Philippine Association of Certified Tax Technicians, Inc.

4F Anelle Bldg., Biak na Bato St., Tabuco, Naga City

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CTT EXAMINATION REVIEWER (MULTIPLE CHOICE QUESTIONS) PAGE B - 1

COMPILATION OF MULTIPLE CHOICE QUESTIONS

1. Effective January 1, 2018 this expense is no longer deductible from the gross estate of a
nonresident not citizen decedent
A. Standard deduction C. Medical expenses
B. Family home D. Judicial expenses

2. Decedent, died January 10, 2018 had the following data:

Gross estate P 10,000,000
Funeral expenses 250,000
Judicial expenses 150,000
Claims against the estate 100,000
Transfer for public use 200,000
Losses 300,000
Hospitalization expenses 85,000
Unpaid taxes 20,000
Unpaid mortgages 50,000
Family home 2,500,000
RA 4917 300,000
6,530,000

Standard deduction 5,000,000

NET TAXABLE ESTATE 1,530,000

TAX RATE 6%

The estate tax payable is

A. P 91,800 C. P 391,800
B. 97,400 D. 141,230

3. House Speaker Alvarez has introduced a bill in the Congress amending certain provisions of the
Family Code to the effect that in the absence of a pre-nuptial agreement, the property relations
of the spouses shall be governed by
A. Conjugal partnership of gains C. Absolute community of property regime
B. Complete separation of property D. Co-ownership

4. The Tax Reform Acceleration and Inclusion Law is the short title for
A. RA 10693 C. RA 10369
B. RA 10936 D. RA 10963

5. The following is a zero-rated sale of services

A. Transport of passengers by Cebu Pacific from the Philippines to Singapore.
B. Transport of passengers by Cathay Pacific from the Philippines to Singapore.
C. Transport of cargo by Etihad Airlines from the Philippines to Singapore.
D. Transport of passengers by Singapore Airlines from Hongkong to Singapore.

6. Point-point Restaurant, non-VAT registered, had gross receipts during the year which amount
to P2,500,000.
If the year of operation is 2017, it is
A. subject to Output VAT of P300,000.
B. subject to Output VAT of P267,857.
C. subject to Percentage Tax of P75,000.
D. subject to Percentage Tax on the P2 million.
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CTT EXAMINATION REVIEWER (MULTIPLE CHOICE QUESTIONS) PAGE B - 2

7. In the preceding problem, if the year of operation is 2018, it is subject to

A. Output VAT of P300,000. C. Percentage Tax of P75,000.
B. Output VAT of P267,857. D. Percentage Tax on the P2 million.

8. In Question 7 above, the taxpayer shall be required to pay the tax on a

A. monthly basis using BIR Form No. 2551M.
B. quarterly basis using BIR Form No. 2551Q.
C. monthly basis using BIR Form No. 2550M.
D. quarterly basis using BIR Form No. 2550Q.

9. In problem 8 above, the taxpayer shall remit the amount withheld, if any, using

A. BIR Form No. 1600 C. BIR Form No. 1600M

B. BIR Form No. 1601 D. BIR Form No. 1600Q

10. Renee Rentah owns an apartment building being leased to different tenants. The aggregate
annual rental is P1,300,000. For the year 2017, Renee is not subject to
A. Value-added tax. C. Income tax.
B. 3% non-VAT. D. 3% non-VAT and income tax.

11. In the preceding question, suppose the monthly rental per unit in 2018 is P14,000 and the
aggregate annual rental is P3,200,000 the lessor is not subject to
A. Value-added tax. C. Income tax.
B. 3% non-VAT. D. 3% non-VAT and VAT.

12. In the preceding problem, assume that the property is a commercial building which is being
leased as offices of professionals such as lawyers, accountants and engineers. If the monthly
rental per unit in 2017 is P12,000 and the aggregate annual rental is P3.5 million, Renee
Rentah is subject to
A. Value-added tax. C. Income tax.
B. 3% non-VAT. D. VAT and income tax.

13. Sale or lease of goods or properties or performance of services the gross annual sales/receipts
amount to P2,500,000 by a non-VAT registered establishment is subject to
Until 12/31/17 Effective 1/1/18 Until 12/31/17 Effective 1/1/18
A. VAT Non-VAT C. Non-VAT Non-VAT
B. VAT VAT D. Non-VAT VAT

14. Sale or lease of goods or properties or performance of services the gross annual sales/receipts
amount to P2,500,000 by a VAT registered establishment is subject to
Until 12/31/17 Effective 1/1/18 Until 12/31/17 Effective 1/1/18
A. VAT Non-VAT C. Non-VAT Non-VAT
B. VAT VAT D. Non-VAT VAT

15. TRAIN Law: In proper cases, the Commissioner of Internal Revenue shall grant refund for
creditable input taxes within _____ from the date of submission of the official receipts or
invoices and other documents in support of the application filed in accordance with regulations
A. 6 months C. 90 days
B. 3 months D. 60 days
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CTT EXAMINATION REVIEWER (MULTIPLE CHOICE QUESTIONS) PAGE B - 3

16. An alien who shall come to the Philippines and stay for an aggregate period of one hundred
eighty (180) days or less during any calendar year.
A. Nonresident alien C. NRA not engaged in trade or business
B. Resident alien D. NRA engaged in trade or business

17. Which of the following is false about a Tax Identification Number?

A. An estate of a deceased person shall be supplied with a separate TIN.
B. Only one TIN shall be assigned to a taxpayer.
C. Any person who shall secure more than one TIN shall be criminally liable under the
provisions of the NIRC.
D. If an employee owns a business in a city other than his place of employment, his TIN shall
be registered in the place where his place of employment is located.

18. If the fringe benefit is given in 2018, the tax rate is

A. 35% C. 25%
B. 65% D. 32%

19. In January 2018, the manufacturing engineer received P16,250 fringe benefit from its
employer. The deductible fringe benefit expense and the fringe benefit tax, respectively, to the
employer is
FBE FBT FBE FBT
A. P 16,250 P 5,688 C. P 16,250 P 5,200
B. 23,897 7,647 D. 25,000 8,750

20. Under the TRAIN Law, the following is subject to income tax
A. SSS C. Philhealth
B. GSIS D. Pag-ibig

21. The following pertains to the data of a resident alien:

Gross estate, Phil 2,000,000
Gross estate, abroad 3,000,000
FE, Phil 250,000
FE, abroad 200,000

How much is the deductible funeral expense in 2017?

A. 450,000 C. 250,000
B. 200,000 D. 100,000

22. In the preceding problem, f the decedent died January 5, 2018, the deduction from gross
estate is
A. None C. P 5,200,000
B. 200,000 D. 5,000,000

23. BIR Form No. 1702-RT must be filled-out in

A. Duplicate copies C. Quadruplicate copies
B. Triplicate copies D. Quintuplicate copies

24. For taxable year 2018. a husband and wife with five (5) qualified dependent children shall be
entitled to a maximum basic personal and additional exemptions of
A. P 100,000 C. P200,000
B. 150,000 D. None

25. Which of the following statements is false?

A. An individual taxpayer is exempt on the first P250,000 of his income.
B. A compensation earner may opt to avail of the 8% income tax rate.
C. A professional income earner who avails of the 8% income tax is exempt from the
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CTT EXAMINATION REVIEWER (MULTIPLE CHOICE QUESTIONS) PAGE B - 4

payment of 3% non-VAT.
D. An operator of cockpit cannot avail of the 8% income tax option even if its gross receipts
during the preceding year did not exceed P3 million.

26. A non-stock and non-profit educational institution is subject to

A. income tax on income of activities that are not related to educational purpose.
B. customs duties on importation of equipment that are used in the exercise of its
educational function.
C. real property tax on land, buildings and improvements that are being used actually,
directly and exclusively for educational purpose.
D. income tax on interest income on bank deposits that are reserved to fund the construction
of school buildings.

27. If the receipt is issued by a VAT seller thru a cash register machine, the receipt does not
include
A. number of the machine used in printing them.
B. description of goods or service, quantity, unit and total cost.
C. value-added tax amount.
D. the buyer’s name, address, and TIN.

28. The version of the Bicameral Conference Committee on a bill which has been approved by the
Senate and the House of Representatives and submitted to the Office of the President is called
A. Bill approved on 3rd reading C. Law
B. Proposed law D. Enrolled bill

29. Mr. A, government employee, has retired from service. Which of the following amounts is
taxable to him?
A. P 730,000 – money value of the accumulated leave credits.
B. 210,000 – lump-sum retirement pay from GSIS.
C. 150,000 – return of insurance premium payments from a private insurance company
D. 34,000 – salary for his last month of service.
30. In accomplishing BIR Form 2316 (Certificate of Compensation Payment/Tax Withheld) of an
employee, which of the following is not included in the Non-Taxable/Exempt Compensation
Income?
A. 13th month pay and other benefits.
B. Employee’s share contribution to Social Security System.
C. Employee’s share contribution to Philhealth
D. Employer’s share contribution to GSIS

31. Your clients are planning to put up a business partnership in your city. They showed to you a
shortlist of government offices where they are planning to register the proposed business.
Which of the following offices will not register the proposed partnership business?
A. Bureau of Internal Revenue C. Securities and Exchange Commission (SEC)
B. City Government of Sorsogon D. Department of Trade and Industry (DTI)

32. Your VAT registered client will file an Application to Print Receipts with the BIR and is being
asked to submit a sample of the receipt. If you are consulted on the sample O.R., which of the
following data should not appear in the Official Receipt?
A. VAT Registration with Tax Identification Number (TIN)
B. O.R. Number
C. Authority to Print Number and Expiration Date
D. The phrase “This document is not valid for claiming input taxes.”
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CTT EXAMINATION REVIEWER (MULTIPLE CHOICE QUESTIONS) PAGE B - 5

33. Donor A donated a parcel of land to B on January 5, 2018 on account of marriage. The
property has a zonal value of P500,000 and an assessor’s value of P550,000. How much is the
donor’s tax due if B is a legitimate child of A? Former girlfriend of A?

Child Former girlfriend Child Former girlfriend

A. P 18,000 P 18,000 C. P 29,400 P 150,000
B. 33,000 33,000 D. 16,400 150,000

Gross Gift 550,000

Less: 25000
Net gift 300,000
Tax rate 6%
Donors tax 18,000

34. An invoice or official receipt shall be valid for a period of __ years from the date of _____
A. 3 years; printing C. 5 years; printing
B. 3 years; permit to use D. 5 years; permit to use

35. Payments by local government units to government contractors or sellers of office supplies are
subject to 5%
A. final withholding tax C. withholding tax on compensation
B. creditable withholding tax D. expanded withholding tax

36. An association has applied for registration with the Bureau of Internal Revenue. After
submission of the requirements, it was issued a Certificate of Registration (COR) which is
otherwise known as BIR Form No. ____
A. 2316 C. 2303
B. 2803 D. 1703

37. Camelle owns a condominium unit in Makati. In 2017 she was paying monthly association dues
of P2,240, inclusive of tax. If there is no increase of association dues in 2018, she will pay to
the association a monthly dues of
A. P 2,240 C. P 2,500
B. 2,000 D. Cannot be determined

38. The following individuals are not required to file income tax return, except
A. An individual whose income tax has been correctly withheld by his employer, provided,
that such individual has only one employer for the taxable year – the Certificate of
Withholding filed by the respective Employers, duly stamped “Received” by the Bureau
shall be tantamount to the substituted filing of income tax returns by said employees;
B. An individual whose sole income has been subjected to final withholding tax;
C. A minimum wage earner;
D. An individual earning purely compensation income from two employers whose total
compensation income does not exceed the amount of P250,000.

39. Brooke is a real estate broker. Her total gross receipts amounted to ₱3,050,000 for taxable
year 2018. Her recorded cost of service and operating expenses were ₱450,000 and
₱1,200,000, respectively.
Her income tax liability will be:
A. P 244,000 C. P 310,000
B. 112,000 D. Either P244,000 or P310,000

3,050,000-450,000-1,200,000= 1,400,000
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CTT EXAMINATION REVIEWER (MULTIPLE CHOICE QUESTIONS) PAGE B - 6

Income tax table

Over Not over Tax Plus Of excess over

P 250,000 Exempt
P 250,000 400,000 20% - P 250,000
400,000 800,000 P 30,000 25% 400,000
800,000 2,000,000 130,000 30% 800,000

1st 800k= 130,000

Excess= 600,000x30%=180,000
Total =310,000

40. Distinctions between donor’s tax and estate tax, except

A. Period for payment of tax C. Tax rate
B. Attachments to the tax return D. Cause of transfer

41. The VAT rate is not

A. 12% C. 5%
B. 0% D. 10%

42. Which statement is false? The certificate of zonal values of real properties for donor’s tax,
estate tax and capital gains tax purposes
A. shall be issued by the Revenue District Offices.
B. must be issued by the Regional Office.
C. may be issued by the Assessment Performance and Monitoring Division of the national
office.
D. is subject to a Certification Fee of P100 and P15 documentary stamp tax.

43. A business establishment becomes subject to VAT if its gross receipts in a 12-month period
exceeds
A. P 1,500,000 C. P 3,000,000
B. 2,500,000 D. 9,191,500

44. Which final tax rate is false?

A. Capital gains from sale of shares of stock not traded in the stock exchange - 15%.
B. Interest income received by an individual taxpayer (except a non-resident individual) from
a depository bank under the expanded foreign currency deposit system – 15%.
C. Philippine Charity Sweepstakes and lotto winnings amounting to P 10,000 or less - 20%
D. Fringe benefit tax – 35%
E. None of the above

45. Which statement is false? The following income payments to a resident or citizen individual is
subject to a final tax rate of
A. 15% - income derived from a depository bank under the expanded foreign currency
deposit system.
B. 15% - net capital gains from sale of shares to stock not trade in the stock exchange.
C. 10% - cash and/or property dividends actually or constructively received from a domestic
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CTT EXAMINATION REVIEWER (MULTIPLE CHOICE QUESTIONS) PAGE B - 7

corporation
D. 20% - winnings in lotto amounting to P10,000.
E. None of the above

46. Which of the following corporations is taxable?

A. Government Service Insurance System (GSIS)
B. Social Security System (SSS)
C. Philippine Health Insurance Corporation (PHIC)
D. Home Development Mutual Fund (Pag-ibig)
E. None of the above

47. Which ceiling on the following de minimis benefits is not correct?

A. Monthly rice allowance – P2,000
B. Monetized value of vacation and sick leave credits paid to government officials and
employees - 10 days
C. Uniform and clothing allowance – P6,000 per annum
D. Medical cash allowance to dependents _ P250 per month
E. None of the above

48. The ceiling on rice allowance as de minimis benefit is –

A. P1,000 per month D. 18,000 per annum
B. 1,500 per month E. None of the above
C. P 2,000 per month

49. In 2018, Miss Minnie Dy received annual clothing allowance amounting to P9,000. Her 13 th
month pay is P80,000. No other benefits were received for the entire year. Which of the
following statements is false?
A. The excess of P3,000 shall be taxable.
B. The entire Other Benefits of P83,000 is tax exempt.
C. Exempt on the entire P89,000.
D. The entire clothing allowance of P9,000 is tax exempt.
E. None of the above

50. A minimum wage earner is not exempt from

A. basic statutory minimum wage.
B. overtime and night shift differential pay.
C. commission
D. holiday pay and hazard pay.
E. None of the above

51. Fe Bisic is a compensation income earner. Her total basic pay during the year is P220,000
which is more than the statutory minimum wage. Other income during the year were;
Overtime pay, P30,000; Holiday pay, P15,000; Hazard pay, P24,000 and Night-shift differential
pay, P18,000. If the amounts are net of mandatory contributions to SSS, Philhealth and Pag-
Ibig, how much is the taxable income?
A. None C. P 307,000 E. None of the above
B. P 220,000 D. 57,000

52. Which of the following statements is not correct?

A. Supplementary compensation income includes payments to an employee in addition to the
regular compensation, such as commission, overtime pay, taxable retirement, taxable
bonus, and other taxable benefits, with or without regard to a payroll period.
B. Representation and Transportation Allowances (RATA) granted to public officials and
employees are not subject to income tax.
C. Personnel Economic Relief and Allowance (PERA) granted to government employees are not
subject to income tax if it constitutes reimbursement for expenses incurred in the
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performance of official duties.

D. Representation and Transportation Allowances (RATA) granted to government employees
are not subject to income tax if it constitutes reimbursement for expenses incurred in the
performance of official duties.
E. None of the above

53. Santi retired from employment with the government on November 30, 2018. As a consequence
of his retirement, he received the following:

Monthly salary (January - November) P 30,000

Monthly Personnel Economic Relief and Allowance (reimbursement) 2,000
13th month pay 30,000
Cash gift 5,000
Retirement pay 750,000
Terminal leave pay 120,000

Longevity pay 30,000

Rice allowance per month 2,500
Clothing allowance 8,000
Loyalty award 20,000

How much is the taxable compensation income of Santi in 2018?

A. P 452,500 C. P 330,000 E. None of the above
B. 332,500 D. 356,500

54. Christopher P, married to Julie A, had an income of P450,000 in 2018. If the spouses have
seven (7) dependent children, the income subject to income tax

A. P 100,000 C. P 225,000 E. None of the above

B. 200,000 D. 50,000

55. Ka Wani, married with two (2) dependent children, works for PACTT, Inc. He is not engaged in
business nor has any other source of income other than his employment. For 2018, Ka Wani
earned a total taxable compensation income of ₱600,000. The income tax due on Ka Wani is
A. P 80,000 C. P 55,000 E. None of the above
B. 20,000 D. 48,000

Items 56 and 57:

56. Ling owns a small sari-sari store and a beauty parlor. In 2018, her gross sales in the store
amounted to P680,000, in addition to her receipts from the parlor of ₱500,000, while her total
cost of sales/services and operating expenses amounted to P 300,000 and P200,000,
respectively.
The income tax due if she signified her intention to be taxed at the 8% income tax rate
A. P 74,400 C. P 54,400 E. None of the above
B. 94,400 D. 34,400

57. The income tax due on Ling if she failed to signify her intention to be taxed at the 8% income
tax rate
A. P 37,500 C. P 74,400 E. None of the above
B. 54,400 D. 100,000

58. Which of the following statements is false?

A. Taxpayer shall be allowed an income tax credit of quarterly payments initially made under
the 8% income tax option.
B. Taxpayer is liable for business tax(es), in addition to income tax. A percentage tax pursuant
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CTT EXAMINATION REVIEWER (MULTIPLE CHOICE QUESTIONS) PAGE B - 9

to Section 116 of the Tax Code, as amended, shall be imposed on P3,000,000. If the annual
gross sales/receipts exceed P3,000,000, it shall be subject to VAT.
C. Taxpayer is liable for percentage tax on the first P3,000,000 if he opted for 8% income tax.
However, the excess shall be subject to VAT.
D. Percentage tax due on the P3,000,000 shall be collected without penalty, if timely paid on
the due date immediately following the month the threshold was breached.
E. None of the above

59. Capital gains realized during the taxable year from the sale, barter, exchange or other
disposition of shares of stock are subject to 15% final tax if the stocks are issued by a
A. resident foreign corporation
B. nonresident foreign corporation
C. domestic corporation
D. corporation
E. None of the above

60. In 2018, Aching sold shares of stocks of a domestic corporation. The selling price is P80,000
while the cost is P65,000.

The final tax on the sale is

A. P 1.500 C. P 480 E. None of the above
B. 2,250 D. 750

61. Which of the following is not considered as intangible personal property within?
A. Franchise which must be exercised in the Philippines.
B. Shares of stocks issued by a domestic corporation.
C. Obligations or bonds issued by a foreign corporation with business situs in the
Philippines.
D. Shares of stocks issued by a foreign corporation 51% of the business of which is located
in the Philippines.
E. None of the above

62. Which of the following donations result to a net gift of P80,000?

A. Alakdan donated property to Balbakwa with a market value of P140,000. The property is
subject to a mortgage indebtedness of P60,000 which was paid by the donor at the time
of the donation.
B. Altura requested Busina to pay Altura’s liability with Cabangis in the amount of P100,000
and in return, the personal property of Altura valued at P180,000 will be donated to
Busina.
C. The daughter of Ananias was married to her boyfriend. As a gift, Ananias donated cash
worth P100,000 to his daughter.
D. Property worth P80,000 was donated by Bibong to Barangay Maaliwalas for use as site of
the Barangay Hall.
E. None of the above

63. On March 6, 2018, a Filipino citizen donated house and lot with fair market value of P2,000,000
to his child on account of marriage last January 1, 2018. Gift tax return was filed and tax paid
on July 5, 2018. The amount payable as of July 5, 2018 is:
A. P136,486 C. P105,000 E. None of the above
B. P134,391 D. P135,427

64. Jose Dasing, Australian, died in 2018. If the decedent was a resident of Manila, how much is
the deductible standard deduction?
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A. P5,000,000 C. P1,000,000 E. None of the

above
B. 500,000 D. None

65. If the decedent was a resident of Australia, the standard deduction is

A. P5,000,000 C. P1,000,000 E. None of the above
B. 500,000 D. None

66. The estate tax return should be accompanied by a certificate of an independent CPA if the
gross estate of a decedent who died in 2018 is:
A. P5,000,000 C. Over P2,000,000 E. None of the above
B. 2,000,000 or over D. Over P5,000,000

67. Mama Tai died on January 3, 2018. The estate tax due and payable of P25,000 was paid on
January 3, 2021.
The estate tax due, including increments but excluding compromise penalty is
A. P 37,250 C. 41,250 E. None of the above
B. 45,000 D. 38,750

68. Mr. Fay, lessor rents his 3 commercial and 10 residential units for a monthly rent of P50,000
and P14,000 per unit, respectively. During the taxable year, his accumulated gross receipts
amounted to P3,480,000 (P1,800,000 from commercial units and P1,680,000 from residential
units).

Which statement is false?

A. The P1,800,000 from commercial units is not subject to VAT since it did not exceed
P3,000,000.
B. Mr. Fay is subject to VAT.
C. The P1,680,000 accumulated receipts from the residential units are not subject to
Percentage Tax.
D. The P1.8 million from commercial units is subject to 3% percentage tax, while the P1.68
million from residential unit is exempt from VAT.
E. None of the above

69. Sale of drugs and medicines prescribed for diabetes, high cholesterol, and hypertension are
exempt from VAT beginning
A. January 1, C. January 1, 2019 E. None of the above
2018
B. July 1, 2018 D. January 1, 2020

70. All of the following, except one, are exempt from the payment of the 3% Non-VAT
A. Cooperatives

B. Marginal income earners

C. Self-employed individuals and professionals availing of the 8% tax on gross sales and/or
receipts and other non-operating income.
D Self-employed individuals and professionals availing of the graduated rates in computing
. income tax on their income.
E. None of the above

71. Exemptions from VAT is limited to the following, except

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A. raw agricultural food C. health E. None of the above

B. agricultural non-food D. education

72. Del owns a small convenience store. Although the annual gross sales range from P2,400,000 to
P2,900,000, she decided to register it as a VAT business in 2018. The store
A. may opt for the 8% income tax option.
B. is subject to 12% VAT.
C. is subject to the 3% non-VAT.
D may be subject to either 12% VAT or to 3% non-VAT.
.
E. None of the above

73. In the preceding question, assuming the sales during the year amounted to P2,600,000 (net of
VAT) while the cost of sales and operating expenses (both net of VAT) were P1,900,000 and
P450,000, respectively, the total of income and business taxes payable amount to
A. P 30,000 C. P 208,000 E. None of the above
B. 238,000 D. None

74. Per provision of TRAIN Law, effective 2019 the excise tax on diesel will be
A. P 2.00 C. P 4.50 E. None of the above
B. 2.50 D. 9.00

75. Per provision of TRAIN Law, the excise tax on drinks containing sweeteners is
A. P 12.00 C. Exempt E. None of the above
B. 6.00 D 9.00
.

76. In January 2019, the manufacturing engineer (supervisory employee) received cash of P16,250
as fringe benefit from his employer. The deductible fringe benefit expense and the fringe
benefit tax, respectively, is
FBE FBT FBE FBT E. None of the above
A. P 16,250 P 5,688 C. P 16,250 P 5,200
B. 25,000 8,750 D. 23,897 7,647

Items 77 to 78:

In 2019, Mrs. Mapang-api owns a one (1) hectare residential land situated in Mandaue City.
The zonal value is P100 per square meter, while the market value in the tax declaration is
P850,000.

77. If the city maximizes the assessment level and tax rate to that allowed by law, how much is
the annual real property tax payable on the land?

A. P 12,000 C. 6,800 E. None of the above

B. 10,200 D. 5,100

78. If Mrs. Mapang-api decides to donate the property to her daughter in law, how much is the
donor’s tax due on the donation?

A. P 105,000 C. 45,000 E. None of the above

B. 120,000 D. 525,000
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79. Taxis, jeepneys and bus operators with annual gross receipts of not exceeding P3 million are
subject to business tax of
A. 12% VAT C. 3% Carrier’s Tax E. None of the above
B. 3% non-VAT D. 3% Carriers Tax/12% VAT

80. The BIR Form to be used in the quarterly remittance of creditable income taxes withheld
(expanded) is
A. 1601EQ C. 1601FQ
B. 0619E D. 0619F

81. An invoice or official receipt shall be valid for a period of __ years from the date of _____
A. 3 years; printing C. 5 years; printing
B. 3 years; permit to use D. 5 years; permit to use

82. In 2020, payments by local government units to government contractors or sellers of office
supplies are subject to 5%
A. final withholding tax C. withholding tax on compensation
B. creditable withholding tax D. expanded withholding tax

Items 83 to 85:
Mr. A is an accountant who is engaged in public practice. His total gross receipts in 2018
amounted to ₱2,250,000. His recorded cost of service and operating expenses were ₱450,000 and
₱100,000, respectively.

83. HOW MUCH is the income tax due if Mr. A avails of the graduated rates in the tax table?
A. P 570,000 C. P 400,000
B. 160,000 D. Cannot be determined

84. HOW MUCH is the income tax due if Mr. A avails of the 8% income tax option?
A. P 180,000 C. P 400,000
B. 160,000 D. Cannot be determined

85. How much is the tax benefit if Mr. A avails of tax avoidance scheme by choosing the method
that will require him to pay less tax to the government?
A. P 240,000 C. P 160,000
B. 307,500 D. Cannot be determined

86. TRAIN LAW: Sale of shares of stock which are listed and traded in the stock exchange is
subject to a business tax rate of
A. ½ of 1% C. 6/10 of 1%
B. 15% D. 5%; 10%

87. In January 2018, Don Knorr donated commercial land to his second cousin. The value in the
tax declaration is P2 million while the zonal value is P1.7 million. How much is the tax due on
the donation?
A. P 600,000 C. P120,000
B. 240,000 D. 105,000

88. Which of the following businesses can avail of the 8% income tax option?
A. KTV bar C. Taxi business
B. Mini-grocery D. VAT registered computer shop

89. In starting a business, which is the last step in registering it with the BIR under Single Window
Policy?
a. Submit application and documents.
b. Get BIR Printed Receipts/Invoices
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c. Pay fees, taxes and charges.

d. Get TIN, COR and ATP
e. None of the above

90. Which of the following documents is not required in registering a business with BIR?
a. Mayor’s Permit
b. DTI/SEC Registration
c. Valid ID
d. Payment of Registration Fee
e. None of the above

91. Not qualified to avail of the 8% income tax rate, except

a. Purely compensation income earner
b. VAT registered taxpayer with annual gross receipts of P1,500,000
c. Partners of general professional partnership.
d. Professional with non-operating income.
e. None of the above

92. Which is false? Business with annual gross receipts more than P250,000 but not more than
P720,000
a. Maybe subject to graduated income tax rates.
b. May avail of 8% income tax rate but subject to percentage tax on business.
c. May avail of 8% income tax rate but exempt from submission of financial statement.
d. Must secure Certificate of Registration.
e. None of the above

93. Which is false? Businesses with annual gross receipts of more than P3,000,000
a. are subject to graduated income tax rates.
b. are subject to creditable withholding tax.
c. may avail of 8% income tax rate but exempt from payment of percentage tax.
d. are subject to VAT.
e. None of the above

94. Which of the following documents is not required to be attached to BIR Form 1706?
a. Certificate Authorizing Registration (CAR)
b. Notarized Deed of Sale
c. Copy of the Transfer Certificate of Title (TCT)
d. Certified true copy of the latest Tax Declaration
e. None of the above

95. One of the following taxes does not require the use of BIR 2551Q in filing the return. Which is
it?
a. Percentage tax on racetracks
b. Percentage tax on winnings
c. Percentage tax on international carriers
d. Franchise tax on water utilities
e. None of the above

96. B. Gus is a rice dealer. His total annual gross sales do not exceed P3,000,000.00. He can avail
of the following, except:

a. As VAT-exempt taxpayer.
b. He may elect to avail of the optional registration for VAT of exempt person
c. If he elects to register as VAT taxpayer, he shall not be entitled to cancel his VAT
registration for five (5) years.
d. He may elect to pay the 8% commuted tax rate on gross sales or receipts and other non-
operating income in lieu of the graduated income tax rates and percentage tax. However,
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he shall not be allowed to avail of the optional registration for VAT of exempt person
e. None of the above

97. Mr. Y signified his intention to be taxed at 8% income tax in lieu of the graduated income tax
rates and percentage tax (3% non-VAT) in his 2018 1st Quarter Income Tax. However, his
gross sales during the taxable year have exceeded the VAT threshold as follows:

January P 250,000 July 250,000

February 250,000 August 250,000
March 250,000 September 250,000
April 250,000 October 1,000,000
May 250,000 November 1,000,000
June 250,000 December 1,000,000
Total sales 5,250,000

Which of the following statements is false?

a. Subject to 8% income tax until December 31, 2018.
b. Subject to 12% VAT prospectively beginning November 2018.
c. He is required to update his registration from non-VAT to VAT on or before November 30,
2018.
d. Subject to 8% income tax option until October 2018.
e. None of the above

Items 98 to 100:
Mr. Z, single with one dependent child, operates a car aircon repair shop. For the year 2018, it
had gross receipts of P1,630,000. The cost of services and operating expenses amounted to
P400,000 and P200,000, respectively.
98. If the business is non-VAT and Mr. Z decides to avail of the graduated rates, the income tax is
a. P130,400 c. P 125,000 e None of the above
b. 199,000 d. None

99. In the preceding question, the business tax payable is

a. P 48,900 percentage tax d. Exempt
b. 123,600 value-added tax e. None of the above
c. P 30,900 percentage tax

100. If Mr. Z avails of the 8% tax option, the total tax due is
a. P 110,400 c. 247,900 e. None of the above
b. 159,300 d. Exempt

101. Period within which refund/credit of input taxes shall be made

a. within ninety (90) days from the date of submission of the official receipts or invoices and
other documents in support of the application filed.
b. within ninety (90) days from the date of payment of the tax.
c. within sixty (60) days from the date of submission of the official receipts or invoices and
other documents in support of the application filed
d. within sixty (60) days from the date of payment of the tax.
e. None of the above

102. Tax Amnesty Act is Republic Act No.

a. 11213 c. 11123 e. None of the above
b. 11312 d. 12113

103. The Tax Amnesty Act of 2019 became effective on

a. April 1, 2019 c. April 24, 2019 e. None of the above
b. April 9, 2019 d. January 1, 2019
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104. Jose Pag-Anapa owns a janitorial single proprietorship business registered with DTI as JPA
Janitorial Services. In the official receipts and invoices, the business style is
a. JUAN Pag-Anapa
b. JPA Janitorial Services
c. Janitorial Services
d. Either Juan Pag-Anapa or JPA Janitorial Services
e. None of the above

105. Jose Namayapa died in 2018. Among the properties he left is a family home consisting of:

Classification Zonal value Assessor’s value

Property
Residential lot Community property P 3,000,000 P 3,500,000
Residential house Exclusive property - 5,000,000

The amount includible in gross estate is –

a. P 6,500,000 c. P 8,000,000 e. None of the above
b. 8,500,000 d. 6,750,000

106. The deductible family home is

a. P 6,500,000 c. P8,000,000 e. None of the above
b. 8,500,000 d. 6,750,000

107. Pacman, resident citizen, earned income of P500,000 in United States and paid the income tax
in that country. Which of the following is false?

a. The income tax paid is US is creditable from his income tax in the Philippines.
b. The income in US is taxable in the Philippines.
c. The income tax paid is US is deductible from his gross income in the Philippines.
d. The income tax in US maybe subject to the 8% income tax option in the Philippines.
e. None of the above

108. In January 2018, Don Nor made a joint donation of commercial land to his second cousin and
its spouse. The value in the tax declaration is P2 million while the zonal value is P1.7 million.
How much is the tax due on the donation?
a. P 90,000 c. P120,000 e. None of the above
b. 240,000 d. 105,000

109. Which of the following businesses can avail of the 8% income tax option?
a. Car wash d. VAT registered computer shop
b. videoke bar e. None of the above
c. Jeepney operation

110. In 2018, Sexy Teksi owns a four (4) units of taxi. Gross receipts of ₱1,680,000; cost of
services and operating expenses were ₱800,000 and ₱200,000, respectively, and with non-
operating income of ₱120,000.
The business tax due is
a. 3% Common carrier’s tax d. Exempt from business tax
b. 3% tax on persons exempt from VAT e. None of the above
c. Value-added tax

111. Which of the following is not subject to the 3% business tax?

a. Jeepney c. Philippine airlines e. None of the above
b. Taxi d. Singapore airlines

112. A non-stock, non-profit university is subject to

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a. Income tax on income from operation.

b. Real property tax on classroom buildings owned by the school.
c. Real property tax on classroom buildings being rented by the school from private person.
d. Stock transaction tax
e. None of the above

113. Which of the following options is false on 5% expanded withholding tax on rental of real
property?
a. Quarterly: BIR Form No. 1601EQ
b. Quarterly: Due date – On or before the end of the month following the close of the quarter
c. Monthly: Due date – on or before the 20th day following the close of the month.
d. Monthly: Due date – on or before the 10th day following the close of the month.
e. None of the above

114. King Macdonald ordered two (2) pieces chickenjoy with drinks in one Jollibee branch. The total
amount due is P120. Assuming that he is neither a PWD nor a senior citizen, how much is the
value-added tax?
a. P 14.40 c. None e. None of the above
b. 12.86 d. Cannot be determined

115. The regular tax rate on a taxable domestic corporation is

a. 25% c. 30% e. None of the above
b. 20% d. 32%

116. One of the main sources of fund that will be used to finance the Universal Health Care Law is
a. VAT on petroleum d. Customs duties
b. Excise tax on alcohol and tobacco e. None of the above
c. Real property tax

117. Certificate of Accreditation of Printers engaged in printing services of official receipts, sales
invoices and other commercial receipts and/or invoices shall be valid for __ ______ from the
date of issuance of the Certificate of Accreditation
a. one (1) year c. three (3) years e. None of the above
b. two (2) years d. five (5) years

118. The estate tax amnesty under RA 11213 applies to

a. Delinquent estate tax liabilities which have become final and executory and those covered by
Tax Amnesty on Delinquencies;
b. Properties involved in cases pending in appropriate courts and Involving violations of the
Anti-Money Laundering Act, as amended;
c. Estate of decedent/s who died on or before December 31, 2017, with or without
assessments duly issued therefor, whose estate tax/es have remained unpaid or have
accrued as of December 31, 2017.
d. Properties involved in cases pending in appropriate courts and involving unexplained or
unlawfully acquired wealth.
e. None of the above

119. The Estate Tax Amnesty Return (ETAR) (BIR Form No. 2118-EA) shall be filed by the executor
or administrator, legal heirs, transferees or beneficiaries within _______ from the effectivity of
RR No. 6-2019.
a. one (1) year c. three (3) years e. None of the above
b. two (2) years d. five (5) years

120. 13th month pay and other benefits is exempt up to a maximum amount of
a. P 80,000 c. P 90,000 e. None of the above
b. 82,000 d. 92,000
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121. The BIR Form to be accomplished in filing VAT return for June 2019 is
a. 2550 M c. 2551 M e. None of the above
b. 2550 Q d. 1800

122. If a nonresident citizen died May 1, 2018, which of the following items is deductible from his
gross estate?
A. Standard deduction of P 5 million C. Judicial expenses
B. Medical expenses D. Funeral expenses

123. Which of the following statements is FALSE?

A. An individual taxpayer is exempt on the first P250,000 of his income.

B. A compensation earner may opt to avail of the 8% income tax rate.
C. A professional income earner who avails of the 8% income tax is exempt from the
payment of 3% non-VAT.
D. An operator of cockpit cannot avail of the 8% income tax option even if its gross receipts
during the preceding year did not exceed P3 million.

124. A non-stock and non-profit educational institution is subject to

A. income tax on income of activities that are not related to educational purpose.
B. customs duties on importation of equipment that are used in the exercise of its
educational function.
C. real property tax on building that are being utilized as offices of the school administrators.
D. income tax on interest income on bank deposits that are reserved to fund the construction
of school buildings.

125. Not subject to 6% capital gains tax

A. issuance of tax declaration without any sale, exchange or disposition.
B. transfer of ownership that resulted from sale, disposition of real property.
C. pacto de retro sales and other forms of conditional sales.
D. conveyance of real property located in the Philippines.

126. The BIR Form to be used in the filing of percentage tax return on business by jeepney or bus
operators
A. BIR Form No. 2550M C. BIR Form No. 2551M
B. BIR Form No. 2550Q D. BIR Form No. 2551Q

127. Your client is planning to put up a sole proprietorship business in your city. He showed to you a
shortlist of government offices where he is planning to register the proposed business. Which
of the following offices will not register the proposed business?
A. Bureau of Internal Revenue C. Securities and Exchange Commission (SEC)
B. City Government D. Department of Trade and Industry (DTI)

128. The following individuals are NOT required to file income tax return, except
A. An individual whose income tax has been correctly withheld by his employer, provided,
that such individual has only one employer for the taxable year – the Certificate of
Withholding filed by the respective Employers, duly stamped “Received” by the Bureau
shall be tantamount to the substituted filing of income tax returns by said employees.
B. An individual earning compensation income and income from profession.
C. An individual whose sole income has been subjected to final withholding tax.
D. A minimum wage earner.

129. A sale of shares of stock which are not listed and traded in the stock exchange is subject to a
tax rate of
A. ½ of 1% C. 6/10 of 1%
B. 15% D. 5%; 10%
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130. Taxable income for compensation earners is the gross compensation income less non- taxable
income/benefits such as the following, except
A. thirteenth (13th) month pay and other benefits up to P90,000.
B. de minimis benefits
C. personal and additional exemption
D. employee's share in the SSS, GSIS, PHIC, Pag-ibig contributions and union dues

131. Which final tax rate is false?

A. Capital gains from sale of shares of stock not traded in the stock exchange - 15%.
B. Interest income received by an individual taxpayer (except a non-resident individual)
from a depository bank under the expanded foreign currency deposit system – 15%.
C. Philippine Charity Sweepstakes and lotto winnings amounting to P 10,000 or less - 20%
D. Fringe benefit tax – 35%

132. Chenie is a civil engineer who is engaged in private practice. Her total gross receipts amounted
to ₱2,150,000 in 2018 while the cost of services and operating expenses were ₱850,000 and
₱600,000, respectively.
Applying the better option, the income tax due on Chenie is -
A. P 105,000 C. P 169,500
B. 152,000 D. None of the above

133. In 2018, Teksi Sexy owns four (4) units of taxi. Gross receipts of ₱1,680,000; cost of services
and operating expenses were ₱800,000 and ₱200,000, respectively, and with non-operating
income of ₱120,000.
Her income tax due for 2018 shall be
A P 100,000 C. P 52,500
.
B 130,000 D. 134,400
.

134. In the preceding question, the business tax due is

A. 3% Common carrier’s tax
B. 3% tax on persons exempt from VAT
C. Value-added tax
D. Exempt from business tax

135. The ceiling on rice allowance as de minimis benefit is –

A. P1,000 per month C. P 2,000 per month
B. 1,500 per month D. 18,000 per annum

136. Alegn Canu, an American employed in International Corporation, a Petroleum Service

Contractor received compensation income of ₱4,000,000 for 2018, inclusive of ₱400,000 13th
month pay and other benefits. The income tax due on Alegn Canu is
A P1,101,200 C. P 586,500
.
B 600,000 D. 300,000
.

137. Cabal, a Certified Tax Technician and BIR accredited tax practitioner, operates a “Wash-your-
Car” business while he offers tax services to clients. In 2018, his gross sales amounted to
₱825,000, in addition to his gross receipts from bookkeeping services of ₱250,000. His
recorded cost of goods sold and operating expenses were ₱360,000 and P37,000, respectively.
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If Cabal opted to avail of the OSD and opted to avail of the graduated rates of tax, the
income tax due shall be
A P 123,750 C. P 66,000
.
B 78,750 D. 91,250
.

138. The income tax due on Cabal if he signifies his intention to be taxed at 8% income tax rate
A P 123,750 C. P 66,000
.
B 78,750 D. 91,250
.

139. Which of the following statements is false?

A. If the taxpayer elects the 8% income tax option, his Financial Statements (FS) is not
required to be attached in the income tax return.
B. The amount of income for distribution of partners in a general professional partnership
shall be net of income tax due.
C. A taxpayer whose gross sales/receipts has exceeded P3,000,000 shall automatically be
subject to the graduated tax rates on income tax.
D Partners of a General Professional Partnership (GPP) by virtue of their distributive share
. from GPP which is already net of cost and expenses cannot avail of the 8% income tax rate
option.

140. Dasing Jose, Australian, died in 2018. If the decedent was a resident of Manila, how much is
the deductible standard deduction?
a. P5,000,00 c. P1,000,000
0
b. 500,000 d. None

141. A resident alien decedent was married at the time of death in 2018 and under the system of
absolute community of property regime. Among the properties in the gross estate was the
family home consisting of:
Land, inherited during the marriage, market P1,000,000
value
House built by the spouses on the inherited land 8,000,000

The deduction for family home is:

a. P9,000,00 c. P1,000,000
0
b. 5,000,000 d. 8,000,000

142. Mama Thai died on January 3, 2018. The estate tax due and payable of P25,000 was paid on
January 3, 2021.
The estate tax due, including increments but excluding compromise penalty is
a. P 37,250 c. 40,250
b. 45,000 d. 38,750

143. Which of the following changes is not introduced on donor’s taxation by the TRAIN Law?
a. Provides extension for the filing of tax return.
b. Removes the exemption on dowries or gifts made on account of marriage.
c. Simplification of the tax rate.
d. Elimination of distinction on tax rate between relative and stranger donee.
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144. Donor A made the following donations to B, donee.

P 500,000 Fair market value of land, with an unpaid mortgage of P200,000, 50% of which
shall be assumed by B.
600,000 Car, with an agreement that the tax of P36,000 on the donation shall be
assumed by B.

The net gift on the donation is -

a. P 1,100,000 c. P 934,000
b. 1,000,000 d. 834,000

145. All tape receipts printed by CRM/POS shall show the following information, except

A. Serial number of the CRM/POS machine.

B. The phrase “This document is valid for claim of input tax” in bold letters, conspicuously
printed at the bottom of Non-VAT ORs, Is/Cis.
C. The phrase “This invoice/receipt shall be valid for five (5) years from the date of the
permit to use.”
D. Description of the items/goods or nature of service.

146. Which statement is not correct? An individual whose sole income is the practice of profession
receiving annual gross receipts of P240,000 shall be

A. Taxable at 0% if he chooses the graduated income tax rate.

B. Not subject to withholding income tax if he chooses the graduated income tax rate.
C. Exempt from income tax but subject to 3% percentage tax if he chooses the 8% income
tax option.
D. Not subject to withholding income tax if he chooses 8% income tax option.

147. Which statement is false? Professional fees rendered by

A. Individual payee: If the gross income for the current year did not exceed P3M shall be
subject to CWT rate of 5%.
B. Individual payee: If the gross income for the current year did not exceed P3M if VAT
registered shall be subject to CWT rate of 10%.
C. Non-individual payee: If the gross income for the current year did not exceed P720,000
shall be subject to CWT rate of 10%.
D. Individual payee: If the gross income for the current year exceeds P720,000 shall be
subject to CWT rate of 5%.

148. A withholding agent is not required to

A. Register the payee within ten days after the withholding.
B. Remit the tax withheld at the time prescribed by law and regulations.
C. Deduct and withhold tax from all money payments subject to withholding tax.
D. Furnish withholding tax certificates to recipient of income payments subject to
withholding.

149. The following pertains to an estate of a married decedent:

Gross estate (except RA 4917) P 7,000,000

RA 4917 300,000
Expenses, losses, indebtedness, taxes, etc. 1,000,000
How much is the net estate if the gross estate and the ordinary deductions are conjugal?
A. P 200,000 C. 6,000,000
B. 3,000,000 D. 1,000,000
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150. BIR Form No. 1701 must be filled-up in

A. Duplicate copies C. Quadruplicate copies
B. Triplicate copies D. Quintuplicate copies

151. BIR Form 2550Q (for VAT) covering the second quarter (April – June) of 2018 must be filed
not later than
A. June 20, 2018 C. July 20, 2018
B. June 25, 2018 D. July 25, 2018

152. One of the following is not a documentary requirement in the issuance of a Tax Identification
Number (TIN) by an individual earning mixed income
A. Any identification issued by an authorized government body (e.g. Birth Certificate,
passport, driver’s license, Community Tax Certificate) that shows the name, address and
birthdate of the applicant;
B. Photocopy of Mayor’s Business Permit;
C. DTI Certificate of Registration
D. BIR Form No. 1903

153. Fees, allowances, per diems and other form of income payments of P30,000 per month to
non-professionals hired by government under a job order or memorandum of agreement are
subject to
Creditable W/holding Tax VAT CWT VAT
A. Yes No C. No Yes
B. Yes Yes D. No No

154. A minimum wage earner had the following data during the year:

Annual salary P 53,000

Overtime pay 5,000
Holiday pay 4,000
The amount subject to tax is
A. None C. P 58,000
B. P 53,000 D. 62,000

155. A minimum wage earner had the following data during the year:

Annual salary P 60,000

Other benefits 95,000
The amount subject to tax is
A. None C. P 145,000
B. P 5,000 D. 60,000

156. Per RMO No. 55-2016, the validity of Electronic Certificates Authorizing Registration (eCAR)
has been extended from
A. one year to two years C. six months to three years
B. one year to three years D. one year to five years

157. Under this program, business operations of non-compliant taxpayers will be suspended and
their establishments will be temporarily closed if they will be found to have violated certain
laws
A. OplanTokhang C. Oplan Double Barrel
B. Oplan Kandado D. Sarado Program

158. If not disqualified, a tax informer who receives a reward shall be

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A. subject to 10% final withholding tax of the reward collected.

B. subject to 10% final withholding tax of the revenue collected by the government.
C. subject to income tax based on the tax table for income tax.
D. exempt from income tax on the reward collected.

159. A senior citizen is

A. subject to VAT on purchase of medicine from Mercury Drug.
B. entitled to 20% discount on foods ordered from a restaurant.
C. exempt from VAT and entitled to 20% discount on foods ordered in a restaurant.
D. not entitled to 20% discount if the ID card is issued by the PRC.

160. A person with disability who is 60 years old shall

A. not be entitled to a 20% discount on cinemas.
B. be entitled to a maximum of 20% discount on foods ordered in a restaurant.
C. be entitled to 20% discount on airfare as a PWD and another 20% as a senior citizen.
D. not be qualified as dependent for purposes of additional exemption.

161. An account holder of a BPI savings deposit earned an interest of P 1,000 on his deposit. If he
decides to withdraw the interest income, he will receive
A. P 1,000 C. P 800
B. 200 D. nothing

162. Monthly remittance for Creditable and Final Income taxes withheld shall be due _____ for
Non-eFPS and _____ for Efps, of the following month in which the withholding was made,
depending on the industry grouping as set forth in RR 26-2002.

Non-eFPS eFPS Non-eFPS eFPS

A. 15th day 15th day C. 15th day 10th day E. None of the above
B. 10th day 15th day D. th
20 day 25th day

163. Remittance of withholding taxes shall be made thru, except

A. Manual: Over the counter of the AAB located within the territorial jurisdiction of the
Revenue District Office (RDO) where the taxpayer is registered.
B. Manual: In places where there are no AABs, concerned Revenue Collection Office (RCO),
thru the Mobile Revenue Collection Officers System (MRCOS) facility, under the
jurisdiction of the RDO.
C. Online: GCash Mobile Payment
D. Online: Landbank of the Philippines (LBP) Linkbiz Portal, for taxpayers who have ATM
account with LBP and/or holders of Bancnet ATM/Debit Card.
E. Online: Philippine National Bank (PNB) Linkbiz Portal, for taxpayers who have ATM
account with PNB and/or holders of Bancnet ATM/Debit Card.

164. Which of the following statements is/are true about a Letter of Authority (LOA) or Letter
Notice (LN)?
I. Any tax assessment issued without a Letter of Authority is a violation of the taxpayer’s right
to due process and is therefore “inescapably void.”
II. Letter Notice (LN) is entirely different from LOA. It is not an authority to conduct an audit
or examination of the taxpayer leading to the issuance of deficiency assessments. After the
LN has served its purpose, the revenue officer should properly secure a LOA before
proceeding with the further examination and assessment of the taxpayer.
III. Any examiner or revenue officer initiating tax assessments or performing assessment
function without LOA shall be subject to appropriate administrative sanctions.

A. I and II C. I and III E. None of them

B. II and III D. All of them
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165. Which of the following options is false? Real property seized by the government on delinquent
taxpayer
A. maybe redeemed within one year by paying in full the taxes, penalties, interests and
administrative costs incurred in the seizure and conduct of auction sale.
B. forfeiture shall become absolute, without further proceedings, after one (1) year from the
date of the execution thereof, unless redeemed.
C. shall be forfeited if during the auction sale, no bidder appeared or the highest bid offered
is lower than the minimum bid price.
D. shall be sold at public auction.
E. None of them

Items 166 to 169:

The employees AB Company received the following fringe benefits from their employer in June
2018:
Chief Operating Officer (managerial employee) P 16,250
Two Supervisors, per person 3,900
Fifteen clerks and laborer, per person 3,000
166. The fringe benefits tax expense is
A. P 23,150 C. 10,850 E. None of the above
B. 20,150 D. 12,950

167. The deductible fringe benefit expense is

A. P 82,000 C. 10,850 E. None of the above
B. 40,000 D. 34,000

168. The amount of fringe benefits tax withheld should be remitted by AB Company not later than
A. April 15, 2019 C. July 20, 2018 E. None of the above
B. July 10, 2018 D. July 31, 2018

169. The remittance should be made thru

A. BIR Form 1601-FQ C. BIR Form 1602Q E. None of the above
B. BIR Form 1603Q D. BIR Form 1604CF

Items 170 to 174:

Mr. See is an accountant who is engaged in public practice. Total gross receipts
amounted to ₱2,250,000 for taxable year 2018. His recorded cost of service and operating
expenses were ₱950,000 and ₱200,000, respectively.

170. How much is the income tax due on Mr. See if he decides to pay tax based on the graduated
rates?
A. P 220,000 C. 88,000 E. None of the above
B. 180,000 D. 164,000

171. What business tax is due on him?

A. Value-added Tax C. 3% Non-VAT E. None of the above
B. Excise Tax D. None

172. If Mr. See decides to avail of the 8% income the option, the tax due on him is
A. P 220,000 C. 160,000 E. None of the above
B. 180,000 D. 164,000

173. In the preceding question, the business due on him is

A. Value-added Tax C. 3% Non-VAT E. None of the above
B. Excise Tax D. None
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174. How much is the tax due if he availed of the Optional Standard Deduction?
A. P 220,000 C. 108,000 E. None of the above
B. 180,000 D. 295,000

175. Which statement is false? The certificate of zonal values of real properties for donor’s tax,
estate tax and capital gains tax purposes
A. may be issued by the Assessment Performance and Monitoring Division of the national
office.
B. shall be issued by the Revenue District Offices.
C. is subject to a Certification Fee of P100 and P15 documentary stamp tax.
D. None of the above
E. All of the above

176. P20,000 cash dividend by a domestic corporation to a resident citizen is subject to a final
withholding tax of
A. P 2,000 C. 5,000 E. None of the above
B. 4,000 D. None

177. A 2018 interest on foreign currency deposit under the expanded currency deposit system is
subject to a final withholding tax of
A. 20% C. 15% E. None of the above
B. 10% D. 7.5%

178. A real property owner owns a 200 square meter residential land in Manila. The market value
in the tax declaration is P5,000 per square meter while the zonal value is P4,000 per square
meter. If the ordinance of the city fixes an assessment level of 18% and a basic tax rate of
1.5%, the annual real property tax payable is
A. P 4,500 C. 3,600 E. None of the above
B. 2,700 D. 2,400

179. Atin Corp is a domestic corporation which is engaged in a grocery business. In filing its
annual income tax return it should use BIR Form
A. 1701 C. 1702 - EX
B. 1702 - RT D. 1703

180. Which of the ceilings on the following de minimis benefits is correct?

Rice subsidy Uniform allowance
A. P 1,200 P 3,000

B. 1,000 4,000

C. 2,000 6,000

D. 1,500 5,000

181. Dividends from a domestic corporation and/or share in the net income of a taxable
partnership received by a nonresident alien NETB is subject to a final tax of
A. 25% C. 20%
B. 30% D. 10%

182. The minimum corporate income tax (MCIT) is based on –

A. 2% of gross income C. 5% of gross income
B. 10% of gross income D. 15% of gross income
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183. ABC Corporation gave a fringe benefit to Benny, one of its employees. The benefit given shall
not be subject to fringe benefits tax if Benny is a -
A. Utility worker C. General manager
B. Accounting supervisor D. CEO of the corporation

184. Nicolai Sikursky, Ukrainian, died in the Philippines. The properties situated in his own country
will not be subject to estate tax if he was a -
A. Resident citizen C. Resident
B. Resident alien D. Nonresident

185. A business establishment becomes subject to VAT if its gross receipts during the 12-month
period exceeds
A. P 1,500,000 C. P 3,000,000
B. 1,991,500 D. 9,191,500

186. Bay purchased a machine from Cel. He was issued documents relative to the transaction. If
they are both VAT registered, which of the following documents will entitle him to claim input
tax on the purchase?
A. Acknowledgment receipt C. Sales invoice
B. Delivery receipt D. Collection receipt

187. On the certificate of exemption from income tax, a non-stock, non-profit educational
institution is
A. required to renew every 3 years
B. required to renew every year
C. required to renew every 5 years
D perpetual unless recalled for valid grounds.
.

188. Which is the best option? BIR Form 1701 (Annual Income Tax Return for Self-Employed
Individuals) shall be filed and the tax be paid not later than April 15 every year. Assuming
April 15 falls on a Saturday
A. the return shall be filed and the tax paid on the following day.
B. the return shall be filed and the tax paid on Monday.
C. the return shall be filed and the tax paid on Sunday
D the return shall be filed and the tax paid on the following business day.
.

189. Transport fares of PWDs are net of VAT and 20% discount on the following common carriers,
except
A. Airplane C. Cruise
B. Roro D. Bus

190. If the bus fare from Naga to Manila is P1,000, how much should a PWD pay to the bus
conductor?
A. P1,000 C. P 714
B. 800 D. Cannot be determined

191. Which of the following is not a basis in computing capital gain tax on sale of real property?
A. Zonal value C. Assessor’s value
B. Selling price D. Book value

192. All taxpayers with the following transactions are directed to secure a TIN prior to their
application for eCAR:
A. Real Property Tax – TIN of owner C. From employment – TIN of income earner
B. Estate Tax – TIN of heir/s D. Sale of Shares of stock – TIN of buyer/s
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193. A decedent non-resident alien is not subject to estate tax on

A. Real property situated in the Philippines
B. Car registered in the Philippines
C. Residential house abroad
D Shares of stock in a domestic corporation
.

194. Which of the following is not subject to a creditable withholding tax?

A. Non-licensed professional deriving gross receipts above P100,000 in any 12-month
period and/or SMW rates from lone payor
B. Rental income on real property
C. Royalty on books
D. Professional receiving income from multiple payors and/or other source of income.

195. Lagot Corporation operates different branches in Luzon. The managers being assigned in the
branch offices usually come from the main office in Santiago City. Because of this practice, it
usually leases residential houses for the branch managers. During the year, the corporation
paid monthly rental of P9,520 for the residential house in Angeles City. How much is the
fringe benefit tax per month on the fringe benefits furnished by to its branch manager in
Angeles City.

a. P 2,563 c. P 3,046
b 2,240 d. None
.

196. The fringe benefits tax is not imposable if the employee is

A. Managerial C. Rank-and-file
B. Supervisory D. All of them

197. Effective January 1, 2018, the tax rate for estate taxation shall be
A. 10% C. 6%
B. 30% D. graduated

198. Effective January 1, 2018, individual income taxpayers shall be exempt on Other Benefits not
exceeding
A. P 82,000 C. P 30,000
B. 100,000 D. 90,000

199. Effective January 1, 2018 individual income earners shall be exempt on income not exceeding
A. P 40,000 C. P 200,000
B. 25,000 D. 250,000

200. Under the TRAIN, Standard Deduction in estate taxation shall be

A. P1,000,000 C. P 10,000,000
B. 5,000,000 D. retained
201. Documentary stamp tax on sale of real property is 1.5% of the tax base. If the selling price
on the sale is P4,000,000, while the zonal value is P2,000,000 and the listed value in the tax
declaration is P2.5 million, the documentary stamp tax payable is
A. P 60,000 C. P 37,500
B. 30,000 D. 240,000

202. In the preceding question, the capital gain tax payable is

A. P 240,000 C. P 150,000
B. 120,000 D. 60,000
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203. In the preceding question, if the buyer wants to register the property in his name he must
apply for transfer of title with the
A. Bureau of Internal Revenue. C. Register of Deeds.
B. City/Municipal Assessor’s Office. D. Bureau of Lands.

204. If the buyer pays P 504 for an article from a VAT seller, the amount of VAT added by the seller
on the value of the article is
A. P 4.00 C. P 60.48
B. 104.00 D. 54.00

205. Monthly bills charged on post-paid subscribers of mobile phone services by telcos are subject
to
A. Franchise Tax C. Value-added Tax
B. Overseas Communications Tax D. Sales Tax

206. An employee who wants to update his personal information must submit BIR Form No.
A. BIR Form No. 2316 C. BIR Form No. 1604-CF
B. BIR Form No. 1700 D. BIR Form No. 2305

207. Which option is wrong? The Certificate on the Compilation Services and Notes to Financial
Statements
A. shall be prepared and signed by a CPA who is tasked to assist management in the
preparation and presentation of the financial information.
B. must be prepared in accordance with the applicable financial reporting framework and
reports as required by accounting and auditing standards.
C. shall be attached to the audited FS that are to be submitted to the regulatory offices.
D. shall be required only for issuers with gross sales or revenues exceeding P1,000,000 for
a particular accounting year.

208. Remuneration or fees received by a personnel under a job order or contract of service
arrangement with the government is
A. subject to income tax as compensation income.
B. subject to creditable withholding income tax of 10%/15% if the individual is not a
professional.
C. subject to creditable withholding income tax of 10% if the personnel is a professional on
his gross professional fee of P40,000 a month.
D. exempt from income tax.

209. Fees, allowances, per diems and other form of income payments of P30,000 per month to
non-professionals hired by government under a job order or memorandum of agreement are
subject to
Expanded Value-added
Withholding Tax Tax
A. Yes No
B. Yes Yes
C. No Yes
D. No No

210. This is a common requisite for tax exemption of separation benefits received by an official or
employee if terminated by his/her employer due to installation of labor-saving device,
redundancy and retrenchment,
A. That the selection of employees to be terminated has been made in accordance with a
fair and reasonable criteria.
B. That there has been an introduction of machinery, equipment or other devices, with brief
description of the use of said machinery, equipment or device;
C. That the positions or services are in excess of what is reasonably demanded by the
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actual requirements of the enterprise to operate in an economical and efficient manner.

D. That the losses, if already incurred, are not merely de minimis, but substantial, serious,
actual and real, or if only expected, are reasonably imminent, with appropriate
supporting evidence of said losses.

211. Romeo insured the life of his sixty (60) employees under group insurance with Philippine
Prudential Insurance Company. Which of the following statements is false?
A. If the beneficiary is the employer, Romeo cannot claim the amount of premiums paid as
deduction from his gross income.
B. If an employee dies, the amount of proceeds shall not be subject to estate tax.
C. If an employee dies, the proceeds shall be subject to income tax if the beneficiary is the
estate of the employee.
D If an employee dies, the proceeds shall neither be subject to income tax nor estate tax.
.

212. Which of the following is not a statement of the Department of Finance relative to their tax
reform proposal under the Duterte Administration?
A. “We are retaining the VAT exemptions for senior citizens and PWDs in the tax reform
proposal. In fact, to make sure the benefits go to them, the government will have a
National ID system.”
B. “In order to expand the tax base, the tax reform proposal plans to limit only the
exemption to raw food and other necessities such as education and health, as well as
other items with clear economic rationale.”

C. “Low income and vulnerable households will be protected through a higher VAT
threshold. This means purchases thru stores with gross sales below P3 million, like
sari-sari stores, will be exempted from VAT.”
D. “We propose to retain zero-rating on indirect exporters and agents and foreign currency
denominated sales.”

213. How many statement/s is/are correct?

I. A "sales or commercial invoice" is a written account of goods sold or services rendered
indicating the prices charged therefor or a list by whatever name it is known which is used
in the ordinary course of business evidencing sale and transfer or agreement to sell or
transfer goods and services.

II. A "receipt" is a written acknowledgment of the fact of payment in money or other

settlement between seller and buyer of goods, debtor or creditor, or person rendering
services and client or customer.

III. A VAT invoice is the seller's best proof of the sale of goods or services to the buyer, while
a VAT receipt is the buyer's best evidence of the payment of goods or services received
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from the seller. A VAT invoice and a VAT receipt should not be confused and made to refer
to one and the same thing.

A. One only, consisting of Statement 1.

B. Two only, consisting of Statements 2 and 3.
C. All statements.
D Two only, consisting of Statements 1 and 2.
.

Questions 214 – 216:

Given the following data during the first quarter of the current year:
Month Output Tax Input Tax
January P 20,000 P 15,000
February 40,000 22,000
March 50,000 10,000

In the books of the taxpayer, there was a debit balance of input tax of P8,000 in the
last quarter of the preceding year.

214. The VAT payable in January is –

A. P (3,000) C. P 0
B. 5,000 D. 3,000

215. The VAT payable in February is –

A. P 18,000 C. P 10,000
B. 15,000 D. None

216. The tax still payable that must appear in BIR Form 2550Q (quarterly return) is -
A. P 55,000 C. P 40,000
B. 63,000 D. 53,000

217. Which of the following information must not appear in the face of a Sales Invoice of a non-VAT
business?
A. Date of issuance and number of the Authority to Print issued by the BIR.
B. Name, address and amount paid by the payor.
C. Name of printer and BIR Accreditation Number.
D The amount of VAT, net of VAT and the total invoice price.
.

218. Manny, a managerial employee, received a fringe benefit of P 50,000 from its employer
corporation. The fringe benefit tax is –
A. P26,923.07 C. P12,669.68
B. 23,529.41 D Exempt
.

219. One of the following is not an acceptable mode/instrument of paying tax with an Accredited
Agent Bank (AAB):
A. Over-the-Counter Cash Payment C. Bank debit system
B. Credit/Debit card D. Post-dated check

220. Which of the following is subject to real property tax?

A. Building owned by a private person and being leased to a private educational institution for
use as classroom of the students.
B. Building owned by a private person and being leased to a private educational institution for
use as offices of the school administrators.
C. Building owned by a private school and being leased to a private person for use as a
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business establishment.
D. Building which is being occupied as a church by a certain religious sect.

221. An individual taxpayer had the following data on income during the period:

Rent income on real property P 48,000

Interest on bank deposit 2,000
Dividend from a A Corp., domestic 40,000
Professional income as management consultant
(current year’s gross income is P600,000) 80,000
Tax informer’s reward 30,000

Assuming that the foregoing amounts are gross of withholding taxes, how much is the
total amount of final withholding tax?
A. P 7,400 C. P 15,400
B. 11,300 D. 4,400

222. King sold 1,000 square meters of lot with a residential house thereon for P5 million. The fair
market value in the tax declaration of the lot is P1.5 million and the house is P3 million. The
land had a zonal value of P4,000 per square meter.
How much is the capital gains tax?
A. P 300,000 C. 210,000
B. 420,000 D. None, because it is an ordinary asset

223. A parcel of land was assessed as commercial with a rate of 45% with a fair market value of
P3,000,000 although the zonal value is P3,200,000. What will be the annual basic real
property tax if the tax rate in the local government unit is 1.5%?
A. P 1,350,000 C. 20,250
B. 1,440,000 D. 21,600

224. In the preceding question, how much is the total annual real property tax on the land?
A. P 20,250 C. 33,750
B. 13,500 D. 36,000

225. On a sale of real property classified as capital asset, the tax that will be imposed is
A. Creditable withholding tax C. Value-added tax
B. Capital gains tax D. Transfer tax

226. A multi-millionaire donated to his childhood friend a commercial land with a market value in
the tax declaration of P800,000 and zonal value of P1 million. How much is the donor’s tax?
A. P 45,000 C. 44,000
B. 60,000 D. 300,000

227. BIR Form No. 1700 must be filled-out in

A. Duplicate copies C. Quadruplicate copies
B. Triplicate copies D. Quintuplicate copies

228. A taxpayer is not qualified to avail of the substituted filing of income tax return if
A. Receiving purely compensation income.
B. Working for only one employer in the Philippines and he has no other income for the
calendar year.
C. The tax has been withheld correctly by the employer (tax due equals tax withheld)
D. The spouse is not qualified to avail of the substituted filing and they are filing jointly.

229. A person with disability is

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A. subject to VAT on purchase of medicine from Mercury Drug.

B. entitled to 20% discount on foods ordered from a restaurant.
C. exempt from VAT and entitled to 20% discount on foods ordered in a restaurant.
D. not entitled to 20% discount if the ID card is issued by the PRC.

230. All of the following, except one, are taxable on income within only:
A. Resident alien C. Resident citizen
B. Nonresident citizen D. Nonresident alien

231. Cathay Pacific Airways Corporation is subject to the following tax in the Philippines
A. Income tax of 2.5% of gross Philippine billings.
B. VAT on carriage of passengers on outgoing flight.
C. VAT on carriage of cargo on outgoing flight.
D. VAT on carriage of passengers on incoming flight.

232. One of the following is subject to the 3% percentage tax

A. Establishments with annual gross sales or receipts exceeding P3,000,000 and which are
VAT registered.
B. Businesses with annual gross receipts or sales exceeding P P3,000,000 and which are not
VAT registered.
C. VAT registered establishments with annual gross receipts of not exceeding P3,000,000
Establishments in which the annual gross sales do not exceed P3,000,000 and are not VAT
D. registered.

233. The income subject to this withholding tax is not includible in the computation of taxable
income –
A. Withholding tax on compensation income
B. Creditable withholding tax
C. Final withholding tax
D. All of the above