QUIZ (General Principles of Taxation)

1. Basis of Taxation
a. Lifeblood theory
c. Benefits protection theory
b. Necessity theory
d. Reciprocal theory

2. Value added tax is an example of what kind of tax:

a. Graduated tax
d. Regressive tax
b. Progressive tax
d. Proportional tax

3. Tax as distinguished from license fee:

a. Non-payment doe's not necessary means the business is illegal.
b. A regulatory measure.
c. Imposed in exercise of police power.
d. Limited to cover the cost of regulation.

4. Our tax laws are both:

a. Progressive and prospective
b. Civil and prospective
c. Penal and regulatory
d. Personal and regulatory

5. Which statement is wrong?

a. A tax is demand of sovereignty c. Special assessment is a tax
b. A toll is demand of ownership
d. Customs duty is a tax

6. Which of the following is not an element of Double Taxation:

a. Taxing Twice
c. Same year
b. Same subject matter
d. Same amount

7. The President of the Philippines and the prime minister of Japan entered into executive
agreement of loan facility to the Philippines from Japan whereby it was stipulated that interest on
loans granted by Private Japanese financial institutions to private financial in the Philippines
shall not be subject to Philippine income Taxes. Is the tax exemption valid?
a. Yes, based on International comity.
b. Yes, based on an executive agreements and treaties.
c. No, it's violation of essential characteristics of taxation.
d. No, based on doctrine of territoriality.

8. Which is the correct and best statement? A tax reform at any given time underscores the fact
that:
a. Taxation is an inherent power of the state.
b. Taxation is essentially legislative power.
c. Taxation is power that very broad.
d. The state can and should adopt progressive taxation.

9. Which statement refers to police power as distinguished from taxation:

a. Its n inherent power of the state.
b. The benefit derived is protection given by the state.
c. It involves taking of property.
d. The amount collected is limited to the cost of regulation.

10. A tax based on the number:

a. Income tax
b. Specific tax
c. Advalorem tax
d. Customs duties

2. Our tax laws are:

a. Political in nature
c. Penal in nature
b. Civil in nature
d. Social in nature

3. All are secondary purpose of taxation except:

a. Sumptuary purpose
c. Compensatory purpose
b. Regulatory purpose
d. Uniformity purpose

4. In the absence of Constitutional limitation the power to tax is:

a. Comprehensive
c. Both a and b
b. Unlimited
d. Regulatory

5. One of the following is Not an inherent limitation of taxation:

a. Taxes must be for public purpose.
c. Territoriality rule.
b. Equality in taxation.
d. Rule on double taxation.

6. All are essential characteristics of tax, except:

a. It is an enforced contribution
c. It is generally payable in
money.
b. It is generally unlimited in amount.
d. It is proportionate
burden.

7. Statement 1: A tax may include power to destroy.

Statement 2: A tax may be imposed violating uniformity of taxation.
a. Only first statement is correct.
c. both statements are
correct.
b. Only second statement is correct.
d. both statements
are incorrect.
8. Statement 1: There can be double taxation in the Philippines.
Statement 2: Double taxation is illegal if its violates uniformity in taxation.
a. Only first statement is correct.
c. both statements are
correct.
b. Only second statement is correct.
are incorrect.
d. both statements

9. Statement 1: Imposition of tax is legislative act.

Statement 2: Collection of tax is an administrative act.
a. Only first statement is correct.
c. both statements are
correct.
b. Only second statement is correct.
d. both
statements are incorrect.

10. Taxation is equitable in all of the following, except:

a. Its burden falls on those better to pay.
b. It is based on ability to pay.
c. It is based on benefits received.
d. It is based on uniformity rule.

1. The following are constitutional limitations, except?

a. No imprisonment for non-payment of poll tax.
b. Non-impairment of the obligation of contracts.
c. Rule of uniformity and equity in taxation.
d. Exemption from income tax of charitable institutions, cemeteries, churches, personage or
convents appurtenant thereto, as well as all lands, buildings and improvements actually, directly
and exclusively used for religious, charitable and educational purposes.

2. Which is not an essential characteristic of a tax?

a. It is unlimited as to amount.
b. It is payable in money.
c. It is proportionate in character.
d. It is an enforced contribution.

3. Special assessment is an enforced proportional contribution from owners of land especially

benefited by public improvement. Which one of the following is not considered as one of its
characteristics?
a. It is levied on land.
b. It is based on the government's need of money to support its legitimate objectives.
c. It is not a personal liability of the persons assessed.
d. It is based solely on the benefit derived by the owners of the land.

4. Which of the following is a nature of taxation?

a. The power is granted by legislative action.
b. It is essentially an administrative function.
c. It is generally payable in money.
d. Without it the state can continue to exist
5. Which of the following is not a determinant of the place of taxation?
a. Source of the income
b. Citizenship of the taxpayer
c. Residence of the taxpayer
d. Amount of tax to be imposed

6. This is an inherent limitation on the power of taxation?

a. Rule on uniformity and equity in taxation.
b. Due process of law and equal protection of the laws.
c. Non-impairment of the jurisdiction of the Supreme Court in tax cases.
d. Tax must be for the public purpose.

7. This is a constitutional limitation on the power of taxation?

a. Tax laws must be applied within the territorial jurisdiction of the state.
b. Exemption of government agencies and instrumentalities from taxation.
c. No appropriation of public money for religious purposes.
d. Power to tax cannot be delegated to private persons or entities.

8. The following are the nature of taxation, except?

a. Inherent in sovereignty
b. Essentially legislative in character
c. Subiect to inherent and constitutional limitation
d. Subject to approval by the people.

9. A resident alien is taxable on all income derived from sources:

a. Within the Philippines only
b. Without the Philippines only
c. Partly within and partly without

9. A resident alien is taxable on all income derived from sources:

a. Within the Philippines only
b. Without the Philippines only
c. Partly within and partly without
d. Within and without the Philippines

10. A citizen of the Philippines. Who works and derives income from abroad is a resident if he
stayed outside the Philippines:
a. For less than 180 days
b. For more than 180 days
c. For 183 days or more
d. For less 183 days

11. A citizen of the Philippines. Who works abroad and whose employment requires him to be
physically present abroad most of the time during taxable years:
a. Taxable on income within and without the Philippines.
b. B. Taxable on income from without the Philippines.
c. C. Exempt from income tax
d. D. Taxable income from within the Philippines.

12. A citizen of a foreign country is considered a non-resident alien engaged in business in the
Philippines. If he stayed inside the Philippines:
a. For 183 days or more
b. For less than 183 days
c. For more than 180 days
d. For less than 180 days

13. A non-resident alien is deemed doing business in the Phil. If he?

a. Is an individual whose residence is within the Philippines.
b. Is an individual whose father or mother is an alien who is engaged in business in the Phil.
c. Is an individual who is naturalized in accordance with law
d. Shall come to the Philippines. And stay therein for an aggregate period of more than 180 days
during a calendar year.

14. Who is non-resident alien not engaged in business in the Philippines?

a. An alien who comes in the Philippines. For a definite purpose which in its nature may be
promptly accomplished
b. An alien who comes to the Philippines. For definite purpose which in its nature would require
an extended stay of more than 180 days.
c. An alien who has required residence in the Philippines.
d. An alien who lives in the Philippines. With no definite intention as to his stay

15. Taxable only on income from sources within the Phil. Except?
a. Resident citizen
c. Resident alien
b. Non-resident citizen
d. Non-resident alien

16. Which of the following is subject to the corporate income tax?

a. a non- stock and nonprofit educational institution
b. Public educational institution
c. Private cemeteries
d. Civic league or organization not organized for profit and operated exclusively for the
promotion of social welfare

17. A corporation organized and created under the laws of a foreign country and is authorized to
do business/ trade in the Philippines is?
a. Domestic corporation
c. Non-resident foreign corporation
b. Resident foreign corporation
d. General co-partnership

18. One of the general principles of income taxation for corporation is?
a. A foreign corporation engaged in business in the Philippines is taxable on all income derived
from sources within and without the Philippines
b. A foreign corporation engaged in business in the Philippines. Is taxable on all income derived
from sources within the Philippines only?
c. A domestic corporation is taxable on income derived from sources within the Philippines only.
d. A domestic corporation is taxable on income derived from sources without the Philippines
only.

19. One of the following doesn't fall under the definition of a "corporation" for income tax
purpose:
a. General partnership
b. Joint stock company
c. Insurance company
d. Sole partnership

20. The Phil. Health Insurance Corporation, a government owned corporation is:
a. Exempt from the corporate income tax
b. Subject to the preferential corporate income tax for special corporations.
c. Subject to the basic corporate income tax.
d. Subject to final tax.

21. Which of the following maybe subject to the corporate income tax?
a. Non-profit educational institution
c. A private educational
Institution
b. A public educational Institution
d. Government Service Insurance
System

22. A domestic corporation may employ, as a basis for filing its annual corporate return the:
a. Calendar year only
c. Either calendar or fiscal year
b. Fiscal year only
d. Neither calendar nor fiscal year

23. The following income are subject to final tax, except?

a. Royalty income received by a domestic corporation from a domestic corporation
b. Cash dividends received by a non-resident foreign corporation from a domestic corp.
c. Cash dividends received by a domestic corporation from a domestic corporation.
d. Interest income received by resident foreign corporation from a Phil. bank.

24. The following statements regarding taxable partnerships are correct, except:
a. They file quarterly and year-end income tax returns.
b. They are subject to the rules on corporation for capital gain tax, final tax on passive income,
normal income tax, minimum corporate income tax and gross income tax.
c. The partners' share in the distributable net income is subject to final tax.
d. They are subject to the improperly accumulated earnings tax.