FREQUENTLY ASKED ARTICLES/TOPICS IN TAXATION LAW

BAR EXAMINATION QUESTION AND SUGGESTED ANSWER IN TAXATION LAW

QUESTIONS TAKEN FROM INCOME TAX

Gross Income
(2014) Q. 9 Compensation for services, Sec 32, NIRC
(2014) Q. 11 Gross income - Compensation for labor or personal services performed outside
Philippines, Sec. 42 (C), NIRC
(2014) Q. 24-A Gross income means all income derived from whatever source, Sec. 32 NIRC
(2015) Q.2-B Exclusion from gross income Re: Prizes and Awards in Sports Competition
(2014) Q.12 MCQ Example of those not to be included in the deductions from gross income
(2014) Q. 26 Deduction on Gross Income (bribes, kickback and other similar payments)
(2018) Q. 3.A Retirement benefits received under Retirement Pay Law, excluded in
employee’s gross income, not taxable.
(2018) 4. B No deduction from gross income is allowed on contributions or gifts actually paid or
made within the taxable year to educational purpose not exclusively for public purpose,
Sec. 34 (H) (1)
(2017) Q. 16. Exemption of non-stock, non-profit educational institution from taxability of their income
2017) Q. 3. Claim for refund of unutilized overpayments may be carried-over by the taxpayer. (Sec.
76, NIRC)

Allowable Deductions
(2014)Q. 24-B Deductions from Gross Income – Expenses Sec. 34 (A), NIRC
(2014)Q. 3 Charitable and Other Contribution, Sec 34 (H) (1)
Private Inurement Doctrine
(2017) Q. 7. Business expenses
(2017) Q. 7. B. Reimbursement.
(2017) Q. 11. Separation pay not taxable.
(2015) Q.2-C Personal Exemption and Deduction, Sec. 34 (C) (1) NIRC
(2015) Q.15 Gross Income, Optional Standard Deductions (OSD)
Tax on Individual (sources of taxable income)

(2015) Q. #2-A, 3-A, 3-B Whether or not the income within and without of a resident citizen is taxable.
 Sources of taxable income and tax base of individual tax payers &
requirements for filing of ITR. Section 23, 24, 25, and 51, NIRC.
(2016) Q. 20 An alien who re-acquire Philippine Citizenship, his income classification would
be a “resident citizen”
(2018) Q. 2 (A-E) A resident citizen, resident alien, non-resident alien, non-resident citizens.
(2015) Q. #5-B&C Tax on Non-resident alien individual, Sec. 25, NIRC.
(2019) Q. 13.
(2015) Q. #5-A Rate of Tax on Certain Passive Income RE: Cash and/or Property Dividends
Sec.24 (2), NIRC.
2019. Q. 13. Special Stipend.

Tax on Corporation
(2015) Q. #5-D Rates of Income tax on Domestic Corporation - Intercorporate dividends,
Sec. 27 (D) (4), NIRC
(2015) Q. #5-E Rates of Income Tax on foreign Corporation
Income receive by a non-resident foreign corporation- Intercorporate dividends,
Sec. 28 (5) (B), NIRC
(2016) Q. 5 sources of taxable income of a Foreign Corporation (selling airplane tickets
through its general agent in the Philippines.
(2018) 6. A Improperly Accumulated Earnings Tax (IAET) covers only domestic-corporation. A
branch of a resident foreign corporation is not subject to (IAET). NIRC; 29 (A).
Q. 6. B. Tax on Branch Profits remittances “any profit remitted by a branch to its head office
shall be subject to a tax of 15%”… - imposition only on actual remittance, Sec. 28 (A)
(5), NIRC.
Q. 9. B No gain or loss shall be recognized if in pursuance of a plan of merger or
consolidation: a corporation which is a party to a merger or consolidation, exchanges
property solely for stock in a corporation, which is a party to the merger or
consolidation.

Minimum Corporate Income Tax

(2015) Q. #14-B Difference between Regular Corporate Income Tax and the Minimum
Corporate Income Tax
(2019) Q.9 Sale of machineries and equipment subject to normal corporation income tax.
Ordinary vs .capital assets.
Personal Exemption for Individual Taxpayer
(2014) Q. 27-A Personal exemptions on income tax
(2015) Q. #4-A Personal exemption, Sec. 35, NIRC
(2014) Q. 27-B Additional Exemption for dependents
(2015) Q. #4B&C Additional exemptions for dependents, Sec 35 {B}, NIRC
(2014) Q. 27-C Effect of Tax withheld from taxable income
Returns and Payment of Tax
(2015) Q. #10-A & 10-B Persons required to file ITR, Sec. 51 (A), NIRC
(2015) Q. #10-C, 10-D #10-E Individuals not required to file ITR, Sec. 51(2), NIRC
(2019) Q. 16. Calendar vs. Fiscal Year
Capital Gains Tax
(2014) Q.13 Payment of capital gains tax in case of foreclosure sale
(2015) Q. #12 Sale of Residential House and Lot may not be subject to capital gains provided
that the following conditions must be complied with.
(2018) Q. 5 Foreign shares are not within the purview of Capital Gains Tax.

(2017) Q. 19. B. Sale of real property by non-stock, non-profit corporation is subject to CGT.
Fringe Benefits
(2014) Q. 10. MCQ De minimis benefits, Sec. 33 (C) (4)
(2015) Q. #11 De minimis benefits, Sec. 33. (C) (4)
(2016) Q. 6. De minimis benefits, Sec. 33
2019. Q. B. Housing facilities. Not subject to fringe benefits.
Tax Liability of Members of General Professional Partnership
(2014) Q.24-B & 24-C A general professional partnership shall be liable for income tax only in
their separate and individual capacities. Sec. 16, NIRC
Failure to stamp taxable document
(2014) Q. 17 Documentary Stamp Tax, Sec. 210, NIRC

QUESTIONS TAKEN FROM TAX REMEDIES

Tax Refund
(2014) Q. 4-A & 4-B Procedure in claiming a refund of or tax credit for taxes and penalties
(2016) Q. 9 (B) Explain the procedure for claiming refunds of tax erroneously or illegally
collected from filing of the claim for refunds with the CIR up to CTA
 (2017) Q. 10. Requisites of a valid waiver of the statute of limitations.
(2017) Q. 10. B. Prescription of the right of the Government to assess and collect. (NIRC.
Section 203)
(2019) 17. Period to file judicial claim or refund.
(2019) 18. Prescription of Assessment.
(2019) 19. Claim for Refund of erroneously or illegally collected taxes.
(2017) Q. 14. Suspension of collection of taxes (RA 1125, Sec. 11)
(2017) Q. 14. B. Posting of surety bond.
Assessment & Pre-assessment Notice
(2014) Q. 15 MCQ & 16 Protesting of Assessment, Sec 228, NIRC
(2019) Q. 1. PAN VS. FAN
Appeals to the Court of Tax Appeals (CTA)
(2015) Q. #9-A The CTA does not acquire jurisdiction in a petition for review that is filed
out of time. Nor does it acquire jurisdiction for petitions filed prematurely.
Revised Rules of the Court of Tax Appeals (AM No. 05-11-07-CTA, November 22, 2005)
(2014) Q. 5. Jurisdiction of Court of Tax Appeals
(2015) Q. #13 Jurisdiction of CTA (Rule 4)
(2016) Q. 2. State at least 5 exclusive appellate jurisdiction of the Court of Tax
Appeals
(2017) Q. 16. Exclusive Appellate Jurisdiction of the CTA
(2018) Q. 14. Exclusive appellate jurisdiction of the Court of Tax Appeals

(2015) Q. #7 Procedure in Civil Case (Rule 8)

(2015) Q. #20 Procedure in Criminal Cases (Rule 9)
(2014) Q. 29-A Execution of Judgment
(2017) Q. 18. Compromise vs. abatement of taxes (sec. 204, NIRC)
Legal Remedies of a Tax Payer
(2014) Q. 1. Administrative Remedies (Assessment)
(2014) Q. 18-A&18-B For administrative remedies on real property taxes
(2018) Q. 20. Administrative remedies and Judicial Remedies.

(2015) Q. #9-B Judicial Remedies (Assessment and refund)

Period within which refund of Input Taxes shall be made
(2016) Q. 16 Judicial Remedy 120+30 days – BIR RULING
(2018) Q. 12. Preliminary Assessment Notice (PAN) or Final Assessment Notice (FAN) is not
necessary in the case of false or fraudulent return with intent to evade taxes or of
failure to file a return, the tax may be assessed or a proceeding in court for the
collection of such tax may be filed without assessment.

(2016) Q. 17 waiver of 3 year prescriptive period for the BIR to assess taxes due
QUESTIONS TAKEN FROM GENERAL PRINCIPLES
(2014) Q. 28 MCQ Equality in Taxation
(2017) Q. 6. Principle of uniformity.
(2014) Q. 21 Tax Evasion
(2016) Q. 14 Tax Evasion
(2014) Q. 23 MCQ Tax avoidance
Tax Credit vs. Tax Deduction
(2016) Q. 11 Tax Credit
(2016) Q. 10 (A) Effect of converting discount from a tax credit to a tax deduction
(2016) Q. 10 (B) Tax Deduction scheme is a valid exercise of the police power of the
state.
(2014) Q. 22 MCQ Double Taxation
(2015) Q. #6 Double Taxation (Strict vs. Broad sense)
(2016) Q. 19 (B) Explain concept of Double Taxation
(2017) Q. 9. Definition of Double Taxation
(2018) Q.1. b. Concept of Indirect double taxation. If there is an element lacking in Direct Double
Taxation it would amount to indirect double taxation. The Constitution only prohibits
direct double taxation.

(2019) Q. 1. Double Taxation

(2015) Q. #1 Principles of a sound taxation system
(2016) Q.1 Explain Lifeblood doctrine, necessity theory, benefits-received theory,
Doctrine of symbiotic relationship

QUESTIONS TAKEN FROM TRANSFER TAXES (ESTATE and DONOR Taxes)

Estate Tax
(2014) Q. 14-A Items that may be considered as part of Estate Income
(2014) Q. 14-B Allowable deductions in gross estate, Sec. 86, NIRC
(2019) Q. 5. Allowable deductions and its requisites.
 (2019) Q. 5. Items of gross estate of a non-resident citizen.
(2017) Q. 15. Medical expenses (under train law medical expenses are removed as
allowable deduction.
(2018) Q. 7. B. Gross estate deduction funeral expenses; medical expenses, etc

(2018) Q.7 Gross value of estate exceeds 200,000 should be included in the gross
estate
(2014) Q. 20 Unpaid mortgages
(2015) Q.22-A and 22-B Computation of Net Estate and Deductions Allowed
(2016) Q. 19 Decedent is a non-resident and left property in the Philippines (shares of
stock), Sec. 104, NIRC - can CIR of the Philippines tax the same
shares?
(2017) Q. 15 Period to file Estate Tax

Donor’s Tax
(2014) Q. 2 Donations to Political Candidates and Parties
(2018) Q.3. B Donation of a car because the employee was well loved
(2015) Q. #17 Valuation of Gifts made in Property (Donor’s Tax)
(2016) Q. 8 Is assignment of share subject to gift tax?
(2018) 4.A Donation of a parcel of land to be used as the site for additional classrooms. Exempt
from donor’s tax provided that not more than 30% of said gifts shall be used by such
done for administration purposes. Educational institution is incorporated as a non-stock
entity.
(2018) Q. 8. Donation to the City Water District or gifts made to or for the use of the National
Government or any entity created by any of its agencies which is not conducted for
profits or to any political subdivision of the Government are exempt gifts.
30% donor’s tax based (under train law donor’s tax is now 6% regardless of
relationship whether or not stranger)
(2017) Q. 19, 19C. Exemptions from Donor’s tax
(2019. Q. 4. Cite instances under tax code where gifts are exempt from donor’s tax

QUESTIONS TAKEN FROM EXCISE TAX

(2017) Q.1 Claim for refund of excise tax, Sec. 135 (a) of the NIRC

QUESTIONS TAKEN FROM REAL PROPERTY TAXATION

(2015) Q. #16-A&16-B Properties exempt from real property taxes under the Local Government
Code
 Exemption of LGU
(2016) Q. 7 GOCC tax exemption in RPT
(2018) Q. 17. A A non-stock, non-profit religious organization is not liable to pay real property taxes if
actually, directly and exclusively used for religious, charitable or educational purposes.
(2018) Q. 17. B.
(2017) Q. 16. Taxability of non-stock, non-profit educational institution.

QUESTIONS TAKEN FROM LOCAL GOVERNMENT TAXATION (RA 7610)

(2014) Q. 7 Procedure for the effectivity of Tax, Ordinance and Revenue Measures:
Question on legality of tax ordinance can only be raised on appeal with
secretary of Justice, Sec. 187, LGC
(2015) Q. #19-A Constitutionality or legality of tax ordinances may be raised on appeal within 30
days from the effectivity to the Secretary of Justice.
Sec. 133, LGC - Limitation on the exercise of taxation powers by LGU
(2017) Q. 13. Exercise of taxing power
(2018) Q. 1. A. Taxing power of LGU – Tax on Businesses, Sec. 133 of the LGC
A business subject to Tax on Wholesalers, Distributors or Dealers and Tax on
Retailers as local taxes. Adding Businesses subject to Excise, VAT and Percentage
Taxes under NIRC by amending tax ordinance.

(2016) Q. 4 Question on legality of tax ordinance, RE: Transfer Tax on Real Property
Ownership, Sec. 135, LGC
(2016) Q. 12 Classification of Medical Arts Center as Special assessment
Special vs. Commercial Classification for assessment purposes
(2018) Q. 15. A. Assessment of Property Subject to Back Taxes (LGC, Sec. 222)
(2018) Q. 15. B. Real property shall be classified, valued and assessed on the basis of actual use

(2015) Q. #19-B Proper procedural remedy and applicable time periods for challenging the
ordinance, Sec. 187, LGC - Procedure for approval of local tax ordinance
(2018) Q. 15. C Period to file protest.
(2018) Q. 16. Payment of delinquent realty taxes subject in an action for ejectment.
(2018) Q. 18. A. Collection of the business taxes maintaining or operating branch or sales outlet shall
be paid to the municipality where such branch or sales outlet is located.
(2018) Q. 18. B. Professional tax shall be payable in the province where he practices his profession or
where he maintains his principal office in case he practices his profession in several
places.

(2014) Q. 29-B Protest Assessment

 QUESTIONS TAKEN FROM TARIFF AND CUSTOMS CODE
(2014) Q. 6 MCQ Unlawful Importation – Smuggling
(2017) Q. 18. Outright smuggling vs. Technical Smuggling
(2015) Q. #18 When importation begins and deemed terminated
(2015) Q. #18-B In what case/s is the decision of the Collector automatically reviewed by
the Commissioner of Customs?
In what instance/s is the decision of the Commissioner automatically
appealed to the Secretary of Finance?

(Supervisory authority of Commissioner and Secretary of Finance in

Certain cases)

(2017) Q. 4. Jurisdiction of the Bureau of Customs

(2018) 13. RTC has no jurisdiction to grant replevin in forfeiture cases

QUESTIONS ON VALUE ADDED TAX (VAT) (3 Questions)

(2014) Q. 8 VAT Imposition – Persons Liable, Sec. 105, NIRC
(2018) Q. 9 (A) Not subject to VAT in case of changes in or cessation of status of a VAT-registered
Person, Sec. 106 (C)
(2018) Q. 10. A. subject to VAT – made in the course of trade or business or incidental thereto
(2018) Q. 11. A Sale of a parcel of land by a person not regularly engaged in the real estate business
shall not be subject to VAT.
(2018) Q. 11. B Sale of a parcel of land by a VAT-registered person – subject to VAT
(2018) Q. 19. A Imposition of 50% surcharge is proper penalty for deficiency tax
(2018) Q. 19 B. Reduction of the amount of surcharge by virtue of a compromise is allowed on 2
grounds financial capacity and assessment is doubtful validity.

(2014) Q. 19 VAT (in the course of trade or business) Sec 105, NIRC
(2014) Q. 25 MCQ VAT Exempt Transactions
(2015) Q. #21-B zero rated sale, Sec. 113 (B) (c)
(2016) Q. 12 RE: Zero rated VAT - Services rendered to persons or entities whose
exemption under special laws or international agreements to which the
Philippines is a signatory effectively subjects the supply of such service
to zero percent (0%) rate (Section 108(B) 3, NIRC).
(2017) Q. 1. Zero-rated sales, Sec. 108 (B) (3), NIRC
(2015) Q. #8 Whether lease of properties should be subject to VAT
(2016) Q. 9 (A) Procedure for claiming refunds or tax credits of input VAT, Sec. 112 from
filing of an application with the CIR up to the CTA
(2017) Q. 5. Period to file a claim for refund of unutilized input vat. (Sec. 112, NIRC)
(2017) Q.12 Sale of real properties; vat; documentary stamp tax. If done in the
ordinary course of trade or business is subject to VAT.
(2017) Q. 12. B Foreclosure sale – the sale made by the bank is exempt from VAT

2014, 2015, 2016, 2017, 2018 and 2019

LGC
9%
VAT
10%
Income Tax
Tariff and 36%
Customs
3%
Real Property
Tax
5%

Transfer Tax
12%

General
Principles
Tax Remedies 8%
18%