[Exercise 8-9] MULTIPLE CHOICE QUESTIONS Flashcards
Who among the following taxpayers is taxable on income within and without the Philippines
a. Resident citizen
b. Non-resident citizen
c. Resident alien
d. Non-resident alien
ANSWER: a. Resident citizen.
“A resident citizen is taxable on income derived from sources within and without the Philippines.”
A Filipino citizen who works in Algeria and whose employment there requires him to be physically present abroad most of the time during the taxable year is
a. Taxable on income within and without the Philippines
b. Taxable on income from within the Philippines only
c. Taxable on income derived from sources without the Philippines only
d. NOT taxable on income within and without the Philippines
ANSWER: b. Taxable on income from within the Philippines only.
“A nonresident citizen is taxable only on income derived from sources within the Philippines.”
Since the Filipino citizen works in Algeria and is physically present abroad most of the time, he qualifies as a nonresident citizen, making him taxable only on income earned within the Philippines.
One of the following is taxable on income within and without the Philippines
a. A citizen of the Philippines who leaves the Philippines during the taxable year to reside abroad, either as an immigrant or for employment on a permanent basis
b. A citizen of the Philippines who works and derives income from abroad and whose employment there requires him to be physically present abroad most of the time during the taxable year
c. A citizen of the Philippines who has been previously considered a non-resident citizen and who arrives in the Philippines at any time during the taxable year to reside permanently in the Philippines, with respect to his income derived from sources abroad and in the Philippines for the taxable year
d. A resident citizen who establishes to the satisfaction of the Commissioner the fact of his physical presence abroad with a definite intention to reside therein
ANSWER: c. A citizen of the Philippines who has been previously considered a non-resident citizen and who arrives in the Philippines at any time during the taxable year to reside permanently in the Philippines, with respect to his income derived from sources abroad and in the Philippines for the taxable year.
“A citizen who has been previously considered as nonresident citizen and who arrives in the Philippines at any time during the taxable year to reside permanently in the Philippines shall likewise be treated as a nonresident citizen for the taxable year in which he arrives in the Philippines with respect to his income derived from sources abroad until the date of his arrival in the Philippines.”
After arrival and re-establishment of residency, this individual is treated as a resident citizen, making them taxable on both Philippine and foreign income for the taxable year.
A Filipino citizen who works and derives income from Hong Kong is a resident citizen if he stayed in Hong Kong
a. For less than 180 days
b. For more than 180 days
c. For 183 days or more
d. For less than 183 days
a. For less than 180 days
“A nonresident citizen is a citizen who:
(c) Works and derives income from abroad and whose employment thereat requires him to be physically present abroad most of the time (not less than 183 days) during the taxable year.”
If a Filipino citizen stays in Hong Kong for less than 183 days, they do not qualify as a nonresident citizen, meaning they are still considered a resident citizen for tax purposes.
Bradley, an American residing in the United States, is taxable on income derived from
a. The Philippines and the United States
b. The United States only
c. The Philippines only
d. Partly in the Philippines and partly in the United States
ANSWER: c. The Philippines only.
“An alien individual, whether a resident or not of the Philippines, is taxable only on income derived from sources within the Philippines.”
Since Bradley is an American residing in the U.S., he is classified as a nonresident alien for Philippine tax purposes. He is only taxable on income earned within the Philippines.
Nicolas Kidman, a citizen of the United States, is considered a non-resident alien engaged in business in the Philippines if, during the taxable year, he stayed inside the Philippines
a. For 183 days or more
b. For more than 180 days
c. For less than 183 days
d. For less than 180 days
b. For more than 180 days
“A non-resident alien is classified into:
(a) Engaged in trade or business in the Philippines (ETB) – refers to a non-resident alien who shall come to the Philippines and stay for an aggregate period of more than one hundred eighty (180) days during any calendar year.”
If Nicolas stays for more than 180 days, he is classified as a nonresident alien engaged in trade or business (NRA-ETB). If he stays 180 days or less, he is classified as a nonresident alien not engaged in trade or business (NRA-NETB).
Which of the following statements is true about optional standard deductions
a. It is based on 40% of the total compensation and business income
b. It is based on 40% of the compensation income
c. It is allowed to a taxpayer even if he did not signify his intention to elect optional standard deduction
d. Optional standard deductions are allowed also for corporations
c. It is allowed to a taxpayer even if he did not signify his intention to elect optional standard deduction
“In lieu of itemized deductions, an individual taxpayer (except a nonresident alien) may elect a standard deduction not exceeding forty percent (40%) of his gross sales or receipts.”
“Deductions are not allowed on compensation income.”
NOT SURE
Individual taxpayers can avail of the 40% optional standard deduction based on the
a. Gross income from business or professional income
b. Gross receipts or gross sales
c. Gross compensation income
d. Net income
ANSWER: b. Gross receipts or gross sales.
“If the individual is on the accrual basis of accounting for income and deductions, the optional standard deduction shall be based on the gross sales during the taxable year. If the individual employs the cash basis of accounting, the optional standard deduction shall be based on gross receipts during the taxable year.”
All of the following are requirements for a senior citizen to be exempt from income tax. Which is the EXCEPTION
a. NOT an income earner
b. A minimum wage earner
c. A minimum wage earner but a mixed income earner
d. Receiving only support from a child for sustenance
ANSWER: c. A minimum wage earner but a mixed income earner.
“Minimum wage earners are exempt from income tax.”
However, if the senior citizen earns additional business or professional income (making them a mixed-income earner), they no longer qualify for the minimum wage earner exemption.
