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TAXATION
MAY 2023 BATCH
REO CPA REVIEW
TAXATION
FINAL PREBOARDS – MAY 2023 BATCH
Which of the following is an inherent limitation on the power of taxation?
a. Uniformity of taxation
b. Progressive system of taxation
c. International comity
d. Free speech
2.
Which of the following is not a requisite of valid classification to justify a
reasonable discrimination?
a. It must be based on substantial distinction.
b. It must be germane to the purpose of the law.
c. It must be applicable to present conditions only but not future ones.
d. It must be applied equally to all persons within the same class.
3.
Which of the following is not a tax mechanism to minimize the impact of double
taxation?
a. Tax shifting
b. Tax levy
c. Tax capitalization
d. Tax transformation
4.
Statement 1: As a method of collection, withholding helps improve the government's
cash flows.
Statement 2: Withholding of taxes is implemented pursuant to the principle of a sound
tax system known as theoretical justice.
a. Only statement I is true
b. Only statement II is true
c. Both statements are true
d. Both statements are false
5.
When the law itself provides for non-payment of taxes, such tax escape is known as
a. Tax evasion
b. Tax holiday
c. Tax minimization
d. Tax avoidance
6.
The House of Representatives is composed of 300 district and party-list
representatives. 200 attended the session dated June 5, 2020. On that particular
session, House Bill No. 8795, which grants tax exemption for married taxpayers, was
voted upon. How many votes are required to pass the Bill?
a. 101 votes
b. 134 votes
c. 151 votes
d. 200 votes
8.
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7.
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1.
When the House and Senate version of a tax bill has difference, what/who will reconcile
the differences?
a. The President
b. The Speaker of the House and the Senate President, jointly
c. All the members of the House of Representatives and Senate, jointly
d. The Bicameral Conference Committee
Statement 1: Substantive due process provides that there must be notice and hearing
before the government acts.
Statement 2: The equality principle in taxation provides that the tax liabilities of
all taxpayers must be equal.
a. Only statement I is true
b. Only statement II is true
c. Both statements are true
d. Both statements are false
REO CPA REVIEW
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9.
Which of the following is not an administrative remedy of BIR Commissioner to collect
tax?
a. Distraint of personal property
b. Civil case to collect a sum of money
c. Garnishment of bank deposit
d. Levy of real property
10. Which case may be filed by the government even if the tax assessment case is still
pending?
a. Civil action to collect the tax
b. Criminal action for tax evasion
c. Both A and B
d. Neither A nor B
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11. Where the basic tax involved exceeds P1,000,000.00, who has the authority to approve
the tax compromise?
a. BIR Commissioner
b. Revenue District Officer
c. Revenue Regional Director
d. National Evaluation Board consisting of BIR Commissioner and 4 Deputy Commissioners
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12. Mr. Santos received a Preliminary Assessment Notice on August 1, 2020. As Mr. Santos
was preparing his reply, he already received a Final Assessment Notice on August 11,
2020, Rule on the validity of the Final Assessment Notice.
a. The FAN is void. BIR should have waited for the reply to the PAN,
b. The FAN is void. The right to due process of Mr. Santos has been violated.
c. The FAN is valid. Mr. Santos’s period to file his reply expired on August 6, 2020.
d. The FAN is valid. Reply to the PAN is not mandatory in nature.
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13. Taxpayer filed his protest through a request for reconsideration. Within how many
days must the duly authorized representative or the Commissioner of Internal Revenue
decide?
a. 90 days
b. 120 days
c. 150 days
d. 180 days
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14. Thunder Company filed its annual income tax return for the calendar year 2020 on
April 12, 2021. The BIR assessed Thunder Company of deficiency taxes on April 14,
2024, without alleging fraud. Thunder Company, in its protest, contended that the
period for BIR to assess has already prescribed. Is Thunder Company correct?
a. Yes, the right of BIR to assess has prescribed on April 12, 2023.
b. Yes, the right of BIR to assess has prescribed on April 12, 2024.
c. No, the right of BIR to assess will only prescribe on April 15, 2024.
d. No, the right of BIR to assess will only prescribe on April 15, 2025.
15. Galante Corporation made a donation on March 1, 2020. It filed the corresponding
donor’s tax return on March 20 of the same year. On April 13, 2020, Galante Corporation
filed an amended donor’s tax return declaring a gross gift which is 40% greater than
the previously declared gross gift. When is the last day for BIR to assess Galante
Corporation for deficiency donor’s tax assuming there is no fraud?
a. March 1, 2023
b. March 20, 2023
c. March 31, 2023
d. April 13, 2023
16. On April 5, 2021, the BIR issued an assessment notice to Gentrix Corporation for
deficiency income tax for the taxable 2017. It was received by Gentrix on April 9,
2021. Gentrix follows the calendar year, and has filed its annual income tax return
for year 2017 on April 7, 2018. Has the assessment prescribed?
a. Yes. The assessment has prescribed on 7 April 2021, and the taxpayer was Only able
to receive the assessment notice on 9 April 2021.
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b. No. The assessment is set to prescribe on 7 April 2021, and the BIR was able to
send the assessment notice on 5 April 2021.
c. No. The assessment is set to prescribe on 15 April 2021, and the taxpayer was able
to receive the assessment notice on 9 April 2021.
d. No. The assessment is set to prescribe on 15 April 2021, and the BIR was able to
send the assessment notice on 5 April 2021.
17. Installment basis of reporting of income shall apply to casual sale of personal
property upon compliance with all of the following requisites, except _.
a. The price exceeds P1,000.
b. The property would not be included in the inventory of the taxpayer if on hand at
the end of the taxable year.
c. The price will be paid in at least three (3) installments.
d. Initial payments do not exceed 25% of the selling price.
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18. Santos, a Filipino resident was engaged by a Japan-based company to render IT-related
services to the latter. Santos rendered his services within the comfort of his home
in Tagaytay. Soon after, when Santos was visiting Korea, it was there that payment
of his service fees was sent by the company via bank transfer. The situs of service
income is _.
a. Korea
b. Where the party availing of the services is located, Japan
c. Philippines
d. Where the contract was perfected, Japan
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19. Marciano sold to Julio a parcel of land classified as a capital asset located in the
province of Tarlac for P6,000,000 on six equal semiannual installments of P1,000,000
each. The first installment will be paid on December 31, 2021, the second installment
six months after, and so on, until the final installment on June 30, 2024.
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Can Marciano declare his income on installment?
a. Yes. The initial payments did not exceed 25%. The initial payments are only 17%
of the selling price.
b. Yes. The initial payments are not at least 25%. The initial payments are only 17%
of the selling price.
c. No. The initial payments exceeded 25%. The initial payments are 33% of the selling
price.
d. No. The initial payments are at least 25%. The initial payments are 33% of the
selling price.
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20. Gomez earned the following items of income for the calendar year ending 2021:
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Interest income, debtor resides in Hong Kong, payment made in
the Philippines
Interest income, debtor resides in the Philippines, payment
made in China
Gain from sale of real property, real property situated in
America
Gain from sale of personal property, sale made in UK, property
is in the Philippines
Gain from sale of shares of stock of a domestic corporation,
residence of buyer is Taiwan, sale made in Argentina
420,000
330,000
440,000
290,000
225,000
1,705,000
If Gomez is a non-resident citizen, how much of his income is subject to Philippine
income tax?
a. 330,000
b. 555,000
c. 845,000
d. 1,705,000
21. Who among the following can most likely claim the 8% income tax option?
a. A registered Barangay Micro Business Enterprise
b. A PEZA-registered entity subject to the special corporate income tax (SCIT)
c. A registered service-oriented sole proprietorship subjected to the 2% withholding
tax rate
d. A PEZA-registered entity enjoying income tax holiday
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22. Irish, a national of Norway, came to the Philippines for a short lecture series
wherein she lectured on how to make wise investments. The lecture series covered the
four weeks of August 2022. The following details pertain to her lecture series in the
Philippines:
Professional fees for lecture (P80,000 a week)
Income from onsite bookselling
Travel expenses incurred, with receipts
Food and accommodation expenses incurred, with receipts
Income tax paid in Norway
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How much is Irish’s Philippine income tax due?
a. zero
b. 65,000
c. 110,000
d. 115,000
P 320,000
140,000
120,000
100,000
50,000
P
855,000
45,000
66,000
80,000
30,000
26,000
1,500,000
P
1,400,000
800,000
600,000
(400,000)
200,000
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Basic compensation
Supplemental compensations
Mandatory contributions
13th month pay
De minimis benefits
Excess de minimis benefits
Gross receipts from accounting work
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23. Santos, a non-VAT registered resident citizen, works as a government employee at
daytime and accepts clients for accounting work after office hours. At the same time,
Santos maintains a t-shirt printing shop to earn more. For the taxable year ending
December 31, 2022, Santos earned the following amounts:
P
P
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T-shirt printing shop:
Gross sales
Cost of sales
Gross income
Operating expenses
Net income
Upon filing his first quarter income tax return, Santos availed of the 8% income tax
option:
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Assuming that the availment of the 8% income tax option is proper, how much is
Santos's income tax due?
a. 232,000
b. 300,000
c. 357,000
d. 377,000
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24. Brent received the following amounts during the taxable year 2022:
Inheritance from his favorite uncle, a car with cost of
P1,200,000 (amount presented is the FMV)
Proceeds of life insurance from uncle's death; Brent is
the named beneficiary
Graduation gift, a condominium unit
Proceeds from accident insurance due to injuries
Payment for damages caused by tortfeasor
Reimbursement of hospital bills for the accident paid
by tortfeasor
Payment for damaged property in the accident; value of
damage, P40,000
Payment for lost salaries
Moral damages from libel case
Total
How much of the enumerated amounts is subject to income tax?
a. 250,000
6,200,000
2,500,000
4,000,000
150,000
200,000
300,000
50,000
250,000
1,000,000
14,650,000
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b. 260,000
c. 300,000
d. 460,000
25. A domestic corporation organized and operated as a non-stock non-profit educational
institution received P200,000 from tuition fees and P300,000 from rentals to private
concessionaires. The educational institution used the P500,000 in order to buy books
as part of its program of upgrading the library. Which of the following statements
is true?
a. The entire amount of P500,000 is subject to 30% income tax.
b. The entire amount of P500,000 is subject to 10% income tax.
c. Only the amount of P300,000 is subject to 30% income tax.
d. The entire amount of P500,000 is exempt from income tax.
I and II only.
I and III only.
II and III only.
I, II, and III.
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d.
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26. Under the CREATE Act, which of the following taxes is no longer or imposed?
I. Minimum Corporate Income Tax (MCIT)
II.
Optional Corporate Income Tax (OCIT) of 15%
III.
Improperly Accumulated Earnings Tax (IAET)
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27. An offshore banking unit had the following offshore banking transactions within the
Philippines during the taxable quarter ending September 30, 2021:
Income
1,200,000
3,400,000
4,700,000
2,650,000
11,950,000
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the offshore banking unit can claim allowable deduction of P2,830,000, how much
the offshore banking unit's income tax due?
912,000
1,950,000
2,280,000
2,736,000
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If
is
a.
b.
c.
d.
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With local commercial banks
With domestic corporations
With other offshore banking units
With non-residents
Total Income
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28. Statement I: A regional or area headquarters of multinationals is generally exempt
from Philippine income taxes. Statement II: PEZA-registered entities are exempt from
the imposition of the branch profits remittance tax.
a. Only statement I is true
b. Only statement II is true
c. Both statements are true
d. Both statements are false
29. Transit earned the following items of income for the taxable year ending December 31,
2021.
Dividends from domestic corporation
Receipts from rental of machinery
Interest income from expanded foreign currency deposit system
Royalties from literary compositions
480,000
330,000
140,000
190,000
1,140,000
If Transit is a partnership constituted in the Philippines, which of the following
statements is true?
a. P1,140,000 will be subject to regular income tax at the rate of 0 to 35%.
b. P330,000 will be subject to regular income tax at the rate of 25%.
c. All items will not be subject to regular income tax as they are all passive income
and are therefore subject to final withholding tax.
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d. All items will not be subject to any income tax as Transit will be merely considered
as pass-through entity.
30. Mahinhin Company was incorporated on June 12, 2000. It uses the fiscal year which
begins from May 1 and ends on April 30 of the next year. For the years ending April
30, 2022, and April 30, 2023, the following are the results of operations:
Sales
Less: Cost of sales
Gross Profit
Less: Expenses
Net income
2022
14,000,000
(8,000,000)
6,000,000
(5,930,000)
70,000
2023
16,000,000
(9,000,000)
6,000,000
(3,500,000)
3,500,000
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Mahinhin Company has assets amounting to P240,000,000, which includes a parcel of
land amounting to P50,000,000.
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How much is income tax payable in 2023?
a. 832,500
b. 875,000
c. 951,000
d. 1,041,000
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31. Incredible Company is a domestic corporation engaged in the manufacturing of beauty
products. Incredible Company has employees named Anna, Beatrice, Carmina, Dionisio,
Evelyn, Felicia, and Gary.
PA
For taxable year 2021, Incredible Company paid salaries amounting to P2,200,000 to
the above employees, as duly recorded in the payroll of the Company. However,
Incredible Company neglected to deduct the applicable withholding taxes, social
security dues, and Philhealth dues in accordance with law.
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In addition, Incredible Company granted fringe benefits to Anna, the Chief Financial
Officer of the Company in the form of use of the company car. Under the terms of the
Benefit Plan, Anna may use the car for personal purposes, but ownership will remain
with Incredible Company. The same benefit was likewise provided to Dionisio, a rankand-file employee. The two cars were both newly acquired at a cost of P1,000,000 each
on 1 January 2021.
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Compute for the fringe benefits tax to be paid for the fourth quarter of 2021.
a. 3,365
b. 13,462
c. 26,923
d. 53,846
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32. A CPA certification
required if _.
a. the gross estate
b. the gross estate
c. the gross estate
d. the gross estate
containing the itemized assets and liabilities of the estate is
exceeds
exceeds
exceeds
exceeds
P500,000
P5,000,000
P200,000
P2,000,000.
33. Santiago died, leaving listed shares of stock as part of his estate. How should these
properties be valued?
a. Book value on the date of death
b. Quotation on the date of death
c. Par value on the date of death
d. Based on a computation in accordance with the Adjusted Net Asset Method
34. Which of the following should be included in the gross estate?
I. Conjugal or community property, in its full amount
II.
Exclusive property of the decedent, in its full amount
III.
Exclusive property of the surviving spouse, in its full amount
a. II only.
b. I and II only.
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c. II and III only.
d. I, II and III.
35. Bill died on September 24, 2020. The following were losses incurred:
23-Sep 2020
28-Sep 2020
10-Nov 2020
5-Jan 2021
Amount
Payments of hospitalization
expense
Loss on fire of property in
Laguna
Loss of cash from theft
Insured loss from flood
Loss from inventory spoilage
to be claimed as deduction
on the income tax return of
the estate
Uninsured loss from bomb
explosion
24,000
55,000
102,000
245,000
52,000
38,200
516,200
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22-Oct 2021
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Date
incurred
22-Sep 2020
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How much may be claimed as deduction against the gross estate?
a. 102,000
b. 126,000
c. 140,200
d. 157,000
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36. Antonio died leaving the following properties:
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Land located in Canada
Shares of a domestic corporation, 90% of
operations are outside PH
Shares of a foreign corporation, 90% of
operations are within the Philippines
Revocable donation of car in Makati, not yet
revoked; Antonio is the donor
Revocable donation of books in Cambodia, right
of revocation waived during lifetime of
transferor Antonio
Cash in foreign banks
Value as of
August 30,
2020
2,013,000
580,000
446,800
335,000
202,400
1,244,000
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Antonio died on June 30, 2020. During the month of August, charges to the estate
amounted P334,000, which were paid for funeral expenses. The payments for the charges
were taken from the cash in bank as enumerated above. Increase in the value of the
land amounted to P255,000 during the month.
If
a.
b.
c.
d.
Antonio is a resident citizen, how much is the gross estate?
4,362,800
4,539,800
4,697,800
4,900,200
37. What is the maximum period that the BIR Commissioner may extend the time for payment
of estate tax in case he finds that the payment on the due date of the estate tax or
of any part thereof would impose undue hardship upon the estate or any of the heirs
because of the judicial settlement of the estate?
a. Two years
b. Three years.
c. Four years
d. Five years
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38. Marina died on November 20, 2018. Some of the properties she left are the following
Assets
Land
Car
Mode of
Acquisition
Donation
Purchase
Date of
Acquisition
7-3-14
10-2-17
Market Value
Date
Death of
acquired
Marina
P500,000 P350,000
800,000
980,000
Other information:
1. The gross estate of the decedent amounts to P3,000,000
2. The land was mortgaged for P50,000 when it was acquired and marina paid the same
before she died
3. The allowable deductions total P125,000 which includes medical expenses of P30,000.
It excludes bequest to a charitable institution in the amount of P50,000
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39. A married decedent had the following properties:
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The vanishing deduction is _.
A. 57,500
B. 58,100
C. 67,083
D. 67,783
I. A car that was owned by the decedent before marriage and earned through industry
II. Rentals from a building that was inherited by the decedent during marriage
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Under the absolute community of property, which of the following would be considered
as exclusive property?
a. I only
b. II only
c. Both I and II
d. Neither I nor II
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40. With no more money left, the heirs of Diwata Reyes were left with no recourse but to
withdraw from the bank account of Diwata who died one month ago. Diwata's bank
deposits amount to P2,400,000. Diwata's net taxable estate after deducting special
deductions and the share of the surviving spouse is P12,500,000, excluding the amount
withdrawn. Pending the payment of estate taxes to the BIR, what is the maximum amount
that the heirs of Diwata can receive from the bank in relation to Diwata's bank
account?
a. 2,112,000
b. 2,256,000
c. 2,332,000
d. 2,400,000
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41. Donor's tax credit
a. Seeks to avoid international double taxation.
b. Seeks to decrease donor's tax payable by removing items already subjected to income
tax.
c. Can be claimed by all individual donors.
d. Can only be claimed by a non-resident alien donor.
42. Transfers for insufficient consideration are generally subject to transfer tax, except
_.
a. When the property transferred is an immovable property held as an ordinary asset.
b. When the property transferred is an immovable property held as a capital asset.
c. When the property transferred is a personal property held as an ordinary asset.
d. When the property transferred is a personal property held as a capital asset.
43. Mimi Lopez is the owner of three parcels of land.
Mimi Lopez rented Land# 1 to Amber. Monthly rental payments by Amber amount to
P20,000. The rental contract is set to last for two years. Land#1 has a value of
P2,300,000. The land is located in Zamboanga.
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Mimi Lopez gave Land# 2 to Selena through a revocable deed of donation on March 13,
2018. Mimi Lopez revoked the donation on September 2, 2018. Land #2 has a value of
P3,400,000 on March 13 and P3,920,000 on September 2. The land is located in Zambales.
Mimi Lopez gave Land #3 to Carly in exchange of cash worth P500,000. The land's value
is P2,440,000. The transaction was documented in a notarized deed. The land is located
in Japan.
If
a.
b.
c.
d.
Mimi is a resident citizen, how much is the donor's tax due?
101,400
131,400
305,400
336,600
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On February 13, he donated to 20,000 square meter parcel of land in Cavite to his
niece subject to the condition that she will graduate. The land was originally
acquired at a price of P3,000,000, has a zonal value as of this date of P3,500,000,
and an assessor’s fair value of P3,550,000.
On February 14, the next day, he transferred a diamond ring to his girlfriend. The
diamond ring is worth P2,300,000.
On April 8, Gavin's niece graduates from college. The parcel of land in Cavite has
increased both its zonal and assessed value by P200,000.
On August 22, Gavin gave 30,000 unlisted preference shares of Diamond Corporation
to his sister. Each share has a par value of P30 and a market value of P32.
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44. Gavin made the following donations to various persons and institutions during 2020:
Gavin is a resident and a citizen of the Philippines. All of the above donations have
complied with the requirements for validity.
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How much is the donor's tax payable for the transaction on April 8?
a. 0
b. 210,000
c. 213,000
d. 225,000
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45. Which of the following is not an excisable article?
a. Vape (vapor products)
b. Cigarettes
c. Cigars
d. Narcotics
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46. Which of the following most accurately provides the rule for excise taxes on goods
actually exported?
a. The BIR is not allowed to collect any excise taxes due on such goods.
b. Such goods are still subject to excise tax but will be subject to zero-rate of VAT
if paid for in acceptable foreign currency.
c. Pursuant to international conventions, the country of destination will pay the
Philippine government half of the excise taxes due on such article.
d. Excise tax will be paid but can be subsequently refunded or credited upon submission
of proof of actual exportation.
47. A transfer of real property in exchange for shares where transferor obtains control
of the corporate buyer who issued the shares is a transaction:
a. Exempt from income tax but is subject to VAT and DST.
b. Exempt from VAT but is subject to income tax and DST.
c. Exempt from DST but is subject to VAT and income tax.
d. Exempt from income tax, value-added tax, and documentary stamp tax.
48. Camilla wants to acquire more parcels of land for use on her upcoming resort project.
Andrea is planning to sell her idle land to Camilla. The land has a zonal value of
P4,000,000, an assessor’s fair value of P4,200,000, and an appraised value of
P4,350,000. Andrea was able to sell it to Camilla for P4,070,000. Camilla paid for
the parcel of land in full cash. They executed a Contract to Sell and Deed of Absolute
Sale to this effect.
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Suppose what was sold by Andrea is her principal residence, and Andrea was able to
use the entire proceeds to acquire a new principal residence in six months, how much
is the capital gains tax and documentary stamp tax due on the transaction?
a. CGT, 0; DST, 63,000
b. CGT, 0; DST, 0
c. CGT, 252,000; DST, 63,000
d. CGT, 252,000; DST, 0
49. The power to impose tax by the local government can only be exercised through _.
a. a valid ordinance as enacted by the Sanggunian
b. a valid proclamation as issued by the local chief executive (mayors, barangay
captains, etc.)
c. a valid publication as done by the local secretary in three consecutive weeks
d. a valid circular as issued by the local treasurer
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the protest on real property tax is denied by the Local Treasurer, an appeal must
made to _.
Court of Tax Appeals Division
Local Board of Assessment Appeals
Secretary of Finance
Commissioner of Internal Revenue
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51. If
be
a.
b.
c.
d.
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50. When does the local business tax accrue?
a. Evenly throughout the year
b. January 1
c. March 1
d. April 15
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52. Hondura Realty, a domestic corporation, sold a parcel of land with the following
details:
• The land has a Transfer Certificate of Title No. 109201.
• It is an agricultural land located in the municipality of Bamban in the province
of Tarlac.
• The area is 2,500 square meters.
• It was acquired in 2004 at a cost of P500,000.
• At the time of sale, it has a fair market value of P7,500,000. This is equivalent
to the prevailing market values enacted by the Sanggunian.
• The consideration for the sale is P6,700,000.
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How much is the local transfer tax from the sale?
a. 33,500
b. 37,500
c. 67,000
d. 75,000
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53. Failure to file a Tax Treaty Relief Application _.
a. invalidates once claim of tax treaty benefits
b. is a criminal tax offense punishable under the National Internal Revenue Code
c. may still allow a taxpayer to avail of the benefits of a tax treaty
d. is not subject to any fine or penalty
54. A barangay micro-business enterprise is exempt fromI. Income tax on its income derived from operations.
II.
Percentage tax on gross receipts derived from operations.
III.
Payment of the annual registration fee to the BIR.
IV.
The obligation to remit taxes withheld on compensation of their employees
a.
b.
c.
d.
I only
I and II
I, II, and III
1, II, 111, and IV
55. In order to qualify as a barangay micro-business enterprise, the total assets of the
enterprise _.
a. must not exceed P1,500,000
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b. must not exceed P2,000,000
c. must not exceed P2,500,000
d. must not exceed P3,000,000
56. A senior citizen can claim a 20% discount on all of the following fares, except _.
a. jeepney fare
b. LRT/MRT fare
c. shipping fare from Batangas to Mindoro
d. air fare from Tokyo to Manila
ie
w
57. While on the grocery, Aling Bebang, a senior citizen, purchased fresh vegetables and
fruits. On her way home, she dropped by the drugstore to purchase her maintenance
medicine for the treatment of arthritis. Which of the following purchases are exempt
from VAT?
a. Purchase of maintenance medicine only.
b. Purchase of fresh vegetables and fruits only.
c. Purchase of both maintenance medicine and fresh vegetables and fruits.
d. Neither purchase of both maintenance medicine nor fresh vegetables and fruits
ev
58. In order to avail of the incentives afforded to PEZA-registered entities, an applicant
must be _.
a. 100% owned by Filipinos
b. At least 75% owned by Filipinos
c. At least 60% owned by Filipinos
d. None of the above. There is no ownership requirement for PEZA-registered entities.
PA
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59. Statement I: A privilege store is not subject to VAT.
Statement II: If a store engages in any business activity during a feast that lasted
for one week, it shall be subject to VAT.
a. Only statement I is true
b. Only statement II is true
c. Both statements are true
d. Both statements are false
C
60. Gross receipts is the appropriate VAT base for all of the following, except _.
a. sale of services
b. lease of properties
c. sale of securities
d. importation
EO
61. Which of the following is not a transaction deemed sale?
a. Retirement from or cessation of business
b. Change of ownership of the business
c. Incorporation of a single proprietorship
d. Change of control of a corporation by the acquisition of the controlling interest
of such corporation by another stockholder
R
62. Lydia Mila is engaged in the sale of chicken in various forms. The following are
Lydia Mila's sales:
Live chickens
Fighting cocks
Fresh chicken meat
Cut chicken meat
Boiled chicken meat
Roasted chicken meat
Smoked chicken meat
Salted chicken meat
Chicken nuggets
Chicken cubes
Chicken hotdog
Total
How much are the VAT-exempt sales?
a. 8,720,000
b. 16,350,000
P 8,510,000
300,000
210,000
7,700,000
2,220,000
510,000
5,310,000
4,640,000
2,130,000
4,970,000
4,500,000
P 41,000,000
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MAY 2023 BATCH
TAXATION
c. 29,100,000
d. 29,400,000
63. In
_.
a.
b.
c.
d.
order to claim input VAT from purchases of services, the proper documentation is
VAT
VAT
VAT
VAT
invoice
official receipt
statement of account
delivery receipt
w
64. Which of the following rendition of services is subject to 12% Output VAT?
a. Laboratory services made by medical clinic to patients
b. Dental services by Dental clinic to patients
c. Check-up services by Pediatrician to patients
d. Accommodation services by hospital to patients
ie
65. Which of the following sale by a realtor in 2022 is exempted from output VAT?
a. Sale of commercial lot at a price of P1,000.000
b. Sale of industrial lot at a price of P500,00
c. Sale of residential lot at a price P1,500,000
d. None of the above
1, 2021
1, 2021
1, 2022
1, 2023
1, 2024
Total
PA
January
June
January
January
January
R
ev
66. Nipon is a VAT-registered online service provider. Due to the prevalence of online
services already offered by multinational technology companies, Nipon is now suffering
from substantial losses. Nipon decided to sell the land that it uses in its business
located in Cagayan de Oro at a price of P20,000,000. The schedule of payments is
broken down below:
P4,000,000
4,000,000
4,000,000
4,000,000
4,000,000
P 20,000,000
EO
C
How much is the output VAT to be recognized on January 1, 2021?
a. 0
b. 480,000
c. 1,200,000
d. 2,400,000
67. Milky Pine Corporation is a domestic corporation engaged in the manufacturing of milk
products. It had the following transactions for the quarter:
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Sold milk to retailers
Disposed a milk evaporator machine (Cost is P50,000,000,
proceeds are P60,000,000)
Distributed milk to its shareholders as part of their property
dividends
Transferred a milking machine to a creditor as payment of debt
VAT Exclusive
amounts
P 48,000,000
10,000,000
14,000,000
8,000,000
How much is output VAT for the taxable quarter?
a. 5,760,000
b. 9,600,000
c. 14,400,000
d. 15,600,000
68. PhilAir is a domestic corporation engaged in the transport of cargo and passengers.
The following are the routes that PhilAir flew and the corresponding amounts it
received for the rendering of such services:
Page 13 of 14 | Final Preboards
MAY 2023 BATCH
TAXATION
Route
Manila to Cebu
Cebu to Manila
Manila to Davao
Davao to Manila
Manila to Seoul
Seoul to Manila
Manila to Tokyo
Tokyo to Manila
Total
Amount
P 2,300,000
7,460,000
8,490,000
5,900,000
6,060,000
5,870,000
4,550,000
5,650,000
P 46,280,000
w
How much is PhilAir’s common carriers tax?
a. 0
b. 724,500
c. 1,070,100
d. 1,388,400
ie
69. The Business and Accounting College of Pines (BACP) is an educational institution
duly registered with the Department of Education and Commission on Higher Education.
During the quarter, it had the following receipts:
Amount
P 70,700,000
7,450,000
5,740,000
P 83,890,000
R
ev
Tuition fees from students
Lease payments by private concessionaires
Grants and donations from alumni
PA
All of the receipts were used by BACP for educational purposes. It was able to
establish a five-story library building and improve its science and computer
laboratories with the amount it has received.
C
If BACP is a non-stock non-profit educational institution, how much is BACP' output
VAT?
a. 0
b. 688,800
c. 894,000
d. 1,582,800
R
EO
70. Which of the following is not subject to amusement tax?
a. Palm Grove, a swimming resort
b. Turtles KTV, a karaoke hub
c. Happy Hour, a night club
d. Cockapitan, a cockpit
- END OF EXAMINATION -
Page 14 of 14 | Final Preboards
MAY 2023 BATCH
TAXATION
TAX TABLES
Over P2,000,000 but not over P8,000,000
Over P8,000,000
January 1, 2023 onwards:
Not over P250,000
Over P250,000 but not over P400,000
Over P400,000 but not over P800,000
Over P800,000 but not over P2,000,000
Over P2,000,000 but not over P8,000,000
R
EO
C
PA
R
Over P8,000,000
0%
15% of the excess over P250,000
P22,500 + 20% of the excess over
P400,000
P102,500 + 25% of the excess over
P800,000
P402,500 + 30% of the excess over
P2,000,000
P2,202,500 + 35% of the excess
over P8,000,000
w
Over P800,000 but not over P2,000,000
ie
Over P400,000 but not over P800,000
0%
20% of the excess over P250,000
P30,000 + 25% of the excess over
P400,000
P130,000 + 30% of the excess over
P800,000
P490,000 + 32% of the excess over
P2,000,000
P2,410,000 + 35% of the excess
over P8,000,000
ev
January 1, 2018 to December 31, 2022:
Not over P250,000
Over P250,000 but not over P400,000