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TAX_PRTC 1stPB with answers
Business Management (University of Caloocan City)
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TAXATION
First Preboard
SIA/TABAG
OCT 2020
Choose the letter of the correct answer.
1. The 30% corporate income tax is increased to 35% by
the Congress for the purpose of raising revenue to be
used for national road expansion project near Bonifacio
Global City, a private corporation. Is the exercised of
the taxing power unconstitutional?
a. Yes, because taxing power must be exercised
exclusively for public purpose without any incidental
benefit to any private entity.
b. No, because the it is exercised directly for public
purpose and the benefit to a private entity is only
incidental.
c. Yes, because the increase in tax rate constitutes
deprivation of right to property of corporation
without due process of law for being excessive and
unreasonable.
d. No, because the constitution does not expressly
state that the power of taxation must be used only
for public purpose, thus, it may be used to benefit a
private entity.
2. Which of the following statements is correct?
a. The amount of sales to PWDs and SCs to be reported
by a private establishment shall be the gross selling
price and the applicable discount.
b. The amount of discount granted to PWDs and SCs
must not be reflected as a deduction from gross
income of the seller but as a deduction from gross
sales to arrive at the correct amount of net sales.
c. The input vat attributable to sales made to PWDs
and SCs shall be reflected in the income statement
of the seller as a deduction from gross income
d. All of the above
3. Which of the following are basic principles of a sound
tax system?
a. Fiscal
Adequacy,
economic
Feasibility
and
Theoretical Justice.
b. Fiscal Adequacy, Administrative Feasibility and
Theoretical Justice.
c. Progressive Taxation, Ability to Pay, Symbiotic
Relationship.
d. Fiscal, Deficit, administrative Feasibility and Ability
to Pay.
6. Donor’s tax return for a donation on January 15, 2020
was filed on January 31, 2018. Last day to file donor’s
tax return shall be?
a. Jan. 15, 2020
c. Feb. 14, 2020
b. Jan. 31, 2020
d. Feb. 28, 2020
7. The Congress enacted RA7716 also known as Expanded
Value Added Tax Law. An association of taxpayers
questions the constitutionality of this law on the ground
that RA7716 did not originate exclusively in the House
of Representatives as required by the Constitution,
because it is in fact the result of the consolidation of two
distinct bills, one from the House of Representatives and
the other from the Senate.
Is the vat law
unconstitutional?
a. Yes, because all appropriation, revenue or tariff
bills, bills authorizing increase of public debt,
bills of local application, and private bills, shall
originate
exclusively
in
the House of
Representatives.
b. Yes, because the Senate has no authority to
propose or concur any amendments with the
revenue or tax bill proposed by House of
Representatives.
c. No, because all appropriation, revenue or tariff
bills, bills authorizing increase of public debt,
bills of local application, and private bills, shall
be initiated by the Senate.
d. No, because it is not the law but the revenue bill
which is required by the constitution to originate
exclusively in the House of Representatives and
insisting otherwise would violate the coequality
of legislative power of the two houses of
Congress and in fact would make the House
superior to the Senate.
The next three (3) questions are based on the following
data:
Mr. and Mrs. Pinagpala donated the following during 2020:
March 30
▪
4. The concept of “situs of taxation” is based on which
limitation of taxation?
a. Territoriality
b. International comity
c. Exemption of the government
d. Public Purpose
5. Statement 1: The inherent powers of the State can
never be taken away.
Statement 2: No laws are necessary to confer the
inherent powers of the State upon any government
exercising sovereignty.
a. Only statement 1 is correct
b. Only statement 2 is correct
c. Both statements are correct
d. Both statements are incorrect
▪
▪
Land valued at P620,000 to Ana, legitimate
daughter, on account of marriage.
Cash of P100,000 to Juan, legitimate son, for
successfully passing the CPA Licensure exam
Second hand car (capital property) valued at
P400,000 to Mr. Pinagpala’s long-time friend,
Pedro
May 15
▪
▪
Cash of P200,000 to Melda, mother of Mrs.
Pinagpala
Jewelry (paraphernal property) worth P100,000
to Emma, Mrs. Pinagpala’s best friend
December 25
▪
Cash of P250,000 to Quezon City government
for public use
8. The donor’s tax due on the March 30 donation should
be:
a. P0 for Mr. & Mrs.
b. P18,600 each for Mr. & Mrs.
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c.
d.
P30,600 for Mr.; P6,600 for Mrs.
P30,000 for Mr.; P6,000 for Mrs.
9. The donor’s tax due on the May 15 donation should be:
a. P6,000 for Mr.; P6,600 for Mrs.
b. P6,000 for Mr.; P12,000 for Mrs.
c. P36,600 for Mr.; P18,600 for Mrs.
d. P40,000 for Mr. and Mrs.
10. The donor’s tax due on the December 25 donation
should be:
a. P0 for Mr. and Mrs.
b. P6,000 for Mr.; P12,000 for Mrs.
c. P36,600 for Mr.; P18,600 for Mrs.
d. P40,000 for Mr. and Mrs.
11. Statement 1: Resident alien would be subject to donor’s
tax only on their donations of property located in the
Philippines.
Statement 2: A donation by a foreign corporation of
its own shares of stock to resident employees is not
subject to gift tax but may be subjected to income tax.
a. Only the first statement is correct
b. Only the second statement is correct.
c. Both statements are correct.
d. Both statements are incorrect.
12. There is reciprocity, when the donor and the donated
property is:
Donor
Property
Intangible Personal Property
a. Non-resident alien
Immovable
b. Non-resident
citizen
Tangible Personal Property
c. Non-resident alien
Any kind of property
d. Resident alien
Use the following data for the next two (2) questions:
On December 19, 2017, Pres. Rodrigo R. Duterte signed
into law the Package 1 of the Comprehensive Tax Reform
Program (CTRP), also known as the “Tax Reform for
Acceleration and Inclusion (TRAIN) as RA 10963. The law
took effect on January 1, 2018. Pedro died on November
1, 2017. His administrator and heirs filed the estate tax
return on May 1, 2018.
13. For estate tax purposes, which law shall be applied in
determining the estate tax liability on the estate of
Pedro?
a. The Tax Code prior to its amendment under RA
10963
b. The Tax Code as amended under RA 10963 (TRAIN
Law)
c. Either “a” or “b” at the option of the executor or
administrator
d. Either “a” or “b”, at the option of the heirs
14. Using the same data in the preceding number but
assuming Pedro died on January 25, 2018. Which law
shall be applied in determining the estate tax liability on
his estate?
a. The Tax Code prior to its amendment under RA
10963
b. The Tax Code as amended under RA 10963 (TRAIN
Law)
c. Either “a” or “b” at the option of the executor or
administrator
d. Either “a” or “b”, at the option of the heirs
15. One of the following is not included in the gross estate
of a decedent.
a. Cash dividend that accrued before death.
b. Shares of stock transferred in contemplation of
death.
c.
d.
Land held in trust but in decedent’s possession
before death.
Rent income on property that accrued before death.
16. A donation which takes effect upon the death of the
donor
I.
Donation mort is causa
II.
Partakes of the nature of an intestate
disposition
III.
Shall be gove rned by the law on
succession
a. I only
c. I and III only
b. I and II only
d. I, II and III
17. A transfer subject to tax other than estate tax:
a. Revocable transfer
b. Transfer for insufficient consideration
c. Transfer in contemplation of death
d. Bonafide sale or transfer
18. Which is correct?
a. A compulsory heir can question a donation and ask
for its reduction if it impairs his legitime.
b. Expenses primarily incurred by an heir intended to
establish his interest in the estate are deductible
judicial expenses from the gross estate.
c. The Commissioner shall have authority to grant, in
meritorious cases, a reasonable extension not
exceeding six (6 months for filing the return.
d. All of the above
19. One of the properties left by a decedent was gutted by
fire during the settlement of the estate. The executor
decided to claim the losses in computing income tax of
the estate. One of the heirs objected to the executor
since even before deducting the said losses, the taxable
income of the estate is already zero. However, the
executor stood his ground and insisted on claiming the
losses as deduction in computing income tax. Which of
the following statements is correct?
a. The losses can no longer be deducted in computing
the estate tax.
b. The losses can still be claimed as deduction in
computing the estate tax since there is no
prohibition against it under the tax laws, rules and
regulations.
c. The losses can still be claimed as deduction in
computing the estate tax since there was no tax
benefit resulted in the deduction in the computation
of income tax.
d. The losses cannot be claimed as deduction both in
the computation of estate tax and income tax since
it occurred during the settlement of the estate.
20. Who among the following transferors is not liable for
estate tax on the property transferred during his
lifetime?
a. The testator who bequeaths property to his heirs in
a last will and testament executed and probated
during his lifetime.
b. The donor who reserves his right to amend or
revoke the donation of property in favor of the
donee.
c. The donee of an appointed property who is required
under a power of appointment to transfer such
property upon death to his eldest child.
d. The transferor of personal property who sold it for
insufficient consideration.
21. The following properties will be classified uniformly
under Conjugal Partnership of Gains and Absolute
Community of Property, except:
a. Property inherited or received as donation
during the marriage
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b.
c.
d.
Property acquired from labor, industry, work or
profession of spouses
Fruits or income due or derived during the
marriage coming from common properties
Fruits or income due or derived during the
marriage coming from exclusive properties
22. The following deductions are also part of the gross
estate, except:
a. Claims against the estate
b. Claims against insolvent persons
c. Transfer for public use
d. Death benefits under Republic Act. 4917
23. Which of the following allowable deductions of a nonresident alien decedent should be prorated?
a. Net share of the surviving spouse
b. Transfers for public use
c. Unpaid mortgage
d. Property previously taxed
24. Decedent died on May 1, 2018. If the estate is settled
judicially, the maximum allowable extension for filing is
up to:
a. November 1, 2018
b. December 1, 2018
c. April 30, 2019
d. May 30, 2019
Use the following data for the next four (4) questions:
Mr. Bu Ang, single and a non-resident alien, died of a heart
attack in 2020, leaving the following properties in favor of
his heirs:
Gross estate within the Philippines
P30,000,000
Gross estate outside the Philippines
20,000,000
Funeral Expense
500,000
Judicial and administrative expenses
2,000,000
Claims against the estate
5,000,000
His gross estate includes family home valued at
P8,000.000.
25. How much is the gross taxable estate of Mr. Ang?
a. P45,000,000
c. P30,000,000
b. P35,000,000
d. P50,000,000
26. How much is the deductible ordinary deductions of Mr.
Ang’s estate?
a. P4,320,000
c. P5,000,000
b. P3,000,000
d. P4,200,000
27. How much is the deductible special deductions of Mr.
Ang’s estate?
a. P500,000
c. P5,500,000
b. P5,000,000
d. P1,518,000
28. How much is the estate tax due of Mr. Ang’s estate?
a. P1,470,000
c. P1,590,000
b. P1,500,000
d. P1,620,000
Use the following data for the next four (4) questions:
Mr. Pim Musay, Filipino and married, died in 2019, leaving
his estate in favor of his surviving spouse. The following
information were made available:
Real property in Quezon City, acquired during
marriage. Said property is supported by a barangay
certification that the spouses resided in this property at the
time of Mr. Musay’s death. The fair market value of this
property as per latest tax declaration is P15,000,000 while
the zonal valuation as of the time death is P 20,000,000.
Said real property was held as a mortgage in a loan applied
by the spouses. As of the time of death, the outstanding
balance of the mortgage payable amounted to P5,000,000.
Real property in Batangas, inherited by Mr. Musay during
marriage, two and half years ago, from his late father. The
fair market value per tax declaration as of his death is
P8,000,000 while the zonal valuation is P12,000,000. Said
property was previously taxed at a value of P10,000,00
when Mr. Musay inherited the property from his father.
Real property in Cavite, donated to Mrs. Musay, 10 years
ago (before marriage) by his parents-in-law . The fair
market value as per latest tax declaration as of the time of
Mr. Musay’s death is P3,000,00 while the zonal valuation is
P4,000,000.
Other exclusive properties of Mr. Musay P1,000,000;
Other properties of Mr. and Mrs. Musay- P3,000,000.
Funeral expenses incurred by the estate during the wake
and burial of Mr. Musay amounted to P1,900,000.
29. Compute item 34 (Gross Estate) of BIR form no. 1801
a. P28,500,000
c. P30,000,000
b. P32,500,000
d. P40,000,000
30. Compute Schedule V (Ordinary deductions) of BIR Form
no. 0801
a. P5,000,000
c. P12,000,000
b. P10,250,000
d. P8,500,000
31. Compute item 40 (Net Taxable Estate) of BIR from no.
1801
a. P3,750,000
c. P29,750,000
b. P13,750,000
d. P0
32. Compute item 20 (Estate Tax Payable) of BIR from no.
1801.
a. P225,000
c. P1,785,000
b. P825,000
d. P0
The next four (4) questions are based on the following:
Pedro, head of the family, died intestate on August 20, 2019
leaving the following properties:
Land and house (family home)
P8,000,000
Agricultural land inherited from his father
800,000
who died 2 ½ years before his death
Other real properties
11,000,000
Other tangible personal properties
200,000
Bank deposit, PNB-Manila representing
500,000
amount received by heirs under R.A. No.
4917
Obligations of and charges against certain properties follow:
Medical
expenses
of
last
illness
P 600,000
(supported by bills and statements from
hospital)
Actual funeral expenses (30% paid for
500,000
from the estate, 70% paid for by
relatives)
Judicial expenses incurred within six (6)
100,000
months after death
Claims against the estate other than
270,000
unpaid mortgage
Unpaid mortgage on inherited agricultural
30,000
land
Claims against insolvent persons
100,000
The value of the agricultural land at the time of inheritance
was P500,000. It had an unpaid mortgage of P80,000.
33. How much was the vanishing deduction?
a. P264,757
c. P159,107
b. P253,443
d. P318,214
34. The total ordinary deduction shall be:
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a. P264,757
b. P664,757
c. P5,000,000
d. P13,500,000
35. The total special deduction shall be:
a. P264,757
c. P5,000,000
b. P664,757
d. P13,500,000
36. How much was the taxable net estate?
a. P6,684,822
c. P6,435,243
b. P6,696,557
d. P6,631,786
37. The amounts withdrawn from the deposit accounts of
decedent subjected to the 6% final withholding tax
imposed under Section 97 of NIRC, shall be:
a. Excluded from the gross estate for purposes of
computing the estate tax.
b. Included from the gross estate for purposes of
computing the estate tax.
c. Claimed as tax credit against estate tax due.
d. Claimed as deduction from the gross estate.
38. The administrator of the Estate of Juan Santos claims as
deduction from the gross estate a receivable from a
person who absconded. His assertion is that the claim
against that person can no longer be collected. He also
explains that for income tax purposes bad debts are
deductible from the gross income so the receivable from
a person who absconded shall also be treated in the
same manner as in estate tax. Despite the
administrator’s contention the BIR disallowed as
deduction the claim against a person who absconded. Is
the BIR correct?
a. Yes, to be allowed as deduction from the gross
estate the claim must be against an insolvent debtor
and that the incapacity of the person must be a fact
and not merely alleged.
b. No, not to allow it to be deducted from the gross
estate will be a great injustice because of the fact
that collection is almost impossible.
c. No, all items that are deductible from gross income
for income tax purposes are also allowed to be
deducted from the gross estate.
d. Yes, the regulations are not clear and it requires BIR
ruling for such claim to be allowed as deduction.
Use the following data for the next four (4) questions:
Juan Dela Cruz , non-VAT registered lessor of residential
and commercial units, had the following date for the 1 st
and 2nd quarters of 2020.
Gross Receipts
1st Quarter 2nd Quarter
Lease of Residential Units
▪
Monthly rental of
P2,500,000 P2,300,000
P13,000/unit
▪
Monthly rental of
1,000,000
1,200,000
P18,000/unit
Lease of commercial units
2,300,000
2,400,000
Input vat from vat suppliers
150,000
120,000
39. How much is the business tax due for the 1 st quarter
2020 of Mr. Dela Cruz?
a. P99,000
c. P396,000
b. P174,000
d. P246,000
40. How much is the business tax due for the 2 nd quarter
2020 of Mr. Dela Cruz?
a. P432,000
c. P708,000
b. P312,000
d. P108,000
41. How much is the business tax due for the 2 nd quarter
2020 of Mr. Dela Cruz, assuming he registered as a VAT
taxpayer at the start of the 2nd Quarter 2018?
a. P432,000
c. P708,000
b. P312,000
d. P108,000
42. Assuming Mr. Dela Cruz is vat registered taxpayer
instead of non-vat registered, how much is his business
tax due for the 1st Quarter of 2020?
a. P246,000
c. P696,000
b. P546,000
d. P396,000
43. Statement 1: Banks are subject to the VAT on its
interest income.
Statement 2: Resident international carriers are
subject to the 0% VAT on its gross Philippine billings
on flight originating from the Philippines to a foreign
destination.
a. Both statements are correct
b. Both statements are not correct
c. Only the first statement is correct
d. Only the second statement is correct
44. In case of sale, barter or exchange of real property
subject to vat, the term fair market value shall mean
a. The fair market value as determined by the
Commissioner of Internal Revenue (zonal value).
b. The fair market value as shown in the schedule of
values of the Provincial and City assessor (real
property tax declaration).
c. Whichever is higher between the zonal value and
the value per real property tax declaration.
d. Whichever is lower between the zonal value and the
value per real property tax declaration
45. Philippine Catering Corporation (PCC) is a vat registered
company which has been engaged in the catering
business for the past 10 years. It has invested a
substantial portion of its capital on flat wares, table
linens, plates, chairs, catering equipment, and delivery
vans. PCC sold its first delivery van, already 10 years
old and idle to Northern Gravel and Sand Corporation
(NGSC), a corporation engaged in the business of
buying and selling gravel and sand. The selling price of
the delivery van was way below its acquisition cost. The
sale of delivery van by PCC to NGSC is:
a. An unrelated transaction to PCC, hence, not
subject to vat
b. An isolated transaction which is not subject to vat.
c. The sale is subject to vat being a transaction
incidental to the catering business which is a vat
registered activity of PCC.
d. None of the above
46. G.I. Joe, an alien employee of the Asian Development
Bank (ADB) who is retiring soon has offered to sell his
car to you, which he imported tax-free for personal use.
The privilege of exemption from tax is granted to
qualified personal use under the ADB Charter, which is
recognized by the tax authorities. If Pedro decide to
purchase the car, the tax consequence shall be:
a. Exempt from vat
b. G.I. Joe is subject to vat
c. Pedro is subject to vat
d. Either G.I. Joe or Pedro is subject to vat, at the
option of G.I. Joe
47. Commonwealth Management and Services Corporation
(Comaserco) is a corporation duly organized and
existing under the laws of the Philippines. It is an
affiliate of of Philippine American Life Insurance
Company (Philamlife), organized by the latter to
perform collection, consultative and other technical
services, including functioning as an internal auditor of
Philamlife and its other affiliates. These services were
performed on a “non-profit, reimbursement-of-cost
only” by Comersco.
The services performed by
Comersco to Philamlife and other affiliates were
subjected to vat by the BIR. Which of the following
contentions of Comersco is correct?
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(I)
Exempt from vat because the service was not
considered “in the ordinary course of trade or
business”.
(II)
Exempt from vat because Comersco was
established only to ensure operational
orderliness and administrative efficiency of
Philamlife and its affiliates, and not in the sale
of services.
a. Ionly
c. Either I or II
b. II only
d. Neither I nor II
48. Which of the following is exempt from vat?
a. Services rendered by Pedro Construction Company,
a contractor to the World Health Organization
(WHO) in the renovation of its offices in Manila.
WHO is an entity exempt from tax under
international agreements to which the Philippines is
a signatory.
b. Sale of tractors and other agricultural implements
by Magsasaka Corporation to local farmers.
c. Sale of RTW by Ana’s boutique, a Filipina dress
designer, in her dress shop and other outlets.
d. Fees for lodging paid by students to Bahay-bahayan
dormitory, a private entity operating a student
dormitory (monthly fee, P2,500).
49. Statement 1: Facilitation expense shall be included in
the determination of applicable input vat on
importation.
Statement 2: Presumptive input vat are creditable
against output tax only if the taxpayer is allowed to avail
for 0% vat on its export sales.
a. Only statement 1 is correct
b. Only statement 2 is correct
c. Both statements are correct
d. Both statements are incorrect
50. _______ is a merchant of stocks or securities, whether
an individual, partnership, or corporation, with an
established place of business, regularly engaged in the
purchase of securites and their resale to customers. He
buys securities and sells them to customers with a view
to the gains and profits that may be derived therefrom.
a. dealer in securities
c. franchise grantees
b. real estate dealer
d. lending investor
51. Mabuhay Corporation is a pre-need company. Which of
the following is statements is incorrect?
a. A considered a dealer in securities subject to 12%
vat on gross receipts.
b. A considered a dealer in securities subject to 12%
vat on gross income.
c. Its gross income is computed as gross receipts
(which consist of actual receipts of premium on
contract price) minus contributions to the trust
funds to be set up independently as mandated by
the Securities and Exchange Commission.
d. None of the above
Receivable balances are all income related and are
inclusive of VAT. Revenues and purchases are VAT
exclusive. Capital goods are estimated to have a useful life
of 10 years.
52. How much is the correct output vat?
c. P213,120
a. P216,000
b. P264,000
d. P240,000
53. How much is the total available input vat?
c. P360,000
a. P86,400
b. P72,000
d. P370,000
54. How much is the deferred input tax as of March 31,
2018?
a. P280,000
c. P283,200
b. P273,600
d. None
55. How much is the amount of input vat to be closed to
expense or income.
a. P26,000 closed to expense
b. P22,000 closed to expense
c. P4,400 closed to income
d. P5,360 closed to income
56. Pilipinas Shell sold fuel to an international shipping
carrier whose voyage is from a port in the Philippines
directly to a foreign port without docking or stopping at
any other port in the Philippines. What is the treatment
of the transaction for VAT purposes?
a. Exempt
b. Zero-rated transaction
c. Subject to 12% VAT
d. Either “b” or “c”
57. When is the deadline for manual filing of the monthly
VAT return?
a. Ten (10) days from the end of the month
b. Twenty (20) days from the end of the month
c. Twenty-five (25) days from the end of the
month
d. Thirty (30) days from the end of the month
58. When is the deadline for manual filing of the quarterly
VAT return?
a. Ten (10) days from the end of the quarter
b. Twenty (20) days from the end of the quarter
c. Twenty-five (25) days from the end of the
quarter
d. Thirty (30) days from the end of the quarter
59. One of the following does not result to output tax:
a. Domestic sale of goods
b. Cash receipt on sale of services rendered in the
Philippines
c. Export sale of goods
d. Cash receipt on sale of services rendered outside of
the Philippines
Use the following data for the next four (4) questions:
The Wash Corporation, a VAT-registered company, is
engaged in the laundry business. During the second
quarter of 2018, the following information were made
available:
60. The Value-added tax is not an/a:
a. Direct tax
b. Indirect tax
c. Excise tax
d. Ad-valorem tax
Net revenues
2M
Receivables from customers, April 1, 2018
448,000
Receivables from customers, June 30, 2018
672,000
Creditable VAT withheld
10,000
VAT purchases, other than capital goods
600,000
VAT purchases, capital goods (all in April 2018)
2.4M
61. Juan Dela Cruz is a Certified Public Accountant (CPA)
who is currently employed as the Chief Financial Officer
(CFO) of a large conglomerate. He regularly earns a
total annual salary of P4,500,000 from his employment.
In addition, he earns professional fees of P600,000 from
his personal clients. The business tax liability of Juan
shall be:
a. 3% Other Percentage Tax
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b.
c.
d.
12% VAT
Excise tax
Amusement tax
d.
62. A resident Filipino citizen (not a dealer in securities) sold
shares of stocks of a domestic corporation that are listed
and traded in the Philippine Stock Exchange.
a. The sale is exempt from income tax but subject to
the 6/10 of 1% stock transaction tax.
b. The sale is subject to income tax computed at the
graduated income tax rates of 20% to 35% on net
taxable income.
c. The sale is subject to the stock transaction tax and
income tax.
d. The sale is both exempt from the stock transaction
tax and income tax.
63. Which of the following statements is incorrect? RA10378
provided for tax exemption of international carriers
from:
a. Income taxation on the basis of tax treaty or
reciprocity.
b. Vat on their carriage of passengers
c. Percentage tax on their carriage of passengers
d. Percentage tax on their carriage of goods.
The donation is subject to graduated rates.
69. DMCI is a non-vat registered real estate dealer and
lessor. If its monthly rental of residential units in 2019
taxable year exceeds P15,000 per unit, the same shall
be subject to 12% vat
a. True, regardless of the amount of annual gross
receipts.
b. True, only if the total annual gross receipts from
rentals exceed P3,000,000.
c. True, only if the total annual gross receipts from
rentals and other operations exceed P3,000,000.
d. False, DMCI is a non-vat registered entity.
70. Queenie Ripot operates a convenience store whose
gross receipts during the taxable year was P3,500,000.
She opted not to register under the VAT system.
Statement 1: Her sales are subject to the 12% output
VAT.
Statement 2: She can claim input VAT credit arising
from her purchases from VAT suppliers.
a. Both statements are correct
b. Both statements are not correct
c. Only the first statement is correct
d. Only the second statement is correct
**end of exam**
64. Rentals of property, real or personal, received by bank
and non-bank financial intermediaries performing quasibanking functions are:
a. Subject to 12% vat
b. Subject to gross receipts tax of 5%
c. Subject to gross receipts tax of 7%
d. Subject to 3% OPT if annual gross receipts do not
exceed the vat threshold
65. Presumptive input VAT shall be available to the
following, except:
a. Sardines
b. Tuna
c. Milk
d. Cooking oil
66. Statement 1: Banks are subject to the VAT on its
interest income.
Statement 2: Resident international carriers are subject
to the 0% VAT on its gross Philippine billings on flight
originating from the Philippines to a foreign destination.
a. Both statements are correct.
b. Both statements are incorrect.
c. Only the first statement is correct.
d. Only the second statement is correct.
67. Double taxation in its general sense means taxing the
same subject twice during the same taxing period. In
this sense, double taxation
a. Violates substantive due process.
b. Does not violate substantive due process.
c. Violates the right to equal protection.
d. Does not violate the right to equal protection.
68. Mr. Bill Morgan, a Canadian citizen but resident of El
Nido, Palawan, donated in 2018 his car in Canada to his
future daughter in-law who is to be married to his only
son in Canada. His son and future daughter in law are
both citizens and residents of Canada.
What is the tax implication of the above donation?
a. The donation is not subject to donor’s tax since the
donee is a non-resident alien and the donated
property is located in Canada.
b. The donation is taxable, however, dowry exemption
may be claimed as deduction.
c. The donation is taxable at 6% in excess of P250,000
without any deduction for dowry.
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