TAXATION 1 – Income Taxation
General Principles of Taxation
1. Taxation as distinguished from police power and power of eminent domain.
A. Property is taken to promote the general welfare.
B. Maybe exercised only by the government.
C. Operates upon the whole citizenry.
D. There is generally no limit as to the amount that may be imposed.
2. The following are constitutional limitations, except
A. No imprisonment for non-payment of poll tax.
B. Non-impairment of the obligation of contracts.
C. Rule of uniformity and equity in taxation.
D. Exemption from income tax of charitable institutions, cemeteries, churches,
personage or convents appurtenant thereto, as well as all lands, buildings and
improvements actually, directly and exclusively used for religious, charitable and
educational purposes.
3. Which of the following statements is correct?
A. The President is authorized to increase or decrease national internal revenue tax rates.
B. One of the nature of taxation is the reciprocal duties of protection and support between
the state and subjects thereof.
C. Every sovereign government has the inherent power to tax.
D. Income tax in an indirect tax.
4. A tax must be imposed for public purpose. Which of the following is not a public purpose?
A. National defense
B. Public education
C. Improvement of the sugar and coconut industries.
D. Improvement of a subdivision road.
5. Which is not an essential characteristic of a tax?
A. It is unlimited as to amount.
B. It is payable in money.
C. It is proportionate in character.
D. It is an enforced contribution.
6. Special assessment is an enforced proportional contribution from owners of land especially
benefited by public improvement. Which one of the following is not considered as one of its
characteristics?
A. It is levied on land.
B. It is based on the government’s need of money to support its legitimate objectives.
C. It is not a personal liability of the persons assessed.
D. It is based solely on the benefit derived by the owners of the land.
7.
It is the privilege of not being imposed a financial obligation to which others are subject.
A. Tax incentive
B. Tax exemption
C. Tax amnesty
D. Tax credit
8. As to scope of the legislative power to tax, which is not correct?
A. Where there are no constitutional restrictions, and provided the subjects are within the
territorial jurisdiction of the state, Congress has unlimited discretion as to the persons,
property or occupations to be taxed.
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B. In the absence of any constitutional prohibition, Congress has the right to levy a tax of
any amount it sees fit.
C. The discretion of Congress in imposing taxes extends to the mode, method or kind of tax,
unless restricted by the constitution.
D. The sole arbiter of the purpose or which taxes shall be levied is Congress, provided
the purpose is public and the courts may not review the levy of the tax to determine
whether or not the purpose is public.
9. Which of the following is a nature of taxation?
A. The power is granted by legislative action.
B. It is essentially an administrative function.
C. It is generally payable in money.
D. Without it the state can continue to exist.
10. Which of the following is not a determinant of the place of taxation?
A. Source of the income
B. Citizenship of the taxpayer
C. Residence of the taxpayer
D. Amount of tax to be imposed
11. Which of the following statements is not correct?
A. An inherent limitation of taxation may be disregarded by the application of a
constitutional limitation.
B. The property of an educational institution operated by a religious order is exempt from
property tax, but its income is subject to income tax.
C. The prohibition of delegation by the state of the power of taxation will still allow the
BIR to modify the rules in time for filing of returns and payment of taxes.
D. The power of taxation is shared by the legislative and executive departments of the
government.
12. Statement 1 – The point on which tax is originally imposed is impact of taxation.
Statement 2 – Eminent domain is inferior to non-impairment clause of the constitution.
Statement 3 – As a rule, taxes are subject to set-off or compensation.
Statement 4 – As a rule, provisions on the validity of tax exemptions are resolved liberally
in favor of the taxpayer.
A.
B.
C.
D.
Statement 1Statement 2Statement 3Statement 4
True
False
False
True
False
True
True
False
True
True
False
False
False
False
True
True
13. A tax system where the revenues are supplied mostly by indirect taxes.
A. Schedular
C. Progressive
B. Proportional
D. Regressive
14. A tax system where the greater bulk of the tax revenues is derived by direct taxes.
A. Schedular
C. Progressive
B. Proportional
D. Regressive
15. This is an inherent limitation on the power of taxation.
A. Rule on uniformity and equity in taxation.
B. Due process of law and equal protection of the laws.
C. Non-impairment of the jurisdiction of the Supreme Court in tax cases.
D. Tax must be for the public purpose.
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16. This is a constitutional limitation on the power of taxation.
A. Tax laws must be applied within the territorial jurisdiction of the state.
B. Exemption of government agencies and instrumentalities from taxation.
C. No appropriation of public money for religious purposes.
D. Power to tax cannot be delegated to private persons or entities.
17. They exist independent of the constitution being fundamental powers of the state, except
A. Power of taxation
C. Power of imminent domain
B. Police power
D. Power of recall
18. The power to acquire private property upon payment of just compensation for public purpose
A. Power of taxation
C. Power of imminent domain
B. Police power
D. Power of recall
19. The power to regulate liberty and property to promote the general welfare.
A. Power of taxation
C. Power of imminent domain
B. Police power
D. Power of recall
20. The power to demand proportionate contributions from persons and property to defray the
expenses of the government.
A. Power of taxation
C. Power of imminent domain
B. Police power
D. Power of recall
21. Basic Principles of a sound tax system, except
A. Fiscal adequacy
C. Administrative feasibility
B. Equality or theoretical justice D. Intellectual sensitivity
22. The tax imposed should be proportionate to the taxpayer’s ability to pay.
A. Fiscal adequacy
C. Administrative feasibility
B. Equality or theoretical justice D. Intellectual sensitivity
23. The sources of revenue as a whole, should be sufficient to meet the demands of public
expenditures.
A. Fiscal adequacy
C. Administrative feasibility
B. Equality or theoretical justice D. Intellectual sensitivity
24. The tax laws must be capable of convenient, just and effective administration.
A. Fiscal adequacy
C. Administrative feasibility
B. Equality or theoretical justice D. Intellectual sensitivity
25. Persons or things belonging to the same class shall be taxed at the same rate.
A Simplicity in taxation
C. Equality in taxation
B. Reciprocity in taxation
D. Uniformity in taxation
26. The tax should be proportional to the relative value of the property to be taxed.
A Simplicity in taxation
C. Equality in taxation
B. Reciprocity in taxation
D. Uniformity in taxation
27.The following are the nature of taxation, except
A. Inherent in sovereignty
B. Essentially legislative in character
C. Subject to inherent and constitutional limitation
D. Subject to approval by the people.
28. It literally means “place of taxation”; the country that has the power and jurisdiction to levy
and collect the tax.
A. Basis of taxation
C. Scope of taxation
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B. Situs of taxation
D. Theory of taxation
29. The existence of the government is a necessity and that the state has the right to compel all
individuals and property within its limits to contribute
A. Basis of taxation
C. Scope of taxation
B. Situs of taxation
D. Theory of taxation
30. The reciprocal duties of support and protection between the people and the government.
A. Basis of taxation
C. Scope of taxation
B. Situs of taxation
D. Theory of taxation
31. Subject to inherent and constitutional limitations, the power of taxation is regarded as
supreme, plenary, unlimited and comprehensive.
A. Basis of taxation
C. Scope of taxation
B. Situs of taxation
D. Theory of taxation
32. Our National Internal Revenue Laws are
A. Political in nature
C. Criminal in nature
B. Penal in nature
D. Civil in nature
33. The levying or imposition of tax and the collection of the tax are processes which constitute
the taxation system.
A. Basis of taxation
C. Nature of taxation
B. Aspects of taxation
D. Theory of taxation
34. The process or means by which the sovereign, through its law-making body raises income to
defray the expenses of the government.
A. Toll
C. Taxation
B. License fee
D. Assessment
35. Enforced proportional contributions from persons and property levied by the state by virtue
of its sovereignty for the support of the government and for all public needs.
A. Toll
C. Taxes
B. License fee
D. Assessment
36. An escape from taxation where the tax burden is transferred by the one on whom the tax is
imposed or assessed to another.
A. Shifting
C. Transformation
B.
Exemption
D. Capitalization
37. An escape from taxation where the producer or manufacturer pays the tax and endeavors to
recoup himself by improving his process of production thereby turning out his units of
products at a lower cost.
A. Shifting
C. Transformation
B.
Exemption
D. Capitalization
38. An escape from taxation where there is a reduction in the price of the taxed object equal to
the capitalized value of future taxes which the taxpayer expects to be called upon to pay.
A. Shifting
C. Transformation
B.
Exemption
D. Capitalization
39. The use of illegal or fraudulent means to avoid or defeat the payment of tax.
A. Exemption
C. Avoidance
B. Shifting
D. Evasion
40. The use of legal or permissible means to minimize or avoid taxes.
A. Exemption
C. Avoidance
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B. Shifting
D. Evasion
41. Synonymous to tax evasion.
A. Tax dodging
C. Tax exemption
B. Tax minimization
D. Tax evasion
42. Synonymous to tax avoidance.
A. Tax dodging
C. Tax exemption
B. Tax minimization
D. Tax evasion
43. In every case of doubt, tax statutes are construed
A. Strictly against the government and the taxpayer.
B. Liberally in favor of the government and the taxpayer.
C. Strictly against the government and liberally in favor of the taxpayer.
D. Liberally in favor of the government and strictly against the taxpayer.
44. In every case of doubt, tax exemptions are construed
A. Strictly against the government and the taxpayer.
B. Liberally in favor of the government and the taxpayer.
C. Strictly against the government and liberally in favor of the taxpayer.
D. Liberally in favor of the government and strictly against the taxpayer.
45. In case of conflict between the Tax Code and the Philippine Accounting Standards (PAS).
A. PAS shall prevail over the Tax Code.
B. Tax Code shall prevail over PAS.
C. PAS and Tax Code shall be both disregarded.
D. The taxpayer may choose between the PAS or the Tax Code.
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46. Tax of a fixed amount imposed upon all persons residing within a specified territory without
regard to their property or occupation they may be engaged.
A. Personal, poll or capitation
C. Excise
B. Property
D. Regressive
47. Tax imposed on personal or real property in proportion to its value or on some other
reasonable method of apportionment.
A. Personal, poll or capitation C. Excise
B. Property
D. Regressive
48. Tax imposed upon performance of an act, the enjoyment of privilege or the engaging in an
occupation.
A. Personal, poll or capitation C. Excise
B. Property
D. Regressive
49. Tax which is demanded from the person whom the law intends or desires to pay it.
A. Direct
C. Excise
B. Indirect
D. Percentage
50. Tax which is demanded from one person in the expectation and intention that he shall
indemnify himself at the expense of another.
A. Direct
C. Excise
B. Indirect
D. Percentage
51. Tax which imposes a specific sum by the head or number or by some standard of weight or
measurement and which requires no assessment other than a listing or classification of the
objects to be taxed.
A. Specific
C. Excise
B. Ad-valorem
D. Income
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52. Tax of a fixed proportion of the amount or value of the property with respect to which the tax
is assessed.
A. Specific
C. Excise
B. Ad-valorem
D. Percentage
53. Tax based on a fixed percentage of the amount of property, income or other basis to be taxed.
A. Proportional
C. Regressive
B. Progressive
D. Indirect
54. Tax where the rate decreases as the tax base increases.
A. Proportional
C. Regressive
B. Progressive
D. Indirect
55. Tax where the rate increases as the tax base increases.
A. Proportional
C. Regressive
B. Progressive
D. Indirect
56. Which of the following statements is not correct?
A. Tax burdens shall neither be imposed nor presumed to be imposed beyond what the
statute expressly and clearly states because tax statutes should be construed strictly
against the government.
B. Tax exemptions, tax amnesty tax condonations and their equivalent provisions are not
presumed and, when granted are strictly construed against the taxpayer because such
provisions are highly disfavored by the government.
C. Exemptions from taxation are highly disfavored in law and he who claims tax exemption
must be able to justify his claim or right.
D. The House of Representatives has the duty and the exclusive power of constructing
and interpreting tax laws.
57. The strongest of all inherent powers of the state because without it, the government can
neither survive nor dispense any of its other powers and functions effectively.
A. Police Power
C. Power of Taxation
B. Power of Eminent Domain D. Power of Recall
58. This power is superior to the non-impairment clause and is broader in application because it
is a power to make and implement laws.
A. Power of Taxation
C. Power of Eminent Domain
B. Power of Recall
D. Police Power
59. Which of the following statements is not correct?
A. An inherent limitation of taxation may be disregarded by the application of a
constitutional limitation.
B. Income tax liabilities shall be paid by the inhabitants even if foreign invaders occupy our
country.
C. Taxes may be imposed retroactively by law, but unless so expressed by such law, these
taxes must only be imposed prospectively.
D.
Tax laws are either political or penal in nature.
60. Which of the following is not a constitutional limitation on the Power of Taxation?
A. No person shall be deprived of life , liberty or property without due process of law.
B. No person shall be denied the equal protection of the law.
C. No person shall be imprisoned for debt or non-payment of tax.
D. No law granting any tax exemption shall be passed without the concurrence of a
majority of all the members of Congress.
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61. The distinction of a tax from permit or license fee is that a tax is:
A. Imposed for regulation.
B. One which involves an exercise of police power.
C. One in which there is generally no limit on the amount that maybe imposed.
D. Limited to the cost of regulation.
62. Police power as distinguished from the power of eminent domain:
A. Just compensation is received by the owner of the property.
B. Maybe exercised by private individuals.
C. May regulate both liberty and property.
D. Property is taken by the government for public purpose.
63. A tax wherein both the incidence of or the liability for the payment of the tax as well as the
burden of the tax falls on the same person.
A. Direct tax
C. Indirect tax
B. Value added tax
D. Percentage tax
64. Which one of the following is not a characteristic or element of a tax?
A. It is an enforced contribution.
B. It is legislative in character.
C. It is based on the ability to pay.
D. It is payable in money or in kind.
65. Tax as distinguished from license fees:
A. Limited to cover cost of regulation.
B. A regulatory measure.
C. Non-payment does not necessarily render the business illegal.
D. Imposed in the exercise of police power.
66. The power of taxation is exercised by
A. The President
C. Bureau of Internal Revenue
B. The Supreme Court
D. Congress
67. One of the characteristics of internal revenue laws is that they are:
A. Criminal in nature
C. Political in nature
B. Penal in nature
D. Generally prospective in application.
68. Which of the following is not an example of excise tax:
A. Transfer tax
C. Real property tax
B. Sales tax
D. Income tax
69. The following are similarities of the inherent power of taxation, eminent domain, and police
power, except one:
A. Are necessary attributes of sovereignty
B. Superior to the non-impairment clause of the constitution.
C. Compensation is received.
D. Are legislative in character.
70. Which of the following is not a scheme of shifting the incidence of taxation?
A. The manufacturer transfers the tax to the consumer by adding the tax to the selling price
of the goods sold;
B. The purchaser asks for a discount or refuse to buy at regular prices unless it is reduced
by the amount equal to the tax he will pay;
C. Changing the terms of the sale like FOB shipping point in the Philippines to FOB
destination abroad, so that the title passes abroad instead of in the Philippines;
D. The manufacturer transfers the sales tax to the distributor, then in turn to the wholesaler,
in turn to the retailer and finally to the consumer.
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71. Which of the following statements is not correct?
A. Taxes may be imposed to raise revenues or to provide disincentives to certain activities
within the state;
B. The state can have the power of taxation even if the Constitution does not expressly give
it the power to tax.
C. For the exercise of the power of taxation, the state can tax anything at any time.
D. The provisions of taxation in the Philippine Constitution are grants of power and
not limitations on taxing powers.
72. License fee as distinguished from tax:
A. Non-payment does not necessary render the business illegal.
B. A revenue raising measure
C. Imposed in the exercise of taxing power.
D. Limited to cover cost of regulation.
73. Value-added tax is an example of:
A. Graduated tax
C. Regressive tax
B. Progressive tax
D. Proportional tax
74. Which tax principle is described in the statement “ the more income earned by the taxpayer,
the more tax he has to pay.”
A. Fiscal Adequacy
C. Administrative feasibility
B. Theoretical justice
D. Inherent in sovereignty
75. The most superior and least limitable among the fundamental powers of the state:
A. Power of recall
C. Power of taxation
B. Police power
D. Power of eminent domain
76. One of the characteristics of a tax is that:
A. It is generally based on contact.
B. It is generally payable in money.
C. It is generally assignable.
D. It is generally subject to compensation.
77. The following are the characteristics of our internal revenue laws except:
A. Political in nature.
B. Civil in nature.
C. Generally prospective in application.
D. May operate retrospectively if congress so provides.
78. Which of the following has no power of taxation?
A. Provinces
C. Barangays
B. Cities
D. Barrios
79. Which of the following statements is wrong? A revenue bill:
A. Must originate from the House of Representatives and on which same bill the Senate may
propose amendments.
B. May originate from the Senate and on which same bill the House of Representatives
may propose amendments.
C. may have a House version and a Senate version approved separately, and then
consolidated, with both houses approving the consolidation version.
D. May be recommended by the President to Congress.
80. Tax as distinguished from special assessment:
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A. not as a personal liability of the person assessed.
B. based wholly on benefits
C. exceptional as to time and place
D. based on necessity and is to raise revenues
81. Under this basic principle of a sound tax system, the Government should not incur a deficit:
A. Theoretical justice
C. Fiscal Adequacy
B. Administrative feasibility
D. Uniformity in taxation
82. Which of the following may not raise money for the government?
A. Power of taxation
C. Eminent Domain
B. Police power
D. License fee
83. No person shall be imprisoned for non-payment of this:
A. Excise tax
C. Income tax
B. Value added tax
D. Poll tax
84. This is a demand of ownership:
A. License fee
C. Toll
B. Tax
D. Customs duties
85. Income tax is generally regarded as
A. an excise tax
C. a property tax
B. a tax on persons
D. tax on profits
86. Which of the following is not acceptable for legally refusing to pay the tax?
A. That the right of the state to collect the tax has prescribed.
B. That there is no jurisdiction to collect the tax.
C. That the tax law was declared as unconstitutional.
D. That there is no benefit derived from the tax.
87. It is important to know the source of income for income tax purposes, i.e. from within or
without the Philippines because
A. The Philippines imposes income tax on income from sources within and without of a
non-resident citizen.
B. Some individual taxpayers are citizens while others are aliens.
C. Separate graduated rates are imposed on different types of income.
D. Some taxpayers are taxed on their worldwide income while others are taxable only
upon income from sources within the Phils.
88 .A law granting tax exemption requires the concurrence of
A. Majority vote of members of congress
B. 2/3 vote of members of Congress.
C. 3/4 vote of members of Congress.
D. Unanimous vote of members of Congress.
89. No person shall be imprisoned for debt or non-payment of poll tax. This is a(an)
A. Inherent limitation
C. International limitation
B. Constitutional limitation D. Territorial limitation
90. The Department of Finance thru its officers entered into a contract with foreign investors
granting them exemption from all forms of taxes to encourage investments in the Phils. The
contract is
A. Void, unless the President ratifies
B. Void, because the power to grant tax exemption is vested in Congress.
C. Valid, if the President has authorized the officers to enter into such contract.
D. Valid, because the purpose is to promote public welfare.
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91. Tax as distinguished from debt
A. no imprisonment for non-payment C. based on contract
B. may be paid in kind
D. based on law
92. Congress can impose a tax at any amount and at anytime shows that
A. Taxation is an inherent power of the state.
B. Taxation is essentially a legislative power.
C. Taxation is a very broad power of the state.
D. Taxation is based on taxpayers’ ability to pay.
93. The amount required is dictated by the needs of the government in:
A. License fee
C. Toll
B. Tax
D. Debts
94. A charge imposed on land for special benefits derived resulting from public improvements.
A. Tax
C. License
B. Toll
D. Special assessment
95. Which of the following are National Internal Revenue Taxes?
I.
Income tax
III. Donor’s tax
V. Other percentage tax
II. Estate tax
IV. Value Added tax VI. Excise Tax
VII.
Documentary stamp tax
A. I, II, III, IV
B. I, II, III, IV, V
C. I, II, III, IV, V, VI
D. I, II, III, IV, V, VI, VII
96. The Bureau of Internal Revenue shall have a chief and four (4) assistant chiefs to be known
as
A. Secretary and Assistant Secretaries
B. Secretary and Undersecretaries
C. Commissioner and Assistant Commissioners
D. Commissioners and Deputy Commissioners
97. The three fundamental powers of the state are
I. Inherent in the state and may be exercised by the state without need of any
constitutional grant.
II. Not only necessary but indispensable.
A. True; True
B. True; false
C. False; true
D. False; false
98. The three fundamental powers of the state are
I. Methods by which the state interfere with private rights.
II Exercised primarily by the legislature.
A. True; True
B. True; false
C. False; true
D. False; false
99. I. Police power regulates both liberty and property while the power of eminent domain and
the power of taxation affect only property rights.
II Police power and the power of taxation may be exercised only by the government while
the power of eminent domain may be exercised by some private entities.
A. True; True
C. False; true
B. True; false
D. False; false
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100. I. The property taken in police power is destroyed while the property taken under the power
of eminent domain and power of taxation are not destroyed.
II. In power of taxation, the compensation received is the protection afforded to the
citizens; in police power the compensation received is the altruistic feeling that somehow
you contributed to the promotion of the general welfare; in power of eminent domain, the
compensation received is the just compensation paid for the property taken.
A. True; True
B. True; false
C. False; true
D. False; false
101. I. The point on which a tax is originally imposed is impact of taxation.
II. The point on which a tax burden finally rests or settles down is incidence of taxation.
A. True; True
B. True; false
C. False; true
D. False; false
102. I. Police power is superior to the non-impairment clause of the constitution.
II. Power of taxation is superior to the non-impairment clause of the constitution.
A. True; True
B. True; false
C. False; true
D. False; false
103. I. No person shall be imprisoned for debt or non-payment of tax.
II. Tax laws are civil and penal in nature because there are penalties provided in case of
violation.
A. True; True
B. True; false
C. False; true
D. False; false
104. I. Tax may be collected in an unlimited amount.
II. License fee may be collected in an unlimited amount.
A. True; True
B. True; false
C. False; true
D. False; false
105. I. Tax is imposed to raise revenue.
II. License fee is imposed to raise revenue.
A. True; True
C. False; true
B. True; false
D. False; false
106.
I. Tax is a demand of sovereignty.
II. Toll is a demand of sovereignty.
A. True; True
B. True; false
C. False; true
D. False; false
107. I Tax is imposed on persons, property, and property rights.
II. Special assessment is imposed on persons, property, and property rights.
A. True; True
B. True; false
C. False; true
D. False; false
108. I. Collection of tax is a legislative act.
II. Imposition of tax is an administrative act.
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A. True; True
B. True; false
C. False; true
D. False; false
109. I. A state has the power to tax even if not granted by the constitution.
II. A state cannot exercise police power if not granted by the constitution.
A. True; True
C. False; true
B. True; false
D. False; false
110. I. There can only be a tax even if there is a law imposing the tax.
II. The power to tax may include the power to destroy.
A. True; True
B. True; false
C. False; true
D. False; false
111. I. Due process of law in taxation under the constitution is a grant of power.
II. Provisions in the Philippine constitution on taxation are grants of power.
A. True; True
B. True; false
C. False; true
D. False; false
112. I. In the Philippines, there may be double taxation.
II. Taxation may be used to implement the police power of the state.
A. True; True
B. True; false
C. False; true
D. False; false
113. I. License fee is a charge imposed under police power.
II. Special assessment is levied on lands only.
A. True; True
B. True; false
C. False; true
D. False; false
114. I. Tax is imposed regardless of public improvement.
II. Special assessment is imposed regardless of public improvements.
A. True; True
B. True; false
C. False; true
D. False; false
115. I. Tax avoidance is the use by the taxpayer of legal or fraudulent means to avoid or defeat
taxes.
II. Tax evasion is the use by the taxpayer of illegal or fraudulent means to avoid or defeat
taxes.
A. True; True
B. True; false
C. False; true
D. False; false
116. I. One of the essential characteristics of a tax is it is unlimited in amount.
II. A tax is generally unlimited because it is based on the needs of the state.
A. True; True
B. True; false
C. False; true
D. False; false
117. I. The power of taxation is inherent in sovereignty being essential to the existence of every
government. Hence, even if not mentioned in the constitution the state can still exercise
the power and is essentially a legislative function.
II. Even in the absence of any constitutional provision, taxation power falls to Congress as
part of the general power of law-making.
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A. True; True
B. True; false
C. False; true
D. False; false
118. I. The President has the power to veto a revenue bill even if such bill was already
approved by Congress.
II. The President is superior to Congress as he/she can veto any bill even if already
approved by Congress.
A. True; True
B. True; false
C. False; true
D. False; false
INDIVIDUAL TAXPAYERS
1. The National Internal Revenue Code of 1988 is
A. RA 9337
B. CA 466
C. RA 9504
D. RA 8424
2. Which of the following statements is not correct?
A. An individual citizens of the Philippines who is working and deriving income from
abroad as an overseas contract worker is taxable on income from sources within and
without the Philippines.
B. A seaman who is a citizen of the Philippines and who receives compensation for
services rendered abroad as a member of the complement of vessel engaged exclusively
in international trade shall be treated as a resident citizen.
C. A non- resident citizen who is not engaged in business in the Philippines is treated as
non-resident alien who is not engaged in business in the Philippines
D. An alien individual, whether a resident or not of the Philippines, is taxable only on
income derived from sources in the Philippines
3. Which of the following statements is not correct?
A. In the case of married individuals, where only one of the spouses is deriving gross
income, only such spouse shall be allowed the personal exemption.
B
In the case of married individuals, the additional exemptions maybe claimed by only
one of the spouses
C. As a rule, the husband shall be the head of the family and proper claimant of the
additional exemption
D. In the case of legally separated spouses, additional exemption maybe claimed by
the spouses who has custody of the children but shall not exceed four(4) for each
spouse
4. A resident citizen is taxable on all income derived from sources
A. Within the Philippines only
B. Without the Philippines only
C. Partly within and partly without
D. Within and without the Philippines
5. A non-resident citizen is taxable on all income derived from sources
A. Within the Philippines only
B. Without the Philippines only
C. Partly within and partly without
D. Within and without the Philippines
6. A resident alien is taxable on all income derived from sources
14
A.
B.
C.
D.
Within the Philippines only
Without the Philippines only
Partly within and partly without
Within and without the Philippines
7. A non-resident alien is taxable on all income derived from sources
A. Within the Philippines only
B. Without the Philippines only
C. Partly within and partly without
D. Within and without the Philippines
8. The following taxpayers are allowed to claim additional exemptions, except
A. Resident citizens
B. non- resident citizens
C. Resident aliens
D. Non-resident aliens
9. Which of the following statements is not correct?
A. If only one spouse is deriving taxable income, only said spouse may claim the
additional exemption
B. If both spouses earn taxable income only one of the spouses can claim additional
exemption
C. If legally separated from the spouse, the husband can claim the additional
exemption
unless he waives the right in favor of his wife
D. An unmarried individual with a child out of wedlock can claim a personal exemption as a
head of the family plus exemption
10. A citizen of the Phils. who works and derives income from abroad is a resident if he
stayed outside the Phils.
A. For less than 180 days
B. For more than 180 days
C. For 183 days or more
D. For less 183 days
11. A citizen of the Phils. Who works abroad and whose employment requires him to be
physically present abroad most of the time during taxable years
A. Taxable on income within and without the Phils.
B. Taxable on income from without the Phils.
C. Exempt from income tax
D. Taxable income from within the Phils.
12. A citizen of a foreign country is considered a non-resident alien engaged in business in the
Phils. If he stayed inside the Phils.
A. For 183 days or more
B. For less than 183 days
C. For more than 180 days
D. For less than 180 days
13. Which of the following dependents is not qualified to entitle a taxpayer additional persona
exemption?
A. Recognized natural son who celebrated his 21st birthday during the taxable year.
B.
Legitimate natural son, 21 years old who got married on December 31, of the year.
C. Legally adopted son, 21 years old son who became employed December 30, of the
taxable year.
15
D.
Widowed mother, who celebrated her 59th birthday during the taxable year.
14. For income tax purposes, which of the following is considered head of the Family?
A. Married individual who has dependent minor child.
B. Married but legally separated individual with a dependent mother who is 59 years
old
C. Single individual with a common law life
D. Married individual even if he has no children
15. Which of the following dependents will qualify a single taxpayer as head of the family?
A. Taxpayer’s brother, 22 years old, unemployed, unmarried, living with him and
dependent upon him for support
B. Taxpayer’s sister, 18 years old, unemployed, unmarried living with parents, but
dependent upon him for chief support
C. Taxpayer’s illegitimate son, 12 years old, unemployed, single, living with him and
dependent upon him for support
D. Taxpayer’s godchild, 10 years old, dependent upon him for chief support
16. Mr. A with a dependent minor legitimate child became a widower in January of 2009. In
February of the following year, he got married to Ms. B and subsequently in November of
the same year, the latter gave birth to three (3) boys. For calendar year 2010, Mr. A’s basic
and additional personal exemption is:
A. P 75,000
B. P100, 000
C. P125, 000
D. P150, 000
17. A German citizen residing in Germany, married is doing business in the Phils. His country
allow non- resident Filipino with income from Germany a basic personal exemption of
P30,000 as head of the family, P40, 000 as married and P15, 000 as single. The allowe
personal exemption he can claim is?
A. P50. 000
B. P30, 000
C. P32, 000
D. P40, 000
18. Which of the enumerated taxpayers below can claim personal exemption only if there exist a
reciprocity clause/law between the Philippines and his country/
A.
Non-resident
B. Resident alien
C. Non-resident alien not engaged in business in the Philippines
D. Non-resident alien engaged in business in the Philippines
19. A legally married couple had the following data in year 20010?
A. Two qualified legitimate dependent children
B. Two dependent nephews
C. One illegitimate child of husband
D. One of legitimate child died in December 2010
E.
Both spouses are gainfully employed.
The claimable personal and additional exemptions of the couple:
A. H-P 50, 000, W-P 125, 000
B. H-P 100,000, W-P 50, 000
C. H-P 100, 000, W-P 75, 000
D. H-P 150, 000, W-P 50, 000
20. A, who became a widower in February of taxable year 2010 had the following dependents:
A.
B.
C.
D.
Two legitimate children
Recognized natural child with current common law wife
B, his common law wife
Illegitimate child with another woman
16
The total basic personal and additional exemption in 2009 is:
A. 150, 000
B. P100, 000
C. P125, 000
D. P75, 000
21. A married, earned P225, 000 (net of P40, 000 w/tax) compensation income from employment
from July to December 2010. He has a legally adopted child as qualified dependent and paid
P3,000 as health and hospitalization insurance premiums. For 2010, he can deduct premiums
for health and hospitalization insurance of:
A. P3, 000
B. P2, 400
C. P1, 200
D. P0
22. Using the preceding number, his personal and additional exemption is
A. P40, 000
B. P75, 000
C. P77,400
D. P78,000
23. Which of the following individual taxpayers cannot avail of the allowed deductions for
health and hospitalization insurance premiums?
A. Non-Resident citizen
B. Resident alien
C. Non-resident alien engaged in business in the Phil.
D. Non-resident alien not engaged in business in the Phil.
24. Taxable on income from all sources within and without the Phil.
A. Resident citizen B. Non-resident citizen
C. Resident alien
D. Non-resident alien
25. Taxable only on income from sources within the Phil. except
A. Resident citizen B. Non-resident citizen
C. Resident alien
D. Non-resident alien
26. May not claim personal exemption
A. Non-resident citizen
B. Non-resident alien engaged in trade or business in the Phil. Under certain conditions
C. Resident alien
D. Non-resident alien who stayed in the Phil. For 175 days
27. Exemption which is determined according to the status of the taxpayer
A. Personal exemption
B. Additional Exemption
C. Optional standard deduction
D. Special additional personal exemption
28. Exemptions allowed based on presence of qualified dependent children
A. Personal exemption
B. Additional Exemption
C. Optional standard deduction
D. Special additional personal exemption
29. Will not qualify as dependent
A. Legitimate child
B. Brother
C. Mother
D. Nephew
30. Personal exemption, if single
A. P20, 000
B. P25, 000
C. P32, 000
D. P50, 000
31. Personal exemption, if married but judicially declared as legally separated with no
dependent.
A. P20, 000
B. P25, 000
C. P32, 000
D. P50, 000
32. Personal exemption, if married but living separately without judicial decree of separation
17
A. P20, 000
B. P25, 000
C. P32, 000
D. P50, 000
33. Personal exemption, if married but judicially declared as legally separated with dependent
A. P20, 000
B. P25, 000
C. P32, 000
D. P50, 000
34. Personal exemption, if head of the family
A. P20, 000
B. P25, 000
C. P32, 000
D. P50, 000
35. Amount of additional exemption each qualified dependent child is
A. P8, 000
B. P100, 000
C. P50, 000
D. P25, 000
36. The number of dependent children who will qualify for additional exemption purposes shall
not exceed.
A. 3 children
B. 4 children
C. 5 children
D. 6 children
37. An unmarried or legally separated man or woman with one or both parents, or with one more
brothers and sisters, or with one or more legitimate, illegitimate, or legally adopted children
living with and dependent upon him or her for their chief support, where such brothers, or
sisters, or children, regardless of age are incapable of self-support because of mental physical
defect.
A. Good father of a family
B. Married
C. Single
D. Head of the family
38. A non-resident alien is deemed doing business in the Phil. If he
A. Is an individual whose residence is within the Phil.
B. Is an individual whose father or mother is an alien who is engaged in business in the Phil.
C. Is an individual who is naturalized in accordance with law
D. Shall come to the Phil. And stay therein for an aggregate period of more than 180
days
during a calendar year.
39. One is not correct
A. If the taxpayer marries during the taxable year, he may claim the personal exemption in
full as a married person for such year.
B. If the taxpayer dies during the taxable year, his estate may still claim the personal and
additional exemption for himself and his dependents as if he died at the close of such year.
C. If the spouse of the taxpayer or any of the dependents dies during the taxable year, the
taxpayer may still claim the same exemptions as if death occurred at the close of such year.
D. If the taxpayer should have additional dependent children during the taxable year, he
can
always claim the additional exemptions for such year.
40. One is correct
A. Where both husband and wife receive compensation income, the additional exemption
shall be claimed by wife unless she explicitly waives her right in favor of her husband in
the withholding exemption certificate.
B. Husband and wife shall be treated as separate taxable units and each shall be allowed
to
claim personal exemption
C. If the gross income does not exceed P20, 000, a special additional personal exemption of
P4, 000 may be claimed by the taxpayer.
D. Husband and wife shall be treated as separate taxable units and shall be allowed to claim
only one personal exemption either for the husband or wife at their option.
41. A. The term “chief support” means more than one-half of the requirements for support
B. If two children contribute equal amounts for the support of dependent, neither one of them
may be qualify as head of the family
18
A. True, true
B. True, false
C. False, true
D. False, false
42. A. If any of the qualified dependents becomes 21 years old during the taxable year, the
taxpayer may claim the same exemptions as if such dependent became 21 years old at the
close of such year.
B. Parents living with and dependent upon the taxpayer for their support regardless of their
age will qualify as dependents
A True, true
B. True, false
C. False, true
D. False, false
43. A. If the dependent child marries during the taxable year, the taxpayer may still claim the
same exemption as if the marriage occurred at the close of such year.
B. In the case of married individuals, the additional exemptions shall be claimed by only one
of the spouses
A True, true
B. True, false
C. False, true
D. False, false
44. Who is non-resident alien not engaged in business in the Phil.?
A. An alien who comes in the Phil. For a definite purpose which in its nature may be
promptly accomplished..
B. An alien who comes to the Phil. For definite purpose which in its nature would require
an extended stay of more than 180 days.
C. An alien who has required residence in the Phil.
D. An alien who lives in the Phil. With no definite intention as to his stay
45. The personal exemption of the non-resident alien engaged in trade or business in the Phil. is
equal to that allowed by.
A. The income tax law of his country to a citizen of the Phil. not residing there
B. The income tax law of his country to a citizen of the Phil. not residing there or the
amount provided by the NIRC to a citizen or resident whichever lower.
C. The NIRC to a citizen or resident
D. The income tax law of his country to a citizen of the Phil. not residing there or the
amount provided by the NIRC to a citizen or resident whichever is higher.
46. A. If a taxpayer marries during the year, he may claim the personal exemption for married
individuals in full for such year.
B. A dependent child who marries within the year may still qualify as dependent for the year.
A. True, true
B. True, false
C. False, true
D. False, false
47. Z, married, had the following data for the taxable year:
Gross income, Philippines
Gross income, China
Expenses, Philippines
Expenses, China
P400,000
300,000
200,000
150,000
If the taxpayer is a resident citizen, married, his taxable income is
A. P309, 000
B. P318, 000
C. 350, 000
D. P300,000
48. If the taxpayer is a non-resident citizen, married, his taxable income is
A. P 300, 000
B. P159, 000
C. P150, 000
D. P200, 000
49. If the taxpayer is a resident alien, married his taxable income is
A. P 300, 000
B. P159, 000
C. P150, 000
D. P200, 000
50. If the taxpayer is a non-resident alien engaged in business in the Phil. married and his
country allows a reciprocity P30, 000 as personal exemption for married individuals, his
taxable income is?
A. P370, 000
B. P170, 000
C. P200, 000
D. P150, 000
19
51. If the taxpayer is non-resident alien not engaged in business in the Phil. married and his
country grants P35, 000 as personal exemption for married individuals, his taxable income
is?
A. P370, 000
B. P170, 000
C. P200, 000
D. P400, 000
52. With regard to deduction for premiums on hospitalization and health insurance, which of the
following statements is wrong?
A. Allowed as deduction even if income is from compensation only
B. Allowed as deduction even if income is from business or practice of Profession
C. Allowed as deduction even if mixed income
D. Allowed as deduction only if the taxpayer is taking itemized deductions from gross
income.
53. Which of the following statements is wrong? The premiums on hospitalization and health
insurance may be deducted
A. Not exceed P2, 400 a year per family
B. Not exceed P200 per month
C. If the family income doesn’t exceed P250, 000
D. By either spouse in the case of married individuals
54. A resident, single with qualified dependent illegitimate children had the following during the
calendar year.
Gross compensation income
P250, 000
Expenses related to his employment
120, 000
SSS premium contributions
3, 600
Philhealth contribution
2, 400
Pag-ibig contributions
2, 000
Union dues
1, 000
Premiums on health insurance
4, 000
The taxable income before personal and additional exemption is
A. P237, 000
B. P241, 000
C. P238, 600(?)
D. P117, 000
55. In which of the following should additional exemption not be allowed to the taxpayer?
A. An alien, whose dependent child is living with him in the Phil.
B. A resident citizen, who has 25 years old mentally retarded son
C. A resident citizen, who has a 50 years old mother as his dependent
D. a resident alien with an illegitimate child, 7 years old
.
CORPORATION
1. 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. Business partnership
2. Which of the following is subject to the corporate income tax?
A. a non- stock and non profit educational institution
B. Public educational institution
C. Private cemeteries
D. Civic league or organization not organized for profit and operated exclusively for the
promotion of social welfare
3. A corporation organized and created under the laws of a foreign country and is authorized to
do business/ trade in the Phil. is:
A. Domestic corporation
C. Non-resident foreign corporation
B. Resident foreign corporation
D. General co-partnership
20
4. One of the general principles of income taxation:
A. A foreign corporation engaged in business in the Phil. is taxable on all income
derived from sources within and without the Phil.
B. A foreign corporation engaged in business in the Phil. is taxable on all income
derived from sources within the Phil. only.
C. A domestic corporation is taxable on income derived from sources within the Phil. only.
D. A domestic corporation is taxable on income derived from sources without the Phil. only.
5. One of the following doesn’t fall under the definition of a “corporation” for income tax
purpose:
A. General partnership
B. Joint stock company
C. Insurance company
D. Sole partnership
6. Which of the following is classified as Special Corporation subject to preferential corporate
income tax rate?
A. Social security System
C. Phil. Charity Sweepstakes Office
B. Proprietary Educational Institution
D. Government Service Insurance System
7. A corporation which may be classified as either a resident corporation or non-resident
Corporation is
A. Domestic corporation
C. Government owned and controlled corporation
B. Foreign corporation
D. Non-profit hospital
8. The Phil. Health Insurance Corporation, a government owned corporation is:
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.
9. Public educational institutions, like the University of the Philippines is deemed by law:
A. subject to preferential corporate income tax for special corporations.
B. Subject to the basic corporate income tax
C. Subject to both the preferential income tax and the basic corporate income tax.
D. Exempt from the corporate income tax.
10. Which is not correct? The following are exempt from the corporate income tax:
A. Philippine Charity Sweepstakes Office C. Gov’t. owned or controlled corp.
B. Bureau of Internal Revenue
D. Social Security System
11. Which of the following maybe subject to the corporate income tax?
A. A non-profit educational institution C. A private educational Institution
B. A public educational Institution
D. Government Service Insurance System
12. A domestic corporation may employ, as a basis for filing its annual corporate return the:
A. Calendar year only
C. Either calendar or fiscal year
B. Fiscal year only
D. Neither calendar nor fiscal year
13. A corporation files a quarterly return within
A. 30 days after the end of each of the 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 quarters
14. A final or annual return is filed on or before the 15th day of the?
21
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
15. A corporation on a fiscal year ending March 31, should file its annual return
A. On or before April 15 of the same year
C. On or before July 15 same year
B. On or before April 15 of the following year D. on or before July 15 of the ff. year
16. The improperly accumulated earnings tax shall apply to
A. Publicly held corporation
C. Insurance companies
B. Banks and other non-bank financial
D. Private corporations
17. Which of the following statements is not correct?
A. MCIT is not applicable to non-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 Phil only
D Non-resident foreign corporations are taxed on gross income from within and without
the Phils..
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 corp.
C. Cash dividends received by a domestic corporation from a domestic corporation.
D. Interest income received by resident foreign corporation from a Phil. bank.
19. The MCIT shall not apply to the following resident foreign corporations, except
A. RFC engaged in business as int’l carrier subject to 2 ½ 0/0 of their Gross Phil billings
B. RFC engaged in business as offensive Banking Units on their income from foreign
currency transactions with local commercial banks.
C. RFC engaged in business as regional operating headquarters
D. RFC engaged in hotel, motel and resort operations
20. Which of the following is not correct? The gross income tax
A. Is optional to qualified corporation
B. Is available if the ratio of costs of sales to gross sales or receipts from all sources does
not exceed 55%
C. Shall be irrevocable for three consecutive taxable years that the corporation is qualified
under the scheme
D. Is compared with the normal income tax and minimum corporate income tax
(?)21. A Corporation’s records show:
Normal
Taxes
Quarter
Income Tax MCIT
Withheld
First
P100, 000
P80, 000 P20, 000
Second
120, 000
250,000
30, 000
Third
250, 000
100, 000
40, 000
Fourth
200, 000
100, 000
35, 000
Excess MCIT
Prior Year
P30 000
The income tax due for the second quarter is
A. P100, 000
B. P80, 000
C. P50, 000
22. The income tax due for the second quarter is
A. P120, 000
B. P250, 000
C. P150, 000
23. The income tax due for the third quarter is
Express withholding
Tax Prior Year
P10, 000
D. P40, 000
D. P230, 000
22
A. P250, 000
B. P100, 000
24. The income tax due for the year is
A. P200, 000
B. P100, 000
C. P140, 000
D. P70, 000
C. P135, 000
D. 165, 000
25. Using the preceding problem except that the normal income tax for the fourth quarter is
P50, 000 (instead of P200, 000), the income tax due for the year is
A. P120, 000
B.P55, 000
C. P45, 000
D.P75, 000
26. One of the following is not acceptable as basis of relief from the MCIT
A. Prolonged labor dispute
C. Legitimate business reverse
B. Force majeure
D. Law suits filed by the company
27. Which is not one of the characteristics of corporate income tax
A. Progressive tax
C. Direct tax
B. General tax
D. National tax
28. CPA University, a private educational institution organized in 2000, had the following data
For 2007.
Tuition fees
P 850, 000
Rental income
150, 000
School related expenses
820, 000
The income tax due for 2007 is
A. P 57, 000
B. P 9, 600
C. P 18, 000
D. P 20, 000
29. CPA college, a private educational institution organized in 2000, had the following data for
2007.
Tuition fees
P 480 000
Rental income
520, 000
School related expenses
450, 000
The income tax due for 2007 is
A. P 17, 600
B. P 5, 500
C. P 100, 000
D. P 165, 000
30. CPA Airlines, a resident foreign international carrier has the following records of income for
the period. (The income represents gross Phil. billings)
A. Continuous flight from Manila to Tokyo=1, 000 tickets at P 2, 000 per ticket
B. Flight form Manila to Singapore ; transfer flight from Singapore to Tokyo=2, 000
Tickets at P 2, 000 per ticket
C. Continuous flight from Manila to Singapore= 3, 000 tickets at P1,000 per ticket
The income tax due is
A. P225, 000
B. P125, 000
C. P100, 000
D. P 175, 000
31-46 The A corporation provided the following data for calendar year ending December 31,
2009 ($ 1= P50).
Philippines
Abroad
Gross income
P4, 000, 000
$ 40, 000
Deductions
2, 500, 000
$ 15, 000
Income Tax Paid
$ 3, 000
31. If it is a domestic corporation, its income tax after tax credit is
A. P675,000
B. P832, 000
C. P962, 500
32. If it is a resident corporation, its income tax is
D. P480, 000
23
A. P730, 000
B. P1, 280, 000
C. P480, 000
33. If it is a non-resident corporation, its income tax is
A. P370, 000
B. P1,280,000
C.P880,000
D. P450, 000
D.P1,200,000
34. Under No. 31, but it opts to claim the tax paid abroad as deduction from gross income, its
income tax is
A. P780,000
B.P832, 000
C.P275,000
D.P150,000
35. If it is private educational institution, its income tax due after tax credit
A. P730, 000
B.P832, 000
C.P275,000
D.P150,000
36. If it is a non-profit hospital, its income tax credit is
A. P730, 000
B.P832,000
C.P275,000
37. If it is a resident international carrier, its income tax is
A.P100,000
B.P10,000
C.37,000
D.P150,000
D.P125,000
38. If it is a non-resident cinematographic film owner/lessor, its income tax is
A.P1,000,000
B.P100,000
C.P300,000
D.P128,000
39. If it is a non-resident lessor of vessels,its income tax is
A.P100,000
B.P180,000
C.P300,000
D.P128,000
40. If it is a non-resident lessor of aircrafts, machineries and equipments, its income tax is
A. P100,000
B.P180,000
C.P300,000
D.P128,000
41. If it is a resident corporation but its expenses within and outside the Philippines is P3M,
Unallocated (disregard original data on expenses), its income tax is
A.P640,000
B.P700,000
C.P480,000
D.P128,000
42. If it is a resident corporation and remitted 60% of its net profit to its head office abroad, its
total tax liability is (Original data).
A. P480,000
B.P571,800
C. P196,000
D.P612,750
43. If it is a private educational institution but P3.5M of its total gross income is from lease and
restaurant business, its income tax is
A.P730,000
B.P275,000
C.P150,000
D.P812,500
44. If it is a domestic corporation, but its total expenses is P5,800,000 (disregard original data on
expenses), its income tax is
A.P730,000
B.P64,000
C.P120,000
D.P85,000
45. Under No.44, but the domestic corporation is non-profit hospital (disregard tax paid abroad ),
Its income tax is
A.P20,000
B.P64,000
C.P10,909
D.P120,000
46. If the corporation is a non-stock educational; institution, which uses all its revenues or
income for educational and charitable purposes , its income is
A. P0
B.P730,000
C.P120,000
D.P64,000
(?)47. A domestic corporation organized in 1998 provided the following information:
2003
2004
2005
2006
2007
Net Sales
P4,000,000 P5,000,000 P6,000,000
P7,000,000 P8,000,000
Cost of sales
2,000,000
2,500,000
2,800,000
4,000,000
5,200,000
Business Expenses 1,900,000
2,350,000
2,900,000
3,100,000
2,300,000
24
The tax due after tax credit, if any for 2005
A.P86, 000
B. P95, 000
C.P87,500
D.P97,500
48. Using the above data, the tax due after tax credit, if any for 2007
A. P115,000
B.P140,000
C.P175,000
D.P80,000
49. A corporation , a resident corporation, provided the following data for taxable year 2006
Philippines
USA
Gross income
P40M
P20M
Dividends from:
Domestic corporation
5M
Foreign corporation
4M
Business expenses
12M
8M
The corporation remitted to its head office the P5M dividend income and 40% of its net profit
to its head office in USA. The corporation’s total tax liability including the tax on the profit
remitted is
A.P10,240,000
B.P11,545,600
C.P15,960,000
D.P12,448,000
50. In the foregoing problem, if it is registered with PEZA, its total tax liability is
A.P10,240,000
B. P0
C.P11,200,000
D.P15,960,000
51. A corporation has the following data for the year 2007:
Gross Income, Philippines
P1,000,000
Gross income, USA
500,000
Gross income, Japan
500,000
Expenses, Philippines
300,000
Expenses, USA
200,000
Expenses, Japan
100,000
Other Income:
Dividend from San Miguel Corp
70,000
Dividend from Ford Motors, USA
120,000
Gain, sale of San Miguel shares directly to buyer 150,000
Royalties, Philippines
50,000
Royalties, USA
100,000
Interest (other than from banks)
60,000
Rent, land USA
250,000
Other rent income
100,000
Prize, contest in Manila
200,000
Land sold in the Philippines (selling prize)
2,000,000
The cost of the land which is not used in business is P1M, while FMV is P3M, Its total tax
liability as a domestic corporation is:
A. P780,500
B. P913,600
C. P963,600
D. P980,500
52. Based on the above problem, its total tax liability if it is a resident corporation is
A. P721,000
B. P679,200
C. P659,200
D.P741,000
53. And if it is a non-resident corporation, its total tax liability is
A. P843,500
B.791,700
C. P791,200
54. A domestic corporation had the following data:
Gross income
1998
P1,000,000
1999
2,000,000
2000
3,000,000
2001
1,000,000
Deductions
P1,200,000
1,900,000
2,950,000
1,100,000
D.P846,000