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2-23. BLT 2(2018)-C (LEC) Income and Business Taxation > Midterm Exam > Flashcards

Midterm Exam Flashcards

1
Q

Sources of Tax Law

A
  • The 1987 Constitution
  • Statutory Enactments
  • Administrative Rulings & Regulations
  • Judicial Decisions of the Supreme Court
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2
Q

for purpose of administration and procedure issued by Secretary of Finance upon recommendation of the Commissioner.

A

Administrative Regulation

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3
Q

prescribe or define rules forth effective enforcement of the Tax Code and related tax laws. (Rules on Enforcement)

A

Revenue Regulations

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4
Q

Official position of the BIR to queries raised by taxpayers on certain issues of law or administration in relation to the Tax Code and/or relevant tax law as well as issuances of the BIR. (Clarifying or Interpreting)

A

BIR Rulings

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5
Q

The power to make regulations is not the power to legislate and under the guise of regulation, legislation may not be enacted.

A

Nature of power to make regulations-

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6
Q

The purpose is only to implement the law or put it into effect. (administrative in nature)

A

Administrative Regulations

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7
Q

True or False

Regulations may not increase or decrease the requirements of the law or embrace matters not covered or intended to be covered by the tax statute.

A

True

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8
Q

True or False

The statute or law being administered may be altered or added to by the power to make regulations thereunder.

A

False

The statute or law being administered may not be altered or added to by the power to make regulations thereunder.

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9
Q

Requisites of valid regulation:

A

-Necessary to the proper enforcement of the law

-Must not be contrary to the law or the Constitution

-Published in the Official Gazette

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10
Q

Effectivity of regulations

A

Under the Administrative Code (E.O No. 292), every agency shall file with the UP Law Center 3 certified copies of rules adopted by it. Such rules shall be effective 15 days from the date of filing unless a different day is fixed by law or specified under said rule in cases of imminent danger to public health, safety and welfare.

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11
Q

No person or property is subject to taxation unless within the terms or pain import of a taxing statute.

A

When There is Doubt

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12
Q

True or False

IN EVERY CASE OF DOUBT, TAX STATUTES ARE NOT CONSTRUED STRICTLY AGAINST THE GOVERNMENT AND LIBERALLY IN FAVOR OF THE TAXPAYER.

A

False

IN EVERY CASE OF DOUBT, TAX STATUTES ARE CONSTRUED STRICTLY AGAINST THE GOVERNMENT AND LIBERALLY IN FAVOR OF THE TAXPAYER.

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13
Q

is a special law that primarily governs internal revenue taxes

A

NIRC

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14
Q

True or False

the NIRC may be considered a general law in relation to other laws dealing with a particular specified subject matter.

A

True

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15
Q

A ___________ is one which embraces a class of subjects or places and does not omit any subject or place naturally belonging to such class.

A

general law

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16
Q

a ____________ is one which relates to particular persons or things of a class

A

special act

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17
Q

are between 2 states for allocating tax revenue between them.

A

Tax Treaties

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18
Q

seek to eliminate double taxation when 2 or more governments tax the same item of income.

A

Tax Treaties

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19
Q

includes earnings from investments and other ventures that require minimal supervision or effort such as income generated from interests, dividends, royalties, and payments from rental property.

A

Passive Income

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20
Q

Total amount of money or equivalent represented by contract, price, compensation, service fee, rental, royalty, deposit including advance payments actually or constructively received during the taxable period.

A

Gross Receipts

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21
Q

Earns income through compensation by employment as well as business or professional income.

A

Mixed Income Earner

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22
Q

Total sales transactions net of VAT, if applicable reported during the period without other deductions.

A

Gross Sales

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23
Q

ceiling determined by law to determine a VAT registered taxpayer. (3Million)

A

VAT Threshold

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24
Q

Pertinent items of GROSS INCOME specified under the Tax Code, LESS DEDUCTIONS, and EXEMPTIONS if any.

A

Taxable Income

25
Q

Source of Income

A

Within the Phils. Without the Phils.

Resident Citizen YES YES
Non-Resident Citizen YES NO
Resident Alien YES NO
Non-Resident Alien YES NO

26
Q

Passive Income of Individual Citizens and Resident Aliens

Interest from currency deposits, trust funds, and deposit substitutes

A

20%

27
Q

Passive Income of Individual Citizens and Resident Aliens

Royalties (on books as well as literary & musical compositions)

A

10%

28
Q

Passive Income of Individual Citizens and Resident Aliens

Royalties (on books as well as literary & musical compositions) in general

A

20%

29
Q

Passive Income of Individual Citizens and Resident Aliens

Prizes (P10,000 or less)

A

(Graduated Income Tax Rates)

30
Q

Passive Income of Individual Citizens and Resident Aliens

Prizes (Over P10,000)

A

20%

31
Q

Passive Income of Individual Citizens and Resident Aliens

Winnings (except from PCSO and Lotto amounting to P10,000 or less)

A

(20%)

32
Q

Passive Income of Individual Citizens and Resident Aliens

From PCSO and Lotto amounting to P10,000 or less

A

(exempt)

33
Q

Passive Income of Individual Citizens and Resident Aliens

Share of an individual in the distributable net income after tax of a partnership

A

(10%)

34
Q

Passive Income of Individual Citizens and Resident Aliens

Capital gains from sale, exchange or other disposition of real property located in the Philippines, classified as capital asset

A

(6%)

35
Q

Passive Income of Individual Citizens and Resident Aliens

Net Capital gains from sale of shares of stock not traded in the stock exchange

A

(15%)

36
Q

Passive Income of Individual Citizens and Resident Aliens

Interest Income from long-term deposit or investment in the form of savings, common or individual trust funds, deposit substitutes, investment management accounts, and other investments evidenced by certificates in such form prescribed by the Bangko Sentral ng Pilipinas (BSP)

A

(Exempt)

37
Q

Passive Income of Individual Citizens and Resident Aliens

Interest Income from long-term deposit or investment in the form of savings, common or individual trust funds, deposit substitutes, investment management accounts, and other investments evidenced by certificates in such form prescribed by the Bangko Sentral ng Pilipinas (BSP)

– Four (4) years to less than five (5) years

– Three (3) years to less than four (4) years

– Less than three (3) years

A

5%; 12%; 20%

38
Q

is treated as an artificial being created by operation of law, having the right of succession and the powers, attributes and properties expressly authorized by law or incident to its existence. Sec 2. Revised Corporation Code

A

Corporation

39
Q

Classification of Taxpayers

A
  1. Domestic
  2. Foreign
  3. General Professional Partnership
  4. Estates and trusts
40
Q

True or False

When Applicant corporation can prove that it has sustained substantial losses on account of a prolonged labor dispute, or because of force majeure, or because of legitimate business reverses, the Secretary of Finance upon recommendation of the Commissioner will not suspend imposition of MCIT.

A

False

When Applicant corporation can prove that it has sustained substantial losses on account of a prolonged labor dispute, or because of force majeure, or because of legitimate business reverses, the Secretary of Finance upon recommendation of the Commissioner may suspend imposition of MCIT.

41
Q

Losses arising from strike staged by employees which lasted for more than 6 months within the taxable period causing temporary shutdown.

A

Substantial losses from prolonged labor dispute

42
Q

ACT OF GOD. Irresistible force (ex. Lightning, earthquake, flood, storm, wars, insurgency or armed conflict)

A

Force Majeure

43
Q

substantial losses due to fire, robbery, theft or embezzlement or other economic reasons determined by the Secretary of Finance.

A

Legitimate Business Reverses

44
Q

True or False

Registered cooperatives which do not transact any business with non-members, or the general public are not subject to any taxes and fees imposed under the internal revenue laws and other tax laws.

A

True

45
Q

Domestic Corporation

General Taxable Income

A

25%

46
Q

Domestic Corporation

What is the tax rate of Minimum corporate Income Tax

A

1%

47
Q

Domestic Corporation

What is the tax rate of Improperly accumulated earnings

A

10%

48
Q

Domestic Corporation

What is the tax rate of proprietary educational institutions

A

1%

49
Q

Domestic Corporation

What is the tax rate of Hospitals which are non-profit

A

1%

50
Q

Domestic Corporation

What is the tax rate of with net taxable income not exceeding 5M and total assets not exceeding 100M

A

20%

51
Q

Resident foreign Corporation

General Taxable Income

A

25%

52
Q

Resident Foreign Corporation

What is the tax rate of Minimum corporate Income Tax

A

1%

53
Q

Resident Foreign Corporation

What is the tax rate of Improperly accumulated earnings

A

10%

54
Q

Resident Foreign Corporation

What is the tax rate of International Carriers

A

2.50%

55
Q

Resident Foreign Corporation

What is the tax rate of Regional Operating Headquarters

A

10%

56
Q

non-resident Foreign Corporation

What is the tax rate of Income Tax

A

In general 25%

57
Q

non-resident Foreign Corporation

What is the tax rate of Reinsurance Premiums

A

Exempt

58
Q

non-resident Foreign Corporation

What is the tax rate of rentals and charter fees payable to non-resident owners of vessels chartered by Philippine national

A

4.5%

59
Q
A

2-23. BLT 2(2018)-C (LEC) Income and Business Taxation (5 decks)

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