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1. Under RA 9010 the following will be subject to EVAT starting January 1, 2003, except:
a. b. c. d. Professionals, actors, actresses, talent, singers, etc. Banks and non-bank financial intermediaries Services performed as professional athletes Cabarets, night clubs and racetracks
2. Export of Marikina shoes is subject to:
a. 12% VAT
b. 0% VAT c. Exempt d. Specific Tax 3. Assessment is necessary in the following cases, except: a. b. c. d. before the preliminary investigation of a fraudulent tax evasion case could prosper to fix the tax liability of a taxpayer establish a case for judicial action for issuance of warrant of distraint or levy
4. The prescriptive period for collection of taxes is: a. b. c. d. 10 years from discovery of omission to file return, falsity or fraud if there is no assessment 3 years from filing of return 5 years from release of assessment a and c are correct
5. Importation of automobiles is subject to: a. Graduated Ad valorem tax of 2% to 60% b. VAT of 12% c. Specific tax d. a and b e. Exempt 6. The manufacture and importation of the following for local consumption are subject to excise tax, except: a. b. c. d. alcohol products tobacco products cinematographic films mineral products
7. Domestic sale of bagoong is: a. exempt from VAT b. subject to 12% VAT if gross annual sales exceed P1.5M c. subject to 0% VAT d. subject to 3% percentage tax if exempt from VAT e. b and d are correct 8. The BIR commissioner may_________ payment of internal revenue tax when it appears to be unjustly or excessively assessed, or that the administrative and collection costs involved do not justify the collection thereof. a. b. c. d. compromise abate credit refund
9. No credit/refund of taxes shall be allowed unless the taxpayer: a. b. c. d. Files a written claim for credit/refund with the BIR within 2 years from payment Pays the tax under protest Appeals to the CTA Amends his tax return
10. Assessment is:
a. b. c. d.
A written notice of the tax due Based on facts and not presumed Demand for payment of the tax within a prescribed period of time All of the above
11. The following are required to keep books of accounts, except: a. b. c. d. Corporations and partnerships Persons engaged in trade or business in the Philippines Persons who earn passive income None of the above
12. Requirements in order that retirement benefits may be exempt from income tax: a. b. c. d. Must be paid to an employee who is at least 50 years old and has served his employer for at least 10 years Exemption from taxation of retirement benefit must be availed of only once The benefit must be received under an existing Collective Bargaining Agreement a and b only
13. For purposes of the donor’s tax, the following are considered strangers: a. Brother or sister, whether whole or half-blood b. Relatives by consanguinity in the collateral line within the 4th civil degree c. Relatives by affinity, except the spouse of the donor d. None of the above 14. The special deductions from the gross estate are the following, except: a. b. c. d. Judicial expenses in testate or intestate proceedings Standard deduction Family home up to P1,000,000 Medical Expenses within one year from the death of the decedent not exceeding P500,000
15. Funeral expenses that can be claimed as deduction from the gross estate should be: a. Actual amount incurred b. Not exceeding P200,000 c. 5% of the gross estate d. The lowest of the above figures 16. The usual modes of avoiding the occurrence of double taxation are: a. b. c. d. Reciprocal exemption either by law or treaty Tax credit for foreign taxes paid Deduction for foreign taxes paid All of the above
17. Jose is a law-abiding citizen who pays his real estate taxes promptly. Due to a series of typhoons and adverse economic conditions, an ordinance is passed by Quezon City granting a 50% discount for payment of unpaid real estate taxes for the preceding year and the condonation of all penalties on fines resulting from the late payment. Arguing that the ordinance rewards delinquent taxpayers and discriminates against prompt ones, Jose demands that he be refunded an amount equivalent to one-half of the real estate taxes he paid. The municipal attorney rendered an opinion that Jose cannot be reimbursed because the ordinance did not provide for such reimbursement. Jose files suit to declare the ordinance void on the ground that it is a class legislation. Will his suit prosper? a. The suit will prosper because the ordinance is discriminatory in character. b. The suit will prosper because the ordinance is not based on substantial distinction. c. The suit will not prosper because taxes are the lifeblood of the government and should be collected without unnecessary hindrance. d. The suit will not prosper because the ordinance is based on substantial distinction. Each set of taxes is a class by itself and the law would be open to attack only if all the taxpayers belonging to one class were not treated alike. e. None of the above 18. Which of the following statements are true? a. Resident Filipino citizens with income from foreign sources only are allowed personal and additional exemptions b. Non-resident aliens not engaged in trade/business in the Philippines are not allowed any personal exemptions
No. b. No. Citing Section 10. e. d. b. All of the above 23. c. d. None of the above. d. The contention is incorrect because taxes must be collected in order to support the government. Article VIII of the 1987 Constitution which provides that salaries of judges shall be fixed by law and that during their continuance in office their salary shall not be decreased. Non-resident aliens engaged in trade/business in the Philippines are allowed personal exemptions based on reciprocity d. The refusal of the mayor is unjustified because it is not within his power. What is the minimum compromise rate in cases of doubtful validity of assessment? a. 26. and other establishments. The periodic decrease in the value of a fixed asset due to wear and tear. Which of the following VAT transactions are not considered zero-rated? a. The contention is incorrect because deduction of withholding taxes is required by law. restaurants. The loss carried over is for a holding period not exceeding 12 months b. Is the contention of the judge correct? a. No. b. All of the above 19. 40% of the basic assessed tax 10% of the basic assessed tax No limitation P1. The refusal of the mayor is not justified because double taxation will generate more revenues. c. The contention is incorrect because taxes are enforced contributions.000. None of the above. restaurants. b. No. the municipal board proposed an ordinance imposing a sales tax equivalent to 5% of the amount paid for the purchase or consumption of liquor in stores. a judge of a Regional Trial Court questioned the deduction of withholding taxes from his salary since it results into a net deduction of his pay.000 24. d. c. obsolescence or inadequacy a. The refusal of the mayor is not justified because the impositions are of different nature and character. 22.c. c. Criminal tax fraud cases Withholding tax cases Delinquent accounts with duly approved schedule of payments All of the above 21. and other establishments selling liquor should pay a fixed annual fee of P20. No. d. No. c. seizure of real property to enforce payment of tax due: a. This is a summary administrative remedy. b. Barbaran municipality has an ordinance which requires that all stores. c. Export sales of goods Domestic sale of goods in the regular course of trade or business Foreign currency denominated sale Sale of gold to Bangko Sentral ng Pilipinas 25. c. The following cases may not be compromised: a. e. Levy Distraint Forfeiture Tax lien 3 . No.000. The following conditions shall be observed when there is a net capital loss carry over: a. The taxpayer should not be a corporation d. d. Is the refusal of the mayor justified? a. No. The amount of the loss should not exceed the income before exemptions in the year when the loss was sustained c. Subsequently. The refusal of the mayor is unjustified because double taxation is allowed in our jurisdiction. The municipal mayor refused to sign the ordinance on the ground that it would constitute double taxation. depletion depreciation capital loss special loss 20. b. The contention is not correct because deduction of withholding taxes is not a dimunition contemplated by the fundamental law. b. d.
Taxable to the extent of P180. d. b. P500 P1.000 plus 50% fraud surcharge.000. Metropolitan Trial Court 4 . he made a gross sales of P2. d. VAT tax effort to Gross National Product equals 4% d. Shirley was allowed to deduct P200. Either a or b 33. Tony has inadvertently omitted P100. What advice will you give Tony? a. He is liable for VAT registration fee of : a.000 and a net loss of P20. In 2004 Allan gave the following donations: a. P100. He is also exporting canned and preserved fruits to Japan. A taxpayer who believes that a tax ordinance is unconstitutional should appeal to: a. b. IN 2004. Splitting of donation b. Meanwhile. ask for refund Protest the assessment Any of the above 29. b. P500.27.000 Not taxable 31. c. Approval of the Secretary of Justice Approval of the BIR Commissioner Approval of the Secretary of Finance Approval of the President 35.000 Taxable to the extent of P20.000 bad debts written off in 2003. National Government Deficit to Gross Domestic Product in the previous year exceeds 1 ½ % c. Which of the following cannot be considered as tax avoidance? a.000 P1. BIR Commissioner Metropolitan Trial Court Court of Tax Appeals Secretary of Justice 32. and thereafter .000 for campaign expenses of a senatorial candidate c.000 to victims of calamities d. _____________ is necessary: a. Tony included the omitted P100. exclusive of charges and penalties. The ___________ has exclusive and original jurisdiction over all criminal offenses arising from violations of the National Internal Revenue Code or Tariff and Customs Code and other laws administered by the Bureau of Internal Revenue or the Bureau of Customs. she was able to recover the bad debts written off in full. Survivorship agreement c.000 to IBP Which of the above donations are subject to donor’s tax? 34.000 income in his 2005 Income Tax Return. c. In 2004. b. 2006: a. d. where the principal amount of taxes and fees. c. d. c. Upon discovery in 2005. b. Any of the following conditions should be met to enable the President to increase the VAT from 10% to 12% starting January 1.000 income in his 2004 Income Tax Return.000 to the Iglesia ni Kristo b.000 Taxable to the extent of P200. c.000. The bad debts recovery is: a. Before any civil or criminal action is filed by the BIR in court. Amend his 2004 Income Tax return to reflect the correct amount of income Pay the assessed tax plus surcharge. Tino is engaged in buying and selling of fresh fruits at the Q-Mart and Aranque Markets. a. d. claimed is one million pesos or more.000. BIR Commissioner b. VAT collection to Gross Domestic Product in the previous year exceeds 2 4/5% b.500 Exempt 30. where she had a net income before bad debts of P180. Holding period for capital asset transactions d. P300. None of the above 28. P200. the BIR issued an assessment for deficiency income tax for P100.
The fundamental principles of local taxation are: a. Doctrine of equitable benefit Doctrine of equitable recoupment Equitable tax benefit rule Cohan Rule 37. The reversal of the ruling is consistent with the lifeblood doctrine. 40. is: a. c. however. Could the BIR now assess ABC Printers for back taxes corresponding to the years before the new ruling? a. The following are considered taxes: a. Yes.000 per quarter his income tax return must be accompanied by: a. Yes. Regional Trial Court d. d. The principle that where a claim for refund/credit is filed beyond the prescriptive period. Audit certificate of an independent CPA Comparative Financial Statements Schedule of Taxes and Licenses Summary of Income payments 39. Resident foreign corporation c. Non-resident alien engaged in trade/business in the Phil. Resident Filipino citizen 41. d. Where the gross income of a taxpayer exceeds P150. b. b. d. d. e. Relying on this ruling. d. Another domestic corporation b. b. c. Gross receipts of carnivals Gross receipts of cinemahouses Professional basketball games Gross receipts of circus 43. Due to an uncertainty whether or not a new tax is applicable to printing companies. Separation pay of employees who voluntarily resigned Value of leasehold improvement constructed on the leased land Increase in market value of land None of the above e. The President b. BIR c. Salary of farm workers in the form of products raised in the farm.c. b. The reversal of the ruling does not result in grave injustice to the taxpayer. Court of Tax Appeals 36. c. ABC Printers submitted a legal query to the Bureau of Internal Revenue on that issue. d. The reversal of the ruling is not prejudicial to the taxpayer. c. Yes. None of the above. b. d. b. Toll License Penalty None of the above 44. it can still be applied against other taxes that may be due. The BIR issued a ruling that printing companies are not covered by the new law. c. c. CTA 5 . Public purpose Uniformity Principle Not to let the collection of taxes to private person All of the above 38. Subsequently. The reversal of the ruling is within the power of the BIR. except: a. the BIR reversed the ruling and issued a new one stating that the tax covers printing companies. b. The following are subject to amusement taxes: a. ABC Printers did not pay said tax. c. 42. d. The following income are not taxable. Cash dividends received from a domestic corporation are subject to final tax of 10% if received by: a. Yes. The power to tax may be delegated to: a.
d. b. Rest on substantial distinction Germane to the purpose of the law Not limited to existing conditions only All of the above 50. Seizure and forfeiture proceedings are within the exclusive jurisdiction of a. The BIR Commissioner can inquire into the bank deposit of the taxpayer in the following cases: a. Life insurance proceeds shall not be included in taxpayer’s gross income when: a. c. Gambling devices Live animals 51. e. To determine the gross estate in estate tax cases Compromise on the ground of financial incapacity Taxpayer executes a waiver of the Bank Secrecy Law All of the above 48. Weapons of war Insidious articles Narcotic Drugs. Due to complications. d. c. The following criteria need not be observed in the exercise of the flexible power of the President under the Tariff & Customs Code: a. b. SAY gave birth to twins. what should JB indicate in the ITR as his civil status: a. Unfortunately. b. Court of Tax Appeals Collector of Customs Regular courts Secretary of Finance 49. In preparing his Income Tax Return (ITR) for the year 2004. d. except: a. d. c. The following BIR actions on the protest of an assessment are tantamount to denial thereof: a. 2004. b. The following are prohibited importations. 2004. e. The amount does not qualify as income The recipient is always the beneficiary The life insurance policy always provides for exclusion The amount is paid upon the death of the insured None of the above 47. SAY died in the course of her delivery. JB got married to SAY last January 2004. Filing of collection case in court b. The BIR Commissioner is empowered to: a. On November 30. b. b. All of the above 52. Issuance of warrant of distraint/levy c. Obtain information. c. Interpret tax laws and decide tax cases b. b. a and b only 45. e. d.d. National security Welfare of the people Jurisdiction of the Customs Commissioner National Economy 6 . All of the above 46. Inaction of the BIR Commissioner within 180 days from submission of supporting documents by the taxpayer d. d. Classification to be valid must: a. The equal protection clause is subject to reasonable classification. however. c. d. summon and examine witnesses c. c. Collect national internal revenue taxes d. c. Single Married with 2 dependents Head of the family with 1 dependent Head of the family with 2 dependents None of the above 53. one of the twins also died on December 15.
b. d. c. surcharges or fees collected by the BIR as a result of the information given P 1. The following non-resident aliens can be subject to 15% income tax on income derived from sources within the Philippines. if employee resigned at the age of 60 d. 10% of revenues. c. c. a. Compensation income Donation Indirect dividend Either a or b 57. c. employed by regional area/operating headquarters of multinational companies employed by OBU employed by petroleum service contractor and subcontractor all of the above 60. Philippine Income Tax Value Added Tax Transfer Taxes All of the above 61. b. b. b. Personal articles Articles for repair Articles for public exposition/exhibits All of the above 59. d.000 a or b whichever is lower a or b whichever is higher 58. 63. a. specific tax general professional partnership ordinary business partnership estates and trusts all of the above 7 . Cancellation of debt of employee by his employer is taxable as a. Taxable income of mother Subject to donor’s tax Exempt from tax None of the above 55. Dumping duties Marking duties Discriminatory duties None of the above 56. c. special tax b. all of the above 62. if employee voluntarily resigned c. d. a. Separation pay is taxable. d. b. if separation is due to death. c. d. The following are special customs duties. c. sickness or injury of employee b. d. Monthly support regularly given by an unmarried daughter to her aged mother. Which of the following taxes are not deductible from gross income: a. local tax c.54. The following are taxed like corporation a. d. b.000. except: a. b. The following are duty-free articles: a. Informer’s reward is equal to a. d. VAT is a. b. c. if the employer closed shop e.
True. True. it is exempt if what is sold is a residential unit a and b are correct 69. b and c are incorrect 8 . c. e. none of the above 64. The Bicameral Conference Committee cannot make unauthorized insertions on the Senate version of the bill d. Why is the Fringe Benefits Tax collectible from the employer and not from the employee? a. required to register with the BIR but exempt from the payment of registration fee c. when there is a prejudicial question when double jeopardy is clearly apparent when charges are manifestly false and motivated by lust for vengeance when the court has no jurisdiction over the offense all of the above 68. a. False. required to pay registration fee d. The MCIT is equal to 2% of the gross income of the corporation b. Sale of real estate is subject to VAT a. c. True b. b. The MCIT is not computed quarterly but on an annual basis c. a. d. except: a. b. e. the Supreme Court held that: a. False.000 per unit. b. The taxpayer should pay the MCIT or the regular income tax whichever is higher. The MCIT payments can be carried over for the next 3 years immediately following such payment d. A taxpayer with gross annual sales not exceeding P100. fringe benefits tax common carrier’s tax caterer’s tax percentage tax on banks and finance companies b and c only 65. c. this is subject to 0% VAT. only if the total gross annual rentals received exceed P 1. b. d. In ruling on the constitutionality of the EVAT. d. False. d. Publicly held corporations Insurance companies Banks and other non-bank financial intermediaries None of the above 66. Which of the following statements is wrong? a. The following taxes have been replaced by VAT per RA 9337 a. If monthly rental income of a residential unit exceeds P 10. c. Valuation of benefits is easier at the level of the employer Collection of FBT is ensured because it is withheld at source The employee does not have the means to pay a and b are correct 70. False. A revenue bill shall originate exclusively in the House of Representatives but the Senate may adopt its own version b. 000 is exempt from payment of business tax and registration requirements. d. The requirement of three separate readings on separate days cannot be dispensed with c. regressive tax e. b and c are correct 71. if made in the regular course of trade or business False. without any further condition. b. the same shall be subject to 12% VAT. it is exempt if the real estate is classified as capital asset False. c. The following are not subject to the improperly accumulated earnings tax. True. The preliminary investigation of a fraudulent tax evasion case may be enjoined in the following cases. this is exempt from VAT under RA 9337 67. 72. d. a. b.5M c.d.
who became a widow during the taxable year and supporting her mother and one mentally retarded illegitimate 25 year-old child? a. File a motion for injunction with the Court of Tax Appeals on the ground that such collection will jeopardize the interest of the taxpayer or the government. b. e. d. While the appeal is pending. d. barter or exchange of goods and services and transactions deemed sale. 000 9 . A. personal tax national tax excise tax direct tax progressive tax 80. c. Granting arguendo that the BIR can legally levy on the properties.000 P 5. professional basketball games boxing exhibitions billiards bowling c and d only 74.73. b. Income tax is not a a. 000 P 100. taxicab operators common carriers transporting cargoes tourist buses motor tricycles 75. None of the above 78.000 d. Additional exemption for each dependent child per RA 9504 a. except: a.000 81. P 75.000 c. d. c.000 P 550. c. VAT percentage tax specific tax advalorem tax exempt 76. b. A tax imposed at every stage of distribution process on the sale. a. b. c. the BIR served a warrant of levy on the real properties of Mario to enforce the collection of the disputed tax. b.000 79. how much is the total personal and additional exemption of Mrs. 000 P 40. b. c. 000 P 48. The manufacture of casino rubbing alcohol is subject to: a. b. P 10. the allowable deduction for medical expenses of a resident decedent shall not exceed : a. Secure a temporary restraining order before the Supreme Court. as well as importation of goods and services. P 9. c. c. d. d. The following are exempt from amusement tax: a. what could Mario do to stop the process? a. d. Appeal the BIR’s action to the Court of Appeals b. d. Per RA 9504. P 8. P 25.000 b. Dispute BIR’s levy on the properties before the Court of Tax Appeals c. Under RA8424. Mario disputed a deficiency tax assessment and upon receipt of an adverse decision by the Commissioner of Internal Revenue. The following are subject to 3% common carrier’s tax.000 P 500. P 50. e. d. privilege tax percentage tax VAT excise tax 77. filed an appeal with the Court of Tax Appeals. e. e.
d. The following are the requisites for income to be taxable. c. b. in addition to the itemized deductions c. The following fringe benefits are not taxable. Tax evasion Tax avoidance Tax exemption Shifting All of the above 91. d. b. The following is not a taxable income of a resident Filipino citizen: a. d. proceeds of life insurance policy payable to an irrevocable beneficiary revocable transfers transfer in contemplation of death claims against insolvent persons none of the above 84. d. e. c. There must be gain or profit The gain must be received or realized The gain must not be excluded by law or treaty from taxation The income must exceed the personal and additional exemptions of the taxpayer None of the above 87. d. c. c. in lieu of all itemized deductions 86. b. except: a. 88. b. Which of the following is a qualified dependent for additional exemption? a. income from an illegal business income from a business abroad income from casino winnings from lotto none of the above 83. Resident alien on income derived within the Philippines. the President the Congress Judiciary BIR All of the above 85. power of taxation is exercised by a. d. b.82. e.000 from the gross estate is: a. e. e. c. e. c. optional b. e. The standard deduction of P 1. c. Which of the following are excluded from the gross estate? a. b. e. d. Basically. b. c. Who among the following are NOT required to file an income tax return? a. Non-resident alien engaged in trade or business An individual whose sole income has been subjected to final withholding tax. d. not available to resident decedents d. except: 10 .000. Filipino citizen with business income from the Philippines. Philippine Health Insurance Corporation Philippine National Oil Company University of the Philippines PAGCOR b and d 89. b. Which escape from taxation does not result in loss of revenue to the government? a. Which of the following are NOT exempt from income tax? a. 45 years old mentally retarded son an illegitimate child legally adopted child all of the above none of the above 90.
b. e. Sale. barter. exchange or other disposition of shares of stocks which are traded in the local stock exchange is subject to: a. b.000 sometime in 1980. Under the “Life-Blood doctrine”.a. whichever is higher. c. The debt must be actually ascertained to be worthless and uncollectible during the taxable year. c. Which of the following is not a source of tax laws? a. none of the above 94. b. The debt must be charged off during the taxable year. 7. Citizens and resident aliens whose income is purely compensation income. c. 92. 95. c. Taxable compensation income and subject to withholding tax. Domeng bought a parcel of residential land for P 1. Contributions of the employer for the benefit of the employee to retirement. dues and other expenses borne by the employer in social or athletic clubs or other similar organizations. d.000. None of the above 93. b. d. c. capital gains tax of 5% and 10% of capital gain b. d. e. Both statements are false. Administrative regulations and rulings or opinions of the Secretary of Budget and Management. The first statement is true while the second statement is false d. The transaction is subject to 6% capital gains tax. Administrative regulations and rulings or opinions of the Secretary of Finance. The following are requisites for the deductibility of bad debts. a. d. There must be a valid and subsisting debt. percentage tax of ½ of 1% of selling price c. Administrative regulations and rulings or opinions of the Secretary of Justice.000 on October 15. b. b. Tips and gratuities paid directly to an employee by a customer and not reported to the employer a. 100. c. Resident aliens Non resident aliens engaged in trade or business in the Philippines. 11 . 96. insurance and hospitalization benefits. c.5% based on the gross profit. a. 97. b. the main source of revenue of the government is taxes. d. Membership fees. De minimis benefits. Fringe benefits which are authorized and exempted from tax under special laws. He sold the same to Norbie for P 10. What is the nature of tax laws? a. b and c are correct. not political penal civil both a and b both a and c 98. It must be evidenced by a closed and completed transaction. b. it is subject to VAT if the sale is in the regular course of trade or business. d. Not taxable. d. The first statement is false while the second statement is true. classified as capital asset is: a. True False. 10% VAT d. c. 99. 6% based on the gross selling price or zonal value. The final tax on capital gains from sale of real property. except: a.000. e. Resident foreign corporations. whether granted under a collective bargaining agreement or not. False. Both statements are true. Benefits given to rank and file employees. b. Who may not avail of the itemized deductions from gross income? a. Administrative regulations and rulings or opinions of the Commissioner of Internal Revenue. if Domeng is engaged in the real estate business. The power to tax includes the power to destroy in all cases. 2000. 20% based on the gross selling price or current fair market value whichever is higher. 6% of the purchase price or the assessed value whichever is higher.
Payment signifies an act of compliance by the taxpayer. c. Tax exemptions are liberally construed in favor of the government. c. The nature of the state’s power to tax is two-fold. b. 109. The power to tax involves the power to destroy. b. 107. d. Congress passed a law allowing the payment of taxes in kind/services.c. d. the following statements are correct except: a. b. a. Taxpayer must receive personal benefit for the payment of tax. b. The following propositions are erroneous exept: Public purpose includes indirect public advantage. c. Which of the following judicial pronouncements is most recent: a. The best evidence obtainable under Section 6 (B) of the NIRC does not include mere photocopies of records/documents. The power to tax is not unlimited. This violates the principle of: a. The secondary or non-revenue purposes of taxation include the following except: As an implement of the police power of the State To encourage the growth of local industries. a. The BIR should be given the necessary discretion to avail itself of the most expeditious way to collect taxes. Taxes are based on one’s ability to pay. b. Legislative power to tax involves the promulgation of rules. The oft-cited doctrine that taxes are lifeblood of the government does not favor one of the following rules: a. d. Taxes are obligations created by law. 104. 105. To reduce social inequality To protect our local industry against unfair foreign competition. 12 . c. In our jurisdiction. a. Taxes are not enforced proportional contributions. Taxes are not subject to set off Taxes should be collected without unnecessary hindrance Tax exemptions should be sparingly granted Doctrine of Equitable Recoupment 103. c. b. 106. said Chief Justice Marshall of the US Supreme Court. c. This should be construed to mean that: a. d. Taxes are always based on the amount received by the taxpayer. b. 108. The power to tax includes the power to regulate even to the extent of prohibition or destruction. d. b. Which of the following statements is true: a. c. The act of assessing and collecting taxes is administrative in character. d. The power of taxation is unlimited The power to tax may be used solely for the purpose of raising revenues. c. Taxes cannot be imposed by the executive department not by the courts. Subject to donor’s tax. The power to tax is superior to all other forms of the government. Economic efficiency Fiscal adequacy Theoretical justice Administrative feasibility Which of the following statements may not be untenable: a. The power to tax is inherent because it requires a set of rules. b. 101. d. c. Symbiotic relationship theory is different from benefits received principle. Upon taxation depends the Government’s ability to serve the people for whose benefit taxes are collected. Taxable compensation income but not subject to withholding tax. d. 110. d. c. d. The rule of taxation should not be proportionate. Taxes are levied by authority of the law. b. No credit/refund of taxes shall be allowed unless the taxpayer: Files a written claim for credit/refund with the BIR within 2 years from payment Pays the tax under protest Appeals to the CTA Amends his tax return 102.
1998. b. d. Gross estate includes the following items except: Transfer for insufficient consideration Donations mortis causa Revocable transfers Transfer under special power of appointment. b. Fringe benefit is subject to 32% final tax effective January 1. b.d. Pineda. 117. This pronouncement was cite in several decisions of the Supreme Court except in the case of: a. 111. 2000. e. Commissioner vs. d. 116. The former may be availed of only by corporate taxpayers. None of the above 112. 113. 114. c. Allowable deduction c. c. a. a. and devises Gains from redemption of shares of stock Fringe benefit tax shall be paid by the employer because: The employee received the benefit net of tax The Tax Code expressly so states The employer relieves the employee of the burden to pay the tax The employer is the agent of the employee for the payment thereof. b. 115. 21 SCRA 105 b. The following items are taxable except: Illegal gains Tax refund involving deductible tax Tax refund involving non-deductible tax Cash dividend Annuities Gross income means all income derived from whatever source. 118. b. b. a. 119. Which of the following statements is not correct? Interest on government securities is not tax exempt effective January 1. d. Donation to stranger is subject to 30% of the net gift. Which of the following prevents the occurrence of double taxation? a. d. Pensions Prizes and winnings Rents Stock dividends Exclusions from gross income under the Tax Code include the following except: Veterans benefits Compensation for injuries and sickness Gifts. The former may be found in Section 34. a. Allowable deductions are distinguished from personal exemptions in that: a. c. b. b. a. c. d. All of the above. The former applies to corporate and individual taxpayers engaged in business or are practicing their profession. Vanishing deduction b. d. d. Fernandez. c. while the latter is granted under Section 35. Stock dividend is tax exempt. bequests. a. whereas the latter covers only natural persons. Stranger includes: Second cousin Half brother Lineal descendant Collateral relative within the fourth civil degree of relationship Taxes are the lifeblood of the government and their prompt and certain availability is an imperious need. c. Exemption method d. Premium on life insurance may be taxable to the employee. Vera vs. whereas the latter may apply to individual taxpayers. 120. c. c. The former is a privilege while the latter is a matter of right. d. 89 SCRA 199 13 . including the following items except: a.
d. 14 . b. 95 SCRA 46 Roxas vs. provided that they are local taxes. because taxes are needed to carry out the legitimate objects of the government. d. BIR can still present evidence to prove assessment. 86 SCRA 270 The symbiotic relationship theory as enunciated in the case of CIR vs. d. CIR. d. May the courts enjoin the collection of revenue taxes? a. Philex Mining vs. e. 129. No. 126. The power to tax is plenary and comprehensive. because taxation also involves the power to carry out the legitimate objects of government. except if the collection will jeopardize the interest of the taxpayer. because the power to tax and police power have some similar objectives. set-off said claim against his other tax liabilities? a. 128. is an amplification of: a. Algue. Local ordinance imposing business tax. provided that the claim is set-off against other national internal revenue tax. d.. 124. Srictissimi juris may be applied in the construction and interpretation of tax laws except: a. Gomez vs. No. Yes. Palomar. Yes. Pao. d. No. b. 23 SCRA 276 Villegas vs. c. the government is not estopped by the errors or mistakes committed by its agents or officers. 158 SCRA 9. provided that they are custom duties. provided that the claim is duly substantiated by receipts. b. Taxes are the sinews of the state. except if the taxpayer is financially incapable. b. the power of taxation and the power of eminent domain are co-equal and inherent powers of government. provided that the tax law provides for prescriptive periods. Inc. d. e. Yes. Taxes are not subject to set-off because: a. Provision of the NIRC granting tax credit. Yes. c. 122. The power to tax is supreme and unlimited. Special law lowering tax rate. 127. No. b. Araneta. provided that the claim is set-off against other unpaid income tax. c. b. b. because taxes are the lifeblood of the government. Yes. Yes. c. 125.” This has been metaphorically mentioned to justify a settled rule as laid down in the case of: a. Yes. d. c. Taxes are the lifeblood of the government. CTA. because taxes may be imposed to regulate. c. Yes. Yes.c. Manila. Yes. Settled is the rule that in tax matters. The police power. The state may still collect prescribed taxes. c. 25 SCRA 827 Punzalan vs. provided that they are income taxes. Ability to pay principle Progressive system of taxation Lifeblood doctrine Benefit-protection theory 123. c. b. Yes. e. Yes. “Lest the collector kill the hen that lays the golden egg. because the police power of the state includes the power to regulate Yes. b. May a tax be validly imposed in the exercise of the police power and not of the power to tax? a. Local ordinance granting tax amnesty. 98 SCRA 148 d. Taxes are enforced charges Taxes should be collected without unnecessary hindrance Taxes are not ordinary obligations. May the collection of taxes be barred by prescription? a. 294 SCRA 678 121. This should be construed to mean that: a. d. Lutz vs. May a taxpayer who has claim for VAT input credit or refund. c. None of the above. provided that they are imposed by special laws. provided that the claimant is a VAT-registered taxpayer.
e. Completed contract basis d. c. It is received without restriction as to its disposition. Taxable rent income includes the following items except: a. d. d. Deduction from foreign taxes paid d. It arises from illegal transaction. sardines. Accrual basis e. c. Outright method b. d. d.5% 4% 2% 8% 138. because carabao is a capital expenditure c. b. To ensure collection of taxes. Tax evasion is: a. 131. Specific tax VAT Percentage tax Excise tax 136. How is compensation paid in promissory note treated for income tax purpose? a. Cash basis 134. a and c only 139. True b. False. To compel taxpayers to report their income To prevent tax evasion. Under RA 9337. What is the purpose of the doctrine of constructive receipt of income? a. Cost of carabao used in farming is deductible as any ordinary expense. b. except: 15 . c. Value of permanent improvement Premiums paid on the insurance of the leased premises Royalties Interest on bond issued by the lessor 133. refined sugar. Tax applicable to certain specified goods or articles manufactured or purchased in the Philippines for domestic sale or consumption. The following are qualified dependents of a head of the family. It is decreed by the court The claimant dies The claimant donates the same 132. Spread-out method c. b. Subject to final tax It is taxed at gross amount Taxable to the amount of the fair market value of the promissory note It is deductible from gross compensation income None of the above 135. Any amount received under claim of right is taxable if: a. False. Means of escape from tax liability outside what is legal and permissible b. b. mackerel. a. c. b. d. and packed noodle-based instant meals at the rate of: a. To prevent the taxpayer on the cash basis from postponing the actual receipt of taxable income. a presumptive input tax credit is allowed to processors/manufacturers of milk. b. e. a. Both b and c 137. e.130. None of the above. d. because carabao is subject to depreciation d. c. c. 1. cooking oil. Income from long-term contracts may not be reported under one of the following methods: a. Tax saving device within the means sanctioned by law c.
Culture and Sports Technical Education and Skills Development Authority 144. e. d. living expenses Wagering losses Kickbacks 141. b. royalty or fee 143. c. Determine which of the following items are taxable: a.000 for his hospitalization b. d. Employer’s contribution to pension trust Personal. d. Educational services rendered by private educational institutions are exempt from VAT if duly accredited by the following. JR was a passenger of an airline that crashed. c. Taxes are imposed on persons and property within the territorial jurisdiction of a State. Capital Receipts Realized profit None of the above 142. b. c. d. Either or both parents Brother/Sister of whole or half-blood Senior citizen Grandchildren Which of the following is deductible for income tax purposes: a. 146. b. lessee or licensee upon payment of compensation. d. an agreement was reached under the terms of which JR was paid some amounts. Following negotiations with the airline and its insurer. Importer of goods/articles previously subjected to VAT Purchaser of domestic goods upon consummation of the sale Exporter of goods and services not registered under the VAT system Purchaser of services. b. c. For tax purposes. d. 145. Dividends received by a domestic corporation from another domestic corporation. e. income is synonymous to: a. He survived the accident but sustained serious physical injuries which required hospitalization for 3 months. d. Taxes are pecuniary in nature. rental. except: a. Interest on deposits with BPI Family Bank e. Payments made in the year of sale in addition to the down payment Mortgage on the real property sold not exceeding the cost thereof Evidence of indebtedness issued by the purchaser to the seller at the time of sale Down payment only made at the time of sale. which of the following statements may be erroneous: a. In our jurisdiction. except: a. P500. None of the above 148. c. the term “initial payments” shall a. c. Determine which of the following is (are) included in the preparation of annual income tax returns: a. 140. Which of the following amounts constitute taxable income? a. c. b. d. The following can avail of the Input Tax Credit. Proceeds of life insurance received by a child as irrevocable beneficiary b. Securities and Exchange Commission Commission on Higher Education Department of Education. Taxes are enforced charges and contributions. b. include: For VAT purposes in connection with deferred payment sale of real property. b. family. P250. d.a. Taxes are levied by the executive branch of the government. Taxes are assessed according to a reasonable rule of apportionment.000 as moral damages 16 . b. 13th month pay and de minimis benefits c. Income from jueteng Gain arising from expropriation of property Taxes paid and subsequently refunded Recovery of bad debts previously charged off All of the above 147. c.
d. c. it would collect through summary remedies. Due to complications. d. the BIR sent a Final Notice before Seizure to the taxpayer. Instead of resolving the request for reconsideration. Tuition fees Laboratory fees Rentals from canteen concessionaires Interest from money-market placements of the tuition fees Donation of a lot and building by school alumni 154. JR received from his employer the amount of P200. An individual client not engaged in realty business paid in full the P50. was a top executive of a US company in the Philippines until he retired in 1999. one of the twins also died on December 15. Shares of stock in Disney World in Florida None of the above 155. File an injunction before the Regional Trial Court Appeal to the Court of Tax Appeals Appeal to the Court of Appeals Proceed with Certiorari before the Supreme Court 152. In preparing his Income Tax Return (ITR) for the year 2005. d. he decided to spend the rest of his life in the country.000 e.2 Million from the BIR demanding payment within 10 days. The client-transferor is not subject to final capital gains tax d.000 and P5. Single Married Head of the family Widower None of the above 150. Unfortunately. The client-transferor is subject to final capital gains tax based on P50. he suffered a heart attack and died. what should MAR indicate in the ITR as his civil status? a. b. Florida. after issuance of the final assessment notice to the taxpayer. c. The Church and a convent occupy the southern side and middle part. Frank Sinatra. b. d. Which of the following assets shall not be included in taxable gross estate in the Philippines? a.000 c. Delinquent accounts b. otherwise. b. d. He came to like the Philippines so much that following his retirement. b. The southeastern side by some commercial establishments. Cases under administrative protest.000 attorney’s fees of his counsel in lot which he bought in 1990 for P5. None of the above 151. c.c. Bank Deposits with Citibank Makati and Citibank Orlando. e. Shares of stock in San Miguel Corporation and PLDT. c. non-profit educational institution run by the Archdiocese of BP City. e. Which of the following is correct? a. The Church may claim tax exemption on the entire land. c. Florida A condominium unit in Makati Shares of stock in the Philippine subsidiary of the US Company where he worked. The tax is imposable on the northwestern side which is idle or unoccupied. Which of these is correct? a.000. Criminal tax fraud cases d. in particular the northwestern side. Which of the following cases may not be compromised: a. however.000 for loss of income during the period of his treatment and recuperation d. SALLY gave birth to twins. XYZ Colleges is a non-stock. On November 30.000 and which has a fair market value of P60. an American Citizen. In the spring of 2004. c. The Roman Catholic Church owns a 2-hectare lot in a town in Tarlac province. The exemption covers only the southern side and middle part occupied by the Church and a convent and the eastern side by a school run by the church. e. Which of the following remedies can the taxpayer avail? a. 149. A taxpayer received a tax deficiency assessment of P1.000 representing the cash equivalent of his earned vacation and sick leaves. P300. while the rest of the property. The client-transferor is subject to income tax for the difference between P50. which are still pending. b. He applied for and was granted a permanent resident status the following year. The client-transferor is subject to final capital gains tax based on P60. None of the above 17 . The entire property is taxable for real property taxation 153. 2005. while vacationing in Orlando. SALLY died in the course of her delivery. Which of the following item(s) is included in its Income Tax Return? a. USA. f.000 b. is idle or unoccupied. 2005. MAR got married to SALLY last January 2005. The taxpayer requested for reconsideration stating the grounds therefore.
Which of the following cases is pre-assessment notice required? a. factory site b. To pre-empt the lapse of prescriptive period within which the government can assess and/or collect in court without assessment. b. d. c. you do not pay – a. For casual sale of real property. d. b. d. Waiver of prescriptive period to last until the completion of investigation is valid. Public power – generating company 18 . acceptance by the state need not observe the level of authority of the officials empowered to accept. Waiver is a taxpayer’s concession to the state. c. irregularity or mistake Verification of compliance with withholding tax laws When taxpayers requests reinvestigation Verification of capital gains tax liabilities 158. b. Waiver being unilateral. 161. 159. the local government of one of these is prohibited to collect – a. e. In local business taxes. Waiver being unilateral. thus. c. The waiver is a waiver by the taxpayer of his right to invoke the defense of prescription. b. d. One of these is not a type of local tax and other impositions – a. places thru which sales trucks pass d. c. none of the above 165. Local water district b. e. One of these is not the correct period within which internal revenue taxes shall be assessed: a. Income tax Transfer taxes (donor or estate) Value Added Tax Privilege tax 162. c. d. and when accepted. the taxpayer need not be notified. c and d only 160. Principal office c. d. One of these is not an exception to the rule that for income tax purposes. b. within 10 years from date of discovery of failure to file return If return is false or fraudulent. Capital gains tax Documentary stamp tax Local transfer tax Income tax 164. it must be construed strictly against the state c. a. b. b. the books and records of a taxpayer shall be subject to examination and inspection only once in a taxable year: a.156. c. d. One of these has no time limit within which to assess: a. the state need not express its acceptance. The government may issue jeopardy assessment The government may require waiver of prescriptive period The waiver by the taxpayer must be accepted by the commissioner or his duly authorized deputy. 157. Special classes of real property do not include – a. Municipal taxes on business & occupations Municipal fees & service charges Real property taxes Taxes on gross receipts of transportation businesses 163. b. When the taxpayer is outside the Philippines When there is fraud. Within 3 days after the last day prescribed by law for the filing of the return Within 3 years from the date the return was filed If no return was filed. c. within 10 years from date of discovery of the falsity or fraud. In a discrepancy between the tax withheld and the amount actually remitted by the withholding agent When the excise tax due has not been paid Transfer by an exempt person of articles to non-exempt person When the commissioner or his duly authorized representative finds that proper tax should be assessed. d. One of these is true: a. b.
D 79. A 4. C 165. B 40. A 6. B 111. C 14. C 149. D 123. C 55.A 101. A 8. D 119. E 135. B 35. B 153. B 75. A 73. C 109. E 98. C 122. D 21. B 49. A 139. D 18. A 133. B 26. D 36. C 154. D 48. D 83. A 30. D 103. D 91. E 65. E 89. A 27. E 128. C 92. B 150. A 102. D 90.D 11. C 131. C 118. C 143. A 24. B 124. C 77. D 136. D 47. C 31. E 74. C 130. A 95. D 60. D 78. D 81. B 63. E 160. D 87. E 42. D 32. F 155 A 156. D 17. D 164. A 82. B 138. B 37. C 29. B 72. D 66. Special assessment d. B 117. D 148. B 132. D 50. D 23. A 10 . D 88. D 104. D 41. A 145. E 147. A 144. C 7. C 64.A 108. C 105. C 58. D 114. A 141. B 71. D 34. B 3. A 125. C 113. A 120. D 28. B 166. A 157. C 93. D 163. C 22. D 96. C 54. D 140. B 25. E 51. A 15. E 148. D 116. C 59. D 16. C 68.C 127. Special education fund b. D 19 . D 44. B 126. C 151. C 107. C 112. C 99. B 53. D 5. B 9. B 86. B 85. D 159. A 39. B 94. B 100 . D 106. B 70. D 56. D 57. C 158. C 80. D 76. A 137. A 84. D 13. B 142. D 33. D 97. D 12. E 134. D 2. D 46. Ad valorem tax on idle land c. D 162. B 43. B 67. D 61. D 69. Which is not a levy on real property – a. D 45. B 62. D 38. B 20. B 152. Hospitals d. B 110. D 19. D 115. Schools 166. D 52.c. D 129. C 121. B 161. Transfer tax on sale or transfer ANSWER KEY TAXATION 1.
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