lOMoARcPSD|13030182
92-03 - Corporate Tax REVIEWER
Business Law (University of the Immaculate Conception)
Studocu is not sponsored or endorsed by any college or university
Downloaded by ALLIAH PAULINE C DOLOR (apc.dolor@sscrmnl.edu.ph)
lOMoARcPSD|13030182
1
CPA REVIEW SCHOOL OF THE PHILIPPINES
Manila
CORPORATIONS
Dela Cruz / De Vera / Llamado
1. One of the following does not fall under the definition of a <corporation= for income tax purposes:
a. General partnership
b. One-person corporation
c. Insurance company
d. Sole proprietorship
2. For income taxation purposes, the term <corporation= excludes one of the following:
a. Ordinary partnership
b. An incorporated business organization
c. General professional partnership
d. One-person corporation
3. A corporation organized and created under the laws of a foreign country and is authorized to do
business/ trade in the Philippines is:
a. Domestic corporation
b. Resident foreign corporation
c. Government owned and controlled corporation
d. Non-profit hospital
4. One of the general principles of income taxation:
a. A foreign corporation engaged in business in the Philippines is taxable on all income derived from
sources within and without the Philippines.
b. A foreign corporation engaged in business in the Philippines is taxable on all income derived from
sources within the Philippines only
c. A domestic corporation is taxable on income derived from sources within the Philippines only.
d. A domestic corporation is taxable on income derived from sources without the Philippines only.
5. A domestic corporation or resident foreign corporation may employ, as a basis for filing its annual
corporate income tax return the:
a. Calendar year only
c. Either calendar or fiscal year
b. Fiscal year only
d. Neither calendar or fiscal year
6. A corporation files a quarterly return within
a. 30 days after the end of each of the first 3 quarters
b. 60 days after the end of each of the first 3 quarters
c. 30 days, after the end of each of the first 4 quarters
d. 60 days after the end of each of the first 4 quarters
7. A final or annual return is filed on or before the 15th day of the
a. Month following the close of the taxable year
b. 2nd month following the close of the taxable year.
c. 3rd month following the close of the taxable year
d. 4th month following the close of the taxable year
Tax 92-03
Downloaded by ALLIAH PAULINE C DOLOR (apc.dolor@sscrmnl.edu.ph)
lOMoARcPSD|13030182
2
8. DEF, a corporation registered in Germany, operates a 1,000 ton steel milling plant in Quezon province.
Which among the following shall be taxable under the Tax Code?
a) Its income from a steel-forging plant located in the Netherlands
b) Its gain from the sale of its non-operational smelting plant in Indonesia.
c) Royalties from the use in the Philippines of its proprietary software which was developed and
patented in Germany.
d) Interest income from a Euro deposit with a French bank in Paris.
e) None of the above.
9. Aplets Corporation is registered under the laws of the Virgin Islands. It has extensive operations in
Southeast Asia. In the Philippines, its products are imported and sold at a mark-up by its exclusive
distributor, Kim’s Trading, Inc. The BIR compiled a record of all the imports of Kim from Aplets and
imposed a tax on Aplets’s net income derived from its exports to Kim. Is the BIR correct?
a. Yes. Aplets is a non-resident foreign corporation engaged in trade or business in the Philippines.
b. No. The tax should have been computed on the basis of gross revenues and not net income.
c. No. Aplets is a non-resident foreign corporation not engaged in trade or business in the Philippines.
d. Yes, Aplets is doing business in the Philippines through its exclusive distributor Kim’s Trading Inc.
10. ABC Inc., a corporation registered and holding office in Australia, not operating in the Philippines, may
be subject to Philippine income taxation on
a. Gains it derived from sale in Australia of an ore crusher it bought from the Philippines with the
proceeds converted to pesos.
b. Gains it derived from sale in Australia of shares of stock of Philex Mining Corporation, a Philippine
corporation.
c. Dividends earned from investment in a foreign corporation that derived 40% of its gross income
from Philippine sources.
d. Interest derived from its dollar deposits in a Philippine bank under the Expanded Foreign Currency
Deposit System.
11. Which of the following is subject to the income tax?
a. A non-stock and non-profit educational institution
b. Public educational institution
c. Civic league or organization not organized for profit and operated exclusively for the promotion of
social welfare
d. Mutual savings bank and cooperative bank having a capital stock represented by shares organized
and operated for mutual purposes and profit.
12. The Philippine Health Insurance Corporation (Philhealth), and the Home Development Mutual Fund
(Pagibig) are government-owned corporations which are
a. Exempt from the corporate income tax.
b. Subject to the preferential corporate income tax for special corporations.
c. Subject to the basic corporate income tax
d. Subject to final tax
13. Public educational institutions, like the University of the Philippines, is deemed by law:
a. Subject to the preferential corporate income tax for special corporations.
b. Subject to the basic corporate income tax.
Tax 92-03
Downloaded by ALLIAH PAULINE C DOLOR (apc.dolor@sscrmnl.edu.ph)
lOMoARcPSD|13030182
3
c. Subject to both the preferential income tax and the basic corporate income tax.
d. Exempt from the corporate income tax.
14. Which is not correct? The following are exempt from the corporate income tax:
a. Local water districts
b. Bureau of Internal Revenue
c. Government owned or controlled corporations
d. Social Security System
15. Which of the following may be subject to the corporate income tax?
a. A non-stock and non-profit educational institution
b. A public educational institution
c. A private educational institution
d. Government Service Insurance System
16. The improperly accumulated earnings tax (IAET) shall apply to:
a. Publicly held corporations for all taxable years prior to 2021
b. Banks and other non-bank financial intermediaries
c. Insurance companies for taxable years ending after July 20, 2020
d. Closely held domestic corporations for taxable years ending prior to April 11, 2021.
17. Which of the following statements is not correct?
a. MCIT is not applicable to resident foreign corporations.
b. The corporate quarterly return shall be filed within 60 days following the close of each of the first
three quarters of the taxable year.
c. Resident foreign corporations would be taxed on net income from within the Philippines only.
d. Non-resident foreign corporations are taxed on gross income from within the Philippines only.
18. The following income are subject to final tax, except
a. Royalty income received by a domestic corporation from a domestic corporation.
b. Cash dividends received by a non-resident foreign corporation from a domestic corporation
c. Cash dividends received by a domestic corporation from a domestic corporation.
d. Interest income from a Peso deposit received by resident foreign corporation from a Philippine bank.
e. Branch profit remitted by a branch to the head office of a resident foreign corporation.
19. The MCIT shall not apply to the following resident foreign corporations, except
a. RFC engaged in business as international carrier subject to 2 1/2 % of their Gross Philippine Billings
b. RFC engaged in business as ROHQ before January 1, 2022
c. Offshore banking units beginning April 11, 2021
d. None of the above
20. Beginning July 1, 2020, the RCIT rate for domestic corporations shall be 25%. However, a lower
RCIT rate of 20% shall be imposed if the following conditions is/are present:
a. The domestic corporation’s net taxable income is not more than ₱5.0 Million
b. The domestic corporation’s net assets (excluding the land on which its office, plant, or equipment
are situated) are not more than ₱100 Million.
c. All of the above.
d. None of the above.
Tax 92-03
Downloaded by ALLIAH PAULINE C DOLOR (apc.dolor@sscrmnl.edu.ph)
lOMoARcPSD|13030182
4
21. The MCIT is 2% of gross income. However, the MCIT rate to be imposed shall be 1%
a. From January 1, 2021 to June 30, 2023
b. From October 8, 2021 to June 30, 2023
c. From July 1, 2020 to June 30, 2023.
d. None of the above.
22. CPG Corporation had the following data for calendar year 2021, its first year of operations:
Gross sales, Philippines
Gross sales, US
Cost of sales, Philippines
Cost of sales, US
Allowable deductions, Philippines
Allowable deductions, US
₱ 8,000,000
5,100,000
3,300,000
2,300,000
800,000
700,000
The corporation’s audited financial statements as of December 31, 2021 includes the following
accounts:
₱ 50,000,000
25,000,000
180,000,000
Land, Philippines
Building, Philippines
Total Assets
Compute the income tax due if the taxpayer is a domestic corporation:
(a) ₱1,500,000
(b) ₱ 975,000
(c) ₱1,175,000
(d) None of the above
Gross sales, Philippines
Gross sales, US
Cost of sales, Philippines
Cost of sales, US
Gross income from ops.
Add: Other taxable income
Total Gross Income
Allowable deductions, Phils.
Allowable deductions, US
Net taxable income
RCIT (25%)
MCIT (1% x Total Gross Inc.)
₱8,000,000
5,100,000
₱3,300,000
2,300,000
₱ 800,000
700,000
₱ 13,100,000
(5,600,000)
₱ 7,500,000
₱ 7,500,000
(1,500,000)
₱ 6,000,000
₱ 1,500,000
None
Note: Even if the computed net taxable income of the corporation is not more than ₱5.0
Million, the applicable tax rate would still be 25% because its total assets excluding the
land amounts to ₱130 Million (₱180 Million - ₱50 Million) which is more than the ₱100
Million threshold.
Tax 92-03
Downloaded by ALLIAH PAULINE C DOLOR (apc.dolor@sscrmnl.edu.ph)
lOMoARcPSD|13030182
5
23. Compute the income tax due in number 22 if the taxpayer is a foreign corporation with a branch in the
Philippines (RFC).
(a) ₱1,500,000
(b) ₱ 975,000
(c) ₱1,175,000
(d) None of the above
Gross sales, Philippines
Cost of sales, Philippines
Gross income
Add: Other taxable income
Total Gross Income
Allowable deductions, Phils.
Taxable net income
RCIT (25%)
MCIT (1% of Total Gross Income)
₱ 8,000,000
(3,300,000)
₱ 4,700,000
₱ 4,700,000
(800,000)
₱ 3,900,000
₱ 975,000
None
24. Compute the income tax due in number 22 if the taxpayer is a foreign corporation with no branch or
office in the Philippines (NRFC).
(a)
(b)
(c)
(d)
₱1,500,000
₱ 975,000
₱1,175,000
None of the above
Gross income, Phils.
Income tax rate
Final Withholding Tax
₱4,700,000
x 25%
₱1,175,000
.
25. MVP Corporation, domestic corporation, had the following financial data for taxable year ending April
30, 2021:
Gross sales
Cost of sales
Allowable deductions
₱15,000,000
8,500,000
2,500,000
Compute the corporation’s income tax due for taxable year ending April 30, 2021, if it is taxable at the
new RCIT rate of 20% effective July 1, 2020.
(a) ₱866,800
(b) ₱1,000,000
(c) ₱75,833
(d) None of the above.
Tax 92-03
Downloaded by ALLIAH PAULINE C DOLOR (apc.dolor@sscrmnl.edu.ph)
lOMoARcPSD|13030182
6
May 1, 2020 to June 30, 2020 (2 months)
July 1, 2020 to April 30, 2021 (10 months)
Blended Rates
RCIT MCIT
30%
2%
20%
1%
21.67% 1.17%
Gross sales
Cost of sales
Gross income from ops.
Add: Other taxable income
Total Gross Income
Allowable deductions
Net taxable income
RCIT (21.67%)
MCIT (1.17%)
26. The records of Acme Corporation, domestic, organized in 2014, engaged in retail, show the following
in calendar years 2019, 2020, 2021:
Sales
Cost of Sales
Operating Expenses
Non-operating income
CWT per BIR Form 2307
2019
1,800,000
430,000
1,740,200
400,000
18,000
2020
1,740,000
110,000
1,600,000
70,000
2,500
2021
2,100,200
510,100
1,300,400
230,000
21,002
The corporation had excess tax credits at the end of 2018 in the amount of ₱15,000. The corporation
chooses to credit in future years any excess tax credits it may have in a taxable year.
Compute the tax due and tax payable for 2019.
a.
b.
c.
d.
₱35,400, ₱2,400
₱35,400, ₱17,400
₱8,940; ₱0
None of the above
Tax 92-03
Downloaded by ALLIAH PAULINE C DOLOR (apc.dolor@sscrmnl.edu.ph)
lOMoARcPSD|13030182
7
30%
2%
RCIT
MCIT
Sales
Cost of Sales
Gross income from operations
Add: Other taxable income not subject to FTs
Total Gross Income
Less: Itemized Deductions (or OSD)
Taxable income
Rate of tax
RCIT
2019
1,800,000
(430,000)
1,370,000
400,000
1,770,000
(1,740,200)
29,800
30%
8,940
MCIT (2% of Total Gross Income)
35,400
Tax due 2019 (MCIT)
35,400
Less: Tax Credits:
(1) Excess tax credits from prior year
(2) Tax paid in previous quarters
(3) CWTs per BIR Form 2307
(4) Excess MCIT from prior year
(5) Foreign tax credits
(6) Tax paid in previous return if filing amended return
Tax payable/(Tax credit/refund)
Excess MCIT (2019-2022)
(15,000)
(18,000)
2,400
26,460
27. In number 26, what would be the tax payable of Acme Corporation for taxable years 2020 and 2021
if the taxpayer qualifies for the 20% tax rate effective July 1, 2020?
a)
b)
c)
d)
₱23,000; ₱55,978
₱6,440; ₱134,908
₱30,500; ₱131,908
None of the above.
Tax 92-03
Downloaded by ALLIAH PAULINE C DOLOR (apc.dolor@sscrmnl.edu.ph)
lOMoARcPSD|13030182
8
20%
1%
25%
1.5%
RCIT
MCIT
2020
2021
Sales
Cost of Sales
Gross income from operations
Add: Other taxable income not subject to FTs
Total Gross Income
Less: Itemized Deductions (or OSD)
Taxable income
Rate of tax
RCIT
MCIT
Tax due
Less: Tax Credits:
(1) Excess tax credits from prior year
(2) Tax paid in previous quarters
(3) CWTs
(4) Excess MCIT from prior year
(5) Foreign tax credits
(6) Tax paid in previous return if filing amended return
Tax payable/(Tax credit/refund)
28. The records of CAMEL Corporation, domestic, show the following for calendar year 2021.
Sales
Cost of Sales
Operating Expenses
Non-operating income
Excess tax credit (previous year)
CWT
Excess MCIT (previous year)
1st Q
4,000,000
50,000
3,700,000
30,000
10,000
50,000
30,000
2nd Q
12,400,000
50,000
12,100,000
120,000
3rd Q
5,500,000
245,000
4,000,000
70,000
4th Q
5,200,000
45,000
4,500,000
45,000
30,000
40,000
35,000
The income tax payable for the first 3 quarters and in the annual return are:
a. ₱84,000; ₱329,000; ₱592,500; ₱802,500
b. ₱84,000; ₱195,000; ₱435,500; ₱802,500
Tax 92-03
Downloaded by ALLIAH PAULINE C DOLOR (apc.dolor@sscrmnl.edu.ph)
lOMoARcPSD|13030182
9
c. ₱54,000; ₱245,000; ₱193,500; ₱175,000
d. ₱0; ₱74,500; ₱259,250; ₱140,000
e. None of the above
Note: We use the 25% corporate income tax rate because there is no information that
the taxpayer qualifies for the lower 20% income tax rate.
1st Q
4,000,000
(50,000)
3,950,000
30,000
3,980,000
(3,700,000)
280,000
25%
70,000
2nd Q
16,400,000
(100,000)
16,300,000
150,000
16,450,000
(15,800,000)
650,000
25%
162,500
MCIT (1% of Total Gross Income)
39,800
164,500
Tax Due
70,000
164,500
(10,000)
(10,000)
0
(80,000)
Sales
Cost of Sales
Gross income from operations
Add: Other taxable income not subject to FTs
Total Gross Income
Less: Itemized Deductions (or OSD)
Taxable income
Rate of tax
RCIT (25%)
Less: Tax Credits:
(1) Excess tax credits from prior year
(2) Tax paid in previous quarters
(3) CWTs
(4) Excess MCIT from prior year
(5) Foreign tax credits
(6) Tax paid in previous return if filing amended
return
Tax payable
(50,000)
(30,000)
0
3rd Q
Annual
74,500
29. If the gross income from unrelated activity exceeds 50% of the total gross income derived by any
proprietary educational institution, the tax rate shall be the RCIT rate (25%/20%) based on the entire
taxable income. This is known as the
a. Constructive receipt
b. Tax benefit rule
c. End trust doctrine
d. Predominance test
30. Holy Hospital, Inc. (domestic corporation), a private non-profit hospital, has the following financial
information for CY 2021:
Hospital-related activities:
Gross receipts
₱10,000,000
Tax 92-03
Downloaded by ALLIAH PAULINE C DOLOR (apc.dolor@sscrmnl.edu.ph)
lOMoARcPSD|13030182
10
Cost of services
Operating expenses
4,000,000
1,250,000
Unrelated business activities:
Gross receipts
Cost of services
Operating expenses
₱10,000,000
3,000,000
1,000,000
Compute the income tax due for CY 2021.
(a)
(b)
(c)
(d)
₱2,687,500
₱2,500,000
₱2,680,000
None of the above.
Related
Activities
10,000,000
(4,000,000)
6,000,000
(1,250,000)
4,750,000
Gross sales/receipts
Cost of sales/sevices
Gross income
Deductible expenses
Net taxable income
Tax rate
RCIT
Unrelated
Activites
10,000,000
(3,000,000)
7,000,000
(1,000,000)
6,000,000
MCIT (1%)
Total
20,000,000
(7,000,000)
13,000,000
(2,250,000)
10,750,000
25%
2,687,500
130,000
Income tax due
2,687,500
Notes:
(a) The private non-profit hospital is subject to the regular income tax rate because it did not
pass the predominance test. Its gross income from unrelated activities (₱7.0 Million)
exceeds its gross income from hospital-related activities (₱6.0 Million). The gross income
from unrelated activities thus exceeds 50% of its total gross income derived from all
sources.
(b) The regular income tax rate to be imposed is 25% since the net taxable income exceeds
₱5.0 Million. The taxpayer is also subject to the 1% MCIT.
31. CPA University, a proprietary educational institution organized in 2006, had the following data for
2021:
Tuition fees
Cost of services (tuition)
Rental income (net of 5% CWT)
₱850,000
400,000
142,500
Tax 92-03
Downloaded by ALLIAH PAULINE C DOLOR (apc.dolor@sscrmnl.edu.ph)
lOMoARcPSD|13030182
11
Cost of services (rental)
School related expenses
10,000
420,000
The income tax still due/(refundable) for 2021 is
a. P 9,500
b. P 10,500
c. (P 5,800)
d. None of the above.
Related
Activities
Unrelated
Activites
Total
Gross sales/receipts
Cost of sales/sevices
Gross income
Deductible expenses
Net taxable income
Tax rate (1%)
Tax due
Less: Credit (CWT)
Income tax still due/(refundable)
32. CPA Airlines, a resident foreign international carrier has the following records of income for the
period. ( The income represents gross billings.)
a. Continuous flight from Manila to Tokyo = 1,000 tickets at P2,000 per ticket
b. Flight from Manila to Taipei; transfer flight (on CPAR Airlines) from Taipei to Tokyo = 2,000
tickets at P2,000 per ticket
c. Continuous flight from Manila to Taipei = 3,000 tickets at P1,000 per ticket
The income tax due is
a. P 225,000
b. P 125,000
c. P 100,000
d. P 175,000
33 -37. The Alliance Corporation provided the following data for the calendar year ending December 31,
2021 ($ 1 = P50)
Philippines
U.S.A.
Gross Income
₱4,000,000
$40,000
Deductions
₱2,500,000
$15,000
Income Tax Paid
$ 3,000
Tax 92-03
Downloaded by ALLIAH PAULINE C DOLOR (apc.dolor@sscrmnl.edu.ph)
lOMoARcPSD|13030182
12
33. If it is a resident international carrier, its income tax is
a. P100,000
c. P 37,000
b. P 10,000
d. P125,000
₱4,000,000
x
2.5%
=
₱100,000
34. If it is a non-resident cinematographic film owner/lessor, its income tax is
a. P1,000,000
c. P300,000
b. P 100,000
d. P128,000
₱4,000,000
x
25%
=
₱1,000,000
x
x
4.5%
4.5%
=
=
₱180,000
₱180,000
35. If it is a non-resident lessor of vessels, its income tax is
a. P100,000
c. P300,000
b. P180,000
d. P128,000
₱4,000,000
₱4,000,000
36. If it is a non-resident lessor of aircrafts, machineries and equipment, its income tax is
a. P100,000
c. P300,000
b. P180,000
d. P128,000
₱4,000,000
₱4,000,000
x
x
7.5%
4.5%
=
=
₱300,000
₱180,000
37. If it is a resident foreign corporation but its expenses within and outside the Philippines is P3m,
unallocated (disregard original data on expense). Furthermore, its total assets amount to ₱90,000,000.
What is its total income tax liability if it remits 60% of its net profit to its head office abroad?
a. P635,000
b. P726,000
c. P480,000
d. None of the above.
Allocation of expenses
4,000,000
3,000,000
x
6,000,000
=
2,000,000
Tax 92-03
Downloaded by ALLIAH PAULINE C DOLOR (apc.dolor@sscrmnl.edu.ph)
lOMoARcPSD|13030182
13
ITR
Total Gross Income
Less: Itemized Deductions
Taxable income
Rate of tax
RCIT
4,000,000
(2,000,000)
2,000,000
25%
500,000
MCIT (1% of Total Gross Income)
40,000
Tax in ITR
500,000
BPRT
Taxable income
Less income tax in ITR
After-tax net income
% Remitted
Branch profits remitted
BPRT rate
Total tax liability
Note: RFCs do not qualify for the 20% income tax rate.
38. DBH Corporation, an RFC, is also a registered ROHQ since 2009. For taxable years 2020 to 2023,
its operations show the following financial results:
Gross sales/receipts
Cost of services
Allowable deductions
Non-operating income
2020
35,000,000
11,250,000
3,625,000
250,000
2021
12,000,000
6,000,000
4,200,000
150,000
2022
13,000,000
6,500,000
1,250,000
400,000
2023
7,000,000
4,250,000
3,125,000
525,000
Compute income tax due for each of the years.
a.
b.
c.
d.
₱2,037,500; ₱195,000; ₱1,412.500; ₱49,125
₱20,012,500; ₱1,800,000; ₱5,250,000; ₱0
₱2,012,500; ₱180,000; ₱1,312,000; ₱0
None of the above.
Tax 92-03
Downloaded by ALLIAH PAULINE C DOLOR (apc.dolor@sscrmnl.edu.ph)
lOMoARcPSD|13030182
14
2020
Gross sales/receipts
Cost of services
Gross income
Non-op. income
Total gross income
Allowable deductions
Net taxable income
Tax rate
RCIT
MCIT rate
MCIT
2021
2022
2023
10%
10%
25%
25%
N/A
N/A
N/A
N/A
1.0%
1.5%
Income Tax Due
Notes:
(a) The regular rate of 25% shall be effective on January 1, 2022 for an ROHQ. It will
also be subject to MCIT beginning on January 1, 2022.
(b) The MCIT rate of 1.5% was used for CY 2023. The MCIT rate from January 1 to
June 30, 2023 is 1%, while the MCIT rate for July 1 to December 31, 2023 is 2%.
The average rate is 1.5%.
(c) For 2023, excess MCIT = 11,625 which can be credited against the RCIT in 2024,
2025, and 2026.
39. <A= Corporation with total assets of ₱40,000,000, excluding the land on which its business is situated,
has the following data for the year 2021:
Gross Income, Philippines
Gross income, USA
Gross income, Japan
Expenses, Philippines
Expenses, USA
Expenses, Japan
Other Income:
Dividend from San Miguel Corp.
Dividend from Ford Motors, USA
Gain, sale of San Miguel shares directly to buyer
Royalties, Philippines
Royalties, USA
Interest income (other than from bank deposit)
Rent, land in USA
Other rental income (Phils.)
Prize, contest in Manila
Interest income ($ deposit in BDO)
Downloaded by ALLIAH PAULINE C DOLOR (apc.dolor@sscrmnl.edu.ph)
P1,000,000
500,000
500,000
300,000
200,000
100,000
70,000
120,000
150,000
50,000
100,000
60,000
250,000
100,000
200,000
50,000
Tax 92-03
lOMoARcPSD|13030182
15
The total tax liability as a domestic corporation:
a. P486,000
c. P679,750
b. P692,750
d. None of the above
40. Based on the above problem, its total tax liability if it is a resident foreign corporation is
a. ₱318,000
c. ₱328,750
b. ₱305,000
d. None of the above.
41. And if it is a non-resident foreign corporation, its total tax liability is
a. ₱433,500
c. ₱338,500
b. ₱385,500
d. None of the above.
Characterization of Other Income
Dividend from San Miguel Corp.
Dividend from Ford Motors (USA)
Gain from sale of San Miguel shares directly to buyer
Royalties (Phils.)
Royalties (USA)
Interest income (other than from banks)
Rentals of land (USA)
Other rental income (Phils)
Prize, contest in Manila
Interest income ($ Deposit in BDO)
DC
Exempt
ITR
FT (15%)
FT(20%)
ITR
ITR
ITR
ITR
ITR
FT(15%)
RFC
Exempt
Exempt
FT(15%)
FT(20%)
Exempt
ITR
Exempt
ITR
ITR
FT(15%)
NRFC
FT (15%)
Exempt
FT(15%)
FT(25%)
Exempt
FT(25%)
Exempt
FT(25%)
FT(25%)
Exempt
Tax 92-03
Downloaded by ALLIAH PAULINE C DOLOR (apc.dolor@sscrmnl.edu.ph)
lOMoARcPSD|13030182
16
(39) DC
(40) RFC
ITR
Gross income: Philippines
USA
Japan
Gross income from operations
Add: Other taxable income not subject
to final tax:
Divided from Ford
120,000
Royalties (USA)
100,000
Interest income (not from
bank deposit)
60,000
Rentals (USA)
250,000
Rentals (Phils.)
100,000
Prize - Manila
200,000
Total Gross Income
Less: Allowable deductions:
Expenses: Phils.
300,000
USA
200,000
Japan
100,000
Net taxable income
1,000,000
500,000
500,000
2,000,000
830,000
2,830,000
(600,000)
2,230,000
RCIT (20%)
446,000
MCIT (1%)
28,300
Final Taxes (if DC)
(a) Gain from sale of SMC shares
directly to buyers
150,000
15%
ITR
Gross income from operations: Philippines
Add: Other taxable income not subject
to final tax:
Interest income (not from
bank deposit)
60,000
Rentals (Phils.)
100,000
Prize - Manila
200,000
Total Gross Income
Less: Allowable deductions:
Expenses: Phils.
Net taxable income
(c) Interest ($ deposit - BDO)
Total Tax Liability
360,000
1,360,000
(300,000)
1,060,000
RCIT (25%)
265,000
MCIT (1%)
13,600
Final Taxes (if RFC)
(a) Gain from sale of SMC shares
directly to buyers
150,000
15%
22,500
(b) Royalties (Phils.)
(c) Interest ($ deposit - BDO)
50,000
20%
10,000
50,000
15%
7,500
22,500
Total Tax Liability
(b) Royalties (Phils.)
1,000,000
50,000
20%
10,000
50,000
15%
7,500
305,000
486,000
Tax 92-03
Downloaded by ALLIAH PAULINE C DOLOR (apc.dolor@sscrmnl.edu.ph)
lOMoARcPSD|13030182
17
(41) NRFC
(a) Income subject to 25% FT:
Gross income (Phils.)
Royalties, Phils
Interest income
Rental income (Phils.)
Prize (Manila)
(b) Dividend from SMC
(c) Gain from sale of SMC shares
directly to buyers
Total Tax Liability
1,000,000
50,000
60,000
100,000
200,000
1,410,000
25%
352,500
70,000
15%
10,500
150,000
15%
22,500
385,500
42. Any income from transactions with depository banks under the expanded foreign currency deposit
system shall be exempt from income tax if derived by a
a. Domestic corporation
b. Resident foreign corporation
c. Non-resident foreign corporation
d. Resident alien
43. The records of a closely-held domestic corporation show the following data for fiscal year ending June
30, 2021:
Gross income
Business expenses
Gain on sale of business asset
Interest on deposits with Metrobank, net of tax
Sale of shares of stocks, not listed and traded:
Selling price
Cost
Dividends from Victory Corporation, domestic
Dividends paid during the year
Reserved for building acquisition
P1,500,000
600,000
60,000
5,000
150,000
115,000
35,000
120,000
300,000
In the previous fiscal year, the corporation suffered an operating loss of P130,000. This amount was
carried forward and claimed as deduction from gross income in fiscal year ending June 30, 2021. Also
in FY ending June 30, 2021, total CWT withheld from its income amounted to P40,000. The income
tax still due or payable for FY ending June 30, 2021 assuming it qualifies for a 20% income tax rate is
a. P126,000
b. P249,000
c. P273,937
Tax 92-03
Downloaded by ALLIAH PAULINE C DOLOR (apc.dolor@sscrmnl.edu.ph)
lOMoARcPSD|13030182
18
d. None of the above
ITR
Gross income from operations
Add: Other income not subject to FTs
Total Gross Income
Less: Itemized Deductions:
Business expenses
NOLCO
Taxable income
Rate of tax
RCIT
MCIT (1% of Total Gross Income)
20%
Tax due
Less: CWT
Tax still due
44. In number 43, the improperly accumulated earnings tax to be imposed for FY ending June 30, 2021 is
a. P36,075
b. P34,765
c. P35,640
d. None
45. Good Vibes Corporation is a domestic corporation and has, since 2015, owned 50% of the outstanding
shares of FirstWorld Corporation, a non-resident foreign corporation. On May 10, 2021, Good Vibes
received a dividend from FirstWorld in the amount of ₱5.0 Million.
On November 8, 2022, Good Vibes paid ₱2.0 Million (out of the ₱5.0 Million) as dividends to its
shareholders. On February 14, 2023, Good Vibes utilized ₱500,000 (of the remaining ₱3.0 Million)
for capital expenditures. On October 8, 2024, it invested the remaining ₱2.5 Million in a domestic
subsidiary.
(a) Good Vibes will be subject to income tax on ₱2.0 Million for the taxable year 2021, plus
surcharge, interest, and penalties.
(b) Good Vibes will be subject to income tax on ₱2.5 Million for the taxable year 2021, plus
surcharge, interest, and penalties.
(c) Good Vibes will be subject to income tax on ₱3.0 Million for the taxable year 2021, plus
surcharge, interest, and penalties.
(d) None of the above.
END
Tax 92-03
Downloaded by ALLIAH PAULINE C DOLOR (apc.dolor@sscrmnl.edu.ph)