PREWEEK LECTURE

TAXATION (TAX)
MAY 2024 LECPA

GENERAL PRINCIPLES

A 1. The power to demand proportionate contribution from persons and property to defray the necessary
expenses of the government.
a. Power of taxation
b. Police power
c. Power of eminent domain
d. Power rangers

D 2. Which of the following is not one of the inherent limitations of the power of Taxation?
a. Public purpose public purpose
b. International comity nternational comity
c. Exemption of the government
d. Uniformity non-Delegation of taxing

xemption of Crmt
powera

situs of Taxation
D 3. Which of the following is not one of the Constitutional limitations?
a. Due process of law
b. Equal protection of law
c. Free worship clause
d. Non-delegability of the taxing power <Inherent)

2 4. Which of the following is not one of the characteristics of Tax?

a. Generally payable in money ~
b. Proportionate in character ~
c. Based on the taxpayer’s ability to pay principles (FATS
d. Exclusively levied by legislature ~

B 5. Which of the following is not one of the sources of tax laws?

a. Court decisions NRC

qewjumabot
b. Author’s interpretations ,

c. BIR rulings
d. Local tax ordinances

↑ >didnt threshold
meet
INDIVIDUALS

D 6. Determine the correct classification of the following: the

I. Manny, a Filipino businessman, went on a business trip abroad and stayed there for almost a half-
year during the taxable year. RO
II. Kyla, a Filipino professional singer, held a series of concerts in various countries around the world

Xintention
during the current taxable year. She stayed abroad most of the time (approximately 185 days)
RC
III.
during the year.
prevails ; NRCkung employment
Efren, a foreign “cue” artist, went to the Philippines during the taxable year to
reason
train and participate
in the world cup of pool. He stayed in the country for 7 months during the taxable year, including
CIODdYS NRA-ETB
the months of preparation. 210>188
:

IV. Alfred, a foreign entrepreneur, went to the Philippines for a definite purpose that would require
an extended stay. RA
V. Elsa, a world-renowned singer, went to the Philippines for a one-night concert and returned to
USA thereafter. NRA-NETB

a. b. c. d.
I. NRC RC RC RC
II. RC NRC NRC RC
III. RA NRA-NETB NRA-ETB NRA-ETB
IV. NRA-NETB RA NRA-NETB RA
V. NRA-ETB NRA-ETB RA NRA-NETB

1
C 7. Which of the following statement/s is/are correct?
I. Interest income derived within the Philippines from bank deposits, deposit substitutes, and trust
funds are taxed at 20% FWT for all individual taxpayers except for NRA-NETB.v
II. Royalties from books, literary works and musical compositions are taxed at 10% FWT for all
individual taxpayers except for NRA-NETB. ↓
III. Prizes amounting to P10,000 or less will be taxed at 10% FWT for all individual taxpayers except
for NRA-NETB. Basic Income Tax (Tax table)
IV. PCSO and Lotto winnings over P10,000 will be taxed at 20% FWT for all individual taxpayers except
for NRA-NETB. v

a. b. c. d.
I. True True True True
II. True True True True
III. True False False False
IV. True False True True

D 8. Statement 1: The determination of 6% capital gains tax on sale of real property is based on net capital
gains realized by the seller of real property. Highest among SP Assessed zonal values
x

. ,

Statement 2: Sale of non-domestic shares in the Philippines directly to buyer will be subject to 15% capital
gains tax. x only domestic unlisted is suby to 15 %
a. Only statement 1 is correct
b. Only statement 2 is correct
c. Both statements are correct
d. Both statements are incorrect

C 9. Statement 1: The husband and wife shall compute their individual income tax separately based on their
respective total taxable income. V
Statement 2: If any income cannot be definitely attributed to or identified as income exclusively earned or
realized by either of the spouses, the same shall be divided equally between the spouses for the purpose
of determining their respective taxable income. ~
a. Only statement 1 is correct
b. Only statement 2 is correct
c. Both statements are correct
d. Both statements are incorrect

Use the following information for the next three (3) questions:

LJ, married, left the Philippines in the middle of the year on July 1 to go abroad and work there for five years.
The following data were provided as of December 31:

Gross Business Income Business Expenses

Philippines Abroad Philippines Abroad
Jan 1 to June 30 P300,000 ~ P200,000 ~ P100,000 M
P50,000-
July 1 to Dec. 31 600,000 v 400,000 150,000v 50,000

A 10. LJ’s taxable net income should be:

a. P800,000 500K 150K -

= 350K b. P950,000
c. P1,100,000 400K-150K =450k d. P600,000
-

888K
B 11. Assuming he arrived from abroad on July 1 to permanently resettle in the Philippines, his taxable income
as of December 31 should be:
300K 100K -
200K
a. P750,000 b. P1,000,000
:

c. P1,100,000 1M 200K -

SNOK2 d. P600,000 -

1M
C 12. Assume LJ did not leave Philippines, his taxable income should be:
a. P750,000 b. P950,000
c. P1,150,000 d. P600,000
1 , 500 , 000-350 , 08
=

1, 150 018
,

2
 Use the following information for the next two (2) questions:

Paolo received the following income during the taxable year:

Gross income, Philippines P3,850,000

Gross income, Canada 1,650,000
Business expenses, Philippines 2,000,000
Business expenses, Canada 725,000
Interest on bank deposit, Metrobank Taguig 50,000
Capital gain on sale of shares of closely held domestic corporation 180,000

N RA
RL NRC RA ETB

Gl 3 , 850 , 000 3 , 850 , 000 3 , 850 , 088 31850 , 08

1, 450 , 000 8 -
A 13. How much is the net taxable income assuming he is:
RC NRC RA NRA-ETB BE (2M) lam) (2m) (2m)
a. P2,775,000 P1,850,000 P1,850,000 P1,850,000
b. P2,775,000 P925,000 P925,000 P1,650,000 (7254)8 * -
c. P2,775,000 P2,775,000 P1,650,000 P1,650,000int
d. P2,775,000 P2,775,000 P925,000 P1,650,000
~-pertains only
to basic income
taXw/caT
ignore subjts NM 2 ,775 , 000 1 1 850, 000 1 , 850 , 00 1 , 850,
B 14. How much is the income tax due assuming he is:
RC NRA-ETB NRA-NETB
a. P167,500 P167,500 P167,500 482 , 50 102 , 5N 3 1 850 , 000

ALuL5
b. P635,000 P365,000 P962,500 e
c. P738,000 P445,000 P962,500
d. P738,000 P167,500 P412,500 ITP

CORPORATIONS

D 15. The term “corporations” shall include:

I. One Person Corporation I
II. Ordinary partnerships v
III. Joint stock companies v
IV. Joint accounts -
V. Associations v
VI. Insurance companies v
VII. Mutual fund companies ~
VIII. Regional operating headquarters of multinational corporations ~
a. I and II only b. I, II, III, IV and V only
c. I, II and III only d. All of the above

A 16. Which of the following is taxable based on income from all sources, within and outside?
a. Domestic Corporations
b. Resident Foreign Corporations
c. Non-resident Foreign Corporations
d. All of the choices
applicable
to
-RFC
B 17. Which of the following statements is correct? ->
I. A minimum corporate income tax (MCIT) of 2% of gross income is imposed upon any domestic
corporation and resident foreign corporation beginning on the 4th taxable year immediately following
the taxable year in which such corporation commenced its business operations.
II. MCIT shall be imposed whenever such corporation has zero or negative taxable income, or when the
amount of MCIT is greater than normal income tax due from such corporation.
III. The computation and the payment of MCIT, shall likewise be apply at the time of filing the quarterly
corporate income tax.
a. I and II only b. I, II and III
c. II and III only d. None of the above
3
A 18. Which of the following statements is incorrect?
Domestic
a. Resident foreign corporations with net taxable income not exceeding P5 million and total assets,
-

excluding land, not exceeding P100 million are taxed at⑳

20%
b. Non-resident cinematographic film owner, lessor or distributor is subject to 25% corporate
income tax ~
c. Rentals and charter fees payable to non-resident owners of vessels chartered by Philippine
nationals is subject to 4.5% corporate income tax We
d. Income of OBUs and foreign currency deposit units (FCDUs) of depository banks is subject to 25%
corporate income tax ~

D 19. Which of the following is not an exempt corporation?

a. Cemetery company owned and operated exclusively for the benefit of its members /
b. Civic league or organization not organized for profit but operated exclusively for the promotion
of social welfare v
c. Labor, agricultural or horticultural organization not organized principally for profit M
d. Proprietary educational institutions and non-profit hospitals, on net income if gross income from
unrelated trade, business, and other activities does not exceed 50% of the total gross income from
all sources. special corp

D 20. Which of the following statements is incorrect for taxation on dividends?

a. Dividends received by nonresident foreign corporation from a domestic corporation is subject to
either 15% or 25% -
b. Dividends received by a resident citizen from a resident foreign corporation is considered as an
v
ordinary income
c. Dividends declared and paid by foreign corporations are subject to predominance test M
d. Dividends received by a resident foreign corporation from a domestic corporation is considered
as an ordinary income exempt

A 21. Which of the following is not one of the requisites for tax exemption on foreign-sourced dividends?
a. Reinvestment should be made within the next two year from the time foreign-sourced dividends
->

where received.
⑧
b. The DC holds directly at least 20% of the outstanding shares of the foreign corporation.
c. It has held the shareholdings for a minimum of 2 years at the time of dividend distribution.
d. Funds from such dividends actually received or remitted into the Philippines are reinvested in the
business operations of the domestic corporation in the Philippines.

Use the following information for the next four (4) questions:

A domestic corporation has the following income and expense for the year:

Philippines Abroad
Gross sales P100,000,000 P50,000,000
Cost of sales 40,000,000 20,000,000
Operating expenses 30,000,000 12,000,000 150M
(LOM)
A 22. How much is the income tax due? 90M 1 8M

Ex
:

vs MGT
.

a. P12,000,000 b. P13,200,000
c. P14,400,000 d. P18,000,000
157 12m
=

->
B 23. How much is the income tax due assuming the total assets amounted to 80 million only? > m

a. P9,600,000 b. P12,000,000

Fren ener
c. P14,400,000 d. P18,000,000

A 24. How much is the income tax due assuming the corporation is a resident foreign corporation?
a. P7,500,000 b. P13,200,000
c. P14,400,000 d. P18,000,000 ⑧
D 25. How much is the income tax due assuming the corporation is a nonresident foreign corporation.
a. P7,500,000 b. P13,200,000

i)
c. P14,400,000 d. P15,000,000

-OMx 258 =
15M

4
PARTNERSHIP, CO-OWNERSHIP, JOINT VENTURE

D
26. Statement 1: The distributive share of a partner in the net income of a taxable partnership is equal to each
partner’s distributive share of the net income declared by the partnership for a taxable year after
deducting the corresponding corporate tax. #T -
~
Statement 2: The income of a general commercial (ordinary) partnership is also subject to MCIT or Regular
Corporate Income Tax whichever is applicable.
a. Statement 1 & 2 are false
b. Statement 1 is true but statement 2 is false
c. Statement 1 is false but statement 2 is true
d. Statement 1 and 2 are true

D 27. It arises when two or more heirs or beneficiaries inherited an undivided property from a decedent, or
when a donor makes a gift of an undivided property in favor of two or more donees
a. Partnership b. Joint account
c. Trust d. Co-ownership
A 28. Statement 1: The share of a co-venture individual in the net income of a tax-exempt joint venture or
consortium is subject to normal income tax. M
Statement 2: The share of a co-venturer corporation in the net income of a tax-exempt JV is subject to 10%
dividend tax.
a. Only statement 1 is correct subigts RCT
b. Both statements are correct
(01)
c. Only statement 2 is correct d. Both statements are incorrect

Use the following information for the next three (3) questions:

Joseph is a partner of RTC partnership, a general professional partnership, and owns 25% interest. The gross
receipts of the partnership amounted to 10,000,000 for the current taxable year. The recorded cost of service
and operating expenses were 2,750,000 and 1,500,000, respectively.

408G
itemized OSD

GR 10 , 000 008 IOM

(2 , 750 ()
,

St (21750 00] ,
-
,

AD 7, 250, CA
[15M)

cashe
N 5 ,750 , 000
41350 CN ,

C 29. If the partnership availed of OSD, how much is the net income for distribution to partners?
a. P2,750,000 b. P2,900,000
c. P4,350,000 d. P5,750,000

A 30. How much is the income tax due of RTC partnership? GPP =

exempt
a. P0 b. P870,000
c. P1,087,500 d. P1,305,000

S 31. How much is the income tax due of Joseph? assuming OSD
a. P86,250 b. P130,000 Joseph's separate 12 :

c. P174,375 d. P321,250
sh .
1 , 087 , 50

a) cost
a

E 174 , 375

5
 Use the following information for the next two (2) questions:

Rhea Co. and Izzy Co. formed a joint venture to undertake energy operation project pursuant to an operating
consortium agreement under a service contract with the government. They shared equally. For the current
year, the following data on their joint and separate operations were presented:
Rhed IzzY
Joint operation: Gross income P150,000,000
Gl 20N 30M
Expenses 50,000,000

Separate operations (not part of joint venture) Exp() M)

ISM COM
Rhea Izzy
Gross income
Expenses
P20,000,000 P30,000,000
5,000,000 10,000,000 - FON
X
2 32. How much is the net income of the joint venture? 250 x
254
a. P235,000,000 b. P150,000,000
c. P100,000,000 150M-SOM d. P200,000,000

B 33. How much is the income tax due from the joint venture?
a. P70,500,000 b. P30,000,000
c. P45,000,000 d. P0

ESTATE AND TRUST

34. A mass of all property, rights and obligations, which are not extinguished by death, of a person existing at
A the time of his death, and includes those which have accrued since the opening if succession.
a. Estate b. Co-ownership
c. Trust d. Partnership

C 35. A right of property, real or personal, held by one person for the benefit of another.
a. Estate b. Co-ownership
c. Trust d. Partnership

B 36. Which of the following statement/s is/are correct?

~JUDICAL Settlement
I. When an estate, under administration, has income-producing properties, the annual income of the
estate becomes part
-
of the taxable gross estate. Ol
II. The items of gross income of the estate are the same items as the items of gross income of individual
taxpayers.
III. Where the estate is not under judicial administration, the income of the estate shall be taxable to the
heirs and beneficiaries.
a. I and II only
b. II and III only
c. III only
d. I, II and III

D 37. Which of the following statements is not correct?

a. An irrevocable trust is subject to income tax. ~ tax table
b. An irrevocable trust is taxed in the same manner as an individual taxpayer. -
c. Tax on irrevocable trust is based on the income of the trust after deducting the income distributed
to the beneficiaries ~
d. None of the above

6
 Use the following for the next two (2) questions:

Jolina died leaving an estate worth P10,000,000. The estate is under administration. The properties in the
estate earned a gross income of P1,200,000 and the estate incurred expenses of P600,000. Juliet, the only heir,
received 200,000 from the income of the estate.

Gross Income P 1 200 000

, ,

Expenses C400 , 000)

AddH Deduction (200 , 000)
NT P400 000 ,

textable : 22 , 500

A 38. How much is the income tax due of the estate?

a. P22,500 b. P50,000
c. P40,000 d. P60,000

D 39. Assume that Juliet also earned net income of 500,000 from his trading business. What amount should
Juliet report as his taxable income for the year? 1500 000
XII-trading ,

a. P200,000 b. P530,000 Ad share 200 CO

:

c. P500,000 d. P700,000 -

XIM P700 uO ,

Use the following information for the next three (3) questions:
-grantor ->taxed as individual beneficial
On January 1, Pedro established an irrevocable trust fund for the benefit of his daughter, Ana. Pedro appointed
Atty. Juan as the trustee. The property transferred to the trust is a piece of land with a dormitory earning rental
income. During the year, the trust earned P40,000,000 revenues and incurred expenses of P10,000,000. Out
of the trust’s income, Atty. Juan transferred P10,000,000 to Ana. During the year, Ana earned compensation
income of P2,500,000. distributio
Trust
-

D 40. How much is the net taxable income of the trust? p40, 000 , 000
Revenues
a. P30,000,000 b. P19,980,000
c. P29,980,000 d. P20,000,000 Expenses (10 00 00]
, ,

Distributio (10 40 a) , ,

B 41. How much is the net taxable income of Ana? NI 420 20 , 08

,

a. P2,950,000 b. P12,500,000 -
-

c. P12,950,000 d. P20,000,000 2 , 500 , O

~no special deductive
A 42. The net taxable income of the trust if it is administered abroad is 10 , 00 , 00 312 500 00
, , Ni

a. P30,000,000 b. P19,980,000
Revenues HOM
c. P29,980,000 d. P21,480,000

GROSS INCOME NT Expor

A 43. It means all wealth which flows into the taxpayer other than mere return of capital and includes gains
derived from the sale or other disposition of capital assets.
a. Income b. Capital
c. Asset d. Fund

D 44. The gross income, as per section 32(A), shall include:

I. Compensation income from services
II. Gross income derived from the conduct of trade or business or the exercise of a profession
III. Gains derived from dealings in property
IV. Interest
V. Rents
VI. Royalties
VII. Dividends
VIII. Annuities
IX. Prizes and winnings
X. Pensions
XI. Partner’s distributive share from net income of a GPP

7
 a. I, II, III V, X and XI only b. I, II, III, IV and V only
c. I, II, III, IV, V, VIII only d. All of the above

B 45. Income, for tax purposes:

I. Means all income from whatever source (legal or illegal), unless specifically excluded under the Tax
Code.
II. Means all wealth which flows into the taxpayer other than return of capital.
III. Is recognized in the year it is actually received in cash or cash equivalent.
IV. Refer to the amount of money coming to a person or corporation within a specified time, whether as
payment of services, interest, or profits from investment.
a. I, II and III only b. I, II, III and IV
c. I and IV only d. None of the above

D 46. The exclusion from gross income, as per section 32(B), shall include but not limited to:
I. Life insurance
II. Amount received by insured as return of premium
III. Gifts, bequests, and devises
IV. Compensation for injuries or sickness
V. Income exempt under treaty
VI. Retirement benefits, pensions, gratuities, etc.
a. I, II, III, IV and V only b. I, II, III, V, VI and VII only
c. I, II, III, IV, V and VI only d. All of the above

Ar
47. Statement 1: Tips or gratuities paid directly to an employee by a customer of the employer that are not
accounted for by the employee to the employer are considered as taxable income subject to basic tax.
Statement 2: The tips described in statement 1 shall not be subject to withholding tax for the reason that
-
tips are not accounted for by the employee to the employer.
a. Both statements are correct
b. Both statements are incorrect
c. Only the first statement is correct
d. Only the second statement is correct

D 48. Which of the following is⑧

not excluded from gross income?
a. Retirement benefits received under RA 7641
b. Benefits received from or enjoyed under the Social Security System in accordance with the
provisions of RA 8282
c. Benefits received from the GSIS under RA 8291
d. Retirement pay by reason of resignation

S 49. The taxable income before income tax of Sarah Corporation for the current year was P500,000. During the
year, the corporation received the following refund of taxes paid in previous years and recoveries of
accounts written off, all of which were credited to income:
P500 000
was it proper
? unadj ,

M 150 000)
Refund of percentage tax P20,000 ,

Refund of income tax 50,000 * (40 a) ,

Refund of Value-Added Tax 40,000

Bad debt recovered (allowed as deduction) 30,000 v
Bad debt recovered (disallowed as deduction) 20,000 X
as
How much would be the adjusted taxable income of the corporation for the current year?
a. P410,000 b. P117,000
c. P390,000 d. None of the choices

A 50. Jose qualified as head of a household for tax purposes. Jose’s taxable income was P200,000, exclusive of
capital losses. Jose had a net long-term loss of 8,000. What amount of this capital loss could Jose offset
against the ordinary income?
a. Zero deductible only b. P4,000
c. P3,000 d. P8,000
up to the capital
gain .

8
 culin contral tuxctle begad
-
B 51. JJ, an official of Excel Corporation, asked for an earlier retirement because he was immigrating to Canada
-

with his girlfriend. He was paid P3,000,000 as separation pay in recognition of his valuable services to the
corporation. Paul, another official of the same company was separated for occupying a redundant position.
He was given P1,000,000 as separation pay. Rene who was rendered 11 years of service and who is now
55 yrs. old opted to retire for the first time. He received 2,000,000 as retirement pay. The total income
subject to withholding tax is _______.
a. P1,000,000 b. P3,000,000
c. P2,000,000 d. P6,000,000

DEDUCTIONS

B 52. The deduction from gross income, as per section 34 of the tax code, shall include:
I. Necessary and ordinary expenses
II. Interest
III. Taxes
IV. Losses
V. Bad debts
VI. Depreciation
VII. Depletion
VIII. Charitable contribution
IX. Research and development
X. Contributions to pension trust
XI. Premium payments on health and/or hospitalization insurance
XII. Proceeds on life insurance X exclusions
a. I, II, IV, VI, IX, and X b. I, II, III, IV, V, VI, VII, VIII, IX, X, and XI
c. I, II, IV, V, VI, VII, IX, and X d. All of the above

A 53. Statement 1: A taxpayer can deduct an item or amount from the gross income only if there is a law
authorizing such a deduction. v
Statement 2: For income tax purposes, a taxpayer is free to deduct from the gross income the full amount
or a lesser amount of the deduction allowed or not claim any deduction at all. -
a. True, True b. True, False
c. False, False d. False, True

A 54. Which of the following is a nondeductible expense?

a. Interest incurred between a fiduciary of a trust and a beneficiary of such trust
b. Actual bad debt write-off ↓
c. Depreciation using sum-of-the-years’ digits method v
d. Net operating loss carry-over ~

Use the following information for the next two (2) questions:

COD Corporation, a domestic manufacturing corporation, had gross sales of P100,000,000 for fiscal year ending
June 30 and incurred cost of sales of P60,000,000 and operating expenses of P17,500,000, with the following
details:

GS $100 , 000 , 000

Cost of sales
Direct materials P30,000,000 WSS (40 08 , 08)
,

Direct labor 20,000,000

Manufacturing overhead 10,000,000 P60,000,000 AD (17 1 500 08),

Hadt (1 1 500 , 20)

Operating expenses -

Salaries and wages 7,000,000 N 21 , NO , as

Taxes 300,000
Depreciation 3,500,000
Professional fees 200,000
Advertising expenses 3,000,000
Training expenses 3,000,000 x 50 % =
1 5M
.

Office supplies 500,000 17,500,000

B 55. How much is the additional allowable training expense, if any?

a. P0 b. P1,500,000
c. P1,000,000 d. P3,000,000

9
 D 56. How much is the net taxable income of the Company?
a. P1,500,000 b. P40,000,000
c. P17,500,000 d. P21,000,000

B 57. ABC Corporation is engaged in the sale of goods and services with net sales/net revenue of P3,000,000
and P2,000,000 respectively. The actual entertainment amusement and recreational (EAR) expense for the
taxable year totaled P30,000. How much is the deductible EAR expense? limit
a. P30,000 Goods 315
:
18 000
=

,
15 008 15K ,
-

b. P27,000 actual 30 000

,

c. P25,000
d. P0 services 215
:

12 500 20 U

k
=
, ,

C 58. A domestic corporation has the following data on income and expenses:
-

Gross business income P6,200,000

Deductions (excluding contributions) 2,500,000
Contributions to the Government for priority project in education 100,000
Contribution to foreign private foundation non-deductible 100,000
Contribution to domestic charitable organization w/limit 190,000

How much is the deductible charitable and other contributions?

a. P390,000
b. P290,000
c. P285,000
d. P211,000
GBI
Less AD
NI before cont
P4 200 008
(2 500 2)
:

P3 700 O
(180 20)
,
,
,

,
,

x 5% =
185 08
,
!
3 asa e
,

NH Sad
59. ABC Corporation, with total assets of P15,000,000, shows the following data during taxable year:
B
MSME
120 , 000
Sales P500,000 Salary
Interest income,⑳net of 20% final tax Grossup :
30 , 000 x20 %= UK 24,000 Interest Exp 00 000
,

non deductible
Cost of sales part of Gl comp but not in ID
-

300,000 Rent 24 , 008

Salary expense 120,000 6 , 008
Interest expense 60,000 Advertising
DepEX 5i 000
Rent expense 24,000 -

Advertising expense 6,000 Hemized deduction & 15 , 20

Depreciation expense 5,000

What is the correct amount of itemized deduction?

a. P202,400 b. P215,000
c. P205,100 d. P265,000

FRINGE BENEFITS

C 60. Statement 1: A “fringe benefit” is any goods, service or other benefits furnished or granted by an employer
in cash or in kind, in addition to basic salaries to individual employee. v
Statement 2: The term “compensation” means all remuneration for services performed by an employee
for his employer under an employer-employee relationship, unless specifically excluded by the Code. ~
a. Only statement 1 is correct
b. Only statement 2 is correct
c. Both statements are correct
d. Both statements are incorrect

A 61. Which of the following statement/s is/are correct?

I. Fringe benefit is a form of pay which may be in the form of property, services, cash or cash equivalent
to supplement a stated pay for the performance of services under an employee-employer
relationship. M
II. Fringe benefits subject to fringe benefit tax cover only those fringe benefits given or furnished to a
managerial or supervisory employee. /
III. FBT is a final tax imposed on the employee withheld by the employer, computed based on the
aU monetary value of the fringe benefit.
IV. FBT is an income tax. Accordingly, the one liable under the law to pay the fringe benefit tax is the
-

employee.r
V. Fringe benefits subject to FBT shall be included in the income tax return of the employee.Final tax

10
 a. I and II b. All of the above
c. I, II and IV only d. None of the above

C 62. Which of the following is incorrect in determining the monetary value of the fringe benefit?
a. For housing privilege, if the employer leases residential property, for the use of the employee, the
monetary value is computed as rental paid multiplied by 50%
b. For housing privilege, if the employer owns residential property for the use of the employee, the
monetary value is computed as higher of FMV or zonal value multiplied by 5% and 50%
c. For housing privilege, if the employer purchases a residential property and transfers
the ownership in the name of the employee, the monetary value is computed as higher of
acquisition cost or zonal value multiplied by 5% and 50%
d. For housing privilege, if the employer purchases a residential property and transfers ownership
to the employee on a lesser amount, the monetary value is computed as higher of FMV or zonal
value less payment by employee

63. Which of the following is subject to fringe benefits tax?

D a. Benefits given for the convenience or advantage of the employer
b. De minimis benefits within the limits
c. Benefits given to rank and file employees
d. Educational assistance to the employee or his dependents

B 64. During the year, Alpha Corporation gave the following fringe benefits to its employees:

Salaries to rank and file employees P1,000,000

Salaries to managerial employees 1,800,000
De minimis benefits to rank-and-file employees 54,400
De minimis benefits to managerial employees 27,200
Fringe benefits to rank-and-file employees 102,000
Fringe benefits to managerial employees 170,000

How much is the fringe benefit tax?

a. P48,000 b. P91,538
c. P80,000 d. P166,400
170K : 258 x 354 :

911548

CAPITAL ASSETS

D 65. Which of the following is considered a capital asset?

a. Stock in trade of the taxpayer, or other property of a kind which would properly be included in

a
the inventory of the taxpayer
b. Property held by the taxpayer primarily for sale to customers in the ordinary course of trade or
business
c. Real property used in trade or business of the taxpayer
d. None of the above

B 66. Which of the following statement/s is/are correct?

-

I. Capital assets include real property not used in trade or business of taxpayer.
II. The holding period does not apply to corporations; hence, capital gains and losses are capitalized at
-
50%. 100%
III. In computing the gain or loss from sale or other disposition of property acquired as gift or donation,
the basis of cost shall be the same as it would be in the hands of the donor.
IV. The gain or loss recognized from sale or exchange of capital assets by an individual taxpayer, other
than real properties and shares of stocks, which are held for more than 12 months shall be 50% of the
net capital gain.
a. I, II and IV b. I, III and IV
c. I, II and III d. All of the above
B 67. Which of the following is not one of the requisites for exemption from CGT on sale of principal residence?
a. The taxpayer is a citizen of the Philippines or resident alien
b. Notice to make such utilization was given to the BIR within -0 60 days from the date of sale
c. The proceeds of the sale was invested in acquiring a new principal residence
d. The reacquisition of the new residence must be within 18 months from date of sale

11
 Use the following information for the next four (4) questions:

On March 1, Johnson sold the following shares of stock of domestic corporations which he bought for
investment purposes: STT
Listed and Traded Not Listed and Traded
Selling price P250,000 P140,000
Cost 118,000 80,000

B 68. How much is the capital gains tax?

140K
a. P3,000 b. P9,000
c. P6,000 d. P12,000 28012)
-

40Kx15 %
A 69. Assume that Johnson is a dealer in securities, the capital gains tax should be: stocks were considered
suby to VAT
a. P0 b. P6,000 inventory
;

c. P3,000 d. P12,000
A 70. Assume the shares sold were issued by foreign corporations, the capital gains tax should be:
-

a. P0 ↓ b. P6,000
income
c. P3,000 Orde navy d. P12,000

A 71. Assume the shares not listed and traded in the local stock exchange were only sold for 60,000, the capital
gains tax should be:
a. P0 b. P9,000
c. P6,000 d. P12,000

D 72. Derek sold 10,000 shares in Alpha Corporation, a closely-held domestic corporation, on June 30 for
P1,250,000. The shares were acquired by Derek a year ago for P1,000,000. The book value per share based
on the audited financial statements of the Company was 200. How much is the capital gains tax?
a. P0 b. P30,000
FMU(10kshx4(00) 2 000 000

DOMOR's fax [ 1
, ,

c. P20,000 d. P37,500
Sp 250 , 000
3 250kx 15 %
,

1 , 000 000
20st
↓ 375NCGT
,
=>

INSTALLMENT REPORTING TFIC

C 73. Which of the following cases may the taxable income be computed not on the basis of the calendar year?
I. Taxpayer has no accounting period (Dec 31
Salways calenda year (Dec 3)
.

II. Taxpayer does not keep books of accounts

III. Taxpayer is an individual taxpayer
IV.
V.
Taxpayer is a corporation
~
Taxpayer is a general partnership
a. IV only b. III, IV and V only
c. IV and V only d. None of the above

B 74. The total amount or price of the sale including the cash or property received and including all notes of the
buyer or mortgages assumed by him.
a. Initial payment b. Contract price
c. Selling price d. Fair market price

Use the following information for the next four (4) questions:

Richard provided the following data on sale of his personal property sold in 20X1 held by him for 15 months:

Cost P225,000 > 50 % HP

y
12MOS =

45 000
,
Mortgage assumed by the buyer 270,000
cost)

E
cexcess ro m over
Installment collection schedule:
20X1 67,500
450K
20X2
20X3
Selling P :
67,500
45,000
longt
S4450 000 ,

cost (225 S ,

Gain 225 000 , x 50 %

=
112 , 50 12
 A 75. How much is the selling price?
a. P450,000 b. P180,000
c. P270,000 d. P225,000
450 , 000
D 76. How much is the contract price?
a. P450,000 b. P180,000 (270 000) ,

c. P270,000 d. P225,000 + 45 , 48
-

225 no ,

C 77. How much is the initial payments? =

a. P67,500 b. P45,000 27 , 50 + 45, 00 =
112 , 50
c. P112,500 d. P225,000 -

collections 450 , 20
A 78. How much is the income subject to income tax in 20X1, 20X2, and 20X3?
a. P56,250, P33,750 and P22,500, respectively contract ↑
=

25%
20x1 112 , 500
~ Inst
b. P112,500, P67,500 and P45,000, respectively Rep
:

x 112 , 50 =
54 , 250
c. P225,000, P0 and P0, respectively 225 NO ,

d. None of the choices 20x2 : (17 , 50 33 ,758

x 112150 =

225 000
,

45 000
DONOR’S TAX 20x3 :
,

112 , 50 22 , 508
x
=

225 , 000
B 79. Which of the following donations inter vivos may not require that it be made in writing? 5, 000/less :
orall
Written
a. Donation of personal property, the value of which exceeds P5,000 note
:

personal
b. Donation of personal property, the value of which is P5,000 property
c. Donation of real property, the value of which is less than P5,000 >
5

, 000 :
Written
d. Donation of real property, the value of which exceeds P5,000 Real :

regardless of amount
Property
A 80. Statement 1: Donor’s tax shall be levied, assessed, collected and paid upon the transfer of property by any
person, resident or non-resident, as a gift. -
Statement 2: The donor’s tax shall apply whether the transfer is in trust or otherwise, whether the gift is
direct or indirect, and whether the property is real or personal, tangible or intangible. v
a. True, True b. True, False
c. False, False d. False, True

S 81. When an indebtedness is cancelled without any service rendered by the debtor in favor of the creditor,
the forgiveness of debt will result to:
a. Taxable income
b. Distribution of dividend
c. Taxable indirect donation
d. Taxable estate

Use the following information for the next three (3) questions:
RC
Alma, a Filipina made the following donations:

• To Nick, a land worth P450,000 in Manila. with

• To Rosalee, jewelry worth P100,000 in Japan. without
• To Adalin, PLDT shares amounting to P150,000. within [Intan)
• To Renard, a building in Italy P1,600,000 mortgaged for P50,000 assumed by the donee. 1 , 558 , 008 w
• To Drew, land in Davao worth P300,000. RP Within
• P300,000 cash, PNB New York to Heart. inten without
• P200,000 receivable, 50% condoned by Alma. 100K 2, 000 , WA

c
Alma sold land located in Manila for P900,000. Its fair market value is P2,000,000. ↑ FIC 1 1 180 , C

no deduction of the mortgage

->
B 82. How much is the gross gift?
450k +
100K +

150k + 1 500 , 000

,
+

300K
a. P5,200,000 b. P4,100,000
300K +
100K + 1-1M
c. P4,200,000 d. P3,200,000
+

I
P 1M deduct
if Netgift 50K
.

B 83. If she is a non-resident Alien, her gross gift is: (within only) assumed

a. P3,200,000 b. P2,100,000
c. P1,200,000 d. P850,000 450k + 150k + 300K +

100K +
1 1M
-

= 2 , 100 , 000

13
 A 84. If she is a non-resident alien, and there is reciprocity law, her gross gift is:
a. P1,850,000 b. P1,050,000 450 888 ,
+

300 , 000 , 1 100 ,

,
08
c. P950,000 d. P700,000
= 1 1 850 , 000

Use the following information for the next two (2) questions:

During the year, Ronald gave a property with a fair market value of P2,000,000, with unpaid mortgage of
P200,000 to be paid by him, to his son Daniel and Daniel’s bride Emily, on account of their marriage 15 months
donce
ago. not assumed by
.

D 85. The allowable deduction is:

a. P10,000 b. P40,000
c. P20,000 d. P0

B 86. The donor’s tax payable should be:

2 000 000
,
,

a. P300,000 b. P105,000
c. P344,000 d. P120,000
0880 x 6% =

10500
ESTATE TAX

A 87. Estate tax accrues from:

1
Deadline Payment year after death
:

of
a. The moment of death of the decedent
b. The moment the notice of death is filed
c. The moment the estate tax return is filed
d. The moment the properties are delivered to the heirs
(NRAS
B 88. The personal properties of a non-resident, not citizen of the Philippines, would⑧
not be included in the gross
estate if:
a. The intangible personal property in the Philippines -
b. The intangible personal property is in the Philippines and the reciprocity clause of the estate tax
law applies
c. The tangible personal property is in the Philippines ~
d. The personal property is shares of stock of a domestic corporation 90% of whose business is in
the Philippines. M

B 89. Which of the following is an exclusion from gross estate?

a. Transfer in contemplation of death inclusion
b. Transfer under special power of appointment (iF general included)
,

c. Transfer for insufficient consideration inclusion

d. Claim against insolvent person inclusion 2100 % included)

D 90. Which of the following is a not considered an ordinary deduction from gross estate?
-

a. Unpaid mortgage or indebtedness

b. Indebtedness or claims against the estate
c. Transfer for public use
d. Standard deduction special Deduction

S 91. Statement 1: Conjugal partnership of gains, absolute community of property and complete separation are
all valid regimes that may govern property relations between spouses. /
Statement 2: Under the regime of absolute community of property, the husband and the wife place in a
common fund the proceeds, products, fruits and income from their separate property and those acquired
by either or both spouses through their effort or by chance. M
a. Only statement 1 is correct
b. Only statement 2 is correct
c. Both statements are correct
d. Both statements are incorrect

C 92. Which of the following statements isE

incorrect?
a. Property acquired during marriage through gratuitous title is exclusive under conjugal partnership
-

of gains ~ whether CPG Or ACP

b. Property acquired gratuitously before marriage is community under absolute community of
-

property ~
conjugal
c. Fruits or income from exclusive property earned during marriage are exclusive under conjugal
-

partnership of gains

14
 d. Property acquired during marriage in exchange of exclusive property is exclusive under absolute
community of property ~follow the original source

Use the following information for the next two (2) questions:

93. Mr. X died and left the following properties:

House and lot in Quezon City serving as family home within P3,700,000
House and lot in USA without ->ordinary deduction 2,000,000
Land in Baguio with P300,000 unpaid mortgage within 1,000,000
Vacant lot in Manila within 1,500,000
Car in Manila within 500,000
Jewelries in USA Without 300,000
Other personal properties in Manila within 200,000
Franchise in Japan without 100,000
Receivable from debtor in Philippines within 90,000
Receivable from debtor in Japan without 100,000
Bank deposits in Bank of the Philippine Islands (BPI) within 90,000
Bank deposits in Canada without irrelevant regardless of % 50,000
:

->
Shares of stock in a domestic corp., 40% of the business is in Philippines within 100,000
Shares of stock in a foreign corp., 70% Xof the business is in Philippines 285 % threshold) 150,000
Shares of stock in a foreign corp., 90% of the business is in Philippines within 250,000
Shares of stocks in a foreign corp., 75% of the ->
as if DC

business is in Philippines and has acquired situs in Philippines within 175,000

within without ↑ 10 , 305 , 000
Question 1: If the decedent is a non resident citizen, his gross estate is
A a. P10,305,000 ) DO NOT DEDUCT THE UM

b. P10,005,000
c. P8,305,000
d. P8,005,000
within

B Question 2: If the decedent is a non-resident alien (without reciprocity), his gross estate is
a. P7,430,000 all within
b. P7,605,000
c. P7,355,000
d. P7,505,000

C 94. The following are properties in the gross estate of a decedent with their fair market value:

House and lot, family home in Quezon City P1,500,000 RP

Deposit in the foreign branch of a domestic bank 500,000 Intan

Shares of stock issued by a domestic corp., certificate kept in the US 1,000,000 Intan

Pieces of jewelry 800,000 PP

Receivable, debtor in Cebu 200,000 intan

If decedent was non-resident alien and there is reciprocity, property excluded from gross estate is valued
at
500k 1M+
>NK +

a. P4,000,000 b. P700,000
c. P1,700,000 d. P200,000

C 95. Pedro died on February 1, leaving a 1,000 sq. meter of parcel of land in Sampaloc, Manila, with the
following valuations:

Assessed valued as determined by the City assessors P25,000/sqm x1k =

25m/
Zonal value as determined by the CIR 18,000,000

What would be the value of the piece of land in the gross estate?
a. P18,000,000 b. P28,000,000
c. P25,000,000 d. P30,000,000

15
B 96. A decedent left 10,000 PLDT shares. The shares were traded in the local stock exchange. At the time of
death, the following were available: traded Are
:

X
not traded BUPS
:

1OK
Average between the highest and the lowest quotations P500 per share X =
5M
Book value 350 per share

What was the value included in the decedent’s gross estate?

a. P3,500,000 b. P5,000,000
c. P4,000,000 d. Whichever is higher among the fair market
value, mean and book value

VALUE-ADDED TAX

C 97. Statement 1: For VAT purposes, a taxable person is any person liable to pay the VAT, whether registered
or registrable in accordance with the Tax Code. v
Statement 2: The status of a “VAT-registered person” as a VAT-registered person shall continue until the
cancellation of such registration. v
a. Only statement 1 is correct
b. Only statement 2 is correct
c. Both statements are correct
d. Both statements are incorrect

B 98. This refers to any person who is required to registered under the provisions of the Tax Code but failed to
register.
a. VAT-registered person
b. VAT-registrable person
c. VAT-exempt person
d. None of the choices

D 99. Which of the following shall be subject to VAT?

a. Sale of agricultural food product in their original state X
b. Sale of services subject to other percentage tax X

c. Lease of residential units with monthly rent not exceeding P15,000 X

d. None of the above

D
100. Which of the following is not exempt from VAT?
a. Transport of passengers by international carriers v
b. Services rendered pursuant to employee-employer relationship V
c. Sale or importation of agricultural and marine food product in their original state
d. Distribution or transfer of inventory to creditors in payment of debt deemed sale Transactio [ Uptable)

D 101. Statement 1: The input VAT on purchase of capital goods valued at P1,000,000 shall be spread over 60
months if the life of property is equivalent to 5 years or more.
Statement 2: The input VAT on purchase of capital goods valued at P1,000,000 shall be spread over the
life of property if the life of the property is less than 5 years.
a. Only statement 1 is correct
b. Only statement 2 is correct
c. Both statements are correct
d. Both statements are incorrect

D 102. Which of the following is incorrect?

a. Presumptive input VAT is 4% based on the purchases of primary agricultural products which are
used as inputs to the production of processor of sardines, mackerel and milk and manufacturers
of refined sugar, cooking oil and packed noodles-based instant meal v
b. Transitional input VAT rate is 2% and applies to taxpayers which became liable to VAT for the first
time /
c. Standard input VAT of 7% applies to sales to government ~
export (zero-rated)
d. Excess input VAT over output VAT on domestic sales can be used as carry-over to offset output
tax, apply for refund or tax credit certificate.

16
 Use the following information for the next two (2) questions: WAT

-inclusive if silent ,

103. The following information are available to you. All amounts provided are gross of VAT. rat exclusive
* * WAT
non-vat
w - Y -
>
z - >
export
W, non-VAT taxpayer, sells to X, VAT taxpayer P94,000 (ignore]
X, VAT taxpayer, sells to Y, VAT taxpayer 151,200 1 12 12 1
↑ .
x .

268,800 112x12'
:
Y, VAT taxpayer, sells to Z, VAT taxpayer, an exporter
Z, VAT taxpayer, exports 360,000
Y
A Q1: The value-added tax of X and Y, respectively X
14 , 200 28 , 80
a. P16,200, P12,600 Output :

x cant claim IV bes (16 20)

b. P4,920, P28,800 is non-vat
w
Input : -
,

14 200 12 , 400
c. P18,144, P14,112 ,

d. P6,864, P16,056
- Vat-reg
but exporter
C Q2: Using the same information above, the value-added tax of Z is
a. P9,771 payable output *

b. P28,800 payable
c. P28,800 creditable
d. P14,400 payable
inPutaple See - endover
C 104. Genson Distribution Inc., a VAT taxpayer, had the following data in a month:

Cash sales
Open account sales
P200,000
500,000
I ywhether w t
Consignment: /
0 to 30 days old (on which there were remittance from consignees of 200,000) 600,000
31 to 60 days old 700,000
61 days old and above 900,000 v

How much is the output tax?

a. P348,000 b. P264,000 1 , 800 000
,
x 124 = 214 18
,

c. P216,000 d. P108,000

OTHER PERCENTAGE TAXES

A 105. Statement 1: Transactions that are subject to other percentage taxes are no longer subject to the value-
added tax but may be subject to excise tax. I
Statement 2: All VAT-exempt taxpayers shall be subject to other percentage taxes. X
Statement 3: A taxpayer who is subject to percentage tax on his gross sales will also be subject to income
tax on his net income. M
a. One of the statements is incorrect
b. One of the statements is correct
c. None of the statements are correct
d. All of the statements are correct

D 106. One of the following is subject to percentage tax under Section 116 of the Tax Code:
a. Establishment whose annual gross sales exceed P3,000,000 and who are VAT-registered VAT
b. Businesses whose annual gross sales exceed P3,000,000 and who are not VAT-registered Vat
c. VAT-registered establishment whose annual gross sales do not exceed P3,000,000 VAT
d. Establishment whose annual gross sales do not exceed P3,000,000 and who are not VAT registered

A 107. Statement 1: A non-VAT registered transportation contractor whose engaged in the transport of
passengers, goods, and cargoes shall be liable to percentage tax under section 116 on gross sales from
transport of goods and cargoes and 3% common carrier’s tax on gross sales from transport of passengers. /
Statement 2: There are franchise holders whose gross sales are subject to 12% VAT even if not VAT
registered. Radio TV > 10M M
Statement 3: The operators of bowling alleys are subject to amusement tax. X
a. One of the statements is incorrect
b. One of the statements is correct
c. None of the above statements are correct
d. All of the statements are correct

17
D 108. Which of the following statements is incorrect?
a. Franchise grantees on water and gas utilities are subject to 2% franchise tax /
b. Proprietor, lessor or operator of place for professional basketball games is subject to 15%
amusement tax /
c. International air and shipping carriers doing business in the Philippines are subject to 3% common
↓
carriers’ tax
d. 0
The owner of the winning horse is taxable based on his gross
net winnings

D 109. Ana has the following data:

Gross sales P2,850,000 >3M

Collections
⑧ fromhere
1,420,000
signi
The correct amount of percentage tax should be: 2 , 850 , NOx 37 =

85 , 50

a. P0 b. P28,500
c. P14,000 d. P85,500

A 110. James Transport Corporation, VAT-registered, offers passenger and cargo transport operations by land. Its
gross sales from passenger operations amounted to P10,000,000 while its gross sales from cargo
operations amounted to P2,000,000. How much is the common carriers’ tax due for the month?
a. P300,000 b. P1,440,000 10Mx34 30K =

c. P540,000 d. P240,000
2mx 127 =
240K

Use the following information for the next two (2) questions:

111. ABC Corporation, not VAT-registered, is a radio-TV broadcasting franchise grantee. The previous year, its
gross sales did not exceed P10,000,000. In the first quarter of the current year, it had the following data:
3 % based on Gross Salle
Gross sales, sale of airtime P3,000,000
Payments received from user of radio station’s communications facilities 750,000
for overseas communications x12
%

Gross rentals of office spaces commercial 5,250,000 vatable (regardley

Business expenses connected to sale of airtime, net of VAT 1,050,000 of vse)
Business expenses connected to rentals, VAT inclusive 1,344,000

C Question 1: How much was the franchise tax due?

a. P58,500 34 90 08
,

3Mx
=

b. P60,000
c. P90,000
d. P112,500

D Question 2: How much was the overseas communications tax?

a. P375,000
b. P300,000
c. P112,500 750KX18 %
d. P75,000

18
 EXCISE TAX

D 112. Which of the following is incorrect?

a. If an article is domestically produced, the excise tax is paid before the goods are removed at the
point of production ~
b. If an article is imported, the excise tax is paid before the removal of the goods from the customs v
c. Excise tax cannot be imposed together with VAT or percentage tax can be
d. Excise tax is an indirect tax which can be passed on to the buyerv

DOCUMENTARY STAMP TAX

A 113. DST is necessary in:

a. Sale of real property
b. Inheritance of real property
c. Estate tax payment
d. Donation of real property exempt from the donor’s tax

LOCAL TAXATION

B 114. Where does the local tax authority emanate from?

-

a. Legislature b. Sanggunian
c. Executive d. Supreme Court

D 115. Which of the following is⑧

not a fundamental principle of local taxation?
a. It shall be uniform in each local sub-unit ~
b. It shall evolve a progressive system of taxation v
c. The revenues collected under the Local Government Code shall inure solely to the benefit of and
subject to disposition by the LGU levying the tax or other imposition (autonomy) ~
d. Collection of local taxes can be delegated to any private person X LGU

D 116. Which of the following is&

not one of the fundamental principles of real property tax?
a. Real property shall be appraised at its current and fair market value ~
b. Real property shall be classified for assessment purposes on the basis of actual use V
c. Real property shall be assessed on the basis of uniform classification within each LGU ~
-

d. None of the above

D 117. Which of the following is incorrect regarding situs of local business tax?
n

a. When there is a sales outlet or branch, the situs is the LGU where the outlet is situated~
-

b. When there is no sales outlet or branch, the situs is the LGU where principal office is situated -
c. When the manufacturer's office is the same as factory outlet or plant, the situs is the LGU where
the manufacturer’s principal office is situated ~ 30 %
d. When the manufacturer's office is different from70 1
factory
.
outlet or plant, the situs is 70% by the en

LGU where the principal office is located and 30% by the LGU where the project office or plant is
-
--

located
50 %

118. A parcel of land in Metro Manila was assessed as commercial with a fair market value of P7,500,000. How
- -

much would be the highest possible amount of annual0

-
basic real property tax that can be collected from
-

the owner?

B Situation 1: The property is located in a city.

-

7 , 500 08 x 5070 x 240

a. P3,750,000 ,

b. P75,000
c. P37,500
d. P0

C Situation 2: The property is located in a municipality and assessed as residential.

a. P1,500,000
b. P15,000 7 SM x 20 % x 27
.

c. P30,000
d. P0 what if tothe RPT ?
30K

Include SEF (12) -O

7 . 3Mx201x11 -
15K
-

LOTL RPT 45K

19
 D 119. How much is the maximum annual additional community tax for individuals? if total , 5 , 005
-

a. P20,000 b. P10,000
c. P15,000 d. P5,000

B > is:
120. The maximum annual additional community tax for corporations
-
if total ,
10 , 05

a. P20,000 b. P10,000
-

c. P15,000 d. P5,000

PREFERENTIAL TAXATION

D 121. Which of the following is not one of the benefits of senior citizens?
a. 20% discount and exemption from Value Added Tax on certain goods and services for their own
use V
b. A minimum of 5% discount on water and utility bills up to 100 kilowatt hours of electricity and 30
cubic meters of water, registered under their name /
c. Mandatory PhilHealth coverage /
d. Groceries worth up to P1,300 per week and 10% Inoff the retail prices of at least four kinds of basic
necessities and prime commodities:

D 122. Which of the following is not one of the benefits of PWDs?

a. 20% discount and Value Added Tax (VAT) exemption when buying certain products and services
nationwide
b. 5% discount on basic necessities and prime commodities
c. Express lanes for PWDs
d. A minimum of 5% discount on water and utility bills up to 100 kilowatt hours of electricity and 30
cubic meters of water, registered under their name so
only
C 123. It is defined as any business enterprise engaged in production, processing, or manufacturing products,
including agro-processing, as well as trading and services, with total assets of not more than P3 million.
Such assets shall include those arising from loans but not the land on which the plant and equipment are
located.
a. Economic zones
b. RHQs/ROHQs of Multinational Corporations
c. Barangay Micro Business Enterprise (BMBEs)
d. PEZA registered entities

D 124. Which of the following is not one of the benefits of BMBEs?

a. Exemption from the coverage of the Minimum Wage Law
b. Income tax exemption from income arising from the operations of the enterprise
c. Priority to a special credit window set up specifically for the financing of BMBEs
d. Exemption from payment of any and all local government imposts, fees, licenses, or taxes. reduced nly

B 125. In general, in order to avail of relief from double taxation on income earned within the Philippines in the
form of decreased tax rates thereon or exemption therefrom, what must be submitted by a non-resident
alien to the International Tax Affairs Division (ITAD) of the BIR?
a. Tax treaty law of the host country
b. Tax treaty relief application (TTRA)
c. None of the above
d. Memorandum of agreement between the taxpayer and host country

C 126. It is the Philippines government agency tasked to promote investments, extend assistance, register, grant
. . .

incentives to and facilitate the business operations of investors in export-oriented manufacturing and
- -
-

service facilities.
a. Board of Investments
b. Bureau of Customs
c. Philippine Economic Zone Authority
d. National Economic Development Authority

20
 D
127. Which of the following is not one of the incentives of PEZA-registered companies?
a. Income Tax Holiday (ITH) – 100% exemption from corporate income tax -
b. Tax and duty free importation of raw materials, capital equipment, machineries, and spare parts.
c. Exemption from wharfage dues and export tax, impost or fees.
d. ExemptionXfrom VAT on local purchases of goods and services, subject to compliance with BIR and
-

PEZA requirements. VaT zero

rating
B 128. The Philippine Board of Investment (BOI) is an agency under the
a. National Economic Development Authority
b. Department of Trade and Industry
c. Office of the President
d. Bureau of Domestic Trade

D 129. Which of the following is not one of the incentives of BOI-registered companies?
a. Income tax holiday
b. Duty exemption on imported capital equipment, spare parts, and accessories
c. Additional deduction for labor expense (ADLE)
d. 5% gross income tax upon expiration of the income tax holiday

REMEDIES

B 130. Generally, the following individuals are required to file an income tax return. Who is the exception?
a. Every Filipino citizen residing in the Philippines. X
b. Every Filipino citizen residing outside the Philippines, on his income from sources outside the
Philippines. NRL
c. Every alien residing in the Philippines on income derived from sources within the Philippines.
d. Every non-resident alien engaged in trade or business in the Philippines.

C
⑧-
131. The following are not required to file ITRs, except:
a. Individual whose sole income has been subjected to final withholding tax. v
b. Individual whose compensation income does not exceed the statutory minimum wage.
whether PIL as
c. Individual whose gross income from business does not exceed his allowable deductions.
long as
d. Individual with respect to pure compensation income derived from one employer in the business
Philippines. ~
A 132. An assessment shall become final if not protested administratively or if such protest is not filed with the
BIR from receipt of the assessment within
a. 30 days b. 60 days
c. 90 days d. 180 days

B 133. Using the preceding number, relevant supporting documents must also be presented to the BIR, from filing
the protest on the assessment (request for investigation) within
a. 30 days b. 60 days
c. 90 days d. 180 days

C 134. Date assessment was received March 10, 2025

Date petition for reinvestigation was filed with the BIR March 31, 2025
Date of filing of documents to support the petition May 8, 2025
No decision on the protest is received as of October 30, 2025

When is the last day to appeal to the CTA?

a. April 15, 2026 the dute
b. November 8, 2025 210
das from
c. December 4, 2025
d. November 30, 2025 of submission of
Dec 4
may 8 dec
=
.

21
 Use the following information for the next two (2) questions:

135. Date of payment of tax erroneously paid April 15, 2024

D Date of claim for refund was filed June 15, 2025
Date of decision of denial by the BIR was received September 15, 2025

When is the last day to appeal to the CTA?

a. April 15, 2026
b. January 15, 2026
c. November 15, 2025
d. October 15, 2025

D 136. Statement 1: All criminal violations may be compromised, except those already filed in court and those
involving fraud. M
Statement 2: For filing a false and fraudulent return, a 50% surcharge is imposed. ~
Statement 3: A compromise for a tax liability on the ground of financial incapacity to pay shall still involve other
a payment of tax from the taxpayer at a minimum compromise rate of 10% of the basic assessed tax. careS 40'1
:

Statement 4: Abatement or cancellation may be availed by the taxpayer on grounds of unjust and
excessive assessment of tax. W
a. Only one (1) of the above statements is true
b. Two (2) of the above statements are true
c. Three (3) of the above statements are true
d. All of the above statements are true

- - END - -

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