness in the assessment and collection of
taxes?
Response: Due process of law
Score: 2 out of 2 Yes

Question 20
 Who heads the Bureau of Internal Revenue?
Response: The Commissioner of Internal Revenue
Score: 2 out of 2 Yes

Question 21
 Which of the following real properties is subject to real property tax?
Response: Profit cemetery
Score: 2 out of 2 Yes

Question 22
 All of the following are major divisions of the BIR, except:
Response: Inventory Systems Group
Score: 2 out of 2 Yes

Question 23
 Which of the following statements is correct?
Response: An alien who has acquired residence in the Philippines retains his status as
such until he abandons the same or actually departs from the Philippines.
Score: 2 out of 2 Yes

Question 24
 Which government agency has the power to declare a tax law unconstitutional?
Response: Supreme Court
Score: 2 out of 2 Yes

Question 25
 A BIR Ruling may be classified as an _____________ of tax laws.
Response: Administrative interpretation
Score: 2 out of 2 Yes

Question 26
 Which of the following statements is not correct?
Response: The Senate can neither propose nor concur with amendments on revenue or
tariff bills.
Score: 2 out of 2 Yes
Question 27
 Which of the following statements is true?
Response: The BIR does not have a lawmaking power but is able to promulgate rules
within limits provided by law through Revenue Regulations.
Score: 2 out of 2 Yes

Question 28
 Which of the following statements is true?
Response: There is imprisonment for non-payment of taxes, but there is no
imprisonment for non-payment of debt.
Score: 2 out of 2 Yes

Question 29
 Which stage of taxation will the legislative department be involved with?
Response: Levy
Score: 2 out of 2 Yes

Question 30
 Taxes must be proportionate. This means that:
Response: The tax to be imposed must be based on the ability of the taxpayer to pay.
Score: 2 out of 2 Yes

Question 31
 Which of the following inherent limitations of the power of taxation violated by the
imposition of tax on the importation of the head of state and other diplomatic or consular
representatives of other countries?
Response: International comity
Score: 2 out of 2 Yes

Question 32
 What is the rationale behind the constitutionally delegated taxation power of local
government unit>
Response: To promote local autonomy
Score: 2 out of 2 Yes

Question 33
 Which of the following concepts is incorrect?
Response: Because of the extraterritorial taxation, resident citizens and domestic
corporations are not subjected to double taxation.
Score: 2 out of 2 Yes

Question 34
 Which of the following is incorrect on the classification of citizens under the Philippine
Constitution?
Response: Those born after January 17, 1973 of Filipino mothers who elected Filipino
citizenship upon reaching age of majority.
Score: 2 out of 2 Yes

Question 35
 Which of the following statements is not incorrect?
Response: Non-payment of additional community tax is a ground of imprisonment.
Score: 2 out of 2 Yes

Question 36
 Which of the following is considered not an item of gross income?
Response: Revenues of non-profit and stock educational institutions.
Score: 2 out of 2 Yes

Question 37
 Which of the following is a characteristic of tax?
Response: It is not subject to legal compensation
Score: 2 out of 2 Yes

Question 38
 Substituted filing of income tax returns is a manifestation of which principle of a sound
tax system?
Response: Administrative feasibility
Score: 2 out of 2 Yes

Question 39
 The House of Representatives is composed of 300 district and party-list
representatives. 200 attended the session dated June 5, 2020. On that particular
session, House Bill No. 1234, which grants tax exemption for workers with the age of 21
to 30 years old, was voted upon. Assuming that the said bill is in line with the provisions
of the Constitution, how many votes are required to pass the said bill in the House of
Representatives?
Response: 151 votes
Score: 2 out of 2 Yes
Question 40
 Which stage of taxation is being carried out by the Executive Department?
Response: Assessment
Score: 2 out of 2 Yes

Question 41
 Which of the following taxes is properly classified as indirect tax?
Response: Value added tax
Score: 2 out of 2 Yes

Question 42
 Withholding is:
Response: A method by which the government collect taxes in advance.
Score: 2 out of 2 Yes

Question 43
 Which of the following issuance is signed by the Secretary of Finance?
Response: Revenue Regulations
Score: 2 out of 2 Yes

Question 44
 Which of the following is not considered as an inherent limitation of taxation?
Response: Uniformity rule
Score: 2 out of 2 Yes

Question 45
 The Chinese government was able to earn income in its rental of spaces to businesses
in the Philippines. The BIR is now collecting the Chinese government of its deficiency
income taxes. What doctrine or principle should the Chinese government invoke or use
to avoid payment of taxes?
Response: International comity
Score: 2 out of 2 Yes

Question 46
 Also known as tax exemption, it is an escape from taxation when the law itself provides
for non-payment of taxes.
Response: Tax holiday
Score: 2 out of 2 Yes
Question 47
 Which of the following is considered as a constitutional limitation of taxation?
Response: Progressive system of taxation
Score: 2 out of 2 Yes

Question 48
 Who heads the Executive Department of the Government?
Response: The President
Score: 2 out of 2 Yes

Question 49
 Which of the following statement is incorrect?
Response: Police power is considered inferior to the non-impairment clause of the
Constitution.
Score: 2 out of 2 Yes

Question 50
 Which of the following is not a tax mechanism to minimize the impact of double
taxation?
Response: Tax levy
Score: 2 out of 2 

Enabling Assessment: Fringe Benefits Tax, De Minimis Benefits and

Taxation for Co-Ownerships, Est...
Question 1
 All of the following are elements of fringe benefits taxation, except:
Response: May arise out of an employer-employee relationship
Score: 2 out of 2 Yes

Question 2
 Any amount of de minimis benefits in excess of the threshold can still be exempt as
“other benefits,” together with the employees’ 13th month pay, but not to exceed
___________.
Response: P90,000
Score: 2 out of 2 Yes

Question 3
 All of the following are correct statements, except:
Response: Those estates not under judicial settlement shall be treated as a corporation
for tax purposes.
Score: 2 out of 2 Yes

Question 4
 It is the arrangement created by will or an arrangement under which title to property is
passed to another for consideration or investment with the income therefrom and
ultimately the corpus to be distributed in accordance with the directions of the creator as
expressed in the governing instrument.
Response: Trust
Score: 2 out of 2 Yes

Question 5
 The fringe benefit tax rate for a non-resident alien engaged in trade or business is:
Response: 35%
Score: 2 out of 2 Yes

Question 6
 Which of the following statements is not incorrect?
Response: In a co-ownership, the income of the property owned in common is divided
among the co-owners who shall then report in their respective tax returns their shares of
the income of the co-ownership.
Score: 2 out of 2 Yes

Question 7
 All of the following describes Fringe Benefits Taxation, except:
Response: De minimis benefits are subject to fringe benefits taxation if received by
managerial and supervisory employees.
Score: 2 out of 2 Yes

Question 8
 It is referred to as any goods, service or other benefits furnished or granted by an
employer in cash or in kind, in addition to basic salaries.
Response: Fringe benefit
Score: 2 out of 2 Yes

Question 9
 All of the following are parties to a trust agreement, except:
Response: Decedent
Score: 2 out of 2 Yes

Question 10
 All of the following correctly describes a de minimis benefit, except:
Response: Monetized value of vacation and sick leave credits paid to private officials
and employees.
Score: 2 out of 2

Enabling Assessment: Taxation of Partnerships and Corporations

Question 1
 It is defined as a commercial undertaking by two or more persons, differing from a
partnership in that it relates to the disposition of a single lot of goods or the completion
of a single project.
Response: Joint venture
Score: 2 out of 2 Yes

Question 2
 Which of the following is not incorrect with regard to the Regular Income Taxation?
Response: Regular Income Tax employs the self-assessment method.
Score: 2 out of 2 Yes

Question 3
 In general, which of the following is the tax base for regular income tax for corporate
taxpayers?
Response: Taxable Income
Score: 2 out of 2 Yes

Question 4
 Which of the following statements is incorrect?
Response: Sale of shares of stock of a domestic corporation not listed and not traded
through a local stock exchange, held as a capital asset is subject to 15% capital gains
tax on the corporation's gross capital gain.
Score: 2 out of 2 Yes

Question 5
 Which of the following incorrectly describes capital gains taxation?
Response: It is imposed on the gain realized on the sale, exchange and other
dispositions of all capital assets.
Score: 2 out of 2 Yes
Question 6
 Which of the following is incorrect regarding final income taxation?
Response: Characterized by final taxes wherein full taxes are withheld by the income
payee at source.
Score: 2 out of 2 Yes

Question 7
 All of the following are considered as a "corporation" for tax purposes, except:
Response: Professional partnership
Score: 2 out of 2 Yes

Question 8
 Which of the following is not a criterion for a corporation to enjoy the 20% regular
income tax rate?
Response: The corporation must be incorporated on July 1, 2020.
Score: 2 out of 2 Yes

Question 9
 All of the following are income taxation schemes, except:
Response: Income Taxation
Score: 2 out of 2 Yes

Question 10
 All of the following statements are correct, except:
Response: The tax base of a resident foreign income is its taxable income from sources
within and outside the Philippines.
Score: 2 out of 2 
Lesson: De Minimis Benefits

Benefits are defined as any perks offered to employees in addition to their salary.
Aside from the benefits commonly given (e.g. maternity leaves, 13th month pays, and
government contributions), there are others that voluntarily being provided by
employers, and these are called "De Minimis Benefits". These are benefits given by
the employer to the employees that are relatively small value in addition to their
regular compensation, but are NOT considered as taxable compensation for income
tax purposes nor subject to the fringe benefit tax. These benefits are intended for the
employees to recognize their efforts and improve worker retention across the
organization.

Below is the list of de minimis benefits with some items updated in amounts by
Revenue Regulations No. 11-2018 (RR 11-2018):

1. Monetized unused vacation leave credits of private employees not

exceeding 10 days during the year;
2. Monetized value of vacation and sick leave credits paid to government
officials and employees;
3. Medical cash allowance to dependents of employees, not exceeding P1,500
per employee per semester or P250 per month (as amended by RR 11-
2018);
4. Rice subsidy of P2,000 or one sack of 50-kg rice per month amounting to
not more than P2,000 (as amended by RR 11-2018);
5. Uniforms and clothing allowance not exceeding P6,000 per annum (as
amended by RR 11-2018)
6. Actual medical assistance, e.g., a therapeutic benefit to cover medical and
healthcare needs, annual medial/executive check-up, maternity assistance,
and routine consultations, not exceeding 10,000 per annum;
7. Laundry allowance not exceeding P300 per month;
8. Employees’ achievement awards, which must be in the form of tangible
personal property other than cash or gift certificates, with an annual
monetary value not exceeding P10,000 received by the employee under an
established written plan which does not discriminate in favor of highly paid
employees;
9. Gifts given during Christmas and major anniversary celebrations not
exceeding P5,000 per employee per annum;
10.Daily meal allowance for overtime work and night/graveyard shift not
exceeding 25% of the basic minimum wage; and
 11.Benefits received by an employee by virtue of a Collective Bargaining
Agreement (CBA) and productivity incentive schemes, provided the total
annual monetary value received from both CBA and productivity incentive
schemes combined do not exceed P10,000 per employee per taxable year.
Any amount of de minimis benefits in excess of the threshold can still be exempt as
“other benefits,” together with the employees’ 13th month pay, but not to exceed
P90,000.
.;
2nd Midterm Summative Assessment
Question 1
 All of the following are subject to corporate income tax, except:
Response: An accounting firm.
Score: 2 out of 2 Yes

Question 2
 Who has the liability to pay the income tax on the property owned by the decedent prior
to his death?
Response: Administrator or executor
Score: 0 out of 2 No

Question 3
 Subject to inherent and constitutional limitations, the following are the general
characteristics of power of taxation, except:
Response: Limited
Score: 2 out of 2 Yes

Question 4
 Statement 1: The chief officials of the BIR consist of 1 commissioner and 4 deputy
commissioners.
Statement 2: One of the powers of the BIR commissioner is to interpret the provisions of
the NIRC even without the review by the Secretary of Finance.
Response: Statement 1 is correct while statement 2 is incorrect.
Score: 2 out of 2 Yes

Question 5
 It pertains to all the property, rights and obligations of a deceased person, including
those that accrue since the opening of succession.
Response: Estate
Score: 2 out of 2 Yes

Question 6
 Based on the scheduled rate of individual income taxation, how much annual income is
exempted from income tax?
Response: P250,000
Score: 2 out of 2 Yes

Question 7
 An individual taxpayer provided the following information for taxable year 2021:

> Gross business income, Philippines - P5,000,000

> Gross business income, Canada - P2,000,000
> Gross business income, Singapore - P1,000,000
> Business expenses, Philippines - P3,000,000
> Business expenses, Canada - P1,000,000
> Business expenses, Singapore - P500,000

If the taxpayer is a resident citizen, how much is his taxable income?

Response: P3,500,000
Score: 2 out of 2 Yes

Question 8
 Peter Parker is a non-resident alien. He stayed in the Philippines for a period of 70
days from March 2021 to May 2021, went abroad, and returned to the Philippines for a
period of 120 days from August 2021 to December 2021. For tax purposes, is Peter
Parker considered as a non-resident alien engaged in trade or business?
Response: No, considering that his longest stay in the Philippines was only for a
continuous period of 120 days.
Score: 0 out of 2 No

Question 9
 It refers to a type of tax imposed on the privilege of a person.
Response: Excise tax
Score: 2 out of 2 Yes

Question 10
 Statement 1: The power to recommend the promulgation of rules and regulations to the
Secretary of Finance is one of the delegable powers of the Commissioner of Internal
Revenue.

Statement 2: Capital gains tax is imposed on the gain realized on the sale of certain
personal assets.
Response: Both statements are correct.
Score: 0 out of 2 No

Question 11
 Which individual taxpayer is taxable for his income from within and outside the
Philippines?
Response: Resident citizen
Score: 2 out of 2 Yes

Question 12
 Which of the following is not considered as an income taxation scheme under the Tax
Code?
Response: Gross Income Taxation
Score: 2 out of 2 Yes

Question 13
 These are defined as any perks offered to employees in addition to their salary.
Response: Benefits
Score: 2 out of 2 Yes

Question 14
 Which of the following is correct regarding the taxation of non-resident foreign
corporations?
Response: They are subject to the final tax of 25% based on gross income
Score: 0 out of 2 No

Question 15
 All of the following statements are correct, except:
Response: The mere sharing of gross returns establishes a partnership.
Score: 2 out of 2 Yes

Question 16
 Which fringe benefit may be subjected to fringe benefits tax?
Response: Fringe benefits in excess of de minimis fringe benefits given to supervisory
or managerial employees
Score: 2 out of 2 Yes

Question 17
 The reduced rate of 20% corporate income tax may apply to:
Response: Domestic corporations.
Score: 2 out of 2 Yes

Question 18
 Which of the following is a resident foreign corporation?
Response: Dhy Corporation, a foreign corporation with a branch in the Philippines.
Score: 2 out of 2 Yes

Question 19
 Under the CREATE Law, interest income from depository banks under the Foreign
Currency Deposit System earned by a resident foreign corporation is:
Response: Subject to final withholding tax of 15%.
Score: 2 out of 2 Yes

Question 20
 Which of the following is correct regarding the taxation of non-resident aliens not
engaged in trade or business?
Response: They are subject to the final tax of 25% based on gross income.
Score: 2 out of 2 Yes

Question 21
 Which of the following is not a requisite of a valid classification to justify a reasonable
discrimination?
Response: It must be applicable to present conditions only but not future ones.
Score: 2 out of 2 Yes

Question 22
 An individual taxpayer provided the following information for taxable year 2021:

> Gross business income, Philippines - P5,000,000

> Gross business income, Canada - P2,000,000
> Gross business income, Singapore - P1,000,000
> Business expenses, Philippines - P3,000,000
> Business expenses, Canada - P1,000,000
> Business expenses, Singapore - P500,000

If the taxpayer is a resident alien, how much is his taxable income?

Response: P2,000,000
Score: 2 out of 2 Yes

Question 23
 If a mixed income earner avails of the 8% income tax option, then:
Response: He is no longer entitled to any exemption.
Score: 0 out of 2 No

Question 24
 Which individual taxpayer is taxable for his income from within and outside the
Philippines?
Response: Resident citizen
Score: 2 out of 2 Yes

Question 25
 Which of the following is incorrect?
Response: If the trust is revocable, the income of the trust forms part of the taxable
income of the trustee.
Score: 2 out of 2 Yes

Question 26
 Which of the following types of income is no longer required to be reported in the
income tax return?
Response: Illegal income.
Score: 0 out of 2 No

Question 27
 Which corporation is taxable for its income from within and outside the Philippines?
Response: Domestic corporation
Score: 2 out of 2 Yes
Question 28
 All of the following are subject to regular income taxation, except:
Response: Fringe benefits received by a supervisory or managerial employee.
Score: 2 out of 2 Yes

Question 29
 All of the following are not parties to a trust agreement, except:
Response: Fiduciary.
Score: 2 out of 2 Yes

Question 30
 It is the arrangement created by will or an arrangement under which title to property is
passed to another for consideration or investment with the income therefrom and
ultimately the corpus to be distributed in accordance with the directions of the creator as
expressed in the governing instrument.
Response: Trust
Score: 2 out of 2 Yes

Question 31
 The income tax rates for individuals can be characterized as:
Response: Progressive
Score: 2 out of 2 Yes

Question 32
 Statement 1: Taxes can be subject to compensation because ultimately these are
obligations of the taxpayers to the government.

Statement 2: The Marshall Doctrine in taxation provides that the power to tax involves
the power to destroy.
Response: Statement 1 is incorrect while statement 2 is correct.
Score: 2 out of 2 Yes

Question 33
 Assume an employer furnished cash fringe benefit subject to fringe benefit tax
amounting to P975,000. What is the amount of fringe benefit tax?
Response: P525,000
Score: 2 out of 2 Yes

Question 34
 Which of the following statements is not incorrect?
Response: If what was given to the heir is not part of the income but part of the estate
itself, there is no deduction for the estate.
Score: 2 out of 2 Yes

Question 35
 Who among the following is not a Filipino citizen?
Response: Michelangelo, born on September 3, 1968. His father is Filipino, and his
mother is Indonesian. He did not elect Philippine citizenship upon reaching the age of
majority.
Score: 0 out of 2 No

Question 36
 Which of the following statements is correct?
Response: An example of ordinary asset is inventory.
Score: 2 out of 2 Yes

Question 37
 Statement 1: The power of eminent domain is superior to the non-impairment clause.

Statement 2: Police power is the most superior among all powers of the state.
Response: Both statements are correct.
Score: 2 out of 2 Yes

Question 38
 Which of the following is incorrect about de minimis benefits?
Response: De minimis benefits are required to be given under the law.
Score: 2 out of 2 Yes

Question 39
 Seamen are classified as:
Response: Non-resident citizen.
Score: 2 out of 2 Yes

Question 40
 Which of the following is not an example of local tax?
Response: Documentary stamp tax
Score: 2 out of 2 Yes
Question 41
 Statement 1: Territoriality rule is one of the inherent limitations of the power to tax.

Statement 2: Congress may authorize the President to fix, within specified limits, tariff
rates, import and export quotas, tonnage and wharfage dues, and other duties or
imposts within the framework of the national development program of the government.
Response: Both statements are correct.
Score: 2 out of 2 Yes

Question 42
 Which of the following is incorrect regarding a de minimis benefit?
Response: Monetized value of vacation and sick leave credits paid to private officials
and employees.
Score: 2 out of 2 Yes

Question 43
 Generally, which of the following types of income is subject to final withholding tax?
Response: Passive income
Score: 2 out of 2 Yes

Question 44
 Which of the following statements is incorrect?
Response: In final income taxation, it is the payee who required by law to remit the tax
to the government.
Score: 2 out of 2 Yes

Question 45
 Which of the following is not a tax mechanism to minimize the impact of double
taxation?
Response: Tax levy
Score: 2 out of 2 Yes

Question 46
 Mae, of Norwegian parentage, went to the Philippines for a short lecture series wherein
she lectured about how to avoid bullying. The lecture series lasted for four weeks.
Based on these facts, Mae is considered as a:
Response: Non-resident alien not engaged in trade or business
Score: 2 out of 2 Yes
Question 47
 The income and expenses of a Filipino citizen for 2021 were provided as follows:

Gross income in the Philippines (January to June) - P5,000,000

Allowable deductions in the Philippines (January to June) - P2,000,000
Gross income in Canada (January to June) - P2,000,000
Allowable deductions in Canada (January to June) - P1,000,000

Gross income in the Philippines (July to December) - P2,000,000

Allowable deductions in the Philippines (July to December) - P1,000,000
Gross income in Canada (July to December) - P3,000,000
Allowable deductions in Canada (July to December) - P1,200,000

Assume that the taxpayer is a resident who left the country in July of the current year to
reside permanently in Canada, how much is his taxable income?
Response: P4,000,000
Score: 0 out of 2 No

Question 48
 Generally, what determines the nationality of a corporation for income tax purposes?
Response: Composition of stockholders
Score: 0 out of 2 No

Question 49
 Statement 1: All taxpayers are subject to final tax.

Statement 2: Taxable income is synonymous to net income.

Response: Both statements are incorrect.
Score: 2 out of 2 Yes

Question 50
 A resident citizen is a citizen who stayed in the Philippines for:
Response: At least 183 days.
Score: 2 out of 2