ESTATE TAX
1.
Statement 1: The power of appointment is “general” when the power of appointment authorizes the done of the
power to appoint only from a restricted or designated class of persons other than himself.
Statement 2: Special power of appointment exists when the power of appointment authorizes the donee of the
power to appoint any person he pleases.
A. Only statement 1 is correct.
B. Only statement 2 is correct.
C. Both statements are correct
D. Both statements are incorrect
2.
Statement 1: Aguinaldo devised in his will a piece of land; naked title to Bonifacio and usufruct to Rizal for as
long as Rizal lives, thereafter to Bonifacio. The transmission from Aguinaldo to Bonifacio and Rizal is subject to
estate tax but the merger of the usufruct and the naked title to Bonifacio upon the death of Rizal is exempt.
Statement 2: Erap devised in his will real property to his brother Fidel who is entrusted with the obligation to
preserve and transmit the property to JDV, a son of Fidel, when JDV becomes of age. The transmission from
Fidel to his son JDV is subject to tax.
A. Only statement 1 is correct
B. Only statement 2 is correct
C. Both statements are correct
D. Both statements are incorrect
3.
One of the following donations is not included as part of gross estate
A. Revocable transfers
B. Transfers with reservation of certain rights
C. Transfer under special power of appointment
D. Transfers in contemplation of death
4.
Which of the following transfers is not included in the gross estate?
A. Transfer with reservation of certain rights
B. Transfer for insufficient consideration
C. Transfer for an adequate and full consideration in money or money’s worth
D. Transfer in contemplation of death
5.
Statement 1: Pedro died giving Juan the power to appoint a person who will inherit his house and lot. Juan,
however, can only choose among Ana, Lorna and Fe. Juan decided to transfer the property to Fe through the
former’s will. The transfer from Juan to Fe is subject to estate tax.
Statement 2: During A’s lifetime, he decided to give B as gift his (A) car subject to the condition that if B does
not become a CPA within 3 years, A shall revoke the transfer. In the second year however, A died. The car
should form part of A’s gross estate
A. Only statement 1 is correct
B. Only statement 2 is correct
C. Both statements are correct
D. Both statements are incorrect
6.
The following are transactions and acquisitions exempt from transfer tax, except
A. Transmission from the first heir or donee in favor of another beneficiary in accordance with the desire of the
predecessor.
B. Transmission or delivery of the inheritance or legacy by the fiduciary heir or legatee to the fideicommissary
C. The merger of usufruct in the owner of the naked title
D. All bequests, devises, legacies or transfers to social welfare, cultural and charitable insitutions.
7.
Which of the following statements is correct?
A. Marriage settlements may fix the property relations of spouses during the marriage within the limits provided
by the family code.
B. The purpose of system of property relationship is to distinguish a conjugal or community property from an
exclusive property.
C. Modifications or amendments in the marriage settlements may only be allowed after the celebration of the
marriage.
D. None of the above
8.
Statement 1: Conjugal partnership of gains, absolute community of property and complete separation are all
valid regimes that may govern property relations between spouses.
Statement 2: Under the regime of absolute community of property, the husband and the wife place in a common
fund the proceeds, products, fruits and income from their separate property and those acquired by either or both
spouses through their effort or by chance.
A. Only statement 1 is correct
B. Only statement 2 is correct
C. Both statements are correct
D. Both statements are incorrect
9.
Statement 1: In the absence of marriage settlements executed before the marriage, the property relationship
between husband and wife shall be governed by local custom and by the provisions of law, respectively.
Statement 2: Claims against insolvent persons may be charged against exclusive property.
A. Only statement 1 is correct
B. Only statement 2 is correct
C. Both statements are correct
D. Both statements are incorrect
10. In the absence of a marriage settlement, or when the regime agreed upon is void, the property relations of the
spouses who married before August 3, 1998 shall be governed by:
A. Absolute community of properties
B. Conjugal partnership of gains
C. Absolute separation of properties
D. No property relations.
11. In the absence of a marriage settlement, or when the regime agreed upon was void, the property relations of
the spouses who were married on or after August 3, 1988 would be:
A. Absolute community of property
B. Conjugal partnership of gains
C. Absolute separation of property
D. Either absolute community of property or conjugal partnership of gains.
12. The
A.
B.
C.
D.
following are exclusive property of each spouse. Which one is not?
That which each acquires during the marriage by lucrative title.
That which is purchased with the exclusive money of either spouse.
That which is acquired by exchange with other property belonging to the spouses.
That which is brought to the marriage as his or her own.
Conjugal Partnership of Gains (CPG)
13. One of the following is a conjugal property of the spouses
A. That which is brought to the marriage as his or her own
B. That which each acquires during the marriage by inheritance
C. The fruits of an exclusive property
D. That which is purchased with the exclusive property of the wife
14. Which of the following is exclusive property under the system of conjugal partnership of gains?
A. Property before marriage
B. Inheritance during marriage
C. Property acquired during marriage out of exclusive property
D. All of the above
15. Which is not an exclusive property of a spouse?
A. That which is brought to the marriage as his or her own.
B. That which each acquired during the marriage by gratuitous title.
C. That which is acquired by right of redemption
D. That which is purchased with the spouses’ common fund.
Absolute Community of Property
16. One of the following is not a community property of the spouses?
A.
B.
C.
D.
Property inherited by the husband before marriage.
Winnings in gambling.
Fruits of property inherited during the marriage.
Fruits of property inherited before the marriage.
17. Which of the following is exclusive property under the system of absolute community of property?
A. Property before marriage
B. Inheritance during marriage
C. Property acquired during marriage
D. All of the above
18. Properties owned by the spouses before and brought into the marriage shall be classified as:
Absolute Community Property Conjugal Partnership of Gains
A.
Community
Conjugal
B.
Exclusive
Exclusive
C.
Community
Exclusive
D.
Exclusive
Conjugal
19. The fruits on properties owned by the spouses before and brought into the marriage shall be classified as
Absolute Community Property Conjugal Partnership of Gains
A.
Community
Conjugal
B.
Exclusive
Exclusive
C.
Community
Exclusive
D.
Exclusive
Conjugal
20. Properties received from gratuitous transfer during marriage shall be classified as:
Absolute Community Property Conjugal Partnership of Gains
A.
Community
Conjugal
B.
Exclusive
Exclusive
C.
Community
Exclusive
D.
Exclusive
Conjugal
21. The fruits received during marriage from gratuitous transfers will be classified as:
Absolute Community Property Conjugal Partnership of Gains
A.
Community
Conjugal
B.
Exclusive
Exclusive
C.
Community
Exclusive
D.
Exclusive
Conjugal
22. Personal property for personal and exclusive use shall be classified as
Absolute Community Property Conjugal Partnership of Gains
A.
Community
Conjugal
B.
Exclusive
Exclusive
C.
Community
Exclusive
D.
Exclusive
Conjugal
100.
Statement 1: The right to succession is effected at the time of transfer of the decedent’s property or rights to
the heir.
Statement 2: Ana is the surviving spouse of Jose. Her share in their community property is classified as her
exclusive property and shall form part of the decedent’s distributable estate.
A. Only statement 1 is correct
B. Only statement 2 is correct
C. Both statements are correct
D. Both statements are incorrect
The next four (4) questions are based on the date provided below:
Mr. J. Chavez died leaving the following properties:
Rest house in Cebu, acquired before marriage
Income from rest house in Cebu
Condominium in Davao, brought to marriage by wife
Income from condominium in Davao
Town house in Quezon City, acquired during marriage
P6,000,000
600,000
3,600,000
360,000
10,500,000
Income from town house in Quezon City
Car, inherited by wife during marriage (the decedent provided in his Will that it shall form
part of the common properties of the spouses)
Jewelry, acquired during marriage for exclusive use of the wife
101.
How much is the conjugal properties under Conjugal Partnership of Gains?
A. P12,510,000
B. P18,510,000
C. P22,310,000
D. P23,610,000
102.
How much is the gross estate under Conjugal Partnership of Gains?
A. P12,510,000
B. P18,510,000
C. P22,310,000
D. P23,610,000
103.
How much is the community properties under Absolute Community of Property?
A. P12,510,000
B. P18,510,000
C. P22,310,000
D. P23,610,000
104.
How much is the gross estate under Absolute Community of Property?
A. P12,510,000
B. P18,510,000
C. P22,310,000
D. P23,610,000
105.
The
A.
B.
C.
D.
1,050,000
1,300,000
200,000
list provided below is not included in the gross estate of a decedent, except:
Share in common properties of the surviving spouse
Exclusive property of the surviving spouse
Properties outside the Philippines of a non-resident alien decedent
Intangible personal property in the Philippines of a non-resident alien when the rule of Reciprocity applies.
Use the following data for the next two (2) questions
The estate of Pedro, resident citizen decedent, married, who died on April 1, 2021 were as follows:
House and lot* (Family Home)
*The lot was acquired at a cost of P3M, five (5) years ago, before marriage, while the
house was constructed on March 1, 2021, during marriage, at a cost of P10M from
partnership funds. The lot had a FMV of P4,000,000 after construction of the house
Other properties acquired during marriage
Vacation house in Batanes inherited on February 14, 2020, during marriage, then with
a fair market value of P1,300,000
Property in Davao, received as gift during marriage from a friend on January 12, 2020
(the applicable donor’s tax was not paid by the donor)
Rental income on the property in Davao up to the time of death
Expenses/Claims:
Funeral expenses
Judicial expenses
Casualty losses incurred on December 10, 2021
Claims against the estate
Medical expenses within 1 year prior to death, only half was receipted
106.
How much is the net taxable estate under Conjugal Partnership of Gains?
A. P3,926,000
B. P6,426,000
C. P3,426,000
D. P1,348,000
P14,000,000
6,000,000
2,500,000
2,300,000
1,200,000
420,000
800,000
600,000
1,600,000
4,000,000
107.
How much is the net table estate under Absolute Community of Property?
A. P4,836,000
B. (P2,174,000)
C. P1,948,000
D. P2,174,000
108.
Mr. Pim Manaw, resident decedent, married, died, leaving the following properties:
Real and personal properties acquired during the marriage
House and lot inherited from his father one year and 3 months before he died (fair
market value when inherited, P1,500,000) used as the decedent’s family home
Car purchased with cash received as gift from his mother during the year he died
Cash (inclusive of P500,000 received as inheritance from the father)
P3,000,000
2,000,000
500,000
1,500,000
The following obligations and expenses were also made available:
Claims against conjugal properties
Unpaid mortgage on the inherited house and lot (original mortgage was for
P600,000)
600,000
100,000
How much is the total vanishing deduction?
A. P1,000,000
B. P1,080,000
C. P1,530,000
D. Nil
109.
Teh Pok died on November 20,2020. Some of the properties he left are the following:
Asset
Mode of
Date Acquired
Market Value
Acquisition
Date Acquired
Land
Purchase
7-13-16
P500,000
Car
Donation
10-2-19
800,000
Market Value
Date of Death
P350,000
980,000
Other information:
a. The gross estate of the decedent amounts to P3,000,000.
b. The car was mortgaged for P50,000 when it was acquired and The Pok paid the same before he died.
c. The allowable deductions totaled P325,000, which includes judicial expenses of P30,000 and funeral
expenses of P150,000.
The
A.
B.
C.
D.
vanishing deduction is
P581,000
P571,000
P648,783
P637,617
Next two (2) questions are based on the following:
A citizen-decedent died with the following data:
Gross estate
Allowable deductions (Excluding standard deduction)
Estate tax paid
Philippines
P14,200,000
6,400,000
USA
P4,400,000
2,200,000
150,000
110.
How much is the estate tax payable in the Philippines assuming the decedent is a non-resident citizen?
A. P132,000
B. P150,000
C. P168,000
D. P300,000
111.
How much is the estate tax payable in the Philippines assuming the decedent is a non-resident alien?
A. P150,000
B. P168,000
C. P300,000
D. P438,000
TAX CREDIT – MORE THAN ONE (1) FOREIGN COUNTRIES
112.
Mr. Nanahimik, citizen decedent, died on April 10, 2019 with the following data:
Gross Estate
Allowable Deductions
Philippines
P18,750,000
P15,750,000
China
3,000,000
1,500,000
Japan
4,500,000
5,250,000
USA
6,000,000
2,250,000
The
A.
B.
C.
D.
Estate tax paid
P37,500
180,000
estate tax payable in the Philippines should be:
P270,000
P315,000
P217,500
P232,500
COMPLIANCE REQUIREMENTS
113.
Statement 1: The estate tax imposed under the Tax Code shall be paid by the executor or administrator before
the delivery of the distributive share in the inheritance to any heir or beneficiary.
Statement 2: The executor or administrator of an estate has the primary obligation to pay the estate tax but the
heir or beneficiary has subsidiary liability for paying that portion of the estate corresponding to his distributive
share in the value of the total net estate.
A. Only statement 1 is correct
B. Only statement 2 is correct
C. Both statements are correct
D. Both statements are incorrect
114.
Lolo Sot died in 2020 leaving a gross estate amounting to P1,500,000. No estate tax is due based on the tax
code, as amended under the TRAIN Law. The gross estate is composed of a vehicle worth P800,000, shares of
stocks valued at P500,000 and P200,000 time deposit. The administrator believes that only notice of death
should be filed since the value of the gross estate is exempt from tax. What will you tell him?
A. Notice of death and estate tax return have to be filed because the gross estate exceeds P200,000 and when
the gross estate consists of registered or registrable properties, estate tax is required to be filed regardless
of the value of the gross estate.
B. Only notice of death is required to be filed because the gross estate exceeds P200,000. Estate tax return
is required to be filed only when the gross estate exceeds P200,000 and/or there is estate tax due.
C. Neither notice of death nor estate tax return need to be filed in this particular case.
D. Only estate tax return has to be filed
115.
A decedent died upon the effectivity of the TRAIN Law, under which of the following situations an estate tax
return is not required to be filed?
A. Transfer which are subject to estate tax.
B. The estate consists of registered or registrable properties for which a clearance from the BIR is required as
a condition precedent for the transfer of ownership.
C. The gross value of the estate consisting of non-registrable properties does not exceed P5,000,000.
D. None of the above.
116.
Who shall file the estate tax return?
A. Executor, or administrator, or any of the legal heirs.
B. Creditors of the decedent.
C. Personal secretary of the decedent
D. Debtors of the decedent
117.
The Estate Tax Return shall be filed and payment made with
A. An authorized Agent Bank (AAB) of the Revenue District Office (RDO) having jurisdiction over the place of
residence of the decedent at the time of his/her death.
B. If there is no AAB within the residence of the decedent, the Estate Tax Return must be filed and the payment
made with the Revenue Collection Officer or duly Authorized City or Municipal Treasurer of the RDO having
jurisdiction over the place of residence of the decedent.
C. If the required filer has no legal residence in the Philippines, the Estate Tax Return will be filed with the
Office of the Commissioner or in the Philippine Embassy or Consulate in the country where the decedent
was residing at the time of his or her death.
D. All of the above.
118.
If the decedent died on or after January 1, 2018, the estate tax return should be filed
A. At the time of death
B.
C.
D.
Within 30 days after death
Within six months after death
Within one (1) year after death
119.
An
A.
B.
C.
D.
estate tax return is not necessary in the following instance
Donation of P500,000 cash
Transfer of motor vehicle valued at P1,300,000
Both A and B
Neither A nor B
120.
Statement 1: The Commissioner or any of the Revenue Officer authorized by him pursuant to the tax code shall
have the authority to grant, in meritorious cases, a reasonable extension not exceeding thirty (30) days for filing
the return.
Statement 2: The application for the extension of time to file the estate tax return must be filed with the RDO
where the estate is required to secure its TIN and file tax return of the estate.
A. Only statement 1 is correct
B. Only statement 2 is correct
C. Both statements are correct
D. Both statements are incorrect
121.
Extension for the payment of the estate tax shall be allowed on the ground of:
A. Undue hardship upon the estate or any of the heirs
B. Negligence
C. Intentional disregard of rules and regulations
D. Fraud
122.
The Commissioner, on meritorious cases, may extend the time for payment of estate tax:
In case the estate is settled judicially
In case the estate is settled extra-judicially
A.
5 years
5 years
B.
2 years
2 years
C.
5 years
2 years
D.
2 years
5 years
123.
When an estate is settled extra-judicially, the estate tax return may be filed and the estate tax paid
A. By any of the heirs, with a right of reimbursement from the other heirs.
B. Only by the heir with authority from the other heirs.
C. By each of the heirs, the payment being for his distributive share in the estate tax.
D. The eldest of the heirs and closest in relationship to the decedent.
124.
A died leaving a house and lot to B on April 1, 2021 which was questioned by C and it is under litigation but,
subsequently, the parties executed an extra-judicially settlement. The last day for filing the estate tax return
is:
A. April 30, 2021
B. April 30, 2022
C. October 1, 2021
D. March 31, 2022
125.
The
A.
B.
C.
D.
126.
In filing the estate tax return, a CPA certificate is required when:
A. Gross estate exceeds P2,000,000
B. Gross estate exceeds P5,000,000
C. Gross estate exceeds P10,000,000
D. Gross estate exceeds P2,000,000
127.
One of the following is not a content of the statement certified to by a CPA:
A. Itemized asset of the decedent with their corresponding gross value at the time of his death or in case of
non-resident alien of that part of his gross estate situated in the Philippines.
B. Itemized deductions from gross estate.
C. The amount of tax due whether paid or still due and outstanding.
D. Certified copy of partition.
last day for the payment of estate tax may be extended, until:
October 1, 2022
March 31, 2024
October 1, 2024
March 31, 2025
128.
Statement 1: If an extension for payment of estate tax is granted, the Commissioner or his duly authorized
representative may require the executor, or administrator, or beneficiary, as the case may be, to furnish a bond
in such amount, not exceeding double the amount of the tax.
Statement 2: Any amount paid after the statutory due date of the estate tax, but within the extension period,
shall be subject to interest but not to surcharge.
A. Only statement 1 is correct
B. Only statement 2 is correct
C. Both statements are correct
D. Both statements are incorrect
129.
Which of the following is not correct?
A. When a compulsory heir is given by will less than his legitime, the provisions of the will should be modified
in such a way that he will receive his legitime.
B. The CIR may examine the bank deposit of a decedent for the purpose of determining his gross estate even
if the estate did not request for a compromise on the ground of financial incapacity.
C. The sharing of heirs in testamentary succession must satisfy the rules on legitime.
D. If an extension to pay the estate tax is granted, the Commissioner of his duly authorized representative
may require the administrator, or executor, or beneficiary, to furnish a bond in such amount exceeding
double the amount of the tax and with such sureties as the Commissioner deems necessary, conditioned
upon the payment of said tax in accordance with the terms of the extension.
130.
Statement 1: Any amount paid beyond the statutory due date of the tax, but within the extension period, shall
be subject to interest but not to surcharge.
Statement 2: No extension for payment of estate tax shall be granted where the request for extension is by
reason of negligence, intentional disregard of rules and regulations, or fraud on the part of the taxpayer.
A. Only statement 1 is correct
B. Only statement 2 is correct
C. Both statements are correct
D. Both statements are incorrect
131.
In case of a resident decedent, the administrator of executor shall register the estate of the decedent and secure
new TIN from the
A. Office of the Commissioner
B. RDO where the administrator or executor is registered
C. RDO where the decedent was domiciled at the time of his death.
D. Duly authorized treasurer of the city or municipality where the decedent is domiciled at the time of his death
132.
Can
A.
B.
C.
D.
133.
A decedent who maintains a bank account died in March 12, 2018. Which of the following statements is correct?
Statement 1: If a bank has knowledge of the death of a person, who maintained a bank account alone, or jointly
with another, it shall allow the withdrawal from said deposit account, subject to a final withholding tax of 6% of
the amount to be withdraw, provided, that the withdrawal shall only be made within one year from the date of
said decedent.
the estate tax be paid in installment?
Yes, in case the available cash of the estate is not sufficient to pay its estate tax liability.
Yes, at the option of the heirs with corresponding interest charges.
No, tax is the lifeblood of the State, hence, collection cannot be delayed under any circumstances.
None of the above
Statement 2: In all cases, the final tax withheld shall not be refunded, or credited on the tax due, on the net
taxable estate of the decedent.
A. Only statement 1 is correct
B. Only statement 2 is correct
C. Both statements are correct
D. Both statements are incorrect
134.
Which of the following statements is correct?
A. There shall not be transferred to any new owner in the books of any corporation, Sociedad anonima,
partnership, business, or industry organized or established in the Philippines any share, obligation, bond or
right by way of gift inter-vivos or mortis causa, legacy or inheritance, unless an eCAR is issued by the
Commissioner or his duly authorize representative.
B.
C.
D.
In instances where the deposit accounts have been duly included in the gross estate of the decedent and
the estate tax due thereon paid, the executor, administrator, or any of the legal heirs shall present the eCAR
issued for the said estate prior to withdrawing from the bank deposit account.
The withdrawal describe in letter b shall no longer be subject to the 6% withholding tax by the bank.
All of the above
Donors Tax
1.
Statement 1: Donor’s tax shall be levied, assessed, collected and paid upon the transfer of property by any
person, resident or non-resident, as a gift.
Statement 2: The donor’s tax shall apply whether the transfer is in trust or otherwise, whether the gift is direct
or indirect, and whether the property is real or personal, tangible or intangible.
A. Only I is correct
B. Only II is correct
C. Both I and II are correct
D. Both I and II are incorrect
2.
Statement 1: “Consideration” means money or equal value or some goods or service capable of being evaluated
in money.
Statement 2: Donative intent is required only in indirect gift.
A. Only I is correct
B. Only II is correct
C. Both I and II are correct
D. Both I and II are incorrect
3.
Statement 1: Regardless of the relationship to the donee, donations made by the donor beginning January 1,
2018 shall be subject to 6% donor’s tax rate in excess of P250,000 exempt gifts.
Statement 2: Donations made by or in favor of juridical persons beginning January 1, 2018 shall be subject to
6% donor’s tax rate in excess of P250,000 exempt gifts.
A. Only the first statement is correct.
B. Only the second statement is correct.
C. Both statements are correct.
D. Both statements are incorrect.
4.
Which of the following constitutes “Gift” for donor’s tax purposes?
A. Transfer of property without consideration.
B. Sales, exchanges and other dispositions of property for a consideration to the extent that the value of the
property transferred exceeds the value in money or money’s worth of the consideration received therefor.
C. Both A and B
D. Neither A nor B
5.
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
6.
A gift that is incomplete because of reserved powers, becomes complete when:
I. The donor renounces the power
II. The right of the donor to exercise the reserved power ceases because of the happening of some event or
contingency or the fulfillment of some condition, other than because of the donor’s death.
A.
I and II are correct
B.
C.
D.
I and II are not correct
Only I is correct
Only II is correct
Use the following data for the next four (4 questions):
Mr. and Mrs. Mapagbigay, made the following donations during 2019:
January 25
May 31
July 15
August 20
To Oliver, their legitimate son, on account of marriage last January 20, 2016, car worth
P400,000, with P200,000 unpaid mortgage, ½ was assumed by the donee.
To John, brother of Mr. Mapagbigay, his capital property worth P200,000 on account of
marriage 6 months ago with a condition that the donee will pay the donor’s tax thereon.
To Felicity, daughter of Mrs. Mapagbigay by former marriage, on account of her marriage 12
months ago. Mrs. Queen’s paraphernal property worth P100,000.
Conjugal car of the couple worth P400,000, with P200,000 unpaid mortgage, ½ assumed by
Felicity and P500,000 worth of land to their four sons on account of their graduation. 20% of
which was owned by their closest friend Roy, who agreed to donate his share through a public
document.
7.
The gift tax payable of Mr. Mapagbigay as of May 31 should be
A. P8,000
B. P7,000
C. P7,200
D. P6,000
8.
The gift tax payable of Mrs. Mapagbigay as of July 15 should be
A. P1,000
B. P2,600
C. P15,000
D. P0
9.
The gift taxes payable of Mr. and Mrs. Mapagbigay on August 20 should be
A. P27,000 and P21,000
B. P21,000 and P27,000 C. P21,000 and P21,000 D. P6,000 and P0
10. The gift tax payable of Roy on June 20 should be:
A.
P30,000
B. P6,000
C. P45,000
D. P0
11. Pedro gave gifts to the following persons on June 12, 2021, his 40th birthday:
A second hand car worth P350,000 to Kaskasero, his trusted driver. The donation was made orally. Since then,
the driver had taken possession of the property.
To his Mayordoma, Ms. Mercy, a lot with a bungalow thereon. The value of the property is P1,200,000. The
donation provides that it may be revoked anytime at the pleasure of Mikey.
His flower shop worth P700,000 to Hardinero, his gardener. The donation is provided in his will.
Cash of P100,000 each to his three long-time friends.
How much is the donor’s tax due
A. P720,000
B. P45,000
C. P100,000
D. P3,000
12. Pedro, single, donated the following properties on September 21, 2021:
Value
Property
Donee
P100,000 Cash
Juan, brother, on account of marriage
400,000 Jewelries
Kat, girlfriend residing in Korea
1,500,000 House and Lot
Parents, silver wedding anniversary gift
75,000 Land
Barangay Mapayapa, for use of barangay hall
300,000 Car
Fe, sister, donation is revocable
50,000 Cash
International Rice Research Institute
100,000 Cas
Guillermo, father of the father of his mother
70,000 Motorcycle
Kay, niece, donation is embodied in the will
The total donor’s tax payable should be
A. P111,000
B. P126,000
DONOR’S TAX CREDIT
13. Donor’s tax credit is not allowed to a donor who is a:
A. Resident citizen
B. Non-resident citizen
C. Resident alien
C. P160,000
D. P220,000
D.
Non-resident alien
The next two (2) questions are based on the following data:
Patrick resident alien, made the following donations for the year 2021:
April 15:

To Hayley (legally adopted child): Car worth P700,000 in the Philippines

To Rebekah (daughter): Car in Canada worth P300,000. The donor’s tax paid in Canada was $200 ($1=P45)
July 20:

To Sophie (niece in Manila): P200,000 worth of personal property.

To Davina (legitimate daughter on account of marriage, July 18, 2017): Car in Manila, worth P400,000 but
mortgaged for P200,000, ½ of which was assumed by the donee.
14. The
A.
B.
C.
D.
gift tax payable on April 15 should be:
P45,600
P30,000
P44,000
P36,000
15. The
A.
B.
C.
D.
gift tax payable on July 20 should be:
P40,000
P30,000
P84,000
P80,000
16. Julio made the following gifts to his relatives:
Philippines
Gross Gift
P750,000
Deductions
250,000
Tax paid
The
A.
B.
C.
D.
USA
P500,000
200,000
25,000
UK
P250,000
150,000
12,000
Italy
P500,000
150,000
10,000
donor’s tax payable after tax credit is:
P26,000
P30,800
P33,250
P60,000
17. Any person making a donation (whether direct or indirect), unless the donation is specifically exempt under the
Tax code or other special laws, is required, for every donation, to accomplish under oath a donor’s tax return.
The return shall set forth:
I. Each gift made during the calendar year which is to be included in gifts.
II. The deductions claimed and allowable
III. Any previous net gits made during the calendar year
IV. Name of the done
A.
B.
C.
D.
18. The
A.
B.
C.
D.
I and II only
I, II and III only
I, II and IV only
All of the above
donor’s tax return shall be filed within:
Six (6) months after the date the gift is made or completed.
Two (2) months after the date the gift is made or completed.
Thirty (30) days after the date the gift is made or completed.
One year after the date the gift is made or completed.
19. Unless the Commissioner otherwise permits, the donor’s tax return shall be filed and the tax paid to the:
I. Authorized agent bank (AAB) under the jurisdiction of the RDO where the donor is domiciled at the time of
the transfer.
II. Revenue District Officer or Revenue Collection of Officer having jurisdiction over the place where the donor
is domiciled at the time of the transfer.
III. Office of the Commissioner if the donor has no legal residence in the Philippines.
IV. Philippine Embassy or Consulate in the country where the donor is domiciled at the time of the transfer or
directly to the office of the Commissioner, in the case of gifts made by a nonresident.
A.
B.
C.
D.
I and II only
I, II and III only
I, II and IV only
All of the above
20. Manolo, a resident of Dagupan City donated to Arturo a property in Laoag City. The donor’s tax is P40,000. The
deed of donation was signed in the residence of Arturo in Baguio City. The donor’s tax return must be filed in
A. Dagupan City
B. Laoag City
C. Baguio City
D. Quezon City
21. Statement 1: Only one return shall be filed for several gifts (donations) by a donor to the different donees on
the same date.
Statement 2: If the donation involves conjugal/community property, each spouse shall file separate return
corresponding to his/her respective share in the conjugal/community property.
A. True, False
B. False, True
C. True, True
D. False, False
22. Statement 1: If on any one date, there is a donation by one donor to his relative and another one to a stranger,
there will be two (2) separate donor’s tax return to be filled.
Statement 2: In donor’s tax, no extension of time for filing the donor’s tax return is allowed.
A. Statement 1 is correct, while Statement 2 is wrong
B. Statement 1 is wrong, while Statement 2 is correct
C. Both Statements are correct
D. Both Statements are wrong
23. Statement 1: A donation can be both a part of the gross gift of the donor and a taxable income to the donee.
Statement 2: A donation may be exempt from donor’s tax but not necessarily a deduction from the donor’s gross
income.
A. Only statement 1 is true.
B. Only statement 2 is true.
C. Both statements are true.
D. Both statements are false.
24. When the donor has no legal residence in the Philippines, the donor’s tax return shall be filed with:
A. Authorized Agent Bank.
B. Revenue District Officer where the donor is domiciled.
C. Revenue Collection Officer where the donee is domiciled.
D. Office of the Commissioner.
25. Statement 1: Husband and wife are considered as separate and distinct taxpayers for purposes of the donor’s
tax.
Statement 2: If what was donated is a conjugal or community property and only the husband signed the deed
of donation, there is only one donor for donor’s tax purposes, without prejudice to the right of the wife to question
the validity of the donation without her consent pursuant to the pertinent provisions of the Civil code of the
Philippines and the Family Code of the Philippines.
A. Statement 1 and 2 are false
B. Statement 1 is true but statement 2 is false
C. Statement 1 is false but statement 2 is true
D. Statements 1 and 2 are true
26. Statement 1: When a donor’s tax return was filed and it was found out by the BIR to have errors which gave
rise to a deficiency donor’s tax, the donor might be required to pay the deficiency although he did not possess
or own the property anymore.
Statement 2: The government is not bound by any agreement between the donor and the donee that the latter
shall pay the donor’s tax instead of the former.
A. Statements 1 and 2 are false
B.
C.
D.
Statement 1 is true but statement 2 is false
Statement 1 is false but statement 2 is true
Statements 1 and 2 are true
VAT
1.
Statement 1: Lease of a parking lot attached to a residential unit at P8,000 per month is exempt from VAT.
Statement 2: Lease of eights (8) residential units at P18,500 per month is subject to VAT.
Statement 1
Statement 2
2.
A
True
True
B
True
False
C
False
True
D
False
False
Statement 1: Sale of drugs and medicines of pharmacy run by the hospital to outpatients are subject to VAT.
Statement 2: Pharmacy items used in the performance of medical procedures in hospital units such as in the
operating and delivery rooms and by other departments are considered part of medical services rendered by the
hospital, hence, not subject to VAT.
Statement 1
Statement 2
3.
A
True
True
B
True
False
C
False
True
D
False
False
Statement 1: Sale of drugs and medicines prescribed for the treatment/and or prevention of diabetes, highcholesterol and hypertension is exempt from VAT.
Statement 2: Importation of drugs and medicines prescribed for the treatment/and or prevention of diabetes,
high-cholesterol and hypertension is exempt from VAT beginning January 1, 2020.
Statement 1
Statement 2
4.
A
True
True
B
True
False
C
False
True
D
False
False
Statement 1: The effectivity of VAT exemption of sale or importation of prescription drugs and medicines for the
treatment/and or prevention of diabetes, high-cholesterol and hypertension under the CREATE law is on January
1, 2020.
Statement 2: The effectivity of VAT exemption of sale or importation of prescription drugs and medicines for the
treatment/and or prevention of cancer, mental illness, tuberculosis and kidney diseases under the CREATE law
is on January 1, 2021.
Statement 1
Statement 2
A
True
True
B
True
False
C
False
True
D
False
False
5.
Which of the following is VAT exempt beginning January 1, 2021 to December 31, 2023?
A. Sale or importation of capital equipment, its spare parts and raw materials, necessary for the production of
personal protective equipment (PPE) components such as coveralls, gown, surgical cap, surgical mask, n95 mask, scrub suits, googles and face shield, double or surgical gloves, dedicated shoes, and shoe covers,
for covid 19 prevention.
B. Sale or importation of all drugs, vaccines and medical devices specifically prescribed and directly used for
the treatment of COVID-19.
C. Sale or importation of drugs for the treatment of COVID-19 approved by the Food and Drug Administration
(FDA) for use in clinical trials, including raw materials directly necessary for the production of such drugs.
D. All of the above.
6.
JAO Corporation is a VAT-registered entity and a holder of License to operate issued by FDA to manufacture
medical-grade PPE components such as coveralls, gown, surgical cap, surgical mask, n-95 mask, scrub suits,
googles and face shield, double or surgical gloves, dedicated shoes, and shoe covers, for COVID-19 prevention.
During the period of April 19 to June 2021, the company had the following transactions:
Importation of raw materials (not locally available)
P2,000,000
Importation of capital equipment
Importation of raw materials (locally available)
Sale or transfer of raw materials to an affiliated company which is also a holder
of License to Operate issued by the FDA
25,000,000
1,000,000
500,000
How much is the amount of Vatable transaction, if any?
A. P0
B. P500,000
C. P1,000,000
D. P1,500,000
7.
Statement 1: The word “VAT exempt” shall prominently be included in the invoice issued for the sale of drugs
and medicines prescribed for the treatment/and or prevention of diabetes, high-cholesterol and hypertension.
Statement 2: The word sale of drugs not included in the list of VAT exempt drugs and medicines prescribed by
the treatment/and or prevention of diabetes, high-cholesterol and hypertension as identified and published by
the Food and Drug Authority (FDA) shall be subject to VAT.
Statement 1
Statement 2
A
True
True
B
True
False
C
False
True
D
False
False
8.
Kape Ko Cooperative is an agricultural cooperative which processes coffee production of its members for sale to
Nescafe Philippines, a coffee processing company selling instant coffee. Kape Ko imported a coffee drier from
abroad. After five years of active use, Kape Ko sold the coffee drier to one of its members, Juan Dela Cruz.
Which of the following is subject to VAT?
A. Importation of coffee drier
B. The sale of coffee drier to one of its members, Juan Dela Cruz
C. Sale of coffee to Nescafe Philippines
D. Sale of coffee by members to Kape Ko Cooperative
9.
ABC Corporation (VAT registered) has the following data for the month of March:
Gross Sales (VAT exclusive)
Sales Returns
P8,000,000
400,000
Goods shipped on consignment (net)
March 25
February 14
January 8
Goods withdrawn for use by the company
Goods taken as payment to creditor
Purchases for the month of (net of VAT)
Goods
Supplies
Capital goods (life 4 years)
Freight and insurance
Salaries of employees
Units
40
30
20
Unit Price
P10,000
10,000
10,000
P50,000
30,000
P600,000
75,000
1,100,000
8,500
385,000
Additional information:

Received cash representing payment of ten (10) units delivered on February 14. The amount received was
net of ten percent (10%) commission.

A consignee reported and remitted P200,000 (gross of 10% commission) representing 20 units sold from
goods consigned in March.
The
A.
B.
C.
D.
VAT payable for the month of March shall be:
P60,000
P84,830
P896,830
P981,600
10. The following are the data of Davao International for the last quarter of 2020:
Sales up to December 15 (invoice value)
Purchases up to December 15 (net)
P380,000
150,000
Additional information:
On December 16, 2020, the company retired from its business and the inventory valued at P190,000 remained
unsold. There is a deferred input tax from the third quarter of P3,500.
How much is the total value added taxes payable of Davao International?
A. P42,100
B. P21,500
C. P22,800
D. P19,300
11. Genson Distribution Inc., a VAT taxpayer, had the following data in a month:
Cash sales
Open account sales
Consignment
0 to 30 days old (on which there were remittances from consignees of P200,000)
31 to 60 days old
61 days old and above
P200,000
600,000
700,000
900,000
How much is the output tax?
A. P348,000
B. P216,000
C. P264,000
D. P108,000
12. Ana, a VAT registered of commercial spaces received P1,337,500 rentals during 2021 from various clients, net
of the 5% creditable withholding tax on rental income. How much is the correct output VAT?
A. P154,080
B. P142,500
C. P150,000
D. P160,500
13. Assume that in the preceding number, Ana is a non-VAT registered lessor, how much is her correct business
tax?
A. P42,237
B. P40,125
C. P38,118
D. P0
14. A VAT registered taxpayer made the following acquisition of capital goods from VAT registered suppliers (net of
VAT) during 2021:
Purchase Date
Acquisition Cost
Estimated Useful Life (yrs)
Jan. 1 ***
P1,000,000
10
Jan. 15
500,000
2
Mar. 2
200,000
6
Mar. 20
300,000
2
Oct. 6
600,000
4
Oct. 30
800,000
6
Dec. 25
3,000,000
1
***The asset was sold on December 2021
How much is the creditable input VAT for the month of January?
A. P2,000
B. P2,500
C. P4,500
D. P6,000
15. How much is the creditable input VAT for the month of February?
A. P2,000
B.
C.
D.
P2,500
P4,500
P6,000
16. How much is the creditable input VAT for the month of March?
A. P4,000
B. P4,500
C. P64,000
D. P64,500
17. How much is the creditable input VAT for the month of April?
A. P2,000
B. P2,500
C. P4,500
D. P6,000
18. How much is the creditable input VAT for the month of October?
A. P2,500
B. P4,500
C. P7,600
D. P8,000
19. How much is the creditable input VAT for the month of November?
A. P2,500
B. P4,500
C. P7,600
D. P8,000
20. How much is the creditable input VAT for the month of December?
A. P63,600
B. P268,000
C. P463,600
D. P480,000
PRESUMPTIVE INPUT VAT
21. Which statement is wrong?
A. There is a transitional input tax on sales of goods or properties
B. There is a transitional input tax on sales of services
C. There is a presumptive input tax on sales of goods or properties
D. There is a presumptive input tax on sales of services
22. All of the following are allowed presumptive input tax, except for one
A. Processor of sardines, mackerel and milk.
B. Manufacturer of refined sugar and cooking oil.
C. Producer/manufacturer of packed noodles.
D. Supplier of books and other school supplies.
23. Marikina Corp., a VAT-registered Corp., is a producer of cooking oil from coconut and corn. It had the following
data for the month of January 2021:
Sales, gross of VAT
P784,000
Corn and Coconut, December 31, 2020
50,000
Purchases of Corn and Coconut on January 2021
330,000
Corn and Coconut, January 31, 2021
20,000
Purchases from VAT suppliers, vat inclusive
Packaging Materials
56,000
Supplies
16,800
The
A.
B.
C.
value-added tax payable for January 2021:
P56,060
P54,900
P60,650
D.
P63,000
TRANSITIONAL INPUT VAT
24. A person subject to VAT for the first time can have an input tax out of the inventory of goods, material and
supplies on hand at the time he become liable. This is called:
A. Value added tax deemed paid
B. Transitional input tax
C. Presumptive input tax
D. None of the above
25. Which of the following shall be included in the beginning inventory for purposes of determining the transitional
input VAT?
A. Goods purchased to resale in the ordinary course of trade or business.
B. Materials purchased for further processing which have not yet undergone processing.
C. Goods which have been manufactured by the taxpayer.
D. All of the above.
26. Taxpayers who became VAT registered persons upon exceeding the VAT threshold of P3,000,000 in any 12-month
period, or who voluntarily register even if their turnover does not exceed P3,000,000 shall be entitled to a
transitional input tax on the inventory on hand as of the effectivity of their VAT registration on the following,
except:
A. Supplies for use in the course of taxpayer’s trade or business.
B. Goods which have been manufactured by the taxpayer.
C. Goods in processed for sale
D. Capital goods being used in the operation of the business.
27. Transitional input tax can be claimed as deduction from output tax. Which of the following statements is correct
as to when it can be allowed as deduction?
A. It can be claimed by a VAT registrable person.
B. It can be claimed by a taxpayer who registered as VAT taxpayer from the inception of business.
C. It can be claimed by a taxpayer who is initially subject to VAT and subsequently cancelled his VAT registration
D. It can be claimed by a taxpayer who is initially paying percentage tax and subsequently registered as VAT
taxpayer.
28. An owner of warehouse, which used to be vat exempt, because its annual receipts never exceeded P3,000,000,
decided to register under the VAT system on January 2, 2021. The following data were from the 1 st quarter
ending March 31, 2021:
Rental from warehousing services, net of VAT
P336,000
Purchases of supplies in February, gross of VAT
112,000
Inventory of supplies, January 1, 2021
100,000
VAT on inventory of supplies, January 1, 2021
10,000
How much was the VAT payable for the quarter ending March 2021?
A. P26,320
B. P18,320
C. P14,000
D. P0
29. A taxpayer registered under the VAT system on January 1, 2021. His records during the month show:
Value of inventory as of December 31, 2021 purchased from VAT-registered persons
P112,000
VAT paid on inventory as of December 31, 2020
12,000
Value of inventory as of December 31, 2020 purchased, from non-VAT persons
518,000
Sales, net of VAT
281,000
Purchases during the month, net of VAT
70,000
Purchases during the month of VAT exempt goods
50,000
The
A.
B.
C.
D.
VAT payable should be:
P23,080
P25,320
P12,720
P12,320
30. Gallaxy Corporation, a manufacturer, had the following data for the first month of 2021:
First year as a VAT taxpayer
Sales:
Export sale
Domestic sales (net)
Purchases:
Raw materials
Services
Machinery (useful life is 2 years)
On January 1, 2021, the company had inventories and taxes paid thereon as follows:
Cost
Raw materials
P120,000
Supplies
40,000
P2,000,000
1,000,000
300,000
100,000
400,000
VAT paid
P2,000
4,000
During the month, additional raw materials were purchased from anther enterprise with a total invoice value of
P61,600, not included above. The VAT payable of Gallaxy is:
A. P72,000
B. P57,000
C. P11,000
D. P66,000
31. Olive is a producer of cooking oil from coconut and corn. Previously exempt from VAT, he became subject to VAT
on January 1, 2020. For January 2020, sale, VAT not included, amounted to P700,000. Olive had the following
other data, inclusive of VAT if applicable, for the month of January:
Inventory, January 1, 2020
Cost
Packaging materials purchased from VAT suppliers
P22,400
Supplies purchased from VAT suppliers
11,200
Purchases during the month
Purchases during the month from coconut and corn farmers
330,000
Purchases during the month from VAT suppliers
Packaging materials
56,000
Supplies
16,800
The
A.
B.
C.
D.
correct amount of transitional input tax should be
P672
P762
P3,600
P4,080
32. The
A.
B.
C.
D.
amount of presumptive input tax should be:
P13,200
P33,000
P6,600
P39,600
33. The
A.
B.
C.
D.
total amount of creditable input taxes should be
P21,762
P24,600
P25,080
P21,672
34. The
A.
B.
C.
D.
value added tax payable for the month should be
P62,328
P58,920
P59,400
P62,328
Use the following data for the next two (2) questions:
JJ is a real estate dealer. During the month of October 2020, he sold three (3) commercial lots under the following
terms:
Lot 1
Lot 2
Lot 3
Selling price
P250,000
P200,000
P300,000
Cost
150,000
130,000
175,000
Gain
P100,000
P70,000
P125,000
Terms:
Down, Oct. 5, 2020
P25,000
P50,000
P40,000
Due:
Dec. 5, 2020
P25,000
P20,000
P20,000
Year 2021
200,000
130,000
240,000
Zonal value 2020
350,000
260,000
250,000
35. How much is the output tax for October 2020?
A. P26,500
B. P34,800
C. P31,800
D. P40,200
36. How much is the output tax for December 2020?
A. P5,400
B. P4,500
C. P6,600
D. None
37. Statement 1: On a sale of real property on installments by a real estate dealer, the seller shall be subject to VAT
on the installment payment received, including interests and penalties for late payment.
Statement 2: On sale of real property on installments by real estate dealer, where the VAT is computed not on
the consideration in the deed of sale but on the higher fair market value, the VAT must be billed separately with
a specific mention that it is based on the market value of the property.
A. Both statements are correct
B. Both statements are incorrect
C. Only the first statement is correct
D. Only the second statement is correct
38. Statement 1: In the case of sale on deferred payment basis not qualifying under the installment plan, the
transaction shall be treated as cash sale and the VAT is payable on the month of sale.
Statement 2: In the case of a sale on deferred payment basis not qualifying under the installment plan, payments
subsequent to the initial payments shall no longer be subject to 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
39. Maharlika Residences Inc. is a domestic corporation engaged in real estate business. It has the following data
for the last quarter of 2021:
Installment Sale of a Townhouse:
Realized gross profit (GPR is 30%)
P300,000
Gross selling price
4,000,0000
Zonal value
5,000,0000
Deferred Sale of a Parking Lot:
Gross selling price
P1,000,000
Fair market value
1,500,000
Rental income
Rent receivable, beginning
Rent receivable, ending
Importation of materials used in the construction
800,000
300,000
100,000
2,625,000
How much is the VAT due or payable?
A. P285,000
B. P261,000
C. P185,000
D. P111,000
5% Special Discount to Senior Citizens and PWDs on their purchase of Basic and Prime Commodities
40. Statement 1: Senior citizens (SC) are entitled to 5% special discount on their purchase of basic and prime
commodities subject to the guidelines of the Department of Trade and Industry (DTI) and Department of
Agriculture (DA).
Statement 2: Persons with disability (PWD) are entitled to 5% special discount on their purchases of basic and
prime commodities subject to the guidelines of the Department of Trade and Industry (DTI) and Department of
Agriculture (DA).
A. Both statements are correct
B. Both statements are incorrect
C. Only the first statement is correct
D. Only the second statement is correct
41. Statement 1: Sale of basic and prime commodities to Senior Citizens (SC) are not exempt from Value Added Tax.
Statement 2: Sale of basic and prime commodities to Persons with disability (PWD) are not exempt from value
added tax.
A. Both statements are correct
B. Both statements are incorrect
C. Only the first statement is correct
D. Only the second statemen is correct
42. _____are goods “vital to the needs of consumers, for the sustenance and existence” while prime commodities
are goods that are “essential” to them.
A. Basic necessities
B. Prime commodities
C. Agricultural products
D. Marine products
43. _____are goods not considered as basic necessities but are essential to consumers.
A. Basic necessities
B. Prime commodities
C. Agricultural products
D. Marine products
44. The maximum amount of purchase is one thousand three hundred pesos (P1,300), per calendar week, without
carryover of the unused amount shall be:
A. P1,000
B. P1,200
C. P1,300
D. P1,500
45. Statement 1: In granting the 5% special discount, business establishments assume the responsibility of correctly
identifying if their inventory qualifies as either necessities or commodities, which are eligible for the discount.
Statement 2: The Tax Code and previous BIR guidelines have clarified that those granting discount are required
to keep separate and accurate records of sales to PWDs. Otherwise, the sales discount may be disallowed as a
deduction for income tax purposes.
A. Both statements are correct
B. Both statements are incorrect
C.
D.
Only the first statement is correct
Only the second statement is correct
46. Which of the following statements is correct?
A. Goods and services covered by the 20% discount comes with absolute VAT exemption.
B. Goods covered by the 5% special discount will only be VAT-exempt if they are agricultural and marine food
products in their original state pursuant to Section 109 of the Tax Code.
C. A senior citizen who is also incidentally a PWD would not be entitled to cumulative benefits. They can only
claim the special discount as a PWD or as a senior citizen, not both.
D. All of the above.
ADMINISTRATIVE PROVISIONS
47. Masbate Foam Inc. paid royalties to Kama Italia Inc., a manufacturer of foam based in Italy for allowing the
former to use the latter’s newly developed technology in manufacturing foam. Which of the following statements
is true as to the tax consequences of the said payment?
A. Masbate Foam Inc. will pay the BIR 5% final withholding VAT
B. Kama Italia Inc. will pay the BIR 5% final withholding VAT
C. Masbate Foam Inc. will pay the BIR 12% creditable withholding VAT
D. Kama Italia Inc. will pay the BIR 12% creditable withholding VAT
48. The Commissioner or his authorized representative is empowered to suspend the business operations and
temporarily close the business establishment of any person for:
A. Failure to issue receipts or invoices of a VAT-registered entity.
B. Failure to file a VAT-return for VAT-registered person as required by the tax code.
C. Understatement of taxable sales or receipts by thirty percent (30%) or more of his correct taxable sales or
receipts for the taxable quarter.
D. All of the above.
49. The term “gross receipts” for hotel and restaurant business operators shall include
I. Service charges billed separately and actually distributed to waiters and employees.
II. Actual cost of long distance and overseas telephone calls, fax, cable, telex and charges of the
telecommunication companies collected by the establishment for the customers/clients for the concerned
telecommunication companies, such as PLDT, which are earmarked for payment to the latter.
III. VAT passed on to customers
IV. Local taxes
V. Rooms, laundry, valet services and food/beverage consumption
VI. Handling charges for providing telephone, cable or fax services
VII. Cake shop sales, lease to concessionaries and compensation for other services.
A.
B.
C.
D.
V and VI only
II, III and VII only
V, VI, and VII only
All of the above
50. Which statement is correct?
A. The sales invoice that show a total, with an indication that it includes the value added tax, even if it does not
show the tax separately, is a correctly prepared invoice.
B. The invoice which shows the selling price and the value added tax separately and with a total which is a
correct amount is a properly prepared invoice.
C. An invoice which shows the selling price and the value added tax separately, but where the value added tax
is wrong, which is paid by the buyer, is a violation of the revenue regulations on issuance of sales invoices.
D. A sales invoice by a VAT taxpayer can be used only on a VAT sale.
51. First statement: The transitional input tax shall be 2% of the value of the beginning inventory on hand or actual
VAT paid on such goods, materials and supplies, whichever is higher, which amount shall be creditable against
the output tax of VAT-registered persons.
Second statement: The value allowed the income tax purposes on inventories shall be the basis for the
computation of the 2% transitional input tax, including goods that are exempt for VAT under Sec. 109 of the Tax
Code.
A. Both statements are correct
B. Only statements are incorrect
C. Only the first statement is correct
D. Only the second statement is correct
52. First statement: Unused input tax of persons whose registration had been cancelled may be converted into tax
credit certificate which may be used in payment of other NIRC taxes.
Second statement: Refund or tax credit certificate should be granted within 25 days from the date of submission
of complete documents.
A. Both statements are correct
B. Both statements are incorrect
C. Only the first statement is correct
D. Only the second statement is correct
53. If a person who is not VAT registered issues an invoice or receipt showing his TIN, followed by the word “VAT”,
the erroneous issuance shall result to the following, except which one?
A. The non-VAT person shall be liable to the percentage taxes applicable to his transactions.
B. The non-VAT person shall be liable to the VAT due on the transactions.
C. The non-VAT person shall have the benefit of input tax credit.
D. The non-VAT person shall be liable to a 50% surcharge under Sec. 248 (B) of the Tax Code.
54. Which of the following statement is not correct?
A. Under VAT, the consumption tax is borne by the consumer.
B. Under VAT, the seller is merely serving as tax collector.
C. Under VAT, the buyer is claiming the input VAT.
D. Under VAT, the final consumer is claiming the input vat as refund.
55. What institution is required to deduct and withhold a final VAT of 5% on the purchase of goods or services subject
to VAT?
A. National government or any political subdivision thereof.
B. Government-owned or controlled corporations
C. Both A and B
D. Neither A nor B
56. The withholding agent of creditable value added tax is required to remit the amount of value added tax withheld
within
A. 25 days following the end of month the withholding was made.
B. 20 days following the end of month the withholding was made.
C. 15 days following the end of month the withholding was made.
D. 10 days following the end of month the withholding was made.
57. A VAT-registered supplier sold goods amounting to P500,000 to a government-controlled corporation during a
particular quarter. Which of the following situation statement is incorrect in relation to the sale in relation to the
sale of goods?
A. The sale is subject to final withholding VAT.
B. The government-controlled corporation will withhold P25,000 withholding VAT.
C. The government-controlled corporation shall remit the withholding of VAT to the BIR within 10 days following
the end of the month the withholding was made.
D. The VAT-registered supplier may refuse the withholding of VAT as long as it is willing to pay the full 12%
VAT.