TAXATION Flashcards
1.The following constitute accumulation if earnings for the reasonable needs of the business:
- Earnings reserved for compliance with any loan covenant or pre-existing obligation established under a legitimate business agreement;
- In the case of subsidiaries of foreign corporations in the Philippines, all undistributed earnings intended or reserved for investments within the Philippines as can be proven by corporate records and/or relevant documentary evidence
- Earnings required by the law or applicable regulations to be retained by the corporation or in respect of which there is a legal prohibition against its distribution;
- Earnings reserved for building, plants or equipment acquisition as approved by the Board of Directors or equivalent body;
- Earning reserved for definite corporate expansion project or program requiring considerable capital expenditure as approved by the Board of Directors or equivalent body;
- All of the choices
2.EXEMPT ORGANIZATIONS may not include:
- Nonstock and nonprofit educational institution
- Farmers, fruit growers, or like association organized and operated as a sales agent for the purpose of marketing the products of its members and turning back to them the proceeds of sales, less the necessary selling expenses on the basis of quantity of procedure finished by them
- Labor, agricultural or horticultural organization not organized principally for profit
- Mutual savings bank not having a capital stock represented by shares, and cooperative bank without capital stock organized and operated for mutual purposes and without profit
- Proprietary educational institution
- Proprietary educational institution
3.Corporation may not include:
*Joint stock companies
*Insurance companies
*Partnerships
*Joint venture undertaking construction projects
- Joint venture undertaking construction projects
4.MCIT may be suspended due to the following reasons:
- Force majeure
*Prolonged labor dispute
*Legitimate business
*None of the choices
*All of the choices
- All of the choices
5.Joint ventures or consortium organized for the following purposes shall not be taxable as a corporation:
*Construction projects
*Engaging in petroleum, coal, geothermal and other energy operations pursuant to an operating or consortium agreement under a service contract with the Government.
*All of the choices
- All of the choices
6.These are not subject to income tax.
*Partnerships
*All of the above
*General Professional Partnerships
*General Co-Partnerships
-General Professional Partnerships
7.he following are the requisites in-order for a joint venture or consortium for the purpose of undertaking construction project is exempt:
- Involve joining or pooling of resources by licensed local contractors, that is, licensed as general contractor by the Philippine Contractors Accreditation Board (PCAB) of the DTI;
- These foreign contractors are engaged in constructions business; and
- All of the choices
- None of the choices
- The JV itself must likewise be duly licensed as such by LTFRB
- Involve joining or pooling of resources by licensed local contractors, that is, licensed as general contractor by the Philippine Contractors Accreditation Board (PCAB) of the DTI;
8.The following are the requisites to qualify as a joint venture:
*Each party to the JV must make a contribution, not necessarily of capital, but by way of services, skill, knowledge, material or money.
*Usually, there is a double business transaction.
*All of the choices
*None of the choices
- Each party to the JV must make a contribution, not necessarily of capital, but by way of services, skill, knowledge, material or money.
9 Which of the following is a resident citizen?
*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
*A citizen of the Philippines who works and derives income from abroad and whose employment thereat requires him to be physically present abroad most of the time during the taxable year
*A citizen of the Philippines who has a permanent home or place of abode in the Philippines to which he/she intends to return whenever he/she is absent for business or pleasure.
*A citizen of the Philippines who establishes to the satisfaction of the Commissioner of the fact of his physical presence abroad with a definite intention to reside therein.
- A citizen of the Philippines who has a permanent home or place of abode in the Philippines to which he/she intends to return whenever he/she is absent for business or pleasure.
A citizen of the Philippines who works and derives income from abroad and whose employment thereat requires him to be physically present abroad most of the time during the taxable year.
Nonresident Citizen
All income received by this person is subject to 25% final withholding tax with certain exceptions.
*0/1
Non-resident alien engaged in trade X or business
Resident Citizen
Non-resident alien not engaged in trade or business
Resident Alien
Correct answer
Non-resident alien not engaged in trade or business
Which of the following does not describe resident alien?
*1/1
An alien actually present in the Philippines who is NOT a mere transient or sojourner
An alien, who comes to the Philippines for a definite purpose, which, by its nature, would require an extended stay making his home temporarily in the Philippines
A person who comes to the Philippines for a definite purpose which in its nature may be promptly accomplished is a transient.
An alien an individual who is not a citizen of the Philippines and whose residence is not within the Philippines.
An alien an individual who is not a citizen of the Philippines and whose residence is not within the Philippines.
It is an individual who is not a citizen of the Philippines but whose residence is within the Philippines.
Resident Alien
Which of the following does not describe final withholding tax?
It is constituted as full and final payment of the income tax liability
It cannot be credited or deducted from the basic income tax due to the BIR.
The income subject to this tax is no longer subject to basic income tax.
It is the payee (income earner) who has the responsibility to file the return and pay the applicable tax.
It is the payee (income earner) who has the responsibility to file the return and pay the applicable tax.
It refers to Filipino citizen employed in foreign countries, commonly referred to as Overseas Filipino Workers (OFW), who are physically present in a foreign country as a consequence of their employment thereat.
Overseas contract worker
A nonresident alien is deemed engaged in trade or business in the Philippines if he/she has stayed in the Philippines for an aggregate period of more than during any calendar year.
160 days
120 days
140 days
180 days
180 days
- Resident foreign corporation which is an international carrier is taxable with its gross Philippine billings at:
- 2.5%
- Dividends received of ordinary domestic corporation from another domestic corporation is taxable at:
- 0%
