INDIVIDUALS

Question 1

1. It is important to know the source of income for tax purposes because
   a. Some individual taxpayers are taxed on their worldwide income while others are taxable only upon income from sources within the Philippines
   b. The Philippines imposes income tax only on income from sources within
   c. Some individual taxpayers are citizens while others are aliens
   d. Export sales are not subject to income tax

Question 2

The following are the general principles of situs of income taxation:
Statement 1: A citizen of the Philippines residing therein is taxable on all income derived from sources within and without the Philippines.
Statement 2: A nonresident citizen is taxable on income derived from sources within the Philippines.
Statement 3: An individual citizen of the Philippines who is working and deriving income from abroad as an overseas contract worker is taxable only on income from sources within the Philippines.
Statement 4: An alien individual, whether a resident or not of the Philippines, is taxable only on income derived from sources within the Philippines.
a. All the statements are true c. One of the statements is false
b. All the statements are false d. Some of the statements are false

Question 3

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

Question 4

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

Question 5

Who among the following is a non-resident alien?
a. An alien who comes to the Philippines for a definite purpose which in its nature may be promptly accomplished
b. An alien who comes to the Philippines for a definite purpose which in its nature would require an extended stay
c. An alien who has acquired residence in the Philippines
d. An alien who lives in the Philippines with no definite intention as to his stay

Question 6

A resident citizen is taxable on all income derived from sources
a. Within the Philippines only c. Partly within and partly without
b. Without the Philippines only d. Within and without the Philippines

Question 7

A non-resident citizen is taxable on all income derived from sources
a. Within the Philippines only c. Partly within and partly without
b. Without the Philippines only d. Within and without the Philippines

Question 8

A resident alien is taxable on all income derived from sources
a. Within the Philippines only c. Partly within and partly without
b. Without the Philippines only d. Within and without the Philippines

Question 9

A non-resident alien is taxable on all income derived from sources
a. Within the Philippines only c. Partly within and partly without
b. Without the Philippines only d. Within and without the Philippines

Question 10

A citizen of the Philippines who works and whose employment 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 without the Philippines
c. Exempt from income tax
d. Taxable on income from within the Philippines

Question 11

Determine the correct classification of the following:
I. Mr. A, a Filipino businessman, went on a business trip abroad and stayed there most of the time during the year.
II. Mr. B, a Filipino professional singer, held a series of concerts in various countries around the world during the current taxable year. He stayed abroad most of the time during the year.
III. Mr. C, a Filipino artist went to Korea during the taxable year to train and participate in the world cup of pool. He stayed there most of the time during the year.
a b c d
I NRC RC RC RC
II NRC NRC RC RC
III NRC NRC NRC RC

Question 12

Who among the following individual taxpayers is taxable on income within and without?
a. Mr. A, a native of Bulacan, working as overseas contract worker in Japan
b. Mr. B, a naturalized Filipino citizen and married to a Filipina. He had been living in Cavite since 1970
c. Mr. C, Spanish citizen, a resident of Madrid, Spain, spent a one (1) week vacation trip in Boracay
d. Mr. D, Taiwanese singer, held a 3-day concert in Manila

Question 13

Mr. Y, a Japanese national, arrived in the Philippines on January 1, 2021 to visit his Filipino friends. He planned to stay in the country until December 31, 2023, by which time he would go back to Japan. Mr. Y derived income during his stay here in the Philippines. For 2021 taxable year, Mr. Y shall be classified as a
a. Resident alien
b. Non-resident alien engaged in trade or business in the Philippines
c. Non-resident alien not engaged in trade or business in the Philippines
d. Special alien employee

Question 14

Mr. X was hired by a foreign petroleum contractor in South Korea to provide technical assistance for two months from February to March. He was hired again for the month of June to July and October to December of the same taxable year. Mr. X is a
a. Resident citizen c. Special Filipino employee
b. Nonresident citizen d. None of the above

Question 15

Mr. Z, an Australian, arrived in the Philippines on January 1, 2021 and continued to live and engage in business in the Philippines. He went on a tour of Southeast Asia from August 1 to November 5, 2021. He returned to the Philippines on November 6, 2021 and stayed until April 15, 2022. He earned during his stay in the Philippines income from his investments in Philippine corporations. For the year 2021, his taxable status is that of a
a. Non-resident alien not engaged in trade or business
b. Resident alien engaged in trade or business
c. Resident alien not engaged in trade or business
d. Non-resident alien engaged in trade or business

Question 16

Mr. X, a Korean singer, was engaged to sing for one week at the Philippine Arena after which he returned to South Korea. For income tax purposes he shall be classified as
a. Resident alien
b. Nonresident alien engaged in trade or business
c. Nonresident alien not engaged in trade or business
d. Resident citizen

Question 17

Mr. Y, nonresident citizen, arrived in the Philippines on July 1, 2021 to reside here permanently after working as a doctor in the United States for many years. Which of the following statements is correct with respect to his classification for income tax purposes?
a. He shall be classified as nonresident citizen for the year 2021 with respect to his income derived from sources abroad from January 1, 2021 until the date of his arrival in the Philippines
b. He shall be classified as nonresident citizen for the whole year of 2021
c. He shall be classified as resident citizen for the whole year 2021
d. He shall be classified as neither resident nor nonresident citizen for the year 2021

Question 18

Mr. Z, a Filipino citizen migrated in the US six years ago and got a permanent resident status or green card. He should pay his Philippine income tax on
a. Dividends received from a two-year old foreign corporation whose gross income was derived solely from Philippine sources
b. The gains derived from the sale in New York of jewelry he purchased in the Philippines
c. The proceeds he received from a Philippine insurance company as the sole beneficiary of life insurance taken by his father who died recently
d. The gains derived from the sale in the New York Stock Exchange of share of stock in PLDT, a Philippine corporation

Question 19

An Australian citizen permanently residing in the Philippines, received several items during the taxable year. Which among the following is not subject to Philippine income taxation?
a. Dividends received from an American corporation which derived 60% of its annual gross receipts from Philippine sources for the past 7 years
b. Interests from his deposits in a local bank of foreign currency earned abroad converted to Philippine pesos
c. Gains derived from the sale of his condominium unit located in Makati City to another resident alien
d. Consultancy fees received for designing a computer program and installing the same in a Tokyo facility of a Japanese firm

Question 20

Mr. X left the Philippines on April 10, 2021 to work as an internal auditor in a big firm in Sydney, Australia. For income tax purposes, which of the following statements is correct with respect to Christopher’s classification?
a. He shall be classified as nonresident citizen for the whole year of 2021
b. His classification as a nonresident citizen will start in 2022
c. He shall be classified as nonresident citizen for the year 2021 with respect to his income derived from sources without from April 10, 2021
d. He shall be classified as nonresident citizen for the year 2021 with respect to his income derived from sources without from April 11, 2021

Question 21

A citizen of the Philippines was a non-resident citizen in 2020. On May 14, 2021, he arrived in the Philippines to reside permanently in the Philippines. His income for the year was
A – From January 1, 2021 to May 14, 2021.
B – From May 15, 2021 to December 31, 2021.
Which of the following is wrong?
a. He is considered a resident citizen on his “B” income
b. He is considered a non-resident citizen on his “A” income
c. He is considered a resident citizen on his “A” and “B” income
d. He is not taxable on his “A” income

Question 22

One of the following individuals is not subject to withholding tax on compensation
a. An individual who derives compensation from two or more employers at anytime during the taxable year
b. An individual who has compensation and business income
c. An individual whose gross income in a year is more than P220,000
d. An individual whose monthly gross compensation income is P8,000

Question 23

The Withholding Tax System was devised for the following reasons, except:
a. To provide the taxpayer a convenient manner to meet his probable income tax liability.
b. To ensure the collection of the income tax.
c. To improve the government’s cash flow.
d. To do away with the filing of income tax returns.

Question 24

Individual taxpayers are subject to the following income tax
I. Basic tax based on graduated tax table
II. Final withholding tax on passive income derived from sources within the Philippines
III. Capital gains tax
a. I and II only c. II and III only
b. I and III only d. All of the above