TAXATION 1 Flashcards
The gross estate of a decedent is valued at P3,000,000 composed of registered and
registrable properties. Total deductions are P4,000,000. Which of the following
statements is/are correct?
I - The estate of the decedent is required to submit notice of death.
II - The estate of the decedent is required to file an estate tax return.
III - The estate of the decedent is required to submit a statement certified
by a CPA.
a. Statements I, II and III
b. Statements II and III
c. Statement II
d. None of the statements
c. Statement II
The gross estate of a decedent is valued at P3,000,000 composed of registered and
registrable properties. Total deductions are P4,000,000. Which of the following
statements is/are correct?
I - The estate of the decedent is required to submit notice of death.
II - The estate of the decedent is required to file an estate tax return.
III - The estate of the decedent is required to submit a statement certified
by a CPA.
a. Statements I, II and III
b. Statements II and III
c. Statement II
d. None of the statements
c. Statement II
Gross gifts of non-resident alien donor shall be composed of:
a. real properties, personal properties and taxable transfers wherever
situated.
b. real properties and personal properties wherever situated.
c. real properties, personal properties and taxable transfers situated
in the Philippines.
d. real properties and personal properties situated in the Philippines
except intangible personal properties when there is reciprocity.
d. real properties and personal properties situated in the Philippines
except intangible personal properties when there is reciprocity.
A VAT-registered taxpayer service provider has the following data taken from the
books of account for the month of January 2021:
Accounts receivable, January 1, 2021 P 560,000
Sales on account for the month of January 1,120,000
Services paid in cash for the month of January 336,000
Accounts receivable, January 31, 2021 784,000
Cash purchases for the month of January 2021 448,000
How much is the output tax for the month of January, 2021 using 12% rate?
a. P201,600
b. P147,840
c. P132,000
d. P96,000
c. P132,000
Who of the following individual taxpayer shall not be required to file an income
tax return?
a. Individuals deriving compensation from two or more employers concurrently or successively at any time during the taxable year;
b. Individual taxpayer receiving purely compensation income, regardless of amount, from only one employer in the Philippines for the calendar year, the income tax of which has been withheld correctly by the said employer.
c. Employees deriving compensation income, regardless of the amount, whether from a single or several employers during the calendar year, the income tax of which has not been withheld correctly (i.e., tax due is not equal to the tax withheld) resulting to collectible or refundable return.
d. Individuals receiving purely compensation income from a single employer,
although the income tax of which has been correctly withheld, but whose
spouse is required to file income tax return
b. Individual taxpayer receiving purely compensation income, regardless of amount, from only one employer in the Philippines for the calendar year, the income tax of which has been withheld correctly by the said employer.
The books of account may be kept in:
a. Native language.
b. Korean language.
c. Chinese language.
d. Japanese language.
a. Native language.
The books of account may be kept in:
a. Native language.
b. Korean language.
c. Chinese language.
d. Japanese language.
a. Native language.
The filing of the withholding tax returns (BIR Form No. 1601EQ) for creditable
withholding tax and Form Nos. 1602 for final tax on interest on bank deposits, 1603Q
for final tax withheld on fringe benefits, and 1601FQ for all other final withholding
taxes and payment of the taxes withheld at source shall be made:
a. not later than the last day of the month following the close of the quarter
during which the withholding was made.
b. not later than the 20th day of the month following the close of the quarter
during which the withholding was made.
c. not later than the 25th day of the month following the close of the quarter
during which the withholding was made.
d. not later than the first day of the month following the close of the quarter
during which the withholding was made.
a. not later than the last day of the month following the close of the quarter
during which the withholding was made.
Which of the following is not an effect of failure to affix the required DST?
a. An instrument, document or paper which is required by law to be stamped and
which has been signed, issued, accepted or transferred without being duly
stamped, shall not be recorded.
b. An instrument, document or paper or any copy thereof or any record of transfer
of the same which is required by law to be stamped shall not be admitted or
used in evidence in any court until the requisite stamp or stamps are affixed
thereto and cancelled.
c. No notary public or other officer authorized to administer oaths shall add
his jurat or acknowledgment to any document subject to documentary stamp tax
unless the proper documentary stamps are affixed thereto and cancelled.
d. An instrument, document or paper which is required by law to be stamped and
which has been signed, issued, accepted or transferred without being duly
stamped, shall make the transaction void.
d. An instrument, document or paper which is required by law to be stamped and
which has been signed, issued, accepted or transferred without being duly
stamped, shall make the transaction void.
The Commissioner may compromise the payment of any internal revenue tax, when:
I -there is a reasonable doubt as to the validity of the claim against the
taxpayer
II -the tax or any portion thereof appears to be unjustly or excessively
assessed.
a. Both I and II are correct
b. Both I and II are incorrect
c. Only I is correct
d. Only II is correct
c. Only I is correct
Who has the power to lift the order of distraint?
a. Secretary of Finance
b. Commissioner of Internal Revenue exclusively
c. Commissioner of Internal Revenue or his duly authorized representative
d. Revenue District Officer
c. Commissioner of Internal Revenue or his duly authorized representative
A taxpayer paid excessive tax on April 15, 2000. On December 20, 2001, she filed a
written claim for refund. Her claim was denied by the BIR and she received the
denial on March 16, 2002. She filed a motion for reconsideration with the BIR on
March 31, 2002. On April 18, 2002, she received the final denial of the BIR. What
will be the taxpayer’s remedy?
a. File another motion for reconsideration with the BIR within 30 days after the
receipt of the final denial
b. File an appeal with the Court of Tax Appeals within 30 days after the receipt
of the final denial
c. File an appeal with the Court of Tax Appeals within 15 days after the receipt
of the final denial
d. The taxpayer has no more remedy against the final denial
d. The taxpayer has no more remedy against the final denial
The following are common to the inherent power of taxation, power of eminent domain
and police power, except for which of the following?
a. They are necessary attributes of sovereignty.
b. They interfere with private rights and property.
c. They affect all persons or the public.
d. They are legislative in implementation.
c. They affect all persons or the public.
Which statement is wrong? A revenue bill:
a. must originate from the House of Representative and on the same bill the
Senate may propose amendments.
b. may originate from the Senate and on which same bill the House of Representative may propose amendments.
c. may have a House version and a Senate version approved separately.
d. may be recommended by the President to Congress.
b. may originate from the Senate and on which same bill the House of Representative may propose amendments.
One of the following is not a characteristic or an element of tax:
a. It is levied by the legislature.
b. It is payable in money or in kind.
c. It is proportionate in character.
d. It is an enforced contribution.
b. It is payable in money or in kind.
Which statement is wrong? A revenue bill:
a. must originate from the House of Representative and on the same bill the
Senate may propose amendments.
b. may originate from the Senate and on which same bill the House of Representative may propose amendments.
c. may have a House version and a Senate version approved separately.
d. may be recommended by the President to Congress.
b. may originate from the Senate and on which same bill the House of Representative may propose amendments.
The power to interpret the provision of the Tax Code and other tax laws shall be
under the exclusive and original jurisdiction of the Commissioner of Internal
Revenue subject to review by:
a. Secretary of Finance.
b. Court of Tax Appeals.
c. Court of Appeals.
d. Municipal Courts.
a. Secretary of Finance.
Unless otherwise provided in Local Government Code, all local taxes, fees, and
charges shall be paid:
a. within the first twenty (20) days of January or of each subsequent quarter,
as the case may be.
b. within the first fifteen (15) days of January or of each subsequent quarter,
as the case may be.
c. within the first ten (10) days of January or of each subsequent quarter, as
the case may be.
d. within the first five (5) days of January or of each subsequent quarter, as
the case may be.
a. within the first twenty (20) days of January or of each subsequent quarter,
as the case may be.
A senior citizen is engaged in the sale of VATable goods. His gross annual sales,
however, do not exceed the VAT threshold and he is not VAT-registered. During the
first quarter of the current year, his gross sales amounted to P250,000. How much
is the business tax due, if any?
a. P7,500
b. P5,000
c. P2,500
d. None, senior citizens are exempt from business taxes
c. P2,500
An individual is operating a trading business enterprise. He is asking you to assist
him to register his business under the Barangay Micro Business Enterprise (BMBE) so
he can avail of the incentives granted under it. His total assets including the cash
of P300,000 he loaned from a bank amounted to P3,500,000. The total assets also
include P500,000 value of the land on which the particular business entity’s office,
plant and equipment are situated. Is the individual qualified?
a. No. Because he is engaged in a trading business which is specifically excluded
from those who can register under BMBE.
b. Yes. Because his total assets excluding the land on which the particular
business entity’s office, plant and equipment are situated do not exceed
P3,000,000.
c. No. Because only juridical persons are qualified to register under BMBE.
d. Yes. Because trading business is automatically qualified regardless of the
total assets.
b. Yes. Because his total assets excluding the land on which the particular
business entity’s office, plant and equipment are situated do not exceed
P3,000,000.
This model generally favors retention of greater so called “source country” taxing
rights under a tax treaty—the taxation rights of the host country of investment—as
compared to those of the “residence country” of the investor.
a. OECD Model Tax Convention
b. UN Model Double Taxation Convention
c. United States Model Income Tax Convention
d. None of the choices
b. UN Model Double Taxation Convention
If the goods or services are used in both the registered project or activity and
administration purposes and the proper allocation could not be determined, the
purchase of such goods and services shall be:
a. subject to 12% VAT. c. exempt from VAT.
b. subject to 0% VAT.
c. exempt from VAT.
d. disregarded.
a. subject to 12% VAT. c. exempt from VAT.
First statement: Registered Business Enterprises (RBEs) which are categorized as
Domestic Market Enterprises (DME) are not entitled to VAT zero-rating on local
purchases.
Second statement: Sale of goods or services to a registered domestic market
enterprise shall be exempt VAT.
a. Both statements are correct
b. Both statements are incorrect
c. Only the first statement is correct
d. Only the second statement is correct
c. Only the first statement is correct
Which of the following has an option to register under the VAT system?
a. Common carriers by land transporting passengers the gross receipts of which
exceed P3,000,000 during the year
b. VAT-registered seller with mixed transactions as far as his VAT-exempt sales
are concerned
c. Operator of cockpit the receipts of which do not exceed P3,000,000 during the
year
d. Seller of VAT-subject services the gross receipts of which exceed P3,000,000
during the year
b. VAT-registered seller with mixed transactions as far as his VAT-exempt sales
are concerned
As a general rule, proceeds of insurance are not taxable because they only
constitute a return of what was lost (return of capital). Which of the following
are taxable proceeds?
a. Proceeds of life insurance
b. Proceeds of accident or health insurance
c. Proceeds of property insurance
d. Proceeds of crop insurance.
d. Proceeds of crop insurance.
Which of the following statements in INCORRECT?
a. No uniform method of accounting can be prescribed for all taxpayers.
b. Each taxpayer is required by law to make a return on his true income.
c. The taxpayer has to adopt accrual method of accounting because it is in
accordance with generally accepted accounting principles.
d. Where purchase or sale of merchandise is an income-producing factor;
inventories on hand shall be taken at the beginning and at the end of year.
c. The taxpayer has to adopt accrual method of accounting because it is in
accordance with generally accepted accounting principles.
Papable Aljon Lee sold a painting (capital asset) which he purchased in 2018 at a
cost of P30,000. He sold the painting to Mamable Tonee Dee, on the following terms:
June 1, 2021 down payment P10,000
August 1, 2021 installment due 10,000
October 1, 2021 installment due 20,000
October 1, 2022 installment due 40,000
October 1, 2023 installment due 40,000
For the year 2021, Papable Aljon will report a gross income of:
a. P90,000 c. P30,000
b. P45,000 d. P15,000
b. P45,000
Selling price P120,000
Less: Cost 30,000
Capital gain (long-term) P 90,000
Income to be recognized (50% of capital gain) P 45,000
One of the following individuals is not subject to income tax in the Philippines.
a. An American engineer who makes the Philippines his residence because of the
nature of his work
b. A Japanese visiting professor who occasionally teaches at one of the leading
universities in the Philippines, and stays here for an aggregate of 185 days
c. A Taiwanese singer who performs in one of the hotels in the Philippines for
one (1) week, and then leaves after he is through with his performances
d. A Filipino residing and working in America who comes to the Philippines to visit his relatives
d. A Filipino residing and working in America who comes to the Philippines to visit his relatives
A domestic corporation has the following data for three (3) years:
Normal income tax MCIT
2019 P 50,000 P 75,000
2020 P 60,000 P100,000
2021 P100,000 P 60,000
How much is the tax payable in 2021?
a. P100,000
b. P 60,000
c. P35,000
d. Zero
c. P35,000
Tax due (higher) P100,000
Less: Unexpired excess MCIT (25,000 + 40,000) 65,000
Tax payable P 35,000
